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New Comparative Advertising Law Tested


12 December 2003


In a recent decision of the Court of Appeal, consideration was given to the new Trade Marks Act 2002, which for the first time makes it legal to engage in comparative advertising.

Section 94 of the Act states it is permissible to use some-one else’s registered trade mark without infringing it in the course of comparative advertising, so long as it is in accordance with honest practices in industrial or commercial matters. Or so long as that use, without due cause, does not take advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

In this case (Benchmark Building Supplies Ltd v Mitre 10 (New Zealand) Ltd & Anor), Benchmark displayed Mitre 10’s brochures outside its shop. It placed orange stickers on the brochures stating prices that were lower than those of Mitre 10.

The Court held that when Benchmark displayed the brochures it did so with the intention that the trade marks of Mitre 10 should perform precisely the same function as they performed upon Mitre 10’s original distribution of the brochures. It could not, therefore, be said that the distinctiveness of Mitre 10’s marks was in any way damaged. Additionally there was no copyright infringement, as putting a sticker on the brochures did not recreate or adapt the original copyright work.

The Court also found it difficult to characterise the open and obvious comparisons employed by Benchmark as being in anyway dishonest. This was a successful appeal against an initial interim injunction.

Damian Broadley, Partner at A J Park, says this is a useful judgment in what is a very new piece of legislation.

“The ability to engage in comparative advertising is new, so it is good to see from factual cases in front of the Courts how the legislation will be interpreted,” he says. “This case helps to clarify for businesses what is acceptable when using others trade marks in comparative advertising”.


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