Smell-alike perfumes - the Bundesgerichtshof's view

On 5 May 2011, the First Civil Senate of the German Federal Supreme Court (Bundesgerichtshof) which is, inter alia, responsible for competition law matters decided that trading with smell-alike perfumes, that are imitations of perfume products that are bearing a protected trade mark does not qualify as unlawful (unlauter) comparative advertising in the sense of Article 6 (2) No. 6 German Unfair Competition Act (UWG) if there is no clear and obvious imitation of the original perfume but where the smell-alike perfume merely evokes an allusion of the original products (case reference: I ZR 157/09 - Creation Lamis).

By way of background: Article 6 UWG is based on Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising, in particular its Article 2 (c) and its Article 4.

The facts: the defendants were offering low priced perfumes on the Internet under the mark "Creation Lamis". These low priced perfumes had similar smells to those of expensive perfume brands. The defendants initially also used ‘comparison charts’ which compared the defendants' smell-alike perfumes with the respective high priced original perfume brand. The defendants had, however, ceased using the comparison charts in recent years.


The claimant, who is a distributor of high priced luxury perfumes brands, took objection to this in its view unfair business practice. The claimant argued that the defendants’ offering, advertising and distribution of the smell-alike perfumes amounted to unfair competition since the smell-alikes were recognisable as imitations of the claimant's high priced original perfume brands all of which where registered as trade marks. The claimant had been unsuccessful in the lower instance courts insofar as it had tried to prevent the defendants' trade with the smell-alikes without the use of comparison charts. In this regard the Bundesgerichtshof allowed the claimant's appeal and sent the case back to the court of appeal, the Kammergericht Berlin.



The Bundesgerichtshof explained that Article 6 (2) No. 6 UWG does not prohibit to imitate an original product. Furthermore, it will not amount to unfair comparative advertising in the sense of Article 6 (2) No. 6 UWG where the original product is recognisable due to the get-up and labelling of the respective imitation (here the smell-alike) even if its advertising evokes certain allusions. What is prohibited under Article 6 (2) No. 6 UWG is a clear and definite imitation statement (Imitationsbehauptung) which makes it clear by itself - and without the need to consider any additional circumstances - that the advertised product is advertised as a copy of a certain and specific original product.


The court of appeal had assessed the question as to whether there was a clear and obvious imitation statement by looking at the end user's perspective and decided that there was no imitiation in the sense of Article 6 (2) No. 6 UWG in this case. The Bundesgerichtshof confirmed that the court of appeal had determined the facts correctly with regard to the end-user perspective.

However, the Bundesgerichtshof found that the court of appeal's decision had not discussed the claimant's argument that the defendant had also targeted retailers with its smell-alike perfumes and not only end users. The claimants had argued that retailers, who had a more specialised knowledge, would have recognised the defendants' smell-alike perfumes as clear imitations of the original luxury perfumes due their 'get-up' (Ausstattung) and their allusive names. In this regard the Bundesgerichts stressed that where an advertisement was targeting different groups of consumers, it was enough to render such an advertisement "unfair" if the conditions of Article 6 (2) No. 6 UWG where met for only one group of the consumers targeted (here: the retailers). As such, the Bundesgerichtshof decided to overturn the court of appeal's decision and send the case back to the court of appeal. The Bundesgerichtshof also held the court of appeal should examine whether the defendants' advertising towards retailers amounted to an exploitation of the reputation of the claimant's trade marks.


While some German observers have already stated that the court has made it easier to trade with smell-alike perfumes due to the relatively high threshold for the application of Article 6 (2) No. 6 UWG, it should be kept in mind that the court of appeal might find that retailers would easily recognise the smell-alikes as imitations of one particular perfume. This Kat will be interested to read the Bundesgerichtshof's decision in its entirety once it becomes available, as well as the Kammergericht Berlin's actual decision in this particular case. Perfumes clearly make for interesting trade mark cases.


The court's press release can be retrieved by clicking here (in German)
Perfume for cats - here.

