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England and Wales High Court (Chancery Division) Decisions

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Cite as: [2000] EWHC Ch 55
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British Airways Plc v. Ryanair Ltd [2000] EWHC Ch 55 (25th October, 2000)

HC 1999 0884

HC 00 00527

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

 

Before: THE HON. MR. JUSTICE JACOB

B E T W E E N

British Airways plc

Claimant

- and -

Ryanair Limited

(A Company Incorporated in the Republic of Ireland)

Defendant

 

Geoffrey Hobbs QC and Emma Himsworth (instructed by Messrs Wragge & Co)

for the Claimant

Richard Meade (instructed by Messrs Theodore Goddard) for the Defendant

Hearing date: 25/26 October 2000

JUDGMENT

 

This is the official judgment of the court and I direct that no further note or transcript be made

 

THE HON MR JUSTICE JACOB 5 DECEMBER 2000

 

Jacob J

 

1. These actions are about some comparative press advertising placed by Ryanair in 1999. The earlier action concerns what I will call the "Bastard" advertisement (headline "EXPENSIVE BA….DS!), the latter about what I will call the "Expensive" advertisement (headline "EXPENSIVE BA"). I reproduce them as an annex to this judgment. The Bastard advertisement appeared in February and March, once in The Times, twice in the Evening Standard, once in The Guardian and twice in the Sunday Times. The Expensive advertisement appeared just once in November, in the Evening Standard. By then the Advertising Standards Authority ("ASA") had, in June, upheld a complaint (not made by BA but by members of the public) against the Bastard advertisement. It considered that the headline "was likely to cause serious or widespread offence." Shortly after that ruling Ryanair’s solicitors indicated that it would not use the headline again. Legal liability for it remained denied. At a later point BA suggested settlement of both actions on the basis of each side paying its own costs. That was rejected. Before me each side conducted their respective cases as a matter of high principle.


2. So I must decide the case, however immature it may seem for two large companies to be fighting this sort of dispute in the courts. It seems particularly odd commercially that BA should persist in its claim that the price comparisons are misleading. The complaint amounts to this: that Ryanair exaggerate in suggesting BA is 5 times more expensive because BA is only 3 times more expensive.


3. BA sues for trade mark infringement and malicious falsehood. BA has a registered trade mark consisting of the letters BA registered for, amongst other services, air travel services. Ryanair does not contest its validity, or that BA in the context of such services, means the claimant. On the contrary their advertisements rely upon the public knowing that BA denotes the claimant.

 

The witnesses

4. For BA I heard from Mrs Shannon, an impressive and knowledgeable witness. She holds a senior position in BA’s European pricing department. However she had no involvement in marketing or advertising and fairly accepted that she saw airline advertisements only as much as any other members of the public. Thus her evidence was essentially limited to providing factual material about prices and destinations. BA’s expert witness was a Mr Gill. His expertise was IATA’s (International Air Transport Association) tariff categorisation and the like. He fairly accepted IATA rules to be so complicated that the general travelling public does not understand them. He was unable to assist in relation to the way the public looks at advertisements or travels or how the public deals with travel agents. He does not get involved with the public. I think his evidence was entirely irrelevant. It does not matter, for instance, that (remarkably) IATA tariffs do not have a category called a "return fare": the public understands the concept well enough. Finally, for BA there was a statement from a Mr Blair, which was accepted. He gave technical background information about computer fare designations.

5. For Ryanair the principal witness was Mr Jeans, its Sales and Marketing Director. It was he who took ultimate responsibility for the advertisements. He was an essentially truthful witness. Mr Hobbs focussed on one answer in particular to suggest otherwise. At one point Mr Jeans was being pressed on whether or not he intended the individual price comparisons to be taken as alternates. He appeared to say not so. But if one listened to him at the time and reads his answers as a whole I think his attitude was fairly clear: he wanted dramatically to convey the message that Ryanair was a lot cheaper than BA for what was broadly the same journey. In part the effect of that would be to take sales from BA, in part it would generate new sales from those who could not afford BA prices. In relation to the Bastards advertisement Mr Hobbs sought to demonstrate that Ryanair selected the headline first and put in the price comparisons later as some sort of spurious justification for the headline. Actually the facts were that the advertising agency had been asked to produce a number of headlines (which they did somewhat sequentially). All of these were intended to go with a price comparison table – of the same sort as Ryanair had used previously. The fact that the detailed BA prices were only obtained at the last minute has no sinister significance – that would have happened whatever the headline chosen. The point of the last minute obtaining of detailed prices was to avoid the risk of any change happening before publication. It was done to ensure accuracy. The choice of the Bastard headline was because those at Ryanair thought it would have the most impact.


