AN CHÚIRT UACHTARACH
THE SUPREME COURT
[S:AP:IE:2017:000115]
Clarke C.J.
O'Donnell J.
McKechnie J.
MacMenamin J.
Finlay Geoghegan J.
Aldi Stores (Ireland) Limited and
Aldi GmbH & Co. KG
Plaintiffs/Appellants
AND
Dunnes Stores
Defendant/Respondent
Judgment of O'Donnell J. delivered the 28th day of May, 2019.
Introduction
1 In June 2013, the defendant, Dunnes Stores ("Dunnes"), launched a comparatively small, and, if they are to be believed, largely unsuccessful advertising campaign, which ran during the months of June, July and August 2013. The campaign sought to draw comparisons between products sold by Dunnes, and those of its competitors, Lidl, SuperValu, Tesco and Aldi. It was therefore explicitly comparative advertising, which in principle is permitted if it complies with the relevant statutory provisions in Irish law, in particular S.I. No. 774/2007 - European Communities (Misleading and Comparative Marketing Communications) Regulations 2007 ("the 2007 Regulations"). The first plaintiff is the Irish subsidiary of the second plaintiff, which owns the trade marks at issue in the proceedings. For the purposes of this appeal, both entities can be referred to as "Aldi" without distinguishing between them. The promotional material which is the subject of the proceedings was threefold in nature:-
(i) 15 specific comparison shelf-edge labels ("SCLs"), by which Dunnes drew specific comparisons with Aldi products, accompanied by the words "Aldi match";
(ii) Banners which were used in store, containing the words "lower price guarantee", "guaranteed lower prices on all your family essentials every week", and "Aldi match". Versions of those banners referred to as "toblerones" (one panel of a banner displayed as a freestanding advertising stand) were also displayed;
(iii) A large number of other shelf-edge labels ("SELs") which used the slogans "lower price guarantee" and "always better value", together with a downward arrow, and accompanied by the words "Aldi match". A standard example read "Dunnes rich and creamy yoghurt, 4 x 125g", under which a sticker with the price €1.99 and a positive tick was displayed, alongside a further sticker stating "Aldi €1.99". At the bottom of the sticker were the words "Price correct at time of print. Aldi price checked in a Dublin Aldi store on 19/06/2013".
2 These materials did not form part of a large-scale, sophisticated advertising campaign. The evidence on behalf of Dunnes was that the marketing spend on the campaign across all its stores was €22,000 per week for nine weeks. By way of comparison, the much more elaborate "Back to School" campaign that followed it had a marketing spend of €200,000 per week. Aldi complained, however, that this was an illegal advertising campaign by reference to the 2007 Regulations, and commenced these proceedings. Although the items involved were familiar household items, the advertising materials were quite standard, and the issues required consideration of a limited number of legislative provisions and relevant decided cases, the litigation in respect of the Dunnes campaign took more than 17 days in the High Court, and has now occupied the attention of three courts, already generating two very substantial judgments. Regrettably, what follows is also unavoidably lengthy.
3 It is probable that this case was so hotly contested because the supermarket business is highly competitive. Heavy advertising is the norm, and comparative advertising is potentially a key battleground. Both parties had an interest, therefore, in understanding what is and is not permitted under the 2007 Regulations, and thus the importance of the case both to the parties and to the market more generally probably transcends the detail of a small and relatively unsuccessful campaign carried out in the low summer months of 2013. Even so, the length of time and effort involved in the determination of this case is quite disproportionate to the significance and intrinsic complexity of the cause of action involved, and it will, I hope, be possible to offer some guidance to permit speedier, more streamlined, and efficient determination of claims under the 2007 Regulations in the future.
4 A detailed consideration of the facts in these proceedings is to be found in a thorough and comprehensive judgment of the High Court (Cregan J.) delivered on 9 June 2015, which runs to 141 pages (see [2015] IEHC 495). Aldi succeeded in the High Court on almost every aspect of the case. The issue of injunctive relief was dealt with in a further judgment on 21 July 2015 (see [2015] IEHC 551). The decision of the High Court was subsequently reversed in a judgment of the Court of Appeal (Ryan P.; Peart and Hogan JJ. concurring) delivered on 6 April 2017 (see [2017] IECA 116). In the light of the detailed accounts given in the judgments delivered in the courts below, it will, I hope, be sufficient to set out a relatively truncated account of the facts and law relevant to the issues which arise on this appeal. In that regard, however, the dispute between the parties extends to the proper characterisation of the proceedings. Aldi assert that this is an action for breach of their trade marks, while Dunnes argues that it is a case of lawful comparative advertising. Both are, to some extent, correct. A neutral starting point is therefore the relevant legal provisions.
The legal framework
5 The source of the legal obligations at issue in these proceedings is to be found primarily in the 2007 Regulations, which implement the provisions of Directive 2006/114/EC concerning misleading and comparative advertising ("the 2006 Directive").
The 2006 Directive
6 The 2006 Directive requires Member States, on the one hand, to prohibit misleading and unlawful comparative advertising, because it is considered that it can lead to distortion of competition within the internal market. On the other hand, Recital 8 of the same directive recognises that "[c]omparative advertising, when it compares material, relevant, verifiable and representative features and is not misleading, may be a legitimate means of informing consumers of their advantage. It is desirable to provide a broad concept of comparative advertising to cover all modes of comparative advertising".
7 Recital 14 acknowledges that it may 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", and at Recital 15, it is recognised that such use of another person's trade mark does not breach the exclusive right protected therein where it complies with the conditions laid down by the 2006 Directive, the intended target being solely to distinguish between the products and thus to highlight differences objectively. The 2006 Directive therefore seeks to delineate a difficult boundary line between trade mark infringement and permitted use of trade marks for lawful comparative advertising, and between misleading comparative advertising, which should be prohibited, and lawful comparative advertising, which should be positively encouraged.
8 The 2006 Directive recognises, therefore, that trade marks are not infringed by comparative advertising which complies with the requirements of that directive. It follows that comparative advertising using the trade mark of another that does not comply with the 2006 Directive will usually be an infringement of the trade mark (subject to any possible defence under s. 14(6) of the Trade Marks Act 1996). The 2006 Directive also recognises that misleading advertising (whether comparative or not) is damaging to consumers and should be prohibited. These concepts of trade mark protection, misleading advertising, and permitted comparative advertising overlap and interact.
9 It is perhaps not an oversimplification to state that most, if not all, comparative advertising would involve the use of a competitor's trade mark, since it will normally be essential to identify the competitor in order to draw the comparison, and in most cases the competitor's name will be the subject of trade mark protection. Only lawful comparative advertising is permitted: therefore, comparative advertising which does not comply with the 2006 Directive will normally involve an infringement of a trade mark, which is an actionable wrong. Furthermore, misleading advertising is wrongful and may be the subject of enforcement proceedings. This was the basis of Aldi's claim. The advertising was comparative advertising which used the Aldi mark, and which, Aldi claimed, was in breach of the 2006 Directive and the 2007 Regulations, and therefore constituted misleading advertising and an infringement of Aldi's trade mark.
10 Article 1 of the 2006 Directive provides that the purpose of the directive is "to protect traders against misleading advertising and the unfair consequences thereof and to lay down the conditions under which comparative advertising is permitted."
11 Article 2(b) of the 2006 Directive defines misleading advertising directed to traders as "any advertising which in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor".
12 Article 3 of the 2006 Directive sets out how to determine whether such advertising is misleading:-
"Article 3
In determining whether advertising is misleading, account shall be taken of all its features, and in particular of any information it contains concerning:
(a) the characteristics of goods or services, such as their availability, nature, execution, composition, method and date of manufacture or provision, fitness for purpose, uses, quantity, specification, geographical or commercial origin or the results to be expected from their use, or the results and material features of tests or checks carried out on the goods or services;
(b) the price or the manner in which the price is calculated, and the conditions on which the goods are supplied or the services provided;
(c) the nature, attributes and rights of the advertiser, such as his identity and assets, his qualifications and ownership of industrial, commercial or intellectual property rights or his awards and distinctions."
13 Article 2(c) defines comparative advertising as "any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor".
14 Article 4 of the 2006 Directive provides:-
"Article 4
Comparative advertising shall, as far as the comparison is concerned, be permitted when the following conditions are met:
(a) it is not misleading within the meaning of Articles 2(b), 3 and 8(1) of this Directive or Articles 6 and 7 of Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market (‘Unfair Commercial Practices Directive');
(b) it compares goods or services meeting the same needs or intended for the same purpose;
(c) it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price;
(d) it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities or circumstances of a competitor;
(e) for products with designation of origin, it relates in each case to products with the same designation;
(f) 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;
(g) it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name;
(h) it does not create confusion among traders, 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."
15 Much of the difficulty in this case can be traced to the lack of a specific definition of misleading comparative advertising for the purposes of Article 4: that is, where the advertising is not alleged to be misleading in general terms under the provisions of the 2006 Directive or Directive 2005/29/EC ("the Unfair Commercial Practices Directive"), but rather it is alleged to be misleading specifically by reason of the comparison that is made. Moreover, the separate definitions of misleading advertising referred to in Article 4(a) of the 2006 Directive (for advertising addressed to traders, by reference to Article 2(b), 3 and 8(1) of the 2006 Directive, and for advertising addressed to consumers, by incorporating Articles 6 and 7 of the Unfair Commercial Practices Directive) give rise to a further, unfortunate degree of complexity.
The Unfair Commercial Practices Directive
16 Articles 6 and 7 of the Unfair Commercial Practices Directive, to which Article 4(a) of the 2006 Directive refers, are found in Chapter 2, Section 1 thereof, headed "Misleading commercial practices". Article 6 prohibits misleading actions, and Article 7 misleading omissions. They provide as follows:-
"Article 6
Misleading actions
1. A commercial practice shall be regarded as misleading if it contains false information and is therefore untruthful or in any way, including overall presentation, deceives or is likely to deceive the average consumer, even if the information is factually correct, in relation to one or more of the following elements, and in either case causes or is likely to cause him to take a transactional decision that he would not have taken otherwise:
(a) the existence or nature of the product;
(b) the main characteristics of the product, such as its availability, benefits, risks, execution, composition, accessories, after-sale customer assistance and complaint handling, method and date of manufacture or provision, delivery, fitness for purpose, usage, quantity, specification, geographical or commercial origin or the results to be expected from its use, or the results and material features of tests or checks carried out on the product;
(c) the extent of the trader's commitments, the motives for the commercial practice and the nature of the sales process, any statement or symbol in relation to direct or indirect sponsorship or approval of the trader or the product;
(d) the price or the manner in which the price is calculated, or the existence of a specific price advantage;
(e) the need for a service, part, replacement or repair;
(f) the nature, attributes and rights of the trader or his agent, such as his identity and assets, his qualifications, status, approval, affiliation or connection and ownership of industrial, commercial or intellectual property rights or his awards and distinctions;
(g) the consumer's rights, including the right to replacement or reimbursement under Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees, or the risks he may face.
2. A commercial practice shall also be regarded as misleading if, in its factual context, taking account of all its features and circumstances, it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise, and it involves:
(a) any marketing of a product, including comparative advertising, which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor;
(b) non-compliance by the trader with commitments contained in codes of conduct by which the trader has undertaken to be bound, where:
(i) the commitment is not aspirational but is firm and is capable of being verified,
and
(ii) the trader indicates in a commercial practice that he is bound by the code.
