From the drugstore to the courtroom – what are the main reasons behind disputes between cosmetic and perfume companies in Poland | In Principle

On the Polish market of cosmetics and perfumes we will find both global producers and Polish brands. The latter are getting better and better. The cosmetics market in Poland doesn’t stop to grow. That growth has been particularly dynamic in recent years. Competition is also intensifying. It can lead to an increase in the number of court litigation cases related to intellectual property rights. Below we indicate what in our experience has been the most common subject of disputes among industry players.

Original, but not for this market!

Our practice and observations indicate that a large number of cases that find their way to the courtroom refer  to trademarked perfumery products sold in Poland, even though they had not been previously placed on the market  in the European Economic Area (EEA) by the right-holder or with his consent. So we are talking here about perfumes that are original but – in simplified terms – were intended by the right-holder for a different market, e.g. Asian or American, and should not be sold in the EEA.

The discussed practice often involves the issue of removing, masking or altering production codes that identify perfumes or the issue of their repacking. Sometimes it also  encompasses the sale of perfumes which the right-holder did not intend for sale at all, for example that of testers. The holder of the trademark that has been placed on such perfumes has the right to oppose these practices. Courts are increasingly often admitting lawsuits in these types of cases.

The “lookalike”

It happens that some cosmetic and perfume manufacturers take a shortcut when introducing a new product on the market and lawlessly render the packaging of that product similar to the packaging of other brands, particularly reputed ones (the so-called “lookalike packaging”). . The similarity usually applies to two areas – on the one hand, the shape of the packaging, and on the other its graphic appearance, including composition, layout, graphics, colour scheme and fonts.

In our practice we meet packaging rendered similar in this twofold manner that holds lip gloss, mascara or eyelash serum, eye shadow or a perfume bottle and its external packaging. Infringers often “reverse the colours”, use a mirror image of some packaging components or render similar the shape of containers, including their characteristic profiling or convexities. In the case of creams or shower gels, the similarity applies to the graphic components of the packaging or labels, and less frequently to the shape. Often the individual components of the packaging differ from the individual components of the original packaging, but, nonetheless, their accumulation and composition make the impression of similarity. This similarity causes customers to reach for a familiar packaging, even if it is not identical to the packaging of the original product. As a result, that product can be sold instantly without its seller having to conduct promotional campaigns, incur advertising expenses, etc.

A war against these types of infringements is not easy but should be nonetheless waged. They are the enemy of fair competition. Some customers, guided by the appearance of the packaging, will confuse the products or will be under the illusion that goods in a similar packaging have the features of goods known to them earlier. Our practice shows that an effective battle with these violations is possible. Many cases end in an amicable settlement.

It is somewhat easier, especially in court, when the right-holder can provide an industrial design that embodies the external form of his product against the infringing packaging. In one such case, the court, confirming infringement of an industrial design, prohibited the defendant from marketing mascara in packages of elongated shape and characteristic profiling, whose lateral surface is curved, with a convexity in the middle, consisting of two parts, where the lower part constitutes a container while the upper part bears the form of an ellipse when looked at from above, and in the side view has the form of a solid with the top cut at an acute angle (judgment of the District Court in Warsaw of 31 January 2013, case XXII GWwp 16/12).

On the one hand, there are many weak marks…

Designations chosen in the cosmetics industry to identify products are often relatively simple and undistinctive. These marks are often descriptive, indicating the type of goods or carrying expressions characteristic of products of the given type. But this is not a good practice. It leads to problems with the subsequent pursuit of the protection of such designations, even when they are registered as trademarks.

For example, let’s take a word designation containing the words “happy”, “derm” or “phyto”. The court pointed out that these words largely described the cosmetic product and its properties. They were commonly used by cosmetic-selling businesses. In the meantime, the designation whose protection the plaintiff claimed consisted exclusively of these words. Unfortunately, even a combination of these words did not strengthen the distinctive ability of the mark.

Interestingly, the issue of the so-called generic nature of the designation also appears in Polish judgments regarding the BOTOX trademark. The defendants in these cases claim that the designation has entered the colloquial language. However, the courts indicate that this does not deprive the BOTOX trademark of its distinctive character. Indeed, it is used only for the determination of a specific preparation and not for different products that have common characteristics. The courts emphasized that, in this particular case, the common knowledge does not deprive the trademark BOTOX of distinctive character but strengthens it (judgment of the District Court in Warsaw of September 1, 2015, case XXII GWzt 17/15, non-final).