6. Ryanair also called Mr Donegan and Mr Murphy as factual witnesses. Mr Donegan at the relevant time was Marketing Services Manager but has now left Ryanair for fresh employment. It was Mr Murphy’s job to get the Ryanair prices, the BA prices, check the small print and make sure nothing was missed out. He had done the same job for an earlier price comparison advertisement of Ryanair in 1998 – an advertisement which also used the expression "mid-week return fare". Mr Murphy accepted that the expression might be taken by some as denoting "out not on weekend, back next week, not on weekend."


7. Ryanair also called a Mr Pinnington as an expert witness. He was a travel agent whose business was principally with the universities of York, Essex and de Montfort (in Leicester) but also encompassed businesses, such as "high-tech" companies nearby to the universities. His clients were very budget conscious. Mr Pinnington was a fair and sensible witness. He was the only outside witness with relevant experience, himself actually dealing (at the time) with the public and placing bookings for air tickets, including bookings with the parties to this case. He was, I think, the most relevant witness.


8. Before passing from the witnesses, it is particularly pertinent to observe that no witness testified to anyone actually being misled by either advertisement. There have been no complaints about deceptiveness in respect of any of the matters alleged made by members of the public (to whom the advertisements were directed) or even by anyone independent in the trade. Complaints might have been made to either party, to the ASA or to any Trading Standards Officer in any Local Authority. This is a matter to which I attach weight – all the more so having regard to the contrasting fact that there were independent complaints to the ASA about the offensiveness of the Bastards headline. Of course the absence of complaint is not conclusive – and I do not treat it as such.

Two causes of action?


9. BA relies upon two alleged causes of action: infringement of registered trade mark and malicious falsehood. In relation to the former Mr Hobbs QC advanced an involved argument based upon European law. In relation to the latter there was no dispute as to the applicable legal principles. Judges (including, perhaps especially, me, see Cable & Wireless v BT [1998] FSR 383 at p.385) have in the past queried what the latter can add to the former in a comparative advertising case. Mr Hobbs advances 4 reasons as to why there may be value in complicating the case by adding this tort. None of the reasons appear to me to be of weight, especially in this case. I will go through them.


10. First he suggests the defendant might change its advertising so as to stop using the registered trade mark but still advertise comparatively in a misleading way. That is an essentially academic speculation. It boils down to the supposition that there might be some other advertisement which might be a malicious advertisement. So there might – but one would have to wait and see what it says before judging it. It is difficult to advertise comparatively without using the other side’s registered trade mark. In the real world if a party’s advertisement has been found misleading in a trade mark infringement suit, that is very likely to be an end of the matter.


11. Secondly Mr Hobbs submits that in an action for malicious falsehood recovery of damages is permitted even where there is no loss of reputation. He relies on what Lord Steyn said in Gregory v Portsmouth City Council [2000] 2 WLR 306. But damages are recoverable for trade mark infringement without any loss of reputation too. Lord Steyn was contrasting damages for malicious falsehood with damages for libel. Both in the case of trade mark infringement and malicious falsehood damages are at large – it will be for the claimant to prove the damage caused by the wrongful act. He will be able to claim all damage he has suffered, to reputation, to sales, or anything else. I cannot see that there would be any difference in the measure of damages recoverable.


12. Thirdly Mr Hobbs suggested that there is room for doubt as to the legal status and effect of s.10(6) of the Trade Marks Act 1994. That is itself a doubtful proposition (though it is fair to say a higher court or the European Court of Justice has not considered it). Even supposing him to be right however, no-one suggests it imposes a higher standard of liability than malicious falsehood. It is the latter tort which adds the requirement of proof of malice.


