The Dutch Supreme Court ruled last week that a fragrance by Dutch-based Kecofa was too similar to the Lancome fragrance Tresor, using evidence from its own laboratories that suggested 23 of the 26 most principal chemicals in the fragrance formulation were the same.
The big difference is in the price. Whereas the L'Oreal fragrance trades for around €50, the Kecofa fragrance trades for approximately €5 - a significant price difference considering how similar the two products are.
According to a report in the London-based Times newspaper, L'Oreal won the court case because it successfully argued that its Tresor fragrance should, in effect, be copyrighted as a work of art.
In Europe Tresor is already copyrighted under terms that exist for all manufactured goods, but as Female Treasure is not an exact reproduction, L'Oreal was unable to take Kecofa to court on this basis.
Instead, the L'Oreal law team chose to give the Tresor perfume a status as a work of art, in order to take advantage of more favourable laws governing this area.
L'Oreal's gamble paid off for the company, giving it a landmark victory that might determine future cases of counterfeiting.
The luxury fragrance market is one of the leading targets for counterfeiters worldwide. In Europe alone fake goods are said to cost the industry millions in lost revenue each year, with 1.1 million fake cosmetic and fragrances being intercepted by EU authorities in 2003.
Because of this leading cosmetic and fragrance companies, particularly those working in the premium end of the market, are pro-active in protecting their copyrights by taking frequent court actions.
But Kecofa believes that the ruling has gone too far and is preparing to put up a fight.
A company spokesperson told The Times that it considered the ruling to be 'ridiculous', adding its belief that L'Oreal's primary concerns was that it was undercutting the price of Tresor by such a considerable margin.
Kecofa says that it does not intend to accept the court ruling and is now considering taking the case to the European Court of Justice.