comparative advertising

01 January 2001

Rachel Bunn

British Airways plc v Ryanair Limited

During 1999, Ryanair placed advertisements in the press that compared the price of Ryanair and British Airways flights to various European destinations under the headings "Expensive BA" and "Expensive BA & .DS!". British Airways sued Ryanair for both trade mark infringement and malicious falsehood. On 5 December, Mr Justice Jacob held that, despite a certain level of ambiguity, the comparative advertisements were honest such that Ryanair had a defence under sections 11(2(b) and 10(2) of the Trade Marks Act 1994 (the "Act"). Further, Jacob J rejected the malicious falsehood claim entirely, adding further weight to the proposition that, in most case, malicious falsehood can add little to a comparative advertising claim.

Trade Mark Infringement - Section 11(2)(b) Defence

Section 11(2)(b) of the Act (reflecting Article 6(1)(b) of the Trade Mark Directive) provides that a registered trade mark is not infringed by the use of indications concerning the kind, quality, intended purpose, value, geographical origin, the time of production of goods or rendering of services, or other characteristics of goods or services. The use must be in accordance with honest practices in industrial or commercial matters.

British Airways submitted that section 11(2)(b) did not apply to a comparative advertisement and that its purpose was to allow honest descriptions but not descriptions using a trade mark as a comparison. Jacob J called this a "startling submission" and postulated that if this were correct no one in trade would be permitted to describe their goods or services perfectly honestly by reference to another s trade mark. He pointed to recital 10 of the Comparative Advertising Directive 97/55 of 6 October 1997 ("the Directive") that deals with the purpose of protection and commented that this contains no hint of an intention to prevent honest, non-deceptive use of a mark. Jacob J brushed British Airways assertion to one side, and went on to consider the section 10(6) defence.

Trade Mark Infringement - Section 10(6) Defence

Section 10(6) of the Act (which has no precise equivalent in the Trade Mark Directive provides a defence to trade mark infringement where it can be shown that the defendant s use of the registered trade mark is for the purpose of identifying the goods and services as those of the claimant proprietor. The defence applies only so long as such use is in accordance with honest practices in industrial and commercial matters and neither takes unfair advantage of, nor is detrimental to, the distinctive character or repute of the trade mark.

British Airways attacked Ryanair s section 10(6) defence on the basis that section 10(6) of the Act should be treated as providing a defence only if there was compliance with the conditions for comparative advertising laid down in the Directive, as implemented in the UK by the Control of Misleading Advertisements (Comparative Advertisements) (Amendment) Regulations 2000 and brought into force in April 2000. Publication of the advertisements pre-dated the implementation date of the Directive in the UK. In view of this, British Airways argued that the Marleasing1 principle of European law should be interpreted as meaning that it is necessary to construe the earlier Act in accordance with the subsequent Directive from the moment of the publication of the Directive, even though the Comparative Advertising Directive itself was not required to be implemented until a later date.

Jacob J rejected this argument on two grounds. Firstly, he could not find any direction in the Directive requiring member states to amend their trade mark laws to permit comparative advertising only in accordance with the Directive. Secondly, he could find no authority to support such an interpretation of the Marleasing principle. So even if the Comparative Advertising Directive had required member states to amend their trade mark law, the Directive would not have been in force at the time the advertisements were published. The interpretation of section 10(6) of the Act therefore remains unqualified by the Comparative Advertising Directive.

Instead, Jacob J applied the principles he had previously set out in Cable & Wireless v British Telecommunications2. He applied the objective test and concluded that a reasonable reader (expecting hyperbole and puff from advertisers) would be likely to say, upon being given the full facts, that the advertisements were honest. This is irrespective of the fact that (i) Ryanair called (by implication) British Airways "bastards"; (ii) Ryanair exaggerated the price differentials between its fares and British Airways fares by about 40%; (iii) in the advertisement the ambiguous phrase "mid week return fares" was used; and (iv) it was not made clear that the Ryanair flight to Frankfurt flew to a different airport, further away from the centre of Frankfurt, than the comparative British Airways flight.Malicious Falsehood

British Airways advanced various reasons as to why the advertisements amounted to the tort of malicious falsehood. Jacob J viewed these suspiciously, commenting that the real reason (he suspected) was that victory in a trade mark infringement case did not sound as good as victory in a malicious falsehood claim. Jacob J said that the "bastard headline" amounted to no more than verbal abuse and that, despite a level of ambiguity (see factors (ii) to (iv) above) the average consumer would not find the advertisements misleading because "in substance" they were true.

It is, however, worthwhile noting that pre-trial a complaint regarding the bastard advertisement was made to the Advertising Standards Authority and upheld on the basis that the headline "was likely to cause serious or widespread offence". Similarly, if such an advert were to appear today, Jacob J commented that it would probably be prohibited under the UK Regulations implementing the Comparative Advertising Directive. However, the UK Regulations do not confer any right of action in civil proceedings.

First published in WIPR in January 2001.

1 Case 106/89 [1997]ECR I-4135
2 Cable &Wireless v. British Telecommunications [1998] FSR 383