“Injurious falsehood” lawsuits against comparative advertisers had been going nowhere until Currys took action against Comet.
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Topic: Prices
Who: DSG Retail Limited (trading as Currys) v Comet Group Plc
When: February 2002
Where: Queens Bench Division of the High Court London
What happened:
In December various branches of Comet stores displayed promotional posters with copies of Currys newspaper advertisements stuck on them. Above this was a statement that prices offered by Comet were even lower than the "10% off" and "£10 off this weekend" advertised in the Currys ads shown. Currys claimed that these were false claims and sued for malicious falsehood. They went to court demanding a quick injunction. The judge had first of all to establish whether the posters in question would be regarded as referring to Currys. This was a no-brainer, since Currys was named in the price claim.
Next up, the meaning of Comet's claims had to be established. This again was straight forward this was that in the relevant cases Comet's prices were cheaper than those of Currys even after taking into account Currys "10% off" or "£10 off this weekend" promotions. Often in cases of this kind, the defendant argues that the advertisement claim in question is "mere puff" and will not be taken seriously by punters. Here, this argument did not wash, since the Comet claims were quite specific and were made directly off the back of Currys advertisements which were reproduced for all to see. In this case, the court held, Comet's claims were intended to be taken seriously.
The next question was whether the price claims in question were false. On the evidence, this was clearly the case. The next issue was whether the falsehood was "malicious" as is required with these "injurious falsehood' torts. In this context, "malice" will be regarded by the court as present if the defendant either knew that the statements were false when they were made or was reckless as to whether they were true or false. On the evidence, the court was satisfied that Comet had been at best reckless as to the truth or falsity of what they were saying, so this point again was decided in favour of Currys. Finally, there was the question of whether the making of the false statements was likely to lead to damage being suffered by Currys. Again, the decision on this was against Comet. The advertisements in question were displayed in December 2001, at a crucial time of the brown goods retail year, and they were clearly intended to entice customers away from Currys stores and into Comet. There was clearly a danger that Currys would lose sales as a result and with the decision on this point clearly going in favour of Currys, their entire case was found sufficiently proven to justify the granting of a continued injunction preventing Comet's use of posters of this kind.
Why this matters:
Over the years, advertisers wishing to sue their competitors for malicious falsehood over comparative advertising have found it extremely difficult to establish a case. The numerous questions which the court had to answer in this case show how complex the tort is and how it is very easy for a claimant to fall at just one hurdle and lose the entire case as a result. In this particular instance, however, Currys were successful, even on the question of establishing "malice", normally the most difficult challenge for a claimant in these cases.
Another aspect of interest is that Currys could, if they had wanted, thrown in a trade mark infringement claim as well, since the Currys trade mark was clearly being reproduced in the Comet advertisement and is no doubt registered. In this context, case law tells us that if the advertisement containing the trade mark is significantly misleading, then there will be an infringement. Given the court's finding here as to the falsity of Comet's claims there is little doubt that Comet would have been liable for trade mark infringement also. Maybe, Currys were sufficiently confident of their case in malicious falsehood not to bother with the additional complications of trade mark infringement claims.
