Final version (July 21, 2004)

LIDC - 2004Question A: Comparative Advertising

Which framework for the regulation of comparative advertising?

SUMMARY REPORT

International Rapporteur: Dr. Gusztáv Bacher, attorney-at-lawSZECSKAY LAW FIRM – MOQUET BORDE (Hungary)gusztav.bacher@szecskay.hu

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I. INTRODUCTION 3II. ISSUES RELATING TO THE LEGALITY OF COMPARATIVE ADVERTISING 5

1. Legal framework for the applicable rules on comparative advertising 51.1 Sources of law 61.2 Area of law 51.3 Interests to be protected 71.4 Justification of specific rules 7

2. Definition of comparative advertising 82.1 Legal definition 82.2 Methods of identifying the competitor 82.3 Advertisements claiming superiority 10

3. Conditions for lawful comparative advertising 113.1 Admissibility of comparative advertising in general 113.2 The criteria for objective comparison 123.3 The criteria for the same need/same purpose of goods 133.4 Misleading nature of the comparative advertisements 143.5 Creating confusion with the competitor in the comparative advertising 153.6 Discrediting or denigrating the competitor 163.7 Price comparison 173.8 Further criteria for the admissibility of comparative advertisement 18

3.8.1. Provisions of the national law 183.8.2 Provisions of self-regulatory code of conducts 18

3.9 The concept of the EU Commission’s Proposed Directive on the misleading nature of an advertisement 19

4. Use of competitor’s trademarks or trade names 204.1 Conflict between trademark law and the need to refer to the competitor’s trademark in the

comparative advertising 204.2 Limits of the use of third party’s trademark 21

4.2.1 Taking unfair advantage of third party’s trademark 214.2.2 Limitation of use to the word format of the trademark 23

4.3 The use of a third party’s other intellectual property rights (i.e., design, copyright) 245. Designation of origin 256. Burden of proof 267. Self-regulatory code of conducts 27

7.1 Types of self-regulatory code of conducts and their binding nature 277.2 Professional organizations and EU antitrust regulation 287.3 Special rules applicable to comparative advertising in self-regulatory code of conducts 29

8. Comparison made by third parties 308.1 Test comparisons 308.2 The use of test result in comparative advertising 31

9. Enforcement of claims against unpermitted comparative advertising, cross-border advertising 31

III. EVALUATION, HARMONIZATION 32

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The present summary report is prepared on the basis of the national reports received from the working groups in the following countries:

This report summarizes the answers to a questionnaire which have been received from the working groups in the following countries:

COUNTRY/GROUP NATIONAL REPORTER

Austria Dr. Peter PöchMag. Melanie Gufler

Belgium Laurent de Brouwer

Françoise Jacques de Dixmude

France Maître Jean-Jacques Le Pen

Germany Prof. Dr. Helmut Köhler

Hungary Dr. Alexander Vida

Italy Avv.Vincenzo Franceschelli

Spain Raul Bercovitz

Switzerland Dr. Dominique Junod Moser

The Netherlands Erik Vollebregt

United Kingdom Katherine Tsang

United States John M. Richardson

I would like to thank all the National Reporters who have contributed for their excellent and comprehensive reports on the state of play in their respective jurisdictions. The reports demonstrate a high level of knowledge and interest in the issues raised by this question.

No reports have as yet been received from Brazil and Japan. The lack of written reports from these countries is regrettable considering that due to this situation the summary report below is based only on the national laws of certain EU Member States, Switzerland and the U.S. However, the review of the applicable laws of those countries outside Europe is also essential and indispensable in order to assess the problems of further harmonization on a worldwide level. The special point of view from countries outside the EU would therefore be of particular significance in order to be able to present a well-balanced overview. Therefore, I kindly ask the national reporters of those countries to present their national laws during the Budapest discussions.

I. INTRODUCTION

With regard to the circumstance that the present summary report will be read by a broader scope of LIDC members than the National Reporters already participated in the project, it

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seems to be justified to reiterate the basic assumptions and preliminary remarks on which the extensive questionnaire was based.

A. Comparative advertising, as a special form of advertising, is a sales promotion device that compares the products or services of one undertaking with those of another, or with those of other competitors.

Objective comparative advertising improves the quality of information available to consumers enabling them to make well-founded and more informed decisions relating to the choice between competing products/services by demonstrating the merits of various comparable products. In this way, comparative advertising can also stimulate competition between suppliers of goods and services to the consumer's advantage.

All comparative advertising is designed to highlight the advantages of the goods or services offered by the advertiser as compared to those of a competitor. In order to achieve this objective, the message of the advertisement must necessarily underline the differences between the goods or services compared by describing their main characteristics. The comparison made by the advertiser will necessarily flow from such a description.

In business, the constitutional (fundamental) principle regarding freedom of speech is inextricably intertwined with the freedom of advertising.1

However, comparisons between goods and services of different undertakings carry with them some significant risks. There is a danger that once undertakings address the merits and inadequacies of competing goods or services, they may be tempted to denigrate them or derive unfair advantages from such inaccurate comparisons. Just like traditional forms of advertising, comparative advertising seeks to both assist the development of the undertaking concerned and to inform consumers. Although both forms of advertising seek to attract customers, in case of comparative advertising, commercial relationships may be exposed to the constant threat of unfair practices. It is therefore difficult to dispute the necessity for all comparative advertising to be subject to comprehensive and straightforward legal rules, laying down strict requirements based on considerations of good faith and fair practices in commercial relationships.

Indeed, the very nature of comparative advertising affects the interests of consumers as well as the interests of competitors and, in this way, those of the general public.

B. While in the United States comparative advertising has been a well-recognized and acceptable form of advertising, the majority of European countries have been hostile to such advertising for a long time and this form of advertising was considered as a per se unfair market practice.

1 Pursuant to Article 10 of the European Convention on Human Rights (Rome, 1950), every person has the right to freedom of expression. This right shall include freedom to hold opinions and impart information and ideas without interference by public authority. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society .. for the protection of the reputation or the rights of others. (This limitation has an important role in case of comparative advertising.)

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Only recently, following the adoption of Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997 was the introduction of comparative advertising into the national legal systems of all EU member states (hereinafter: the "Directive 97/55") accepted as a matter of principle; however only subject to very strict conditions as to the circumstances in which such advertising would be permitted. To this end, Directive 97/55/EC amended Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising (hereinafter: the "Directive") on the basis of the consideration that the acceptance or non-acceptance of comparative advertising, in the various national laws, may constitute an obstacle to the free movement of goods and services and create distortions vis-à-vis of competition; therefore, the freedom to use comparative advertising should be assured.

The European Court of Justice (ECJ) and the Court of First Instance have interpreted the meaning of certain provisions of the Directive in three cases: (i) Case C-112/99, Toshiba Europe GmbH v. Katun Germany GmbH, 25 October 2001; (ii) Case C-44/01, Pippig Augenoptik GmbH & Co. KG v. Hartlauer Handelsgesellschaft mbH, 8 April 2003, and (iii) Case T-144/99, Institute of Professional Representatives before the European Patent Office v Commission of the European Communities.

C. LIDC has already dealt with the issue of comparative advertising: in 1980, LIDC adopted a resolution on comparative advertising, and in 1994, at the Congress of Berlin, LIDC adopted the resolution on the harmonization of the laws relating to unfair competition including the principles to be taken into account in the course of using a third party's trademark in comparative advertising.

D. The harmonization of advertising standards is important because companies make large expenditures for their advertising campaigns, and, in particular, multinational companies may desire to use in all the countries where they do business identical advertisements (except with respect to the language and elements which may run against national morals and culture). Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and may assist them in making rational purchasing decisions. Thus, comparative advertising may encourage product improvement as well as innovation, and can lead to lower prices in the marketplace.

Therefore, the carrying out of a detailed survey regarding the national laws relating to comparative advertising and adopting a resolution relating to the harmonization of requirements is both justified and timely.

A further reason for carrying out such survey was that the previous surveys in this field had been carried out before the adoption of the Directive 97/55 or shortly after its adoption. As the result of such research, the WIPO issued its comparative law publication entitled - Protection Against Unfair Competition (Geneva 1994). Within the framework of LIDC's work, the study of Michael Golding and David Latham shall be referred to (Revue 1./1997). In 1998, at the Congress in Rio, the AIPPI dealt with the question of comparative advertising, and in particular, with the issue of the impairment of goodwill or disparagement resulting from same (Question 140).

It is time to analyze the experiences and practices which have emerged in recent years under the new rules and the new interpretation of the requirements for comparative

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advertisements. The proposed amendment of the Directive by the European Commission may provide an opportunity for these proposals to fine-tune the present rules.

With respect to the goal of further harmonization on a worldwide level, it should be stated that the WIPO Model Provisions on Protection Against Unfair Competition (1996) does not deal with the issue of comparative advertising, although its inclusion would have been appropriate.

It is in this context that LIDC decided to place the Question of comparative advertising onto the agenda of the Budapest Congress of 2004.

