O2 had lost its original case and appealed, and the Court of
Appeal had asked the European Court of Justice (ECJ) to rule on
whether 3's use of the motifs was illegal under trade mark law.
The ECJ, Europe's highest court, ruled today that 3 was entitled
to use the symbols as long as it did not confuse the public into
thinking that the ad was from O2 itself.
Telefonica-owned O2 holds registered trade marks for its name
and for images of bubbles in relation to telecoms services, and
claimed that the use of its name and of bubbles similar to its own
in the 3 price comparison ad violated its trade marks.
The ECJ said that violation would only occur if the use was in
the course of trade; was without the trade mark owner's consent;
was in relation to the same kinds of goods or services as that for
which the trade mark is registered; and confuses consumers as to
the origin of the goods or services.
The ECJ said that since the fourth condition was not met, O2
could not oppose the use of the bubbles or its name.
"The Court notes that the first three conditions are satisfied
in the case in the main proceedings. By contrast, in accordance
with the referring court’s own findings, the use by H3G of bubble
images similar to the trade marks did not give rise to a likelihood
of confusion on the part of consumers," said an ECJ statement.
"The advertisement, as a whole, was not misleading and, in
particular, did not suggest that there was any form of commercial
link between O2 and H3G [3]. Consequently, the fourth condition is
not satisfied in the case in the main proceedings," it said.
"The Court finds that the proprietor of a registered trade mark
is not entitled to rely on his trade mark rights 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 is registered where
such use does not give rise to a likelihood of confusion on the
part of the public," said the ECJ.
Comparative advertising is allowed, but the ECJ ruling makes it
slightly clearer how much of a competitor's corporate identity can
be used in an advert. Trade mark law expert Judith Tonner of
Pinsent Masons, the law firm behind OUT-LAW, said, though, that the
decision still left some grounds for confusion.
"It can be inferred from the ECJ's finding in favour of H3G that
their use of more than one of O2's marks wasn't viewed as
increasing the likelihood of consumer confusion in any way," she
said. "It's difficult to predict where the line would be drawn with
this. For example, would it be within the terms of the comparative
advertising directive to overload a comparative advert with your
competitor's brand assets? From a brand owner's perspective, it
would be reasonable to view such an action as the advertiser
pushing their luck."
The ECJ's ruling is in answer to questions from the Court of
Appeal, which must finally rule in the case, but the opinion from
the ECJ will set the standard for future advertising. Tonner said
that it could well benefit consumers.
"From a consumer's viewpoint, clear comparison of features like
prices will be welcomed as encouraging a competitive marketplace.
For those whose brands are being used in adverts, it will obviously
be frustrating that they are unable to prevent a competitor's use
of their mark, or even multiple marks, provided the comparative
advertising directive's conditions of honest and objective use are
deemed to have been met," she said.
