IP and Retail Conference: session 3

First to speak after lunch was Institute of Practitioners in Advertising's Becky Chong, looking at the use of third party brand names and copyright material in advertising and marketing material.  Summarising the basic IP issues, Becky was soon launching into Advertising Standards Authority adjudications and BCAP and CAP regulation.

"Basket of goods" comparisons are a popular source of complaints, where supermarkets claim that their goods are, on average, cheaper than others.  Tesco's complaint against Asda's advertisement that a £15 saving was made was dismissed on the basis that the words objected to in the advertisement were taken to be an endorsement by a specific consumer and not as an advertising comparison. The methodology of comparison is also open to criticism, where some of the products in the baskets are own-brand goods that have no identical comparator.

Becky next tackled the use and abuse of the rights and images of celebrities. Trade marks, copyright and passing off are all relevant here, as well as rights of privacy both in law and under the standards imposed by the various advertising codes. The Royal Family is a special case, since permission is in principle -- though not in practice -- required.  Offensive and racist references to celebrities are also objectionable, though the right may be difficult to get them upheld.

Dead celebrities do not automatically enter the public domain; they may be registered as trade marks and some such personages -- notably Albert Einstein -- are the subject of litigation.

Online advertising is governed by the Advertising Standards Authority, Becky reminded us, though not everyone is yet aware of this. This can affect sponsored tweets and other online communications, where there has to be some clear indication that the online content is an advertisement and not a genuine private communication.

Chris Stothers (Arnold & Porter) spoke next, on grey goods and the problems they raise for the retail sector.  Distinguishing genuine, grey and counterfeit goods, Chris then asked the important questions: (i) who cares and (ii) why?  Suppliers, retailers and consumers are all interested, in their respective ways.   IP rights are only part of the story, since -- despite EU competition laws -- many businesses seek to restrict the free movement of goods through contract or may refuse to contract with certain parties.  They may be able to get away with this if they do not hold a dominant position within the European single market and, even if they don't and they are named and shamed following a Commission investigation, the naming and shaming won't be felt until some years after the initial restrictions have been imposted.

Where a retailer finds that it is being substantially undercut by ostensibly grey goods, the first recourse should be to the supplier, which may give a greater discount to enhance competitiveness or, if it suspects that the goods are counterfeit, may investigate it.  There's no point in saying "we're competing against grey goods at lower prices: can you please stop them?", which is an invitation to anticompetitive conduct. Whatever you write, bear in mind that the competition authorities might read it later.

The flip side of parallel imports is parallel exports, which can cause local shortages and force up prices in the home market. As Chris pointed out, in the UK the pricing of pharmaceutical products has caused a shift from parallel imports to parallel export, and this has indeed caused some problems with availability.

What risks do retailers face? The main issue is how you complain to the supplier, so as not to be tarnished with the label of being anticompetitive. Compliance training can come in handy there. If you are selling grey goods, you want to satisfy yourself that they were truly first put on the market in the European Economic Area (EEA) -- though suppliers may be a bit coy about providing the relevant information. Oh, and don't forget to have a budget for dealing with any issues relating to loss of supply or the cost of enforcement.