Asda relaunched its optician service with lines like “Be a real spec saver at Asda” and “Spec saving at Asda.” Double oval branding was perhaps the last straw for Specsavers, who sued. Nick Johnson focuses on the ensuing verdict and its key messages.
Topic: Brands
Who: ASDA, Specsavers
Where: High Court, London
When: July 2010
Law stated as at: 30 July 2010
What happened:
The High Court held that ASDA's use of various marketing materials featuring verbal and visual allusions to Specsavers did not amount to passing off or trade mark infringement under Article 9(1)(b) of the Trade Marks Regulation (likelihood of confusion). However, the use of the words "spec saver" in the context of one of Asda's straplines was held to infringe the SPECSAVERS trade mark through taking unfair advantage contrary to Article 9(1)(c) (unfair advantage).
As explained below, the case has important implications for comparative advertising and indeed for any advertisers that like to "live dangerously" by parodying, alluding to or otherwise referencing third party businesses and their trade marks.
Key facts
Specsavers had sought to challenge ASDA's use in various in-store materials, website content and a flyer of:
– the strapline "Be a real spec saver at Asda";
– the strapline "Spec savings at Asda"; and
– an "ASDA Opticians" logo featuring two non-overlapping oval shapes.
Specsavers relied on their registrations of the word mark SPECSAVERS and of various logo marks featuring overlapping ovals (both with and without the word "Specsavers").
In the event, ASDA's materials were held not to give rise to any likelihood of confusion or misrepresentation. Some evidence was submitted of one or more individuals believing, apparently on the basis of ASDA's materials, that ASDA's optician service was provided by or in association with Specsavers. However, that was insufficient to meet the likelihood of confusion/association test under trade mark law or to demonstrate passing off.
Specsavers' trade mark registration for an overlapping pair of ovals without words was also revoked pursuant to an ASDA counterclaim.
However Specsavers were successful in convincing the court that "Be a real spec saver at Asda" gave rise to an infringement under Article 9(1)(c) of the Trade Marks Regulation, by virtue of taking unfair advantage of the SPECSAVERS trade mark.
Why this matters:
This case confirms our predictions as to how the ECJ's judgment in L'Oréal v Bellure will have to be applied in comparative advertising cases. In effect:
– notwithstanding that the comparative claim is true and fully substantiated, an advertiser may be at risk of trade mark infringement if it uses a sign identical or similar to that of a competitor who has a significantly stronger market position in the relevant market;
– any such use risks being seen as unfair "riding on the coat-tails" or (as Mr Justice Mann puts it in this case) "standing on the shoulders" of the allegedly infringed mark Mann J explains this as being "a use which uses the mark and its inbuilt reputation to create or enhance the reputation of the infringing product" (para 158(ii));
– it is irrelevant for these purposes that the advertiser has a strong market presence in other areas. While ASDA is a leading supermarket brand generally, in the optician services sector Specsavers' market presence is significantly superior;
– the judgment leaves open the possibility that a "straight, verifiable objectively stated and objectively provable comparison" (para 168) could nevertheless be permissible if it did not use the competitor's mark "to suggest the qualities inherent in the brand". However, given that most comparative advertising seeks to position the advertiser as a valid (and preferable) alternative to its competitor, it is hard to see how a smaller market player can avoid allegations of "coat-tail riding" or "shoulder-standing" when comparing against a better established or more successful brand; and
– where the advertiser's usage is not sufficiently similar to the competitor's trade mark(s), the link established and the degree of "resonance" with the trade mark(s) may be too weak and may fail to confer any advantage material enough to be "unfair".
(This was held to be the case with "Spec savings at Asda" and ASDA's various twin oval logos.)
Survey evidence slammed again
The judgment also contains yet more judicial criticism of survey evidence – a subject on which neither side escaped unscathed – as well as some interesting development of the concept of "living dangerously" introduced in United Biscuits v Asda [1997] RPC 513. On the latter – the idea of moving just far enough away from the original in one's copying so as to avoid infringement/unlawfulness – Mann J held that:
– while evidence of subjective intentions is prima facie irrelevant to determining likelihood of confusion under Article 9(1)(b), there is "a limited place for such evidence in support of a case for confusion". Essentially, if there is clear evidence that an advertiser believed their usage would lead to some beneficial confusion, then that would be admissible – but not conclusive – in relation to the question of actual confusion; and
– such evidence may also be admissible in seeking to demonstrate a "link" for the purposes of Article 9(1)(c) (unfair advantage). If the advertiser clearly believed that their material established some "resonance" with the competitor's trade mark, then that may be evidence of such a link (although that does not of itself amount to unfair advantage).
Conclusions
– Given this judgment and the ECJ's position in the L'Oréal case, we are likely going forward to see comparative advertising on a named basis confined mostly to comparisons against competitors with similar market positions.
– Challenger brands will generally need to steer away from direct references to market leaders, and we are likely to see a sharp increase in more creative, oblique references.
– Market-leading businesses who have not already registered their brands as trade marks should consider doing so in order to limit their competitors' scope to run comparative advertising.
– Advertisers who choose to "live dangerously" should remember that early internal drafts and emails may become disclosable in litigation. An early verbal discussion with legal advisers (or privileged written communication with external lawyers) may help reduce the risk of starting off on the wrong foot.
– Surveys should be designed and conducted carefully, so as to anticipate potential judicial criticisms (not always so easy without the benefit of judicial hindsight!). Appropriate "control" groups should be used, and once litigation is afoot the court's permission should be obtained before proceeding with any survey.