13. Fourthly, and this is much the same point, he submits that the test of honesty for s.10(6) (which on current authorities applies without regard to the subjective intention of the advertiser) has not been examined by a higher court. The answer is the same.


14. Mr Hobbs does not mention a fifth reason. I suspect the real reason to be this: that victory in a trade mark infringement claim does not sound as good as victory in a malicious falsehood claim. If the latter can be proved the wronged trade mark owner can trumpet: "judge says my competitor’s advertisement was not only false, it was malicious!." I do not say that in some very clear cases that might not be a worthwhile result to achieve. It is miles from this case, however.

Trade Mark Infringement – the Law

 

15. There is no dispute but that in both advertisements Ryanair used the exact registered trade mark, BA. So this is a case falling within s.10(1) of the 1994 Act:

"A person infringes the registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered."

This corresponds with Art.5.1(a) of the Trade Marks Directive of 21st December 1988 (89/104/EEC).

 

16. Ryanair say they fall within the defences provided by s.10(6) of the 1994 Act and/or s.11(2)(b) of the Act. s.10(6) is partly, to use Laddie J’s vivid phrase, "home grown" (see Barclays Bank v RBS Advanta [1996] RPC 307 at p.313). s.11(2) is taken directly from Art.6.1(b) of the Directive.

s.10(6) reads:

"Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identifying goods or services as those of the proprietor or a licensee.

But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark."

s.11(2) reads:

"A registered trade mark is not infringed by –

    1. …

    2. The use of indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services, or

    3. …

Provided the use is in accordance with honest practices in industrial or commercial matters."


17. The language is identical to one of the grounds for refusal or invalidity set out in Art.3(1)(c) of the Directive (corresponding to s.1(c) of the 1994 Act). The objection to validity can be overcome if it is proved that at the relevant date the mark "has in fact acquired a distinctive character as a result of the use made of it (Art.3(3), repeated in the proviso to s.3(1) of the 1994 Act)."


18. Mr Hobbs submitted that s.11(1)(b) had no application to comparative advertising. He further submitted that the construction of s.10(6) reached in a number of first instance decisions had to be reconsidered and modified as a result of the "comparative advertising Directive" of 6th October 1997 (97/55/EEC).


19. First then, the extent of s.11(1)(b). Does it protect honest comparative advertising? Mr Hobbs’ submission is startling in its effect. If right, it would mean that no one in trade is permitted to describe their goods or services perfectly honestly by reference to another’s trade mark. In ordinary life consumers regularly do this. Some may say " ‘Bisto’ is as tasty as ‘Oxo’ ", others may say " ‘Bisto’ tastes stronger than ‘Oxo’ ". In neither case is either trade mark being misused. One is being used as a comparator for the other – to describe the other. Likewise traders are apt to compare each other’s prices, using their respective trade marks to do so. In all these cases the trade mark is being used as an indication of the characteristics of goods. Mr Hobbs must therefore submit, as he does, that the natural width of the language of the defence is circumscribed: "any honest description is allowed except a description using a trade mark as a comparison." He can point to no recital of the Directive supporting him – indeed the 10th recital which sets out the purpose of protection contains no hint of an intention to prevent honest, non-deceptive, use of a mark.


20. All that Mr Hobbs relies upon is a passage in the decision of the ECJ in the Windsurfing Chiemsee case ([1999] ETMR 585 (joined cases C-108/97 and C-109/97). At paragraph 28 the court said:

"In addition, Article 6(1)(b) of the Directive, to which the national court refers in its questions, does not run counter to what has been stated as to the objective of Article 3(1)(c), nor does it have a decisive bearing on the interpretation of that provision. Indeed, Article 6(1)(b), which aims, inter alia, to resolve the problems posed by registration of a mark consisting wholly or partly of a geographical name, does not confer on third parties the right to use the name as a trade mark but merely guarantees their right to use it descriptively, that is to say, as an indication of geographical origin, provided that it is used in accordance with honest practices in industrial and commercial matters."

