November 2004
The Battle of the Bubbles in the Rival Mobile Market is set to Fizz and Blast in Court
The British phone company MmO2, which operates under the O2 brand in Germany, Britain and the Republic of Ireland, is suing the video pioneer 3G UK for trade mark infringement and unfair price comparisons in advertisements. The case was sparked by a number of TV, print and radio adverts run by the Hutchinson Whampao-owned brand in August, promoting its Three Pay Tariff. MmO2 sought a High Court injunction banning 3G from infringing a total of 18 trade marked images of oxygen bubbles which MmO2 claim are a linchpin of and synonymous with its brand but the judge refused to grant an interim injunction to MmO2 ahead of a full hearing. It was established for 3G UK, that the right to use accurate comparative advertising should not be interfered with by trade mark infringement allegations, where a trade mark had to be used in order to make comparisons.
MmO2 have been using this imagery since their demerger with BT in 2001. They contend that by using this imagery to advertise similar products and services, 3 are trying to pass off their products as those of MmO2. Furthermore, the Advertising Standards Authority received a complaint from O2 (UK), T-Mobile (UK) and a member of the public, who objected to the price comparisons evidenced on a poster, three national press advertisements, a regional press advertisement and an in-store leaflet for a mobile phone service provider. The Authority upheld all but one of the nine complaints made, saying that the advertisements were misleading for various reasons. Interestingly, this is at odds with the judge's preliminary view, which did not regard the price comparisons as inaccurate or to be in breach of the principle of "honest practice".
Briffa Comment
In essence, comparative advertising is perfectly legal but it is only permitted where a number of conditions are met under various pieces of legislation. It could be considered unfair and misleading and even that it distorts competition by restricting consumer choice if it goes outside of the prescribed remit. The advertiser runs the risk that his product will be identified with the product of a competitor. Where the reasonable consumer would not be confused as to the origin of each product in such an advertisement, there will be no action in passing off. With regard to the various challenges put forward by MmO2 against 3, the basis of the Advertising Authority's decision stemmed from a failure to adhere to the CAP code. This case highlights the importance of being able to substantiate claims in advertisements. The code also stipulates that no communication (including comparative claims) should mislead the public by exaggeration, omission or otherwise. Features of a competitor's products, which may include price, should be clearly, fairly and objectively compared and the elements of comparisons should not be selected in a way that gives the marketers an artificial advantage. The advertising code proves to be a crucial checklist for those dealing with clearance.