Living Dangerously – Shouldn’t Have Parodied Specsavers

At the end of January 2012, the Court of Appeal handed down judgement in the case of Specsavers v ASDA. The appeal was borne out of proceedings instigated by Specsavers against ASDA for trade mark infringement and passing off.

Specsavers v ASDA

The facts

The case concerned a marketing strategy adopted by ASDA in late 2009 to promote the opticians that it had in some of its stores. The strategy was implemented by an advertising campaign which extended to newspaper ads, roadside billboards, and online promotion together with promotional material sent out to customers and appearing in and around ASDA stores.  The campaign made use of two straplines which made deliberate reference to Specsavers –  “Be a real spec saver at ASDA” ( the first strapline) and “Spec savings at ASDA” (the second strapline). In addition, new logos were devised which made use of two abutting white ovals with ‘ASDA’ and ‘Opticians’ in green writing within those ovals.

Specsavers have the benefit of various community trade marks including one ‘word only’ trade mark for the word ‘SPECSAVERS’  and two word and design marks, which placed the word ‘specsavers’ at the centre of two overlapping ovals. The latter two marks differed in that the area of overlap was shaded in one of the trademarks but not in the other (the shaded logo and the unshaded. In addition, Specsavers had registered a CTM of the ovals without any writing (the wordless trademark).

Specsavers sought to protect their intellectual property rights by issuing proceedings to prevent the use by ASDA of the straplines and the logos. Specsavers claimed that ASDA had infringed their rights under the Community Trade Mark Regulations (the Regulations).

The law

Regulation 9(1)(b) of the Regulations enables an owner of a trade mark to prevent a third party from using in the course of trade any sign where, because of its identity with or similarity to a Community Trade Mark and the identity of similarity of goods or services for which that CTM is registered, there exists a likelihood of confusion on the part of the public. The likelihood of confusion for these purposes includes the likelihood of association between the offending sign and the CTM.

In contrast, regulation 9(1)(c) prohibits the use in the course of trade of a sign which is identical with or similar to the CTM in relation to goods or services which are not similar to those for which the CTM is registered, where the CTM has a reputation within the European community and where the use of the sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the CTM.

The decisions

At first instance the majority of Specsaver’s claims were unsuccessful. The Court held that only the first strapline infringed Specsavers rights as the first strapline took unfair advantage of Specsaver’s registered ‘word mark.’  The Judge found that ASDA’s use of ‘spec saver’ within the first strapline was to give consumers the message that they would get a better deal at ASDA. The advantage that ASDA gained was considered to be unfair by the Court because of the reputation that Specsavers had accrued for providing value for money. The Judge concluded that it was this reputation that ASDA sought to build on in the first strapline and used to suggest that it provided better value than Specsavers.

Whilst a success to some degree for Specsavers, it is hard to see how the decision of the High Court in the summer of 2010 would have assisted Specsavers in the protection of its brand: by the end of 2009, ASDA had ceased to use the two straplines and so a declaration of infringement in respect of the first strapline must have been seen as little more than a pyrrhic victory. ASDA remained at liberty to use the logos, the second strapline and had also succeeded in an application to revoke Specsavers’ wordless trademark.

Specsavers appealed against the decision in so far as its claims had been dismissed: ASDA cross-appealed against the finding that the first strapline infringed Specsaver’s word mark.

The Court of Appeal reversed aspects of the High Court and held that not only did the second strapline infringe Specsavers’ word marks, the shaded and unshaded logos but also that the ASDA logos infringed the Specsavers’ shaded and unshaded logos. Like the High Court, the Appeal Court was not persuaded that there was a likelihood of confusion on the part of the public and so infringement was found under Regulation 9(1)(c):  the use of the ASDA logos and both straplines took unfair advantage of Specsavers’ CTMs.

Specsavers’ appeal in respect of the revocation of the wordless mark was referred to the European Court of Justice together with a question regarding the impact on infringement of the trade marks of the extensive use by Specsavers of their signature shade of green. ASDAs appeal was dismissed.

Comment

The judgements of both the High Court and the Appeal Court noted that ASDA had specifically targeted Specsavers as their main competitor: the evidence before the High Court showed that as the campaign for ASDA was devised and as it progressed, the marketing brief was to aggressively target Specsavers with a view to comparing the range of goods, but primarily, the price of those goods offered by ASDA and Specsavers. The trial judge found that the design process adopted by ASDA had started with something close to the Specsavers logo and had then moved to something which ASDA had considered to be a safe distance away from the Specsavers logo.

It is probable that many such marketing campaigns devised to promote their own brands in place of their competitors would have a similar genesis. In and of itself however, such a tactic does not impinge upon that competitor’s intellectual property rights: the trial judge found that ASDA was ‘living dangerously’ in devising the marketing campaign in the way that it had but that was not sufficient for there to be an actionable infringement, an approach which the Court of Appeal approved. An important part of the Court of Appeal decision was that in using the straplines and the logos, ASDA had sought to compare its goods and services favourably to those of Specsavers but without actually substantiating that favourable comparison.

Adverts comparing competing products are permissible providing that such advertisements comply with the requirements of the Comparative Advertising Directive. In my view the irony for ASDA was that had they complied with those rules and used Specsavers CTMs within those adverts, provided it was clear that they were Specsavers’ CTMs, it is highly unlikely (following a ruling of the European Court of Justice in 2006) that Specsavers would have succeeded at all.