Trade Marks - Gibraltar (UK) Ltd and another v Viovet Ltd

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Jane Lambert 

Chancery Division, Intellectual Property List (James Pickering KC) Gibraltar (UK) Ltd and another v Viovet Ltd  [2024] EWHC 777 (Ch)

"Comparative advertising" is defined by reg 2 (1) of The Business Protection from Misleading Marketing Regulations 2008 (SI 2008 No 1276) as "advertising which in any way, either explicitly or by implication, identifies a competitor or a product offered by a competitor."  The same regulation defines "advertising" is "any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of a product."

That form of advertissing was prohibited by s.4 (1) of the Trade Marks Act 1938 following the Court of Appeal's judgment in Bismag Ltd v Amblins (Chemists) Ltd. [1940] Ch 667, [1940] 2 All ER 608, 109 LJ Ch 305, 57 RPC 209, 84 Sol Jo 381, 163 LT 127, 56 TLR 721.  The 1938 Act was repealed by The Trade Marks Act 1994 from 31 Oct 1994.  For a time there was some uncertainty as to whether the prohibition continued under the new Act.  The uncertainty was removed by art 1 (3) of Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997 amending Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising OJ L 290, 23/10/1997 P. 0018 - 0023 which provided expressly for comparative advertising in certain circumstances. That directive was repealed and replaced by Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising (codified version) (Text with EEA relevance) OJ L 376, 27.12.2006, p. 21–27 which was implemented by reg 4 of The Business Protection from Misleading Marketing Regulations 2008 (SI 2008 No 1276.  

In Gibraltar (UK) Ltd and Another v Viovet Ltd [2024] EWHC 777 Gibraltar (UK) Ltd ("Gibraltar") was the registered proprietor of the marks VETPLUS and AKTIVAIT for goods in classes 5 and 31.  VetPlus Ltd ("VetPlus") is described in the transcript of the judgment as "the authorised supplier".  It may be assumed to have been Gibraltar's exclusive licensee but the transcript does not make that clear.  The online retailer, Viovet Ltd. ("Viovet"), marketed VetPlus's products as well as its own Viovet range through its website. Whenever a customer chose a VetPlus product he or she would be offered the choice of clicking either an "Add to Basket" button or a "Save £[x] per day", "Swap and Save [£]" or "Try something new" button.  Clicking the latter would take the customer to a page displaying Viovet products,  The customer who opted to "Add to Basket" would see a pop-up which displayed not only the selected VetPlus product but also one of Viovet's products and the prices of the two products.  He or she could proceed to the checkout or select a Viovet product instead.  In the case of AKTIVAIT products, the customer could click a "Read More" button which would lead him or her to a page displaying VIOVET's competing product.  There he or she would be told that the competing product contained the same ingredients as ALTIVAIT but was a "more cost-effective option."

Gibraltar and VetPlus sued Viovet for trade mark infringement.  At the case management conference, the parties invited, and the master agreed, to order a trial of the following as a preliminary issue:

"What message is conveyed by the comparative advertising complained of? In particular:

(a) 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?
(b) 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 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?"

The matter came on for trial before Mr James Pickering KC sitting as a deputy judge of the Chancery Division on 5 Dec 2023.  Mr Pickering delivered judgment on 9 April 2024.

Between paras [19] and [23] of his judgment the learned deputy judge directed himself on the relevant law.  Curiously, he referred to art 9 (3) (f) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (codification) (Text with EEA relevance.) OJ L 154, 16.6.2017, p. 1–99 even though the events of which Gibraltar and VetPlus had complained took place after that regulation had ceased to apply to the UK and VETPLUS and AKTIVAIT are British trade marks.  However, it probably did not make any practical difference because s.10 (4) (e) is similar to art 9 (3) (f). That subsection expressly refers to the Business Protection from Misleading Marketing Regulations 2008 which I mentioned in the first paragraph above.

