We all love a bargain. You walk into your local supermarket to see a perfume priced at $30. You notice the label says it is ‘inspired by’ a luxury perfume — a fragrance that typically retails for $830.
You’re likely to pick the former. The ‘deal-maker’ in this transaction, as is often the case, is the thrill of finding a cheaper alternative. Fuelled by social media trends and new Gen Z shopping preferences1, this consumer behavior is the propelling force behind what is now a billion-dollar “dupe” industry.
Perfume dupes, also called “imitation perfumes” or “knock-offs” position themselves as low-cost, equally superior alternatives to high-end fragrances. While this value proposition offers a competitive advantage, it pushes the boundaries of IP law.
In a previous post, we explained the legal complexities that beset the copyright protection of perfumes. But another interplay that may invoke IP concerns is where a dupe perfume brand uses the trademarks of a luxury brand to promote its product, thereby not only diluting the brand equity of the luxury brand but exploiting its trademark reputation for commercial gain.
Indeed, in the spirit of (fair) competition, the law recognizes and encourages competitive endeavors in the form of creating and selling smell-alike fragrances. Dupe manufacturers, however, risk crossing into unlawful territory where they infringe upon a third-party brand’s trademark in their marketing communications or advertisement.
This article explores perfume dupes in relation to competition law, clarifying the thin line between legal advertising and actions that may violate trademark and competition laws. It provides instances where a perfume dupe may be held to be in breach of trademark rights examples of trademark violations and addresses common tactics dupes employ to avoid infractions.
The case for Comparative Advertisement
Following the 2018 decision of the CJEU in Levola Hengelo BV v. Smilde Food BV2 which ousted the taste of a food product from the list of copyrightable “works” contemplated under Article 2(1) of the Berne Convention3, any progress recorded in the Kekofa/Lancôme may well be short-lived. This is due to similarities in the rationale by the court in both decisions — that smell, like taste, is too relative a concept to be precisely represented, identified, perceived, or communicated. Therefore, perfumes, and scents, for that matter, are ineligible for copyright protection.
Most of the EU has adopted a similar stance, giving ‘smell-alike’ manufacturers leeway to enter the perfume markets more brazenly. The target market is the Gen Z, whose obsession with dupes stems from a combination of tougher economies and online trends — especially TikTok trends — that celebrate “the thrill of the find.”
It is this cultural zeitgeist dupe brands look to draw from in their marketing communications. Dupe brands use comparative advertising to appeal to shoppers’ preference for affordable alternatives. This strategy often involves drawing a comparison with a company’s products or services to those of its competitor.
Typically, these comparisons, in a bid to show how their products stack up to original products and help consumers make informed choices, end up talking up their strengths to make themselves out to be the superior option.
Perfume dupes and the slippery slope of Comparative Advertisement
Comparative advertising holds a serious commercial advantage for dupe brands. By claiming to imitate famous perfumes at a lower price, dupe brands have on their hands, an attractive business model — as they need no marketing budget, and increase their profit margin (even so, they are considered cheaper, as luxury brands come with a premium pricing).
This levels their playing ground to compete against industry giants with bigger marketing budgets and brand equity. While this is a potent strategy in the marketing arsenal of dupe perfume brands, the reputational harm it can (sometimes) occasion may hamper the commercial interests of an original perfume brand.
It is often said that imitation is the highest form of flattery. But from a perfumer’s view, nothing flatters about an advertising model that seeks to obtain an advantage over direct industry rivals—more so when it could lead to a potential dilution of their trademark.
This led the perfume industry, especially in perfume powerhouses like France, to seek to neutralize the adverse effect this could have on their hard-earned dominant market position. They finally got their wish in the form of a so-called “perfume clause”, the codification of which is contained in Art. 4 of the European Directive 2006/114/EC.4
The clause forbids any claim openly offering a product as an imitation or a replica of another original branded product. Other iterations of this provision exist in Art. 9 (3) (f) of the EU Trademark Regulations5. In the U.S., comparative advertising is primarily governed by the Lanham Act, which, in contrast to the EU regime, is more forgiving in classifying certain instances as “fair use”. Per the Lanham Act, comparative advertising is lawful only if:
1. It amounts to Fair Use: Fair use can be nominative or descriptive in its function.
Nominative fair use consists in the use of an original brand’s trademark solely to identify it. This use is solely for comparison, especially when the original brand cannot be easily identified without using a trademark — not to suggest any endorsement or affiliation.
Consider the case of a company that sells fragrance dupes explicitly stating that their product is “inspired by” or “a version of” a well-known fragrance. If that brand sells a perfume oil and labels it as “Our version of Chanel No. 5,” this would be nominative fair use — especially barring a practical way to indicate this.
On the other hand, descriptive fair use takes place where a perfume dupe uses a trademark only to describe its own fragrance. For instance, if a perfume is labeled as “Floral Essence,” the term “floral” is being used descriptively to indicate that the fragrance has a floral scent, rather than as a trademark.
2. It is truthful/an opinion: The advert must be based on factual claims that can be substantiated. Any similarities should stem from genuine opinions, and comparisons — not exaggerations.
3. Consumers are not misled as to the origin of the product: There must be a clear indication that the product being promoted is from a dupe perfume and not the original. This will prevent confusion about the source of the dupe. In this way, consumers will not ascribe the brand authority and value of the original brand to the dupe.
