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Cite as: [1999] EWHC Patents 260

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Emaco Limited, Aktiebolaget Electrolux v. Dyson Appliances Ltd [1999] EWHC Patents 260 (26th January, 1999)

CH 1997 E No. 2878

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

In the matter of :-

 

( 1 ) EMACO LIMITED

( 2 ) AKTIEBOLAGET ELECTROLUX

Plaintiffs

and

DYSON APPLIANCES LTD

Defendant

 

JUDGMENT

This is the official judgment of the court: no further note or transcript is to be made.

The Honourable Mr Justice Jonathan Parker

26th January 1999

INTRODUCTION

1. This case is about comparative advertising. Each side complains about advertising material put out by the other containing (it is said) false comparisons between their respective products.

2. The first plaintiff in this action, Emaco Limited, manufactures and distributes domestic electric vacuum cleaners under the trade mark ELECTROLUX, of which the second plaintiff in the action, Aktiebolaget Electrolux (the parent company of the first plaintiff), is the registered proprietor. I will refer to the plaintiffs collectively hereafter as "Electrolux". The defendant in the action, Dyson Appliances Limited ("Dyson"), carries on business in competition with Electrolux in the manufacture and distribution of domestic electric vacuum cleaners under the registered trade mark DYSON, of which it is the licensee.

3. In this action Electrolux accuses Dyson of malicious falsehood in relation to statements made by Dyson about vacuum cleaners in Electrolux's "Powersystem" range (I will refer to this type of machine as "the EPS") to the general effect that the EPS is less efficient than a competing product marketed by Dyson and known as "the DC01".

4. The particular statements of which Electrolux complains take the form of (a) a graph published by Dyson in March 1997 purporting to compare the suction power of the EPS unfavourably with that of the DC01, and (b) words allegedly spoken by Mr James Dyson, the founder and Chairman of Dyson, in the course of a conversation with a reporter for a trade journal, to the effect that a particular component of the EPS (viz. its "cassette system", the nature of which I will explain in due course) "does not work". Electrolux alleges in each case that the statement was false; that it was made maliciously (in the sense that Dyson knew it was false, alternatively was reckless as to whether it was true or false); and that it was calculated to cause pecuniary damage to Electrolux. Electrolux claims injunctive relief, an inquiry as to damages, and consequential relief.

5. Dyson disputes these claims. As to the graph, Dyson contends that, giving the graph its ordinary meaning, the information which it conveyed was (save in one respect) true. As to the words attributed to Mr Dyson, Dyson denies that Mr Dyson used the words quoted in the sense of which complaint is made. Dyson contends that, taken in context, the words which Mr Dyson used in his conversation with the reporter conveyed a different meaning, which meaning was true. In each case Dyson denies malice, and denies that the statement was calculated to cause pecuniary damage to Electrolux.

6. Dyson retaliates by counterclaiming for injunctive relief and an inquiry as to damages on grounds of malicious falsehood in respect of a "flyer" published by Electrolux, comparing the DC01 unfavourably with the EPS. The allegations made by Dyson in relation to the flyer all of which allegations are denied by Electrolux) take the same general form, mutatis mutandis, as the allegations made by Electrolux in relation to the graph.

7. As a secondary line of attack, both Electrolux and Dyson claim infringement of trade mark in relation to the graph and the flyer respectively. The claims of infringement of trade mark are based upon the same factual allegations as are pleaded in support of the primary claims.

8. Since the publication of the material of which complaint is made, events have moved on. The DC01 has been substantially modified and improved, and it may be that the same applies to the EPS (Counsel was not clear whether or not this was in fact the case: see Mr Milmo QC's observation at Day11/1366.9-10.). At all events, in the context of the continuing marketing war being waged between Electrolux and Dyson the graph and the flyer are already for practical purposes obsolete, just as Mr Dyson's quoted comments are a matter of history. Thus, if and to the extent that either party is successful in its claims in this action, in considering what (if any) remedy to grant the Court will be concerned not so much with the regulation of future conduct by means of injunctive relief as with assessing the extent which the successful party (or parties) was (or were) damaged by a specific incident or incidents in the course of a marketing war in which each party wielded the weapon of comparative advertising in an attempt to establish the supremacy of its own product over the product of the other. To put it shortly, this action is concerned essentially with the past - and with the settling of old scores - rather than with the future.

