Another round of price comparisons ended up before a Judge, but this time it was not the usual combatants like the credit card companies or mobile telephone companies but the airlines that were in Court. British Airways ("BA") had taken Ryanair, the low costs airline, to Court over a series of adverts that Ryanair had run in national newspapers. The first advert was run in February and March 2000 and ran with the headline, "EXPENSIVE BA....DS!" and the second was run in November under the headline "EXPENSIVE BA!". The adverts made comparisons about the cost of flying between London and certain European cites on the respective airlines. BA had commenced a high Court action alleging malicious falsehood and also trade mark infringement.
In order to establish trade mark infringement, BA had to demonstrate that the Ryanair use of the "BA" registered trade mark was the use of a sign which is identical with the trade mark in relation to goods or services which were identical for which the mark was registered. This is referred to as infringement under section 10(1) of the Trade Marks Act 1994 (or just 10(1) infringement). In fact this was not even contested by Ryanair, they confirmed that their use of the trade mark in the adverts fell under the definition of this section. What Ryanair was alleging in defence was that their use of the trade mark, was "fair" in a way that is permitted by the law.
There are provisions in the 1994 Trade Marks Act that allows one person to use another persons registered trade mark without infringing it subject to conditions. The first of these allows a person to use the registered trade mark where the use is for the purposes of identifying the goods or services as those of the proprietor. So for instance, it is permissible to say "compatible with IBM" where in this case IBM is a registered trade mark. The law permits this use as you are only using the trade mark to identify the goods (or services) of the trade mark owner. The permitted use is not without its own restrictions. In order to gain the benefit of this defence you must use the registered trade mark "in accordance with honest business practices in industrial or commercial matters" and also if the use is "without due cause takes unfair advantage or, or is detrimental to, the distinctive character or repute of the trade mark" then it will not be allowed to enjoy the benefit of this defence.
The second defence allows a person to use another persons registered trade mark where the use is to indicate the "kind, quality, intended purpose, value, geographical origin, time of production of goods or rendering of services, or other characteristics of goods or services". In effect Ryanair's point was that they allowed to use "BA" it was to indicate the origin of the service, i.e. BA the airline. Once again this defence carries with it the caveat that the use of the registered trade mark "must be in accordance with honest practices". Before adjudicating upon the allegation of trade mark infringement and the defences, the Judge went on to consider the second cause of action, malicious falsehood. If there was malicious falsehood, then the use of the registered trade mark would not be "fair". This cause of action arises where one person uses (i) words that are false, (ii) that were published maliciously and (iii) were calculated to cause damage.
What BA alleged in support of the allegation of falsity was that (i) the BASTARDS headline was offensive and (ii) the false comparison carried out by Ryanair in some of its price comparisons and destinations. Ryanair's Sales and Marketing Director admitted to being ashamed of the first headline that they had used. Had they used it later advert they may well have been caught by the provisions of the Comparative Advertising Directive that now regulates advertising of this kind. As it was the second Ryanair advert did not repeat the word, so the Judge decided to say nothing further about it. The real point of interest was the actual fare comparisons that Rayanir. BA argued that the comparison was not "like for like".
The dispute centred around (i) the 'Saturday night rule' and (ii) the airports that were used by each airline. The Judge found that most people were aware that air fares were cheaper if you chose not to fly back on Saturday. Ryanair compared the price of their midweek return with BA's standard fare. An asterisk in the advert drew the attention of the reader to the conditions under which the ticket was offered. The Judge dismissed BA's argument. He found that people reading this would know there were conditions attached to the ticket on offer and in fact the asterisk drew their attention to the restrictions on the ticket, that it had to be a midweek return flight. Also even if you made a like for like comparison, BA was still significantly more expensive. The substance of the adverts was true and the Judge held that is what the reader would understand.
The second allegation of falseness was based on the airport that each airline flew to. Using one comparison, BA flew to Frankfurt and Ryanair to Hahn, which was some 68 miles away from the city centre. The Rayanir advert said that it flew to Hahn, but did not make the distance clear. Once again the Judge said this, even though true, was not significant enough to lead to a finding of falsity. In substance the comparison was accurate.
The case illustrates how the Court's adopt robust view of comparative advertising. The Judge also commented on how if found it strange that two mature companies were in Court over this series of advertisements. The message to take away from this is that the Court's expect a degree of hyperbole when they judge adverts, but so long as the adverts are fair and caveats are drawn to the reader's attention, then the Court's will not want to interfere. Ryanair escaped the Court's censure, but were not so fortunate before the Advertising Standards Authority. A complaint by a member of the public over the offensive nature of the BASTARDS advert, was upheld.
It is permissible to use another persons registered trade mark in order to identify the other person's goods or services.
The use of another person's registered trade mark has to be in accordance with honest practices and must not take unfair advantage, or be detrimental to the repute of the registered trade mark.
Comparative adverting is subject to the Comparative Adverting Directive 1997 lists the conditions that have to be adhered to in comparative advertising.
The Court's take a robust view of comparative adverting and expect that there is a degree of hyperbole.
Care should be taken to make the comparisons accurate, compare like for like and draw attention to any caveats.
First published in Brand Strategy in February 2001.