Mr Hobbs suggest the court there laid down that the defence of use as a description does not include use of a description by way of use of a trade mark to describe goods. I reject that. It is not saying anything of the sort. The point the court was dealing with was registration of the geographical word "Chiemsee", the name of a Bavarian lake. The applicants wanted a monopoly of that. They raised the oft-tried-never-works argument: "Give me the registration. It will not harm the public who want to use the mark descriptively because there is a defence for descriptive use". In paragraph 28, having pointed out the objective of Art.3(1)(c) was to keep descriptions free for public use, the Court was merely saying that the defence given by Art.6(1)(b) did not extend to the defendant using a geographical name as a trade mark for his goods. Such use would not be used as a description.


21. I feel confirmed in my view by the qualification that use as a description must be "in accordance with honest practices etc". There is no such qualification under Art.3(1). This to my mind indicates that, although the language preventing registration unless the mark is shown to be distinctive is the same as that of the defence, any honest descriptive use is permitted by Art.6(1)(b).


22. If I were wrong in this view then so far as I can see (and as Mr Hobbs submitted) comparative advertising, would not be permitted by the Directive at all. The whole of s.10(6) would be a non-permitted derogation from the Directive. Other countries do not have a s.10(6). So, if Mr Hobbs were right, comparative advertising should not have been allowed throughout the European Union from the due date of implementation of the Directive. Yet so far as I know no one has taken the Directive as forbidding honest comparative advertising using a registered trade mark.


23. Actually, if anything, there is an indication in the Comparative Advertising Directive that the European Parliament and Council in 1997 considered that the Trade Marks Directive permits honest comparative advertising. It mentions the Trade Marks Directive in Recitals 13-15, which read:

"(13) Whereas Article 5 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks confers exclusive rights on the proprietor of a registered trade mark, including the right to prevent all third parties from using, in the course of trade, any sign which is identical with, or similar to, the trade mark in relation to identical goods or services or even, where appropriate, other goods;

 

    1. Whereas it may, however, be indispensable, in order to make comparative advertising effective, to identify the goods or services of a competitor, making reference to a trade mark or trade name of which the latter is the proprietor;

      2.  

    2. Whereas such use of another’s trade mark, trade name or other distinguishing mark does not breach this exclusive right in cases where it complies with the conditions laid down by this Directive, the intended target being solely to distinguish between them and thus to highlight differences objectively."

 

Now the 1997 Directive was an amending Directive. It amends the 1984 Directive concerning misleading advertising (84/450/EEC). That Directive left the problem of comparative advertising for another day (see Recital 7). If in 1997 it was thought that the Trade Marks Directive did not permit any comparative advertising however fair, then the 1997 Directive would surely have amended the Trade Marks Directive as well as the 1984 Directive. But there was no amendment of the Trade Marks Directive. None was called for. All the recitals are saying is that if you comply with the conditions laid down in this Directive you will not infringe a registered trade mark. One only has to see the conditions (set out below) to see that compliance will be well within "honest practices in industrial or commercial matters." The recitals of the 1997 Directive are not trying to set out an exhaustive definition of these for the purposes of the Trade Marks Directive and any national law implementing it.


24. I turn to Mr Hobbs’ next submission, namely that our s.10(6) should now be construed in the light of the Comparative Advertising Directive. He says s.10(6) should be treated as providing a defence only if there is compliance with the conditions for comparative advertising laid down in the Directive. They read as follows:

 

"(a) it is not misleading according to Articles 2(2), 3 and 7(1);

    1. it compares goods or services meeting the same needs or intended for the same purpose;

    2. it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price;

    3. it does not create confusion in the market place between the advertiser and a competitor or between the advertiser’s trade marks, trade names, other distinguishing marks, goods or services and those of a competitor;

      4.  

    4. it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor;

    5. for products with designation of origin, it relates in each case to products with the same designation;

    6. it does not take 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;

    7. it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name."