II. ISSUES RELATING TO THE LEGALITY OF COMPARATIVE ADVERTISING

1. LEGAL FRAMEWORK FOR THE APPLICABLE RULES ON COMPARATIVE ADVERTISING

1.1 Sources of law

In the continental European countries, the rules on comparative advertising are based on statutory law, although the interpretation and construction of such rules have been developed by the court practice. In addition to these statutory rules, there are professional codes and industry self-regulation rules relating to comparative advertising (See Section 7 below). Further, in certain countries (Spain), an extensive practice has evolved on the basis of arbitration awards rendered by such self-regulated association. In the UK, the rules on comparative advertising are a mixture of statutory law and case law constituting a three-layered system comprising: (i) legislation creating a system of civil and criminal actions regulating advertising; (ii) case law/common law prohibiting advertising that constitutes malicious falsehood; and (iii) self-regulation by virtue of various codes. There is specific case law in the area of malicious falsehood which addresses comparative advertising.

On the basis of the national reports received, it can be concluded that all the EU countries have implemented the Directive in their legal systems, with essentially identical criteria set forth in the Directive. However, in certain countries (Austria), the legislator seemed reluctant to regulate the conditions on comparative advertising in a more detailed way. In particular, the conditions for comparative advertising as mentioned in Article 3a (1) of the Directive were not expressly incorporated in the statutory law: the newly introduced provision on comparative advertising states – on a general basis - that comparative advertising must comply with the rules of “unfair competition” (i.e., general clause, misleading acts, disparagement of an enterprise and misappropriation of business designations). Because of the previous extensive court practice, the Austrian national reporters do not consider that the Austrian courts will have any difficulties with such a “short” implementation of the Directive.

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1.2 Area of law

The national reports indicate that the rules on comparative advertising belong to different areas of law.

The majority of the national reports indicate that the rules on comparative advertising are part of the unfair competition law (Austria, Germany, Italy, the Netherlands, Switzerland), and there are specific provisions applicable to comparative advertising in addition to the general rules of unfair competition. However, the Dutch report indicates that the provisions do not apply in addition to general rules on unfair competition but they are a lex specialis of the general tort provision.

Further, under the Hungarian and Spanish law, there are rules on comparative advertising both within the unfair competition law and within the advertising law which is - in this respect - of an administrative law nature. When both fields of law are invoked before a court, the Spanish jurisprudence has established that the advertising law must prevail in case of any conflict or contradiction. However, both regulations are quite homogeneous.

Moreover, in Spain, once an act of illegal comparative advertising is adjudicated, the advertising law provides that such act may be also considered an infringement of the consumer protection law. But this is only for the purpose of imposing administrative fines or sanctions on the infringer. The consumer protection law does not have provisions allowing for an assessment of the existence of an act of illegal comparative advertising.

In France, the rules on comparative advertising belong to the framework of consumer’s protection; however, the criteria determining the legality of the comparative advertising refer also to other areas of law, namely to competition law, unfair competition law, advertising law and trade mark law. In Belgium, the legislation implementing the Directive 97/55 belongs to both unfair competition law and consumer protection law.

In the UK, the rules belong to various areas of the law ranging from trade mark infringement (including passing-off), to unfair competition2, to consumer protection, to advertising law. Exclusively, the British report referred to the possibility of criminal sanctions.

In the U.S., the right to “commercial” speech has been recognized by the Supreme Court as being protected by the First Amendment to the U.S. Constitution but with presently less than the full scope of the protection of freedom of speech as to political and social issues of public concern. The core value being protected by this constitutional rule is the right of access to truthful information about lawful commercial activities, which, in context, is not misleading. There is no constitutional value in untrue or deceptive speech. State regulation must be based on a substantial interest, the regulation must directly related to that interest, and there must be proportionality in the scope of the regulation.

2 The British reporters note that this refers to the general concept of unfair competition, not the cause of action of unfair competition that is available in some countries on the European Continent.

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1.3 Interests to be protected

Irrespective of the fact as to which area of the law governs comparative advertising, the interests to be protected simultaneously are the following:

(i) the protection of competitors;(ii) the protection of proprietary rightholders (i.e., trademark, trade name); (iii) the protection of consumers; and (iv) the protection of the general public interest in undistorted competition3.

Generally speaking, comparative advertising should enable advertisers to objectively demonstrate the merits of their products. Based on this objective information, consumers may make informed and therefore efficient choices. Comparative advertising which aims to objectively and truthfully inform the consumer promotes the transparency of the market. Market transparency is also deemed to benefit the public interest as the functioning of competition is improved resulting in keeping down prices and improving products.

The British reporter observes that there is no one authoritative statement that sets out the principles of the UK system or the interests that are to be protected although the underlying aim would appear to be that of fair trading, and further that regard should be had to the interests of all concerned - in particular - the public interest. This is tempered with a recognized need to safeguard the interests of owners of registered trade marks.

1.4 Justification of specific rules

The national reporters agree that specific conditions should be set forth for comparative advertisements in addition to the general rules of unfair competition.

Comparative advertising is a legitimate means of informing consumers of the advantage of the product / service compared with that of a competitor. In order to guarantee that it fulfils this objective, comparative advertising must be used in a fair manner.

Due to the special characteristics of comparative advertising, namely the direct or indirect reference in the advertising to identifiable competitors, it is important to protect the interests of such competitors as well in order to prevent (i) disparagement, or (ii) taking of unfair advantage of the competitor's reputation. This consideration justifies the application of the general rules on unfair competition very thoroughly and – where necessary – the application of special conditions that comparative advertising should comply with in order to ensure that disparagements of competitors be prevented.

It is important to determine which practices relating to comparative advertising may distort competition, be detrimental to competitors and have an adverse effect on consumer choice. In particular, it is important to establish special criteria for objective comparisons and rules with regard to the possibility to compare products and services. Thus, relying on the general rules for unfair competition does not provide sufficient legal certainty and leaves too wide a scope

3 It cannot be established on the basis of the national reports whether in case of comparative advertisements, the protection of the general public interest in undistorted competition constitutes an independent interest to be protected or this is an aggregate result arising from the protection of consumers and competitors.

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for divergence of national laws and jurisprudence which would hinder cross-border trade. It is for further discussion how precisely such criteria can be established in the law.

2. DEFINITION OF COMPARATIVE ADVERTISING

2.1 Legal definition

Pursuant to Article 2a. of the Directive, “comparative advertising means any advertising which explicitly or by implication identifies a competitor, or goods or services offered by a competitor.”

Thus, only the comparison made for commercial purposes falls under the scope of comparative advertising, as the French reporter emphasizes. Consequently, comparisons (tests) made by third parties (i.e., consumer organizations) to provide information to the public does not constitute a comparative advertisement provided it does not promote any goods or services (See Section 8).

The definitions in the national laws of EU countries are identical or nearly identical to that of the Directive. The definition in the UK's law on point, however, in view of the British reporter, may broaden the scope of the definition by indicating that the identification of the competitor, either explicitly or by implication, can be effectuated “in any way”.

The Swiss law does not contain a definition of comparative advertising, and the Swiss reporter points out that the jurisdiction limited itself to a very superficial attempt at defining it: comparative advertising refers to competitors. Thus, the notion of comparative advertising is construed broadly, and entails - contrary to EU law - comparative tests made by third parties (see Section 8.1).

Recital (6) of the Directive 97/55 sets forth that it is desirable to provide a broad concept of comparative advertising in order to cover all types of comparative advertising. To this end, the ECJ held that in order for there to be comparative advertising within the meaning of Article 2a. of Directive, it is sufficient for a representation to be made in any form which refers, even by implication, to a competitor or to the goods or services which he offers. Therefore, if the competing products are merely referred to within the advertising, it in itself constitutes an instance of comparative advertising and it is irrelevant whether an actual comparison is made between the goods and services offered by the advertiser and those of a competitor (see C-112/99, Toshiba, para 31.).

2.2 Methods of identifying the competitor

There are several different ways to identify a competitor in a comparative advertisement or, even if the competitor's name is not mentioned, its product. Such reference can be made directly or indirectly, by implication or insinuation.

As the national reports point out, any reference made to the competitor or its product, explicitly or implicitly, is considered to be comparative advertising. It is not required to expressly mention the name of the competitor in the comparative advertising. However, it must be clear that the competitor is affected by the statement; therefore, such reference must be clear and unmistakable, and must establish in any manner a link between the goods or services of the advertiser and the goods or services of one or more competitors.

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Under Swiss law, comparative advertising may refer to an indeterminate number of competitors. Pursuant to UK case law, regarding implied references to a competitor, case law suggests that where an expression is such that it can only be construed as referring to one competitor, that is likely to amount to identifying that one competitor.

A competitor is recognizable directly if it is in particular mentioned in the comparison or figuratively represented. To be covered by the scope of the definition, it is also sufficient, as the German reporter indicates examples, if the competitor can be recognized indirectly, i. e. on the basis of: (i) reference to the advertisement of the competitor, (ii) reference to business circumstances of the competitor, (iii) direct or indirect group designations, or (iv) situation on the relevant market. As such, in Austria, an advertisement claiming superiority was deemed to include a reference to identifiable competitor(s), as the number of the advertiser’s competitors on the relevant market was very small and could easily be managed. Further, if an undertaking has a dominant position in the market, Belgian jurisprudence considers the comparative advertising as a comparison with such dominant undertaking.

Hungarian legal literature (scholarly opinion) makes a distinction between so-called polarized and unpolarized advertising on the basis of the circumstance that in the former specific competitor(s) are identifiable, while in the later the comparison generally refers to the competing products available on the market.

