Ireland: IP Update: Dunnes Stores Simply Bettered By Aldi In Comparative Advertising Injunction Case

Last Updated: 29 September 2015
Article by Gerard Kelly

On 9 June 2015, Mr Justice Cregan of the Irish Commercial Court held that Dunnes Stores ("Dunnes"), one of Ireland's largest supermarket retailers, had infringed the Irish comparative advertising regulations by its use of a comparative advertising campaign in 2013. The advertising campaign in question compared prices of certain grocery products with those of Aldi. 

A more recent decision in the case in July dealt with the issue of whether an injunction should be granted in circumstances where the acts complained of had finished, i.e. the advertising campaign dated back to 2013.

The business impact of the decision is as follows: 

  • Comparative advertising campaigns are not themselves prohibited; however, a high level of care should be taken on the part of traders to ensure that any advertisements do not infringe both the comparative advertising regulations and also any relevant trade mark rights;
  • Trade mark owners can be confident in their ability to obtain an injunction on foot of trade mark infringement under the Trade Mark Regulation even where the infringement itself may appear to have ceased, provided no "special reasons" exist to prevent the Court from granting such an injunction; and
  • This judgment is a reminder to parties that conduct, even at a pre-litigation stage, is always open to scrutiny and the Court has a discretion to take any conduct it considers relevant into account when deciding a particular case or, in this case, the granting of an injunction.

In the original Commercial Court in June, Mr Justice Cregan held that Dunnes had infringed Aldi's trade marks in the course of its price comparison campaign as the trade marks were used "otherwise than in accordance with honest practices". Dunnes is currently appealing this decision which found that Dunnes gave false information or omitted or concealed material information in relation to Aldi's products.  This included, for example, the higher tomato content of a tomato ketchup comparison and the additional ingredients in the dog food stocked by Aldi. Furthermore, Dunnes failed to state that certain Aldi products displayed the Bord Bia approved logo which is a quality assurance mark and an indicator of provenance in Ireland. Aldi subsequently lodged an application for an injunction against Dunnes preventing further infringement of its trade marks.

This injunction application was determined by Mr Justice Cregan on 21 July 2015. Aldi, in seeking the injunction, relied on Article 102 (1) of the Community Trade Mark Regulation which states:

"Where a Community trade mark court finds that the defendant has infringed or threatened to infringe a Community trade mark, it shall, unless there are special reasons for not doing so, issue an order preventing the defendant from proceeding with the acts which infringed or would infringe the Community trade mark. It shall also take such measures in accordance with its national law as are aimed at ensuring that this prohibition is complied with."

The Court held that the wording of Article 102(1) placed an obligation on Irish Courts to grant an injunction unless special reasons existed for not doing so. No special reasons within the meaning of the Article were found so as to prevent the granting of an injunction in this case. Dunnes argued that the granting of such an injunction was unnecessary and inappropriate given that the campaign in question had ceased in August 2013. However, the Court held that this was not a ground on which the Court should refuse an injunction restraining the defendant from infringing the marks. Furthermore, the fact that Dunnes Stores intended to engage in comparative advertising in the future meant that there was a risk of further infringement.

The Court also held that Aldi was entitled to an injunction under the relevant Irish national legislation, namely section 18(2) of the Trade Marks Act 1996, which states:

"In an action for infringement of a registered trade mark all such relief by way of damages, injunctions, accounts or otherwise shall be available to the proprietor as is available in respect of the infringement of any other property right"

Infringements

Mr Justice Cregan placed particular emphasis on the fact that the infringements of Aldi's trade marks were widespread and part of a calculated and nationwide campaign. In addition to the Community Trade Mark Regulation and the Trade Marks Act 1996, the Court held that Aldi was also entitled to an injunction under the provisions of section 72 of the Consumer Protection Act 2007, which transposes the EU unfair commercial practices directive into Irish law. Having examined the relevant legislative provisions, the Court then turned to the question of whether the Court should, in the exercise of its discretion, grant an injunction in this case.

In deciding to grant the injunction sought by Aldi, Mr Justice Cregan expressed concern that "were the court not to grant such an injunction, Dunnes might, whether accidentally or carelessly, launch comparative advertising campaigns in the future which would engage in unlawful comparative advertising and thereby infringe the plaintiffs' trade marks. An injunction would ensure that this would not be done."

Mr Justice Cregan also made particular reference to the "cavalier attitude" Dunnes had displayed towards Aldi's complaints. The failure on the part of Dunnes to reply to basic correspondence was considered to go "beyond mere discourtesy". The judge stated that this conduct did not inspire him "with any confidence that Dunnes Stores would take sufficient care to ensure that such infringement would not happen again".

Comment

This decision is an important reminder that conduct before and during litigation, even in correspondence following a cease and desist letter, can be relied upon by rightsholders in the enforcement of their IP rights. Courts can infer from such conduct whether there is a risk of future infringement, whether the matter is taken seriously enough or whether enough care will be taken to prevent such infringements arising in the future. This will provide food for thought for those responding to cease and desist letters in the future. Of course, such conduct becomes a moot point if Dunnes succeeds in due course in overturning the infringement findings on appeal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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