Perfume boss says Hong Kong laws 'too lax' for it to sue ex-distributor in brand row

Lampe Berger boss says Hong Kong's 'lax' rules mean company is unable to sue ex-distributor it claims used trademark to create a retail empire

PUBLISHED : Monday, 30 September, 2013, 12:00am
UPDATED : Monday, 30 September, 2013, 10:08pm

A French fragrance company that alleges a former distributor used its brand name to build an Asian retail empire says Hong Kong law is too lax for it to sue.

Lampe Berger Paris said it had been selling its products to its sole distributor in the region, Digital Crown Holdings HK (DCHL), for a decade.

But the century-old firm discovered last year that annual sales in Asia had fallen from millions of euros to nearly nothing.

Lampe Berger's Hong Kong branch director, John Vullierme, questioned how DCHL would be able to provide Lampe Berger products to its members when it had "almost ordered nothing" from Paris since mid-2011.

He told the South China Morning Post he believed DCHL might have sold products bearing a close resemblance to those of his own company using highly similar names, such as "Lamp Berger France".

He said the company was suing DCHL in France for infringement of intellectual property rights after it continued to use Lampe Berger trademarks and logos in Asia. But he said the company was unable to take legal action in Hong Kong.

This was despite having sent a letter to the Customs and Excise Department last year to demand a crackdown on what he said was DCHL's use of the brand to sell or promote other products.

He said: "The relevant law in Hong Kong is very lax and very liberal and our legal advisers have told me not to pursue a lawsuit. I wish there was an easier legal way to resolve the situation."

Vullierme also said DCHL had sold Lampe Berger products through a multi-level marketing scheme, which is banned in many places including the European Union, Australia and the mainland.

But such a scheme is allowed in Hong Kong as long as it involves the sale of a legitimate product or service.

He added that while DCHL promoted Lampe Berger products on the basis they had "magical effects" on health and beauty, his company made no such claims, other than that its products removed odour.

He told the Post that such marketing tactics had a negative impact on the brand. He said: "DCHL has wrongly portrayed itself as, or called itself, Lampe Berger over the years. We have suffered a lot from it."

Vullierme said the Paris headquarters started to feel suspicious about DCHL in mid-2011 and ceased supplying DCHL on December 30, 2011.

"During the time, orders from the Asia market, sold solely through DCHL, had dropped dramatically from €12 million (HK$126 million) each year to almost nothing," he said.

DCHL's customer manager has failed to reply to repeated inquiries from the Post concerning the allegations since September 13. It is understood the chain had noted there were many allegations regarding its controversial marketing scheme.

It was now pursuing legal advice to reform its operation "to avoid further confusion and misunderstanding".

In a previous comment, the company said its multi-level marketing scheme - under which sellers are credited not only for their own sales, but also for those of sellers they recruit - was legal in Hong Kong.

It is understood that the Customs and Excise Department has no evidence to enable it to take action against DCHL, but is monitoring the situation closely. A customs source said the department handled cases involving legal disputes with extra caution.

A spokeswoman said it would follow up complaints and take action where appropriate.

The DCHL website was yesterday still displaying the Lampe Berger Paris logo and promoting Lampe Berger fragrance oil as one of its key brands.

It said the product could "improve the quality of indoor air, discompose second-hand smoke and kill bugs".

Lampe Berger logos were also seen in several of DCHL's sales centres in Causeway Bay.