Article 7
Misleading omissions
1. A commercial practice shall be regarded as misleading if, in its factual context, taking account of all its features and circumstances and the limitations of the communication medium, it omits material information that the average consumer needs, according to the context, to take an informed transactional decision and thereby causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.
2. It shall also be regarded as a misleading omission when, taking account of the matters described in paragraph 1, a trader hides or provides in an unclear, unintelligible, ambiguous or untimely manner such material information as referred to in that paragraph or fails to identify the commercial intent of the commercial practice if not already apparent from the context, and where, in either case, this causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.
3. Where the medium used to communicate the commercial practice imposes limitations of space or time, these limitations and any measures taken by the trader to make the information available to consumers by other means shall be taken into account in deciding whether information has been omitted.
4. In the case of an invitation to purchase, the following information shall be regarded as material, if not already apparent from the context:
(a) the main characteristics of the product, to an extent appropriate to the medium and the product;
(b) the geographical address and the identity of the trader, such as his trading name and, where applicable, the geographical address and the identity of the trader on whose behalf he is acting;
(c) the price inclusive of taxes, or where the nature of the product means that the price cannot reasonably be calculated in advance, the manner in which the price is calculated, as well as, where appropriate, all additional freight, delivery or postal charges or, where these charges cannot reasonably be calculated in advance, the fact that such additional charges may be payable;
(d) the arrangements for payment, delivery, performance and the complaint handling policy, if they depart from the requirements of professional diligence;
(e) for products and transactions involving a right of withdrawal or cancellation, the existence of such a right.
5. Information requirements established by Community law in relation to commercial communication including advertising or marketing, a non-exhaustive list of which is contained in Annex II, shall be regarded as material."
17 It should be noted that the Unfair Commercial Practices Directive is implemented by the Consumer Protection Act 2007 ("the 2007 Act"), the relevant provisions of which are set out below.
The 2007 Regulations
18 As noted above, the 2006 Directive was implemented in Irish law by the 2007 Regulations. Regulation 3 (implementing Articles 2(b) and 3 of the 2006 Directive) prohibits misleading marketing communications aimed at traders. Regulation 3(2) provides that:-
"A marketing communication is misleading if —
(a) in any way (including its presentation), it deceives or is likely to deceive in relation to any matter set out in paragraph (4) the trader to whom it is addressed or whom it reaches, and
(b) (i) by reason of its deceptive nature, it is likely to affect the trader's economic behaviour, or
(ii) for any reason specified in this paragraph, it injures or is likely to injure a competitor" (Emphasis added).
19 Regulation 3(4) sets out a number of matters to be considered for the purpose of Regulation 3(2)(a), including, at Regulation 3(4)(b), the main characteristics of the product, including geographical origin, commercial origin, etc. It will be necessary to address the limitation of Regulation 3 to communications with traders a little later.
20 Regulation 4 of the 2007 Regulations implements in Irish law Article 4 of the 2006 Directive. However, whereas Article 4 of the 2006 Directive is framed in positive terms ("comparative advertising shall…be permitted when the following conditions are met"), Regulation 4(1) of the 2007 Regulations is framed in negative terms, and creates an obligation not to engage in a prohibited comparative marketing communication. Regulation 4(2) states that:-
"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."
21 Regulation 5 of the 2007 Regulations permits a trader or any other person to apply to the Circuit Court or the High Court for an order prohibiting another trader from engaging in or continuing to engage in a misleading marketing communication or a prohibited comparative marketing communication. That provision is invoked by Aldi in these proceedings.
22 An issue which was touched on both in the High Court and the Court of Appeal was whether Regulation 3 of the 2007 Regulations contained an obvious error, in that it was suggested the reference to a "trader" in Regulation 3(2) should have meant "consumer". This query arises from the difference between the definition of misleading advertising in Article 2(b) of the 2006 Directive, which refers to "the persons to whom it is addressed or whom it reaches", and the terms of Regulation 3 of the 2007 Regulations, which refers only to traders. In this regard, it might be noted that the European Commission, in its review of the 2006 Directive (see COM(2012) 702 final, pp. 2 to 3) has explained that:-
"The [2006 Directive] sets a minimum legal standard of protection applying to misleading advertising in any business-to-business transaction across the EU, while leaving the Member States the flexibility to set a higher level of protection […]
In 2005 the Unfair Commercial Practices Directive created a separate comprehensive legal framework protecting consumers against all forms of unfair commercial practices, before, during and after a commercial transaction, and applicable also to all advertising practices which harm the economic interests of consumers, irrespective of whether it affects the interests of a competitor. The Unfair Commercial Practices Directive reduced the scope of the [2006 Directive] to situations where advertising is addressed solely to businesses. However, comparative advertising provisions remained relevant to business-to-consumer transactions because they provide a general test for assessing whether comparative advertising is lawful."
23 The prohibition on providing misleading information to consumers is already covered by the terms of ss. 43 to 46 of the 2007 Act, and it appears that the 2007 Regulations were drafted in this manner to ensure that Irish law also extended to prohibit misleading practices vis-á-vis traders, as required by the 2006 Directive. I do not think anything turns on this for present purposes, since it is plain that Irish law, through the terms of the 2007 Act, prohibits the provision of misleading advertising to consumers, and, furthermore, Regulation 4(2)(b) precludes any misleading advertising from being permitted comparative advertising for the purposes of the 2007 Regulations. In any event, it is clear for the purposes of this case that the test for misleading advertising is whether it breaches ss. 43 to 46 of the 2007 Act, and therefore is prohibited by Regulation 4(2)(b) of the 2007 Regulations.
24 Aldi argued that the SCLs, the banners and toblerones, and the SELs were not permitted comparative advertising for the purposes of the 2007 Regulations, because it was alleged that they breached three subparagraphs of Regulation 4(2), namely Regulation 4(2)(b), (c) and (d). One additional complication in this case is that the 2007 Regulations deal in separate subparagraphs with misleading marketing communications under Regulation 3 and those which are misleading commercial practices under ss. 43 to 46 of the 2007 Act, whereas both relevant provisions were captured by Article 4(a) of the 2006 Directive. Accordingly, the subparagraphs of Regulation 4(2) of the 2007 Regulations, and the subparagraphs of Article 4 of the 2006 Directive are not in sync. Thus, Regulation 4(2)(c) equates to Article 4(b) of the 2006 Directive, and so on. The High Court addressed these issues in reverse order, considering first Regulation 4(2)(d) ("the objective comparison ground"), then Regulation 4(2)(c) ("the comparability ground"), and finally Regulation 4(2)(b) ("the misleading ground").
The Consumer Protection Act 2007
25 Articles 6 and 7 of the Unfair Commercial Practices Directive are implemented in Irish law by ss. 43 to 46 of the Consumer Protection Act 2007. In this regard, s. 43 of the 2007 Act deals with the provision of false, misleading or deceptive information, whereas s. 46 deals with the withholding, omission or concealment of material information. Sections 43(1) and (2) provide:-
26 Section 43(3) provides, as relevant:- "(3) The following matters are set out for the purposes of subsections (1) and (2):
(a) the existence or nature of a product;
(b) the main characteristics of a product, including, without limitation, any of the following:
(i) its geographical origin or commercial origin;
(ii) its availability, including, without limitation, its availability at a particular time or place or at a particular price;
(iii) its quantity, weight or volume;
(iv) its benefits or fitness for purpose;
[…]
(viii) its composition, ingredients, components or accessories;
[…]
(c) the price of the product, the manner in which that price is calculated or the existence or nature of a specific price advantage
[…]"
27 Section 46(1), for its part, provides:- "46.— (1) A commercial practice is misleading if the trader omits or conceals material information that the average consumer would need, in the context, to make an informed transactional decision ("material information") and such practice would be likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make."
28 It is perhaps useful to observe at this point that the statutory test created by the 2007 Act is a standalone test for misleading commercial practices, including the provision of misleading information or omission of material information, which is then incorporated into the 2007 Regulations by the reference contained in Regulation 4(2)(b). Thus, the 2007 Act is designed to capture misleading commercial practices, and in particular the giving of misleading information or withholding of relevant information generally , and not merely misleading advertisements in the context of comparative advertising.
29 It is also necessary to note that, in its submissions and at the hearing of this appeal, Dunnes argued that s. 46 of the 2007 Act was not specifically referred to in Aldi's pleadings, and therefore was not an appropriate matter for the High Court or the Court of Appeal to have addressed. However, it is clear that s. 46 was in issue at an early point, and has been relied on and dealt with consistently during the course of the proceedings in the High Court. Accordingly, I do not consider that it can be excluded from the analysis at this late stage on such a narrow pleading point.
The Trade Marks Act 1996
30 It was not seriously disputed in these proceedings that, insomuch as the advertisements undoubtedly used Aldi's trade mark, if they were impermissible under the 2007 Regulations, then the trade mark was infringed. It should be noted in passing that while s. 14(6) of the Trade Marks Act 1996 permits use of a trade mark to designate the product of the holder of the mark, such use will be an infringement if it is not in accordance with honest commercial practices and takes unfair advantage of or is detrimental to the reputation of the mark. However, this aspect of the matter was not debated, and for the purposes of this case it can be accepted that if the advertising was not permitted comparative advertising, then it was ipso facto an infringement of the Aldi trade marks. In any event, if the advertising was not permitted comparative advertising, then it was prohibited under the 2007 Regulations and could be restrained on that ground alone.
Applicable case law
31 It is accepted that there is only a limited amount of case law shedding light on the interpretation of the 2006 Directive and, consequently, the 2007 Regulations. The most important case is Lidl SNC v. Vierzon Distributon SA (Case C-159/09) [2010] E.C.R. I-11761. In that case, Vierzon placed an advertisement in a local newspaper reproducing till receipts listing, by means of general descriptions and, where appropriate, their weight and volume, 34 products (mainly foodstuffs) purchased from the store belonging to Vierzon and that operated by Lidl. The till receipts showed a total cost of €46.30 for the Vierzon products as against €51.40 for those of Lidl. The advertisement also included slogans stating "Not everybody can be E. Leclerc! Low prices - And the proof is E Leclerc is still the cheapest", and "In English they say ‘hard discount' - in French they say ‘E. Leclerc'". The case illustrates two important principles which are relevant to the resolution of the present case. First, at para. 46 of the judgment, it stated that it is for the referring court to ascertain, in the circumstances of each particular case, and bearing in mind the consumers to which it is addressed, whether advertising can be regarded as misleading. Second, it is observed at paras. 37 and 38 that to decide that, unless they are identical, two food products cannot be identified as comparable, would effectively rule out any real possibility of comparative advertising regarding a particularly important category of consumer goods. That, it was said, would "run counter to the [CJEU's] settled case law that the conditions required of comparative advertising must be interpreted in the sense most favourable to it". For present purposes, most attention was focussed on para. 56 of the court's judgment, which it is useful here to set out in full:-
"56 In the light of all the foregoing, the second part of the answer to be given to the question referred by the tribunal de commerce de Bourges is that Article 3a(1)(a) of Directive 84/450 [the predecessor of Article 4(a) of the 2006 Directive] is to be interpreted as meaning that an advertisement such as that at issue in the main proceedings may be misleading, in particular if:
- it is found, in the light of all the relevant circumstances of the particular case, in particular the information contained in or omitted from the advertisement, that the decision to buy on the part of a significant number of consumers to whom the advertisement is addressed may be made in the mistaken belief that the selection of goods made by the advertiser is representative of the general level of his prices as compared with those charged by his competitor and that such consumers will therefore make savings of the kind claimed by the advertisement by regularly buying their everyday consumer goods from the advertiser rather than from the competitor, or in the mistaken belief that all of the advertiser's products are cheaper than those of his competitor, or
- it is found that, for the purposes of a comparison based solely on price, food products were selected which, nevertheless, have different features capable of significantly affecting the average consumer's choice, without such differences being apparent from the advertising concerned."
