The beauty and cosmetics industry is a crowded marketplace. According to an Oxford Economics report commissioned by the British Beauty Council, in 2018 the total value of UK spending on beauty products and services was £27.2 billion. In such a saturated industry, it can be challenging to stand out. Whilst most brands are embracing new ways of engaging with consumers through social media, influencer advertising and augmented and virtual reality, there are two constants that are the building blocks for long term success: quality products and a strong brand.
The events of the past year have created unforetold challenges for an industry which in 2018 contributed £28.4 billion to UK GDP and represented one in every 60 jobs in the UK. Like all consumer-driven sectors, the beauty industry is facing real hardship with shops and salons forced to close. But, there are some glimmers of hope: back in 2001 Leonard Lauder (Chairman emeritus of Estée Lauder) coined the term "lipstick index" to reflect increased sales of lipstick during times of economic uncertainty – an affordable indulgence when more expensive luxuries were out of reach. Because of COVID-19 – in particular, compulsory face masks and significantly reduced opportunities for socialising – there has instead been a big push towards "feel good" products such as skincare; with retailer John Lewis' sales of skincare, body and hair products up 234% in 2020 (according to the Guardian). According to Fabrizio Freda (Chief Executive Estée Lauder):"the Lipstick Index has been substituted by the Moisturiser Index. But the concept of the index is still there" (see here).
Having a unique brand, which tells a consistent story through marketing, packaging, product design and overall "get up", is a powerful way for beauty businesses to stand out from the crowd in circumstances where they are restricted to online and virtual retail channels.
Choosing and Protecting a Brand Name
The strongest brand names – those that are memorable to the consumer and likely to be registrable as trade marks – are those which are highly distinctive and memorable to the average consumer of the relevant products. Conversely, brands should avoid names with elements that are descriptive of the characteristics of the relevant product, or are otherwise descriptive or non-distinctive. There is of course a full spectrum in between. The best brand names are those that are only vaguely allusive of the relevant goods (e.g. Morphe or Illamasqua, said to be a combination of 'illusion' and 'masquerade'), or which are entirely unrelated to the relevant goods (such as Votary and Summer Fridays).
A striking recent example of a trade mark being refused on grounds of descriptiveness and non-distinctiveness concerns an EU trade mark application for FACEGYM. This premium brand sells tools and skincare products for facial "exercises" as well as classes and salon treatments. The trade mark application covered a wide range of goods and services and was granted protection for many of the applied for terms. However, registration was refused in relation to goods and services which appear to be core to the brand, namely "hand tools for use in beauty care; beauty implements" in class 8, a range of massage appliances in class 10, and a range of beauty treatment services in class 41. The proprietor had argued credibly that the combination of the words 'face' and 'gym' was unusual and fanciful, and only vaguely hinted at the relevant goods and services. However in its recent decision the EU General Court disagreed: it decided that the relevant public would perceive FACEGYM as a mere combination of the words 'face' and 'gym' (which they would understand as an abbreviation of 'gymnastics'). FACEGYM was therefore descriptive of goods and services related to facial exercises.
There are, however, a high number of beauty brands with arguably descriptive components to their brand name, many of which have been successfully registered. For example, a search for live trade marks in the UK and EU in class 3 (the class for personal care and cosmetics products) containing "bio" brings up 9,426 results across the UK and EU. Whilst it is undoubtedly possible to create a unique and successful brand by using such descriptive/distinctive terms, this can entail challenges when protecting a brand against third parties. The owner of an EU trade mark for NATURALIUM faced these difficulties when it filed an opposition against a later application for NATURANOVE. Although it was initially successful in opposing the NATURANOVE application, those decisions were overturned by the General Court in favour of the applicant for NATURANOVE. The General Court concluded in its decision that the 'NATURA' element in the mark would be understood by the relevant public as suggesting the natural origin of the goods, and that the earlier mark had weak distinctiveness. On this basis it concluded that there was no likelihood of confusion and the opposition failed. The Court noted: "although a company is free to choose a trade mark with a low degree of distinctiveness and use it on the market, it must accept, however in doing so, that competitors are equally entitled to use trade marks with similar or identical descriptive components".
A longstanding trend in the beauty industry is for a brand to be named after a key individual associated with the brand, for example Laura Mercier and Kate Somerville. Personal names can be excellent brands, particularly where the name is unusual and therefore distinctive. However, the individual should consider the long-term implications of allowing their personal name to become entwined with their business. If the individual and the business choose to separate later down the line, there can be complications – and the individual (or even their relatives) could face restrictions on the use of their name, as has been seen with brands such as Jo Malone and Bobbi Brown.
The principle that imitation is the highest – if most unwanted – form of flattery is as applicable to the beauty industry as it is to other retail sectors. A search for "beauty dupes" brings up a large number of articles – sometimes from reputable sources – on the best affordable dupes of premium products. The question of what constitutes a dupe is key: a less expensive variant of a product, sold under clearly different branding and packaging, might be considered a "dupe" but is probably not an IP infringement, even if the underlying concept of the product has been copied (unless the rights in the underlying formula are protected and have been infringed). This can be frustrating for brands who feel that their products are being emulated.
In many cases, dupes will emulate well-known brands so that the source of inspiration is clear, but are often careful to design around registered trade marks and design rights. Claims based on the "get up" or "look and feel" of a product would usually be based on a claim of passing off, where the infringer misrepresents to the public that its goods are associated with those of the claimant. However a necessary element to a successful passing off claim is that a substantial part of the relevant public would believe that the defendant's goods share common origin with those of the claimant or that there is some connection between the two. The difficulty with applying this to the beauty sector is that there can sometimes be a significant price differential between the 'premium' and the 'dupe' product. Thus in some cases the purchasing consumer may be aware that the product in question does not share common origin with the premium brand: they just don't care. For this reason, a passing off action brought by Moroccan Oil against Aldi did not succeed. The judge held "I think that Aldi intended to make the public think of Moroccanoil when they saw Miracle Oil in its packaging and I think Aldi succeeded. But purchases of Miracle Oil have not been and are not likely to be made with any relevant false assumption in the mind of the purchasers".
For certain types of copying, it may be possible for other IP rights to bridge this gap. In 2019, the proprietor of rights in the Charlotte Tilbury brand was successful in a copyright infringement claim against Aldi, concerning a bronzer and highlighter palette (see coverage of this case in our IP Annual Review 2020). The claimant successfully argued that the palette lid and the design embossed on the powder itself both qualified as artistic copyright works and had been infringed. Interestingly, Aldi had tried to argue that the artistic work embossed on the powder did not qualify for copyright protection, because it could be rubbed away by the user and was not 'fixed'. The judge rejected this argument (drawing a parallel with copyright in a bespoke wedding cake). It would be interesting to see whether this principle could now be extended to creative make-up artistry on the face (which has historically not been deemed to qualify for protection as an artistic work: see Merchandising Corporation v Harpbond  FSR 32).
Of course, we would always recommend filing for registered design protection for key designs which are consistently used across the brand (such as packaging and bottle/tube designs etc.).