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My Business is Better than your Business!

“Look how much better my product is than all the others on the market. It’s the best out there, it’s the cheapest, the best quality, so don’t even consider going to Joe Bloggs Ltd.”

There are various statements about your business’ products or services you may wish to promote until the cows come home, but what statements are you legally allowed to make in your advertising?

You may know for a fact that your goods or services are cheaper or of higher quality than those of a competitor and perhaps you’d like to advertise this fact to gain a commercial advantage over them. Who wouldn’t?

Where you either explicitly or by implication identify a competitor of goods or services in your advertising, this is known as ‘comparative advertising.’

You are perfectly entitled to highlight to the public the comparable characteristics of your products or services with those of a competitor. However (and this is a big however), there are a number of conditions set out under the Misleading and Comparative Advertising Directive 2006, the Consumer Protection from Unfair Trading Regulations 2008 and the Trade Marks Directive 2008, that must be met, if you intend to do so.

Under this combined legislation, you are allowed to make a comparison with one of your competitors, as long as your advertising meets the following conditions:

  • It cannot be misleading. That is to say, it cannot deceive your consumers, so you can’t spin any lies or half-truths about your goods or those of your competitor.
  • It must compare goods and services that meet the same needs or are intended for the same purpose. Comparing chalk for cheese to make a point just won’t cut it.
  • It must objectively compare features of the goods (which can include price and quality), so make sure your comparison is built on solid grounds that are material, relevant and verifiable with evidence. Simply stating your goods are of better quality than another’s with no proof to back up your claim will be too vague to be permitted.
  • It must not discredit or denigrate any trade marks or other activities or services of the competitor.
  • Where it relates to products with a designation of origin, it can only relate to products with the same designation.
  • It must not take unfair advantage of the competitors’ trade mark or its reputation, nor can you present your goods or services as imitations or replicas of those bearing the trade mark.
  • Finally, it must not create confusion between the advertiser and trade mark owner.

This is not to say you cannot reference a trade mark of another company or product in your advertising, if using the mark is strictly necessary to identify the competitor or their products. However, if you are using a competitor’s trade mark in your advertising, you must do so honestly and fairly, or you could face an allegation of trade mark infringement.

This condition is a little more controversial. It means that you can’t try and enhance your own reputation by associating yourself with a well-known registered trade mark, especially where your product could be held to be imitating their goods or services.

This condition was crystallised in 2010, when Bellure released a range of “smell-alike” perfumes with a smell comparison chart to those of L’Oréal perfumes. Despite having different names and packaging, the advertising was held to infringe L’Oréal’s rights. The UK Court of Appeal, somewhat reluctantly, held that businesses cannot in essence “free ride” off the back of famous brands to promote cheaper imitations. Where you are seeking to “ride on the coat-tails” of a trade mark with a reputation, to benefit from the prestige generated from its owner, this will be held to be an “unfair advantage” and will not be permitted.

Therefore, if your product or service is an imitation of a well-known trade marked product, tread with care.

This means in practice, that you cannot use a trade mark of your competitor in your advertising if it might confuse the market as to the origins of the trade mark and might lead the public to think there is a connection between you, the advertiser, and the trade mark’s owner.

A dispute between mobile providers Hutchinson and O2, in 2008, fondly dubbed the “Battle of the Bubbles” confirmed that this was the case. Hutchinson ran a TV advert claiming they were cheaper than O2, using an image featuring bubbles similarly used in O2’s branding to make this point. The Court of Justice decided that as the public would not be confused as to think there was a trade connection between Hutchinson and O2 that the advertisement was acceptable.

“You wouldn’t want to go to Joe Bloggs Ltd anyway, they’re unreliable and their products are terrible.”

Your competitor may be utterly rubbish in your opinion, but are you allowed to say so?

In short, only if it’s true…

Saying something untrue about a competitor runs the risk of inviting a claim for libel, which is the legal term of a published false statement, so it is of paramount importance that anything you publish or broadcast about a competitor is truthful and can be evidenced.

For a libel claim to be successful it must be based on defamatory material that adversely affects the reputation of the “victim” i.e. your competition. However, where you are giving a subjective opinion about a competitor, this will generally be unlikely to amount to libel.

Nonetheless no-one likes to be insulted and whilst broadcasting your opinions may not result in a libel suit, it’s always better to have friends than enemies.

Other considerations

You should also be aware that if you are using photographs of your competitor’s products or logos, then you may be infringing their copyright. To use any image in your advertising, you must make sure that you have permission to use it, usually in the form of a license, from the copyright owner.

As a final remark, many of the conditions around comparative advertising are governed by a number of EU directives and the application of this EU legislative framework will be reviewed when the UK withdraws from the EU. We are yet to see what changes this might bring.

If you would like to learn more about what you can and can’t include in your advertising, please get in touch! We’d love to hear from you.

By Freya Claydon