A Lidl bit pricier? Can consumers verify Vierzon? The CJEU rules

It's a big day for comparative advertising today, with the long-awaited ruling of the Court of Justice of the European Union (CJEU) in Case C-159/09 Lidl SNC v Vierzon Distribution SA, a reference for a preliminary ruling from the tribunal de commerce de Bourges (France).

In short, Lidl is a giant supermarket chain and runs a chain of food stores in France, one of which is an unwelcome neighbour of Vierzon Distribution, which sells everyday consumer goods under the name ‘Leclerc’. In September 2006 Vierzon Distribution placed an advertisement in a local newspaper which reproduced till receipts listing, by means of general descriptions, accompanied, as appropriate, by their weight or volume, 34 items -- mainly food -- purchased respective from Vierzon Distribution and Lidl, showing the bill for its own goods at EUR 46.30 as against Lidl's EUR 51.40.  The advertisement also included the slogans

‘Not everybody can be E. Leclerc! Low prices – And the proof is E. Leclerc is still the cheapest’ and ‘In English, they say “hard discount” – in French they say “E. Leclerc”’. [Says the IPKat, someone probably sent their child to university for three years so that he could learn to write like that-- and they say that creativity is dead.  Says Merpel, I alway thought "hard discount" was a French term].

Lidl sought an (i) damages for unfair competition and (ii) publication of extracts of the judgment in its favour in the press and on posters in its store.  According to Lidl, Vierzon infringed Article L. 121‑8 of the French Consumer Code: the advertisement at issue deceived, or even misled consumers [it's quite difficult to do the one without the other, though ...], both as a result of its presentation and because Vierzon selected only products which placed it in an advantageous position after aligning, where necessary, its prices with those of its competitor.  Moreover, the products were not comparable, since their qualitative and quantitative differences meant that they did not meet the same needs, as the reproduction of till receipts showing the list of the products compared does not per se let consumers identify the specific characteristics of those products or understand the reasons for the price differences.

Vierzon disagreed: two products which are not the same may be compared, provided that they meet the same needs or are intended for the same purpose and are thus sufficiently interchangeable, which was the case here. The differences between the products at issue were clear and no-one would have been deceived. The fact that Vierzon  itself chose the products to be compared was not unlawful and, since the items were purchased on the same day, any possibility that the prices could have been manipulated was also ruled out.

Feeling a need for guidance from Luxembourg the tribunal de commerce de Bourges decided to stay the proceedings asked the CJEU for a preliminary ruling on this question:

‘Is Article 3a of Directive [84/450 on misleading and comparative advertising] to be interpreted as meaning that it is unlawful to engage in comparative advertising on the basis of the price of products meeting the same needs or intended for the same purpose, that is to say, products which are sufficiently interchangeable, on the sole ground that, in regard to food products, the extent to which consumers would like to eat those products or, in any case, the pleasure of consuming them, is completely different according to the conditions and the place of production, the ingredients used and the experience of the producer?’

On those grounds, the Court (Fourth Chamber) hereby rules:

"Article 3a(1)(b) ..., as amended by Directive 97/55 ..., is to be interpreted as meaning that the fact alone that food products differ in terms of the extent to which consumers would like to eat them and the pleasure to be derived from consuming them, according to the conditions and place of production, their ingredients and who produced them, cannot preclude the possibility that the comparison of such products may meet the requirement laid down in that provision that the products compared meet the same needs or are intended for the same purpose, that is to say, that they display a sufficient degree of interchangeability.

Article 3a(1)(a) of Directive 84/450, as amended ..., is to be interpreted as meaning that an advertisement such as that at issue in the main proceedings may be misleading, in particular if:

– it is found, in the light of all the relevant circumstances of the particular case, in particular the information contained in or omitted from the advertisement, that the decision to buy on the part of a significant number of consumers to whom the advertisement is addressed may be made in the mistaken belief that the selection of goods made by the advertiser is representative of the general level of his prices as compared with those charged by his competitor and that such consumers will therefore make savings of the kind claimed by the advertisement by regularly buying their everyday consumer goods from the advertiser rather than the competitor, or in the mistaken belief that all of the advertiser’s products are cheaper than those of his competitor, or

– it is found that, for the purposes of a comparison based solely on price, food products were selected which, nevertheless, have different features capable of significantly affecting the average consumer’s choice, without such differences being apparent from the advertising concerned.