9. Electrolux appears by Mr Patrick Milmo QC and Mr Iain Purvis of Counsel (instructed by Messrs Bristows); Dyson by Mr Peter Prescott QC and Mr Daniel Alexander of Counsel (instructed by Messrs Herbert Smith).

FACTUAL BACKGROUND
Vacuum cleaners generally

10. In order to render this judgment even remotely comprehensible, in so far as it addresses technical matters, a brief general explanation is required of the way vacuum cleaners work and of the various types of vacuum cleaners on the market.

11. A vacuum cleaner operates by creating a vacuum within a vacuum chamber. The vacuum chamber is linked to a cleaning head. Suction is created at the vacuum head by means of a fan driven by an electric motor. The action of the fan sets up an airflow which sucks dust and debris from the surface to be cleaned, via the cleaning head, into a receptacle within the vacuum chamber.

12. Domestic vacuum cleaners are of two main types: upright cleaners and cylinder cleaners. An upright cleaner consists of a single unit, which the user manipulates by hand over the surface to be cleaned. In the case of a cylinder cleaner, on the other hand, the motor and the vacuum chamber are contained in a separate unit (or cylinder), which is connected to the cleaning head by a flexible tube. Upright vacuum cleaners tend to have lower "suction power" than cylinder cleaners. To compensate for this, most upright cleaners have a rotating brush within the cleaning head, which assists in picking up dust and debris. This case is concerned only with upright cleaners.

13. There are, in turn, two types of upright cleaner: "bag" cleaners, and "cyclonic" cleaners. In the case of a bag cleaner, the dust and debris are separated from the air flowing through the machine by means of a porous bag through which the air passes and in which the dust and debris collect. The bag thus acts both as receptacle and as filter. The bag must be removed when full, and replaced. In the case of a cyclonic cleaner, on the other hand, the separation process is designed to be carried out by means of a cyclone. In its most basic form, a cyclone consists of a rapidly rotating current of air. In a cyclonic vacuum cleaner, the cyclone is induced by means of a cone-shaped component through which the air sucked into the cleaner flows and which forces the airflow to rotate at speed. The cyclone is designed to extract dust and debris from the air flowing through the machine by the application of centrifugal force, which in turn has the effect of throwing the dust and debris at the sides of the cone-shaped component, whence they fall by gravitational force to the bottom of the vacuum chamber. The chamber requires emptying from time to time, but no bag is involved.

The advent of the DC01

14. Prior to 1993 the great majority of upright cleaners on the market were bag cleaners, one of the major manufacturers and suppliers of upright bag cleaners being Electrolux.

15. In the late 1980's, Mr Dyson had invented a form of cyclone system for a domestic vacuum cleaner, known as the "Dual Cyclone" system. His invention was subsequently patented. In January 1993 Dyson began manufacturing and supplying upright cleaners incorporating the Dual Cyclone system. The first model, which was known as the DC01, came off the production line at the end of January 1993.

16. The DC01 has a belt-driven brush at the cleaning head. The air containing the dust and debris is sucked through the Dual Cyclone system, which is designed to separate and extract the dust and debris by cyclonic action (as explained above), leaving them to collect at the bottom of the vacuum chamber. The air then passes through a filter (known as the "pre-filter") before reaching the motor-driven fan which creates the suction. After passing through the pre-filter and the fan, the air passes through a final filter before being expelled from the machine back into the atmosphere.

17. The DC01 proved to be extremely popular with the public, and by the end of 1996 sales of the DC01 accounted for a very substantial share of the market for upright cleaners.

The launch of the Electrolux "Powersystem" range of upright cleaners

18. In the Spring of 1997, with a view to increasing its own market share in the face of competition from (inter alia) the DC01, Electrolux launched a new range of upright cleaners known as the "Powersystem" range. (There were, and are, a number of models within the Powersystem range, but for present purposes nothing of significance turns on the difference between them. Hence, save where the context otherwise requires the expression "the EPS" refers to all or any of the models in the "Powersystem" range at the relevant time.)