In all jurisdictions, it does not make any difference whether the comparison is direct or indirect. Obviously, in cases of indirect comparison, it may be easier to prove that the advertising does not constitute comparative advertising, since the implied reference to a competitor, or to his goods, services must be clear enough for a standard (well-informed) consumer and there is more room for interpretation for the courts in such types of cases. Thus, the understanding of the respective target group of the advertising shall be taken into consideration.

Austrian case law and doctrine have mentioned several kinds of “comparisons” that are deemed outside the definition of comparative advertising. The definition of comparative advertising clearly does not include comparisons of an advertiser’s own products. For example, in a very recent decision, an advertiser promoted a dishwasher detergent by using the phrase “one hundred per cent more washing power” while it compared its own product. Further, so-called “instead of” price comparisons (the classic pattern is to say “instead of” and cross out a higher price) which do not refer to an identifiable competitor are outside the definition of comparative advertising. Although “instead of” prices were considered as a special kind of price comparison, they were allowed if they were not misleading. There must not be any doubt what the higher price was: the own price of the advertiser, a recommended price of the producer, the average market price, etc. In addition, “abstract” comparisons which do not refer to an identifiable competitor or product are also outside the scope of the definition. Under Austrian law, so-called “system comparison” are considered as abstract comparative advertising because they usually do not refer to an identifiable competitor or product. Generally speaking, a system comparison aims at demonstrating the merits of different means of distribution, production, application or functioning of products or services (for example, the comparison between the system “tampon” versus the system “sanitary towel”).

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2.3 Advertisements claiming superiority

Certain advertisements claim the superiority or uniqueness of the product (like "the best" and use of other superlatives) which involves - without indicating any specific competitor - per se a comparison with all other products of the same nature available on the market.

There is certain divergence among the jurisdictions examined as to whether advertisements claiming superiority or uniqueness of the product fall under the scope of comparative advertising, or such advertisements are subject to general rules (i.e., the prohibition of misleading advertising).

In Switzerland and the UK, such advertisements constitute a form of comparative advertising. In the Netherlands such advertisements may constitute a form of comparative advertising if the public will interpret the advertisement as a reference to one or more specific competitors rather than every other competitor in the market. The adjudications mentioned in the UK report are based on the examination of whether the advertiser was able to show that the statements in the advertising were true and not misleading. Under Swiss law, however, advertising exaggeration, i.e. obtrusive praise that does not make sense, that is recognizable as such and therefore not taken seriously by the public, and obtrusive exaggeration or advertising resorting to value judgment do not fall within the ambit of the rules of comparative advertising. They may however be unlawful if they amount to unnecessary disparagement. In Italy, using superlatives in the advertising is considered as a kind of indirect comparison with all market participants in the specific field of goods/services.

In contrast, in other countries (Austria, Belgium, France, Germany, Hungary, Spain) advertisements claiming superiority or uniqueness of the product - which do not include a reference to an identifiable competitor - are considered to be outside the definition of comparative advertising, and they are subject to general rules. In particular, they must not be misleading and aggressive tendencies should be avoided as well as global disparagements. The Hungarian legal practice makes a difference between a comparative advertisement (with a definition identical to that of the Directive) and an advertisement containing a comparison (where no competitor can be identified). Considered as an advertisement containing a comparison, the competition authority found the slogan “it removes easily the stain and scale which other products leave” misleading because the product – according to the instruction of use - could not be used on all surfaces in the bathroom and kitchen.

Further, the rules on comparative advertising will indeed apply to advertisements claiming superiority or uniqueness if there are only very few competitors and it is clear who is affected by a statement. For example, the Austrian Supreme Court came to this conclusion in a case where the advertiser of a newspaper claimed to be “faster and more current” and there was only one competing newspaper in the relevant market. On the other hand, in France, the use of the slogan “No. 1 of newspaper advertisements” was not considered as a comparative advertisement since the slogan did not refer, directly or indirectly, to any competitor newspaper. However, the slogan was considered to be unfair.

It can be concluded that the admissibility of advertisements claiming superiority can be subject either to specific rules on comparative advertising or to general rules (i.e., prohibition of misleading). It seems to be desirable to apply the specific rules on comparative advertising if it can be identified with which competitor the comparison is made and such specific competitor can be regarded as the injured party.

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3. CONDITIONS FOR LAWFUL COMPARATIVE ADVERTISING

3.1 Admissibility of comparative advertising in general

All national reports set forth that comparative advertising is generally permitted, however, subject to certain circumstances set forth in the national law.

Comparative advertising is not expressly mentioned in Article 10bis of the Paris Convention. However, it seems to be clear that comparative advertising should comply with restrictions applicable to all advertisements: that is, it shall not cause confusion, mislead, or discredit a competitor. Due to the special nature of comparative advertising, however, certain additional requirements should be applied to this type of advertising (for the justification of such specific rules see Section 1.4).

Since the overwhelming majority of national reports were received from EU Member States (reports from jurisdictions outside the EU were received from Switzerland and U.S.), the admissibility of comparative advertising will be examined in the light of the criteria set forth in the Directive. Pursuant to Article 3(a)(1) of the Directive, comparative advertising shall, as far as the comparison is concerned, be permitted when the following conditions are met:

(a) it is not misleading;(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 create confusion in the market place 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;

(e) it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor;

(f) for products with a designation of origin, it relates in each case to products with the same designation;

(g) 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;

(h) it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name, and

(i) any comparison referring to a special offer shall indicate in a clear and unequivocal way the date on which the offer ends or, where appropriate, that the special offer is subject to the availability of the goods and services, and, where the special offer has not yet begun, the date of the start of the period during which the special price or other specific conditions shall apply.

Recital (11) of the Directive provides that the above listed conditions for comparative advertising should be cumulative and should be respected in their entirety. Further, the ECJ held that the Directive carried out an exhaustive harmonization of the conditions under which comparative advertising in Member States might be lawful. Such a harmonization implies by its nature that the lawfulness of comparative advertising throughout the Community is to be

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assessed solely by the criteria laid down by the Community legislation. Therefore, stricter national provisions on the protection against misleading advertising cannot be applied to comparative advertising with regard to the form and content of the comparison (Case C-44/01, Pippig, para 44).

No national report indicated that there are additional criteria in the respective national law for the admissibility of the comparative advertising. The Swiss report indicated the application of almost the same criteria as well. However, there are certain further criteria applicable with respect to certain goods / services or set forth in professional codes / industry self regulation rules relating to comparative advertising (see Section 7 below).

No national report suggested that any further criteria should be added to those set forth above.

On the other hand, the U.S. Federal Trade Commission - in its statement of policy regarding comparative advertising - evaluates comparative advertising in the same manner as it evaluates all other advertising techniques. The ultimate question is whether or not the advertising has a tendency or capacity to be false or deceptive.

Section 43(a) of the Lanham Act is a federal unfair competition provision which has been very liberally interpreted by the federal courts with the result that it is the overwhelming favorite of those seeking to prevent alleged acts of unfair competition. Section 43(a) of the Lanham Act provides that "any person who, on or in connection with any goods or services . . . uses in commerce any ... false or misleading description of fact, or false or misleading representation of fact, which (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods ... shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act." The US. Lanham Act contemplates a free market into which advertisers are not to inject false or misleading information, but in which, as in any free market, it is up to the consumer to see to it that only the product that best serves the consumer's needs is bought. If the competitor believes consumers will make more optimal decisions if they consider information other than that provided by advertiser, its solution is to augment rather than censor the available truthful information.

On the basis of the national reports, the present summary below analyzes, both in the B2B and in B2C aspects of comparative advertising: (i) how the courts interpret the criteria relating to comparative advertising, and (ii) explores same and/or different requirements for comparative advertisements to be permitted. (Please note that although included within the above requirements, the criteria relating to the use of a third party's trademark and to the issue of the same designation of origin will be examined under separate headings.)

3.2 The criteria for objective comparison

As a general rule, comparative advertising must be based on accurate data which is objectively verifiable and true. The majority of national reports indicate that the comparative advertising must objectively relate to:

- material,- relevant,

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- verifiable,- true, and- representative features of the goods or services.

The ECJ held that comparison of products with the same technical functionalities constituted an objective comparison (C-112/99, Toshiba/Katun, paragraph 39).

The Austrian reporter commented that the public must be provided with all relevant information to make an objective decision on their advantage. Features or characteristics of a product or service are considered to be relevant for a comparison if they are appropriate to have a bearing on a consumer’s decisions. The Belgian reporter observed that the wording of the Directive does not require that the advertiser shall exhaustively compare all advantages and disadvantages of the compared products. The French reporter points out that the comparison cannot be made relating to features of secondary importance.

All relevant differences between the compared products must be disclosed. This is, in particular, important if the compared products are not similar and the public is not aware of the differences between the products.

It is also not allowed to base the comparison on incomplete information if this is appropriate to influence a consumer’s decision to purchase a product or to generally claim the superiority of the own products without providing any concrete information.

In addition, it is required that the compared goods and services are objectively comparable with respect to their quantity and quality.

Hungarian advertising law further specifies that it is forbidden to make any advertisement public, purporting or alluding a true option, that contains a comparison with a fictitious product or undertaking, with a product that is not available on the market, with a product or undertaking that cannot be clearly identified, or with a product or undertaking not of similar nature.

