Honest comparative advertising does not constitute trade mark infringement, rules ECJ

The ECJ has ruled that trade mark owners should not be able to sue for trade mark infringement in relation to honest comparative advertisements.

The decision comes following a request by the Court of Appeal for the ECJ to rule on whether Hutchison 3G’s use of O2’s “bubble imagery” in a television advert they ran claiming their pre-pay service was cheaper than O2’s, constituted trade mark infringement as claimed by O2.

Hutchinson 3G argued that such use could not constitute trade mark infringement as there was no suggestion in the advert that the mark referred to its own goods but instead the mark was used to contrast its goods to those marketed by a competitor.

The ECJ’s decision is that where a competitor uses a trade mark in a comparative advertisement the applicable law should ordinarily be the Comparative Advertising Directive (“CAD”), as implemented in each Member State, rather than the Trade Marks Directive. They said that as long as the advert does not create confusion, or a likelihood of confusion, in the mind of the public then it will not breach trade mark legislation. Where confusion is caused, the trade mark owner will have a choice of using trade mark legislation or seeking enforcement under the CAD.

The CAD deals with trade mark issues, and has some safeguards in place. It provides that comparative advertisements must not:

Create confusion between the advertiser and the competitor;
Discredit or denigrate the competitor’s trade marks; or
Take unfair advantage of the reputation of a trade mark.

Mark Blunden, a leading commercial lawyer at Reading firm Boyes Turner said "The Court of Appeal must now decide the case but following the ECJ’s ruling, it seems unlikely that a trade mark owner will be able to sue for trade mark infringement in relation to a comparative advertisement except where it is misleading. Instead, the only course of action available to the owner will be to complain to the Office of Fair Trading, the Advertising Standards Agency or the Trading Standards Office. This effectively leaves trade mark owners at the mercy of public bodies to protect their brands in comparative advertising. These public bodies have limited resources and funding and will prioritise those complaints with the most public interest.

This decision could be seen as the green light for the use of third party trade marks in comparative advertising by competitors who feel safer in the knowledge that trade mark owners cannot sue for damages but instead are reliant on public bodies taking up their cause."

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accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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