Friday 15 December 2017

Dunnes Stores wins appeal over in-store price comparison with Aldi

Dunnes Stores won the High Court Appeal
Dunnes Stores won the High Court Appeal

Tim Healy

DUNNES Stores have won an appeal over a ruling that it had infringed Aldi's trademark by the use of in-store labelling to claim their products were cheaper than the rival.

The Court of Appeal set aside a 2015 High Court finding of trademark infringement through the use of shelf-edge labelling because it had failed to objectively compare one or more of the relevant and verifiable features of the Dunnes' products with those of Aldi.

Aldi alleged this was in breach of the Consumer Protection Act 2007 and the European Communities (Misleading and Comparative Advertising) Regulations 2007.

At the heart of the appeal was whether the summer 2013 price advertising campaign  by Dunnes, which employed Aldi's trademarks for identification and comparison purposes, complied with conditions imposed by the regulations when such adverstising is carried out, the president of the Court of Appeal, Mr Justice Sean Ryan, said.

The judge disagreed with the High Court in relation to its finding that the shelf-edge labelling part of the campaign breached the regulations.

He will hear the parties next month on whether there should be a re-trial in relation to that matter.

He agreed with the High Court finding that shop-floor advertising banners were not permissible.  Mr Justice Ryan said the court would replace the High Court finding in relation to these with a declaration that they were not permitted because they did not constitute comparative advertising.

In the circumstances of the substantial success by Dunnes in its appeal, the injunctions obtained by Aldi in 2015 should be set aside, notwithstanding the unlawfulness of the shop floor banners, he said.

In its submissions to the three-judge appeal court, Dunnes argued the High Court erred in its application of the rules of comparative adversting in the 2007 regulations, Mr Justice Ryan said.

Aldi contended the Dunnes approach was completely misconceived and its advertising, and thre way it was done, was misleading.

Mr Justice Ryan said the High Court had accepted the evidence of Aldi's expert in relation to whether the shelf-edge labelling in relation to 15 chosen products breached the regulations.

Mr Justice Ryan said he disagreed with that expert's approach.

He also said the rationale of the High Court judge, Mr Justice Brian Cregan, in rejecting Dunnes' expert's opinions was not altogether clear.

In circumstances where the High Court relied so heavily on one expert (Aldi's) "to the almost complete exclusion of the opposing witness, it is unsatisfactory not to have the benefit of the judge's reasoning for this preference", he said.

He would not overturn the High Court finding on this basis alone but the findings in relation to breach of the comparative advertising regulations could not be sustained, he said.

The High Court case had concentrated on 15 products, 14 of which were found to be in breach of the regulations. As a result, another 247 labels were condemned for similar infractions.

The products included pork sausages, turkey breast mince, yogurts, day cream, shower gel, toilet tissue, a sparkling orange drink, tomato ketchup, white sauce, tinned beef and chicken dog foods and dry cat food.

The High Court found infringement occurred because Dunnes  claimed prices for these products were lower than Aldi prices - but did not objectively compare those products as meeting the same needs or as being intended for the same purpose.

The High Court judge concluded such information would be likely to cause the average consumer to make a transactional decision, which that consumer would not otherwise make. 

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