West Law Report

Competitors’ trademarks can be used in comparative advertising

From The TimesJune 17, 2008

Competitors’ trademarks can be used in comparative advertising
Court of Justice of the European Communities

Published June 17, 2008

O2 Holdings Ltd and Another v Hutchison 3G UK Ltd

Case C-533/06

Before P. Jann, President of Chamber and Judges A. Tizzano, A. Borg Barthet, M. Ilesic and E. Levits Advocate General P. Mengozzi

(Opinion January 31, 2008) Judgment June 12, 2008

The proprietor of a trademark was not entitled to prevent the use by a competitor of a sign identical or similar to his mark in a comparative advertisement, provided, inter alia, that there was no risk of confusion on the part of the public between the proprietor and the competitor or between their respective goods or services.

The First Chamber of the Court of Justice of the European Communities so held, inter alia, on a reference for a preliminary ruling by the Court of Appeal.

The claimants, O2 Holdings Ltd and O2 UK Ltd, providers of mobile telephone services, used bubble images to advertise their services and were the proprietors of two marks registered in the UK for telecommunications apparatus and services, each consisting of a static picture of a bubble.

The defendant, another provider of mobile telephone services, marketed under the sign “3”, offered, inter alia, a pay-as-you-go service known as “Threepay”.

In television advertisements for Threepay, the defendant used the name “O2” in conjunction with bubble imagery, followed by “3” and “Threeway” imagery, and stated that its services were cheaper than those of the claimants’ in a specific way.

In trademark infringement proceedings brought by the claimants, it was accepted for the purpose of those proceedings that the price comparison in the advertisement was true and that the advertisement was not on the whole misleading and in particular did not suggest any form of trade connection between the claimants and the defendant.

The High Court dismissed the claim on the ground that although the use of the bubble images in the advertisement came within article 5(1)(b) of First Council Directive 89/104/EEC of December 21, 1988, to approximate the laws of the member states relating to trade marks (OJ 1989 L40/1), the defendant had a defence deriving from Council Directive 84/450/EEC of September 10, 1984, concerning misleading and comparative advertising (OJ 1984 L250/17), as amended by Directive 97/55/EC of the European Parliament and of the Council of October 6, 1997 (OJ 1997 L290/180).

On the claimants’ appeal, the Court of Appeal referred under article 234, issues raised to the European Court of Justice at Luxembourg Court for a preliminary ruling.

The First Chamber of the Court of Justice held as follows:

It was necessary to clarify the relationship between Directives 89/104 and 84/450.

Under article 5(1) and (2) of Directive 89/104, the registered trademark proprietor had exclusive rights entitling him, under certain conditions, to prevent all third parties not having his consent from using in the course of trade any sign which was identical with, or similar to, his trademark, and under article 5(3)(d), he could prevent the use of such a sign in advertising.

However, it was apparent from recitals 2 to 6 in the preamble to Directive 97/55 that the Community legislature wished to promote comparative advertising, in the interests of stimulating competition and informing consumers, and recitals 13 to 15 recognised that, in the context of comparative advertising, the right conferred by a trademark had to be limited to a certain extent.

It would be held, in order to reconcile the protection of registered marks and the use of comparative advertising, that a trademark proprietor was not entitled to prevent the use, by a third party, of a sign identical with, or similar to, his mark, in a comparative advertisement which satisfied all the conditions laid down in article 3a(1) of Directive 84/450.

However, the same interpretation was to be given to the word “confusion” in article 5(1)(b) of Directive 89/104 and article 3a(1)(d) of Directive 84/450, and it was to be pointed out that where the condition in article 5(1)(b) relating to confusion was met, it was not possible for the condition in article 3a(1)(d) to be satisfied.

It was apparent from article 3a(1)(d) that comparative advertising was not permitted if there was a likelihood of confusion between the advertiser and a competitor or between the advertisers trademarks, goods or services and those of a competitor.

For article 5(1)(b) to operate in favour of a trademark proprietor, four conditions had to be satisfied: the use had to (i) be in the course of trade, (ii) be without the consent of the proprietor, (iii) be in respect of identical or similar goods or services, and (iv) affect or be liable to affect the essential function of the trademark, which was to guarantee to consumers the origin of the goods or services, by reason of a likelihood of confusion on the part of the public: see, for example, Arsenal Football Club v Reed (Case C-206/01) (The Times November 18, 2002; and May 22, 2003; \ Ch 454; \ ECR I-10273).

The first three conditions were satisfied in the present case.

However, on the referring court’s own findings, the use by the defendant, in the advertisement in question, of bubble images similar to the claimants’ 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 the claimants and the defendant.

On those and other grounds the European Court of Justice ruled:

1 Article 5(1) and (2) of Directive 89/104 and article 3a(1) of Directive 84/450 were to be interpreted to the effect that the proprietor of a registered trademark was not entitled to prevent the use by a third party of a sign identical with, or similar to, his mark, in a comparative advertisement which satisfied all the conditions, laid down in article 3a(1) of Directive 84/450, under which comparative advertising was permitted.

However, where the conditions required in article 5(1)(b) of Directive 89/104 to prevent the use of a sign identical with, or similar to, a registered trade mark were met, a comparative advertisement in which that sign was used could not satisfy the condition, laid down in article 3a(1)(d) of Directive 84/450, under which comparative advertising was permitted.

2 Article 5(1)(b) of Directive 89/104 was to be interpreted as meaning that the proprietor of a registered trademark was not entitled to prevent the use by a third party, in a comparative advertisement, of a sign similar to that mark in relation to goods or services identical with, or similar to, those for which that mark was registered where such use did not give rise to a likelihood of confusion on the part of the public, and that was so irrespective of whether or not the comparative advertisement satisfied all the conditions laid down in article 3a of Directive 84/450 under which comparative advertising was permitted.

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One Response

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  1. SmeagoLiemnbig said, on August 3, 2008 at 11:16 pm

    Thanks for the post


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