19. Like the DC01, the EPS has a belt-driven brush at the cleaning head. Unlike the DC01, the EPS incorporates a dual cleaning system, giving the user a choice between a bag system or a cyclone system. The two systems are interchangeable. The cyclone system incorporates a reusable cyclone cassette, which fits into the vacuum chamber and which may be interchanged with a unit containing a bag. The cyclone cassette itself is a transparent plastic container divided into two chambers. It incorporates what is designed to be a three-stage process for separating dust and debris from the air passing through the machine. The first stage of this separation process involves the use of gravity in allowing the coarser elements of the dust and debris to fall to the bottom of the first chamber as the airflow enters it. At the second stage, the airflow passes through a filter or "shroud" on its way into the second chamber. The shroud is designed to catch the coarser elements of the dust and debris which have remained in the airflow after the first stage. On reaching the second chamber, the airflow is forced through a cyclone. Dust and debris separated from the airflow by the action of the cyclone collect the bottom of the second chamber. At the third stage, the air passes through a filter at the back of the cassette (the "exhaust filter") which is designed to collect whatever dust and debris remain in the airflow after the first and second stages have been completed. The exhaust filter is of a substantial nature, being made of felt and incorporating of a large number of interlocking fibres. The airflow then passes through two further filters, one on each side of the fan, before being expelled back into the atmosphere.

20. The exhaust filter on the EPS requires to be cleaned regularly, and eventually replaced. The Instruction Manual for the EPS (L2/344.) recommends that the exhaust filter be cleaned once a month to maintain good performance, and that the cassette be emptied after each use (See ibid. p.348). It goes on to assert: "It is clearly visible when the dust compartment is full and needs emptying" (See ibid.).

21. The amount of dust and debris capable of being collected by the EPS in what has been referred to in the course of the hearing as "cassette mode" is, of course, dependent on the nature of the material collected; but under normal circumstances the first of the two chambers within the cassette may be expected to fill before the second chamber, simply because the larger items of debris, such as fibrous material and fluff from carpets, will tend to collect in the first chamber.

22. Thus the main differences between the EPS (in cassette mode) and the DC01 are:

(i) that the EPS uses a single cyclone chamber whereas the DC01 uses two; and

(ii) that the EPS relies upon both the cyclone and the exhaust filter to complete the separation process, whereas the DC01 relies on the cyclone alone (the "pre- filter" being included merely as a safety precaution to prevent any dust or debris reaching the motor).

The publication of the graph

23. In March 1997 Dyson, as part of its ongoing promotional campaign for the DC01, produced a small card on which appears the graph of which Electrolux complains in this action. On or about 26 March 1997 Dyson distributed copies of this card to all its retailers.

24. The card was designed to be "pocket-sized": it measures some 10.5cms in length by some 7.5cms in width. The side which contains the graph bears at the top the logo "Dyson", beneath which appears the slogan: "The only cleaner with no loss of suction". Below that slogan is the graph itself. The left-hand side of the graph is calibrated in blocks of 20 from 0 (at the foot of the graph) to 100 (at the top of the graph). Against these figures appear the words "Suction (air watts)". ("Air watts" is the unit of measurement of the suction power of a vacuum cleaner when empty, and when tested in laboratory conditions according to a standard protocol to which further reference will be made later in this judgment.) The foot of the graph is calibrated in blocks of 100 from 0 (on the left) to 300 (on the right). Against these figures appear the words: "Dust loading (grams)". At the foot of the card appear the words "Independent test results" in small capitals.

25. Returning to the graph itself, two lines are plotted on it. Reading the graph from the top downwards, the first line to be encountered is a straight horizontal line (coloured yellow) which crosses the graph at or around the level of 90 "air watts". Immediately above this line appear the words: "Dyson DC01". The second line (coloured red) starts (on the left-hand side of the graph) at a level of just above 80 "air watts", and declines in a more or less regular manner until it reaches the right-hand side of the graph at a level of about 20 "air watts". Beneath this red line appear the words: "Electrolux cassette".

26. On the other side of the card there are pictures of a Dyson upright cleaner and a Dyson cylinder cleaner, below which appears the slogan: "The world's first bagless vacuum cleaner with [in larger letters:] no loss of suction".