32 It is important that that passage be read in the light of the facts of the case, and in particular paras. 51 and 52 of the judgment:-
"51 An advertisement such as that at issue could also be misleading if the referring court found that, for the purposes of the price ‑ based comparison in the advertisement, food products were selected which are in fact objectively different and the differences are capable of significantly affecting the buyer's choice.
52 If such differences are not disclosed, such advertising, where it is based solely on price, may indeed be perceived by the average consumer as claiming, by implication, that the other characteristics of the products in question, which may also have a significant effect on the choices made by such a consumer, are equivalent."
33 Paragraph 39 of the same judgment further states, with regard to what is now Article 4(b) of the 2006 Directive, that:- "[…] the fact alone that food products differ in terms of the extent to which consumers would like to eat them and the pleasure to be derived from consuming them, according to the conditions and place of production, their ingredients and who produced them, cannot preclude the possibility that the comparison of such products may meet the requirement laid down in that provision that the products compared meet the same needs or are intended for the same purpose, that is to say, that they display a sufficient degree of interchangeability."
34 The decision in Lidl SNC v. Vierzon Distributon SA (Case C-159/09) [2010] E.C.R. I-11761 provides important guidance to the resolution of this case. It establishes that products do not need to be identical to be comparable under the 2007 Regulations. Therefore, the fact that there are differences between the products does not, in principle, mean that they cannot be the subject of lawful comparative advertising. Thus, for example, this means that foodstuffs can be compared even though they are obviously not identical. However, even though they are comparable, and are the subject of an objective comparison on at least one material, relevant, verifiable and representative feature, the advertising may nevertheless be deceptive, and therefore misleading, if the comparison made suggests by implication that other characteristics of the product in question are also equivalent when they are not, and when, moreover, those characteristics may also have a significant effect on the choices made by a consumer.
35 Both sides relied also on observations made in Interflora Inc. v. Marks and Spencer plc [2013] EWHC 1291 (Ch). Arnold J. said:-
"[…] in a case concerning ordinary consumer goods and services, the court is able to put itself into the position of the average consumer without requiring expert evidence or a consumer survey."
36 In Interflora Inc. v. Marks and Spencer plc [2014] EWCA Civ 1403, the Court of Appeal of England and Wales reversed Arnold J.'s decision, but at para. 115, Kitchin L.J. referred approvingly to Lewison L.J.'s statement at paras. 45 to 50 of the first Court of Appeal judgment in that case, to the same effect:- "115 Fourth, and again as Lewison L.J. explained in [ Marks and Spencer plc v. Interflora Inc. [2012] EWCA Civ 1501, paras. 45 to 50], in a case concerning ordinary goods or services, the court may be able to put itself in the position of the average consumer without requiring evidence from consumers, still less expert evidence or a consumer survey. In such a case, the judge can make up his or her own mind about the particular issue he or she has to decide in the absence of evidence and using his or her own common sense and experience of the world."
37 In the light of Lidl SNC v. Vierzon Distributon SA (Case C-159/09) [2010] E.C.R. I-11761, it is plain that the question of whether advertising is misleading is a matter for the national court. The approach set out in Interflora Inc. v. Marks and Spencer plc [2014] EWCA Civ 1403 means that the resolution of that issue will depend on a common sense approach by the trial judge to the matters in dispute.
Application by the High Court of the law to the facts
38 Considerable evidence was adduced in the High Court. It is fair to say that the High Court judge accepted the evidence adduced on behalf of Aldi, in particular the approach of its principal witness, Professor Paul Berryman, who was an expert in comparative labelling. This discipline is closely related to the issues which fell for resolution in these proceedings, although Dunnes contended that there was an important difference between comparative labelling and comparative advertising, and, indeed, that the focus on labelling practices led the High Court into error.
The SCLs
39 The principal battleground in the High Court was in relation to the SCLs, and certainly the bulk of the High Court judgment was devoted to that aspect of the campaign. Initially, Aldi had complained about 27 SCLs. Dunnes immediately removed some of them. When proceedings were commenced, Aldi cited 21 SCLs which they contended were in breach of the 2007 Regulations, but by the time of the hearing, 15 were in issue. The High Court judge proceeded to make findings of fact in relation to each SCL, and drew certain inferences from the evidence. I will attempt to summarise the conclusions as follows:-
(i) Tomato Ketchup
Aldi's tomato ketchup cost 75 cents per 563g and Dunnes tomato ketchup cost 65 cents for 495g, and was thus marginally cheaper on a gram per cent basis. However, the court found that Aldi's tomato content was 189g tomato per 100g ketchup, whereas the Dunnes ketchup had 115g tomato per 100 g. It was also established in evidence that the well-known ketchup brand Heinz had 148g tomato, Chef had 140g, and the reformulated Aldi ketchup had 132g. The court found that the difference would have an influence on the flavour and quality of the product, and that Aldi's product was a "better quality product". The court concluded therefore that the Dunnes product and the Aldi product were not comparable.
(ii) Pork Sausages
The pork sausages offered by Dunnes were €1.59 per 454g and Aldi's sausages were also €1.59 but for 450g. The High Court found, however, that Aldi's sausages carried the Bord Bia label. The court concluded that:-
(a) Aldi's pork sausages were Bord Bia approved and the Dunnes product was not;
(b) The Bord Bia label was a quality assurance mark and an indicator of provenance;
(c) The Aldi pork sausage had 17.2g of fat whereas the Dunnes sausage had 26g of fat. This was a significant nutritional composition difference;
(d) This information was not given to the consumer. This information should have been given to the consumer so that they could be informed of the difference. Cregan J. concluded in the light of the foregoing that the Dunnes product and the Aldi product were not comparable.
(iii) White Sauce
Aldi white sauce was 49 cents per 18g and the Dunnes St. Bernard white sauce was 49 cents per 17g. It was accepted that both packets made a half pint of sauce. The judge concluded:-
(a) The Aldi product weighed 18g; the Dunnes product weighed 17g;
(b) The price of the Dunnes product and the Aldi product was not set out in a pro rata, per gram price;
(c) The nutritional composition of the product was different: the fat content of the Dunnes Stores product was double that of the Aldi product;
(d) The information was not pointed out to the consumer in the SCL. It was information that could have affected consumer behaviour. Accordingly, Cregan J. concluded that the Dunnes product and the Aldi product were not comparable.
(iv) Day Cream
Here, the Dunnes day cream was €1.49 per 50g and the Aldi anti-wrinkle day cream cost €1.99 per the same 50g. However, it was accepted that the Aldi product had a sun protection factor of 6, and the Dunnes product had no such sun protection. Initially, the experts on both sides had agreed that the products were not comparable, but at the trial Dunnes maintained that they were comparable as a matter of law. The judge concluded:-
(a) The Dunnes product was not comparable to the Aldi product because the Aldi product had a special sun protection factor of 6;
(b) The information was not made available to the consumer by Dunnes;
(c) The information could have affected consumer behaviour or choice.
(v) Turkey Breast Mince
Here again, the Dunnes fresh Irish turkey breast mince was €3.59 per 400g, while Aldi's turkey breast mince was €3.95 per 400g. However, again the Aldi product had the Bord Bia label, and the judge accordingly concluded that Dunnes was a difference in provenance between the products and they were therefore not comparable.
(vi) Sparkling Orange Drink
The Dunnes Cadet Sparkling Orange drink was €1.79 per two litre, while the Aldi sparkling orange was the same price. However, the Aldi product had an orange juice concentrate of 7.6 per cent and orange comminute of 2.3 per cent. The Dunnes product had only 2 per cent orange juice from concentrate. Again, the judge made these findings, and concluded that the Aldi product was of a higher quality than the Dunnes product, and the SCL did not bring this information to the attention of the consumer. This was information which he considered could or might have affected consumer behaviour, and therefore concluded the products were not comparable.
(vii) Shower Gel
Here, the comparison was between the Dunnes shower gel (€1.19 per 275ml) and Aldi's shower gel (€1.19 per 250ml). However, Aldi maintained, and the judge accepted, that the products were not comparable because the Aldi product contained an extra ingredient, tea tree oil, which was a significant differentiating factor, as it is an expensive oil and has antiseptic properties. Initially, the experts agreed that the products were not comparable, but the Dunnes Stores expert gave evidence that the tea tree oil ingredient in the Aldi shower gel amounted to 0.05 per cent of the product, and that in the context of a 250ml bottle this amounted to approximately one-eighth of one millilitre. There was no smell of tea tree oil, which was very characteristic, and for tea tree oil to have antiseptic qualities, it would have to be between 2 and 3 per cent of the product. Nevertheless, the judge concluded that the fact that the Aldi product contained tea tree oil even in small quantities was a significant differentiating factor, and that therefore the two products were not comparable.
(viii) Toilet Tissue
Both Aldi and Dunnes sold a nine-pack of toilet roll at €2.69. However, the judge concluded that the Aldi product was longer (at 29.48 metres to 23.1 metres) and heavier (at 963g to 730g), and the products were therefore not comparable. The experts on behalf of Dunnes conceded this initially, but again at the trial maintained that as a matter of law they were comparable.
(ix) Strawberry Yoghurt
Here, both products retailed at 99 cents per 500g for a low-fat, large, strawberry flavour yoghurt pot. Again, Aldi contended that there was a greater strawberry content (12 per cent) in comparison to the Dunnes yoghurt (10.6 per cent). Therefore, the Aldi yoghurt contained 13 per cent more strawberry than the Dunnes product. The judge concluded that the Aldi product was of higher quality. The Dunnes product also had 2.4 gm of fat per 100g, compared with 0.2 gm per 100 gm in the Aldi product. The information was not given on the SCL, and might have or could have effected consumer choice. The High Court therefore concluded that these products were not comparable.
(x) Peach and Nectarine Yoghurt
Dunnes charged 99 cents for a 500g low-fat large peach flavoured yoghurt pot. This was compared with Aldi's peach and nectarine yoghurt which sold at the same price. The Aldi product contained both peach and nectarine and had a total fruit content of 10 per cent, whereas the Dunnes product contained only peach and 6.9 per cent fruit content. In relation to the peach and nectarine, Dunnes gave evidence that they were botanically indistinguishable, except that peaches had a furry skin and nectarines had an additional gene giving them a smooth skin. This had no impact on the flavour or nature of the fruit since the skin of the fruit was removed in making the yoghurt. The judge concluded that the Dunnes product had 44.9 per cent less fruit than the Aldi product. The Aldi product was of a different nature and fruit type. The information was not given in the SCL. It was information which could significantly affect the consumer's decision, and accordingly the judge concluded that the products were not comparable.
(xi) Sunflower Spread
Both companies sold sunflower spread at 55 cents per 500g. The Dunnes spread had 20 per cent sunflower oil, and the Aldi product contained 22 per cent sunflower oil. One of Aldi's experts accepted that this was borderline, and the judge accordingly came to no conclusion in respect of this product.
