It was big news when the Trade Marks Act 1994 allowed advertisers to use their competitors' registered trademarks in knocking copy provided their advertising was not significantly misleading. Now a Chancery verdict shows the exception extends beyond normal comparative advertising.
Who: Wolters Kluwer (UK) Limited and Reed Elsevier (UK) Limited
Where: The Chancery Division of the High Court, London
When: September 2005
Wolters Kluwer (UK) Limited ("WK") applied to the Court for an interim injunction against Reed Elsevier ("RE") in respect of RE's use of WK's brand name "CCH".
The story was that WK had for some time been publishing an on-line seminar service for accountants called "CCH Seminars". WK contracted out the provision of this service to a company called On-Line Tutors Limited ("OLT") and WK had registered "CCH" as a trademark in classes 9, 16, 35 and 41.
WK and OLT parted company in July 2005 and whilst WK continued offering its service using a different sub-contractor, OLT moved to WK's competitor RE, offering a service called "Tolley's Seminars On-Line".
In July 2005, RE advertised its new service in Taxation Magazine, stating:
"Subscribers to CCH Seminars online, the former name of the service, should call [telephone number] and [Tolley's]will honour their existing subscription free of charge until its expiry".
First WK complaint
WK complained about this and RE published corrections making it clear that CCH was continuing with its own service. WK was not impressed, however, by a later RE ad announcing that RE had entered into an agreement with OLT, "the company behind the former version of CCH Seminars On-Line" then repeating the offer of free access to existing CCH subscribers.
CCH applied to the court for an interim injunction on grounds of trade mark infringement.
RE defended on the basis of section 10(6) of the Trade Marks Act 1994. Historically this has been used as a defence in comparative advertising cases.
The sub section provides that there will not be infringement of trademark in the case of "the use of a registered trademark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee". However the sub-section goes on to make it clear: "but any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing a registered trademark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trademark".
WK responded by saying that RE's use of WK's trade mark was not within section 10(6). This was because it was being used for the purpose of diverting customers from WK to RE, not "identifying goods or services as those of the proprietor or a licensee".
WK application dismissed
Mr Justice Mann dismissed the WK application for an injunction. He saw no reason why section 10(6) should not be applied outside a case of straight comparative advertising, provided the provisions covered the case in hand.
Whilst the Judge accepted that the commercial purpose of RE might be to try to divert customers from WK to RE, in context the CCH mark was being used in order to identify services offered by WK. Such use was four square within section 10(6) and since the judge rejected WK's allegations that RE's use of CCH was dishonest, the injunction application was thrown out.
The verdict is not dispositive of the entire action, which may still proceed to full trial. In this instance the judge was only determining whether there was a serious issue to be tried as a matter of law on the WK claims and whether damages would be an adequate remedy at the end of the day, without the need for granting an injunction.
Why this matters:
It has always been clear that the wording of section 10(6) of the 1994 Act is wide enough to encompass cases other than those of pure comparative advertising. This verdict is important because it sheds light on just how wide the potential ambit of the sub-section might be in the context of marketing communications .