27. The red line on the graph (which I will call "the Electrolux line") plots the results of tests of the suction power of the EPS carried out on 3 March 1997 by an independent third party, Moore's (Wallisdown) Ltd ("MWL"), at the request of Dyson. These tests were carried out by MWL using kaolin powder, grade E. The yellow line on the graph (which I will call "the Dyson line") represents Dyson's own internal test results as to the suction power of the DC01. No independent tests were carried out on the suction power of the DC01 until some time after the card containing the graph had been produced by Dyson and distributed to retailers; and the tests which were subsequently carried out on the DC01 by MWL were of a different nature from those which MWL had earlier carried out on the EPS. Hence, as Dyson accepts, the statement "Independent test results" was untrue in so far as it implies (if it does not expressly state) that the totality of the information on the graph (ie. both the Dyson line and the Electrolux line) had been substantiated by comparative tests on both machines carried out by some independent body.

The article in "The Independent Electrical Retailer"

28. In April 1997 a trade magazine called "The Independent Electrical Retailer" published a supplement on floorcare which contained an article (L2/474) by one of its reporters, Susan Dean, entitled: "Getting down to ground level". In the course of the article, the following passage appears (L2/479):

"Electrolux recently launched its new upright range - Electrolux Power System, offering what are claimed to be: "Irresistible reasons to trade up to the £200+ price points." The Power System range consists of three models: 1710 at £196.99, 1720 at £199.99 and 1740 at £219.99. The flagship 1740 model features: "The dual cleaning system, which offers consumers the unique combination of high performance dustbag for cleaning fine dust you cannot see around the home, and a reusable cyclone cassette ideal for collecting larger particles of dust and debris you can see". Electrolux can rest assured that James Dyson will not be suing it for infringing any of his "cyclonic" patents: "It is not the same. It doesn't work," says Dyson provocatively."

The commencement of this action

29. On 22 May 1997 Electrolux issued the writ in this action, claiming (among other things) injunctive relief and an inquiry as to damages on grounds of malicious falsehood in relation to the graph and to the statement attributed to Mr Dyson in the magazine article, and, as an alternative claim, on grounds of infringement of trade mark in relation to the graph.

The publication of the flyer

30. In July 1997 Electrolux issued a "flyer" which made a deliberate play on a slogan much used by Dyson: "100% suction power, 100% of the time". The slogan on the flyer, referring, of course, to the EPS, proclaims: "More suction power 100% of the time". Beneath this slogan appears, on the left-hand side of the flyer, a photograph of an EPS in cassette mode. To the right of the photograph, beneath the words "You decide!", there is a table which purports to make a number of specific comparisons between the EPS and three vacuum cleaners made by competitors. One of the other machines is the DC01. The remaining two machines are bag machines. Against the top line of the table appears the legend: "Most powerful motor on the market". The top line of the table gives a wattage of 1500 for the EPS as compared with 1200 watts for the DC01. No complaint is made of these figures, which accurately represented the size of the respective motors. The second line of the table also bears the legend: "Most powerful motor on the market". On this line the table gives a figure of 207 air watts for the EPS, as compared with 102 air watts for the DC01. The reference to air watts establishes that what is being compared on the second line of the table is in fact suction power. It is admitted by Electrolux that the figure of 207 air watts was a result which had been obtained by Electrolux in testing the suction power of an EPS in bag mode, and that the suction power of an EPS in cassette mode would have been substantially less.

Dyson's Counterclaim

31. On 8 August 1997 Dyson served a Defence and Counterclaim in the action, in which it counterclaimed for (among other things) injunctive relief and an inquiry as to damages on the ground that in publishing the flyer Electrolux was guilty of malicious falsehood, further or in the alternative of infringing Dyson's trade mark.

32. Hence the Court is faced with a tit-for-tat position, in which each side accuses the other of malicious falsehood and infringement of trade mark in relation to the other's promotional material. In addition, Electrolux complains of the statement attributed to Mr Dyson in the magazine article.