Article 3a(1)(c) of Directive 84/450, as amended ..., is to be interpreted as meaning that the condition of verifiability set out in that provision requires, in the case of an advertisement, such as that at issue in the main proceedings, which compares the prices of two selections of goods, that it must be possible to identify the goods in question on the basis of information contained in the advertisement".

Says the IPKat, the easiest way to ensure that it is possible for consumers "to identify the goods in question on the basis of information contained in the advertisement" is for the comparative advertiser to make reference to branded goods (eg our Mars Bars are cheaper than theirs).  This is more difficult, or may even be impossible to achieve, where the competing goods are supermarket own-brands.  Goods sold by geographical indication are also easy to compare: even though they may be made by different manufacturers, the GI/PDO has a specification with which competitors must comply, so they should always be equivalent.

This decision comments on the much-criticised ruling of the same court in Case C‑487/07 L’Oréal and Others v Bellure (on which see the IPKat here, among other places):

"16 Article 3a of Directive 84/450, with which the question referred is concerned, lists, in subparagraphs (1)(a) to (h), various cumulative conditions which comparative advertising must satisfy in order to be permitted (see, inter alia, Case C‑487/07 L’Oréal and Others [2009] ECR I‑5185, paragraph 67). ..

20... it is apparent from the Court’s case‑law that the purpose of the various conditions listed in Article 3a(1) of Directive 84/450 under which comparative advertising is permitted is to achieve a balance between the different interests which may be affected by allowing comparative advertising. Thus, it is apparent from a reading of recitals 2, 7 and 9 in the preamble to Directive 97/55 that the aim of Article 3a of Directive 84/450 is to stimulate competition between suppliers of goods and services to the consumer’s advantage, by allowing competitors to highlight objectively the merits of various comparable products while, at the same time, prohibiting practices which may distort competition, be detrimental to competitors and have an adverse effect on consumer choice (L’Oréal and Others, paragraph 68).

21 It follows that the conditions listed in Article 3a(1) of Directive 84/450 must be interpreted in the sense most favourable to permitting advertisements which objectively compare the characteristics of goods or services, while ensuring at the same time that comparative advertising is not used anti-competitively and unfairly or in a manner which affects the interests of consumers (L’Oréal and Others, paragraph 69 and the case‑law cited)".

L'Oreal v Bellure at the ECJ

The morning the ECJ delivered its judgment in L'Oreal v Bellure, on whether 'knock off' imitation perfumes which clearly weren't the trade marked goods, but were marketed in a way that 'winked at' L'Oreal's famous perfume brands, infringed L'Oreal's trade marks and were protected as permissible comparative advertising.

Is harm needed for unfair advantage?

The court answered the 5th question first. This boiled down to whether there could be unfair advantage under Art.5(2) without (a) confusion or (b) detriment to the earlier mark.

Since only one of the types of harm mentioned in Art.5(2) is needed for there to be infringement, there could be no need for detriment to repute or distinctiveness for unfair advantage to be made out. [IPKat comment: quite right. The IPKat can see why the UK Courts might have wanted to introduce a harm to trade mark function requirement in here, but there was no basis for it on the face of the Directive].

How can unfair advantage be proved?

The ECJ's words bear repeating in full, since the IPKat reckons they're going to be the subject of much close textual analysis by legions of lawyers:

In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the mark, the Court has already held that, the stronger that mark’s distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. It is also clear from the case-law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark or is, or will be, detrimental to them (see, to that effect, Intel Corporation, paragraphs 67 to 69).

[IPKat comment: 2 huge problems with this - (1) all these factors go towards showing that there's a link between the marks, but they don't really show that the link has 'rubbed off' on the later mark to give its owner an unfair advantage; (2) these are the factors that were used in relation to detriment to distinctive character, but the court has just said that these are two different types of harm; (3) the ECJ in Intel v CPM said such factors are insufficient for showing unfair advantage. ]

The ECJ also said: ' In addition, it must be stated that any such global assessment may also take into account, where necessary, the fact that there is a likelihood of dilution or tarnishment of the mark.'

