PARFUMS GIVENCHY WINS A PAIR AGAINST GRAY MARKET

Byline: Julie L. Belcove

NEW YORK — Parfums Givenchy has won two more rounds in its legal battle to stamp out the gray market — but one of its opponents, Drug Emporium, is appealing to the Supreme Court.
The Ninth Circuit Court of Appeals in San Francisco has refused Drug Emporium’s bid for an expanded review of the case Parfums Givenchy v. Drug Emporium.
A three-judge panel of the Ninth Circuit originally sided with Givenchy in October, upholding a lower court ruling that Drug Emporium had infringed on Givenchy’s copyright of the Amarige packaging by selling the women’s fragrance without Givenchy’s authorization.
Drug Emporium then asked for an en banc hearing, in which at least 10 appellate judges would review the case. Courts rarely grant such petitions, and the Ninth Circuit denied the request Jan. 12.
“It’s the new law of the land,” said Robert Brady, president of Parfums Givenchy, noting that the Ninth Circuit panel was unanimous.
In another suit brought by Givenchy, Brady said several major mass merchants — including Kmart, Wal-Mart and Sears, Roebuck — have settled out of court. Brady said all but a few of the 12 stores Givenchy sued in November agreed to stop selling Amarige and Ysatis, another Givenchy scent with copyrighted packaging.
Executives at Kmart and Sears could not be reached for comment. A spokesman for Wal-Mart said he had no knowledge of a settlement.
The stores that refused to settle, the most prominent of which is Perfumania, have now been served with injunctions prohibiting the sale of the fragrances, according to Brady.
Givenchy has used the Drug Emporium lawsuit as a test case for its novel copyright strategy. Previously, fragrance manufacturers had trademarked their products, but copyright law offers more protection to companies seeking to control distribution of foreign-manufactured goods.
COPIAT, the antidiversion coalition of manufacturers, has estimated that the gray market accounts for as much as 25 percent of the $4 billion prestige fragrance industry, or $1 billion annually.
Other fragrance companies, including Boucheron and Lancaster, have also begun to patent and copyright their packaging.
John Borgo, a lawyer for Drug Emporium, said the Powell, Ohio-based drugstore chain is not accepting defeat. “We’re filing our petition today in the Supreme Court,” Borgo said Thursday.
Givenchy then has 30 days to file a response, and Borgo said he expects the High Court to decide before the term ends in June whether to hear the case. Although he acknowledged that chances for a Supreme Court review are slim, Borgo said a fact in Drug Emporium’s favor is that the Ninth Circuit and the Third Circuit have issued conflicting decisions in similar cases.
But Brady said the cases to which Borgo referred differ in the important point of where the goods were manufactured. In the Third Circuit case, the goods were made in the U.S., but Givenchy’s arguments hinge on the part of copyright law that grants protection against unauthorized imports, such as its own French-made scents.

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