THE LAW
The claims based on malicious falsehood

33. As Glidewell LJ said in Kaye v. Robertson [1991] FSR 62, 67:

"The essentials of [the tort of malicious falsehood] are that the defendant has published about the plaintiff words which are false, that they were published maliciously, and that special damage has followed as the direct and natural result of their publication. As to special damage, the effect of section 3(1) of the Defamation Act 1952 is that it is sufficient if the words published in writing are calculated to cause pecuniary damage to the plaintiff. Malice will be inferred if it is proved that the words were calculated to produce damage and that the defendant knew when he published the words that they were false or was reckless as to whether they were false or not."

34. In Horrocks v. Lowe [1975] AC 135, at 150, Lord Diplock contrasted recklessness with "carelessness, impulsiveness or irrationality in arriving at a positive belief that [the matter complained of] is true".

35. It is accepted by both sides that the requirement that publication of the material of which complaint is made should have been "calculated to cause pecuniary damage" to the other party is an objective one. On the pleadings, however, each side denies that the publication of the material complained of by the other side was calculated to cause pecuniary damage.

36. Thus, in relation to each of the claims of malicious falsehood four issues arise for decision:

(1) Meaning: What was the meaning of the material of which complaint is made? In addressing this issue, it is in my judgment appropriate to adopt the approach of the Court of Appeal in Skuse v. Granada Television Limited [1996] EMLR 278 (a libel case), in so far as that approach is applicable to the particular facts of the instant case (Both sides accept that the so-called "single-meaning rule" in libel cases applies in the context of the claims in malicious falsehood.). Thus:

(i) The words and images complained of are to be given their natural and ordinary meaning, in the sense of the message or messages which they would have conveyed to a reasonable member of the public reading or viewing them in the context in which they were intended to be read or viewed.

(ii) Thus, in the case of the graph and the flyer, the words and images must be read and viewed through the eyes of a potential customer interested in purchasing a vacuum cleaner who is being subjected to sales patter designed to persuade him or her to purchase one machine (either the EPS or the DC01, as the case may be) rather than the other.

(iii) In the case of the words attributed to Mr Dyson, there is an issue on the pleadings as to what precisely he said. Subject to that, the question is how his words would reasonably have been understood by someone in Susan Dean's position: ie. by a reporter for a trade journal. How Susan Dean in fact understood them is, of course, directly relevant to that question.

(iv) In addressing these questions, the Court must avoid on the one hand engaging in an over-elaborate analysis and on the other hand adopting too literal an approach.

(2) Falsity: Giving the material complained of its natural and ordinary meaning, were the messages conveyed (ie. the representations made) by such material, or any of them, false? The resolution of this issue involves both factual and expert evidence. And

(3) Malice: To the extent that false representations were made, were they made "maliciously", in the sense that the maker of them either knew that they were untrue or was reckless as to whether they were true or not (see Kaye v. Robertson (above))? This is an issue of fact.

(4) Damage: Was the material complained of calculated (in an objective sense: ie. likely) to cause pecuniary damage to the party complaining of it?

The claims based on infringement of trade mark

37. In the course of his judgment in Vodaphone Group Plc v. Orange Personal Communications Services Ltd [1997] FSR 34, Jacob J traced the development of the law in relation to comparative advertising, saying this (at page 39 of the report):

"Prior to the coming into force of the Trade Marks Act 1994 comparative advertising using a registered trade mark of a competitor was, subject to minor exceptions involving the use of a company name, forbidden by section 4(1) of the Trade Marks Act 1938. But in an increasingly pro-competitive environment there was virtually a moratorium on enforcement of section 4(1) rights in a number of trades - for instance comparative advertising in the field of motor cars was very common for a number of years before the 1938 Act was repealed. The 1994 Act now positively permits fair competitive advertising by section 10(6). This provides:

"Nothing in the preceding provisions of this section shall be construed as preventing the use of a registered trade mark by any person for the purpose of identfying goods or services as those of the proprietor or a licensee.

But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark."

In this case it is common ground that there is no infringement unless the use of Vodaphone in the comparison falls within the qualification of section 10(6). This qualification was considered by Laddie J in Barclays Bank Plc v. Advanta [1996] RPC 307. He held that it is for the plaintiff to show that the use falls within the qualification and that the test of honesty is objective (ie. would a reasonable reader be likely to say, upon being given the full facts, that the advertisement is not honest?). Laddie J gave as an example the case where the advertisement is "significantly misleading". In trade marks, as [Counsel] rightly submitted, there is no "one meaning rule". If a comparison is significantly misleading on an objective basis to a substantial proportion of the reasonable audience, it is not an "honest practice" within the section."

