Gibraltar (UK) Limited and Vet Plus Limited v Viovet Limited [2024] EWHC 777 (Ch)
Key points
- Comparative advertising acknowledges that businesses can use a competitor’s trade mark legitimately in certain circumstances.
- Businesses which seek to rely on a defence of comparative advertising must advertise in a way which is fair, objective, verifiable, accurate, non-derogatory and honest taking account of all the characteristics of the advertisement and the product.
- Advertisements which fail to meet the conditions will infringe.
There is a fine line between fair competition and trade mark infringement. Careful analysis is required to ensure compliance with the law.
What is comparative advertising?
Comparative advertising occurs when an advertisement identifies both the advertiser’s own product or service and a competitor’s product or service (either explicitly or implicitly) to highlight differences in price, quality, performance, or other features.
The law seeks to strike a fair balance between trade mark protection, which reduces confusion among consumers and protects the investment made by businesses in developing their brand, and, on the other hand, encouraging fair competition.
Comparative advertising must therefore comply with specific legal regulations to prevent misleading claims and unfair advantage-taking.
The law seeks to balance two competing interests:
- Encouraging fair competition by allowing businesses to promote their products in a meaningful way.
- Protecting intellectual property rights by ensuring trade mark owners do not suffer harm through unfair or misleading comparisons.
The law
The law is set out in:
- Directive 2006/114/EC (the Comparative Advertising Directive (CAD))
- Regulation (EU) 2017/1001
- The Business Protection from Misleading Marketing Regulations 2008 (the 2008 Regulations)
The CAD establishes the legal framework and the 2008 Regulations implement the CAD in the UK. In addition, although the United Kingdom has left the EU and can therefore deviate from EU law, it is often helpful to refer to the EU legislation because the Court of Justice has given judgments interpreting that specific wording.
Article 9 of Regulation (EU) 2017/1001 states:
- The registration of [a] trade mark shall confer on the proprietor exclusive rights therein.
- …the proprietor of that… trade mark shall be entitled to prevent all third parties not having his consent from using in the course of trade, in relation to goods or services, any sign where: (a) the sign is identical with the… trade mark and is used in relation to goods or services which are identical with those for which the… trade mark is registered;
Comparative advertising is therefore an exception to the principle that use of a competitor’s trade mark constitutes trade mark infringement.
When is comparative advertising a defence to trade mark infringement?
Regulation 4 of the 2008 Regulations sets out that comparative advertising is permitted only when:
- it is not misleading under Regulation 3[1];
- it is not a misleading action under Regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008 or a misleading omission under Regulation 6 of those Regulations;
- it compares products meeting the same needs or intended for the same purpose;
- it objectively compares one or more material, relevant, verifiable and representative features of those products, which may include price;
- it does not create confusion amongst traders-
- between the advertisers and a competitor, or
- between the trade marks, trade names, other distinguishing marks or products of the advertiser and those of a competitor;
- it does not discredit or denigrate the trade marks of a competitor;
- for products with designation of origin, it relates in each case to products with the same designation;
- it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products;
- it does not present products as imitations or replicas of products bearing a protected trade mark or trade name.
In order to qualify for the comparative advertising defence, any business which wishes to use a competitor’s trade mark must do so in a way which is fair, objective, verifiable, accurate, non-derogatory and honest.
If any of the conditions are not met then the defence will be unavailable in response to an allegation of trade mark infringement.
The First Instance Decision[2]
In the case of Gibraltar UK Ltd & Vet Plus Ltd v Viovet Ltd, the High Court of England & Wales considered whether certain advertising practices amounted to an unauthorised and misleading use of the claimants’ registered trade marks, contrary to the 2008 Regulations.
The two claimants in this case were:
- Gibraltar (UK) Limited (GUK) – the owner of trade marks for SYNOQUIN, AKTIVAIT, FIBOR, COATEX, and CYSTAID, which are used for veterinary nutraceutical products.
- Vet Plus Limited (VetPlus) – the authorised supplier of products sold under the trade marks.
VetPlus distributes its products through veterinary wholesalers, who then sell them to pet owners following a veterinary consultation and recommendation. The claimants asserted that the products sold under the trade marks have a strong reputation in the UK veterinary market for high quality and efficacy, supported by clinical testing.
The defendant, Viovet Ltd (Viovet), operates an online retail platform (www.viovet.co.uk) selling both its own-brand veterinary nutraceutical products and third-party brands, including VetPlus products. Therefore, a customer visiting the website could choose between purchasing VetPlus-branded products or Viovet’s own-brand alternatives.
The advertisements
Between August 2021 and June 2022, Viovet ran a series of three advertising campaigns on its website while offering VetPlus products to visitors. In the proceedings, these advertisements were classified into three categories, as outlined below:
- Annex A advertisement
When a customer selected a VetPlus product, they were presented with two buttons:
- an orange button labelled “Add to Basket”, which, if clicked, would (subject to the Annex B advertisement below) enable the customer to purchase the selected VetPlus product,
or
- a red button featuring reversible arrow symbols and text stating either “Save £[x] per day”, “Swap and Save [£]”, or “Try Something New”. Clicking this button redirected the customer to one of Viovet’s own-brand products.
- Annex B advertisement
If a customer selected “Add to Basket” from the Annex A advertisement, they were shown a pop-up window displaying the VetPlus product they had originally selected and a Viovet own-brand alternative, positioned alongside it.
