What is the difference between a $15 Revlon foundation and a $100 Estee Lauder foundation? And why do consumers pay so much more for the same product? The use of similar packaging by competing brands brings up questions of intellectual property (IP) infringement and consumer protection. However, there is a fine line between innocently following market trends and infringing IP rights. How similar is too similar? In this article, we set out the legal implications of makeup duplicates.
Why Do Companies Create Makeup Duplicates?
While quality differentiates high-end and drugstore makeup products, high-end makeup brands rely on their reputation. They use branding to establish themselves as luxurious and encourage consumers to pay higher prices for their products.
However, drugstore makeup companies copy market trends and roll out similar products, otherwise known as duplicates, often using similar packaging. They are often piggy-backing off the commercial success of a more expensive product or idea.
IP Implications of Makeup Duplicates
Companies that produce makeup duplicates have to be careful not to infringe the trade mark rights of higher end brands. A company uses trade marks to distinguish its products from those of its competitors. They can include:
- fonts; and
Higher-end makeup brands use trade marks extensively to protect their products. For example, Estee Lauder has 165 registered trade marks in Australia. Using marks that are substantially identical or deceptively similar to registered trade marks may be a trade mark infringement. For example, ‘Enlighten’ is an Estee Lauder trade mark in relation to perfumes. If another company released a perfume called ‘Enlighten’ or used the same font as Estee Lauder’s in its packaging, it might be infringing Estee Lauder’s rights.
Brands with particularly distinctive packaging may register that packaging as a design, giving them exclusive rights to that aesthetic. To successfully register the design of a product’s packaging, it must be new and distinctive. Makeup duplicates that use packaging that is substantially similar to registered designs will be in breach of those IP rights.
The Tort of Passing Off
Even if the makeup duplicate is not in breach of IP rights, a cause of action in the tort of passing off may exist. Passing off is a legal cause of action used when a business suggests there is a connection between their products and a different brand where there is not one.
This tort operates to protect the goodwill of established companies by preventing others from unfairly benefitting from their reputation. If the packaging of a makeup duplicate is too similar to a high-end product, it may cause consumers to think it belongs to a different brand. A brand must have sufficient goodwill to establish a cause of action in the tort of passing off, and the infringement must cause the brand damage.
Goodwill refers to the brand’s reputation. The brand must be sufficiently well-known to cause consumers to think the duplicates belong to its range. Goodwill is readily established for well-known makeup brands such as Estee Lauder.
To be liable for passing off, the makeup duplicate must also cause the original brand damage. This is likely to be in the form of damage to the brand’s reputation or loss of potential revenue.
Misleading and Deceptive Conduct
The Australian Consumer Law prohibits misleading and deceptive portrayals of goods and services. The mere fact that a duplicate uses similar packaging to higher-end makeup brands is not enough to establish misleading and deceptive conduct. However, if the extent of the similarities would cause the general public to be misled as to the quality or brand of the product, it may be misleading and deceptive conduct.
The court will compare the products side by side and consider the similarities and differences in deciding whether a reasonable consumer is likely to be misled.
Drugstore makeup brands often copy market trends, releasing similar products to high-end brands and using similar packaging. These makeup duplicates raise concerns and questions about IP rights and consumer protection laws.
Makeup duplicates that use other companies’ registered designs or trade marks infringe the IP rights of those brands. Accordingly, if the makeup duplicate is too similar to the high-end brand’s product, and likely to deceive the general public, an action in the tort of passing off or misleading and deceptive conduct may be established. If you have questions, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.
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