38. In Cable & Wireless Plc v. British Telecommunications Plc [1998] FSR 383, Jacob J gave further consideration to the nature of the test of "honest practice" in the context of section 10(6), saying (at page 391):

"[I]n the end I think the parties were right in submitting that the test is objective in this sense: that one should ask whether a reasonable trader could honestly have made the statements he made based upon the information that he had."

39. In the instant case, both sides invite me to proceed on the footing the the test of "honest practice" is an objective one, and nothing turns on the question whether the test is fully objective (as suggested in Vodaphone) or something less than fully objective (as suggested in Cable & Wireless). In the circumstances, it is sufficient for me to say that I am content to proceed on the footing that the test is essentially an objective one.

Remedy

40. As I indicated earlier in this judgment, each party seeks (among other things) injunctive relief and an inquiry as to damages. In relation to the claims of malicious falsehood, since no special damage has been pleaded or proved the damages (if any) will be at large (See Mr Milmo QC in reply [Day11/1369].). In the case of the claims of infringement of trade mark, each party claims loss of profits or, at its option, an account of profits made by the other party by its (ex hypothesi) infringing use of the trade mark.

41. I drew attention earlier (See page 3 above.) to the fact that this case is concerned essentially with raking over the ashes of past battles (or, perhaps more aptly, skirmishes) in the marketing war between Electrolux and Dyson, rather than with regulating the conduct of that war in the future. On that footing, injunctive relief may well be inappropriate in any event. Moreover, damages (whether in the form of general damages or of damages linked to profits), to the extent that they are more than merely nominal, will plainly be extremely difficult to assess and may ultimately prove to be relatively insignificant in terms of quantum. The fact that these considerations have not deterred the parties from fighting this protracted and expensive litigation vigorously to judgment only serves to confirm that they are more concerned with winning than with the obtaining of any particular remedy. "Victory, victory at all costs" appears to be the cry, on both sides. As Mr Prescott QC put it, rather more graphically, in the course of his closing speech when referring to Dyson's Counterclaim (Day9/1111.):

"The position is ......, this animal having been attacked, it must defend itself. As we see it, that is what this case is really about. ...... [R]ather like nuclear warfare, if the other side are going to maintain their case for trade libel, then we would be most unwise to give ours up, for reasons which are obvious."

42. These factors must, it seems to me, have a bearing on what (if any) remedy should be granted in the event that either party succeeds in its claims. As I observed at the time (Day9/1112.), each side is aiming its nuclear weapons at each other and each is pressing the button. It is my task, in this judgment, to determine what are the legal and practical consequences of this high-risk strategy. The possibilities range from global conflagration to a damp squib.

THE CLAIMS IN MALICIOUS FALSEHOOD

43. I turn now to the claims in malicious falsehood. I consider first Electrolux's claim in relation to the graph; next, Electrolux's claim in relation to Mr Dyson's conversation with the reporter from the trade magazine; and finally Dyson's claim in relation to the flyer.

THE GRAPH
Meaning

44. In the first place, it seems to me to be inevitable that a reasonable member of the public (I will refer to him or her as "the customer"), when confronted by the graph in circumstances typical of those in which it was designed to be seen (As to which, see page 13 above.), would naturally assume that it was intended to depict the relative suction power of the two machines in ordinary use in accordance with the manufacturer's instructions and recommendations. The customer would, in my judgment, be bound to assume that the information conveyed by the graph was intended to have some direct bearing on the practical use to which the machines were designed to be put. The customer would in all probability not have heard of "air watts" before, but having read the slogan immediately above the graph ("Dyson - the only cleaner with no loss of suction") would deduce, correctly, that measurements in air wattage reflected in some scientific way the relative suction power of vacuum cleaners. On the other hand, in my judgment the customer would not have anything approaching a precise notion of the weight of the dust and debris collected by a vacuum cleaner in normal use before its receptacle (be it bag or cyclone cassette) needed emtpying. Thus, the weight of "dust" expressed in grams on the graph would have little or no meaning for the customer. In my judgment, the customer would naturally assume that the graph plotted the relative suction power of the two machines from empty to "full" (ie. to the point where, in ordinary use in accordance with the manufacturer's instructions and recommendations, the machine would be likely to need emptying). Similarly, the customer would interpret the word "dust" as meaning household dust, in the sense of dust and debris picked up by the machine in the course of a practical test in conditions designed to be reasonably typical of those which the machine would be expected to encounter in normal use.

