O2 Ltd & Anor v Hutchison 3G UK Ltd.

Comparative advertising is permissible where the comparison is objectively fair and the competitor’s mark is used in accordance with honest practices. The court should assess the advertisement as a whole, focusing on its headline or take-home message rather than adopting a microscopic textual analysis. The relevant standard is objective and reflects what the reasonable public expects from advertising, including a degree of hyperbole. An advertisement that is significantly misleading will not satisfy the honest-practices requirement. At an interlocutory stage, plainly untrue advertising may justify restraint, but relief must remain proportionate to the likely damage. A decorative sign will not ordinarily be indispensable to an objective comparison and may fall outside the comparative-advertising defence.

The claimants sought interlocutory injunctions restraining Hutchison 3G UK Ltd from broadcasting and publishing comparative advertisements concerning prepaid mobile-phone tariffs. They alleged that the advertisements were misleading and infringed their registered O2 and bubble marks. The defendant relied on the comparative-advertising protection in section 10(6) of the Trade Marks Act 1994 and article 12(b) of the relevant Community trade mark regulation.

The advertisements compared the price of a three-minute peak-rate call on O2’s service with the price of the same call on ThreePay. The central issues were whether the comparison was materially misleading, whether the use of the marks was honest and indispensable to the comparison, and whether interim relief was proportionate.

The application for interlocutory relief was refused.

1. Comparative advertising. Article 12(b) of the Community trade mark regulation was capable of protecting honest comparative use of a competitor’s mark, including use concerning price. The domestic and Community provisions had to be read consistently with the comparative advertising policy reflected in the relevant Community instruments. The court applied the approach explained by Jacob J in British Airways Plc v Ryanair Limited.
2. Honest practices. The assessment was objective. The court had to consider whether a reasonable reader, given the full facts, would regard the advertisement as dishonest. The advertisement had to be read as a whole, with attention to its headline or take-home message. The court should allow for the public’s familiarity with advertising hyperbole and should avoid microscopic analysis. A significantly misleading advertisement would not be honest.
3. On the preliminary evidence, the take-home message that ThreePay was generally cheaper for the relevant target market was strongly arguable as true. The limitation concerning unused voucher minutes therefore did not, at this stage, make the comparison materially misleading. Even if that conclusion were wrong, the advertisement was not shown to depart significantly from honest practices.
4. The use of the bubbles was arguably connected with the O2 mark but was not indispensable to making the price comparison. Infringement of the bubble marks and the comparative-advertising defence were both arguable. Infringement of the O2 word mark was not really arguable.
5. The balance of convenience did not justify an injunction. The evidence of dishonesty and confusion was weak, the likely unquantifiable loss was slight, and both parties could meet any award of damages. Any disruption caused by interim relief would therefore be disproportionate to the damage alleged.

Not stated in the judgment.