Ashfords Solicitors - You've been Branded

In what will come as very welcome news to every Marketeer, Advertising Executive, PR Consultant and Brand Manager in the land, a ruling today of the European Court of Justice has decreed that businesses still have legal protection over how their brands are presented.

The Court has today ruled that competitors cannot use your 'brand' or trade 'image' in a derogatory way to gain competitive advantage and, if they do, it can constitute registered trade mark infringement.

Significant value is attributed to quality trade marks, brands and images. Fair competition has traditionally been based on comparisons of price, service and quality. In the case in issue, Hutchinson 3G took O2's trade mark bubbles and based an advertising campaign on portraying the bubbles as dull, lifeless and popping on the screen.

Carl Steele, a partner at Ashfords who specialises in trade mark law, comments:

"Brand owners will be pleased with the result, as it will assist them to protect the image presented to the public of their own brand.

If damage is done to their brand by a comparative advertisement, they will still in certain cases have the ability to claim damages for any loss they suffer as a consequence. Before the Court gave its ruling today many feared that this would no longer be the case and, as a consequence, brand owners would, in effect, lose control over the image of their brand and how it is presented to the public

When you consider how much money major brand owners spend on creating the right image and impression for their brands, such a decision would have been a disaster for them".

Background

O2 promotes its mobile phone services using images of bubbles. It is the proprietor of two UK registered trade marks, both consisting of static pictures of bubbles. As a result of O2's use of its 'bubbles' trade marks, consumers in the UK have come to associate images of bubbles in water (particularly against a graduated blue background) in the context of mobile phones exclusively with O2.

In March 2004, Hutchinson 3G (H3G) ran a comparative advertising campaign, using TV advertisements in which they made price comparisons with their competitors' services, including O2. In particular, H3G ran a TV advertisement featuring images of bubbles that were black and grey (rather than blue) and which popped on the screen. When the bubbles were seen on screen they were accompanied by a downbeat soundtrack and voice over.

Whilst O2 accepted the price comparison between its services and H3G's as detailed in the advertisement was true (and the advertisement was therefore not misleading), it objected to the way in which H3G had misused and presented its 'bubbles' trade marks in order to make the comparison. O2 brought registered trade mark infringement proceedings in the UK alleging that the use of its 'bubbles' trade marks by H3G constituted registered trade mark infringement.

At first instance the claim was rejected. O2 appealed to the Court of Appeal. In order to settle the dispute, the Court of Appeal referred various legal questions to the ECJ for a preliminary ruling.

What are the implications of the ECJ's decision?

The ECJ has clarified the law and decided that the use by a trader of a competitor's trade mark for the purpose of a comparative advertisement can constitute registered trade mark infringement. Thus, trade mark owners are, in certain circumstances, able to bring legal claims in this country for an injunction, damages and legal costs where a competitor makes use of their trade mark in a comparative advertisement.

Had the ECJ held otherwise, the only remedy many trade mark owners would have had would have been to complain to the Office of Fair Trading, the Advertising Standards Authority or to Trading Standards. These bodies cannot award damages in relation to any loss suffered by a brand owner as a result of their brand being presented in a negative or derogative manner in a comparative advertisement.

Ashfords is regulated by the Solicitors Regulatory Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied upon as legal advice nor as an alternative to taking professional advice relating to specific circumstances.

12th June 2008

You've been Branded

Introduction