25. Compliance with most of these conditions will obviously be necessary to comply with s.10(6). But there is one significant extra - "denigration". You can be offensive about another’s trade mark or name without being dishonest. The Bastards headline does just that. I think Mr Hobbs’ elaborate submission about s.10(6) is designed principally to catch that use. Mr Meade (for Ryanair) accurately summarised Mr. Hobbs’ argument as follows:

    1. The 1994 Act was passed to give effect to the Trade Marks Directive;

    2. Section 10(6) is, however, a "home-grown" add on;

    3. The Community has also legislated about misleading and comparative advertising;

    4. The Comparative Advertising Directive was not promulgated until after the passage of the 1994 Act and was not implemented in the UK until after the acts complained of;

    5. The Comparative Advertising Directive amended the earlier Misleading Advertising Directive, which had force in the UK through the Control of Misleading Advertisement Regulations 1998 (SI 1988/915) made pursuant to s.22(2) of the European Communities Act 1972 to implement Directive 84/450/EEC;

    6. By virtue of the Marleasing principle, the 1994 Act must be interpreted in accordance with the Misleading Advertising and Comparative Advertising Directives even though it came before them.


26. This elaborate and ingenious argument breaks down at a number of points. Firstly, I have already indicated that in my view the Comparative Advertising Directive was not intended to amend the Trade Mark Directive. It would follow it is not intended to amend or affect the interpretation of any national law passed to implement the Trade Mark Directive. It is especially difficult to see how it could affect the interpretation of a national law which did not have its own home-grown equivalent of s.10(6). What provisions of the Trade Mark Directive as implemented in national law could be "amended" (i.e. interpreted by the Marleasing principle) by the Comparative Adverting Directive?


27. Next, the Comparative Advertising Directive says that it may be implemented in a manner to be chosen by each of the member states. Recital 11 reads:

"Whereas the conditions of comparative advertising should be cumulative and respected in their entirety; whereas, in accordance with the Treaty, the choice of forms and methods for the implementation of these conditions shall be left to the Member States, insofar as those forms and methods are not already determined by this Directive."

 

Leaving the method of implementation to the Member States is a far cry from requiring Member States to amend their trade mark laws to permit comparative advertising only in accordance with the Directive. It is an even further cry from requiring Member States to confer or extend private rights such as those given by registration of a trade mark. Actually, in the UK implementation has been achieved by the Control of Misleading Advertisements (Amendment) Regulations 2000 (SI 2000 No.914). These amend the 1988 Regulations. The amended regulations provide a machinery of complaint in respect of comparative advertising which does not comply with the Regulations. You go to the Director of Fair Trading who can, if necessary, apply to the court to prevent breaches of the code. No private rights are conferred or extended.


28. It should be remembered that the control of misleading advertising is a much wider subject than trade mark infringement, or indeed comparative advertising. Generally such controls do not require the creation of private rights. That is indeed explicit in the case of the 1988 Regulations as amended in relation to comparative advertising. Regulation 4(a)(3) reads:

 

"The provisions of this regulation shall not be construed as:

 

(a) conferring a right of action in any civil proceedings in respect of any contravention of this regulation (save as provided for in these Regulations); or

(b) derogating from any right of action or other remedy (whether civil or criminal) in proceedings instituted otherwise than by virtue of these Regulations."


29. There is also the formidable difficulty in the way of Mr Hobbs to the effect that Art.3 of the 1997 Directive required Member States to bring into force the laws, regulations and administrative provisions necessary to comply with it at the latest thirty months after its publication in the OJC. So implementation was not required until after the time of publication of the advertisements in this case. Mr Hobbs seeks to get over that by submitting that the Marleasing principle (Case 106/89 [1990] ECR I-4135) requires one to construe a national law in accordance with a subsequent Directive from the moment of its publication, even though the Directive itself requires implementation later. No authority supports that. Mr Hobbs relied upon the judgment of the court in Inter-Environnment Wallonie v Région Wallonne (Case C-129/96 [1997] ECR I-7411). But all that case says is that during the period before compliance with a Directive is required, a Member State must refrain from taking any measures liable to compromise the result prescribed. In plain language if you have to do a thing by a certain time you must not put it out of your power to do just that. That is miles from this case.


