Legal Eye: Trademark landmark

Owning a trademark no longer means you're the only one who can use it. A major European ruling involving mobile operators O2 and 3 has big implications for trademarks on comparative advertising websites, says lawyer Siân Croxon.

Last month, mobile operator 3 won a four-year battle with rival O2 over the use of O2's signature bubbles trademark in an advertising campaign. Ruling in 3's favour, the European Court of Justice said the use of rival trademarks is permissible in certain, specific circumstances.

Comparative advertising:
Key issues

1. Association - comparative advertising allows smaller players to feed off recognised brands.

2. Price - demonstrating competitive pricing is becoming all the more important as consumers feel the strain of rising household costs.

3. Information - brand awareness is no longer enough. Consumers will undertake their own background research before making informed decisions.

4. Protection - understanding the nuances of trademarks is key to policing against infringements to your brand, products and services.

The landmark case goes back to a 2004 TV advertisement for 3's ThreePay pay-as-you-go service. In that advert, 3 used a bubbles motif to introduce ThreePay as a cheaper alternative to O2's service.

While O2 was unable to challenge the price comparison, it felt 3 had infringed its trademark and that consumers would find the advert misleading.

O2's initial proceedings before the English High Court were dismissed and put before the European Court of Appeal, which asked the European Court of Justice to rule.

Apart from providing precedence on the use of rival trademarks in advertising campaigns, the ruling raises interesting tensions between separate European directives on trademarks and comparative advertising.

Under the Trademark Directive, trademark owners have exclusive rights to prevent others from using a mark that is identical or confusingly similar to their own.

But because the European Parliament is currently promoting comparative advertising, where competitor goods or services need to be identified, the ruling came down on the side of the Comparative Advertising Directive.

The European Court of Justice specified that trademark owners may bring proceedings in certain cases.

For example, they can bring proceedings if a trademark is used without the consent of its proprietor, if it relates to other identical or similar products or services, or if it is liable to affect the essential function of a trademark - to guarantee to consumers the origin of the products or services - and if a likelihood of confusion arises as a result of that use.

Of course the ruling goes far beyond O2, 3 and other mobile operators. It looks set to change the approach of all brands towards comparative advertising.

Consider also the recent changes to trademark keyword bidding on Google, where all and sundry can now bid on trademark-registered terms during the pay-per-click auction process. It's clear there have been some seismic shifts in the trademark ecosystem in recent months.

Advertising and information sources such as comparison websites have grown in popularity because of changing consumer attitudes. This latest ruling will only fuel that growth.

With the details at their fingertips, consumers are now better equipped to question advertising claims. So comparative advertising plays to increasingly informed potential purchasers.

Being the biggest in your field - both in terms of market-share and advertising budget - won't stop smaller companies jumping on the bandwagon and gaining recognition from associating with your brand through comparative marketing campaigns.

The necessity to maintain a well-defended portfolio of trademarks and intellectual property remains but recent developments have certainly moved the goal-posts.

DLA Piper is the world's largest global legal services organisation with more than 3,700 lawyers across 64 offices and 25 countries. Its award-winning technology, media and commercial practice employs 70 partners specialising in IT, telecomms, media, sport and IP law. Experts in convergence between the technology, communications and media sectors, it advises some of the world's leading multinational entertainment, media, sport and technology companies.