Bubbles in Luxembourg -- now the story can be told

The Court of Justice of the European Communities, having teased the waiting world with its press release, has finally published its ruling in the exciting dispute between two telecoms companies over the right to use bubbles in a price-comparison advertisement, Case C-533/06 O2 Holdings v Hutchison 3G.

Right: the bubbles battle has been a real cat-and-mouse game (artwork from Tambra Studios)

First, the facts: for the purpose of promoting its mobile phone services, O2 used images of bubbles and owned a number of pictorial bubble trade marks, registered in the UK for telecommunications apparatus and services. It was established that UK consumers associated images of bubbles in water (particularly against a graduated blue background) with O2 mobile phones.

H3G later launched a pay-as-you-go mobile phone service called ‘Threepay’ and, in the same year, started an comparative advertising campaign which used TV advertisements to make a price comparison with their competitors’ services, using bubbles imagery that was similar, but certainly not identical, to the bubbles registered by O2. O2 sued for infringement and the question arose as to whether the bubbles images in H3G's advertisement were absolved from liability for trade mark infringement on the basis that they complied with Article 3a(1) of Directive 84/450 on misleading advertising.

Unsuccessful in its claim at first instance, O2 appealed to the Court of Appeal for England and Wales, contending that the defence outlined above did not apply. H3G for its part said it didn't need the defence in the first place because its use of the bubbles was not the use of a similar mark in circumstances likely to give rise to confusion. The Court of Appeal then referred the following questions to the ECJ:

"Where a trader, in an advertisement for his own goods or services uses a registered trade mark owned by a competitor for the purpose of comparing the characteristics (and in particular the price) of goods or services marketed by him with the characteristics (and in particular the price) of the goods or services marketed by the competitor under that mark in such a way that it does not cause confusion or otherwise jeopardize the essential function of the trade mark as an indication of origin, does his use fall within either (a) or (b) of Art. 5 of Directive 89/1041?

Where a trader uses, in a comparative advertisement, the registered trade mark of a competitor, in order to comply with Art. 3a of Directive 84/4502 as amended must that use be "indispensable" and if so what are the criteria by which indispensability is to be judged?

In particular, if there is a requirement of indispensability, does the requirement preclude any use of a sign which is not identical to the registered trade mark but is closely similar to it?".

On 31 January Advocate General Mengozzi delivered his Opinion. He concluded:

"(1) The use of a sign identical or similar to the registered trade mark of a competitor in an advertisement which compares the characteristics of goods or services marketed by that competitor under that trade mark with the characteristics of goods or services supplied by the advertiser is covered exhaustively by Article 3a of Council Directive 84/450..., as amended ..., and is not subject to the application of Article 5(1)(a) or (b) of First Council Directive 89/104 ....

(2) Article 3a of Directive 84/450 is not to be interpreted as permitting the use, in a comparative advertisement, of a sign identical or similar to the registered trade mark of a competitor only when that use is indispensable for the purpose of identifying the competitor or the goods or services concerned".

The ECJ has now ruled as follows:

"1. Article 5(1) and (2) of First Council Directive 89/104 ... and Article 3a(1) of Council Directive 84/450 ..., as amended ..., must be interpreted to the effect that the proprietor of a registered trade mark is not entitled to prevent the use by a third party of a sign identical with, or similar to, his mark, in a comparative advertisement which satisfies all the conditions, laid down in Article 3a(1) of Directive 84/450, under which comparative advertising is permitted.

However, where the conditions required in Article 5(1)(b) of Directive 89/104 to prevent the use of a sign identical with, or similar to, a registered trade mark are met, a comparative advertisement in which that sign is used cannot satisfy the condition, laid down in Article 3a(1)(d) of Directive 84/450, as amended by Directive 97/55, under which comparative advertising is permitted.

2. Article 5(1)(b) of Directive 89/104 is to be interpreted as meaning that the proprietor of a registered trade mark is not entitled to prevent the use by a third party, in a comparative advertisement, of a sign similar to that mark in relation to goods or services identical with, or similar to, those for which that mark was registered where such use does not give rise to a likelihood of confusion on the part of the public, and that is so irrespective of whether or not the comparative advertisement satisfies all the conditions laid down in Article 3a of Directive 84/450, as amended by Directive 97/55, under which comparative advertising is permitted".

The IPKat says, what is clear is that, while the ECJ affirms that infringing acts of the Art.5(2) type -- conduct amounting to disparagements or unfair advantage -- are neutralised if that conduct falls within the scope of Directive 84/450, the rest of its ruling addresses only same-mark-same-goods/services and likelihood of confusion types of infringement under Art.5(1). This leaves it open to the ECJ to consider the interrelationship of Art.5(2) afresh and on its own merits in a further reference for a preliminary ruling.

Merpel adds, now it's up to the Court of Appeal to apply the ruling: but, given the way the ECJ weighs the facts, there are no prizes for guessing which way the Court of Appeal will go.

Properties of bubbles here
How to make the best bubbles here
I'm forever blowing bubbles here