Compare, But Beware – Recent Judgment On Comparative Advertising In Hong Kong

Introduction

Historically, there have always been tensions in intellectual property law around how to balance the exclusive rights granted to intellectual property rights owners, while also allow for healthy competition between businesses to benefit consumers. One area where this tension is evident is in comparative advertising - e.g. where advertising materials identify a competitor, and identify a company's products or services as superior.

A recent judgment of the Hong Kong High Court ("Court") provides guidance on comparative advertising for the first time, including the interpretation of section 21 of the Trade Mark Ordinance (Cap. 559) ("TMO")13. In this case, the Court dismissed a trade mark infringement claim brought by the PCCW-HKT Group ("PCCW"), against its competitor, Hong Kong Broadband Network Limited ("HKBN")14. In doing so, the Court demonstrated support for comparative advertising, allowing more freedom for advertisers to highlight their companies' market advantages, and encouraging healthy competition.

Background

In 2015, HKBN launched an advertising campaign with a number of catchphrases that included: "PCCW Home Telephone Service customers say goodbye to bloated monthly fees!" and "電訊盈科家居電話用戶唔駛再忍受 咁大食嘅家居電話用費". These catchphrases included trade marks registered by PCCW, such as "PCCW" and "電訊盈科" ("Marks").

There was no dispute by the parties that HKBN used the Marks. However, PCCW argued that HKBN had infringed PCCW's trade mark rights under sections 18(1) and (4) of TMO, as HKBN used the Marks in the course of business, thus taking unfair advantage of the reputation of the Marks. HKBN relied on section 21 of the TMO as a defence which states that there is no infringement of registered trade marks, if they are used in accordance with honest practices in industrial or commercial matters.

The factors that the Court may consider in determining "honest practices" include, in particular, whether:

the use takes unfair advantage of the trade mark; the use is detrimental to the distinctive character or repute of the trade mark; or the use is such as to deceive the public. PCCW claimed that HKBN's use of the Marks was not in accordance with honest practices in industrial or commercial matters. One of the reasons given to support this contention was the use in the advertisements of the expressions "bloated fees" and " 大食" (meaning gluttonous in Chinese).

HKBN rebutted this claim by asserting that a reasonable consumer reading the...