Comparative Advertising is now feasible in Hong Kong under the Trade Marks Ordinance provided that the comparison is within the scope of honest practice.   Executive Summary   In the past, if you compared the product price or service fee of your competitor against yours in your advertising materials, and the trade name of your competitor was a registered trade mark, you might be in breach of section 27(1)(b) or section 27A(1)(b) of the old Hong Kong Trade Marks Ordinance (Cap.43). However, the Trade Marks Ordinance (Cap.559), which has come into effect since 4 April 2003, may give you a way out provided that the comparison is within the scope of honest practice.   The Old Law   Sections 27(1)(b) and 27A(1)(b) of the Hong Kong Trade Marks Ordinance (Cap.43) states that any person other than the proprietor of the registered trade mark, is not allowed to use such trade mark in any advertisement issued to public if such use will import a reference to the registered user of the trade mark. The comparison of prices or features which involves the mentioning of the competitor’s registered trade mark will be caught by these sections.   The New Law   Section 21(1) of the new Trade Marks Ordinance (Cap.559) allows an exception in the use of a registered trade mark in advertising if such use is in accordance with honest practices in industrial or commercial matters. The factors that the Court considers in determining whether it is an honest practice are whether:-   1. The use takes unfair advantage of the trade mark; 2. The use is detrimental to the distinctive character or repute of the trade mark; or 3. The use is such as to deceive the public.   The Recent Cases   Section 10(6) of the English Trade Marks Act 1994 has already introduced this idea of honest practice regarding comparative advertising in the UK. In the 2 English cases, Barclays Bank plc. v. RBS Advanta [1996] R.P.C. 307 and Vodafone Group plc. v. Orange Personal Communications Services Ltd. [1997] FSR 34, the Court stated that the test for honest practice was an objective one considered by a reasonable audience, who would also take into account of the hyperbole element. As a result, being selective in the choice of features used in comparison of products or service is not itself misleading or dishonest, unless there are some serious misrepresentation or inaccuracy. As Hong Kong law is very similar to the English law, it is very likely that Hong Kong Court will adopt a similar approach.   Our Advice   1. It is possible that you may include comparative advertising in your marketing strategy provided that it is honest practice. 2. In any event, if you do not want your trade name to be mentioned in a dishonest way, you should apply to register your trade name as a registered trademark in Hong Kong.

IMPORTANT: Without knowledge of the background/facts of the individual matter, we do not intend for the above summary to deal with every important topic or to cover every aspect of the topics with which it deals.  Such summary is for general information purposes only and is not intended to provide legal advice.

For enquiries: Please contact members of our Intellectual Property Practice Group:

Ludwig Ng Senior Partner, Head of Intellectual Property & Technology Practice Group +(852) 2107 0315 ludwig.ng@onc.hk

Derek Lau Associate +(852) 2107 0329 derek.lau@onc.hk

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