The European Court of Justice (ECJ) has today ruled on the long-running comparative advertising dispute between mobile operators O2 and Hutchison 3G. O2 claimed infringement of its bubble trademarks based on 3's use of bubble imagery in a TV advertisement, which compared its own pay-as-you-go service with O2’s. The case involves fundamental issues of trademark and advertising law, requiring a "EU-wide answer".
The ECJ’s decision will be of great importance and interest to advertisers across Europe as it is hoped to provide a definitive legal position on Comparative Advertising.
Lewis Silkin’s leading advertising and intellectual property practice has acted for 3 throughout the case. The team was led by Head of Department, Giles Crown.
Commenting on the Judgment Giles said:
“We are delighted with the judgment. This is great news for Hutchison 3G. It’s been a hard fought 4 year battle with O2.
The judgment confirms 3’s right to engage in robust but fair advertising. This is also great news for other advertisers engaged in comparative advertising. They are entitled to do so provided they don’t cause any consumer confusion. However if they do, they could still be sued for trademark infringement. In this way the judgment balances the interests of the comparative advertisers and the rival brand owners”
Giles Crown will be available for comment on the Judgment today.
Background
3 ran a hard hitting comparative advertising campaign across various media in August 2004. 3 compared its "Pay as you go" tariff prices against each of the other existing mobile operators, and it highlighted that it was substantially cheaper than its competitors.
O2 objected to the television commercial, claiming that the price claim was misleading, and sought to obtain an injunction in the High Court, on very short notice, preventing 3 from broadcasting the advert and allowing consumers to see it.
The High Court refused to grant an injunction and found that the 'take home' message of the advertisement, that 3's pay as you go prices were cheaper than O2 for the relevant section of the market to which 3 directed its advertising, appeared to be true. Following the injunction hearing, O2 dropped its complaint in relation to the price claim, later formally conceding that the price claim was fair and accurate.
O2 then limited its complaint only to 3's use of "bubble imagery", which appeared in the television commercial in order to make clear to consumers that a comparison was being made between 3 and O2, along with oral and on-screen references to O2. O2 claimed that the use of the bubble imagery in the television commercial constituted trademark infringement of O2's various registrations for blue and white bubbles. They claimed that the black and white bubble imagery used in the 3 advertisement confused consumers or took unfair advantage of O2's trade mark bubbles - in particular by discrediting or denigrating O2's bubbles.
The English High Court dismissed O2's complaints. It held that 3 had complied with all the requirements for lawful comparative advertising, in particular that the 3 television commercial was not confusing and did not discredit, denigrate or otherwise take unfair advantage of O2's bubble trade marks. The English Court of Appeal indicated that in their view, 3 should win. They emphasised that restrictions on comparative advertising should be interpreted in the way most favourable to the advertiser, because comparative advertising promotes competition and therefore benefits consumers.
However, the Court of Appeal felt that because the decision would have an impact on business and advertising across Europe, a few technical points of European law should be referred to the European Court of Justice for consideration.
The ECJ decision will clarify whether use of a competitor's trade mark in a comparative advertisement, solely in order to refer to the competitor's own goods and services, can ever fall within the scope of trade mark protection. It will also clarify the rules which comparative advertising must follow in order to comply with the Comparative Advertising Directive.
A positive result for 3 would mean that advertisers will be able to carry out comparative advertising in a more confident manner to the benefit of consumers across Europe. Provided that the advertisement complies with the conditions laid down in the Comparative Advertising Directive which are designed to make sure things are done in a honest manner, then the advertiser will be free to be a lot more creative on its comparative campaign.