After opening a hotel in Courchevel, the LMVH group announced its intention to open a new CHEVAL BLANC hotel in the Maldives in 2013.
But it does not stop there! Their hotel and restaurant website states the following:
MALDIVES After the Cheval Blanc hotel in Courchevel, the world number one in the luxury business, LMVH, is set to open a luxury complex with the same name at the beginning of 2013, on the Randheli archipelago to the north of Malé. The complex will host around forty villas of more than 100m2. The Sultanate of Oman, followed by the city of Aswan in Egypt, and finally the former Samaritaine building in Paris will each get their turn to display the beautiful name of Cheval Blanc in reference to its namesake wine in which LMVH holds a 50% share.
What does trademark law have to say about this?
Firstly, on the subject of value:
The value of a trademark depends on the financial flow it generates, as well as (and at times especially) on the potential that the trademark carries for a future buyer.
This ability to expand the trademark’s scope, can apply to
a geographical area (distributed in zones where the buyer has special relationships), or especially to inhabitual marketing domains.
One merely has to take the example of Nestlé’s ultra-fresh
la Laitière trademark which gained legitimacy in the ice-cream industry:
Or Mars candies which also invaded this industry:
The LVMH move not to limit its ultra-high-end CHATEAU CHEVAL BLANC wine trademark is therefore a logical one:
This is especially so since the average annual wine production is low, yielding no more than 150,000 bottles.
The hotel industry thus provides an interesting opportunity to diversify business (and thereby increase sales, which in turn increases value) by taking advantage of this notoriety. LVMH is not limiting itself to hotel services since their brand-stretching also covers spa services, restaurants and various related products (such as skis).
But does this diversification come without risk?
It has been more than 20 years since the Evin Law of 10 January 1991 on the fight against tobacco and alcohol use was passed. However its provisions are still relevant today, especially Articles L 3323-2 and 3323-3, which prohibit all direct and indirect advertising in favour of alcohol products.
It would have been clear to everyone that:
- The CHATEAU CHEVAL BLANC and CHEVAL BLANC trademarks are different
- The owners are different, one belonging to the Civil Society of Cheval Blanc and the other belonging to METROPOLE 1850 (which granted a trademark licence to the company using the Cheval Blanc hotel)
- The contents of each website made no reference to each other unless one searches deep into the site, as evidenced by the following excerpt:
The 1947 by Yannick Alléno
THIS EXCEPTIONAL RESTAURANT, AWARDED TWO STARS BY THE « MICHELIN RESTAURANT AND HOTEL GUIDE », TAKES ITS NAME FROM THE MOST PRESTIGIOUS AND SOUGHT-AFTER CHÂTEAU CHEVAL BLANC VINTAGE. LOCATED ADJACENT TO THE SKI SLOPE, THE 1947 CREATES A UNIQUE CULINARY SETTING, WITH ITS LEATHER-UPHOLSTERED DESIGN BY SYBILLE DE MARGERIE
All these firewalls were undoubtedly set up in anticipation of the grievance associated with advertising in favour of an alcohol product, and prove on the other hand, that the risk of contagion, ultimately resulting in ban on trademark use, is very real.
We cannot overemphasize the need for owners of famous trademarks and wine trademarks to seek informed advice should they wish to head in a similar direction.