The majority of national reports indicated that comparisons based only on subjective factors are not allowed. However, pursuant to the Belgian and Dutch case law, it is allowed to make a comparison based on subjective factors, as long as they have been measured in an objective manner (i.e., taste of pet food). The Swiss reporter noted that subjective or personal advertising is admissible since the person of the seller/provider may play a role in the buyers' decision (e.g., in relation to securities). The same rules as those of objective comparative advertising are applicable. The doctrine recommends that the requirements apply more strictly since subjective comparison may be more easily deemed to unnecessarily disparage the competitor because the facts are often extraneous to competition.

3.3 The criteria for the same need/same purpose of goods

In the great majority of the countries from where national reports were received, there is very little case law on this point. The UK reporter considered that, according to UK legal literature, the case-law under trademark law relating to the term “identical or similar goods or services” is of little relevance to its interpretation.

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In view of the German reporter, the terms “same need/same purpose” may not be understood too closely. A functional identity of the offered goods or services is not necessary. Goods and services in a comparative advertising must be interchangeable and offered on the same relevant market to the consumers.

Under Austrian law, this requirement means that products or services which are not similar may be subject of a comparison as long as they can be substituted with regard to the need or purpose they meet. According to consistent court practice, the compared products or services must be comparable. It is not required to compare identical products or services. However, the differences between the compared products or services must not reach an extent of significance to cause confusion among consumers. For example, a comparative price advertising which involves two kinds of construction materials and is truthful with respect to the differences between those materials, would be lawful. However, in another case, the Austrian Supreme Court found that a tabloid and a newspaper focusing on detailed information in the fields of politics, economics and culture were not comparable.

The Austrian reporter concludes that a comparison of goods and services which are not similar is allowed, if the differences between the compared products or services are disclosed or if the public is aware of the differences.

It follows from the Belgian report that if an advertisement compares goods which are not competing products because they are not for the same need, and they are therefore not substitutable, the advertisement cannot be considered as comparative advertisement and its is subject to general rules of unfair competition (i.e., an advertisement compared the product Viacreme, a gel stimulating female orgasm with Viagra.) 3.4 Misleading nature of the comparative advertisements

Generally speaking, when an advertisement is truthful, it is unlikely to be found to be misleading. Pursuant to Article 2(2) of Directive 450/84, an advertisement is misleading if “in any way, including its representation, it deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and if, by reason of its deceptive nature, it is likely to affect their economic behavior or, for those reasons, injures or is likely to injure a competitor.“

The U.S. reporter noted that to succeed in a claim brought pursuant to Lanham Act, the plaintiff must demonstrate that the advertisement is either literally false or that the advertisement, though literally true, is likely to mislead and confuse consumers.

It is a general understanding in the national reports that whether an information is misleading depends on the understanding of the relevant public. As a rule, the relevant public will be everybody. In specific cases, where the addressees of the advertising are limited circles (like physicians) their understanding will be decisive. The average consumer or average member of the relevant public and his first understanding without thorough examination will be decisive. The standard is an average consumer who is reasonably well-informed. An advertisement would be forbidden, if certain part of the public would be mislead. Such relevant part of the public is defined in the Swiss law as a not insignificant part of the public, in the Austrian law as a still relevant part, that is 10-15% of the public, and in the UK law as a substantial proportion of the reasonable audience. In addition, the misleading information must be related to and must favorably influence the decision to buy a product or to hire services.

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The above mentioned general rules apply in the same way when assessing the lawfulness of comparative advertising. The Spanish reporter commented that a comparative advertising is more likely to be misleading as it must meet a higher standard of accuracy, and more requirements are established for this type of advertising.

The British reporter cites interesting cases. In assessing whether a comparative advertisement is misleading, the courts recognize that the public is used to a certain amount of hyperbole/”puffing” by advertisers and that statements may be subject to conditions and small print. The test is whether a reasonable person would believe the claim to be serious or not. Cases where the court has found comparative advertisements not to be misleading appear to be where the court thinks consumers would be aware of, or perhaps expect, additional facts and conditions which are not stated in the advertisement e.g.:

● in a comparison of the price of flights where the claimant’s flights were to airports in the city center whereas the defendant’s flights were to airports many kilometers from the city and certain conditions were attached to the defendant’s flights;

● in a comparison of the price of mobile phone services where the claimant said that on average its users saved £20 a month compared with a competitor’s users, without mentioning that the price may vary depending on the way of usage.

These cases can be contrasted with a case where the court found a comparative advertisement to be misleading: the advertisement included results of tests on the products being compared, however, those tests had not been carried out under the normal mode of operation of those products and this was not apparent from the advertisement.

3.5 Creating confusion with the competitor in the comparative advertising

Pursuant to the Directive, comparative advertising shall be permitted when it does not create confusion in the market place 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.

Under Austrian law, a comparative advertising creates confusion in the market if the public is mistaken as to the belonging of a name, trademark, designation, corporate identity etc. to a certain undertaking or as to the origin of the goods and services. There is confusion in case the public could believe that the goods or services come from the same undertaking or from economically linked undertakings. The Dutch and the German reporters also cite cases where the reader of comparative advertising may believe that the advertising company is combined with the competitor. Further, as the Austrian reporter observes, in relation to comparative advertising, likelihood of confusion may in particular occur when the advertiser tries to describe the quality of his own products by comparing them to well known other products and taking advantage of their standing and reputation. Such behavior is considered as "parasitism" under the French law. The Belgian reporter refers to an advertisement comparing generic and original pharmaceutical products which was found to create confusion because of comparing these two different types of medicine.

When assessing the likelihood of confusion in relation to comparative advertising, the distinctiveness of the name or special designation, the similarity of the name and special designation as well as the area of operation which is typical for the undertakings has to be considered.

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While the Hungarian reporter refers to court practice in trademark infringement cases relating to the concept of “likelihood of confusion”, the British reporter observes that such analogous UK case law does not appear to be relevant.

Under Swiss law, the provisions dealing specifically with comparative advertising does not contain a prohibition of confusion. However, similarly to the Austrian case law, the exploitation of the good reputation of another product may lead to confusion. For instance, when the reference to another trademark is combined with words such as “type, “kind”, a risk of confusion may occur, since the public does not take such words into account.

3.6 Discrediting or denigrating the competitor

Comparative advertising discredits or denigrates the competitor, if the comparison leads to a decrease of the appreciation of the competitor and his products. However, it is generally not considered as a denigration of the competitor to objectively show the merits of the own products by comparing them with the products of a competitor. This is deemed to be part of the nature of comparative advertising.

The Belgian reporter noted that even certain degree of agressivity of the expressions used in the advertisement is also accepted.

The U.S. Federal Trade Commission held that disparaging advertising is permissible so long as it is truthful and not deceptive. The advertisers should not be prevented from making truthful and nondeceptive statements that a product has certain desirable properties or qualities which a competing product or products do not possess. Such a comparison may have the effect of disparaging the competing product, but there is no rule of law which prevents a seller from honestly informing the public of the advantages of its products as opposed to those of competing products. The U.S. reporter suggests that it is probably wise for legislatures and courts to take a long and sceptical look at claims for protection for commercial reputation since commerce has some inevitable bias to dishonesty.

National reporters provided several examples for the discrediting effect of a comparative advertising. In particular, this may be established in case of adverse criticism without justification or in case of the presentation of untrue facts.

The reporters indicated that even the presentation of real facts in the comparative advertising may amount to denigration. The German reporter observes that the presentation of true facts is not permitted, if the information is not useful for the consumer’s decision and the consumer is impaired by inappropriate influence. The Hungarian reporter noted that the reference to real facts can qualify as unfair if they are presented in a harmful and discrediting manner. Under Spanish law, even if a declaration is exact and accurate, it does not mean that it is pertinent. Besides, statements made in comparative advertising must not only be exact, true and pertinent, but also must be material, relevant, and representative to the goods or services which are being advertised.

Further, an assertion is denigrating when it shows the competitor’s good as being deficient, unusable, defective or damaged. The Belgian reporter referred to a case where the statements in the comparative advertising were denigrating not only relating to the competitor but also to its consumers. Pursuant to the Swiss reporter, the negative statement must be of sufficient

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seriousness. If the critical assertion exceeds the acknowledged function of comparative advertising (i.e. information of the customer), it is then deemed unjustified and disproportionate.

It can be concluded that the competitors must not unnecessarily be exposed and aggressive tendencies should be avoided as well as global disparagements. Comparisons, even if they are materially correct, must also be fair. Consequently, comparative advertising which is offensive, or includes aggressive tendencies, global disparagements or mockery is not permitted.

3.7 Price comparison All national reports indicate that it is permitted to compare exclusively the prices of the competing products or services. The comparison of prices is subject to the same rules as any other comparison: one may compare only what is comparable and the comparison must not mislead the consumer.

Hence, price comparison should refer to identical or equivalent products having identical qualities, and to identical quantities. Consequently, if the difference in price is due to the fact that the more expensive product/service meets more needs or has substantially more advantages, such comparison could be considered unlawful and misleading. In addition, also the requirement is applicable that the comparison must be made objectively, and such objectivity may require that more than one characteristic - not only price - shall be compared when other characteristics of the product/service are essential. In such cases the omitting of such relevant information may mislead the consumer. The Austrian and Hungarian reporters refer to cases where the advertiser presented in the comparison much cheaper prices and claimed the equality of its own product with highly appreciated and well known products of a competitor (perfumes). Such comparison infringes the requirement of objectivity and amounts to an exploitation of the well-known brand products, since the advertiser drew the public’s attention to its own product by using the good reputation of a competitor’s product without providing details regarding the unequality of the compared products.

