O2’s trademark woes.
After a four year battle O2, the British mobile phone operator, lost the trademark infringement case it brought against 3, part of the Hong Kong conglomerate Hutchison Whampoa.
In an interesting test of trademark law, the European Court of Justice declared that 3 could use the O2 bubbles is its advertising as long as it did not cause consumer confusion. The European Court stated that there are four steps to be taken in order to prove that there has been a trademark infringement.
1. The alleged infringement must be in the course of trade;
2. The use of the mark must be without permission;
3. The use of the mark must relate to similar or identical goods or services; and
4. The way in which the trademark is being used must be likely to cause confusion.
[youtube]http://www.youtube.com/watch?v=U_XFVYrQbzg[/youtube]
Giles Crown, 3’s lawyer from Lewis Silkin, said, “The judgment confirms 3’s right to engage in robust but fair advertising.
“It is also great news for other advertisers engaged in comparative advertising. They are entitled to do so provided they don’t cause any consumer confusion. However if they do, they could still be sued for trademark infringement. In this way the judgment balances the interests of the comparative advertisers and the rival brand owners.”
It appears that the lawyers are divided on the implication of the ruling in which the European Court stated, “The court finds that the proprietor of a registered trademark is not entitled to rely on his trademark rights to prevent the use, by a third party, in a comparative advertisement, of a sign similar to that mark … where such use does not give rise to a likelihood of confusion on the part of the public.”
Robin Fry, an intellectual property partner at law firm Beachcroft, said: “The freedom apparently given by this court ruling is very limited: most advertisers will still want to include a visual reference to their competitor’s product - which remains unlawful if it means that any ‘artistic work’ is shown.”
With a differing view, Andy Millmore, a partner at law firm Harbottle and Lewis, warned that the ruling could become a “counterfeiters charter” without further clarifications.
“This judgment appears to be saying that if there is no question of someone being confused over whose product it is, then trademark laws do not engage. This is what will be worrying, and will be seen as part of a trend towards limiting trademark protection.
“For example, somebody could say ‘ buy my fake Rolex watch for five pounds’. If the rationale in this ruling is extended beyond comparative advertising, then because they’ve made clear that the watch is fake - and therefore there is no possible confusion in the minds of the consumer - the logical extension is that the sale is also permissible.”
In the UK companies have to adhere to the Consumer Protection from Unfair Trading Regulations and the Business Protection from Misleading Marketing Regulations when advertising. The latter of these states that a company must not “discredit or denigrate trademarks of a competitor.” In the case of O2, they themselves admitted that the facts presented in the advert were correct. With that in mind, I am not sure how the fake Rolex argument stands.
What is clear is that if a company chooses to use a third parties trademarks in its advertising it can do so, but it must be careful how it presents it.
Useful links
- The European Court of Justice's decision in full
- Click on the link to Case C‑533/06 for the full decision.
- O2's Company site
- 3's Company site
- Wikipedia - European Court of Justice
- The Court of Justice of the European Communities, usually called the European Court of Justice (ECJ), is the highest court in the European Union (EU). It has the ultimate say on matters of EU law in order to ensure equal application across the various European Union member states. This article gives a lot more information regarding the court.