[IPKat comment: aaargghhh - you just said that the various types of harm are different. Anyway, if there is likely dilution or tarnishment, why do you need unfair advantage on top? Also, note the use of the word 'likely'.]

On the facts

The defendants had created a link, they had done so for commercial advantage and had done so with the intention of creating a link. Thus, there was unfair advantage.

[Let the IPKat be the first to welcome the law of unfair competition to the whole of the EU, even if you do need a registered trade mark to qualify for it (but how hard is that now - you could just apply your distinctive word/device mark to your relatively straightforward product shape, register the whole bangshoot as a CTM a la Whirlpool v Kenwood and hey presto, you qualify for protection.]

The harm in a nutshell

The ECJ sums up:

'The advantage arising from the use by a third party of a sign similar to a mark with a reputation is an advantage taken unfairly by that third party of the distinctive character or the repute of the mark where that party seeks by that use to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark’s image.'

The comparison lists

Here the question was whether the use of the names of L'Oreal's perfumes in price comparison lists could amount to infringement under Art.5(1)(a), seeing as the ability of L'Oreal's marks to idenify the origin of L'Oreal's goods (the essential function) wasn't harmed.

The ECJ noted that price comparison lists were a form of comparative advertising, and it had already held in O2 that the use of a mark in comparative advertising could infringement, but also had Art.3a(1) of the Comparative Advertising Directive to save it.

The court revisited its line of case law on the scope of Art.5(1)(a), noting that it encompassed not only harm to the essential function, but also to the other functions of a trade mark which are 'in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising'. Art.5(1)(a) is wider than Art.5(1)(b) [thus confusion isn't required] and while descriptive use, e.g. Holterhoff, isn't covered, price comparisons aren't purely descriptive as they are for the purposes of advertising. The court noted that Art.5(2) might also apply in price comparison cases.

[IPKat comment: this sounds very nice in theory, but the court doesn't give us a clear understanding of what sorts of activities can harm the other functions of a mark. It seems though that the Court of Appeal in Arsenal got it right when it said that the effect of Holterhoff was to exclude descriptive use only.]

The Compartive Advertising Directive

In relation to Art.3a(1)(h) (comparative advertising must not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name), this didn't require the goods to be counterfeit, nor did it require the advert to be misleading for it to be prohibited. The imitation could be implicit or explicit. Moreover, the imitation didn't have to be of the product as a whole, and could be of one aspect, e.g. its smell. In this case ' It is not in dispute that the object and effect of the comparison lists at issue in the main proceedings are to draw the attention of the relevant public to the original fragrance of which the perfumes marketed by Malaika and Starion are purportedly an imitation. Those lists thus attest to the fact that those perfumes are imitations of the fragrances marketed under certain marks belonging to L’Oréal and Others, and they consequently present the goods marketed by the advertiser as being imitations of goods bearing a protected trade mark within the meaning of Article 3a(1)(h) of Directive 84/450.'

In relation to Art.3a(1)(g) (omparative advertising must not take unfair advantage of the reputation of a trade mark), unfair advantage appeared both here and in Art.5(2), and had to be interpreted in the same way in both. in this case, in the words of the court: '... since, under Directive 84/450, comparative advertising which presents the advertiser’s products as an imitation of a product bearing a trade mark is inconsistent with fair competition and thus unlawful, any advantage gained by the advertiser through such advertising will have been achieved as the result of unfair competition and must, accordingly, be regarded as taking unfair advantage of the reputation of that mark.'

[IPKat comment: some circular reasoning going on here. Because the advertising was contrary to Art.3a(1)(h), it was unfair under Art.3a(1)(g). At least though this is an attempt to articulate the unfairness, rather than just stopping at the fact that there has been an advantage. Generally though, this makes it very hard for people to tell consumers that their products are like trade marked products in some respect.]

