England and Wales High Court (Queen's Bench Division) Decisions

"In their natural and ordinary and/or inferential meaning and in the context in which they appeared (including the horse racing photograph) the said words meant and were understood to mean that the Claimant was unable or unwilling to work as hard or as effectively in the management of its funds as the Defendant, and therefore consistently achieved a substantially lower return on them than the Defendant, so that investors would be foolish to entrust their money with it."

"WHY GET YOUR ISA FROM AN ALSO-RAN?

Why invest your money where it would get a lower return than it could?

Johnson Fry is the top performing small unit trust group* Johnson Fry funds consistently beat the competition....

[Version 1: So don't put your money with someone who won't work as hard for it as you do...

[Version 2: So... put your money with someone who will work as hard for it as you do...]

*Group weighted one year unit trust performance to 31/12/98. Source Standard & Poor's Micropal Awards 1998..."

The said words were accompanied by a large photograph which appeared in the middle of the page between the words WHY GET YOUR ISA" and "FROM AN ALSO-RAN?".

The photograph depicted racehorses running on a race-track. Under the leading horse appeared the name "Johnson Fry, under the horse in third place appeared the name "Jupiter""

"The Law.

The order made by Sir Michael Davies was made following the trial of a preliminary issue ordered under RSC Order 33 rule 3. Such an order would now be made under RSC Order rule 82, rule 3a.

It is important to bear in mind that the judge's decision was on the question of law whether the words complained of were capable of bearing the meanings alleged in paragraph 7 of the amended statement of claim. The actual meaning has yet to be decided. Nevertheless, it is helpful to refer to the recent guidance given by the Master of the Rolls giving judgment in the Court of Appeal in Skuse .v. Granada Television Ltd [1996] EMLR 278) in which he set out the principles as follows:

(1)The court should give to the material complained of the natural and ordinary meaning which it would have conveyed to the ordinary reasonable viewer watching the programme once.

(2)The hypothetical reasonable reader (or viewer) is not naive but he is not unduly suspicious. He can read between the lines. he can read in an implication more readily than a lawyer and may indulge in a certain amount of loose thinking, But he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available.

(3)while limiting its attention to what the defendant has actually said or written the court should be cautious of an over-elaborate analysis of the material in issue.

(4)A television audience would not give the programme the analytical attention of a lawyer to the meaning of a document, an auditor to the interpretation of accounts, or an academic to the content of a learned article.

(5)in deciding what impression the material complained of would have been likely to have on the hypothetical reasonable viewer the court are entitled )if not bound) to have regard to the impression it made on them.

(6)The court should not be too literal in its approach.

(7)A statement should be taken to be defamatory if it would tend to lower the plaintiff in the estimation of right-thinking members of society generality, or be likely to affect a person adversely in the estimation of reasonable people generally.

In context of the present case I do not think it is necessary to refer in more detail to the judgment of the Master of the Rolls, save to say that he cited a passage from Lord Devlin's speech in Lewis .v. Daily Telegraph Ltd [1964] AC 234 at 277 where Lord Devlin pointed out that a layman reads in an implication much more freely than a lawyer and added unfortunately, as the law of defamation has to take into account, is especially prone to do so when it is derogatory."

"8. Further or alternatively, in their natural and ordinary and/or inferential meaning and in the context in which they appear the said words bore and were understood to bear the following meanings, in which meanings they were false:

8.1 the Claimant has been placed third behind the Defendant in the group weighted performance figures for small unit trust groups for the year to 31 December 1998;

8.2 the Claimant was properly to be regarded as an "also-ran" by comparison with the Defendant.

8.3 the Defendant consistently and substantially out-performed the Claimant in the management of its funds.

8.4 the Claimant was unable or unwilling to work as hard or as effectively in the management of its funds as the Defendant."

"In transcript page 19".