Beneath each product, the price and price per day were displayed, with Viovet’s alternative consistently priced lower. Between the two products, reversible arrow symbols were placed, and at the bottom of the pop-up, the customer was given two options:
- an orange button labelled “Swap and Save”, which, if clicked, directed them to the Viovet own-brand product displayed, and
- a white button labelled “No Thanks”, which, if clicked, allowed the customer to proceed with purchasing the originally selected VetPlus product.
- Annex C advertisement
This advertisement related exclusively to Aktivait, a VetPlus product. On the product’s listing page, the customer was shown a “Read More” button. Upon clicking this button, the customer was redirected to an advertisement for Viovet’s own-brand product, “RenewMe”, which included statements such as “contains trusted ingredients as found in Aktivait” and stated that this product was a “more cost-effective option”.
Trade mark infringement proceedings
Upon becoming aware of the advertisements, the claimants issued proceedings alleging that Viovet’s advertising constituted trade mark infringement because its marks had been used in a way which reached UK comparative advertising regulations.
Viovet denied wrongdoing, arguing that its advertisements simply compared price and had used the trade marks in question for the purposes of comparative advertising in such a way that was in accordance with the 2008 Regulations and thus no trade mark infringement had taken place.
The preliminary issue for the Court to determine was what message the advertisements conveyed to the average consumer. In particular, the two questions to answer were:
- Would the average consumer when presented with the Disputed Representations regard them as statements that the Defendant’s products are comparable in nature and/or composition and/or specification to the Second Claimant’s products including, inter alia, the efficacy and quality of the products?
- Would the comparative advertising at Annexes A and B to the Particulars of Claim be understood as only making a comparison concerning price and not making any comparisons concerning the nature, composition, specification or efficacy of the Defendant’s and Second Claimant’s products? Would the 6 comparative advertising at Annex C to the Particulars of Claim be understood as making a comparison concerning price and also as stating that the Defendant’s RenewMe product contains some of the ingredients that are found in the Second Defendant’s Aktivait product?
VetPlus and GUK asserted that the advertisements in question failed to meet the criteria set out in the 2008 Regulations, specifically:
- Regulation 4(a) – The advertisements were misleading.
- Regulation 4(d) – The advertisements failed to objectively compare one or more material, relevant, verifiable, and representative features of the products, including price.
- Regulation 4(h) – The advertisements took unfair advantage of GUK’s trade marks.
The Court determined that Regulation 4(d) was the primary issue to consider. If the claimants were unsuccessful under this provision, the other two claims would fall away.
What features were being compared?
The Court first considered what features in the advertisements were being compared (either expressly or by implication). Once this was established, the Court could then assess whether the comparisons were objective or misleading.
Annex A and B advertisements were examined by the Court together. Both parties agreed that these advertisements expressly compared the price of all the parties’ products. However, they disagreed on whether the advertisements impliedly compared other characteristics, such as quality and efficacy.
- VetPlus contended that the advertisements conveyed a message that Viovet’s products were comparable in nature, composition, and specification, including efficacy and quality.
- Viovet argued that the advertisements should be taken at face value, asserting that no express or implied comparison was made regarding efficacy and quality.
To assess this issue, the Court referred to the Court of Justice of the European Union (CJEU) decision in Lidl v Vierzon[3], which established that even where an objective price comparison is made, an advertisement may still be misleading if it implies equivalence in other significant product characteristics where no such equivalence exists. The Court had to determine whether Viovet’s advertisements compared only price or whether they implied a broader comparison of efficacy and quality.
Assessment from the perspective of the average consumer
The Court applied the standard of the average consumer, i.e. one who is reasonably well-informed, observant, and circumspect[4]. Given that the products in question were everyday goods, no expert evidence was required[5].
Viovet argued that an average consumer would assume that a cheaper alternative was different and possibly of lower quality. However, the Court disagreed and held that the average consumer of veterinary nutraceuticals is primarily concerned with the health and well-being of their pet. Such consumers would likely have been directed to Viovet’s website following a veterinary recommendation. When presented with a lower-priced alternative alongside a VetPlus product, the logical assumption would be that the alternative product was comparable in nature, composition, efficacy and quality.
Applying this reasoning, the Court examined the Annex C advertisement, which explicitly stated that Viovet’s RenewMe product contained some of the same ingredients as VetPlus’ Aktivait product. The Court found that this statement reinforced the implication that the products were comparable in nature, composition, efficacy and quality.
Court’s conclusion
The Court ultimately found that all of Viovet’s advertisements conveyed an implicit message that Viovet’s own-brand products were comparable to VetPlus’ products in nature, composition, specification, efficacy and quality.
What next?
Following this preliminary judgment, the next step is for the Court to determine whether Viovet’s products are in fact comparable to the VetPlus products. If they are not comparable because they differ in efficacy or quality then the comparative advertising defence will fail and it is likely that there will be trade mark infringement.
References
[1] Regulation 3 states that advertising is misleading which in any way deceives or is likely to deceive traders and is likely to affect their economic behaviour taking into account all of its features and the characteristics of the product
[2] Gibraltar (UK) Limited and Vet Plus Limited v Viovet Limited [2024] EWHC 777 (Ch)
[3] Lidl SNC v Vierzon Distribution SA, Case C-159/09 [2011] 2 CMLR 10
[4] Lidl Belgium GmbH & Co. KG v Etablissementen Franz Colruyt NV., Case C-356/04 [2006] ECR I-8501
[5] Interflora v Marks & Spencer [2014] EWCA Civ 1403