IPKat concluding comment

If Intel was the low point of Art.5(2) protection for trade mark owners then this has got to be the high point, particularly when taken in conjunction with the approach to comparative advertising. Although the ECJ didn't explicitly adopt the Advocate General's position that any advantage is unfair, in bascially stopping once the link has been established if there is a commercial motivation for making that link, it may as well have. It looks like we're stuck with something which looks rather like a tort of unfair competition. The escape route is that only marks with a reputation will qualify. This makes it crucial for us to have a clear understanding of the standard for establishing when marks have a reputation - something which so far has been rather imprecise.

Localised acquired distinctiveness; coming up in the ECJ

Being from East Yorkshire doesn't help you in Newport, but might in Luxembourg

The IPKat has stumbled across what must have been one of the now Mr Justice Arnold’s last decisions as a Lord Chancellor’s Appointed Person [Merpel wonders if we’re still allowed to call them that, since we still have a Lord Chancellor]. In it, he was called upon to hear an appeal refusing to register THE JOURNAL for, well, journals. It appears that the applicant had only used the mark in for publications in the East Yorkshire area and could do no better than showing acquired distinctiveness in that area at the very most. The hearing officer found that, following Europolis, acquired distinctiveness of one region was not sufficient.

Not to be defeated, the application changed its specification to “Lifestyle regional magazines containing information about and relevant to the area of East Yorkshire”. This led to the cunning argument that acquired distinctiveness had to be judged from the point of view of the relevant consumer. The relevant consumer for the goods covered by the specification was from East Yorkshire and a substantial number of such people would know of the publication.

The LCAP (as he then was) really rather fancied making a reference. He said:

In my judgment, the law is not entirely clear from EUROPOLIS. The Court of Justice was not addressing the question which arises in this case, which is whether it is permissible to claim acquired distinctiveness amongst a geographically-restricted class of consumers if the market for the product or service in question is limited to that locality or region. It is conceivable that the Court of Justice might give a different answer to this question, or least a more nuanced answer, than it gave to the questions in EUROPOLIS. In particular, I think that it is possible that different
considerations may apply in the case of a service which is normally provided to
a local clientele, such as hair dressing, than to goods. Accordingly, had it not been for the applicant’s opposition to a reference, I would have referred a question to the Court of Justice.

However the applicant, wisely avoiding the expense and delay of a reference made it known that he didn’t want a reference. Thus, the LCAP had to reach a decision himself. He found that acquired distinctiveness could not be shown if that distinctiveness was limited to a particular geographical location for a number of reasons. A mark in unitary across the UK, a mark should only become registrable where it has fully overcome the public policy objections of Arts 3(1)(b) to (d), goods may circulate outside the region in which they have become distinctive and there would be no protection for honest concurrent users who used the mark for similar goods but outside the specification (e.g. in a different geographical area).

The IPKat reckons that this is undoubtedly the right decision. Distinctiveness which is geographically limited can anyway be protected by the law of passing off, which doesn’t quite have the same sledgehammer effect on traders in identical goods as registered trade mark law. The applicant’s revised specification, though clever, looks to the IPKat like an attempt to get around limits on acquired distinctiveness which are there for very good reasons.



Coming up in the ECJ

November is a good month for dilution cases. On 27 November, the ECJ’s long-awaited decision in Intel v CPM is due out. The IPKat is hoping that this will bring some long-awaited clarity to dilution, but he has this nasty fear that the ECJ will somehow find a way of wriggling out of answering the question. Also, today (5 November), the ECJ heard L’Oreal v Bellure. This is a comparative advertising case, referred by the UK, in which the Court of Appeal is effectively asking whether some form of harm to the trade mark owner in needed in order to prove unfair advantage under Art.5(2).

Even more on O2 - this time, trade mark use

The IPKat thinks it's worth giving some attention to the potential trade mark use issue in O2. It could have been argued that there was no infringement because H3G wasn't using the mark to identify its own services, but rather to identify O2's services, for the purposes of making a comparison with them.

The ECJ says at para.36:

"the use by an advertiser, in a comparative advertisement, of a sign identical with, or similar to, the mark of a competitor for the purposes of identifying the goods and services offered by the latter can be regarded as use for the advertiser’s own goods and services for the purposes of Article 5(1) and (2) of Directive 89/104."

