Confirmed: Comparative Advertising Is Back On The Agenda In Ireland

Aldi Stores (Ireland) Limited and Aldi GmbH & Co KG and Dunnes Stores [2019] IESC 41, Supreme Court, decision by O’Donnell J.

Very long running litigation in Ireland between well-known supermarket operators has finally concluded with a Supreme Court decision that confirms the test for comparative advertising under the confusing Irish implementation of the EU Directive on Misleading and Comparative Advertising Directive 2006/114/EC (the “2006 Directive”) and of Directive 2005/29/EC of the European Parliament and of the Council (“Unfair Commercial Practices Directive”). Following a lengthy trial in 2015, the earlier decision of the High Court had made a finding of trade mark infringement in circumstances that placed a chilling effect on the possibility of traders undertaking comparative advertising in all but the most straightforward and objectively comparable scenarios. This position was subsequently reversed by the Court of Appeal and largely endorsed by the Irish Supreme Court in a helpful and practical decision that is firmly anchored in both EU competition policy and trade mark law principles.


In or around June 2013 Aldi became aware that Dunnes Stores had launched a price comparison campaign concerning various household products. Aldi claimed that the nationwide campaign, which included point of sale advertising, failed to comply with comparative advertising legislation and infringed its trade marks. The matter was commenced in the Irish Commercial High Court on 9 June 2015. The High Court decision was subsequently reversed in a judgment of the Court of Appeal delivered on 6 April 2017.

The parties to this legal dispute, both leading supermarket chains in Ireland, need no introduction. Aldi is a limited line discounter and stocks in or around 1,350 products whereas Dunnes stocks 18,000 products. The promotions which were subject of the proceedings were the following:

  1. Shelf-edge labels/specific comparative labels (“SCLs”) in which Dunnes drew comparisons with Aldi products and included the term “Aldi match”;
  2. Banners and toblerones (banners in a free-standing display) including the slogans; “lower price guarantee” and “guaranteed lower prices on all your family essentials every week”; and
  3. Shelf-edge labels (“SELs”) which included the slogans “lower price guarantee” and “always better value” plus “Aldi match”.

Legal framework in Ireland

The EU Directive on Misleading and Comparative Advertising Directive 2006/114/EC (the “2006 Directive”) was implemented into Irish law by the European Communities (Misleading and Comparative Advertising) Regulations 2007 (the “2007 Regulation”). Directive 2005/29/EC of the European Parliament and of the Council (“Unfair Commercial Practices Directive”) was implemented into Irish law by the Consumer Protection Act 2007 (the “2007 Act”). Article 4 (a) of the 2006 Directive provides that comparative advertising is permitted as long as it is not misleading within the meaning of Article 2(b), 3 and 8(1) of the 2006 Directive or Articles 6 and 7 of the Unfair Commercial Practices Directive. The equivalent provision in the 2007 Regulation is Regulation 4(2):

“A comparative marketing communication is prohibited if, as regards the comparison —

(a) it is misleading under Regulation 3,

(b) it is a misleading commercial practice under any of sections 43 to 46 of the Consumer Protection Act 2007 (No. 19 of 2007),

(c) it does not compare products meeting the same needs or intended for the same purpose,

(d) it does not objectively compare one or more material, relevant, verifiable, and representative features of those products, which may include price,

(e) it discredits or denigrates the trade marks, trade names, other distinguishing marks, products, activities, or circumstances of a competitor,

(f) for products with designation of origin, it does not relate in each case to products with the same designation,

(g) it takes unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products,

(h) it presents goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name, or

(i) it creates confusion among traders —

(i) between the trader who made the comparative marketing communication and a competitor or,

(ii) between the trade marks, trade names, other distinguishing marks, goods or services of the trader who made the comparative marketing communication and those of a competitor.”

The Supreme Court noted that much of the difficulty in the present case arose from the lack of specific definition of misleading comparative advertising for the purposes of Article 4 of the 2006 Directive. This is particularly problematic where it is not claimed that the advertising is misleading in general terms under both directives, but it is claimed that the advertising is misleading by the fact of the comparison that is made. The second issue identified by the Supreme Court lies in the separate definitions of misleading advertising referred to in Article 4(a) of the 2006 Directive and Articles 6 and 7 of the Unfair Commercial Practices Directive.