30. In the result I do not think there is anything in Mr Hobbs’ reliance upon the Comparative Advertising Directive. The interpretation of s.10(6) is unqualified by it. In Cable and Wireless I, borrowing from and adding to Mr Crystal QC in BT v AT&T, summarised the position:

"(1) The primary objective of section 10(6) of the 1996 Act is to permit comparative

advertising (see Advanta at pages 312-313 and 315, and Vodafone at pages 4-5 of the transcript of the judgment);

 

    1. As long as the use of a competitor’s mark is honest, there is nothing wrong in telling the public of the relative merits of competing goods or services and using registered trade marks to identify them (see Advanta page 315, Vodafone at page 4);

    2. The onus is on the registered proprietor to show that the factors indicated in the proviso to section 10(6) exist (see Advanta at page 315, Vodafone at page 4);

    3. There will be no trade mark infringement unless the use of the registered mark is not in accordance with honest practices (see Advanta at page 315);

    4. The test is objective: would a reasonable reader be likely to say, upon being given the full facts, that the advertisement is not honest? (See Advanta page 315, Vodafone at page 4);

    5. Statutory or industry agreed codes of conduct are not a helpful guide as whether an advertisement is honest for the purposes of section 10(6). Honesty has to be gauged against what is reasonably to be expected by the relevant public of advertisements for the goods or services in issue (see Advanta at page 316);

    6. It should be borne in mind that the general public are used to the ways of advertisers and expect hyperbole (see Advanta at page 315; cf. Vodafone at pages 3-4);

    7. The 1994 Act does not impose on the courts an obligation to try and enforce through the back door of trade mark legislation a more puritanical standard than the general public would expect from advertising copy (see Advanta at page 3125, Vodafone at page 4);

    8. An advertisement which is significantly misleading is not honest for the purposes of section 10(6) (see Advanta at page 316, Vodafone at pages 4-5). I venture with diffidence to make a number of additional observations.

    9. The advertisement must be considered as a whole (cf. Advanta at pages 316-318);

    10. As a purpose of the 1994 Act is positively to permit comparative advertising, the court should not hold words used in the advertisement to be seriously misleading for interlocutory purposes unless on a fair reading of them in their context and against the background of the advertisement as a whole they can really be said to justify that description;

    11. A minute textual examination is not something upon which the reasonable reader of an advertisement would embark;

      12.  

    12. The court should therefore not encourage a microscopic approach to the construction of a comparative advertisement on a motion for interlocutory relief."

 

Those are the principles I intend to apply here. I would only add this: Mr Hobbs suggested I should apply a uniform test which he derived from the Esteé Lauder Cosmetics case (Case C-220/98 [2000] IP&T 380). Paragraph 27 of this reads:

"It should be borne in mind that when it has fallen to the court, in the context of the interpretation of Directive 84/450, to weigh the risk of misleading consumers against the requirements of the free movement of goods, it has held that, in order to determine whether a particular description, trade mark or promotional description or statement is misleading, it is necessary to take into account the presumed expectations of an average consumer who is reasonably well informed and reasonably observant and circumspect (see, in particular, Gut Springenheide GmbH v Oberkreisdirektor des Kreises Steinfurt-Amt fur Lebensmittel-Uberwachung Case C-210/96 [1998] ECR1-4657 (para. 31))."

 

31. This "average consumer" test is, to my mind, no different from that which our law has traditionally applied in cases of passing off and trade mark infringement. The passage concerned is derived from a German reference in Gut Springenheide. According to my understanding German unfair competition law traditionally imposed a lesser standard for confusion, having in mind what it perceived to be a need to protect even the stupid or careless. Whether I am right or wrong about that, I propose to apply the "average consumer" test here.


32. It is of course the case that the average consumer has been exposed from birth to advertising. People get case hardened by it. They expect hyperbole and puff. One can almost say no advertisement is complete without them. The courts have long recognised this. Thus Lord Diplock said in Advocaat [1979] AC 731 at 742:

"… in an economic system which has relied on competition to keep down prices and to improve products there may be practical reasons why it should have been the policy of the common law not to run the risk of hampering competition by providing civil remedies to everyone competing in the market who has suffered damage to his business or goodwill in consequence of inaccurate statements of whatever kind that may be made by rival traders about their own wares. The market in which the action for passing off originated was no place for the mealy mouthed; advertisements are not on affidavit; exaggerated claims by a trader about the quality of his wares, assertions that they are better than those of his rivals even though he knows this to be untrue, have been permitted by the common law as venial ‘puffing’ which gives no cause of action to a competitor even though he can show that he has suffered actual damage in his business as a result."

