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On 9 June 2015, Mr. Justice Brian Cregan of the High Court held that the retailer Dunnes Stores had engaged in unlawful comparative advertising in comparing the prices of some of its own-brand products with the discount supermarket chain Aldi and later ruled that Aldi is entitled to an injunction restraining Dunnes from using its trade marks.
Aldi complained about three separate types of comparative advertisement:
- Dunnes’ use of “shelf- edge labels” in respect of 15 specific products, in which it compared its products to those of Aldi and incorrectly stated the price/rate/volume of the products when the two products were not properly comparable or failed to properly compare the two products. These products comparison included toilet paper, cat food, yoghurt, pork sausages, tomato ketchup and a sparkling orange drink.
- Dunnes’ use of “banners” containing the Aldi’s trademarks and also the words “Lower price guarantee” and “Guaranteed lower prices on all your family essentials every week” and the words “Aldi match”.
- Dunnes’ use of shelf- edge labels which contained the words “lower price guarantee” and “always better value”, which Aldi claimed was essentially making representation that Dunnes’ products are cheaper than those of Aldi when that was not the case.
The issue of how to properly compare products was the subject of extensive debate from Expert Witnesses from both sides. The Court agreed with an expert for Aldi that the five cornerstones for product comparability are comparison of quantity, provenance, nature, substance and quality.
The Court held that Dunnes’ comparative advertisements either gave false information or concealed material information in relation to 14 of its products. This was based on the fact that Dunnes provided incorrect information regarding the main characteristics of the products, namely their quantity, weight or volume, ingredients, or their composition. The Court stated that this information was misleading and deceiving to customers because it was likely to cause them to make a transactional decision that they otherwise would not make. This was a clear breach of the Consumer Protection Act 2007. Importantly, Justice Cregan stated that if all material and relevant features of both products are not set out in the comparative advertisement then it is bound to mislead.
Justice Cregan held that the price labels on Dunnes’ display shelves did not compare like with like because the products that were compared did not meet the same needs or were not intended for the same purpose. The comparative advertisements did not objectively compare one or more material, relevant, verifiable and representative features of these products and that these comparative marketing communications are prohibited.
On the in-store banner advertisements containing the phrases “Lower Price Guarantee” and “Guaranteed Lower Prices on all your family essentials every week” as well as the terms “Aldi match” and “Lidl match”, the Court held that the banners breached the European Communities (Misleading and Comparative Advertising) Regulations 2007 because they did not objectively compare material or verifiable features of both stores’ products. For example, the phrase “Guaranteed Lower Prices on all your family essentials every week” was vague and uncertain because they did not specify in any way what those products might be. Therefore a proper comparison between the goods could not be made by the consumer. Furthermore, evidence was provided that on numerous occasions the Dunnes’ product was not priced any lower than the Aldi product and therefore the banners provided false and misleading information.
The Court held that because Dunnes’ advertisements were unlawful, the retailer’s use of Aldi’s Trade Marks was also unlawful and was an infringement of their Trade Marks. Justice Cregan stated that Dunnes had taken unfair advantage of Aldi’s Trade Marks and their use was detrimental to the distinctive character and reputation of the Marks.
It is worth mentioning that Mr Justice Cregan was critical of the fact that a significant amount of expert evidence was given in the proceedings which was not particularly helpful in regard to the legal issues the Court had to consider. This is reflective of the somewhat hardening attitude of the judiciary in recent years in regard to unnecessary expert evidence due to the fact that it can cause matters to become more complex than they need to be. Furthermore, such evidence can result in unnecessary costs for both sides.
The case has been adjourned for submissions on the exact wording of the injunction.
[Image sourced from NorthsideShoppingCentre.ie]