O2 Holdings Ltd v Hutchison 3G UK Ltd (No 1)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeSir Christopher Staughton
Judgment Date05 Dec 2006
Neutral Citation[2006] EWCA Civ 1656
Docket NumberCase No: A3/2006/0976 and 0977

[2006] EWCA Civ 1656

Before :

The Rt Hon Lord Justice Mummery

The Rt Hon Lord Justice Jacoband

Sir Christopher Staughton

Case No: A3/2006/0976 and 0977

HC 04 CO2776/CO3779

Between :
(1) O2 Holdings Limited (Formerly O2 Limited)
(2) O2 (Uk) Limited
Hutchison 3g Limited

Richard Arnold QC and Mark Vanhegan (instructed by Wragge & Co) for the Claimants/Appellants

Geoffrey Hobbs QC and Emma Himsworth (instructed by Lewis Silkin) for the Defendant/Respondent

Lord Justice Jacob

Lord Justice Jacob:


The trial judge, Lewison J, opened his judgment [2006] EWHC 534 (Ch); [2006] RPC 699 saying "this is a case about bubbles." And so it is. But it is also about a lot more. How aggressively does EU law permit comparative advertising to go? Particularly can the advertiser not only use his rival's main name or trade mark but also, honestly, his subsidiary registered trade marks including marks embodying his trade imagery (what the Americans call trade dress) ? The question deep down involves a decision based upon the philosophy of how competitive the law allows European industry to be.


For that reason I have come to the firm conclusion that an EU-wide answer is needed. That can only be provided by the European Court of Justice, for both sides agreed that the position was not so straightforward as to be acte clair. Mr Hobbs QC for the defendants, "H3G," indicated that his client would prefer it if we just decided the case, leaving the question of a reference to the House of Lords. But the House (even when considering a Petition for leave to appeal) is, pursuant to Art. 234 of the EU Treaty bound to refer a question of EU law if it is not acte clair. Each side sees a question of principle at stake so there is no reasonable prospect of settlement. So if we decided matters for ourselves, whichever way we went, and whether or not we granted leave to appeal to the House of Lords, a reference in the end would be inevitable. So it is better to refer now rather than allow the delay and expense which would otherwise be involved.


At the outset of these proceedings the claimants, "O2", raised a large number of complaints. By trial these had been whittled down (by a mixture of self-culling and the exercise of the court's case management powers by the Vice-Chancellor as he then was) to allegations of infringement of four registered trade marks. All four of these consist of static pictures of bubbles. The specifications of goods and services of all the marks include telecommunications apparatus and telecommunications services. The marks were divided into pairs; one pair was alleged to be infringed pursuant to Art.5(1) (b) of the Trade Marks Directive (implemented by s.10(2) of the Trade Marks Act 1994) and the other pair pursuant to Art. 5(2) (implemented by s.10(3) ) . Lewison J had to decide a great many issues, many of which are not pursued on appeal. These included the validity of the registrations (now accepted) and the issue of infringement of the pair said to infringe by virtue of Art. 5(2) (which he held did not infringe) . There is no appeal from the latter decision. So that leaves just the issues of infringement of the pair of marks said to infringe by virtue of Art.5(1) and whether, if so, there is a defence.


I reproduce the marks here:

"Technical" (No. 2,360,558)

The left hand picture is in blue – the right in monochrome.

"Fizz" (No. 2,298,347)

The picture as registered is in blue


The parties were agreed that the effect of some cryptic headings and entries in the register (which I need not set out) meant no more than that Technical was registered in both blue and monochrome and Fizz just in blue – just as the pictures are on the Register. There was no suggestion that the rights in them were limited to the colours of registration.


In the market place O2 used bubble imagery in a host of ways. The evidence clearly established that images of bubbles in water (particularly against a graduated blue background) in the context of mobile phones had become associated with O2 and none other. O 2 is the chemical symbol for the oxygen molecule and the idea is to link the name O2 with the logo O 2 and the imagery of the life-giving gas. The Judge describes the use in more detail at [8]-[13] and the resulting success in implanting in the public mind the image of bubbles as denoting O2's mobile phone business at [29]-[33]. His conclusions are not challenged.