So the court seems to be implicitly suggesting, consistent with Adam Opel, that the use must be use by the defendant for his OWN goods. However, the court seems to think using someone else's mark in a comparative advert to make a comparison with the claimant's goods is use for the defendant's goods, rather than for the claimant's.

The IPKat is not sure this makes sense, because if you use someone else's mark in a comparative ad, you're using the mark to identify that someone else's goods (otherwise the comparison won't work). Perhaps the key questions is what is meant by use 'in relation' to goods under Art5(1)(a) or, under Art.5(1)(b), when the defendant's goods are 'covered' by the mark.

As a follow-up to that point, although Art.5(1)(b) uses the term 'covered by', s.10(2) of the UK Trade Marks Act 1994 uses the words 'in relation to'. Did the drafter of the TMA know something that we don't?

The plot thickens if you take a look at Art.12 (grounds for revocation). There the Directive talks about use ‘in connection’ with goods. Again, the TMA talks about use ‘in relation’ to goods.

Bubbles in Luxembourg -- now the story can be told

The Court of Justice of the European Communities, having teased the waiting world with its press release, has finally published its ruling in the exciting dispute between two telecoms companies over the right to use bubbles in a price-comparison advertisement, Case C-533/06 O2 Holdings v Hutchison 3G.

Right: the bubbles battle has been a real cat-and-mouse game (artwork from Tambra Studios)

First, the facts: for the purpose of promoting its mobile phone services, O2 used images of bubbles and owned a number of pictorial bubble trade marks, registered in the UK for telecommunications apparatus and services. It was established that UK consumers associated images of bubbles in water (particularly against a graduated blue background) with O2 mobile phones.

H3G later launched a pay-as-you-go mobile phone service called ‘Threepay’ and, in the same year, started an comparative advertising campaign which used TV advertisements to make a price comparison with their competitors’ services, using bubbles imagery that was similar, but certainly not identical, to the bubbles registered by O2. O2 sued for infringement and the question arose as to whether the bubbles images in H3G's advertisement were absolved from liability for trade mark infringement on the basis that they complied with Article 3a(1) of Directive 84/450 on misleading advertising.

Unsuccessful in its claim at first instance, O2 appealed to the Court of Appeal for England and Wales, contending that the defence outlined above did not apply. H3G for its part said it didn't need the defence in the first place because its use of the bubbles was not the use of a similar mark in circumstances likely to give rise to confusion. The Court of Appeal then referred the following questions to the ECJ:

"Where a trader, in an advertisement for his own goods or services uses a registered trade mark owned by a competitor for the purpose of comparing the characteristics (and in particular the price) of goods or services marketed by him with the characteristics (and in particular the price) of the goods or services marketed by the competitor under that mark in such a way that it does not cause confusion or otherwise jeopardize the essential function of the trade mark as an indication of origin, does his use fall within either (a) or (b) of Art. 5 of Directive 89/1041?

Where a trader uses, in a comparative advertisement, the registered trade mark of a competitor, in order to comply with Art. 3a of Directive 84/4502 as amended must that use be "indispensable" and if so what are the criteria by which indispensability is to be judged?

In particular, if there is a requirement of indispensability, does the requirement preclude any use of a sign which is not identical to the registered trade mark but is closely similar to it?".

On 31 January Advocate General Mengozzi delivered his Opinion. He concluded:

"(1) The use of a sign identical or similar to the registered trade mark of a competitor in an advertisement which compares the characteristics of goods or services marketed by that competitor under that trade mark with the characteristics of goods or services supplied by the advertiser is covered exhaustively by Article 3a of Council Directive 84/450..., as amended ..., and is not subject to the application of Article 5(1)(a) or (b) of First Council Directive 89/104 ....

(2) Article 3a of Directive 84/450 is not to be interpreted as permitting the use, in a comparative advertisement, of a sign identical or similar to the registered trade mark of a competitor only when that use is indispensable for the purpose of identifying the competitor or the goods or services concerned".

