European law report - Comparative advertising
It is a common practice nowadays for businesses to advertise their services or goods by comparing their prices with those of competitors in order to show the higher prices charged by competitors for the same goods or services. In doing so they...
It is a common practice nowadays for businesses to advertise their services or goods by comparing their prices with those of competitors in order to show the higher prices charged by competitors for the same goods or services. In doing so they necessarily use the trademark of their competitors. Under normal circumstances the use of someone else's trademark would be regarded as illegal.
Recently, the European Court of Justice (ECJ) considered this matter in the context of comparative advertising in a judgment delivered after a preliminary reference was made by the UK Court.
The case at issue concerned O2 Holdings Limited (O2), a UK mobile provider that brought an action against its competitor, Hutchinson 3G Limited (H3G), in relation to H3G's television advertisement which compared its mobile phone service to O2's service. The advertisement referred to O2 and featured images of bubbles. To advertise its mobile telephone services, O2 used bubble images and is the proprietor of two British national trademarks which consist of a static picture of bubbles.
Faced with these facts, the UK Court of Appeal referred the matter to the ECJ in order to obtain guidance on how to assess the legality of the use of a sign in the course of trade purely for the purpose of comparing the merits of one's goods or services with those of the trademark owner.
The court explained that there is a clear distinction between the trade mark directive and the directive on comparative advertising. While the use, in a comparative advertisement, of a sign identical with, or similar to, a mark of a competitor for the purposes of identifying the latter's goods and services may be prevented under the trade mark directive, it could be perfectly legal under the directive on comparative advertising. In fact a trademark owner cannot prevent the use, by a third party, of a sign identical with, or similar to, his mark, in a comparative advertisement.
However, the use of a trademark owned by a third party is allowed only if all the conditions of comparative advertising are met with; the advert should not be misleading. Neither can it create confusion in the market place between the advertiser and a competitor or between trade marks, nor should it discredit or denigrate a trade mark. Lastly it must not take unfair advantage of a trademark. If, for instance, there is a likelihood of confusion between the advertiser and a competitor or between the advertiser's trademarks, goods or services and those of a competitor, the advertisement would not be allowed and the proprietor of the mark is entitled to prevent the use of a sign identical with, or similar to, his mark.
In this particular case, the court found that the use by H3G of bubble images similar to the trade marks did not give rise to a likelihood of confusion on the part of consumers. The advertisement, as a whole, was not misleading and, in particular, did not suggest that there was any form of commercial link between O2 and H3G. Therefore O2 could not prevent H3G from using this method of advertising to win more customers for its business.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.
jgrech.demarcoassociates.com
Recently, the European Court of Justice (ECJ) considered this matter in the context of comparative advertising in a judgment delivered after a preliminary reference was made by the UK Court.
The case at issue concerned O2 Holdings Limited (O2), a UK mobile provider that brought an action against its competitor, Hutchinson 3G Limited (H3G), in relation to H3G's television advertisement which compared its mobile phone service to O2's service. The advertisement referred to O2 and featured images of bubbles. To advertise its mobile telephone services, O2 used bubble images and is the proprietor of two British national trademarks which consist of a static picture of bubbles.
Faced with these facts, the UK Court of Appeal referred the matter to the ECJ in order to obtain guidance on how to assess the legality of the use of a sign in the course of trade purely for the purpose of comparing the merits of one's goods or services with those of the trademark owner.
The court explained that there is a clear distinction between the trade mark directive and the directive on comparative advertising. While the use, in a comparative advertisement, of a sign identical with, or similar to, a mark of a competitor for the purposes of identifying the latter's goods and services may be prevented under the trade mark directive, it could be perfectly legal under the directive on comparative advertising. In fact a trademark owner cannot prevent the use, by a third party, of a sign identical with, or similar to, his mark, in a comparative advertisement.
However, the use of a trademark owned by a third party is allowed only if all the conditions of comparative advertising are met with; the advert should not be misleading. Neither can it create confusion in the market place between the advertiser and a competitor or between trade marks, nor should it discredit or denigrate a trade mark. Lastly it must not take unfair advantage of a trademark. If, for instance, there is a likelihood of confusion between the advertiser and a competitor or between the advertiser's trademarks, goods or services and those of a competitor, the advertisement would not be allowed and the proprietor of the mark is entitled to prevent the use of a sign identical with, or similar to, his mark.
In this particular case, the court found that the use by H3G of bubble images similar to the trade marks did not give rise to a likelihood of confusion on the part of consumers. The advertisement, as a whole, was not misleading and, in particular, did not suggest that there was any form of commercial link between O2 and H3G. Therefore O2 could not prevent H3G from using this method of advertising to win more customers for its business.
• Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.
jgrech.demarcoassociates.com