"Damage

In the light of my conclusion that Dyson did not act maliciously in publishing the graph, it is not necessary for me to consider the issue of damage in the context of the claim in malicious falsehood. For completeness, however, I would say that it seems to me that, to the extent that it has any market effect at all (and depending on the circumstances this may be an important qualification), comparative advertising is by its nature calculated (in the sense of likely) to cause pecuniary damage to suppliers of the competing product, if only by reducing the market share of the competing product whilst increasing that of the product which is the subject of the comparative advertising. That, after all, is the purpose of comparative advertising. But where, as in the instant case, damages are sought in respect of a single example of comparative advertising in the context of a continuing marketing war between two suppliers, questions inevitably arise as to whether any substantial damage can properly be attributed to that particular piece of comparative advertising, and, if so, how such damage is to be assessed. I shall have to return to this aspect in the context of the claims based on infringement of trade mark."

in transcript page 25

"As to damages, I have three particular concerns

In the first place, as at present advised it seems to me to be a real possibility that any damage caused by the particular infringements which have been established in this case - i.e. by the publication of the graph and the flyer respectively- may be negligible, if not nominal. It occurs to me to wonder how many consumers are significantly influenced by a single piece of promotional material such as the graph or the flyer, to the point where they are deterred from purchasing a particular type of machine and/or persuaded to purchase a different type of machine. It must, after all, be remembered that, as I pointed out earlier, the graph and flyer were but single incidents in the course of a continuing marketing war between Electrolux and Dyson.

In the second place, I am concerned that the parties will be faced with very considerable practical difficulties in attempting to prove that the particular infringements caused any substantial damage. Short of providing the Court with a list of consumers prepared to testify that they were about to buy an EPS (or, as the case may be a DC01) until deterred from doing so by the flyer (or, as the case may be, the graph) I am, as at present advised, unable to envisage what evidence the parties could usefully put before the Court in support of a claim of loss of profits. The same general considerations apply in relation to any claim for an account of the profits made by the infringing party from its wrongful use of the other party's trade mark (should either party elect for such an account instead of claiming loss of profits).

In this connection, I refer once again to the general observations which I made about damages earlier in this judgment in the context of the malicious falsehood claims; the same observations apply, mutatis mutandis, in the context of the claims of infringement of trade mark.

In third place, I am concerned about the considerable time and expense which any inquiry as to damages in this case would, as I see it, inevitably involve.

In the light of these concerns, before directing any inquiry as to damages I must be satisfied that there is, at the very least, a realistic prospect of the inquiry resulting in the award of a sum which is other than negligible in relation to the time and costs involved. In Macdonald's Hamburgers Ltd .v. Burgerking (U.K.) Ltd [1987] FSR 112 CA. Fox LJ. said (at page 118)

"In my view the court must have a degree of discretion to refuse (an inquiry as to damages), with its attendant trouble and expense, if it is satisfied that such an inquiry would be fruitless"

See also the Sanitas Company Ltd v. Condy [1887] 4 RPC 530 at 533 per Kekewich J. cited by Fox LJ. later in his judgment in the Macdonalds case. In the instant case no evidence has been led by either party on the question of damages, and as matters stand I am not satisfied that an inquiry as to damages at the suit of either party would be justified. In particular, the mere fact that any party prosecuting such an inquiry would do so at its own risk as to costs does not seem to me (as at present advised) to provide sufficient justification for taking up the court's time in an exercise which may ultimately prove fruitless"

"in considering whether a trader in puffing his own goods had overstepped the permissible limit of denigration of his rival's goods, so as to render him liable to damages or injunction in an action for slander of goods, the proper test to be applied was whether a reasonable man would take the claim being made as one made seriously; the defendants' pamphlet purported to present the results of a scientific test, properly carried out, which must have been intended to be taken seriously and could not be assumed to be mere idle puff, and, accordingly, the defendants' motion should be dismissed with costs"

"If there had been in this case an imputation of intentional misrepresentation for the purpose of misleading purchasers, or a statement that Melon's food was positively injurious, or that it contained deleterious ingredients, and would be hurtful if it were used, I think there would have been a good ground of action; and if the authorities have not settled the law otherwise, I should even say that an averment of special damage ought not to be necessary. But when all that is done is making a comparison between the plaintiff's goods and the goods of the person issuing the advertisement and the statement made is that the plaintiff's goods are inferior in quality or inferior, it may be, in some special qualities, I think this cannot be regarded as a disparagement of which the law will take cognizance."

"But I must add a general comment. This is a case about advertising. The public are used to the ways of advertisers and expect a certain amount of hyperbole. In particular the public are used to advertisers claiming the good points of a product and ignoring others, advertisements claiming that you can "save ££££...." are common. carrying with them the notion that "savings" are related to amount of spend, and the public are reasonably used to comparisons- "knocking copy" as it is called in the advertising world. This is important in considering what the ordinary meaning may be. The test is whether a reasonable man would take the claim being made as one made seriously. De Beers Abrasive Products Ltd .v. International General Electric Co. of New York Ltd [1975] 1W.L.R. 972: the more precise the claim the more it is likely to be so taken - the more general or fuzzy the less so."

