Mobile telecoms provider O2 took a rival 3G service provider to court over comparative advertising. But once again a Chancery Judge refused to grant an injunction to ban ‘knocking copy.’
MM02 and 3
The Chancery Division of the High Court of Justice London
Chancery Judge Nicholas Pumfrey handed down judgment on an application by 02 for an urgent, interim injunction preventing further use of an advertising campaign for Hutchison's "3" 3G mobile telecommunications service.
Under the spotlight was TV advertising which compared 3's Pre-pay pay as you go tariff with the equivalent from MM02. The 3 advertisement featured "bubble" imagery, with the number 3 moving across the screen leaving a trail of bubbles and opening shots with larger, more threatening, red-coloured bubbles to the sound of bubbling liquid.
Multiple 02 trademark registrations
In court, 02 claimed that 3's advertisement was a trademark infringement. It referred to no less than 17 trademark registrations in the name of MM02, all of which featured varying images of bubbles.
All of the registrations were in respect of telecommunications services and 02 argued that the images in the 3 advertisement were "similar" to these registrations.
As a matter of law, if this was correct and it was also the case that 3's use of similar imagery created "a likelihood of confusion or association" with 02's registered marks, they would have a clear prima facie case of trademark infringement against 3. As such they would stand a very good chance of getting the interim injunction that they requested unless 3 could take advantage of the defence which was available to them under the Trade Marks Act 1994 section 10(6).
The effect of this is that even if on the face of it there is a trade mark infringement, it will be a complete defence for 3 to show that the 02 branding was referred to for the purposes of comparative advertising. Even then, the defence might not work. This is because it will not be available to 3 if the advertising can be shown to be "contrary to honest commercial practices" or detrimental to or taking unfair advantage of 02 registered trade marks.
"Grossly misleading" allegation
So 3 duly ran the "comparative advertising" section 10(6) defence. 02 countered with a forceful argument that the price comparison in the ad was "grossly misleading" and that accordingly the ad was contrary to honest commercial practices, thus disallowing 3 from using the defence.
"Weak case" finding
In order for an injunction to be granted at this early stage in the proceedings, 02 had to persuade the Judge that there was least a "serious issue to be tried" on trade mark infringement. The Judge held that on the materials in front of him, the case in trade mark infringement was weak.
Hutchison did not even have to deal with an argument as to the advertising being contrary to honest commercial practices unless the Judge was persuaded that there was a serious issue as to whether 3 was using branding which was "similar" to the 02 trademark and that this created a likelihood of confusion or association between the advertisement and the 02 brands.
On this aspect, the Judge held that the case as to confusion was weak, with no evidence of confusion to speak of.
As regards the allegation that the advertisement was "contrary to honest commercial practices", there was little evidence of dishonesty and the court was unwilling to say that 3 was indulging in anything other than honest practices.
In the circumstances and particularly bearing in mind that if the advertisement was allowed to continue being screened, any damage caused would be small, the court held that the case in trademark infringement was either not really arguable or that there was an arguable defence.
Accordingly the injunction application was refused.
Why this matters:
Yet again the courts have refused to grant an injunction on grounds of trademark infringement in a comparative advertising case, whilst similar advertising has met with a very different fate in front of the Advertising Standards Authority. A week before this case went to court, the ASA upheld all but one of nine complaints against 3 by 02 and T‑mobile, and it is quite clear that having to prove not only a "likelihood of confusion or association" but also "dishonest commercial practices" creates a very high barrier for any advertiser looking for court orders to stop its competitor carrying its branding in knocking copy.