3 has come out on top in its 18-month legal battle with 02 when the High Court decided in 3’s favour.
The case was brought by O2 in response to a television advertisement broadcast in August 2004…
the ad compared pay-as-you-go costs, saying that “on O2 pay-as-you-go the first three minute peak rate call each day could cost you 75p – or with ThreePay that exact same call could cost 15p”.
O2 sought to stop 3 from making such comparisons,and also tried to prevent 3 from using the ‘O2’ trademark in such ads along with the bubble imagery.
O2 initially sought an injunction to prevent the ad from being aired, but that failed. Last year it attempted to take the case to the European Court of Justice, claiming a breach of European rules on price comparisons, but again it was turned out.
The latest suit homed in the bubbles: O2 argued that 3 had caused damage to O2’s brand identity by using the trademark bubbles. Mr Justice Lewison rejected that submission, saying bubbling imagery was widespread – among other examples he mentioned Aero chocolate bars,Oral-B Sonic toothbrushes, Colgate Oxygen toothpaste, and Microsoft Office. More to the point, no viewer could possibly confuse the two networks (the essence of a ‘passing off’ case like this) and 3’s campaign had not discredited O2’s trademark.
Graeme Oxby, Marketing Director of 3 UK, was suitably magnanimous in victory: “O2 has tried to stop 3 using effective comparative advertising, but fortunately for the UK consumer they’ve completely failed in their aims. Our advert was a legitimate way for us to highlight the great value we offered in comparison to O2.”
Meanwhile 3’s parent, Hong Kong conglomerate Hutchison Whampoa, has turned in a good set of results – revenues for its 3G operations more than doubled during 2005 to reach HK$37.5bn (about £2.8bn). But the cost of winning customers went up, and there were manufacturing delays in delivering lower cost handsets in the second half.
Even so,3’s worldwide losses fell 30% to HK$26.8bn; and both 3 Italia and 3 UK reported operating profits before EBITDA.
The 3 Group’s 3G customer base grew 66% year on year and currently stands at 11.9m. Of those, 3.6m are in the UK and Ireland; they delivered an average monthly revenue of £34.51 per user in 2005.