H3G, also a mobile phone service provider, was a late entrant to the UK market, starting its service in March 2003. It calls its service "3". By then four providers, Vodafone, Orange, O2 and T-mobile, were well established and 3 did not find the going easy. In March 2004 3 launched a pay-as-you-go service called "Threepay" Again the going was not easy. So it was decided to advertise against the big brands comparatively. The intention was to do so "in a robust but fair way."


After checking with TV advertising voluntary regulators and their own solicitors, H3G started their comparative advertising campaign using not only TV but other advertisements too. We have seen the TV advertisements upon which the case is based. O2 and their rivals were the subject of comparisons, each main player being the subject of an individual comparative advertisement. The general scheme of the advertisements is to begin by using the name and something of the imagery of the rival, then to use the Threepay and 3 imagery with a message that it was cheaper in a specific way. The imagery used for the comparison against Orange was a spinning orange square, that for Vodafone flying abstract shapes resembling commas, that for T-Mobile a pink triangle and that for O2, bubbles.


The judge described the "anti-O2" advertisement as follows but with the accurate caution that it is difficult to describe in words:

Time (Secs)



A concentrated mass of white bubbles appears in a circular shape on a black screen. The bubbles start to expand in size


As the bubbles continue to expand a male voice over begins. The male voice speaks in a relative monotone. The spoken words are: "On 02 pay as you go the first three minutes peak call rate each day could cost you seventy five p." The words "seventy five p" are emphasised. The voice-over lasts until 8 seconds into the advertisement


As the bubbles continue to expand a soundtrack of bubbling noises begins


The bubbling noises continue. The bubbles now fill the screen. Individual bubbles have expanded and have become discernible against the background mass of bubbles. The individual bubbles are circular in shape, and appear against the mass of much smaller bubbles.


As the bubbles continue to expand a caption (or "super") appears at the bottom of the screen. It is in black lettering, in contrast to the white bubbles. It reads:

"O2 Talkalot & Talkalotmore 5p per minute thereafter. Based on a £25 VideoTalk voucher with a 30 day validity period. Certain calls excluded. See three.co.uk"


The voice-over ends simultaneously with the bubbling noises. An upbeat jingle fades in. The jingle lasts until the end of the advertisement.


A large circular bubble sweeps across the screen. It is seen against the mass of smaller bubbles. The screen clears quickly from the centre, leaving the caption on a white screen. The jingle is continuing.


A stylised and animated "3" appears on the screen. It enters stage right with a fizzing tail and performs a journey to stage front. It spins and twists as it goes, and at one point appears to rush out of the screen towards the viewer. The fizzing tail consists of grey flow lines and a variety of green shapes.


A second voice-over begins. The voice-over is a female voice, in a brighter and upbeat tone. The spoken words are: "Or with ThreePay, that exact same call could cost you fifteen p". This voice-over lasts until 15 seconds into the advertisement. Meanwhile the jingle continues, and the caption remains on screen. The stylised "3" continues to move about the screen, changing colour from red to blue to green. It then rotates on the spot.


As the voice-over continues and the caption remains on the screen, the stylised "3" stops moving. It changes colour to yellow and then to green; and the fizzing tail fades. The stylised "3" remains in the middle of the screen until the end of the advertisement.


The second voice-over ends. The stylised "3" is still on screen and changing colour. The caption remains on screen.


The caption disappears.


A third voice-over begins. This is in the same female voice as the second voice-over. The spoken words are: "ThreePay—Pay as you go from 3"


While the voice-over continues, the stylised "3" continues to change colour (green to blue to turquoise to purple) . A second caption appears on screen. It reads: "ThreePay—Pay as you go from 3"


The third voice-over ends. The jingle ends. The caption fades. The stylised "3" is still on screen and changing colour


The advertisement ends, with the stylised "3" still on screen.


Note that, for the purposes of the proceedings, it was accepted that the price comparison was true and, moreover, that as whole, the advertisement was not misleading in any way. In particular it did not suggest any form of trade connection between O2 and 3. The average member of the public would see the...

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