Swimming with the sharks: Trademark infringement challenges
EU trademark laws heavily frown upon acts that could misappropriate a brand’s goodwill. (also known as “freeriding” or “parasitic competition”) This raises a question for dupe brands: How can they market their products as smell-alikes without implying an open imitation that would breach trademark or competition laws?
For dupe brands, this issues a clarion call for legal and marketing teams to go back to the drawing board. A careful look at the statutes reveals the threshold: The law permits a covert allusion to a luxury brand, but draws the line where an overt, open imitation of the original brand is made. Therefore, complying with this legal threshold would thus require marketing tactics that thread this fine line cautiously.
One such tactic is the ‘Smell-alike List’. It involves creating lists of affordable fragrances that closely mimic the scent profiles of high-end designer perfumes. For example, a dupe brand like Smart Collection Perfume offers Perfume No. 385 in their collection, Aventus Creed. Meanwhile, they also claim in their advertisement that the perfume is not only a nod to the Creed Aventus, but smells just like Aventus.
Notably, the stringent requirements of the EU laws are at odds with this. Even in the best of cases, it would not fall under the exception under Art 14 (1) (c) EUTMR — a proviso that exempts a trademark user from infringement if the advertisement refers to the trademark owner’s goods in good faith.
Perhaps a better way would be to be more covert in the comparison. The ‘Genealogy of Scents’ method gets this down to a fine art. Here, a dupe perfume simply claims that its fragrance profile belongs to the same scent family as a more popular brand. Understandably, legal commentators are up in arms about this approach, arguing that it not only exploits a loophole in the ‘open imitation’ threshold but could legitimize subtle allusions that still ride on the appeal of popular perfume brands.
The l’Oréal v. bellure case
Like in the Lanham Act6, the EU courts in relying on the “perfume clause” would not rule an advertisement to infringe trademark or competition laws where it is based on factual claims, and is not misleading. European courts are strictly guided by trademark laws. They are less likely to allow leniency for dupe brands under ‘Fair Use’, unlike their American counterparts.
The 2010 landmark case of L’Oréal v. Bellure1 exemplifies this. The case involved a trademark infringement claim, with popular perfume brand L’Oréal alleging that Bellure’s use of a smell-alike list (see above section) strategy in advertising its products infringed on its trademark.
The court, per Justice Jacob, was quick to admit that a third party’s trademark for advertising is allowed, provided there is no exploitation of the trademark’s reputation and the advertised product is not a replica. But it found that Bellure crossed this line by riding on the reputation of L’Oréal’s trademarks in its advertisements, where it openly compared its imitation perfumes to L’Oréal’s originals.
Under European trademark law, Bellure was deemed to have unfairly benefited from the effort and investment L’Oréal had made in its trademarks, using them to enhance the perceived quality of its dupe.
Wary enough to admit the potential for advertising constraints to stifle competition and create unfair monopolies in an industry known for its market inequality, the court cited concerns. One such concern was that for competition to exist, dupes are expected to take fair advantage of the reputation of premium brands. It also noted that customers of these premium brands may not necessarily be their target anyway; dupes appeal to a cost-conscious, lower-end consumer base.
The Court also considered the broader implications of this decision on various industries, along with the principles of free speech and free trade. Despite these concerns, it ultimately concluded that the potential harm to premium or original brands outweighed them. These brands, which often invest significantly in registering and maintaining their trademarks, would face even greater damage if consumers who could afford their products opted for cheaper dupes instead.
It is worth noting that the L’Oréal ruling may have taken a different turn under the U.S.’s more permissive trademark protection regime, with Bellure’s comparative advertising falling under the fair use defense. In the U.S., comparative advertising is fair game where there is no confusion about the origin or identity of the product, and does not imply that the trademark owner endorses the product.
Wrap up
Arguably, the idea of a replica is tough on innovators. It snuffs out incentives for creativity, drops sales, and dilutes brands. After all, the comparative angle to dupe marketing could encroach into market share. But one could argue the power dynamics in the fragrance industry do not exactly indicate a level playing field.
To compete, dupes are constantly swimming against the torrents of massive brand reputation that often joins forces with influential celebrities, raising barriers to competition even further. Still, this offers little in the way of a license to compromise the integrity in non-deceptive comparative advertising — a means to promoting fair competition in markets.
For this reason, this author submits that the ECJ in L’Oréal v Bellure was justified in its decision to move past open imitations to outlaw even implicit communications that may yet be designed by dupe perfumes to freeride on the reputation of luxury brands.
Call it reverse logic, but for this younger generation of shoppers, finding bargains is the new status symbol. Saving is the new splurge. With the dupe megatrend already woven into Gen Z/Millennial cultural fabric, it’s set to be a mainstay in the foreseeable future. Lawful comparative advertising must therefore take into account the rules of engagement. Recourse must be had to the relevant laws, legal advice from Trademark attorneys, as well as educational resources like the ITA (International Trademark Association) fact sheet7 on the legal (and ethical) use of a third-party’s trademarks.
While trademark rights may not operate to forestall a fair use—at least legally in the U.S. and theoretically in the EU—it remains potent in remedying infringements disguised under the pretense of competition.
Endnotes
- C-487/07, L’Oréal SA and ors -v.- Bellure NV and ors, 18 June 2009
- https://www.businessinsider.com/gen-z-is-the-dupe-generation-2023-12
- https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62017CJ0310
- https://wipolex.wipo.int/en/text/283693
- https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32006L0114
- https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R1001&from=BG
- https://www.uspto.gov/sites/default/files/trademarks/law/Trademark_Statutes.pdf
- https://www.inta.org/resources/fact-sheets/