45. On that basis, the representations made by the graph according to its natural meaning were in my judgment as follows:

(1) that the DC01 has greater suction power than the EPS (in cassette mode) when empty;

(2) that, in ordinary use in accordance with the manufacturer's instructions and recommendations, the suction power of the DC01 remains more or less constant;

(3) that, by contrast, the suction power of the EPS (in cassette mode) in ordinary use in accordance with the manufacturer's instructions and recommendations suffers a progressive and continuous decline as it fills up with dust and debris until, by the time it needs emptying, its suction power is less 25 per cent of that of the DC01; and

(4) that all the above facts have been verified by independent, comparative tests on the two machines.

Falsity

46. In addressing the issue of falsity in relation to the graph I have had the benefit of expert evidence from two expert witnesses called by Electrolux and one expert witness called by Dyson. Each expert provided an initial written report and (following exchange of the initial reports) a supplemental written report. Each was cross-examined on his reports.

47. The expert witnesses called by Electrolux were Mr David Downham and Mr Paul Thorneycroft.

48. Mr Downham is a former employee of Electrolux who has since 1988 been exclusively involved in the design and manufacture of vacuum cleaners. From 1983 to 31 May 1988 Mr Downham was Design/Development Manager of Electrolux Floorcare, based in Luton. In addition to his two expert reports, Mr Downham also provided a witness statement dealing with certain factual matters.

49. Mr Thorneycroft is the consultancy manager at The University of Southampton Institute of Transducer Technology ("USITT"). He arranged and supervised the carrying out of performance tests on EPS machines (in both bag and cassette mode), including "field trials" in which the machines were used in a domestic environment.

50. The expert witness called by Dyson was Dr Eric Brown. Dr Brown is Director and Chief Executive of Cleaning Research International Ltd. He is an expert on all aspects of textile performance, including the cleaning and maintenance of carpets, and he acts as consultant on these matters to a large number of organisations. Dr Brown carried out comparative tests on EPS and DC01 machines.

51. I am extremely grateful to all three expert witnesses for the assistance they have given me.

52. I also heard oral evidence on factual matters relevant to this issue from Mr James Dyson, from Mr Mark Bickerstaffe (currently Research and Development Director of Dyson Research Limited, formerly Engineering Director of Dyson), and from Mr Jim Wills (of MWL). All these witnesses were cross-examined.

53. I will now consider each of the above representations in turn.

Representation (1)

54. On the evidence in this case, this representation was false. Tests carried out on EPS machines (in cassette mode) and DC01 machines (That is to say, machines of the same specification as those which were marketed in March 1997, when the graph was published.) when empty, according to an accepted industry standard known as "IEC Standard 312" (International Electrotechnical Commission Standard 312, 2nd edn., 3rd amendment 1994. This test is applicable only to empty machines. There is as yet no accepted industry standard test of the suction power of vacuum cleaners in use.), show that in virtually every case the EPS generated more air watts than the DC01 (Dr Brown's tests on DC01 machines having the same specification as those marketed in March 1997 - ie. the machines referred to as D and E in his supplemental report - gave an average of some 87 air watts, as compared with an average of 112.5 air watts for the EPS machines which he tested.). In most cases the EPS machines achieved more than 100 air watts when empty, whereas the DC01 machines (as marketed in March 1997 - ie. prior to modification) rarely reached 100 air watts, averaging about 90 air watts.