Mr Pickering quoted the definitions of "comparative advertising" and advertising from reg 2 of those Regulations.  He also set out reg 4 in full:

"Comparative advertising shall, as far as the comparison is concerned, be permitted only when the following conditions are met:
(a) it is not misleading under regulation 3;
(b) it is not a misleading action under regulation 5 of the Consumer Protection from Unfair Trading Regulations 2008(1) or a misleading omission under regulation 6 of those Regulations;
(c) it compares products meeting the same needs or intended for the same purpose;
(d) it objectively compares one or more material, relevant, verifiable and representative features of those products, which may include price;
(e) it does not create confusion among traders
(i) between the advertiser and a competitor, or
(ii) between the trade marks, trade names, other distinguishing marks or products of the advertiser and those of a competitor;
(f) it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, products, activities, or circumstances of a competitor;
(g) for products with designation of origin, it relates in each case to products with the same designation;
(h) 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;
(i) it does not present products as imitations or replicas of products bearing a protected trade mark or trade name."

He concluded at para [23]:

"In short, therefore, where there is comparative advertising, if all of the above conditions are met, there will be no infringement. If, however, one or more of the above conditions is not met, the comparative advertising is not permitted and it may amount to an infringement for the purposes of EUTMR."

The claimants contended that Viovet's advertising did not satisfy conditions (a), (d) and (h).  The deputy judge observed that conditions (a) and (h) were "parasitical on the non-compliance asserted in relation to regulation 4 (d)",   He added:

"In other words, if they are unsuccessful in showing that there has been non-compliance with regulation 4 (d), GUK and VetPlus accept that it must follow that it will not be open for them to argue non-compliance with regulations 4 (a) and 4 (h) either. In short, therefore, for present purposes, it is only necessary for me to consider regulation 4 (d)."

He directed himself at [25]:

 "regulation 4 (d) makes it a condition of permissible comparative advertising that the advertisement in question 'objectively compares one or more material, relevant, verifiable and representative features of those products, which may include price'. This being the case, it is necessary, first, to determine what features are being compared – either expressly or by implication. Once it has been determined what features are being compared, it is then necessary to consider whether the relevant comparison is objective as opposed to misleading."

As to the features that were expressly compared he noted that it was uncontroversial that the VetPlus and Viovet products were compared for price and that the comparison was accurate.  The claimants contended that Viovet impliedly represented that its products were "comparable in nature and/or composition and/or specification to [VetPlus's] products including, inter alia, the efficacy and quality of the products".  Viovet responded that there was nothing in its advertising that made any "comparisons concerning the nature, composition, specification or efficacy of" the Viovet own brand products and the VetPlus Products.

Mr Pickering referred to the judgment of the Court of Justice of the European Union in Case C-159/09 Lidl SNC v Vierzon Distribution SA [2011] ETMR 6, [2010] EUECJ C-159/09, [2011] CEC 687, [2010] EUECJ C-159/9, [2011] 2 CMLR 10 as authority for the proposition "that even if goods are the subject of an objective comparison on at least one material, relevant, verifiable and representative feature (for example price), the advertising may nevertheless still be misleading if the comparison suggests by implication that other characteristics of the product in question are also equivalent when in fact they are not, and when, moreover, those characteristics may have a significant effect on the choices made by a consumer."  He quoted the following passages from the Court's judgment:

"[51] An advertisement such as that at issue could also be misleading if the referring court found that, for the purposes of the price-based comparison in the advertisement, food products were selected which are in fact objectively different and the differences are capable of significantly affecting the buyer's choice.
[52] If such differences are not disclosed, such advertising, where it is based solely on price, may indeed be perceived by the average consumer as claiming, by implication, that the other characteristics of the products in question, which may also have a significant effect on the choices made by such a consumer, are equivalent.

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[55] In such cases, the fact that the consumer is not informed of the differences between products being compared in terms of price alone may deceive the consumer as to the reasons for the difference in prices claimed and the financial advantage that can in fact be obtained by the consumer by buying his goods from the advertiser rather than from a given competitor and have a corresponding effect on the consumer's economic behaviour. The latter may thus be led to believe that he will in fact obtain an economic advantage because of the competitive nature of the advertiser's offer and not because of objective differences between the products being compared."