Further, the Austrian, Belgian, German and Italian reporters observed that price comparison will render impermissible, if the consumer may get the impression that competitor’s prices are generally excessive or it denigrates the competitor. The competitor must not be unnecessarily exposed in a comparative price advertising.

The Belgian jurisprudence emphasizes that in case of comparing prices of two competitors, it is not sufficient to state exclusively that the advertiser's prices are lower and those of its competitor are much higher since the precise and express indication of the prices constitutes an essential element of objective comparison. However, a Belgian court held an advertising lawful where a telephone service provider claimed 30% to 35% lower prices than those of its competitors, even without presenting all the tariff structures of its main competitor.

Under Swiss law, the seller is entitled to indicate, for comparison’s sake, the average competing price in addition to his own price. The competing price must actually be charged by the sellers of the relevant segment of the market for at least half of the goods or services of identical quality and with similar features. The relevant market segment is the geographical sector where the consumer buys the concerned products.

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Generally, it is allowed to compare list prices to discounted prices as long as the comparison refers to the discount and the conditions for benefiting of the discount. It shall be decided on the basis of the requirement of objectivity whether the advertisement shall indicate all terms and conditions arising from the discount (i.e., limitation of liability, exclusion of guarantee, if applicable).

This requirement follows, as the Swiss reporter observes, also from the requirement that transparency must also concern the type of price that is compared.

3.8 Further criteria for the admissibility of comparative advertisement

3.8.1 Provisions of the national law

Except for the British report, the other national reports did not indicate any further, generally applicable criteria for the admissibility of comparative advertisement set forth in the national law.

In the UK national law an action for malicious falsehood arises where (i) the defendant has published words about the claimant which are false, (ii) they were published maliciously, and (iii) special damage has resulted as a consequence of the publication. The tests for a successful claim are stringent, and the courts are reluctant to consider a claim for malicious falsehood where a claim for trade mark infringement is also being brought in relation to a comparative advertisement.

While in some countries, in certain fields of business or industry (pharmaceutical industry, consumer credit), the legislators enacted special rules on the admissibility of comparative advertising, in other countries (the Netherlands) there are only such product or service specific requirements that often include an obligation to provide certain information but these would apply to all advertising.

Strict rules are applicable relating to medicinal products and health professions. In Switzerland, in advertising for medicine, no comparison and use of superlatives is allowed in advertising addressed to the public. The legislation is under revision in order to notably add provisions on price comparison. The legislator aims at reducing health costs, but wants to prevent price comparison from becoming a means to getting around the prohibition to advertise for the public. The draft new rules seek to ensure neutrality. The compared drugs must have a similar action and be interchangeable from a therapeutic point of view. The price comparison must indicate the pertinent criteria for the therapeutic equivalence. The price per unit must be the basis of comparison.

It shall be noted that in the UK, it is a criminal offence for anyone to issue an advertisement which suggests that the effects of a particular medicinal product intended for human use are better than, or equivalent to those of an identifiable treatment or medicinal product.

3.8.2 Provisions of self-regulatory code of conducts

Special rules applicable to comparative advertising in certain fields of industry/business (i.e., pharmaceuticals, professional services), in addition to the general rules on advertising restrictions, can be found in self-regulatory code of conducts (See Section 7).

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3.9 The concept of the EU Commission’s Proposed Directive on the misleading nature of an advertisement

On June 18, 2003, the EU Commission presented a Proposal for a Directive concerning unfair business-to-consumer commercial practices in the Internal Market and amending directives 84/450/EEC, 97/7/EC and 98/27/EC (the Unfair Commercial Practices Directive) (COM (2003) 356 final, 2003/0134 (COD) (hereinafter: the "Proposed Directive"). Recital (5) of this Proposed Directive indicates that it approximates the laws of the Member States on unfair commercial practices (including unfair advertising) which harm consumers' economic interests. In line with this, the Proposed Directive sets forth that it neither covers nor affects the national laws on unfair commercial practices which harm only competitors' economic interests or which relate to a transaction between traders. Further, it does not address the provisions of Directive 84/450/EEC on advertising (including comparative advertising) which is misleading to businesses, but not misleading for consumers.

Pursuant to Article 14 (4) of the Proposed Directive, Article 3a of the Directive shall be replaced by a partially new list of conditions which each instance of comparative advertisement shall comply with. The Commission’s rational for the new proposal states that, for the sake of clarity and simplicity, the Proposed Directive incorporates the misleading advertising directive’s B2C provisions (i.e., provisions dealing with advertising reaching or directed at consumers) and limits the scope of the existing Directive to business-to-business advertising (i.e., provisions dealing with advertising reaching or directed at businesses) and comparative advertising which may harm a competitor (by denigration, for example) but where there is no consumer detriment (page 8). Thus, as a result of the amendment, subsections (a) and (d) will be deleted from the Directive.

The questionnaire raised the issue whether the national reporters agree with the concept of the Proposed Directive that the misleading nature of the comparative advertisement shall be assessed in a different way depending on whether it harms the consumers or competitors.

The German, Hungarian and Italian reporters do not agree with the concept, because one can not separate exactly the aspects of harm to consumer and harm to competitor. Further, the Spanish reporter comments that it is difficult to think of a situation where a misleading advertising can only harm a competitor and not the consumers. By definition, a misleading advertisement is the one that leads to confusion to the end users of the product or service which is advertised. Therefore, the distinction contemplated by the Proposed Directive is somewhat artificial and, as a matter of fact, it is difficult to imagine that such new rules will lead to a different outcome with respect to the present rules of the Directive in force.

Similarly, the Austrian reporter observes that the law on unfair commercial practices should be fully harmonized with regard to interests of both consumers and competitors. The differentiation as envisaged in the Proposed Directive is likely to render the national legal systems unnecessarily complicated and torpedo the legal certainty of the law. The Austrian court practice has formulated different principles to assess whether misleading comparative advertising harms consumers or competitors. There is no apparent need for statutory rules as provided in the Proposed Directive. This is also the view of the French reporter who finds it undesirable to complicate the system since the difference between advertising addressed to consumers or professionals has already be taken into consideration in the court practice.

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Although the Dutch reporter admits that at first sight the concept of the Proposed Directive would make sense from a consumer protection point of view since this difference has to some extent been addressed in case law by requiring that the legal appreciation of allegedly misleading comparative advertising has to take into account the target audience of the advertising, which may be specialist traders in their professional capacity, he acknowledges that there is a likely pitfall, namely, that the interpretation of comparative advertising law relating to consumers and competitors will diverge as a result of the blacklist in the Proposed Directive. This would not make sense because the average consumer will in the end always be the yardstick, even if a company complains about unlawful comparative advertising. This point of view was also taken by the Sociaal Economische Raad ("SER"), the Dutch advisory committee to the government on economic matters.

On the other hand, the British reporter explains that a significant number of business participants appeared to agree with the concept that the misleading nature of a comparative advertisement shall be assessed in a different way for B2C advertisements as opposed to B2B advertisements. The Proposed Directive introduces the need for a causal link between a B2C comparative advertisement and the transactional decision by the consumer. However, the British reporter observes, in practice it seems unlikely that it departs from the way in which the UK courts apply the current law because they currently tend to find a need that an advertisement be misleading in any event.

Finally, it shall be noted that for the purposes of the Proposed Directive, in compliance with the civil law definition in EU legislation, consumer means any natural person who, in commercial practices (covered by the Proposed Directive), is acting for purposes which are outside his trade, business or profession. However, in certain countries (Hungary), the concept of consumer in competition law is not restricted to natural persons.

4. USE OF COMPETITOR’S TRADEMARKS OR TRADE NAMES

4.1 Conflict between trademark law and the need to refer to the competitor’s trademark in the comparative advertising

In order to make comparative advertising effective, it is necessary 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. However, the holder of a trademark has the exclusive right to use it to identify the products or services for which the trademark is registered, and to dispose thereof. The function of the trademark is to individualize and distinguish products or services. The scope of the exclusive rights conferred by trademark protection covers the right to use the trademark for advertising purposes.

In 1994, at the Congress of Berlin, LIDC adopted a resolution on the harmonization of the law relating to unfair competition and declared that, with respect to comparative advertising, a reference to another's mark or name should be permitted only to the extent that such reference does not take unfair advantage of, and is not detrimental, to the distinctive character or reputation of the mark or name.

Recital (15) of the Directive provides that the use of another's trade mark, trade name or other distinguishing marks does not breach the proprietor's exclusive right in cases where it complies with the conditions laid down by the Directive, the intended objective being solely

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to distinguish between the goods/services and, thus, to highlight their differences objectively. Thus, the Directive permits the use of a competitor's registered mark to this limited extent.

In order to prevent trade mark infringement, such identification should be permitted only if there is an exemption to the proprietor's exclusive right for use. In certain countries (Belgium, Hungary, Spain, UK), statutory law (trademark or advertising law) expressly grants an exemption from infringement and provides that it is permitted to use a third party’s trademark without the trademark holder´s express consent in comparative advertising, if the comparison complies with the rules on comparative advertising.

