Picture this: An industry that commands high profits and highly loyal customers is growing at the rate of $ 20 billion a year but has a persistent problem eating into its profits, a problem which it has no legal defense against. The highly lucrative perfume industry faces constant encroachment from smell-alikes. A smell-alike is a copy of a perfume that is similar to the original but sold at a lower price. This intrusion is making the perfume industry fight hard to protect its market from the copycats.
How Do They Get Away?
A perfumes fragrance is very subjective and subtle. It is made up of three subelements called notes. The top note is the first whiff or impression that the user gets from the perfume; the middle note is the fragrance that emerges when the top note is wearing off before the bottom note is yet to emerge; and the bottom note is the base scent pervading the whole perfume. To further complicate matters, these notes could last for differing periods of time and are also strongly affected by the wearers skin. The things that make a fragrance unique also make them intangible and unpredictable and virtually impossible to trademark.
Basically, perfume creation is the application of technical knowledge of aromatic ingredients mixed in different combinations to produce favorable results. The procedure is relatively simple, but the trick lies in getting the combinations right. Once the correct combination is achieved, it becomes simple to reproduce. Unfortunately, chemical analysis can easily reveal the composition of a perfume making; it is easy to copy. Smell-alikes often do not need to even copy all the ingredients of the original perfume to achieve very similar results.
A fragrances subjective and subtle nature, coupled with the relative ease of reverse engineering, makes it easy for originals to be copied without large investments in research. The original creator could spend millions on R & D, branding, and marketing to build up goodwill and a reputation only to have it encroached upon by a smell-alike.
Besides copying the fragrance, smell-alikes often use similar bottle shapes, colors, and packaging to make the copy as close to the original as possiblejust enough to skirt the law and yet sufficient to suggest a strong resemblance to the original. Producers of luxury and premium perfumes are particularly hard hit by these copycats.
Where Is the Law?
Different countries have different laws regarding protection of perfumes and the permissibility of smell-alikes. What is more or less universal is that it is not illegal to produce or distribute smell-alikes. As perfumes are made through the application of technical knowledge and mixing of chemicals in correct proportions, they are not treated as a tangible form of expression and hence cannot claim copyright protection. Instead, countries usually solve disputes between the perfume creator and the copycats by assessing such cases for trademark infringement or unfair comparative advertising.
Primarily because of a fragrances highly subjective nature, it cannot be trademarked. Instead, perfume manufactures protect their products by registering the distinctive packaging of their products (viz. trade dress) or unique design elements, like color, applicator, bottle shape, etc., (product configuration) as their trademarks. These are significantly more tangible manifestations of a products uniqueness and hence disputes are usually taken to court for trademark infringement. In the United States, scents and fragrances do not enjoy intellectual property protection. Instead, creators have to use the trademark or the trade dress route to protect their creations. That is why U.S. companies prefer to channel most of their marketing budgets and effort into establishing their perfumes identity and image while the actual fragrance is given less importance.
Comparative advertising is also allowed in most countries, though with differing amounts of regulation. This is a thin line to walk: As long as a competitor can show that the comparison is to help the consumer make a better choice, it is allowed. When the same advertising crosses over to take advantage of the reputation of the original and usually more established company, it can be disputed in court. European laws are more explicitly worded and thereby more stringent when dealing with such cases. U.S. trademark law is more permissive with regards to comparative advertising. Broadly speaking, when such comparisons are clear and do not cause any confusion about the identity of the products and do not suggest that the trademark holder approves of the other product, it is seen as fair use. As long as the advertising is not deceptive, it is encouraged as it helps consumers make better choices, induces product improvement, and helps lower prices.
Laws pertaining to the perfume industry are still evolving, and companies find it very hard to protect their market. Given below are some recent examples of disputes and their verdicts, which highlight the complexities involved.
LOreal v. Bellure (2010)
In May 2010, European trademark law felt ripples of change when England’s Court of Appeals upheld the cosmetic giant LOreals complaint against Bellures use of certain words on lists comparing their respective perfumes. This was construed as trademark infringement, and Bellure was free riding on the reputation and goodwill garnered by the better known company. This judgment implies that now the law recognizes the marketing and monetary efforts made by a company to create and maintain its trademark.
Though the verdict was in LOreals favor, one of the three judges had his reservations. He felt that the average customer was smart enough to recognize the difference between the original and the smell-alike and would know that both differ in quality. In his view, the cheaper smell-alikes allowed more sections of society access to premium fragrances. He, however, also felt that the very same low pricing could harm the premium product if those who could afford the original bought the smell-alike. The judge also feared for the principles of free trade and free speech. As most verdicts set precedents with wider ramifications, there is a possibility of this verdict affecting other industries, such as generic drug manufacturers who usually advertise their products as identical to those sold under a trademarked name.
LOreal v. Bellure (2006)
2010 brought partial relief for French perfume manufacturers from the incessant problem of encroachers when a French appeals court ruled in LOreal v. Bellure (2006) that perfumes enjoyed French authorial rights to protect them from imitation for a period of 70 years. By using chemical analysis, LOreal proved that the Bellure smell-alike had an almost exact match of ingredients with its own perfumes. However, a higher court subsequently overruled this verdict, ruling that a perfumes fragrance cannot be copyright protected.
Lancome v. Kecofa (2006)
Though there are conflicting views and laws regarding copyright protection and perfumes, some progress has been made, as evidenced by the Dutch case Lancome v. Kecofa (2006). When Kecofa copied 24 of Lancomes 26 ingredients to make their perfume, it was judged as copyright infringement. Though the fragrance was still deemed to be too subtle to be protected under copyright law, it was the liquid medium carrying the fragrance that was awarded protection under Dutch law.
Abercrombie & Fitch
Abercrombie & Fitch, creators of Fierce, were quick to take action in 2009 to protect their signature scent from the pop diva Beyonce Knowles. She had proposed naming her yet-to-be launched perfume after her album, Sasha Fierce. As unlikely as it was that the two fragrances would be similar, one being packaged and targeted at men, while the other at women, it was the infringement on the registered name that allowed Abercrombie & Fitch to preemptively move to protect their product.
Some online selling sites have policies banning sale of testers and samples of perfumes and cosmetics. Smell-alike perfumes that compare themselves to branded items are restricted as are perfumes that are not in their original bottles. Imitations are not allowed.
The Unique Production Code
The unique production code is a numeric batch code assigned to each product unit to permit the producer to trace and resolve quality issues. This system is important to prevent counterfeits, assure quality, and to protect against theft.
This system is also useful in tracking down grey-market goods. These products are registered in the U.S., legally produced abroad, purchased legally from authorized distributors abroad, and then imported without the trademark holder’s knowledge or permission.
In 2009, the E.U. introduced a single regulation with respect to the E.U. Cosmetic Directive of 1976. This will apply to all member states simultaneously. This development increases the manufacturers responsibility, fortifies market surveillance, and establishes clearer guidelines to reduce administrative and litigation costs.
Distinctive Trademark Protection
As most laws are more clearly worded on issues regarding trademarks, it would help producers guard their markets by registering products and packaging that are distinctive, unique, and easily distinguishable. The closer the association of a product with its registered trademark, the better the chance of safeguarding it.
Different countries have different laws regarding trademarks and their infringement, permissible competition, and comparative advertising. It is most advisable for both, debutant perfume manufacturers as well as smell-alike producers, to get expert legal help with trademark registration and comparative advertising before venturing into production or distribution of perfumes.