The ECJ has now ruled as follows:

"1. Article 5(1) and (2) of First Council Directive 89/104 ... and Article 3a(1) of Council Directive 84/450 ..., as amended ..., must be interpreted to the effect that the proprietor of a registered trade mark is not entitled to prevent the use by a third party of a sign identical with, or similar to, his mark, in a comparative advertisement which satisfies all the conditions, laid down in Article 3a(1) of Directive 84/450, under which comparative advertising is permitted.

However, where the conditions required in Article 5(1)(b) of Directive 89/104 to prevent the use of a sign identical with, or similar to, a registered trade mark are met, a comparative advertisement in which that sign is used cannot satisfy the condition, laid down in Article 3a(1)(d) of Directive 84/450, as amended by Directive 97/55, under which comparative advertising is permitted.

2. Article 5(1)(b) of Directive 89/104 is to be interpreted as meaning that the proprietor of a registered trade mark is not entitled to prevent the use by a third party, in a comparative advertisement, of a sign similar to that mark in relation to goods or services identical with, or similar to, those for which that mark was registered where such use does not give rise to a likelihood of confusion on the part of the public, and that is so irrespective of whether or not the comparative advertisement satisfies all the conditions laid down in Article 3a of Directive 84/450, as amended by Directive 97/55, under which comparative advertising is permitted".

The IPKat says, what is clear is that, while the ECJ affirms that infringing acts of the Art.5(2) type -- conduct amounting to disparagements or unfair advantage -- are neutralised if that conduct falls within the scope of Directive 84/450, the rest of its ruling addresses only same-mark-same-goods/services and likelihood of confusion types of infringement under Art.5(1). This leaves it open to the ECJ to consider the interrelationship of Art.5(2) afresh and on its own merits in a further reference for a preliminary ruling.

Merpel adds, now it's up to the Court of Appeal to apply the ruling: but, given the way the ECJ weighs the facts, there are no prizes for guessing which way the Court of Appeal will go.

Properties of bubbles here
How to make the best bubbles here
I'm forever blowing bubbles here

A nice drop of bubbly from the ECJ

Today the ECJ has ruled on the dispute between O2 and H3G. O2 objected to a comparative advertisement, in which H3G used bubbles in the course of making a price comparison with O2's mobile telephone services. O2 is the proprietor of various trade marks depicting bubbles. A reference to the ECJ from the Court of Appeal of England and Wales ensued.

The court's judgment isn't out yet, but a press release is available on the ECJ's website.

This suggests:

• in contrast to the Advocate General's opinion, the ECJ is of the view that a comparative advertisement CAN infringe a trade mark
• however, the legislature has shown a clear intention to promote comparative advertising, and therefore the rights granted by trade mark law are limited by comparative advertising
• consequently, a trade mark owner CANNOT oppose the use of his mark in comparative advertising where all the condition of Art.3a of the Comparative Advertising Directive are met
• where there is a likelihood of confusion, by definition not all the conditions of Art.3a are met, and therefore the comparative advertiser can be pursued under trade mark law
• four conditions must be met before action can be taken against a comparative advertiser under trade mark law: (1) that use must be in the course of trade; (2) it must be without the consent of the proprietor of the mark; (3) it must be in respect of goods or services which are identical with, or similar to, those for which the mark is registered; and (4) it must affect or be liable to affect the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services, by reason of a likelihood of confusion on the part of the public
• in this case, there was no likelihood of confusion and so the fourth condition wasn't met and there could be no trade mark infringement by H3G

The IPKat reckons that it sounds like the ECJ has got pretty close to applying the law to the facts here. The Kat is in two minds about the way the decision seems to have panned out. On the one hand, it makes life a lot simpler conceptually if comparative advertising is taken out of trade mark law, but on the other hand, why as a matter of principle, should comparative advertising be treated differently from other forms of use, particularly since there is no express defence of comparative advertising in the Directive. He is also rather puzzled. What if you don't meet the other conditions of Art.3a, for example if you denigrate the mark? This is also a ground of trade mark infringement - is the ECJ trying to say that Art.5(2) infringement doesn't apply to comparative advertising?

More from the IPKat when the full judgment comes out.

More on O2 v H3G

The IPKat has taken a proper read through AG Mezzoni's Opinion in O2 v H3G (see previous post for reference and details).

