Who: Liberty Global / UPC and eircom
Where: Ireland
When: 17 February 2014
Law stated as at: 27 March 2014
What happened:
eircom, the largest phone and broadband provider in Ireland launched its new TV service eVision and advertised it as €10 per month. The eircom comparative marketing campaign in February this year took place over radio, online and print media made a comparison with UPC and Sky which were the main competition for TV services in Ireland.
The small print of the advertisement referred to the need for a broadband subscription or some references were made to “€10 a month in a bundle”. The required broadband and phone package cost an additional €45 per month.
The comparison made was for the €10 per month TV eVision package offered by eircom versus the standalone TV (i.e. not in a bundle) package offered by UPC at €32.50 per month. However as a broadband subscription was a prerequisite to obtaining the eircom offer the comparison should have been made against the “tripleplay” option offered by UPC at €53 per month which was for TV, phone and broadband. While the ad claimed that by switching UPC customers would save €330 for their first year (based on a one off further discount by eircom for the first 6 months) the reality was that money was saved by not switching to eircom’s combined package at €55 per month.
The comparison made was therefore not comparing like with like and was considered misleading. Ireland has transposed the comparative advertising directive (2006/114/EC) in the European Committee (Misleading and Comparative Marketing Communications) Regulations 2007 (SI 774 of 2007). The Regulations provide for a right of private action for persons who are subjected to a prohibited comparative marketing communication and facilitates a court granting prohibition orders on further publication but not damages.
While such a court action is possible, the key consideration where there is an on-going damaging comparative advertising campaign is speed. As the principles for lawful comparative advertising were not complied with there was no defence to trade mark infringement. As the Court of Justice of the European Union held in O2 Holdings Ltd. v Hutchison 3G Ltd ([2008] RPC 33) all of the conditions under the comparative advertising directive must be complied with in order for a defence to trade mark infringement to apply.
As a result, following unsuccessful pre-action correspondence, UPC were also able to issue the proceedings for trade mark infringement which qualified as a “commercial proceeding” for the purposes of Ireland’s Commercial Court Rules and meant damages could also be sought as relief. The case was admitted to the Commercial Court and settled shortly after.
Why this matters:
Exercising the right of private action under the Regulations on its own could take some time to hear as Irish courts have held that such relief is not available on an interlocutory (i.e. prior to trial) basis (Tesco Ireland Limited v Dunnes Stores [2009] IEHC 569). Where damages are not available the effectiveness of the remedy in stopping a campaign is curtailed as the comparator will remain motivated to see the campaign through to finish and deal with the consequences later.
The ability to combine the right of private action under the Regulations with a trade mark infringement action and invoke the Commercial Court Rules means that upon issuing the proceedings it is possible to have the case before the Irish courts a week later with a hearing to seek directions for case management to an early trial.
Such a hearing also provides an opportunity for a self-help “corrective statement” where the media is likely to pick up on the dispute and may report the trade mark owner’s rebuttal of the comparisons in open court. That publicity could assist in bringing the dispute to an end.
A useful precedent has now been set in combatting misleading comparative advertisements with efficiency.
