UK: Comparative Advertising

Last Updated: 29 April 2008
Article by Georgie Collins

Open season?

Recent decisions in the UK and European courts have restricted the use of trade mark law to resolve comparative advertising disputes, making it easier for an advertiser to use a competitor's trade mark in its own adverts. Such disputes should now be dealt with under the Misleading and Comparative Advertising Directive, but brand owners believe this provides them with a far less rigorous mechanism of enforcement and redress. So, what has happened to bump the challenging legal field of comparative advertising out of the arena of trade mark law? Georgie Collins takes a closer look at the two cases in question.

02 and Hutchinson 3G (2008)

Hutchinson 3G was a late entrant to the mobile phone market. In asserting itself in the market it launched an advertising campaign which compared its cheaper pre-pay service to those of its rivals 02, T-Mobile, Vodafone and Orange. 02 owns a number of trade marks but of relevance in this case was its registrations for a range of 'bubble' images.

The 3G ad in question used the word "02" together with moving pictures of bubbles. Whilst 02 did not claim that 3G's advert was misleading, it sued for trade mark infringement in the UK claiming that the images were confusingly similar to its own bubble image trade marks. 3G defended saying that its advertisement complied with the Misleading and Comparative Advertising Directive ("the Directive") which sets out the criteria that comparative adverts must meet to be permitted.

The Directive requires that the advert:

1. must not be misleading;

2. must objectively compare goods or services meeting the same needs or intended for the same purpose;

3. must objectively compare features of the goods including prices;

4. must not discredit or denigrate the trade marks or other activities or services of the competitor;

5. where it relates to products with a designation of origin, relates only to products with the same designation;

6. must not take unfair advantage of the competitors trade mark or its reputation;

7. must not present the goods or services as imitations or replicas of those bearing the trade mark; and

8. must not create confusion between the advertiser and trade mark owner.

3G claimed its advertisement fell squarely within the above criteria. The High Court agreed and dismissed O2's action. In fact the court held that, whilst 3G had infringed 02's marks by virtue of its use of bubbles similar to 02's registered bubbles, it nonetheless did indeed have a defence under the Directive.

O2 then took its case to the Court of Appeal, claiming that under the construction of the Directive 3G had to show that it was "necessary" for it to use 02's trade marks but that there was no need to use bubbles because 3G could simply have referred to O2 by name.

3G counter-argued that "necessity" was not required under the Directive. Furthermore it said that, even if the court considered that the directive had not been complied with, 3G also had a defence pursuant to section 10(6), Trade Marks Act 1994 because it had used 02's trade marks in a purely descriptive manner.

In October 2007 the Court of Appeal commented that the defence afforded by section 10(6) was a "home-grown" UK provision which did not reflect the wording of the Trade Marks Directive (from which the UK Trade Marks Act is derived) and so should be repealed as an unnecessary distraction, to and complication of, UK law.

The Court of Appeal then referred three questions to the European Court of Justice (the ultimate forum in which EU member states questions of trade mark interpretation are determined) and the Advocate General delivered an interim decision on 31 January 2008. (Whilst the Advocate General's opinion is only a precursor to the ECJ's own decision, in the majority of cases the ECJ does follow it.)

The questions referred by the Court of Appeal were as follows.

Question 1: Does the use of registered trade marks in comparative advertising cases fall foul of the trade mark infringement provisions dealing with the use of those marks, particularly if the use of the trade mark in the advertisement does not cause confusion or jeopardise the function of the trade mark?

The Advocate General stated that comparative advertising had been harmonised in Europe by the misleading and comparative advertising directive and, consequently, comparative adverts should not be considered under rules relating to trade mark infringement.

Question 2: Where a trader uses the registered trade mark of a competitor in a comparative advertisement must that use be necessary if it is to comply with the provisions which permit comparative advertising? (See points 1-8 above.)

The Advocate General said that use of the trade mark in an advertisement did not have to be "necessary" as this was not a requirement specified by the legislation or by previous case law. In fact, if a requirement of necessity were introduced, this would run counter to the spirit of the comparative advertising directive which sought to encourage comparative advertising.

Question 3: If there is a requirement of necessity, does this preclude any use of a sign which is not identical to the registered trade mark but is closely similar to it?

In view of the Advocate General's response to question two this question no longer required an answer.

Boehringer v Vetplus (2007)

The Court of Appeal's decision in Boehringer v Vetplus in June 2007 added a twist for any brand owner seeking an injunction to restrain publication of a comparative advertisement.

Boehringer and Vetplus both produce and market nutritional supplements for dogs. Boehringer sought an interim injunction to prevent Vetplus from publishing an advert comparing their respective canine comestibles. The Vetplus advert claimed that Boehringer's product contained one nutrient in lower levels than was claimed on the product labelling. Boehringer claimed in turn that Vetplus' tests for determining the percentage levels of nutrients were unreliable and that it would suffer detriment to its brand if the advert was allowed to be published. The High Court initially granted an injunction restraining publication of the advert pending trial, but when the parties returned to court for the full trial of the case the court refused to maintain the injunction.

Boehringer then appealed to the Court of Appeal which also dismissed its claim.

The Vetplus defence to Boehringer's trade mark claim was that it honestly and reasonably believed that its statements about the results of its nutrient content tests were true even though they subsequently turned out to be incorrect. The Court of Appeal held that a party could not avail itself of the defence of acting in accordance with honest practices if it made a statement it thought to be true which later turned out to be false but then refused to compensate the person who had suffered damage as a result of that statement.

Notwithstanding the fact that the Vetplus defence failed, Boehringer still failed in its application for an injunction. The Court of Appeal took the opportunity to review the law and criteria relating to the granting of injunctions in comparative advertising cases, having particular regard to the impact of the Human Rights Act which seeks to protect freedom of expression.

Section 12(3) of the Human Rights Act states that no interim relief is to be granted so as to prevent publication before trial unless the court is satisfied that the applicant seeking the relief is likely to establish that the publication should not be allowed. The Court of Appeal reviewed the usual test applied to interim injunction applications, known as the American Cyanamid rules, which require that the applicant seeking an interim injunction demonstrate that there is a serious issue to be tried.

However, in this case Lord Justice Jacob said that since comparative advertisements involve freedom of expression, the correct test was whether the applicant was more likely than not to succeed at trial. On this basis the Boehringer appeal against the court's refusal to grant it an injunction was refused.

What these decisions mean for brand owners

If the ECJ follows the Advocate General's decision in the O2 case, brand owners will not be able to use trade mark legislation either to prevent a comparative advertisement (through an injunction) or to sue in respect of its use. There is no provision under the Directive for a trade mark owner to bring legal proceedings in its own name: this means that the brand owner loses control over the misuse of its trade mark(s) and must instead rely on the Advertising Standards Authority and Office of Fair Trading (the enforcing bodies under the directive) to take action.

The impact of the 02 and Boehringer cases will be felt most by large brand owners where competition is high and products and services are price sensitive.

If the ECJ adopts the Advocate General's opinion then the law relating to comparative advertising will effectively have been rendered toothless. However, it will be interesting to see the decision of the ECJ and any gloss it adds to the judicial comments already made. The ECJ's role is only to answer the questions referred to it; once it has delivered its judgment the 02 case will be remitted back to the UK courts for them to interpret the ECJ decision and apply it to the facts of the case.

As the Boehringer case highlights, advertisers need to take care with regard to the claims they make; if it is found that the claims are not in accordance with honest practices substantial damages may be payable.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.