The case involved use by H3G of bubbles in an advert which compared its phone tarrifs to those of O2. O2 objected, arguing that the use infringed Art.5(1)(b) of the Trade Marks Directive (similar marks; identical goods) and, because it took unfair advantage of its bubbles and/or denigrated them, H3G's advert was unacceptable under the Comparative Advertising Directive as well.

The Court of Appeal referred 3 questions to the ECJ:

‘(1) Where a trader, in an advertisement for his own goods or services uses a registered trade mark owned by a competitor for the purpose of comparing the characteristics (and in particular the price) of goods or services marketed by him with the characteristics (and in particular the price) of the goods or services marketed by the competitor under that mark in such a way that it does not cause confusion or otherwise jeopardise the essential function of the trade mark as an indication of origin, does his use fall within either (a) or (b) of Article 5[(1)] of Directive 89/104?

(2) Where a trader uses, in a comparative advertisement, the registered trade mark of a competitor, in order to comply with Article 3a of Directive 84/450 as amended must that use be “indispensable” and if so what are the criteria by which indispensability is to be judged?

(3) In particular, if there is a requirement of indispensability, does the requirement preclude any use of a sign which is not identical to the registered trade mark but is closely similar to it?’

The AG opined that comparative advertising is harmonised by the Comparative Advertising Directive, and should not be considered under trade mark infringement. However, this did not stop him pointing out that, had trade mark infringement been relevant, it would have been a tricky one to decide since the ECJ's jurisprudence on trade mark use is contradictory.

IPKat comment: it's not quite open season on trade marks (as the anonymous comentator in the previous post suggests, since under the Comparative Advertising Directive, we still look at types of harm which are mighty similar to trade mark infringement. It looks like good old s.10(6) is truly superfluous now.

On the second question, the AG found that the use of the trade mark did not need to be dispensible. Such a requirement wasn't suggested by the wording of the Directive or in previous cases. Also, it would be contrary to the spirit of the Directive, which sees comparative advertising as a good thing.

The favourable approach to comparative advertising meant that it should also cover use of marks which were similar, rather than identical, to the comparee's mark.

The AG then appears to go beyond his remit saying that in the circumstances, it would be hard to see how H3G could have taken unfair advantage ofO2's mark here. The AG says that the whole point of comparative advertising is to gain an advantage for oneself by establishing a link with the compared product. Thus, such a link would only be unfair if it might cuase the public to associate the reputation of the comparee's products with the comparor's. Such a link wouldn't occur here because in addition to the bubbles, H3G had identified O2 by reference to its word mark. The AG also said that while o2 might be able to argue that the distortion of its bubbles denigarted them, it could not raise the issue of whether the use had damaged their distinctiveness because damage to distinctiveness isn't mentioned in Art.3a.

IPKat comment: this favourable approach to comparative advertising is to be welcomed. He cautions readers to avoid using the AG's definitions of unfair advantage in relation to Art.5(2) of the Trade Marks Directive since they seem very much based in the justifications for comparative advertising, and also, appear to introduce a confusion element.

In view of the answer to the second question, the third question didn't need to be answered.

AG'S Opinion in O2 v H3G

Advocate General Mengozzi has delivered his Opinion from the UK reference in Case C-533/06 O2 Holdings v Hutchison 3G (the case concerning comparative advertising using bubbles).

He concludes:

... I propose that the Court give the following answer to the questions referred by the Court of Appeal (England and Wales):

(1) The use of a sign identical or similar to the registered trade mark of a competitor in an advertisement which compares the characteristics of goods or services marketed by that competitor under that trade mark with the characteristics of goods or services supplied by the advertiser is covered exhaustively by Article 3a of Council Directive 84/450/EEC of 10 September 1984 concerning misleading and comparative advertising, as amended by Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997, and is not subject to the application of Article 5(1)(a) or (b) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks.

(2) Article 3a of Directive 84/450 is not to be interpreted as permitting the use, in a comparative advertisement, of a sign identical or similar to the registered trade mark of a competitor only when that use is indispensable for the purpose of identifying the competitor or the goods or services concerned.

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