The company's pursuit of Belgian perfume manufacturer Bellure through the UK courts hinged on L'Oreal's claim that Bellure enjoyed unfair advantage and infringed a number of its trademarks by distributing a 'smell-a-like' list to retailers that compared its fragrances and prices to well-known L'Oreal products.

L'Oreal v Bellure was referred to the ECJ by the UK's Advocate General to clarify in particular whether use of a mark may constitute trademark infringement even if there is no likelihood of confusion and no damage done to the brand owner in question. The ECJ has taken the view that infringement can occur in the absence of confusion or damage.

The ECJ agreed that Bellure had enjoyed an 'unfair advantage' and had thus infringed L'Oreal trademarks. But the case broke new ground because L'Oreal did not have to demonstrate confusion of origin or that there had been a dilution of the trademarks in question to claim 'unfair advantage'.

Controversially perhaps, the ECJ arrived at this conclusion by finding that price comparison lists can be construed as comparative advertising. Its judgement said: 'It is not in dispute that the object and effect of the comparison lists at issue… are to draw the attention of the relevant public to the original fragrance of which the perfumes… are purportedly an imitation.'

It continued: 'Those lists thus attest to the fact that those perfumes are imitations of the fragrances marketed under certain marks belonging to L'Oreal… they consequently present the goods marketed by the advertiser as being imitations of goods bearing a protected trademark.'

Kirsten Gilbert, solicitor at intellectual property firm Marks & Clerk, hailed the decision as an important victory for brand owners. 'Quite clearly the court takes the view that imitation is not the sincerest form of flattery, even when there is no confusion in the marketplace between two products,' she said. 'The decision should allow for greater harmony across European courts.'

However, the ECJ seemed to imply that the ruling applies only to marks with an already established reputation. Referring to previous decisions it said: '… the stronger that mark's distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it.'

No doubt subsequent cases will reveal whether the courts are moving in that direction. In the meantime, the decision is likely to be seen as a significant shift within European intellectual property law.

L'Oreal vs. Bellure has now been referred back to the UK Court of Appeal in the light of the ECJ's guidance.