Such requirement means, under the English trademark law, that the use (i) is in accordance with honest practices in industrial or commercial matters, and (ii) does not without due cause take unfair advantage of, or is not detrimental to, the distinctive character or repute of the mark. Hungarian advertising law provides that the trademark holder – on the basis of its exclusive right – cannot object the use of the trademark in comparative advertising in compliance with the aim of the advertisement, if the use of the trademark is indispensable for the comparison and it does not exceeds the extent which is absolutely necessary.

In other countries (Austria, Switzerland), court practice grants a similar exemption from infringement.

In order to ensure the transparency of the legal system, it would seem desirable if the trademark law, constituting the exclusive right, would expressly grant a statutory exemption on the basis of clear-cut rules for the use of the trademark of a competitor in comparative advertising. This may require the further harmonization of trademark law.

4.2 Limits of the use of third party’s trademark

4.2.1 Taking unfair advantage of third party’s trademark

The Directive and respective provisions in the national laws provide, inter alia, that the comparison is permitted if:

(i) it does not create confusion in the market place 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, and

(ii) 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.

For example, a competitor does not take unfair advantage of the reputation of a trademark, if the trademark is solely used to highlight the merits of the advertiser’s product on the basis of objectively verifiable characteristics. On the other hand, if all the criteria set forth for lawful comparative advertising are not met, the trademark holder is entitled to object to use of the trademark which constitutes an infringement.

It follows from certain national reports that the examination as to whether the use of the trademark takes unfair advantage of its reputation is carried out under different formulation.

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Under Spanish law, the trademark holder may object to the use of its trademark in comparative advertising when such use is not a “justified” one. That is, according to the case law, when the use of the third party’s trademark is not necessary for the development of the commercial activity (the most clear example is that of the indication of the purpose of a given product or service, such as retail parts or accessories).

Under English law, as the use of a registered trade mark in a comparative advertisement is permitted provided that the use (i) is in accordance with honest practices in industrial or commercial matters, and (ii) does not without due cause take unfair advantage of, or is not detrimental to, the distinctive character or repute of the mark, the UK courts have focused on the first part of the proviso i.e. the need for the use to be in accordance with honest practices. The courts have commented that the requirement that the use does not take unfair advantage of the reputation of a trade mark adds nothing significant to the need for the use to be in accordance with honest practices. So, if dishonesty can be proven, it automatically follows that the use takes unfair advantage of the reputation of the mark.

The Swiss reporter submitted that under Swiss trademark law, specific concerns should be assessed. Firstly, the advertiser must not give the impression that he is advertising for the goods of the trademark owner instead of for his own goods. Secondly, the use of a third party’s trademark in advertising must not mislead the public about the existing relationship between the advertiser and the owner of the trademark. Furthermore, when the reference to others’ trademark is combined with words such as “in the style of … “, “type”, the “kind”, a risk of confusion may appear since the public does not take such words into account. The risk of confusion is also prohibited under the law against unfair competition.

The cases cited in the national reports are related to the use of well-know trademarks or trademarks enjoying good reputation. Obviously, the affected trademark must have a reputation in the market for the products or services provided, which can economically be exploited. There are no specific statutory rules with regard to comparative advertising using well-known trademarks, but it may be argued that these trademarks enjoy a wider scope of protection against taking unfair advantage of the reputation. In these cases, consumers may more easily associate the products compared by the advertiser with the trademark of the trademark owner.

Under Austrian case-law, with respect to the use of famous or well-known trademarks in comparative advertisements, it is not allowed to take unfair advantage of their reputation by way of assimilation. It was considered to contravene public policy, if the advertiser tries to show the quality of its own products by comparing them to well known other products in order to make use of their standing and reputation. One case involved a comparative advertising campaign of a major Austrian drugstore, where several products of the drugstore’s newly established house-brand were compared with well-known competing brand products (for example, “Kodak”). The advertisements only highlighted the – substantially – lower price of the drugstore’s own products without establishing why the compared products can be seen as equal. Almost similar factual pattern relating to well-known perfumes was mentioned by the Hungarian reporter.

Similarly, in Switzerland, the main concern about comparative advertising using trademarks is parasitism, i.e. the exploitation of others’ reputation. So-called "parasite" advertising takes advantage without restraint of the good reputation of a competing or non-competing product. The advertiser refers to the famous trademark or distinctive sign to take advantage of its

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renown and to favor its own product which it describes as being as good. The two products are not contrasted with each other, but described as being both as good. Even correct and objective advertising may be considered unfair when it exploits the renown of a competitor by attributing to his own product the well-known qualities of the product of the competitor. The exploitation of the reputation of a competitor is admissible when it enhances the transparency of the market and is limited in form and content to what is necessary for this purpose (principle of proportionality). Hence, a company should refrain from referring to its competitors and use their trademarks, except in case of absolute necessity.

However, the Dutch reporter submitted that the extended protection for well-known trademarks should not be unduly extended because this would lead to immunity for well-known trademarks from comparative advertising.

4.2.2 Limitation of use to the word format of the trademark

The questionnaire raised the issue whether it would be desirable to limit the reference to the competitor by using only the word format of the competitor’s trademark. Conflicting interests shall be taken into consideration: while it shall be prohibited to take unfair advantage on the competitor's reputation, the competitor must be clearly identified and confusion shall be avoided. The use of the figurative trademark may be necessary to exclude any possibility of confusion. Further, it shall be also noted that in certain cases the use of a word format of a trademark with a device may constitute a distortion of the trademark which may also damage the trademark holder’s interest.

The opinions of the national reporters were divergent.

In the view of the Austrian reporter, there is no need to limit the reference to the competitor by using only the word format if the requirements established by the Directive are met. Reproducing of a competitor’s logo or device may be necessary to make reference to the competitor. According to consistent court practice, additional circumstances from which it can be concluded that the advertiser is taking unfair advantage of the trade mark of the competitor would render the comparative advertising unlawful. This is also the view expressed by the French reporter who finds it unnecessary to impose additional limitations since the courts apply strict requirements to the comparative advertisement. Further, the Dutch reporter believes that such limitation would be unjustified, since that would be contrary to the case law of the ECJ, which provides that comparative advertising as a concept should be interpreted in the sense most favorable to it (see C-112/99 Toshiba/Katun). By limiting comparative advertising instruments to use of words only, the concept of comparative advertising would be interpreted narrowly and deprive advertisers of creative possibilities to refer to the competitor or its products.

In contrast, other national reporters (Germany, Hungary, Spain, Switzerland, UK) found it reasonable to limit the reference to the competitor by using only the word format of the competitor’s trademark. However, as the German reporter emphasizes, it shall be made sure, that even in this case the consumer can identify the competitor and his products.

The Swiss reporter believes that this limitation could be the concrete expression of the principle of proportionality: the use of others’ trademark should be restricted to what is necessary for the purpose of giving information to consumers. The use of a logo/device mark

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would exceed what would be necessary to assist rational consumer choice; use of the word mark alone may suffice.

4.3 T he use of a third party’s other intellectual property rights (i.e., design, copyright)

While there is an express exemption from trademark infringement in the Directive and in the national laws (statutory law or jurisprudence), nothing is expressly said about the competitor's or third party's design right or copyright. The reproduction of third parties' work under copyright protection, if it does not fall within the scope of free-use (fair dealing), constitutes per se copyright infringement. The same consideration applies to design as well.

Pursuant to the British report, if a comparative advertisement reproduces e.g. a competitor's logo or product design, this is likely to amount to copyright infringement unless a statutory exemption applies (e.g. incidental inclusion4). Consequently, UK copyright law may prohibit comparative advertising, perhaps supporting an argument that express rules are required relating to the connection between comparative advertising and copyright (and design). On the other hand, the UK copyright laws only prevent an advertiser from using, for example, a logo form of a competitor’s trade mark. There is still scope for lawful comparative advertising using e.g. a word mark or competitor’s name.

Similarly, under Belgian law, the works under copyright protection cannot be used in a comparative advertisement.

In view of the lack of any express regulations or comments regarding copyright and other intellectual property rights in the Directive, it seemed to be unclear as to whether the advertiser is free to refer to his competitor’s trade marks in his advertisement, but not to any logo, product shape or package in which copyright or design right may subsist. However, in Case C-44/01, Pippig, the ECJ – in response to questions referred to by an Austrian court - held that Article 3a(1)(e) of Directive, does not prevent comparative advertising, in addition to citing the competitor's name, from reproducing its logo and a picture of its shop front, if that advertising complies with the conditions for lawfulness laid down by Community law.

The national reports agree that the same rules shall govern the use of third party’s trademark and the use of the competitor’s other intellectual property rights: such use shall be permitted if the advertising fully complies with the requirements set forth in the Directive. However, there is a difference of opinion on whether it is necessary to create express rules in this respect.

The Dutch and the French reporters submitted that there is no need to establish express rules since the reference in the Directive (and in the national laws respectively) to "other distinguishing marks of a competitor" covers what would be protected under other IP rights.

On the other hand, the Hungarian and Spanish reporters found it desirable to establish specific rules to the use of other intellectual property rights in comparative advertising which would apply the same principles to which reference has been made above for trademarks and other distinctive signs. The Belgian reporter observes that the rules of citation shall be extended to the use of works under copyright protection in the comparative advertising.

