With the European Court of Justice due to mull whether using your competitor’s registered trade mark in knocking copy can ever infringe that registration, two UK “free speech” verdicts in two weeks deal brand owners another blow. Emily Devlin exercises her free speech rights.
Who: (1) Red Dot Technologies Limited v Apollo Fire Detectors Limited (24 April 2007); and (2) Boehringer Ingelheim & ors v Vetplus Ltd (20 June 2007)
Where: (1) High Court, Chancery Division (David Richards J) and (2) Court of Appeal.
Law stated as at: 27 June 2007
Two recent decisions have shown that, where a Defendant in a comparative advertising case avails itself of its right to "freedom of expression" under the Human Rights Act, the threshold for granting injunctive relief will be raised, even though its trade mark might be infringed.
The applications & defences
Both of these cases were applications for interim injunctive relief arising out of the publication of comparative advertisements. In both cases the Claimants alleged that the use of their registered trade marks in those advertisements amounted to an infringement and that, as they had "a real prospect of success" at trial and the "balance of convenience" was in their favour, interim injunctions should be granted pending final determination at the full trial.
The Defendants, however, both claimed that:
– They were exercising their right to freedom of expression in accordance with Section 10 HRA and as such Section 12(3) HRA was the appropriate test for whether an injunction should be granted; and
– The rule against prior restraint in Bonnard v Perryman applied in cases of comparative advertising as for defamation cases.
Freedom of expression
Section 12 HRA provides:
(1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression.
(3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed [our emphasis].
Both courts considered that the test under Section 12(3) turned on the interpretation of the word "likely." Richards J took into account Lord Nicholls in Cream v Banerjee, when he rejected the proposition that "likely" meant "more likely than not". In Lord Nicholl's view, that "would set the degree of likelihood too high" and "flexibility is essential":
"The intention of Parliament must be taken to be that "likely" should have an extended meaning, which sets as a normal prerequisite to the grant of an injunction before trial a likelihood of success at the trial higher than the commonplace American Cyanamid standard of "real prospect", but permits the court to dispense with this higher standard where particular circumstances make this necessary" (para 20).
Jacob LJ on the other hand favoured the "more likely than not" approach, but in both cases the outcome was the same, with urgent injunctive relief being refused.
Both Defendants argued that their use of the Claimants' trade marks was in accordance with honest practices and fair (Section 10(6) Trade Marks Act 1994 "TMA").
Both Defendants also submitted that in the same way that defendants in a defamation action can rely on the rule in Bonnard v Perryman to avoid the grant of an interim injunction (i.e. because they would be relying on a defence of justification), so could defendants in a trade mark infringement case rely on a Section 10(6) TMA defence to achieve the same end.
Neither court was convinced by this argument. David Richards J considered the various authorities presented to him, but concluded that they were not sufficiently persuasive on their face for him, on such an application, to accept they extended to trade mark infringement cases. In Boehringer Jacob LJ was more dismissive:
"I do not consider that such a simple and simply invoked rule is appropriate for trade mark infringement, even in a case of comparative advertising… Accordingly, I do not consider that the rule in Bonnard applies as such to a trade mark infringement claim" (paras 43-44).
Both courts were mindful of the pending reference to the ECJ in O2 v Hutchison 3G, concentrating on one of the questions referred – whether use of a trade mark in a legitimate comparative advert amounts to an infringement under Section 10(1) and/or 10(2) TMA at all. If the answer is "yes" then in cases such as these there would be a prima facie infringement case, unless a Section 10(6) defence is raised . However, until we know the answer, Jacob LJ's judgment in that case is "a very powerful expression of view" and, as such, David Richards J found it "impossible" to be satisfied that Red Dot were likely to establish a right to an injunction on the basis of a Section 10 (1) TMA infringement.
Why this matters:
The key message of both these decisions is that the "free speech" provisions of the Human Rights Act will now be wheeled out as another line of defence in comparative advertising cases, thus making it even less likely that the courts will grant interim injunctions pending trial.
David Richards J readily accepted that the "free speech" provisions of the European Convention on Human Rights were engaged since comparative advertising was a form of expression that, if fair and not misleading, was in the public interest.
In Boehringer Jacob LJ was slightly more circumspect, commenting that:
"…although there is an important issue of free speech involved in comparative advertising other more complex factors are involved too. Most particularly the defendant has a commercial interest in diverting trade which would have gone to the trade mark owner himself. It is not a question of "pure" free speech" (para 41).
However the Appeal Judges did accept that the Human Rights Act was potentially key.
Human rights issues properly engaged?
There is an argument that the "free speech" arguments in these two cases were given disproportionate weight and Jacob LJ should perhaps have gone further than he did in emphasising that these are economic undertakings concerned with profit at the expense of competitors and not individuals exercising their rights to free speech.
In an economic context, such comparisons inevitably require third party marks to be used and in doing so these assist the consumer in making an informed choice. However, should defendants be able to invoke human rights-related defences when they already have a specific framework under UK regulations implementing the Comparative Advertising Directive and Sections 10 and 11 TMA.
Trade mark rights eroded?
Taken to their logical conclusion, freedom of expression arguments could undermine the very nature of trade marks as exclusive rights and important business assets.
Despite Jacob LJ's comments in Boehringer, these two decisions must therefore concern brand owners. Interim injunctions are relatively rarely granted in comparative advertising cases as it is, and the introduction of "freedom of expression" arguments, together with the uncertainty in the law produced by the O2 v Hutchison 3G reference, muddies the waters even further.
Osborne Clarke, London