Is advertising for counterfeit branded perfume anticompetitive?

The Federal Court of Justice (BGH) had to decide whether trading in branded perfume imitations constitutes unlawful comparative advertising that must cease, where no clear and unambiguous imitation claim is made, but merely associations with the originals are evoked.

An internet retailer offered inexpensive perfumes under the brand "Creation Lamis" whose scent was identical to that of more expensive branded perfumes. The online retailer had used order forms some years ago, in which each plagiarism was contrasted with a more expensive branded product. However, these forms had not been used for several years. A competitor, which principally distributes the originals of well-known brands, considered the advertising and distribution of the imitations to be anticompetitive because they were recognisable as imitations of the branded perfumes.

Court decision
The Karlsruhe judges saw no breach of competition law in the trade of the imitation. This is evident from the judgment of the BGH of 05.05.2011 – Az. I ZR 157/09. Trading in branded perfume imitations does not constitute unlawful comparative advertising if no clear and unambiguous imitation claim is made, but merely associations with the originals are evoked. The prohibition of comparative advertising under competition law does not prevent the imitation of an original product. Rather, what is prohibited is a clear imitation claim, from which – without consideration of other circumstances yet to be determined – it becomes apparent that the advertiser's product is being promoted precisely as an imitation of the original product.

Whether the advertising of the online shop inappropriately exploits the reputation of the competitor's perfume brands was left open by the Federal Court of Justice (BGH), and the court remitted the matter to the court of appeal in this respect.

Conclusion

Despite this judgment from Karlsruhe, one should be very cautious with the trade of imitations. Whether the court of appeal will ultimately decide in favour of the competitor from a trade mark law perspective remains open, but is certainly possible given the use of the order forms described above. In any event, in such cases one should obtain qualified legal advice in order to avoid costly court proceedings.