(xii) Tinned Chicken Dog Food
Dunnes sold tinned chicken and jelly flavour dog food at 52 cents per 400g, Aldi sold its chicken in gravy dog food at the same price. The Aldi product contained four per cent chicken and four per cent carrot, whereas the Dunnes product contained four per cent chicken and no carrot. The judge accepted Aldi's evidence in this regard, and concluded therefore that the products were of a different nature, that the information was not contained in the SCL, and it was information which could affect consumer choice. Again, he concluded that the two products were not comparable.
(xiii) Tinned Beef Dog Food
Here again, the products retailed at the same price (52 cents per 400g), but the Aldi product contained four per cent beef and four per cent carrot, whereas the Dunnes product contained four per cent beef and no carrot. For the same reasons, the judge concluded that these products were not comparable.
(xiv) Six-Pack Dog Food
Dunnes sold Patch dog food in 6 x 400g tins at €2.99, while Aldi's six-pack of dog food sold at the same price. However, once again, there was a difference in the composition. The Aldi product had four per cent chicken, four per cent turkey and four per cent vegetable, whereas the Dunnes product had four per cent chicken, no turkey and no vegetable. In the second variety, the Aldi product had four per cent chicken, four per cent beef and four per cent vegetable. The Dunnes product had four per cent beef alone. The third variety was lamb, and the Aldi product had four per cent lamb and four per cent vegetable, whereas the Dunnes product was four percent lamb and zero per cent vegetable. Again, the judge preferred the evidence of Aldi's expert, and concluded that the product was accordingly not comparable.
(xv) Dry Cat Food
The Dunnes St. Bernard complete dry cat food product and the compared Aldi product sold at the same price of €2.25 per two kilos. However, once again, the Aldi product contained four per cent chicken and four percent liver, whereas the Dunnes Stores product contained only four per cent chicken. Again, the judge accepted that his meant that the product was not comparable, that the Aldi product was of a higher quality, and that the information was not available to the consumer and could have affected consumer choice.
40 It is clear from the foregoing that, in each case, there was a difference between the products compared. The High Court accepted the evidence of Professor Berryman and concluded that the products were not comparable. It should be said that, in each case, the Dunnes experts did not challenge the fact that there were differences between the products as outlined above, but contended that the products were essentially similar and that the food products were of similar nutritional value. The issue, therefore, was the significance in law of the admitted differences between the products which were compared.
41 It was suggested that the logical sequence in which to address the issues raised here was first to consider if the products were comparable under Regulation 4(2)(c)), then to consider if an objective comparison was made of one or more material, relevant, verifiable and representative features feature of the products under Regulation 4(2)(d), and finally to consider if the advertising was misleading either generally, or by virtue of the comparison made, under Regulation 4(2)(b). With the considerable benefit of hindsight, I agree that this sequence is more logical and may have been of some assistance in understanding the scope of each relevant provision.
42 However, at para. 271 of his judgment, the High Court judge commenced with a consideration of Regulation 4(2)(d), because this, he considered, allowed an analysis of the issues without reference to the more difficult concept of misleading advertising. He concluded that the 14 advertisements (with the exception of the one relating to sunflower spread, on which he made no finding) did not satisfy the objective comparison ground set out in Regulation 4(2)(d). He adopted the approach of Aldi's experts in having regard to the characterising ingredient of each product, and accepting that a difference of more than ten per cent of such ingredient is a reasonable tolerance in assessing whether the difference was material, relevant, or representative of the product. He also concluded that the other tests used by Aldi's experts in comparing the nature, quality, substance, provenance and quantity of the product were also reasonable tests to use to consider whether the differences in the products being compared were material, relevant and representative. Accordingly, he concluded that the comparison did not objectively compare the Dunnes product with that of Aldi, and thus, in his view, contravened Regulation 4(2)(d) of the 2007 Regulations.
43 The judge next considered whether the advertisements compared products "meeting the same needs or intended for the same purpose" within the meaning of the comparability ground in Regulation 4(2)(c) of the 2007 Regulations. He accepted in relation to the 14 products in issue that they were all products which in broad terms met "the same needs" or were "intended for the same purpose". However, he considered the problem here was that the Dunnes SCLs did not in fact make a proper comparison between its products and Aldi's products. What each label did in each case was set out the Dunnes product and refer to some unidentified Aldi product with a price. Accordingly, he concluded that the advertisement did not, as a matter of fact, actually compare products meeting the same needs or intended for the same purposes. It purported to, but did not in fact, do so. Accordingly, he concluded that the advertisements infringed Regulation 4(2)(c) of the 2007 Regulations.
44 Finally, the judge turned to what he considered to be the more difficult question of whether the products infringed Regulation 4(2)(b) of the 2007 Regulations as a misleading commercial practice under ss. 43 to 46 of the 2007 Act. At para. 333 of his judgment, the judge considered that the analysis carried out in respect of Regulation 4(2)(d) was also applicable to the matter to be determined under ss. 43 to 46 of the 2007 Act. Accordingly, he concluded that the Dunnes advertisements either gave false information or omitted or concealed material information in relation to tomato ketchup, pork sausages, white sauce, day cream, turkey breast mince, sparking orange juice, shower gel, toilet tissue, strawberry yoghurt, peach and nectarine yoghurt, tinned chicken dog food, tinned beef dog food and six-pack dog food, and, finally, dried cat food. In each case, the material was precisely the same as that which led to the conclusion that there had been a failure to comply with Regulation 4(2)(d). The information was such that it "would be likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make". Accordingly, at paras. 340 and 341, the High Court concluded that the advertisements infringed s.43(1) and (2) and s. 46(1) of the 2007 Act, and therefore contravened Regulation 4(2)(b) of the 2007 Regulations.
The banners and toblerones
45 The banners in question had three separate panels. One compared the Dunnes products to those of Aldi and Lidl, the second compared them to Supervalu and Tesco, and the third simply extolled Dunnes by suggesting that they offered more special offers than any other supermarket. The only issue raised concerned the first panel. That continued a photograph of a selection of groceries with a "lower price guarantee" logo at the top of the panel, the words "guaranteed lower prices on all your family essentials every week", then the words "Aldi match", "Lidl match", a graphic illustration of a number of different products, and the phrase "images for illustration purposes only". As the judge observed, the panel clearly used the Aldi trade mark.
46 Following the approach he took to the SCLs, the judge found that the banners contravened Regulation 4(2)(d) of the 2007 Regulations. Again, he found that consequently they contravened Regulation 4(2)(c), because they did not properly compare any "product", and finally at para. 355 he found that Dunnes had engaged in misleading commercial practices under s. 43(1) and (2), and s. 46(1) of the 2007 Act, and therefore, it seemed, had contravened Regulation 4(2)(b) of the 2007 Regulations.
47 It is an unusual feature of the case that Aldi did not complain about the banners in their letters of 26 July 2013, which, indeed, went unanswered. It was only when Niall O'Connor, the managing director of Aldi, visited a Dunnes supermarket in Charleville, Co. Cork on 10 October 2013 (as it happened, after the promotion had ended) that he noticed banners which, it appears, had not been removed, and thought that this was a further escalation of a campaign which Aldi had complained about to Dunnes and received no response. Dunnes do not now contest the finding that the banners were unlawful comparative advertising.
The SELs
48 The final component of the case involved some 247 SELs, described as lower price labels. These are to be distinguished from the SCLs, because they made no direct comparison with a specific product. They were described as follows by the trial judge at para. 358 of his judgment:-
"(1) On the left hand side there is a yellow arrow pointing downwards with the words "Lower Price Guarantee" in the arrow.
(2) Underneath the arrow, are the words "Always Better Value".
(3) To the right of the arrow is a white rectangular box in which, for example, in the example in Appendix 2, is contained the words "Dunnes' rich and creamy yoghurt 4 x 125g and then underneath that a yellow circle with the word "€1.99" and to the right of that "Aldi €1.99".
(4) In small print, at the bottom right hand side of the shelf- edge label, the following words appear: "Price correct at time of print. Aldi prices checked in a Dublin Aldi store on 19/06/2003"."
49 The analysis in the High Court judgment followed the same approach as had been applied in respect of the SCLs. It was held that the labels did not satisfy the objective comparison ground in Regulation 4(2)(d) of the 2007 Regulations, since they did not compare a Dunnes product with a particular Aldi product, and did not objectively compare features of the two products. Again, the judge found that the advertising did not compare within the meaning of Regulation 4(2)(c): although it was clear by inference that Dunnes was comparing its "rich and creamy yoghurt" (to take this example) with an Aldi yogurt at the same price (and not some other product entirely), this was not clear on the face of the advertising, and accordingly it did not compare "products" meeting the same needs or intended for the same purpose. At paras. 370 to 371 of the judgment, the High Court also considered that the SELs failed to comply with s. 43(1) and (2) and s. 46(1) of the 2007 Act, and thus contravened Regulation 4(2)(b) of the 2007 Regulations.
50 The judge considered and rejected certain other arguments raised by Dunnes which are no longer material. He concluded that the advertising also infringed Aldi's trade mark, and, insomuch as it was a live issue, that Dunnes was not entitled to rely on s. 14(6) of the Trade Marks Act 1996 as a defence to a claim for trade mark infringement.
The order of the High Court
51 The trial judge heard further detailed submissions on the nature and scope of the remedy and the form of order. Following the delivery of its second judgment on 21 July 2015, the High Court granted orders in the following terms:-
"IT IS ORDERED
1 The Defendant shall not use, publish, display, or infringe the trade marks of the Plaintiffs (the "Marks") as identified in Schedule 2 hereto in any comparative advertising or promotional material in any of the manners found to be unlawful in the judgment of the Court delivered herein on 9 June 2015.
2 The Defendant shall not engage in prohibited comparative marketing communications as defined in the European Communities (Misleading and Comparative Advertising) Regulations 2007, contrary to Regulations 4(2)(b), (c) or (d) of the Regulations, where such communications make use of the Marks.
3 The Plaintiffs will not seek any order of attachment or committal in respect of any breach by the Defendant of this order unless such breach, and the basis on which the Plaintiffs contend for such breach, is notified by electronic mail (to e-mail addresses to be notified to the Plaintiffs' solicitors by the Defendant's solicitors) to the Defendant and one of the following conditions is met:-
(a) within ninety-six hours (excluding weekends and public holidays) of being so notified, the Defendant has not remedied the breach;
(b) the breach is one of a number of breaches giving rise to the reasonable inference that there is a continuing pattern of breaches of the orders by the Defendant; or
(c) the breach is deliberate or made in bad faith."
52 Dunnes was also ordered to pay Aldi's costs, such order being stayed pending any appeal, but the High Court refused to grant any stay on the injunction ordered, with the effect that the injunction restraining the prohibited comparative advertising remained in place for almost two years until the delivery of the judgment of the Court of Appeal.
The decision of the Court of Appeal on the substantive issues
53 If the trial in the High Court was a comprehensive victory for Aldi, the decision in the Court of Appeal was a substantial - indeed almost total - reverse. For reasons which will become apparent, it is not, however, necessary to outline the detailed reasoning of the court in every respect. It is, I consider, sufficient to say that the Court of Appeal was satisfied that the approach of the High Court, influenced in part by the approach taken by the principal expert witness for Aldi, whose evidence was comprehensively accepted by the trial judge, was plainly incorrect.
The SCLs
54 The judge's finding that there was a breach of Regulation 4(2)(d) of the 2007 Regulations was a key finding from which the subsequent finding of breach flowed. However, the Court of Appeal considered that on a true construction of the 2007 Regulations, it was apparent that Regulation 4(2)(d) did not require that a product should be comparable in every material respect. Rather, it required simply that the advertising compared the products in one or more objective respects: most obviously and normally, a comparison on price.
