Sent-Wish is a small local business who buys original perfumes such as Chanel, Tom Ford, Chloe, Hermes and Burberry via parallel import from overseas vendors, pours the perfume to small refill bottles and then sells the new refill bottles to consumers using the manufacturer’s name.
The bottles are sold with a package that carries a disclaimer that the products do not have any affiliation with the manufacturer.
Chanel has decided to confront Sent-Wish and sent Cease and Desist letters to Sent-Wish demanding to remove all bottles from the market and to refrain from using Chanel’s trademark.
Sent-Wish company responded by filing a Motion for a Declaratory Judgment asking the Court to declare that the rebottling of the original perfume does not infringe Chanel’s trademark.
Chanel claimed that the use of Chanel’s trademark for selling unauthorized refill bottles constitutes trademark infringement and dilution.
In addition, Chanel claimed that the sale of the perfume in unauthorized bottles damages Chanel’s reputation, the value of the brand and the quality of the original perfume.
Chanel also claimed that the rebottling materially changes the original product, therefore considered to be an infringement.
Sent-Wish responded by claiming that their actions do not damage the basic component and nature of the original perfume and that the use of the name Chanel considered to be “True Use” of Chanel’s mark for the purpose of reselling the perfume legally bought in the market, therefore do not constitute an infringement.
Judge Tamar Avrahami agreed that there is a possibility that the rebottling might reasonably change the quality of the perfume but decided that this assumption is not enough since the question of trademark infringement must be decided based only on implementing section 47 of the Trademark Ordinance.
According to section 47, the use of a trademark without the authorization of the trademark owner is not considered to be an infringement if the use of the mark qualifies as “True Use” in the market, which relates to the original essence or quality of the product.
Judge Avrahami than implemented the three tests that were acknowledged by the Supreme Court to determine whether the use of Chanel’s mark considered to be “True Use” in the market:
Identification Test: Whether the product can be identified without using the mark.
The Essentiality of the Use Test: Whether the use of the mark is essential and reasonably required.
The Affiliation Test: The use of the mark doesn’t imply that the use is authorized or approved by the trademark owner.
Following the implementation of the three tests above and based on the fact that the new bottles were labeled with a disclaimer, Judge Avrahami has decided that the rebottling of Chanel’s perfume considered as True Use of the mark regarding the original product, therefore does not constitute trademark infringement.
In light of the Court’s findings regarding the actual use of the mark, Judge Avrahami ruled that Sent-Wish is entitled to resell the perfume by rebottling and to use Chanel’s mark to indicate the fact that the perfume sold in the bottles is the material ingredient and for identification purposes.
My estimation is that an appeal will certainly follow.
This does not constitute as a any legal opinion, and it is strongly recommended to consult with knowledgeable lawyers in this field.