Boehringer Ingelheim Limited has lost its appeal against the decision of the High Court not to grant an interim injunction against its competitor, Vetplus Limited, to prevent publication of a comparative advertisement and press release, which Boehringer believed would disparage its product.
Boehringer and Vetplus both manufacture and sell nutritional supplements for dogs containing chondroitin, which they claim has a beneficial effect on dogs’ joints. Vetplus had planned an advertisement for its SYNOQUIN product which was to feature the results of tests that had been carried out on competitor’s products regarding the chrondotin content of such products. Boehringer’s SERAQUIN supplement was one of the competitor products featured. The results of the test revealed that Boehringer’s supplement contained lower levels of chondroitin than the amount claimed on its label.
In March, Boehringer applied for a “without notice” injunction to prevent publication of the advertisement arguing that the test results cited in the advertisement were unreliable. Patten J granted the injunction pending trial. However, when the parties returned to court in April, Pumfrey J refused to grant any further restraint on publication of the advertisement. Boehringer appealed this decision to the Court of Appeal.
The appeal was dismissed.
Jacob LJ gave the leading judgment and held that the correct test to be applied by the courts in dealing with an application for an interim injunction involving trade mark infringement in a comparative advertising context was whether the applicant was more likely than not to succeed at trial rather than the American Cyanamid v Ethicon “serious issue to be tried” threshold (which is followed by a weighing up of the balance of convenience). This was because the right of freedom of expression was in issue in such circumstances and so section 12(3) of the Human Rights Act was engaged.
The Court of Appeal found that Boehringer had failed to prove that it was more likely than not to succeed at trial and therefore the injunction was refused.
Vetplus, presumably prompted by the success of the “free speech” argument, also attempted an argument that the rule in Bonnard v Perryman applied in the context of comparative advertisements. Bonnard is a defamation case in which it was held that if a defendant intends to run a defence of “justification” then no interim injunction may be granted unless it is clear that the defence of justification is bound to fail at trial. The Court of Appeal considered the submission but held that the rule does not apply to a trade mark infringement claim -
“…if the …other cause of action is in reality a claim brought to protect the plaintiffs' reputation and the reliance on the other cause of action is merely a device to circumvent the rule, the overriding need to protect freedom of speech requires that the [Bonnard rule] …be applied…I accept that proposition. But I do not accept that a trade mark infringement action, even one in respect of comparative advertising, is merely a claim to protect the claimant's reputation. It is a claim to protect a property right”.
The Court of Appeal also rejected Vetplus’ argument that it had a complete defence to trade mark infringement under Article 6(1) of the EU Trade Marks Directive because, whether or not its tests proved to be accurate, it had honestly and reasonably believed them to be so and therefore it had met the requirement toact in accordance with honest practices as required by Article 6 (1). Jacob LJ held that an honestly held opinion did not equate to acting in accordance with honest practices. When choosing to publish the test results Vetplus must also be willing to compensate the trade mark owner for any harm it suffered if the results were later found to be untrue –
“I think a man who makes a damaging statement involving use of another's mark which he reasonably believes to be true at the time but which later turns out to be untrue would not be acting in accordance with an honest practice if he were not prepared to compensate the owner of the damaged mark. He can express his honestly held opinion, but unless that is on the basis that he will compensate his trade rival if it is proved to be wrong, he is not acting in accordance with an honest practice and will be adjudged to infringe”
This judgment indicates that the courts will be unwilling to interfere with a respondent’s right to freedom of expression at an interim stage in cases of alleged trade mark infringement within a comparative advertising context unless the applicant has a better than evens chance of succeeding at full trial.
But what is perhaps of more concern to free speech is the notion that regardless of how honest you are if you publish data alongside your trade rival’s trade mark which later turns out to be untrue or damaging in some fashion to them, you may well be required to pay them compensation. It is commonly accepted that the various legislative bodies across Europe regard comparative advertising as a good thing due to its perceived beneficial effect on the single market. Further it is common practice for new entrants to a market to use comparative advertising featuring the prominent players in that market to draw attention to their new offering. This judgment renders comparative advertising potentially ruinous to a start-up company. How many SMEs can take this risk when entering a market against global players?