See you in Court

Wednesday 18 April 2012

It is not uncommon for businesses to spend substantial sums on marketing, but there are dangers involved in using a marketing campaign which aggressively targets a competitor by reference to its trade marks. Businesses should be aware that the Courts will not allow them to “ride on the coat tails” of others or build unfairly on a well-known competitor’s reputation, even where the business itself is a well-known brand in its own right.

The case of Specsavers –v- Asda concerned a marketing campaign by Asda to promote its in-store optician services. Asda used various marketing materials in their stores and on their website which included the taglines “Be a real spec saver at Asda” (“the first strapline”) and “Spec saving at Asda” (“the second strapline”). Asda had also used a logo mark of two non-intersecting ovals similar to those used by Specsavers.

Specsavers issued proceedings in the High Court for trade mark infringement and passing off. The Community Trade mark (CTM) Regulation provides the owner of a CTM with the right to prevent unauthorised third parties from using any sign where there exists a likelihood of confusion on the part of the public and any sign which takes unfair advantage of, or is detrimental to, the distinctive character of the CTM.

The use of the first strapline was found to be an infringement because it drew on the reputation of Specsavers and as this was intentional, it was found to be unfair. The second strapline was however acceptable because it had a much weaker link and any detriment was therefore much less likely.

Mr Justice Mann found that the use of the logo did not amount to trade mark infringement because the ovals did not overlap (as those used by Specsavers) and Asda’s very well known name appeared in the logo so there was no confusion. This was reinforced by the fact that the material appeared only in Asda’s own stores and on its website.

The claim for passing off failed because Asda’s intention was only to invite favourable comparisons with Specsavers and not to misrepresent itself as its competitor.

The parties appealed. The Court of Appeal upheld the decision relating to the first strapline and further found that the second strapline did infringe Specsavers’ marks when used as part of its composite advertising campaign. Using Specsavers brand as a reference point for consumers to convey that Asda’s service was of good value did amount to taking an advantage.

Asda’s cross-appeal relating to the first strapline was dismissed as the Court considered they had adopted the strategy of using a strapline that was intended to bring to mind its competitor and to convey its own superiority in terms of value, range and professionalism. The Court rejected the argument that this was merely comparative advertising.

Lord Justice Kitchin confirmed that in assessing the likelihood of confusion arising from the use of a sign, the Court must consider the matter from the perspective of the average consumer of the goods or services in question. It must take into account all the circumstances that are likely to operate in the average consumer’s mind in considering the sign and the impression it is likely to make on him.

The Court found that Asda had intended to benefit from and exploit the Specsavers brand to its own advantage. Specsavers had a significant reputation and it was the intention of Asda to target this campaign for identical goods and convey the message that they offered good, if not better, value.

The Court of Appeal is seeking guidance from the Court of Justice as to the importance to be attached to the colour of a trade mark which, although not registered, has become synonymous with that mark when assessing public confusion and unfair advantage.