Brussels, 12/06/2008 (Agence Europe) - On Thursday 12 June 2008, the Court of justice ruled that trade marks do not take primacy over the right to comparative advertising, as long as the advertising in question does not denigrate the competition or cause confusion in the minds of the public. It is highly unlikely, then that English courts will find against British telecommunications company Hutchison (H3G) for using a rival's trade mark in its television advertising (case C-533/06).
“We respect the brands of our rivals, and as English courts have noted, we don't seek to denigrate them. This has always been about the right to make fair comparisons between our deals and those of others,” said H3G's sales and marketing director Marc Allera. This case underpins the 1984 Council directive (84/450/EEC) on comparative advertising. The ruling thus confirms that the directive limits the possibility for a trade mark holder to prevent any reference by competitors to this trade mark.
In this case, the image was of air bubbles in water, a trade mark registered by the company O2, a competitor of H3G. In 2004, H3G broadcast a television advert in which featured the image of bubbles along with the name “O2”, followed by a comparison of prices of services proposed by O2 and H3G (whose prices were, of course, lower). O2 brought proceedings for infringement of its bubbles trade mark before the High Court of England and Wales, although it accepted that the price comparison in the advertisement was true and that the advertisement was not misleading. The action was dismissed. O2 therefore appealed against the judgment before the Court of Appeal, which asked the European Court of Justice if the non-authorised use of a brand was allowed in such a comparative advertisement, given that it does not give rise to a likelihood of confusion between the advertiser and a competitor.
The Court ruled that the use of trade mark by a third party could only be prevented if it was “liable to affect the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services, by reason of a likelihood of confusion on the part of the public”. As all parties acknowledged, there was no risk of confusion. Justin Bass, H3G's Senior Legal Counsel noted, too, that “the whole point of a comparative advert is to clearly distinguish between what you are providing and what the competition is offering”. O2 also argued that the image of the “bubbles” used to refer to its prices was in black and white and not in colour (mainly blue) as O2 usually uses in presenting its trade mark. This monochrome representation could be seen as denigrating the brand, it said, something which is proscribed by directive 84/450/EEC. The English courts rejected this argument. H3G also said that it had chosen to present the bubbles in black and white precisely so avoids any confusion. The advert was not guilty, therefore, of confusion or denigration.
The Commission will surely facilitate this result, which will facilitate a direct comparison of the companies' products and services with those of their competitors, as well as make consumer choice easier and more transparent. As explained by Mr Bass, who revealed the common sense because when “identifying a competitor, one is often obliged to use its mark”.
His ideas echoed the terms of the directive, which clearly say that this “may, however, be indispensable, in order to make comparative advertising effective, to identify the goods or services of a competitor, making reference to a trade mark or trade name of which the latter is the proprietor”. The proprietor in question cannot oppose such use, explains the directive, as long as the stated goal is only to distinguish the different companies.
The interests of transparent competition, therefore emphasises the importance of mutual respect from competitors. The question remains, however, “how aggressively does EU law permit comparative advertising to go” as asked by Lord Justice Jacob during his oral argument at the British Court of Appeal. Mr Bass admitted that this question remained open because of the subjective interpretation involved. The directive includes a list of criteria to respect by comparative advertising - listed in paragraph 3 of a) to g - but there is still a margin of cultural interpretation, particularly because of the creative nature of the advertising media. Although Commission efforts go in the sense of a harmonisation of standards in this area, cultural differences are opposed to it in some ways. In Germany, for example, where the authorities originally tried to resist comparative advertising in principle, this tactic is not used by employers very often, even now. On the other hand, the British sense of fair play does not appear to oppose comparative advertising, which is increasingly present in the United Kingdom and often takes a teasing tone. In the absence of Community guidelines, on the difference between parody and denigration, it is up to the companies and their advertisers to be willing to pay attention to the different cultural sensitivities on the European markets. (C.D./transl.rt)