 

Malicious Falsehood – The Law

33. It is the same average consumer who is relevant when one comes to consider malicious falsehood. There was no dispute as to the principles. BA must show that:

    1. The words complained of were false;

    2. They were published maliciously;

    3. They were calculated to cause BA pecuniary damage.

As I said in Vodafone v Orange:

"The meaning of the words concerned is the first matter to be considered, for their truth or falsity is to be tested against that meaning. The meaning is for the court to determine when a judge sits without a jury. Evidence of the meaning to others is inadmissible. The question:

‘is not one of construction in the legal sense. The ordinary man does not live in an ivory tower and he is not inhibited by the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of worldly affairs … What the ordinary man would infer without special knowledge has generally been called the natural and ordinary meaning of the words. But that expression is rather misleading in that it conceals the fact that there are two elements in it. Sometimes it is not necessary to go beyond the words themselves, as where the plaintiff has been called a thief or a murderer. But more often the sting is not so much in the words themselves as in what the ordinary man will infer from them, and that is also regarded as part of their natural and ordinary meaning’, per Lord Reid in Lewis v The Daily Telegraph"

Moreover there is only one "natural and ordinary meaning" permissible for the purposes of

this tort (see the discussion in Vodafone).

BA’s Complaints

34. BA have a number of complaints:

  1. The offensiveness of the Bastard headline;

  2. The individual price comparisons are said to be unfair;

  3. In the case of Frankfurt and Dinard the destination comparisons are said to be unfair.


35. I begin with (1). In my view this is not actionable as a trade mark infringement. It is saved by s.10(6) and is in any event just use of the mark in relation to the proprietor. Nor is it a malicious falsehood, amounting as it does to no more than vulgar abuse. I rather think, from the way he gave his evidence, that in retrospect, Mr Jeans felt a little bit ashamed of the headline. It would probably be caught now, if repeated, by the amended 1988 Regulations. It was in fact caught by the existing voluntary regime of the ASA. Ryanair promised not to repeat it in June 1999. There is nothing more to be said about it.


36. I turn to the price comparisons. It is here that that the main battle took place. It is in fact the only point which could have significance for the future. The "destination" point has been dealt with generally in the industry by the ASA. It requires all airline advertisements identifying a destination city having more than one airport to precisely identify the particular airport concerned.


37. The individual prices quoted for Ryanair and for BA were said to be unfairly compared – put forward as like-for-like when they were not. Before considering them in detail there is one important background matter with which, the witnesses agreed, most interested readers of the advertisement would be familiar. "Flag" or "conventional" airlines such as BA have for many years operated what was called the "Saturday night rule". If you want to fly out on a weekday and fly back before the weekend, it costs a lot more then if you are prepared to stay over for the Saturday night. The airlines exploit the fact that in the case of short, mostly business, trips, people want to go out and home for the weekend. I rather think that many resent the rule, which, until the advent of "low-cost" airlines such as Easyjet, Ryanair and even BA’s own Go, could not be avoided. Thus, taking the Frankfurt fare as an example, BA’s return same week fare was, as quoted in the Bastard advertisement, £374. If you were prepared to stay the Saturday night, the return fare would be £192. (It was agreed that one could work on just the Frankfurt fares, the figures on the other destinations being comparable).


38. Now in the advertisements the quoted fares are said to be "from*" The asterisk draws attention to the small but legible print "Midweek return fares". Mr Hobbs’ attack was based on that phrase. As a matter of language and out of any context it literally could be taken to mean either return the same week but not on weekends, or return next week not a weekend. Mr Hobbs characterised this as an ambiguity. He said Ryanair were trading on an ambiguity. Thus the comparison was unfair – not in accordance with honest trade practices.