Articles 6 and 7 of the Unfair Commercial Practices Directive are implemented into Irish law by Section 43 of the 2007 Act, which deals with the provision of false, misleading, or deceptive information and Section 46 of the 2007 Act which deals with withholding, omission or concealment of material information. The Court observed that the 2007 Act is drafted to prevent misleading commercial practices in the context of providing or withholding misleading information and not merely misleading advertising in the context of comparative advertising.

Section 14(6) of the Irish Trade Mark Act 1996 permits use of a trade mark provided that the use is in accordance with honest commercial practices and does not take unfair advantage or is detrimental to the reputation of the mark.  It was clear that if the advertisements in the current case were examples of impermissible comparative advertising, then there would be an infringement of Aldi’s trade marks.

The High Court’s decision

Cregan .J delivered a 141-page judgment ([2015] IEHC 495) in the High Court which dealt in great detail with an analysis of the products promoted in the SCLs. The judge accepted the evidence adduced by Aldi’s expert in comparative labelling which compared five key criteria of quantity, provenance, nature, substance and quality. By way of example, he found that  there was a significant difference between the turkey mince offered by either retailer as Aldi’s turkey breast mince was endorsed by the Irish food agency, Bord Bia-a mark of provenance, whereas the Dunne’s product was not. He examined the characterising ingredient of each product and accepted that a difference of more than ten percent was a reasonable threshold in assessing whether the difference was material, relevant or representative of the product.  In relation to Regulation (2)(d) of the 2007 Regulation, the judge was swayed by the analysis of the difference between the products in terms of their composition and ingredients in determining whether the SCLs met the objective comparison grounded in Regulation 4(2)(d). He concluded that 14 of the 15 SCLs failed to satisfy the criteria set out in Regulation 4(2)(d) as these SCLs failed to objectively compare the products.

In his examination of the SCLs under Regulation 4(2)(c) of the 2007 Regulation, Cregan J. accepted that the compared products broadly met the same needs or were intended for the same purposes as set out in Regulation 4(2)(c). However, he considered the fact that the Dunne’s SCLs referred to an Aldi product identified only by price meant that the SCLs did not actually correctly compare products under Regulation 4(2)(c).

In establishing whether the SCLs breached Regulation 4(2)(b) of the 2007 Regulation, Cregan J. relied on the same analysis carried out in respect of Regulation 4(2)(d). He concluded that the Dunnes advertisements either gave false information or omitted or concealed material information in relation to 14 out of the 15 products used in the SCLs.

Adopting the same formula, Cregan J. found that the banners and toblerones and SELs contravened Regulation 4(2)(d), 4(2)(c) and 4(2)(b) of the 2007 Regulation. Dunnes did not dispute the decision with respect to the banners.

The Court of Appeal’s decision

Dunnes appealed and the Court of Appeal[1] overturned the High Court's finding on the basis that it had applied an incorrect test in concluding that the SCLs and SELs were contrary to comparative advertising law. In rejecting the trial judge’s approach to the interpretation of Regulation 4(2)(d), the Court held that it was only necessary that the advertisement compared the products in one or more objective respects, not in every material respect. The Court also rejected Cregan J’s interpretation of Regulation 4(2)(c) as it held that the products under comparison only needed to be substitutable and interchangeable but not identical. Further, it found that the High Court judge’s reliance on Aldi’s expert evidence concerning minute differences in the respective trader’s products was unwarranted and that this impacted upon the High Court judge’s findings in relation to Regulations 4(2)(d) and 4(2)(c).

The Court of Appeal also reversed the High Court’s findings in relation to the SEL’s on the basis that there was no implicit comparison. However, it found that the comparative advertising on banners and toblerones was impermissible because no comparison of product prices or any feature of the rival products had been made within the meaning of the 2007 Regulation. The Court declined to order a re-trial on a number of grounds, including that the costs would be disproportionate to the value of the substantive case, a substantial period of time had elapsed since the conduct at issue occurred and that new evidence would need to be heard making the case wholly different.

Aldi appealed in relation to the Court of Appeal’s findings concerning SELs and SCLs, but not with respect to the banners.