4 Section 31(1) of the CDPA.

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5. DESIGNATION OF ORIGIN

The Directive provides that for products with a designation of origin, the comparative advertisement shall relate in each case to products with the same designation and it shall not take unfair advantage of the reputation of the designation of origin of the competing products.

The requirements of the Directive should, in particular, include consideration of the provisions resulting from Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (see (12) of the recitals of the Directive). The Directive vigorously restricts the possibility of comparative advertising regarding products with a designation of origin. As the competing products must have the same designation of origin, the products which are subject to the comparison are having the same features. The Austrian reporters comment that it seems, consequently, that only comparative price advertising would be possible.

Under Swiss law, the reference to a designation of origin is also subject to the rules of unfair competition, notably to the prohibition of misleading and to the prohibition of confusion. It is prohibited to use a designation of origin to which is added a “delocalizing” information for products that have more or less the typical characteristics of the products originating from the designated place but that do not originate from this place (such as Californian Champagne, Swedish Emmental). This use amounts to the exploitation of a well-known designation. The adjunction of such words as “kind”, “type”, “way”, to a designation of origin is also unlawful since this practice may weaken the designation of origin.

Relating to the prohibition of taking unfair advantage of the reputation of the designation of origin of the competing products, the national reports indicate that the same standards will apply as in case of trademarks. However, the Dutch report notes that this criteria is taken care of in the requirement that a comparison must relate to goods with the same designation of origin. Consequently, it is not possible to take unfair advantage of the designation of origin if both of the products in the comparative advertising have the same designation.

Contrary to the French and Spanish reporters, other reporters found it unjustified to totally limit the possibility of comparison to goods with the same designation of origin.

The Swiss reporter suggests that a general limitation would be excessive. However, if a quality is strongly related to an origin, then the rule that only identical goods should be compared is applicable and entails such a limitation.

The Austrian, Dutch and English reports submit that it is difficult to justify this restriction because it quarantines certain products from most types of comparative advertising. For example, it should be allowed to compare the price of Prosciutto di Parma with Jamon Serrano Andaluz since in these cases the comparison does not concern features that are not attributable to the origin, such as price. There are no obvious reasons to treat differently products with a designation of origin and products with geographical indications when it comes to comparative advertising. It can be argued that the other requirements of the Directive (i.e., requirement of objectivity, prohibition on misleading and taking unfair advantage) sufficiently protect products with designation of origin against taking unfair advantage of the reputation and misleading use. Further, the Austrian reporter believes that the restriction concerning products with designation of origin can hardly be justified in view of the protection of products with a designation of origin by the Regulation (EEC) No

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2081/92 of 14 July 1992 against imitation and taking unfair advantage of the reputation. Thus, the restriction in the Directive does not seem to fit in the “overall-regulation” on comparative advertising.

6. BURDEN OF PROOF

There are positive requirements (i.e., the objective comparison of material, relevant and verifiable features of the goods) and negative requirements (i.e., not to be misleading, not causing confusion, not discrediting the competitor) which comparative advertising should comply with.

It is the general rule of law that the burden of proving an alleged fact rests on the party who bases his claim on that fact. Hence, as a rule, the burden of proof lies with the plaintiff. However, with respect to advertising, there are special rules which constitute an exception to this rule.

Article 6 (a) of the Directive sets forth that the advertiser shall furnish evidence as to the accuracy of factual claims in advertising if, taking into account the legitimate interest of the advertiser and any other party to the proceedings, such a requirement appears appropriate on the basis of the circumstances of the particular case and, in the case of comparative advertising to require the advertiser to furnish such evidence in a short period of time5. This provision means a conditional reversal of the burden of proof which can be compared with similar provision of the TRIPs relating to the protection of IP rights (Article 43).

In certain countries (Belgium, Hungary, Switzerland6), after having weighed the different interests of the parties and circumstances of the case, the forum deciding upon the case is entitled to shift the burden of proof to the advertiser and oblige the advertiser to provide evidence on the statements made in the advertisement.

In other countries (Austria, Italy, France, the Netherlands, Spain), the burden of proof is reversed ipso iure and the defendant shall evidence the accuracy and the truthfulness of the indications and factual allegations he has made in the comparative advertising. Moreover, in France, the advertiser must prove the compliance with all requirements of legality of the comparative advertising.

In the UK, different rules will apply depending on which law/cause of action the complaint is based. The burden will be on the Office of Fair Trading to prove that the advertisement complained of does not meet one or more of necessary criteria, however, the rules mirroring the Directive’s provision can also be found in the English legal system. In case of trade mark infringement, the burden will be on the claimant to show (on the balance of probability) that the use of the mark concerned amounts to an infringement. If the defendant claims a defense that the use of the trademark is in compliance with the honest business practice and does not take unfair advantage of the trademark, the burden is on the claimant to show that the

5 Pursuant to the Proposed Directive, the words “furnish evidence as to the accuracy of factual claims” shall be replaced by the words “substantiate factual claims”.

6 This special provision of the Swiss law applicable to comparative advertising has been added to the Act against Unfair Competition in the context of the Swisslex program that aimed at making Swiss law compatible with European law.

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defendant’s use of the mark falls outside of that proviso i.e. is not in accordance with honest practices.

Relating to the nature of the evidence to be supplied by the advertiser, there are no requirements in the different legal systems. The defendant may furnish expert opinions, test results, market surveys, etc. depending on the nature of the case and the court is free in determining the weight it gives to such evidence for determining whether comparative advertising is allowed or not. In Switzerland and in the Netherlands, in the pharmaceutical industry, however, special rules apply relating to the required method of proof.7

The Swiss reporter points out that the evidence shall not only relate to the accuracy of factual claims, but also to the understanding of the advertisement by the public, to the question of the impact of the advertisement on the decision-making process of the consumer, to whether or not the denigration or the positive reference to the competitor is necessary.

Although the Directive states that in the case of comparative advertising the advertiser shall be required to furnish evidence in a short period of time, the national laws do not expressly refer to a specific timeframe. Under Dutch law, an advertiser is required to provide the evidence underlying claims in comparative advertising on short notice. The Supreme Court held that if the advertiser has problems getting his evidence together due to the expedited nature of the legal proceedings, this is a circumstance for the risk of the advertiser.

The rationale for requiring providing evidence within short period of time is the consideration that the advertiser should have obtained the respective evidence prior to publishing the advertisement.

7. SELF-REGULATORY CODE OF CONDUCTS

7.1 Types of self-regulatory code of conducts and their binding nature

The national reporters indicated that there are both general and industry/business specific self-regulatory rules with regard advertising, and especially to comparative advertising. Specific professional codes and industry self-regulation rules can be found usually in the pharmaceutical industry, media, the toys industry, investment banking, pension funds, and within lawyers. Reference shall be made also to the ICC International Code of Advertising Practice.

Further differentiation of such codes can be made on the basis whether self-regulation is exercised by public bodies or by private associations. In the latter case, any code of conduct adopted by such private associations constitutes a soft-law. As the self-regulatory bodies are independent of the courts, as the Dutch reporter comments, on occasions they issue recommendations that are inconsistent with judgments from the courts.

Generally, the self-regulatory rules are only binding for the members of each association. In some cases membership is compulsory for professionals (i.e., for lawyers, in the corresponding Bar Association). In Spain, the advertising law grants a specific authorization

7 In Switzerland, published reports of clinical trials undertaken in compliance with good practice guidelines shall be provided. In the Netherlands, some self-regulatory bodies have special rules of proof, e.g. the self-regulatory body that is responsible for medicinal products advertising requires two independent scientific studies to prove that one product is better than the other for comparative advertising to be permitted.

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to certain collegiate professions for establishing special rules on comparative advertising, even for introducing prohibition on the use of comparison in advertisement.

The relevance of these self-regulatory rules is that they provide an easily accessible low cost means of dispute resolution - by means of special committees that judge on the basis of complaints - from which mainly consumers benefit.

Certain countries (Spain, UK) have a very efficient systems of advertising self-control whereas self-control appears to play no vital role in other countries (Germany). There is a divergence also in respect of the role and importance of advertising self-control systems. The Dutch reporter noted that self-regulatory rules are usually less strictly observed by companies and often used to dissuade the government from imposing rules in a particular area. Therefore, self-regulatory rules may be less justified as they tend to serve more the purpose of protecting companies against the government than consumers and competitors against companies.

On the other hand, in Spain, the most significant cases of comparative advertising have been resolved by arbitration, according to the rules provided by the Association for Advertising Self-Control, integrated by many of the big companies operating in the Spanish adverting market, who are members of the Association which is a private entity. The membership is voluntary, and by entering the association, its members commit to solve their advertising controversies privately, by means of an arbitration procedure. The decisions are binding for the members of the Association that were parties of the corresponding arbitration procedure.

In the Netherlands, as the national reporter observes, the added value of the general self regulatory code is that any member of the public - consumers, competitors, etc. – who objects to an advertisement because it violates the Dutch Advertising Code can lodge a complaint with the Advertising Code Committee. Though not enforceable, advertisers normally obey the decision of the Committee. The media that are member of such association are contractually bound to refuse publication of any advertisements that have been found contrary to the Advertising Code.

In the UK, extensive self-regulation rules can be found in different segments of the media.