Duffield to Thomas - 27th April 1999.

"I trust that the advertisement will not be repeated and that we will not need to unleash the lawyers"

Olswang to Johnson Fry - 27th April 1999

"After the advertisement was first published our client understood that Johnson Fry was not intending to use Jupiter's name in any of your advertisements in future, but it appears that this position has now changed. We therefore give you notice that should this advertisement, or any similar advertisement damaging to our client be published in the future we are instructed to issue proceedings without further notice."

Thomas to Duffield - 30th April 1999

"Accordingly, I confirm that we would be prepared to agree not to use Jupiter's name in any further planned publication of this advert on you confirming in writing to us that this would be accepted by you in full and final settlement of any alleged claims arising from the publications made to date. As I indicated to you on the telephone today, we are unable to withdraw the following adverts"

Olswang to Thomas - 7th May 1999

"Our client accepts that there are practical constraints about withdrawing advertisements that have already been placed. Jupiter is therefore prepared to agree not to pursue its claims in relation to publications todate nor claims in relation to the publication listed on the second page of your letter (with the exception of the Willis Owen publications which are dealt with below), provided you give an undertaking not to use Jupiter's name in any further publication of the offending advertisement, nor any similar advertisement. Please may we receive your confirmation of this undertaking in writing.

So far as the Willis Owen advertisements are concerned, we have made enquiries and understand that at the time your letter of 30 April was written, printing of the inserts had not started. Our client objects strongly to further circulation of the false and defamatory allegations of which it has explained. Our client therefore requires that the insert and client mailing be withdrawn and replaced with an advertisement which does not refer to Jupiter. Should any further publication of these allegations occur, whether in Willis Owen advertisements and client mailings or otherwise, we are instructed to issue proceedings forthwith in relation to all publications of the offending advertisements"

Johnson Fry to Olswang - 10th May 1999

"As requested, we undertake not to use Jupiter's name in any further publication of the advertisement that has been the subject of our recent correspondence and further undertake not to use Jupiter's name in any similar advertisement in the future. For the avoidance of doubt this undertaking is given without any admission as to liability being made, and does not cover Willis Owen advertisements which we discuss below.

We have discussed the timing of the Willis Owen advertisement and confirm that we made our best efforts to replace the advertisement but were advised by Willis Owen that this was not possible"

Olswang to Johnson Fry - 11th May 1999

"Our client notes that the Willis Owen advertisement will be overprinted with a black box over Jupiter's name. Our client requires that Jupiter's name be illegible, failing which it reserves its right to bring proceedings in relation to this matter.

On the basis, our client is prepared to resolve the matter on the basis that you provide an undertaking in the terms of your letter of 10 May in open correspondence. May we please have this by return."

Johnson Fry to Olswang - 13th May 1999

"Your letter makes a request for Johnson Fry to provide certain undertakings and these are provided below.

The undertakings are given without any admission as to liability being made and strictly on the basis of the offer contained in your letter of 11 may 1999, namely that they will be accepted by your client in full and final settlement of this matter, including for the avoidance of doubt, any alleged claim arising from the publications made to date and the publication of the Willis Owen advertisement that has been subject of our recent correspondence and further undertake not to use Jupiter's name in any similar advertisement.

We understand that Willis Owen have complied with your request"

"The undertaking they gave was not to use Jupiter's name in any further publication of the advertisement. However, they did. Whether that was their fault or the fault of their printers is of no concern to Jupiter but a matter for Johnson Fry and the printers to resolve between themselves, whether by third party proceedings or amicable agreement"

"The overprinting arrangements.

Following the compromise agreement it was agreed between Johnson Fry and Willis Owen that the advertisement should appear in the Willis Owen guide using the wording described as Version 2, but without Jupiter's name, which would be obliterated by overprinting. Willis Owen provided Johnson Fry with proof of the advertisement in this agreed form ('Version 3'). In this proof [page 13] Jupiter's name was wholly illegible. Johnson Fry approved the proof believing and intending that the advertisement should appear in that form and in that form only. Accordingly it is admitted and averred that Johnson Fry authorised the publication by Willis Owen of the advertisement in Version 3 only. It is denied that Johnson Fry authorised publication of the advertisement in the Willis Owen guide in any other form."