MISLEADING & COMPARATIVE ADVERTISING REGULATIONS – PROTECTION FOR BRAND OWNERS
Authors: Duncan Grehan & Conor Griffin, Duncan Grehan & Partners Solicitors
A new regime for comparative advertising has been introduced throughout the EU in the last 12 months with the EU Misleading & Comparative Advertising Directive (2006/114/EC). It has changed the regulatory framework for such practices throughout the 27 member states of the EU each of whom are now obliged to implement the Directive into their domestic laws. Ireland was one of the first countries to do so when the European Communities (Misleading & Comparative Marketing Communications) Regulations, 2007 came into force in January 2008.
Their purpose is to implement the new Directive, replace Ireland’s existing misleading advertising regulations and to act as a supplement to the Consumer Protection Act, 2007 which protected consumers.
The Regulations cover a very broad spectrum of products and services which includes all goods (including real or personal property), services and any form of representation made by a trader in connection with a trade, business or profession. In addition the definition of “marketing communication” is quite broad and although so far untested in court could cover any representation made in the course of trade – even orally to a customer.
The Regulations restrict any form of misleading marketing communication which is defined as any marketing communication which deceives or might deceive the target audience and (by reason of its deceptive nature) might affect a trader's economic behaviour, or injures or is likely to injure a trader's competitor. The Regulations also set out in detail the criteria to be used in determining whether a marketing communication is misleading.
The Regulations also prohibit comparative marketing communications which are misleading or confusing. A "comparative marketing communication" is defined as any form of representation made by a trader that explicitly or by implication identifies a competitor of the trader or a product offered by such a competitor. Once again the criteria to be used in determining whether the advertisement is misleading are set out in the Regulations. The criteria include anything that discredits or denigrates a rivals trade mark, does not objectively compare trade marks, does not compare the same products or features objectively or takes unfair advantage of the reputation of a trade mark.
The Regulations provide a specific right of action to a brand owner who feels that a comparative advertisement or representation by a rival is misleading or is prohibited under the Regulations. The brand owner can make an application to the Circuit Court or High Court prohibiting the advertisement/representation in question. The burden of proof is placed on the advertiser to demonstrate to the Court that its advertisement or representation is true in response to any allegation. The Court has the power to ban the advertisement/representation, to order the offending trader to publish a corrective statement or to prohibit the trader from making similar representations in future. It does not, however, have the power to make an award of damages although it can award legal costs to the successful party. A trader seeking damages would have to sue for passing off or infringement of a trade mark if he was seeking damages.
As the Regulations are targeted at brand owners and not consumers there are fewer restrictions in place than under the Consumer Protection Act, 2007 which implemented the EU Unfair Commercial Practices Directive into Irish law. Cases taken under the Consumer Protection Act have to be taken in the knowledge of the National Consumer Agency who must be on notice of any court proceedings. These Regulations have no such requirement and brand owners are free to take their own proceedings without notifying any third party.
The Regulations have provided an important tool for brand owners and trade owners to help prevent misleading representations from rivals. We would suggest that any company launching a comparative advertising or marketing campaign. In Ireland take local legal advice in order to ensure compliance with the Regulations.