55 Equally plainly, that was in fact done here, since the products were all compared on price. Regulation 4(2)(c) dealt with the comparability of the products, but all it required was that the product compared should be products meeting the same needs or intended for the same purpose. This did not require that the products be identical, but simply that they be essentially substitutable and interchangeable. Again, this requirement was plainly satisfied in this case by the products which had been so carefully scrutinised in respect of the SCLs. Accordingly, the findings of non-compliance with Regulation 4(2)(d) and Regulation 4(2)(c) could not stand. What remained was a finding that the labels were misleading under the 2007 Act, and that they were therefore not capable of not being permissible comparable advertising.
56 The Court of Appeal found, correctly in my view, that the conclusion of the High Court in respect of Regulation 4(2)(b) - that the advertising was misleading - was clearly dependent upon the erroneous findings of non-compliance with Regulation 4(2)(d), and (in the judgment's terms) the consequential finding of non-compliance with Regulation 4(2)(c). It followed that, once the error in relation to Regulation 4(2)(d) was identified, this finding could not be sustained either.
57 However, the Court of Appeal did appear to consider at para. 84 of its judgment that it was at least possible that a court approaching this matter on a correct construction of the 2007 Regulations could perhaps conclude that the advertising was misleading, either by reason of Regulation 3, or because it was contrary to the provisions of ss. 43 to 46 of the 2007 Act. Again, at para. 92, the Court of Appeal considered that "it would have been possible for the High Court to have concluded that had some or all of the 14 products ultimately in dispute could not have been the subject of valid comparative advertising because of a difference that was sufficient, in, for example, their nature or composition, to make the comparison invalid and the advertising accordingly misleading". The judgment instanced the possibility that the Bord Bia mark may have been within the category of relevant matters in Regulation 3(4)(e), that is, the existence of any approval or sponsorship of the product by others, but reiterated that this was not how the High Court had approached the question.
58 The court went on, however, to consider and reject the case made under ss. 43 to 46 of the 2007 Act. First, the Court of Appeal considered that the High Court's findings were, as already set out, consequential on the flawed findings under Regulations 4(2)(d) and (c). Second, the court had not addressed such a serious matter in sufficient detail to come to that conclusion. Third, it was inappropriate to make those findings in the context of an openly declared intention on the part of Dunnes to challenge its rivals on price. The intention was comparison, not deceit. Further, it did not seem to the Court of Appeal that the evidence was sufficient to warrant such a finding.
59 It is not precisely clear how this finding sits with the court's acknowledgement that it might have been possible to find that the advertising was misleading, and therefore was not permissible comparative advertising. However, for present purposes, read fairly, it must be accepted that the court's principal ground for reversing the High Court's finding in this respect was that it was plainly consequential upon a flawed finding of breach under Regulation 4(2)(c) and (d), and therefore could not stand. Further, on a fair reading of the Court of Appeal decision, there remained at least the possibility of a finding of liability against Dunnes in some respect, if not under Regulation 4(2)(d) or (c), then under Regulation 4(2)(b). This is important for present purposes, since the question of the appropriate order to be made in such circumstances was the subject of considerable debate on this appeal.
The SELs
60 The court then turned to the finding in respect of the 247 SELs. First, the Court of Appeal considered that the failure to specifically identify an Aldi product was not fatal. Indeed, it was unnecessary in circumstances where it was not contested that there was indeed a corresponding product fitting the description, and comparison by implication was expressly envisaged by the 2006 Directive. That left the use of the phrases "lower price guarantee" and "always better value", together with the Aldi trade mark. The High Court judge, at para. 362(2), had concluded that this created an impression that, although the prices seemed to be the same (€1.99 in the example above), in fact the Dunnes product was at a lower price or was always better value. The Court of Appeal considered that this conclusion was an inference rather than a finding of primary fact, and it was open to it to come to a different conclusion on appeal. It concluded that "no sensible person could be misled by the use of general slogans that are the commonplace stuff of most advertising". The correct price was identified, it was the same as the Dunnes price, and, indeed, the slogan used was "Aldi match". The court considered that shoppers had to be given some credit for their intelligence and their appreciation of common marketing practices, and that the proposition put forward by Aldi was unrealistic and inconsistent with the attitude to be ascribed to a reasonably well-informed, circumspect shopper.
The banners and toblerones
61 Finally, the Court of Appeal turned to the banners and toblerones. In this regard, the court agreed that they were impermissible, but for different reasons than those which had prevailed in the High Court. The court considered that they were not comparative advertising at all, and the part of the banner referring to Aldi did not objectively compare the prices or other specified features of the rival products. The court did not consider that the advertising was misleading. It simply did not purport to offer a comparison of goods within the meaning of Regulation 4(2)(c), or to objectively compare goods on the basis of price or other relevant features as specified in Regulation 4(2)(d). Accordingly, the Court of Appeal upheld the judgment of the High Court that the banners were impermissible having regard to the 2007 Regulations. The court was minded to replace the decision with regard to the banners with a declaration that they were not permitted, but considered that, in the light of the substantial success by Dunnes, the injunctive relief ordered by the High Court should be set aside, notwithstanding the unlawfulness of the banners.
The judgment of the Court of Appeal in relation to costs and retrial
62 The President of the Court of Appeal delivered an ex tempore judgment on 17 May 2017 on the question of costs and a retrial. The Court of Appeal considered that there was insufficient precedent to provide useful guidance, and that the issues raised were ones of some uncertainty. The judgment was expressed to be on a "pragmatic basis" designed to do justice in the circumstances of the case, rather than to establish any binding precedent. The court declined to order a retrial for the following reasons:-
(i) The period of time since the conduct in issue in the case occurred;
(ii) The price comparison campaign was long over;
(iii) The test applied by the trial judge was the one suggested by Aldi and its experts;
(iv) New evidence would be required making the case a wholly different one or a significantly different one from what was presented in the High Court;
(v) Little or no useful purpose would be served in re-litigating the whole issue;
(vi) The cost would be disproportionate to the value of any matters in issue.
63 The court also made an order that Dunnes, as the "overall victor", was entitled to 80 per cent of its costs in the High Court and Court of Appeal, and Aldi was entitled to 20 per cent of its costs. The court set off those amounts so that the net order was that Dunnes were entitled to recover 60 per cent of its costs in the High Court and Court of Appeal. The court also ordered payment on account, but placed a stay on that order in the event that this court granted leave to appeal.
The appeal to this court
64 The issues in this appeal have altered substantially from those debated in such detail in the High Court and Court of Appeal. That is because Aldi, for its part, now accepts that the Court of Appeal was correct in its analysis of the High Court judgment in relation to Regulation 4(2)(d), and that consequently the route by which the High Court found breaches of Regulations 4(2)(c) and (b) was flawed. Aldi does, however, seek to make a rather more restricted case that the SELs breached Regulation 4(2)(d), and maintains that in any event both the SELs and the SCLs were misleading, and therefore not compliant with Regulation 4(2)(b). For its part, Dunnes has not sought to appeal from the finding that the banners were unlawful comparative advertising and therefore infringed Aldi's trade mark.
65 It is clear, however, that the outcome of the decision of the Court of Appeal was that there was an unresolved issue (which, for the reasons set out, the Court of Appeal considered was not necessary to resolve) as to whether the SCLs were misleading in some sense, which was not dependent upon the High Court's finding under Regulation 4(2)(d) to the effect that they did not constitute lawful comparative advertising. As already set out, the Court of Appeal considered that it was not appropriate to direct a retrial of that issue. On this appeal, Aldi has strenuously maintained that the SCLs were indeed misleading and thus unlawful comparative advertising, and furthermore have sought to reverse the Court of Appeal's finding that the SELs were lawful comparative advertising. Aldi have also contended that if this court does not itself conclude that the SCLs and SELs were unlawful, then there should be a retrial in the High Court on that issue. On this appeal, Dunnes, perhaps unsurprisingly, adopted and supported the approach of the Court of Appeal.
66 It is necessary to approach the issues in this appeal with some care, since they are both complex and interrelated. Plainly, the question whether an injunction ought to have been granted may depend on one of the other issues in this appeal, namely the extent to which the judgment of the High Court can be sustained, since that will determine the degree to which Aldi's rights were infringed, and perhaps were likely to be infringed in the future. Even more clearly, the question of the costs order made in the Court of Appeal may be affected by the outcome of this appeal itself. If, for example, this court came to a different conclusion to the Court of Appeal on any aspect of the appeal, then the question of the correctness or otherwise of the Court of Appeal's order in respect of costs would become redundant and it would be necessary to address the costs issue afresh in the light of the conclusions of this court. Having said that, in the light of the respective concessions made, the issues arising in this appeal appear to be the following:-
(i) Whether, accepting that the High Court's findings that both the SELs and SCLs did not comply with Regulation 4(2)(d) were based on a flawed interpretation of that provision, the High Court finding that the SELs and SCLs were not permitted comparative advertising can nevertheless be sustained either on the grounds that the SELs did not comply with Regulation 4(2)(d), or (and this was the bulk of the argument) because both the SELs and the SCLs were misleading, and thus did not comply with Regulation 4(2)(b)?
(ii) If this court concludes that an appellate court could not itself sustain the finding of impermissible comparative advertising on the ground that it was misleading, but that equally, such a finding could not be excluded as a possibility as a matter of law, whether the Court of Appeal ought to have ordered a retrial on that issue, and, if so, whether this court should now do so?
(iii) If the finding of impermissible comparative advertising is upheld in any respect, should this court grant an injunction, and, if so, in what terms?
(iv) Even if the Court of Appeal's finding is correct, and the only breach of Aldi's rights was that in relation to the use of the banners, was the Court of Appeal correct not to grant an injunction, and, if not, should this court do so?
(v) In the light of the conclusions to the foregoing, what is the correct order in respect of costs? The argument in this regard proceeded on the assumption that, even if the Court of Appeal was entirely correct, it was incorrect to award Dunnes 60 per cent of their costs in the High Court and the Court of Appeal. Logically, however, that issue only arises in precisely that way if this court upholds the Court of Appeal's findings in their entirety. If not, the precise argument becomes redundant, and the issue of the correct order for costs shifts to the outcome of the appeal in this court. For this reason, although the issue had been debated in the written submissions, the parties agreed at the hearing of this appeal that the matter of costs was best left to be dealt with in the light of the findings of this court on the substantive issues raised.
Discussion 67 It is apparent that this litigation has occupied a substantial amount of court time, and has produced a comprehensive and indeed meticulous judgment in the High Court, a very extensive review in the Court of Appeal, and a number of detailed ancillary rulings on some difficult points of law. It remains the case, however, that each of these decisions has provoked substantial disagreement. This is all somewhat incongruous in the context of mundane household products and a legal test which requires the court to consider the position of the average consumer, in this case making routine purchases in an environment that is familiar to any shopper.
