LVMH Sues L'Oreal for Trademark Infringement in China
- Chaileedo Press
- Nov 25, 2022
- 4 min read
Recently, in two civil rulings released by the China Judgements Online, LVMH sued L'Oréal China for trademark infringement and unfair competition, and claimed 10 million yuan (about $1.4 million).
What happened? Back to March 18, 2021, Shanghai Pudong New Area People's Court filed a case against the plaintiff LVMH Perfume & Cosmetics Shanghai Co., Ltd, a China affiliate of luxury giant LVMH, and the defendant L'Oréal (China) Co., Ltd.(L’Oreal China)
LVMH claimed $1.4 million from L'Oreal
According to the civil ruling of the Pudong New Area People's Court, LVMH claimed that L'Oreal's skin care products NECTAR ROYAL series, launched in 2019, imitated the honey-based skin care products ABEILLE ROYALE launched by Guerlain France, a brand of the LVMH Group, in 2010. In addition, the L'Oréal campaign intentionally used the same design elements as the "ABEILLE ROYALE" product.
According to LVMH, Guerlain launched its skin care products in 2010 under the name "ABEILLE ROYALE" and was granted registration No. G1102506 in the category "Soaps, fragrance products, essential oils and cosmetics". The trademark "ABEILLE ROYALE" was registered in the category "Soaps, Fragrances, Essential Oils and Cosmetics" under the exclusive right to use the trademark for the period from September 19, 2011, to September 19, 2021. "The promotional materials for ABEILLE ROYALE products use a series of creative visual and design elements that have been used by Guerlain France for many years and invested heavily in advertising, and have formed a stable association with the Guerlain brand. L'Oréal's move clings to the goodwill and market influence that Guerlain has long built for its 'ABEILLE ROYALE' products and is suspected of constituting unfair competition."
LVMH also believes that the word "NECTAR ROYAL" used in the above-mentioned products by L'Oréal China is similar to the trademark "ABEILLE ROYALE", which is likely to cause confusion among consumers and allegedly constitutes trademark infringement.
(Credit: from Guerlain official)
LVMH said that the ingredients of L'Oreal China's "NECTAR ROYAL" products are not nectar, but honey. The use of "NECTAR ROYAL" as product description is likely to mislead consumers and constitutes unfair competition through false advertising.
Accordingly, LVMH requested that L'Oreal China be ordered to stop using the "NECTAR ROYAL" logo, to take down the products, to publish a clarification statement in its official store and account, and stop advertising the relevant products, related logos and so on. At the same time, LVMH demanded L'Oreal China pay damages of 10 million yuan (about $1.4 million).
For LVMH's lawsuit, L'Oreal China objected to the jurisdiction during the submission of its reply, and the relevant court and department rejected L'Oreal China's appeal and upheld the original decision.
It is worth mentioning that recently, the Shanghai Pudong New Area People's Court issued a civil ruling but showed that "the epidemic has affected the relevant litigation activities for a longer period, so the lawsuit has been suspended". Up to now, no new progress in the case has been announced.
(Credit: from Chinese social media Xiaohongshu)
The price difference between the two products involved in the case is nearly 1,000 yuan
Public information shows that the founder of Guerlain, Pierre-François-Pascal Guerlain, was inspired by the Vendôme Column and decorated the perfume bottle with bees and a colorful ribbon, thus the Bee Bottle was born and became the brand emblem, which continues to this day. Its "ABEILLE ROYALE" skincare products launched in 2010 are also a continuation of the brand's history and innovation.
Currently, Guerlain's official Tmall flagship store shows that the "ABEILLE ROYALE" series of products include Youth Water Oil, Lotion, Night Cream, Day Cream and other products.
From the performance of this year's Double 11 published by Tmall, this series of products has become Guerlain's blockbuster. According to the data, ABEILLE ROYALE Youth Water Oil ranked No. 4 on Tmall's Double Eleven Hot-selling Products List, and Guerlain's official flagship store ranked No. 14 on the FMCG list and No. 13 on the beauty list in terms of cumulative GMV. In the financial report of LVMH, it also praised the contribution of Guerlain ABEILLE ROYALE series products to the brand several times.
The L'Oréal "NECTAR ROYAL" products mentioned in the case, include light cream, golden supplement essence and other products. This series of products is also hot-selling for L'Oreal. For example, in L'Oreal's Tmall flagship store, the NECTAR ROYAL Light Cream Nourishing Edition has sold 200,000+ pieces, with monthly sales reaching 10,000+ pieces.
(Credit: from L'Oreal's official account on Weibo)
However, the price difference between these two series of products is nearly a thousand yuan. It is reported that Guerlain ABEILLE ROYALE series of single products are priced at 540 yuan - 2100 yuan ($75.4-$293.2), while L'Oreal "NECTAR ROYAL" series of single products are priced at 199 yuan to 429 yuan ($27.8-$59.9).
International beauty giants' battle in China
Although the above case is still inconclusive, the two international beauty giants of the lawsuit have caused widespread concern in the industry. A senior industry source believes that "the actual reflection behind this is the fierce competition between international beauty groups in the Chinese market."
According to the recent three quarterly reports released by the beauty groups, L'Oreal Group achieved a 12% growth in performance, with sales of 28.68 billion euros (about $30 billion), firmly sitting at the top of the global cosmetics group. Although L'Oréal China achieved double-digit growth, it certainly took some pressure.
In order to consolidate its market position, L'Oréal is also continuously expanding the Chinese and even Asian markets with new brands and new products. For example, recently, a number of international media released news that L'Oreal Group, in cooperation with South Korea's Hotel Shilla and private equity firm Anchor Equity Partners, has launched a new luxury skincare brand Shihyo through a third-party joint venture, Loshian, with the intention of developing the Asian market. L'Oréal even exhibited a total of 225 exhibits, which set a new record high, at the fifth edition of the China International Import Exhibition.
LVMH's cosmetics and fragrance division have also been growing year on year in recent years. According to the latest ranking, the group's global beauty company ranking has risen from the bottom in 2020 to rank seventh. LVMH even said in this year's third quarterly report, Dior and Guerlain's performance is particularly good, the former with the Sauvage, J'adore, Miss Dior and other classic perfume products maintaining high growth, while Guerlain is thanks to the growth of ABEILLE ROYALE skincare series.
China is already the world's second-largest beauty market. In recent years, the beauty giants in the Chinese market have begun to fierce war. As a result, LVMH and L'Oreal are also tensing up in the face of the Chinese beauty market, which is increasingly competitive but still attractive.
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