The recent Court of Appeal’s decision in Aldi Stores (Ireland) Ltd. and Aldi GMBH & Co. KG v Dunnes Stores [2017] IECA 116 set aside a High Court finding that Dunnes Stores infringed Aldi’s trademarks by use of in-store shelf labelling comparing their product prices to Aldi’s. This decision clarifies the law in relation to comparative advertising.

This case concerned a 2013 Dunnes Stores advertising campaign, which contained in-store shelf signage setting out Dunnes’ prices and Aldi’s prices, for items which Dunnes alleged were comparable. The campaign also included banners and floors stands, which contained advertising slogans such as “Lower price guarantee,” “Guaranteed lower prices on all your family essentials every week,” and the words “Aldi match”.

The High Court held that the in-store shelf labelling, banners and floor stands breached the European Communities (Misleading and Comparative Advertising) Regulations, 2007 (the “2007 Regulations”), the Consumer Protection Act 2007 and constituted an infringement of Aldi’s trademarks. In assessing the campaign it determined that the Dunnes and Aldi products could not be compared on price alone as there were significant differences between them. Such advertisements needed to include a comparison of other relevant features of the products to be permitted.

In overturning the decision of the High Court, the Court of Appeal concluded that the High Court had applied the wrong test when considering whether an advertising campaign was permissible under the 2007 Regulations. The Court determined that the correct test was whether the advertisements compare products meeting the same needs or that were intended for the same purpose, subject to the comparison not being misleading. As such the products compared did not need to be identical but substitutable or interchangeable. While there might be some difference in the composition of the products, this does not prevent their comparison under the 2007 Regulations. It also determined that comparison by price only was permitted under the 2007 Regulations.

The Court of Appeal rejected the High Court’s finding that the slogans on the in-store shelf labelling of “Lower price guarantee” and “Always better value” could mislead customers that the Dunnes’ products are always a lower price or always better value, when it might be the same price as the Aldi product.

The Court of Appeal did, however, agree that Dunnes’ banners and floor stands, which used the Aldi trademarks, were impermissible under the 2007 Regulations. While these advertisements referred to Aldi, they did not compare prices or any feature of Aldi’s products with Dunnes’. The banners and floor stands did include images of baskets of goods, however, the Court of Appeal found the picture lacked the clarity required for a legitimate comparison. Therefore, neither the banners nor floor stands were protected by the 2007 Regulations from a finding of trademark infringement.

In setting aside the High Court’s determination of a breach of the 2007 Regulations in relation to the in-store shelf labelling, the Court of Appeal did not endorse Dunnes’ advertising campaign, but found the High Court applied the wrong test when assessing the campaign. In light of its findings, the Court of Appeal set aside the injunctive relief granted to Aldi.

Given that the advertising campaign concluded in 2013, the Court of Appeal has held that there should be no retrial of this matter.

This decision is likely to be good news for advertisers, as it overturns the very limited approach which the High Court had applied in determining what was permissible under the 2007 Regulations and appears to reintroduce price-only comparative advertising.