First Place for N°5

Chanel takes victory in trade mark copy-cat dispute in China. Chanel sued Yiwu Story of Love Cosmetics (“Yiwu”) for selling a perfume under the name N°9, arguing it to be too similar to the Chanel perfume N°5.

Chanel issued the claim in the Intermediate People’s Court of Shaanxi Province (“the Court”) back in 2019 on the grounds Yiwu was in breach of Anti-Unfair Competition Law (“the Law”) of China for replicating and selling Chanel’s N°5 perfume under the name N°9. Chanel cited Article six of the Law, which prohibits parties offering up products which are confusingly similar to others.

In 2020, the Court ruled in Chanel’s favour, giving rise to the fact consumers would mistakenly associate the N°9 product with Chanel. Yiwu was ordered to pay 600,000 Chinese Yuan (the equivalent to around £69,981.00) to Chanel in damages and expenses and also cease sale of the infringing product.

Yiwu appealed the decision in 2021 on the grounds that “neither Chanel’s N°5 perfume trade dress nor its labelling are distinctive enough to identify the source of the product.” Essentially, consumers associate “N°5” and “CHANEL” with Chanel, not the bottle. Yiwu also argued the Chanel product retails for 61 times the price of the N°9 product.

The appeal was dismissed by the Shaanxi Provincial Higher People’s Court. The court did acknowledge the labelling of Chanel’s perfume was a common perfume packaging decoration and the position of the text within the label was also common. But ultimately, the court ruled in favour of Chanel. In delivering judgement, the court concluded hazardous behaviour which disrupts the market or causes damage to the image of large brands should be regulated.

The ruling provides some meaningful takeaways for large brands seeking to enforce their rights, in particular in the Chinese market and as a stark warning to those seeking to copy them.

If you have any questions on the above, please do not hesitate to contact the team at McDaniels Law on 0191 281 4000 or legal@mcdanielslaw.com.