The Supreme Court’s decision

In giving a decision on behalf of the Supreme Court, O’Donnell J. underlined the policy basis for comparative advertising and in doing so the intersection in this regard between competition law and trade mark law. He noted that while EU law principles mandate that courts take a broad view of comparative advertising, a failure to comply with the regime could result in a finding of trade mark infringement and that there was an added layer of confusion resulting from the 2006 Directive’s inclusion of the test for misleading commercial practices from the 2007 Act in Ireland and the manner in which all of this had been implemented into Irish law.  He suggested in passing that difficulties in determining what is, or is not, a prohibited comparative advertisement might have been averted by including a definition of circumstances in which although products are comparable under Regulation 4(2)(c) and an objective comparison is made under Regulation 4(2)(d), the comparison is nevertheless to be regarded as misleading under Regulation 4(2)(b).

Referring to Lidl SNC v Vierzon Distribution SA[2], O’Donnell J stated that it was for national courts to establish whether a particular advertisement was misleading or not under Article 4(2)(b) of the 2007 Regulations and approving Lewison L.J.’s statement in Marks and Spencer plc v Interflora Inc,[3] that this can be done in the case of commonly advertised consumer products by a judge alone without extensive expert evidence. He noted the overall test as requiring that the judge considers whether the advertising satisfies Regulations 4(2)(c) to (i) of the 2007 Regulations and then forms a sensible and pragmatic judgment as to compliance with Regulation 4(2)(b).This is all to be approached on the basis that courts recognise that advertisements will naturally present products in order to highlight their most attractive features,  that most transactions are carried out without minute or microscopic examination by consumers and that the test involves an assessment as to whether the consumer is somehow deceived in the circumstances, whether positively or by omission. Where products have acknowledged differences, this translates to considering whether the products are comparable and when objectively compared, at least in one respect (normally as to price) the comparison is misleading in the sense that there is a false implication of other features of the product which operates so as to deceive the customer and significantly affect their purchasing decision.

The Supreme Court’s Conclusion in respect of the SCLs

O’Donnell J. found that the High Court had been in error in considering that the analysis of composition and ingredients in products was relevant to whether the advertisement satisfied Regulation 4(2)(d) of the 2007 Regulations and that the Court of Appeal had correctly identified that all that was required was the comparison of one material, relevant, verifiable and representative feature of the goods and that the comparison was objective. In this case the Court found that the relevant comparator was price and that this was appropriately made in relation to all of the SCL’s with the exception of two, namely toilet tissue and day cream. The Court held that minor compositional differences of all but these last two products was not material and in this regard the Supreme Court referred to guidance in the Lidl v Verizon case stating:

“A practice will be misleading by omission if it omits material information the average consumer needs, in the context, to take an informed transactional decision and thereby is likely to cause the average consumer to take transactional decisions he or she would not otherwise have taken.”

Accordingly, the Court found that the length of toilet paper was a “material feature” and that the implication that the products were substitutable in relation to products of significantly different length was false and breached Regulation 4(2)(b). The Court also found that the SCL in respect of the day cream breached Regulation 4(2)(b) on the basis that a consumer might be falsely misled into thinking that Dunnes cream also contained an SPF like the Aldi product when this was not the case.

The Supreme Court agreed with the decision of the appellate court, that the slogans were not misleading within the meaning of Regulation 4(2)(b). It considered that even under pressure, the average consumer would not treat vague slogans as overriding specific price information.

Relief For Infringement of Aldi’s trade marks

The Supreme Court examined whether the Court of Appeal was incorrect not to grant an injunction in relation to the banners and toblerones against Dunnes as it had breached Aldi’s trade marks in that regard.  This was also a relevant consideration in relation to the Supreme Court’s finding of two instances of breach of Regulation 4(2)(b).

The Court noted that Aldi had already had the benefit of an injunction in relation to all of the products for some years and Dunnes could never be compensated for what now must be considered an excessive restraint. Moreover, there was no indication that Dunnes threatened to repeat its campaign and it was unlikely in all the circumstances of this judgment that Dunnes would reproduce the offending banners and the two SCLs. Therefore, the Supreme Court held that that this case could be classified as an exceptional circumstance within the meaning of Article 102(1) of the Regulation 207/2009 on the Community Trade Mark in which injunctive relief would not be granted.

[1] [2017] IECA 116

[2] (C-Case 159/09)

[3] [2012] EWCA Civ 1501

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