7.2 Professional organizations and EU antitrust regulation

In 2003, LIDC examined whether professional organizations in charge of the drafting or the control of the rules concerning the practice of liberal professions have to comply with antitrust regulation.

Some reports indicate that certain professional rules have been held anti-competitive by the competent competition authorities. With respect to comparative advertising, I briefly refer to the following European case.8

Article 7(5) of the Directive provides that nothing in this Directive shall prevent Member States from, in compliance with the provisions of the Treaty, maintaining or introducing bans or limitations on the use of comparisons in the advertising of professional services, whether

8 Please note that I will not deal with the issue of the connection between primary and secondary EU legislation since it does not have relevance outside the EU countries.

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imposed directly or by a body or organization responsible, under the law of the Member States, for regulating the exercise of a professional activity.

With respect to the requirement of "in compliance with the provisions of the Treaty", in Case T-144/99, Institute of Professional Representatives before the European Patent Office v Commission of the European Communities, the Court of First Instance of the European Communities (CFI) held that the provisions of the code of conduct by prohibiting advertising comparing professional representatives, constitute restrictions of competition for the purposes of Article 81 EC, thus, Article 7 (5) of the Directive does not exempt in itself such rules from the provisions of the Treaty.

Thus, the mere fact that rules which organize the exercise of a profession are classified as rules of professional conduct by the competent bodies does not mean that they fall as a matter of principle outside the scope of Article 81(1) EC. Only an examination on a case-by-case basis permits an assessment of the validity of such rules under Article 81(1), in particular by taking account of their impact on the freedom of action of the members of the profession and on its organization and also on the recipients of the services in question.

The subject matter of this case was that the Code of Conduct for Professional Representatives before the European Patent Office prohibited comparative advertising. The CFI considered that this ban restricts the ability of more efficient professional representatives to develop their services, with the consequence, inter alia, that the clientele of each professional representative is crystallized within a national market. Such prohibition falls within the scope of Article 81(1) EC if it is not shown that the absolute prohibition of comparative advertising is objectively necessary in order to preserve the dignity and rules of conduct of the profession concerned since the favorable effects which fair and appropriate comparative advertising has on competition prevail.

7.3 Special rules applicable to comparative advertising in self-regulatory code of conducts

It is impossible to give a comprehensive overview of these rules as there are many of these rules. Therefore, the present summary addresses only some special rules.

In Austria, Spain and Hungary, the professional code for attorneys-at-law expressly states that comparative advertising relating to other attorneys-at-law is not allowed. Under the Swiss federal law, as a general rule," the lawyer may advertise as long as the advertising limits itself to objective facts and meets the general interest”. Comparative advertising is de facto forbidden as it would not comply with the concept of dignity. In the UK, while no publicity by a solicitor may make direct comparison or criticism in relation to the charges or quality of service of any other identifiable solicitor, a solicitor may participate in the preparation of a bona fide survey of legal services conducted by a third party which may make comparisons between the charges of or quality of service provided by different solicitors.

In Austria, with regard to self-regulatory codes of conduct with regard to pharmaceutical products, the Supreme Court expressly stated that comparative advertising is allowed, if the requirements of the Directive are met. Self-regulatory codes of conduct of the pharmaceutical industry included a prohibition to refer to competing trademarks in their advertisements without the consent of the competitor. The Supreme Court ruled that this view contravenes the law of the European Union because it does not comply with the Directive.

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Pursuant to the Swiss Code of Conduct of the Pharmaceutical Industry, comparison with other medicinal products must be scientifically accurate and correctly referenced. More detailed rules can be found in the Spanish code which provides that when the efficacy, security or other properties of different active agents are compared, pieces of information such as the statistical significance of the results shall not be omitted, nor results of different studies or clinical tests shall be compared in the same chart or diagram without clarifications. Statistics or conclusions or any other data from different studies carried out with different methodologies cannot be mixed or compared either.

8. COMPARISON MADE BY THIRD PARTIES

In view of its importance, the survey covered not only comparisons made by competitors, but also those comparison tests prepared by third parties (who are not competitors).

In many countries, product testing is done by consumer organizations and/or private or public institutions like the press, television and other media. It shall be examined as to (i) whether these organizations are liable under unfair competition law, and (ii) whether the results of their testing may be used in advertising.

8.1 Test comparisons

In all countries covered by the national reports, it is generally permitted to carry out test comparisons and to publish the results. There are no legal restrictions on third parties carrying out test comparisons on products. Similarly, there are no restrictions on publishing such test results, provided that publication would not result in the breach of some other legal obligation or liability, e.g. breach of copyright, breach of confidentiality, etc. Generally, it is not allowed to publish product tests which are not true and therefore appropriate to mislead the public.

Stricter rules are applicable in Switzerland where test comparisons are allowed to the same extent as comparative advertising is admissible. The rules about comparative advertising are applicable whoever the author of the comparison is and it is not necessary for the assertions to emanate from a competitor. Some authors consider that the requirements should be stricter for comparative tests than for comparative advertising since the consumer expects the results to be the outcome of a neutral and objective examination. Comparative tests are taken very seriously by the consumer. The Swiss reporter noted that the Swiss case-law on test comparisons is sometimes difficult to reconcile with the principle of free speech. A Swiss judgment on the matter was annulled by the European Court of Human Rights because it did not meet the proportionality requirement.

The organization preparing the test can be held liable under the rules of general tort law. The Austrian reporter observes that rules of unfair competition apply on misleading statements only if such misleading statement was made for competition purposes. Organizations (which are not related to the advertiser or a competitor) preparing tests usually do not act intentionally with the objective to promote the sales and business of an undertaking. In this context, the Austrian Supreme Court has ruled that the publication of a test result by a consumer protection organization was not an act of competition because there were no competitive interests.

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8.2 The use of test result in comparative advertising

It is also generally permitted to make reference to test results in comparative advertising. However, Belgian law prohibits the reference to comparative test if such test was carried out by consumers' organization.

If the advertiser refers to such comparative test, he shall be held liable for complying with the rules of comparative advertising.

Under UK law, use of test results is permitted provided that such use is in accordance with honest practices, thus, the advertisement (i) must reflect the conditions which the product will encounter in practice and be in accordance with the manufacturer’s instructions; (ii) the existence of any accepted industry standard test for testing the type of product under consideration may be relevant; and (iii) where an advertisement claims to be based on “independent test results” and such results are not achieved by a third party acting independently, the representation will be viewed as false and therefore dishonest.

For the use of the test in the advertising, in the majority of the countries, it is generally required to obtain the consent of the person/organization who carried out the test. The national reports indicated different reasons for the need of such consent: (a) copyright law (Germany, The Netherlands), (b) database law protection on the test results (The Netherlands), (c) special statutory provision of advertising law requiring such consent (Hungary).

However, under Austrian law, the advertiser is generally not required to obtain prior consent by the person or organization who carried out the test. Specific circumstances, e.g. the advertiser was not ordering the test, may require the consent for the use. In Spain, the consent of the person/organization carrying out the test is not required as long as such information has been published or obtained by lawful means. In any case, the source of the information should be cited.

9. ENFORCEMENT OF CLAIMS AGAINST UNPERMITTED COMPARATIVE ADVERTISING, CROSS-BORDER ADVERTISING

The issue of enforcement of claims arising from unfair competition law was on the agenda of the Barcelona Congress in 2003 (International Rapporteur: Ms. Frauke Henning-Bodewig). With respect to such thorough examination of the enforcement procedure, the purpose of the questions9 raised in the questionnaire was to explore whether there are any special rules in connection with comparative advertising.

On the basis of such survey it can be concluded that the general rules on enforcement of claims apply in case of claims arising from unpermitted comparative advertising.

If the comparative advertising is not in compliance with the applicable rules, the same sanctions shall be applied as in case of any other type of advertisement. It shall be noted that

9 Questions:- Who is entitled to start proceedings in the case of unpermitted comparative advertisement?- What are the sanctions against using unpermitted comparative advertising?- What are the requirements for obtaining an interim measure?- Is it possible to prevent the publication of an unpermitted comparative advertising? - Do you have any statistical data relating to complaints (i) from consumers and (ii) from

competitors on comparative advertising?

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in all countries, from which national reports were received, actions (usually interim relief) can be brought to prevent an advertisement from being published, or to remove once it has already published.

No statistical data were provided relating to the frequency of actions/complaints on unpermitted comparative advertising. The same conclusions can be established also with respect to cross-border advertising.

III. EVALUATION, HARMONIZATION

All countries are essentially content with their respective national rules on comparative advertising. No national report suggested that any further criteria should be added to those set forth above.

Significant case-law has emerged relating to comparative advertising. All national reports acknowledge that their respective courts apply strict scrutiny in evaluating the admissibility of a comparative advertising and such court practice is considered to be justified. In general, no divergence between the court practice of different states can be found relating to applying the criteria for lawful comparative advertising.

The present summary report highlighted certain issues which might require further discussions and/or fine-tuning of existing rules:

(i) rules on the use of third party’s intellectual property in the comparative advertisement,

(ii) comparing goods with designation of origin,

(iii) role of self-regulatory codes and bodies, and

(iv) the concept of the Proposed Directive that the misleading nature of the comparative advertisement shall be assessed in a different way depending on whether it harms the consumers or competitors.

On the basis of the above summary report and considerations, please find attached a draft resolution for discussions and which shall be adopted at the Budapest Congress.

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