Here is another example worth considering. The court decided in a judgement that the designation PANORAMIC for mascaras is strongly distinctive.. It indicated that the designation allows the association with the effect obtained when using the product, but does not describe it, leaving that to the imagination of the buyer in whose memory this association will remain. In this case (judgment of the Court of Appeals in Warsaw of February 20, 2009, case I ACa 944/08), the court found that the designation PANORAMA used for the same product types, i.e. mascaras, creates a risk of confusion and infringes the PANORAMIC trademark.

An attempt to claim protection for non-distinctive designations may fail. The courts emphasize that the consequences of choosing a “weak” mark encumber the plaintiff. Therefore, the choice of the designation should be well-thought-out and should take into account the likely possibility of having to claim its protection in the future. Our experience shows that this issue is often neglected.

…and on the other, there are many strong marks too

At the other extreme, in opposition to a large group of evidently weak marks, we see in this industry an equally characteristic accumulation of strong renowned trademarks. There are not many other markets on which such marks exist in large numbers. What is more, some of them are marks associated with high quality and luxury. The issue of renowned trademarks is also present in the judgments of Polish courts. For example, the courts confirmed an infringement  of the renowned trademark Cartier for perfume products, by the defendant’s products marked Chartier. In the same case, the court also ruled on the confusing similarity and violation of the principles of fair competition (judgment of the Court of Appeals in Katowice of February 22, 2011, case V ACa 507/10). In another judgment related to the same case, the arbitration court raised the issue of infringement of the plaintiff’s rights to the renowned trademark Cartier by registering the chartier.pl domain name (see the judgment of the Court of Conciliation for Internet Domains dated March 12, 2015, case 57/14/PA), under which the defendant operated an online perfume store. Another trademark whose repute was confirmed is REXONA (judgment of the Court of Appeals in Warsaw of February 26, 2013, case I ACa 1001/12) and the already mentioned BOTOX.

Substitutes instead of proprietary marks

Cases of another type that we often come across are those where defendants use third-party trademarks in commercial information about their own products. This applies in particular to designations of luxury perfumes. Infringers  use phrases such as “alternative to”, “alternative perfumes”, “inspired alternative perfumes”, “perfume substitutes, inspiration” or „perfume equivalents”, and follow them with a renowned trademark. Infringers claim in court that their actions are justified by the need to inform consumers about the features, properties and intended use of their products. Courts, however, tend to consider such actions as unlawful and violating the trademark’s distinguishing and promoting function. Indeed, defendants engage in this manipulation with the objective of swaying consumers to purchase their products by transferring thereon consumers’ positive perceptions of the quality or effectiveness associated with the earlier, usually well-known, trademark.

Cosmetics or household chemicals?

In one of the cases pending in court there was a problem with establishing the similarity of goods bearing opposing trademarks. The dispute concerned the trademark KINDII, which the plaintiff uses for child body care products, and the disputed mark KINDY LOVE, which the defendant uses for his household chemical products that serve to wash children’s clothes and undergarments. The lower courts have recognized that the goods of both parties were targeted at consumers interested in products for young children and infants. Despite this, they did not accept that there was a similarity of goods. Consequently, they concluded that there was no risk of confusion since in market conditions the goods offered by the parties were not substitutable, and the only aspect that connected them was that they interested the same group of customers. As a result of the plaintiff’s last-resort appeal, the case went to the Supreme Court (judgment of the Supreme Court of February 11, 2015, case I CSK 50/14). The Supreme Court referred the case back to the court of appeals and instructed it to examine not only the actual and current extent to which the plaintiff uses the trademark but also the entire range of goods or services for which the mark was registered. The judgement that will be issued in this case may provide interesting information about the similarity of goods, especially those located at the border between cosmetics and other types of products, e.g. chemical, medical or pharmaceutical.

Summary

If the cosmetics and perfumes market will continue to grow, and everything seems to indicate that it will, we should expect a growing number of potential points of contention. As indicated above, cases concerning infringements of intellectual property rights and principles of fair competition in the cosmetics and perfumes industry undoubtedly have their specificity. In the above examples we focused exclusively on products. However, it should not be overlooked that the cosmetics market is not limited to goods, but also, and perhaps above all, it offers services – various cosmetic treatments, massages, therapies, spas, consultations or training. Therefore, violations may affect a much wider area.

Lena Marcinoska, adwokat, Intellectual Property practice, Wardyński & Partners