68 I think that at least some of the difficulty can be traced to the 2006 Directive itself, which perhaps attempts too much in a very difficult field. Commercial entities are entitled to seek and obtain trade mark protection and to use it for commercial advantage, most obviously by preventing competitors from using their mark in connection with the range of products protected. However, comparative advertising is in principle something of considerable benefit to consumers, since it necessarily promotes competition. Disseminating information about features of a product (including its price), and making comparisons with competitors' products will inevitably stimulate competition to improve product features and reduce price to the benefit of consumers. It is difficult, however, if not impossible, for a trader to draw such a comparison without using the name of its competitor or the competitor's product, which will almost always be protected by a trade mark. The interest of consumers requires that comparative advertising be encouraged and a broad view be taken. But a failure to comply with a narrow definition of comparative advertising may also give rise to an actionable trade mark infringement, and that itself may have a chilling effect on comparative advertising. On this already difficult balance is overlaid a prohibition against misleading advertising. In principle, such a prohibition is entirely sensible, since misleading advertising is harmful to the interests of consumers and, indeed, an efficient market. Yet it also gives rise to a further complication, since, at the level of principle, misleading advertising can and does arise outside the field of comparative advertising.
69 The 2006 Directive also attempts to incorporate into the test for unlawful comparative advertising the concept of misleading commercial practices, which are prohibited under the Unfair Commercial Practices Directive (implemented in Irish law by the 2007 Act). At the level of theory, this creates a neat and orderly pattern, but it is not necessarily conducive to the resolution of disputes such as the present one. This is because the misleading commercial practices prohibited by the Unfair Commercial Practices Directive and the 2007 Act extend beyond the field of advertising, and, even within that field, extend beyond the question of comparative advertising.
70 While it may be unobjectionable to say that a practice, or indeed advertising, which contravenes the 2007 Act cannot be lawful comparative advertising even if it otherwise complies with the 2007 Regulations, misleading advertising is already captured by the 2007 Act, and it is hard to see what added benefit there is in denying it the status of comparative advertising so that it may also give rise to a cause of action for trade mark infringement, except perhaps if there were some difficulty or restriction on enforcement of the 2007 Act. Indeed, insomuch as the remedy of a prohibition order under the 2007 Act requires notice to the Competition and Consumer Protection Commission ("the CCPC") to provide an opportunity to that body to make representations, the 2007 Regulations open up the possibility of indirect enforcement of the 2007 Act without reference to that body. In this case it appears the National Consumer Agency (the predecessor to the CCPC), was represented in the High Court on the 10 March 2014 and indicated it was taking a neutral stance and did not wish to be heard at the trial.
71 Redundancy on the one hand, or duplication on the other, are not, however, in themselves fatal defects. Yet the reference to the 2007 Act and the practices it prohibits can obscure rather than illuminate what is at issue in a case such as this: that is, that a piece of advertising may be misleading not because of what it says in itself, but rather in the comparison it draws. To take an example close to the facts of this case, if Dunnes had claimed, falsely, that its pork sausages were Bord Bia approved, that might well be a misleading commercial practice for the purposes of the 2007 Act. It could also mean that, even if there was what was in every other respect a correct and valid comparison on the basis of price for the purposes of Regulation 4(2)(d), and it was clear that the products were comparable for the purposes of Regulation 4(2)(c), the advertising would nevertheless be impermissible and would not comply with Article 4(2)(b). Accordingly, it could be the subject of a trade mark infringement action by Aldi and a claim for relief under the 2007 Regulations.
72 However, what this case illustrates is that it may be alleged that an advertisement is misleading, and therefore cannot be lawful comparative advertising, not because of the claims it makes for its own product, but rather because of the comparison that is made. It is a significantly different question, therefore, whether, by comparing the Dunnes pork sausages to their Aldi competitor that has Bord Bia approval, the Dunnes advertisement is misleading. This is an issue which can only arise in the context of comparative advertising, and it might have been preferable if it was addressed in that context, i.e. by setting out a definition for the situation where, although the comparison is of products which are comparable under Regulation 4(2)(c), and a valid and objective comparison is made under Regulation 4(2)(d), the comparison is nevertheless to be regarded as misleading. At present, that is something upon which little guidance is to be gained from the separate prohibition of misleading commercial practices in Regulation 4(2)(b), incorporating as it does the further broad definition contained in the 2007 Act.
73 It is clear from Lidl SNC v. Vierzon Distributon SA (Case C-159/09) [2010] E.C.R. I-11761 that it is for the national court to determine if a particular advertisement is misleading within the meaning of Regulation 4(2)(b) of the 2007 Regulations. I also agree that such a conclusion can be reached without expert evidence, and certainly without extensive detailed evidence, particularly when the product involved is one in common use, and where the advertisement is one directed to the general population, of which judges are members. In the context of this case, for example, judges are consumers, go to supermarkets, buy products, observe banners and toblerones, see shelf-edge labels, and, therefore, should readily understand the context in which the present dispute arises. Where a claim is brought, judges must consider whether the advertising satisfies Regulations 4(2)(c) to (i) of the 2007 Regulations, and there is no reason why they cannot form a sensible and pragmatic judgment as to compliance with Regulation 4(2)(b). In the normal course of events, judges may encounter questions of fairness, accuracy, and deceit in commercial practices, and, for example, in cases of passing off or trade mark infringement, may have to form judgments about the impression gained by members of the public from the use of particular words or phrases or the get up of a product. In this regard, I fully agree with the observations of Kitchin L.J. in Interflora Inc. v. Marks and Spencer pl c [2014] EWCA Civ 1403, referred to at para. 36 above.
74 It is indeed desirable that robust and pragmatic judgments are capable of being made on these issues. It will be difficult to demonstrate causal effect and quantify damages arising from any unlawful comparative advertising, and a permanent injunction restraining the features of an advertising campaign long completed may be of little benefit to a competitor who has suffered from unlawful comparative advertising. It is important, therefore, that the primary remedy available under the 2007 Regulations, an injunction restraining the unlawful comparative advertising, be available promptly. It has been held that the regulations do not themselves permit an application for interim or interlocutory relief: see the judgment of the Supreme Court in Dunnes Stores Ltd. v. Mandate [1996] 1 I.R. 55, pp. 63 and 64, and the judgment of the High Court in Tesco Ireland Ltd. v. Dunnes Stores [2009] IEHC 569, (Unreported, High Court, Laffoy J., 23 December 2009), at p.19.
75 If so, it may be desirable that the 2007 Regulations should be amended to permit such interlocutory relief, and might also usefully provide that such a case is one of the exceptions contemplated in the decision in Campus Oil v. Minister for Industry (No. 2) [1983] I.R. 88 where, given the likelihood that the resolution of the interlocutory matter may resolve the entire dispute, it is not desirable that an injunction should be granted simply on the basis of establishing an arguable case. However, pending any such amendment of the 2007 Regulations, it becomes, if anything, more important that the remedy available under the 2007 Regulations should be available at some point proximate to the advertising complained of, and that the issue, if disputed, should be capable of being promptly decided. The primary remedy under the 2007 Regulations is an order that any advertising in breach of the 2007 Regulations should be prohibited. If traders are being subjected to comparative advertising which is unfair and impermissible under both the 2006 Directive and the 2007 Regulations, then they should be entitled to immediate protection. If consumers are being misled and deceived, then it is important that such conduct be brought to an end. It is equally important that traders should be in a position to offer comparative advertisements with some confidence (since that promotes competition, which is beneficial to the consumer) and it is wrong that there should be prolonged uncertainty as to a potential liability. All these considerations point to the need for a speedy, pragmatic and robust resolution of the issues arising under the 2006 Directive and the 2007 Regulations.
76 The question, therefore, of whether there has been a breach of the 2006 Directive and the 2007 Regulations, and, in particular, the potentially more difficult question of whether any comparative advertisement is misleading, should be approached on the basis that the courts recognise that advertising is, by its nature, meant to present a product in its most attractive light in order to highlight features that are seen as potentially attractive to consumers, and, furthermore, that most transactions are carried out without minute or microscopic examination, weighing, assessment, or analysis. This feature cuts both ways. It means that an advertiser cannot rely on some small print provision if the overall impression obtained by the average consumer, paying limited attention, is misleading. Indeed, this is exactly what Aldi alleges to have occurred in relation to the SELs. The test for misleading advertising involves the idea that the consumer is somehow deceived, either positively or by omission. Again, this should be capable of clear determination. Once it is established that the product satisfies Regulations 4(2)(c) and (d), and once the advertising is viewed and the products placed side by side to identify their respective constituents, it should normally be readily apparent whether a consumer would consider themselves deceived into buying one of them, either by the terms of the advertising itself, or by some omission from it. In the case of products which have acknowledged differences, this would involve a consideration of whether, as set out above, the products are comparable, and when objectively compared in at least one respect (normally price), the comparison is misleading in the sense that there is a false implication of equivalence of other features of the product, which, moreover, operates in a way which deceives the customer and may significantly affect their decision to purchase.
77 Turning to the facts of this case, it is, I think, regrettably clear that the High Court judge was in error when he accepted the submission that the analysis of the differences between the products in terms of their composition and ingredients was relevant to the question whether the advertisement satisfied Regulation 4(2)(d) of the 2007 Regulations. I agree with the learned President of the Court of Appeal that all that is required under Regulation 4(2)(d) is the comparison of one material, relevant, verifiable, and representative feature of the goods, and that the comparison be objective. In truth, this posed little difficulty in this case, since in all cases the relevant comparison sought to be made was on price. That comparison was objective: it said that the Dunnes price was the same, or, in some cases, lower than the Aldi price. In no case has it been suggested that this aspect of the comparison was either wrong or lacking in objectivity. Thus, Regulation 4(2)(d) of the 2007 Regulations was readily satisfied.
78 At paras. 79 and 91 to 94 of its written submissions in this case, Aldi suggests that Regulation 4(2)(d) may still be an issue in respect of the SELs. This seems to turn on an assertion that the objectivity of the price comparison made was somehow undercut by the slogans "lower price guarantee" and "always better value". I do not agree that this analysis is permissible in this case. While in theory it may be possible to say that a comparison on price can become so submerged in misleading slogans that in truth it is no longer a valid comparison, that would be an extreme case. It is difficult to conceive of circumstances where a court could arrive at such a decision without already having concluded that the advertising was misleading. Insomuch as this aspect of the matter is relevant, therefore, it falls to be considered, if at all, under Regulation 4(2)(b) of the 2007 Regulations, which will be addressed further below.
79 I also agree with Ryan P. that the above conclusion cannot be limited to the specific finding under Regulation 4(2)(d), but rather has implications for the rest of the High Court judgment. It is plain that the principal finding made was of a breach of Regulation 4(2)(d) and that the findings of breach of Regulation 4(2)(c) and 4(2)(b) followed on that finding. The findings by the High Court of non-compliance with Regulations 4(2)(c) and (b) respectively cannot be separated from the conclusion under Regulation 4(2)(d), and accordingly must be set aside.
Retrial
80 A question which arises on this appeal, and which was vigorously debated, was whether the Court of Appeal ought to have directed a retrial on those issues. This arose most clearly on the question whether the SCLs, on a proper application of the law, could be found to be misleading contrary to Regulation 4(2)(b) of the 2007 Regulations.
81 Insomuch as the Court of Appeal or this court might conclude that there could be no sustainable finding of a breach of Regulations 4(2)(c) or 4(2)(b), or, conversely, that the evidence was only consistent with a breach of either provision, then there is no doubt that an appellate court could so find and proceed to determine the case. Indeed, the decision of the Court of Appeal provides instances of both of these approaches. The court found, and it is not now contested, that the banners and toblerones were unlawful, and did not lawfully compare products on the basis of price or any other permissible feature under Regulation 4(2)(d) of the 2007 Regulations, and could not be said to compare comparable goods under Regulation 4(2)(c). Accordingly, the finding of breach of the 2007 Regulations was upheld. Conversely, the Court of Appeal found that the SELs were objective comparisons on price, and that since there was an implicit comparison with a product (and it was not suggested that the product was in any way different) the products were comparable for the purposes of Regulation 4(2)(c).
