Trade Marks — European News

Bubbles Burst

Comparative advertising rules (somewhat) clarified*

By APLF Member Firm Kilburn & Strode, London U.K.

European law has developed two distinct strands of consumer protection:

(i) trade mark law, which generally aims at preventing the mischief of confusing consumers by different traders employing similar marks for similar goods and services, and

(ii) law regulating advertising in which a trader makes comparisons between his/her goods/services with those another trader making use of the latter’s better known trade mark, so as to prevent unfairness and confusion as a result.

Both of these can not only confuse the public but also damage the property interest of the owner of the earlier trade mark or its reputation. These two strands have their own respective Directives, the Trade Mark Directive (”TMD”) and the Comparative Advertising Directive (”CAD”).

Commentators have long wondered how these Directives interact, and whether an honest comparative ad using someone else’s trade mark constitutes trade mark infringement.

This issue ‘bubbled up’ in this case (a reference to bubbles, O2’s registered trade mark, used in altered form in Hutchison’s impugned ad) and the dispute went before the European Court of Justice for resolution.

The ECJ held that the use of the word ‘confusion’ in the two Directives must be given the same meaning. Secondly, the Court noted that one of the listed criteria for a legitimate ad under the CAD is that it does not create confusion in the market place; while the TMD provides that infringement occurs when as a result of similarity of marks/signs and goods or services there is a likelihood of confusion. The Court essentially equated these. It held that if a comparative ad does not comply with any of the criteria listed in the CAD, and in particular with the one prohibiting the creation of confusion in the market place, then it cannot be a permitted ad and the proprietor of the earlier trade mark mentioned in it may proceed against the advertiser for trade mark infringement under the TMD.

Conversely, where there is no likelihood of confusion caused by the ad, the proprietor of the earlier registered trade mark may not proceed against the advertiser for infringement under the TMD even if the ad does not comply with all the conditions for permitted comparative ads under the CAD.

* O2 Holdings Limited and O2 (UK) limited v Hutchison 3G UK Limited; ECJ Case C-533/06; 12.June.08

Implications

Since O2 agreed from the outset that Hutchison’s ad did not cause confusion, the decision represent a blow to O2 — but also to all those leading brand owners who now have to endure the free-riding on their goodwill by competitors ‘trying to catch up’ through ads which are objective and careful not to confuse the public.

One should note that the ECJ was careful not to rule on the situation where trade mark infringement by ‘dilution’ is alleged. That is for the future.

The information provided in this article is, of course, of a general nature and should not be considered as legal advice; if you have any specific questions, please contact Paul Chapman at in London, UK. E-mail: pchapman@kstrode.co.uk. Visit the website at www.kstrode.co.uk

The information contained in this alert is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.

 

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