United Kingdom: Comparative advertising: UK v Europe

United Kingdom

Comparative advertising: UK v Europe

Comparative advertising - advertising by explicitly or implicitly identifying a competitor or a competitor’s products or services - can be very attractive from an advertiser’s point of view. It is a clear and efficient way to stand out and influence consumers’ choice. However, it is not so welcomed by brand owners. Within the EEC there have been different approaches historically. Some considered comparative advertising as wrong in principle and only allowed for a limited number of exceptions. They considered it to be an aggressive practice or to constitute an act of unfair competition. In England and Wales, a more liberal approach was adopted. Comparative advertising was authorized by the 1994 Trade Mark Act, which provided in Section 10(6):

Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee.

But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.

The rationale for allowing comparative advertising is that it stimulates competition and serves to provide consumers with better information.  Laddie, a well respected High Court Judge, stated: “as long as the use of the competitor’s mark is ‘honest’ then there is nothing wrong with telling the public of the relative merits of competing goods and services and using registered trade marks to identify them” (Barclays Bank v RBS Advanta [1996] RPC 307).

However, Section 10(6) is a home-grown provision, which is not reflected in the 1997 European Directive 97/55, that sought to harmonise Comparative Advertising or the Comparative Advertising Directive (‘CAD’ - Directive (EC) 2006/114), that later codified it, and provides a checklist of requirements for a comparative advert to be lawful.

The CJEU seems to be pro comparative advertising. In Toshiba v Katun (C-112/99) it ruled that the provisions of the CAD should be interpreted to be favorable to such advertising. However, it is probably less permissive than what was allowed by the UK provision.  It is difficult to know whether comparative advertisements which were authorized under s 10(6) TMA would still be considered lawful under EU law. It follows from O2 v Hutchison (C-533/06) and L’Oreal v Bellure (C-487/07) that the use of a sign that satisfies all the conditions laid down by the CAD is excluded from infringement. On the other hand, if there exists a likelihood of confusion, the use of the mark will breach the CAD provisions, and amount to trade mark infringement.  Similarly, a comparative advertisement that takes unfair advantage of the reputation of a mark is excluded from permitted comparative advertising and therefore likely to constitute infringement as well.

As a result of harmonization and the CJEU jurisprudence, our view is that Section 10(6) TMA adds nothing to TM law or, to the extent it does, it is incompatible with EU law. Jacob LJ himself clearly stated that it is a pointless provision and should be repealed.