82 In relation to the SCLs, however, the court did not make a positive finding that they were not misleading under Regulation 4(2)(b) of the 2007 Regulations, but nevertheless declined to order a retrial of that issue for the reasons already identified. The fundamental unresolved issue, particularly in relation the SCLs, was whether, while there was an objective comparison on price between the products, it can be said that some or all of the products were not in truth substitutable for the purposes of Regulations 4(2)(c), and in any event (and more importantly) that the advertising was nevertheless misleading under Regulation 4(2)(b) because of the identified and objective differences between the products, which were not in dispute. While acknowledging that the issue was open, and had not been resolved by the decision of the Court of Appeal to set aside the judge's findings in this regard, the Court of Appeal nevertheless decided, for the reasons set out above, not to order a retrial on that issue.
83 It is easy to sympathise with the approach of the Court of Appeal to this issue. The main thrust of the case had been decided. There had been a comprehensive finding in favour of Aldi in the High Court, which was based on what the Court of Appeal considered, correctly, to be a misinterpretation (and consequently a misapplication) of the law. Furthermore, the error which had been clearly identified and corrected by the Court of Appeal was a product of Aldi's own argument and the evidence it adduced. It is possible also to consider that there would be little reality to a retrial on the limited remaining issues, particularly in respect of the 14 SCLs which remained in dispute, which made specific comparisons with Aldi products six years ago in the course of a small advertising campaign now long forgotten. It is hard to believe that, if such a limited retrial was ordered, it would not be compromised. Certainly, if the costs of the original trial, and some component of the costs of the appeal, were to be dependent upon the outcome of any such retrial, it seems clear that the cost implications would far outweigh the significance of any of remaining legal issues involved. Pragmatism and practicality certainly weighed heavily against a retrial.
84 However, I cannot agree that a retrial is an entirely discretionary decision and can be refused because a court considers, even if correctly, that it is not an entirely desirable or useful use of court time or resources. A litigant who contends that he or she has been the subject of a civil wrong is entitled to come to court and have that dispute resolved. There are a number of important rules, practices and procedures which seek to manage court resources efficiently, but if Aldi had limited its claim to the question whether the SCLs, and the banners and toblerones complied with the 2007 Regulations, it would not have been possible to have that claim stayed or dismissed on the basis it was frivolous, vexatious, bound to fail, or otherwise unworthy of judicial decision. The litigant is normally entitled to have a genuine dispute of fact and law determined by the courts, in the first place by a trial court, and, if that decision is erroneous, to have the error corrected on appeal so that the fundamental issue raised is determined in accordance with law. That may involve an appellate court resolving the matter itself (if it can), and if it cannot do so, directing a retrial. The parties are, however, normally entitled to have a final adjudication of the issue in dispute, which in this case is whether or not Aldi was the subject of a civil wrong at the hands of Dunnes in any of the respects it has raised, and which have not been resolved by the determination of the Court of Appeal upheld by this court.
85 In putting the matter in this way, I do not wish to subtract in the slightest from the importance of rigorous procedures for the management of scarce and expensive court resources, or to suggest that parties are at large as to what disputes they may ventilate in court, the manner in which they may do so, or, importantly, the length of time they may take. On the contrary, courts are entitled, and perhaps obliged, to adopt rigorous rules of practice, procedure, allocation of time, identification of issues, and the exclusion of what is vexatious, frivolous, absurd, scandalous or abusive of the process of the court. But the purpose of all these rules of procedure is to ensure that the legal dispute is resolved, if not by agreement, then by adjudication, as promptly and efficiently as possible. The end point is, however, the resolution of the issue brought before the court. Accordingly, while I am entirely sympathetic to the pragmatism of the approach of the Court of Appeal, I do not think that it was permissible to refuse to order a retrial on the purely pragmatic and prudential grounds set out in its ex tempore judgment of 17 May 2017.
86 The issue here, however, is whether this court must order a retrial, or whether it can properly resolve the remaining issues between the parties. Where an appellate court can do so, it should seek to resolve matters finally, since that is the most efficient use of resources, and is the function of an appellate court. There is nothing admirable in seeking the equivalent in litigation of perpetual motion, involving endless trials, appeals, and retrials. This, if anything, is now more true with the advent of the Court of Appeal, and the possibility, then, of fragmentation of issues and re-hearings in different courts. Indeed, retrials pose their own problems for the administration of justice, since parties and witnesses are unavoidably aware of what has been said and done in the previous trial.
87 A retrial is certainly appropriate where there is a remaining issue which may involve an assessment of the credibility and cogency of competing evidence. If there is credible evidence which, if accepted, would allow one or other party to succeed, then there may be little option but to direct a rehearing so that an independent trier of fact can make that assessment. Even then, the court should try to limit the issue for determination to that which is absolutely necessary to resolve the remaining dispute in accordance with law, as clarified by the decision of the appellate court. Here, however, the basic evidence relevant to the issue was not in dispute. In the case of the SCLs, there were greater or lesser differences between the products being compared. That evidence was not challenged.
88 Once it was found (correctly, as I have held) that the High Court's approach to Regulation 4(2)(b) of the 2007 Regulations was wrong in law, and furthermore that the basis upon which the evidence had been advanced was also flawed, much of the contentious evidence in the case was no longer relevant. Furthermore, as already observed, the question of whether the advertising was misleading was a matter upon which a court could and should form its own judgment, and on which evidence was not required, at least where the products and the context in issue were part of normal everyday life with which a judge could be expected to be familiar. Even in the case of advertising in specialist areas, the amount of evidence required would be limited. Here, for example, there was no evidence of confusion or complaints on the part of customers. It was essentially a matter for a court to decide by reference to the true interpretation of the 2006 Directive and the 2007 Regulations whether the advertising was misleading.
89 This court and the Court of Appeal are in as good a position to come a conclusion on that issue as a trial judge, and accordingly, in my view, this court should now do so. Dunnes, for its part, argued strongly that the court should take this course and bring the litigation to an end. Aldi expressed a preference for a retrial, but did not seriously dispute that an appellate court could take this course if it considered there was no factual issue which remained to be resolved. In the event, in my view, the court has power to determine the matters which remain an issue and should do so. It should be pointed out, however, that on any such adjudication, there is a residual area of permissible deviation. It is conceivable that an appellate court might be inclined to disagree with the conclusion of a trial court, but might nonetheless conclude that the decision of the trial judge was within a permissible range, and for that reason decide not interfere with it. The conclusion set out hereunder should be approached in that way.
Conclusion in respect of the SCLs
90 The initial question which arises is whether the difference in the products means that they are not comparable for the purposes of Regulation 4(2)(c) of the 2007 Regulations: that is, that they meet the same needs or were intended for the same purpose. In nearly all of the cases, I consider that the products compared were comparable under this test. Tomato ketchup and strawberry yoghurt, to take humdrum examples, clearly satisfy the test, which in my view should be applied relatively broadly, since a comparison which is misleading will still fall foul of Regulation 4(2)(b).
91 There were four products where it was suggested that Dunnes witnesses had initially agreed that the products were not comparable: that is, the day cream, shower gel, toilet tissue and sparkling orange. In my view, the toilet tissue was comparable, and it satisfied the test under Regulation 4(2)(c). I would conclude that the shower gel product was comparable under this test, largely because the evidence is that the quantity of tea tree oil was minuscule and much below the dose necessary to have any antiseptic effect. There was no evidence that the Aldi product was specifically marketed by reference to the tea tree element, nor, and perhaps more importantly, was there any evidence that it was valued particularly by consumers for this ingredient. I think it is clear that two shower gels met the same need and were intended for the same purpose.
92 I might, however, have come to a different conclusion in relation to the day cream. The key difference here is the sun protection factor, which is slight in real terms (a factor of 6 does not appear substantial), but which, any event, might be considered material. While I acknowledge that this is a matter on which there might be differing views, and that the test depends to some extent on how broadly the court considers the question of "same purpose" or "same need", nevertheless, in my opinion, the day cream products are broadly speaking comparable for the purposes of Regulations 4(2)(c). Aldi rested its argument in this regard principally on the question of whether the comparison was misleading under Regulation 4(2)(b) and it is more appropriate to address the issue under this heading. However, this analysis illustrates how closely related the two questions are in this context.
93 The most difficult decision, as the trial judge recognised, is whether, if indeed there was an objective comparison on price or some other feature of broadly comparable products, the objective difference between the products nevertheless meant that the advertising was misleading, and thus did not come within Regulation 4(2)(b) of the 2007 Regulations. This is made more difficult by the fact that the misleading nature of the advertisement is said to arise by omission: that is, that the SCLs did not inform consumers that the Aldi products were different in some respects, so, for example, it was not made clear that the Aldi tomato ketchup had a higher tomato content, or the Aldi sausages and turkey mince had been Bord Bia approved, or that the Aldi dog food had carrot content rather than simply chicken or beef, whereas the Dunnes product did not.
94 In this respect, the guidance in Lidl SNC v. Vierzon Distributon SA (Case C-159/09) [2010] E.C.R. I-11761 can be read helpfully together with the terms of the Unfair Commercial Practices Directive (while recognising that the former case was decided by reference to the terms of the predecessor of the 2006 Directive, Directive 84/450/EEC concerning misleading and comparative advertising). As already observed, it is important to recognise that the Unfair Commercial Practices Directive (implemented by the 2007 Act) relates to misleading commercial practices occurring in circumstances wider than the field of comparative advertising, or indeed advertising more generally, and therefore governs matters which go beyond the admittedly difficult issue which arises where the misleading effect is alleged to arise from the nature of the comparison drawn. In judging whether comparative advertising which satisfies Regulations 4(2)(c) to (i) of the 2007 Regulations would nonetheless fail under Regulation 4(2)(b) because the comparison made is misleading, it is necessary to have regard to the benchmark set by the Unfair Commercial Practices Directive, which speaks of the consumer being deceived. 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.
95 It is also apparent, with perhaps the clarity of hindsight, that there was a further flaw in the approach of the High Court in this specific regard. The High Court, having identified objective distinctions and differences between the products compared, then asked itself the question whether the hypothetical consumer's decision may have been influenced if he or she had known about this difference in the product. However, that approach will almost always result in a finding that advertising is misleading, unless the differences in the products are truly trivial. But advertising is not about the recitation of a comprehensive set of facts covering all the constituents and features of a product. It concerns, by definition, the selection of some features of a product thought likely to attract consumers, and is not inherently misleading because it does not recite other features. In that context, any piece of truthful information about a product if given to a consumer may affect a consumer's decision, but that is very far from a finding that an advertisement deceives the consumer if it omits of that information from an advertisement.
96 To take a simple example, two traders may offer standard white shirts. The first trader's shirts may, however, have been manufactured in a low-wage country with labour practices which have been criticised by human rights organisations. The second trader's product may have been produced in the EU. It would not be a misleading comparative advertisement for the first trader to advertise a difference in price without saying anything about the country of manufacture, even though that information, if given to a consumer, might well affect their decision and thus satisfy the test applied in the High Court. On the other hand, if all schools adopted a policy that school uniforms could only consist of garments produced in the EU, and the second trader's shirt is sold as part of a "Back to School" promotion on school uniforms, the first trader would not be entitled to advertise by comparing the shirts on price alone. It might be arguable that such a comparison would not be permissible under Regulation 4(2)(c), but even if it was, it would be misleading under Regulation 4(2)(b). This example also illustrates the fact that there is a close relationship between the test of comparability under Regulation 4(2)(c) and the issue of misleading comparison under Regulation 4(2)(b).