The deputy judge concluded at [31] that he had to determine for the purposes of the present preliminary issue, whether the advertisements were to be understood as only making a comparison as to price or whether they would be understood by implication to be also comparing other features including in particular the quality and/or efficacy of the relevant products. The parties agreed that the determination would be made from the perspective of the average consumer of the goods being advertised who is reasonably well informed, reasonably observant and reasonably circumspect as Mr Advocate-General Tizzano put it at para [71] of its opinion in Case C-356/04 Lidl Belgium GmbH & Co KG v Etablissementen Franz Colruyt NV [2007] CEC 3, [2007] 1 CMLR 9, [2006] EUECJ C-356/04, [2006] EUECJ C-356/4, [2007] ETMR 28, [2007] Bus LR 492, [2006] ECR I-8501. They also agreed that neither evidence from consumers nor expert evidence was required as the products were ordinary goods.   The deputy judge referred to para [115] of Lord Justice Kitchin's judgment in Interflora Inc and Another v Marks and Spencer Plc  [2015] ETMR 5, [2014] EWCA Civ 1403, [2015] BUS LR 492, [2014] WLR(D) 473, [2015] Bus LR 492, [2015] FSR 10:

"…in a case considering ordinary goods or services, the court may be able to put itself in the position of the average consumer without requiring evidence from consumers, still less expert evidence or a consumer survey. In such a case, the judge can make up his or her own mind about the particular issue he or she has to decide in the absence of evidence and using his or her own common sense and experience of the world."

Mr Pickering rejected Viovet's submission that the average consumer would not expect a cheaper product to be as good as a more expensive one for the simple reason that he or she would be a pet owner who would want the very best for it.   The deputy judge set out his reasoning in [35]:

"(1) A consumer who has reached the Annex A or Annex B advertisements will have been looking at one of the VetPlus Products. The purpose of each VetPlus Product is to improve the health and well-being of a pet or animal. The average consumer of such a product will no doubt be keen to achieve that purpose – the health and well-being of their pet will be of importance to them. So when that consumer is then offered an alternative (Viovet own-brand) product, it seems to me that there will be an assumption that the alternative product is of comparable quality and efficacy. It is not the sort of product where a consumer would be prepared to compromise on such quality and efficacy lightly.
(2) This is all the more so given that the average consumer who has found a VetPlus Product on the Viovet website will probably have done so following a recommendation from a vet. Indeed, as set out in the (unchallenged) evidence, VetPlus sells its products (via veterinary wholesalers) to veterinary practices which then on-sell the VetPlus Products to pet owners usually following a consultation with, and a recommendation from, a vet. In other words, the average consumer of such products is unlikely to have been just carrying out just a random search; it is most likely that they will have consulted a vet and, during that consultation, have been recommend a specific VetPlus Product. In such circumstances, so it seems to me, when on Viovet's website that consumer is then offered an alternative (Viovet own brand) product, it is even more likely that he or she will assume that the alternative product is comparable in nature, composition, quality and/or efficacy.
(3) The above is further reinforced by the particular wording appearing within the Annex A and Annex B advertisements. As stated above, the Annex A advertisements simply state 'Save £[x] per day'. In my judgment, far from it being obvious to the average consumer that what is being offered is a different (and possibly inferior) product, the implication is that what is being offered is going to be equally beneficial for their pet but at a cheaper price. Similarly, the Annex B advertisements refer to saving £X per day and offer the consumer the ability to 'Swap and Save'. Again, so it seems to me, the average consumer - who no doubt will be considering the health and well-being of their pet - will assume that by being offered a 'Swap"' what they would be receiving in the alternative is something comparable in nature."

Although the advertisements only expressly referred to price, the average consumer when offered the chance to save £X per day and/or to swap to an alternative product would assume that that alternative product was comparable in nature, composition, efficacy and/or quality.

As for the AKTIVAIT alternative, the comparison was express.  Consumers were told that the Viovet product contained the same ingredients,

The leaned deputy judge concluded at [38] that the answer to the question as to what message was conveyed by the advertisements was that the average consumer would regard them as statements that the Viovet products offered in the alternative were comparable in nature and/or composition and/or specification to the relevant VetPlus Product including, inter alia, the efficacy and quality of those products.

Mr Pickering's finding is not conclusive.   As he observed at [26], it is only the first step. The determination of the extent to which any such comparisons are objective as opposed to misleading will be for a potentially time-consuming and expensive second trial.

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