39. The evidence shows that Ryanair, internally, regarded the phrase as meaning return same week. That could be done on Ryanair for the price quoted. However, because there was a restriction (spelt out in the small print) of a minium stay of 2 night and because for airlines Friday does not count as a weekday, one would have to travel on Monday or Tuesday to get back before the weekend. However the phrase in the abstract is not limited to Ryanair’s internal meaning. What matters is the phrase read in the context of the advertisement – by people familiar with the Saturday night rule. My conclusion is that most people would have appreciated that what was being got at was the resented rule. Such was indeed Ryanair’s intention. I think people would take the advertisement to be making the most favourable comparison Ryanair could reasonably make – that is what advertisers are most apt to do. The average consumer would know BA was cheaper if one stayed over Saturday. So, he would realise that it was same week returns that were being compared.


40. I of course accept Mr Pinnington’s evidence under cross-examination to the effect that "there is a level of ambiguity and it would be foolish and contrary to say anything else". But it is not shown to be anything other than an ambiguity out of context – particularly the context of the average reader having knowledge of the Saturday night rule. The evidence shows that, apart from these advertisements, Ryanair have used the phrase in some other advertisements and one journalist felt able to use it in Business Traveller June 2000 when comparing BA’s fare to Berlin with that of Buzz (another low cost airline). One can infer that the journalist would expect his readers to understand the phrase in the sense I have mentioned.


41. Accordingly, I do not think that the average consumer would find the price comparison misleading. He would expect there to be some sort of conditions (and indeed the small print makes that clear). In substance the advertisements were true. The fact that no-one has complained, not even travel agents who might perhaps have lost commission and thus keen to complain, confirms me in my view.


42. Even if that were wrong however, and fair comparison was for fares staying over a weekend, the substance of the price comparison is sufficiently true. I return to the Frankfurt fares. Ryanair’s price is quoted at £69.00, about one fifth of BA’s quoted price. If you take BA’s suggested comparison – a ticket including a Saturday night – Ryanair is about one third. There is still a saving of £123.00. That according to Mr Pinnington’s unchallenged evidence is a very significant amount likely to motivate even business travellers who were not paying their own fares. His unchallenged evidence was:

"The travelling public is very price sensitive. In my experience for travel in Europe a fare difference of as little as £10 will cause most travellers to consider altering their plans. For fare differences in the region of £50 most travellers, if they are paying for themselves, will usually amend their travel plans to take advantage of the fare difference. Even when not paying for themselves and travelling on business a fare difference in the region of £100 will lead travellers to consider altering their plans and if they cannot change them they will tend to feel that they are paying a premium that is not necessarily justified."

 

Accordingly in my view the use was honest comparative advertising. I suspect the real reason BA do not like it is precisely because it is true.


43. Finally I turn to the destinations point. There are actually two. The first relates to Frankfurt. Ryanair fly to the "secondary" airport called Hahn. It is designated by IATA as a city airport of Frankurt but is further out than Frankfurt International, to which BA flies. Hahn is about 68 miles from the city centre whereas Frankfurt International is, I assume, significantly closer. BA say the advertisement does not make this clear, which is true. But I do not regard it as making it a significantly unfair comparison. It is better to put more information out, just as it is better to indicate whether an airline flies from Heathrow, Luton, Gatwick or Stansted. In substance you are comparing like with like as far as fares go.


44. The last point, about Dinard, was bizarre. BA would sell you a ticket to Dinard at the quoted price. In fact you would fly BA to Jersey and change planes to another airline with whom BA have arrangements. If you went to Dinard airport you would see a desk labelled BA but it would in fact be run by the other airline. So the complaint is this: the advertisement compares the fares but does not point out that the BA fare is for a journey which suffers the disadvantage of having to change planes. Why not pointing that extra disadvantage made the advertisment dishonest I am unable to see. Of course any travel agent who sold the BA ticket without the customer being told he had to change would be in "deep trouble" as Mr Pinnington put it, but that has nothing to do with the fare comparison of the advertisement.


45. So I think the advertisements were not shown to be false. There is a defence under s.10(6) and s.11(2)(b) of the Trade Marks Act 1994 and the malicious falsehood claim does not get off the ground.

 

 

 

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