97 There is, in my view, a difference between a consumer who, when they compare the Aldi and Dunnes products side-by-side, may decide that they prefer one or the other, and may do so because of features of the product or information they glean about it, and a consumer who feels, justifiably, that they have been deceived into buying one as a substitute for the other. Within the field of comparative advertising, an advertisement may be misleading where it falsifies or undermines the implicit comparison made, and the implicit equivalence asserted, notwithstanding the fact that the products are compared in the advertisement by reference to one or more objective features of the products, thus satisfying Regulation 4(2)(d)), and they are broadly targeted at the same need or purpose and so comply with Regulation 4(2)(c).
98 In this case, I do not think that the identified differences between the pet foods (tinned chicken dog food, tinned beef dog food, six-pack dog food and dry cat food), the tomato ketchup, or the white sauce, are such that the omission to specify those differences in the comparison would mean that the advertisement was misleading. Nor do I consider that the omission to state that the Aldi sausages or turkey mince were Bord Bia approved, or to state that the equivalent Dunnes Stores product were not, was misleading. This is an example of the distinction made above: it is information which, if given to a consumer, might affect a decision to purchase, but it cannot be said that the omission rendered the price comparison of the sausages or the turkey mince misleading. Nor do I consider that the SCLs in relation to the strawberry yoghurt, the peach and nectarine yoghurt, the sunflower spread, or the sparkling orange juice were misleading.
99 At the other extreme, the toilet roll is, in my view, an instance where even though an objective comparison on price is made, and the product can be said to be comparable as directed towards the same need, a consumer could justifiably feel misled and deceived if they purchased toilet roll that was substantially shorter than the comparator at the same or a similar price. A difference in length of toilet roll is in my view a material feature of the product, so that the implication contained in the fact of the comparison (that is, that they are essentially substitutable products and any differences are not material) would be false, and in that respect is misleading in such a way as would affect the consumer's decision to purchase.
100 The final products to be considered probably come close to falling on either side of what is a difficult line to draw. In the case of the shower gel, tea tree oil is a feature that consumers might undoubtedly value. However, it is telling that the quantity was miniscule, that it did not have the minimum amount needed in order for it to have any valid antiseptic qualities, and did not have any of the distinctive odour of tea tree oil. Furthermore, if it were possible to distinguish products from other competing products by the addition of miniscule and ineffective quantities of other ingredients, it would significantly undermine the scope and effect of permitted comparative advertising, which, as the CJEU has found, is to be encouraged. Therefore, I conclude that the SCL comparing the shower gel products was not misleading within the meaning of Regulation 4(2)(b) (although it might be observed in this regard that the labelling of the Aldi product as containing tea tree oil, while objectively correct, may nevertheless itself be considered somewhat misleading if it is understood as implying that the shower gel had the beneficial antiseptic qualities of tea tree oil valued by consumers).
101 A very similar issue arises in relation to the day cream. The two products are broadly comparable, and addressed to the same need, but the Aldi product has a sun protection factor of 6. That difference is itself not extensive, but not without some hesitation, I have come to the conclusion that it cannot be ignored and is something that a consumer would tend to value, as I consider that someone who was used to purchasing the Aldi product, and who had bought the Dunnes product on faith of the advertising, might legitimately consider that the comparison and the equivalence implicitly asserted was false and accordingly feel misled. Accordingly, I would hold that in respect of the toilet tissue and the day cream, the relevant SCLs were in breach of Regulation 4(2)(b) insomuch as they contravened, in my view, the provisions of s. 46 of the 2007 Act.
Conclusion in respect of the SELs
102 It is argued that the SELs were misleading within the meaning of Regulation 4(2)(b) of the 2007 Regulations because, while the prices were accurately and clearly compared, the accompanying slogans may suggest, firstly, that even where the prices are identical, the Dunnes price is somehow lower. Second, it is argued that the repetition of the slogans on the banners and on the SELs creates a halo effect, suggesting that all products in the supermarket, or all which are compared, have lower prices.
103 I agree with the decision of the Court of Appeal that the slogans cannot, or at least should not, be understood in this way. That conclusion depends on a number of factors, such as the general nature of slogans, the historic association with the slogan traditionally used by Dunnes Stores, the relative importance customers place on generalised slogans, especially when compared with figures showing prices, and the relative size and location of the slogans, compared to the prominence given to the price comparison. It is difficult to consider that the average consumer, even under pressure of time, would treat the vague slogans in this case as overriding the specific information which was very clearly presented. It is perhaps possible to conceive of circumstances where these features do not apply in just the same way, and where a slogan may be treated as deceptive and misleading notwithstanding the presence of accurate information, but in this case I agree with the conclusion of the Court of Appeal that the SELs were not misleading within the meaning of Regulation 4(2)(b).
Outcome
104 In the result, I would uphold the Court of Appeal decision, save that in two respects, namely the toilet tissue and the day cream, I would hold that the Dunnes SCLs were misleading under Regulation 4(2)(b), and therefore were not permissible comparative advertising under the 2007 Regulations. Accordingly, there being no appeal against the Court of Appeal decision in respect of the banners and toblerones, Aldi have succeeded on those two additional specific issues, but have failed in respect of the SELs and the remaining 13 SCLs. The next question, therefore, is the nature of the remedy which should be granted.
Injunction
105 Aldi argues that, even on the terms of the decision of the Court of Appeal, that court was wrong not to grant an injunction with the trade mark infringement which it had identified in respect of the banners and toblerones. That question must now be approached in the light of the fact that this court has found that, in two further respects (day cream and toilet tissue), the advertising was not covered by the provisions of the 2006 Directive and the 2007 Regulations, and, accordingly, infringed Aldi's trade mark.
106 As a general principle, the proprietor of the trade mark who establishes an infringement is entitled to obtain an injunction restraining repetition of that infringement. Aldi contended that this position is, if anything, even clearer as a consequence of the terms of the 2006 Directive.
107 There are a number of unusual features of this case which must be considered. First, in my view, even if the decision of the High Court was entirely correct and upheld by the appellate courts, the order made was broader than was justified in law. It is, I think, a general and beneficial principle that an order should not be expressed in terms that simply restrain a person from a breach of the law. Instead, if a person is to be restrained by an injunction which can be enforced by processes of committal, then the person must know what they are bound to do or not to do. As was observed by Lord Upjohn in Redland Bricks Ltd. v. Morris [1970] A.C. 652, at p. 666, "the court must be careful to see that the defendant knows exactly in fact what he has to do, and this means not as a matter of law but as a matter of fact". This sentiment is expressed vividly in a Scottish case in 1874 cited by Lord Hope in Attorney General v. Punch Ltd . [2003] 1 AC 1046, at p. 1073: "[i]f an injunction is to be granted at all, it must be in terms so plain that he who runs may read". This principle may be relaxed in some cases (see Bean, Injunctions (13th edn., Sweet & Maxwell, 2018), paras. 5.33 to 5.34), but it is a useful guide. The order sought in this case was qualified significantly by requiring that, before any application was made for committal or other remedy for contempt, Aldi would be obliged to give Dunnes 96 hours' notice in order to permit it to consider removing the offending items. However useful at a practical level this may have been, it poses other substantial difficulties, since it meant that the advertising, or at least any comparative advertising Dunnes engaged in, was to be policed by a competitor in circumstances which made it highly likely that the consequence would be that Dunnes would refrain from engaging in any comparative advertising that might be challenged, other than something which was strictly and clearly permitted by law. Executives of responsible companies do not willingly risk the sequestration of the assets of a company, or personal committal to prison, and it is predictable, therefore, that they will refrain from any comparative advertising which could give rise to challenge. However, that is inconsistent with the object of the 2006 Directive, which treats lawful comparative advertising as a positive benefit for consumers that is to be encouraged. It also gives one competitor substantial power over another's commercial choices.
108 In any event, in the light of the decision of the Court of Appeal and this court, it is now clear that, even if much more narrowly drawn in terms of what was to be restrained, the subject matter of the injunction was considerably broader than was required by law. It follows that Dunnes have been restrained for almost two years from doing something which, it has now been established, they were lawfully entitled to do, and indeed which, it follows, the law in the shape of the 2006 Directive and the 2007 Regulations positively encourages. Furthermore, since the injunction granted was a permanent injunction, no undertaking as to damages was provided (although this is something which there is a discretion for the court to require pending appeal - see Bean, op. cit., para. 6.24 - and which might usefully be considered in a case like this). Accordingly, there is no possibility of compensation for Dunnes, however inadequate, in respect of what now must be considered to be the excessive restraint imposed by the High Court order. These are substantial and unusual factors in this case.
109 Furthermore, any injunction which Aldi might properly claim on foot of the decision of this court would be narrow, would relate to an advertising campaign that is now six years old, and, in the traditional language of the law relating to injunctions, is sought where there is no indication that Dunnes threatens or intends to persist with the kind of advertising at issue here unless restrained by order of the court. The only purpose of granting an injunction (apart from the practical but legally irrelevant purpose of bolstering a claim to costs) would be to permit committal for contempt if the order was breached. It seems highly improbable that Dunnes, in the light of this judgment, would reproduce the offending banners, toblerones, and the SCLs in relation to toilet tissue and day cream, but if they did, the existence of this judgment would mean that it could be readily and immediately restrained. It is more likely that the issue would arise in relation to some other form of advertising or other products, in which case this judgment would provide substantial assistance, but it is hardly necessary, or desirable, that the matter would be dealt with through the medium of a contempt application. I agree with the Court of Appeal that Aldi's trade marks have been vindicated by the collective decision of the courts. Furthermore, the specific trade mark entitled to protection already had the benefit of an injunction for the period between the judgment of the High Court and the Court of Appeal. In all the circumstances, I consider that this is indeed a sufficiently special case, and therefore an exceptional circumstance as contemplated under Article 102(1) of Regulation 207/2009 on the Community trade mark and interpreted in Nokia Corp v. Wardell (Case C-316/05) [2006] ECR I-12083, Nikolajeva v. Multi Protect OU (Case C-280/15) EU:C:2016:467, and combit Software GmbH v. Commit Business Solutions Ltd. (Case C-223/15) EU:C:2016:719, that it is not necessary to grant a permanent injunction restraining a repetition of the limited breaches of the 2007 Regulations which have been found.
Costs
110 Finally, Aldi contests the order for costs made by the Court of Appeal, which treated Dunnes as the "substantial victor" in the litigation, and accordingly awarded Dunnes 60 per cent of the costs of the entire litigation. Aldi argue that this was an entirely inappropriate order, given that the outcome of the case, even after the judgment of the Court of Appeal, was that it had been determined that Dunnes had engaged in advertising (at least in respect of the banners and toblerones) which was not permitted under the 2006 Directive and the 2007 Regulations, and accordingly had infringed Aldi's trade mark.
111 This issue has been superseded by the fact that the outcome in this court is somewhat different from that in the Court of Appeal, and accordingly the issue of costs may require to be reconsidered in that light. The parties have agreed that this matter should be dealt with following the court's determination of this appeal when considering costs.
Order
112 I would accordingly allow the appeal to the extent only of making a declaration that, in respect of the banners and toblerones, and in respect of the specific SCLs relating to toilet tissue and day cream, the advertising carried out by Dunnes Stores was not permitted comparative advertising under the 2007 Regulations.
