The European Court of Justice (the ECJ) ruled that O2 Holdings Limited and O2 (UK) Ltd. could not rely on their trademark rights to prevent the use of bubble imagery in a comparative advertisement by Hutchinson 3G UK Limited, as the advertisement was not misleading and did not cause confusion as to the origin of the services being offered. O2 Holdings Limited and O2 (UK) Ltd v. Hutchinson 3G UK Ltd., Case C-533/06 (ECJ, June 12, 2008).

Cell phone operator H3G’s television advertisement compared H3G’s charges to those of O2, used the name of O2 and contained a backdrop of moving bubbles. O2, which has registered a number of pictorial bubble trademarks, sued H3G in England for trademark infringement.

O2 lost the initial case and appealed. The Court of Appeal asked the ECJ to rule on whether H3G’s use of bubble imagery was an infringement of O2’s rights under European trademark and comparative advertising legislation.

The ECJ held that a trademark proprietor can only prevent the use of an identical or similar sign to a registered trademark under Article 5(1)(b) of the Trade Marks Directive where the following four conditions are satisfied: use is in the course of a trade, use is without consent, use is for goods or services that are identical with or similar to those for which the mark is registered and there is a likelihood that consumers will be confused as to the origin of the goods or services.

The ECJ considered that H3G’s advertisement met the first three of these conditions, but not the fourth. Considered as a whole, the advertisement did not give rise to any likelihood of confusion, was not misleading and did not suggest any form of commercial link between O2 and H3G.

In a press statement on its decision, the ECJ commented “the proprietor of a registered trademark is not entitled to rely on his trade mark rights to prevent the use, by a third party, in a comparative advertisement, of a sign similar to that mark in relation to goods or services identical with, or similar to, those for which that mark is registered where such use does not give rise to a likelihood of confusion on the part of the public.”

Practice Note: Trademark proprietors will be unable to claim infringement of their marks where they are used in honest and fair comparative advertising in Europe, so long as there is no likelihood of confusion by consumers regarding the origin of the goods or services being advertised. Such advertisements must, however, otherwise comply with European legislation on comparative advertising.