CHANEL is a premier French luxury fashion house. Its century-old N°5 perfume is perhaps the most recognized and revered fragrance of all time. Created in 1921, CHANEL N°5 has been known for its aesthetic design, featuring simple lines, plain white label and the chiseled stopper, which is cut like a diamond.

In 2019, CHANEL found that a Chinese company Yiwu Ai Zhi Yu Cosmetics Ltd. (“Ai Zhi Yu”) manufactured a “N°9 Flower of Story” perfume, which is a slavish copy of the unique trade dress of CHANEL N°5 perfume (as shown below). In November, CHANEL conducted notarized purchase of the copycat product and later sued Ai Zhi Yu and its distributor, an e-commerce company based in Xi’an before the Xi’an Intermediate Court, on the ground of unfair competition arising from trade dress infringement.

Court’s decision

The case exhausted the trial of 2 levels.

The trial court, Xi'an Intermediate Court rendered a decision on December 23, 2020, finding:

1.      The evidence CHANEL furnished could corroborate the fact that CHANEL N°5 perfume, which entered the Chinese market about 20 years ago, has been known by the relevant public in China.

2.      The bottle and packaging serve as a key source identifier of perfume. The bottle of CHANEL N°5 perfume has been used for a century and is known for the distinctive contour among the Chinese consumers through continuous and extensive use.

3.      The design of CHANEL N°5 bottle shape as well as the layout and color of the characters on the front label is distinctive and the said trade dress has formed a stable relationship with CHANEL, thus could function as a source identifier of the products.

4.      The shape, material and design of the bottle and the stopper, as well as the color scheme, character arrangement, size, proportion and position of the white label of the accused infringing product is highly similar to that of CHANEL N°5, which is likely to cause misidentification among the relevant public.

The court therefore found that the defendants’ act constitutes unfair competition, ordered cessation and damages (to be borne by Ai Zhi Yu).

In January 2021, Ai Zhi Yu filed an appeal before the Shaanxi High Court. Ai Zhi Yu (the appellant) challenged the distinctiveness of the trade dress of CHANEL N°5 perfume, asserting that the trademarks “N°5” and “CHANEL” rather than the bottle per se (trade dress) function as the source identifier of the products. The appellant adduced an administrative judgment rendered by the Beijing High Court, rejecting CHANEL’s application of a 3D trademark based on the bottle of N°5 perfume to back up its argument.

The said administrative judgment was dismissed by the Court of Appeal. The Shaanxi High Court noted that the result of the 3D trademark application is irrelevant to this case by weighting the following:

1.       Firstly, the applied 3D trademark is a mere bottle design. The trade dress seeking protection in this case is the design comprising various elements including the graphics, color, shape, size and font employed by CHANEL in its entirety. They are different subjects.

2.       More importantly, the registrability of a 3D trademark application and the prerequisite for invoking trade dress protection are different matters governed by different laws. The rejection of a 3D trademark application does not necessarily deprive the related trade dress of being protected under the framework of the Anti-unfair Competition Law.

On August 24, 2021, the appeal court maintained the decision made by the trial court.

Comments:

Registration of a 3D trademark has become an uphill battle in China. Brand owners hoping to protect the design of their iconic products are increasingly shifting their eyes to alternative remedies like seeking trade dress protection on unfair competition basis.

The courts not only offer some interesting insights in the assessment of the distinctiveness of trade dress involving product shape, but also makes it clear that whether a trade dress may be protected by the Anti-Unfair Competition Law has no bearing on the assessment of the registrability of the 3D trademark application incorporating the same product shape.

Authored by Cui Wen & He Wei, first published by WTR