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3 UK wins O2 bubble trade mark case

Mobile phone company 3 UK yesterday won a trade mark action brought against it over a 2004 price comparison ad campaign that used the O2 trade mark along with O2’s brand imagery – bubbles – to identify the rival firm.24 Mar 2006

The offending ad featured a concentrated circle of white bubbles on a black screen, expanding to fill the screen as a voice over explained, "On O2 pay-as-you-go the first three minute peak rate call each day could cost you 75p”. Text at the bottom of the screen then referred to O2. Later on in the 20-second ad, another voice over advised that “with ThreePay that exact same call could cost 15p".

O2 went to court in an attempt to prevent 3 running the advert, but failed to obtain an injunction. O2 then focused its attention on the use of bubble imagery in the advert, claiming that this breached its trade marks in bubble images.

In the High Court yesterday, Mr Justice Lewison ruled in favour of 3.

He found that O2’s bubbles were sufficiently distinctive to give the firm a valid trade mark in the images, and that 3’s use of bubbles at the start of its ad was confusingly similar to some of O2’s trade marked images – and was therefore in breach of those trade marks. But, said the Judge, 3 had a valid defence under the 1997 Comparative Advertising Directive.

This Directive, implemented into UK law by The Control of Misleading Advertisements (Amendment) Regulations 2000, allows parties, where it is “indispensable, in order to make comparative advertising effective, to identify the goods or services of a competitor, making reference to a trade mark or trade name of which the latter is the proprietor”.

According to the Judge, the Directive applied not only to the use of registered trade marks, but could also apply to marks that were similar to, but not identical with, the registered trade marks – such as the bubble imagery used by 3.

O2 queried whether the use of the bubble imagery was “indispensable” in making the comparison, given that the name brand was also shown, but Judge Lewison dismissed the argument.

“The point at issue is trade mark infringement,” he said. “O2's logo is a trade mark. Why should it be acceptable for H3G [Hutchison 3G UK Ltd – which owns 3] to have used one of O2's trade marks in a comparative advertisement, but not another?”

The Judge also considered whether there had been trade mark infringement under a second ground – that O2’s bubble mark had a reputation within the UK, and that 3’s use had taken unfair advantage of, or had been detrimental to the distinctive character or repute of the mark, effectively diluting it.

While he found, hesitantly, that one of O2’s bubble images had a reputation within the UK, he could not find that 3’s bubbles would have brought this particular image to mind. Accordingly he ruled that there had been no trade mark infringement on this ground.

Even if there had been, he said, 3 would again have had a defence under the Comparative Advertising Directive.

Taken as a whole, said the Judge, he could not regard the advert as:

“anything other than a fair and objective price comparison which does not take unfair advantage of or denigrate O2's trade marks or brand. As I have said comparative advertising is necessarily robust; and within the confines of the Comparative Advertising Directive, advertisers should, in my judgment be permitted to do what is needed to make the comparative advertisement effective.”

Graeme Oxby, Marketing Director of 3 UK, welcomed the ruling.

"O2 has tried to stop 3 using effective comparative advertising, but fortunately for the UK consumer they've completely failed in their aims. Our advert was a legitimate way for us to highlight the great value we offered in comparison to O2,” he said.

O2 is considering an appeal, according to reports.