55. The representation was also false in so far as it purported to make a general statement as to the suction power of all EPS and DC01 machines on the market at the relevant time (ie. March 1997). In all the many IEC 312 tests of which evidence has been given in this case, no two EPS machines, and no two DC01 machines, have achieved the same air wattage when empty. This may be due to variations in the manner in which the standard test was carried out, or it may be due to variations between particular machines with the same factory specification. But whatever the reason, the assertion of consistency in air wattage when empty between particular machines with the same specification was wholly unsupported by any evidence, whether scientific or empirical. On the contrary, the evidence available in March 1997 showed not consistency in this respect but a lack of it: a feature which has been subsequently confirmed by the expert evidence in this case.

Representation (2)

56. On the evidence in this case this representation was true, subject always to the qualification (noted above in relation to representation (1)) that individual machines might generate differing levels of suction power when empty.

Representation (3)

57. On the evidence in this case, this representation was false.

58. In the first place, although the tests conducted by Dr Brown (Dyson's expert) establish that the EPS in cassette mode lost some of its suction power as the vacuum chamber filled with dust and debris and as the exhaust filter became progressively clogged with dust, Dr Brown was not able to distinguish between these two causes of the loss of suction power. He accepted that emptying the casette would have resulted in some improvement in suction power, although that was not an effect which he had measured. What is clear from his tests, however, is that the decline in the suction power of an EPS machine in cassette mode from empty to "full" (ie. to the point at which a user operating the machine in accordance with the manufacturer's manual might reasonably be expected to empty the cassette) was nothing like as great as that which is depicted on the graph. This conclusion is confirmed by the tests carried out by USITT under the supervision of Mr Thorneycroft.

59. In the second place, as noted earlier, the MWL test results (which formed the basis for the Electrolux line on the graph) were obtained by loading an EPS machine not with the kind of dust and debris which might typically be found in ordinary domestic use, but with kaolin powder.

60. The experts are agreed that it is the fine particles of dust which are the primary cause of clogging in a bag machine (where the porous bag becomes progressively clogged in use) and that the same applies to the exhaust filter on an EPS (See paras. 38 and 40 of Mr Downham's first report, and Dr Brown's evidence in corss-examination at Day 7/919-920.). The evidence establishes (a) that the diameter of kaolin particles is of the order of 1 to 2 microns (A micron is one thousandth of a millimetre.) and (b) that particles of that size will form only a small proportion (by weight) of the dust and debris which may reasonably be expected to be picked up by a vacuum cleaner in ordinary domestic use. As Mr Dyson put it in evidence (Day 5/577.) (and as I find), kaolin:

".... is an accurate representation of the clogging element of household dust." (My emphasis.)

Dr Brown himself described the use of kaolin as "an absolute worst case scenario" (Day 7/920.), and he accepted in cross-examination (Day7/947.) that a laboratory test using kaolin grossly exaggerates the clogging effect of dust on the exhaust filter of the EPS cassette

61. I conclude, therefore, that "feeding" a vacuum cleaner with a diet of neat kaolin powder is not a fair or accurate representation of the conditions which the machine may reasonably be expected to encounter in ordinary domestic use, and in particular that the use of neat kaolin will seriously exaggerate the loss in suction power which an EPS machine may reasonably be expected to suffer in ordinary domestic use. This conclusion is supported by Dr Brown's own evidence to the effect that in ordinary domestic use the cassette chamber of an EPS will require to be emptied more than once (and possibly several times) before it has picked up 300 grams of particles within the 1-2 micron range. The EPS machines which he tested were emptied a number of times before they had accumulated anything approaching 300 grams of dust and debris, and this occurred in the course of a field test designed to replicate ordinary use. The dust and debris actually picked up by these machines must therefore be assumed to have contained only a small proportion by weight of particles comparable in size with particles of kaolin. On that basis, the machine would have required emptying many more times before it picked up 300 grams of kaolin-sized particles (It follows that even if, contrary to my conclusions as to the meaning of the graph, the customer would have understood what 300 grams of "dust" represented in the context of a vacuum cleaner in ordinary domestic use, the Electrolux line on the graph is still grossly misleading (and the message it conveys untrue) in that it leaves out of account the need to empty the cassette chamber and (in consequence) the improvement in suction power which would result from so doing.).

62. My conclusion as to the clogging effect of kaolin is also confirmed by comparing the results of tests on an EPS machine undertaken by Dyson (under the supervision of Mr Bickerstaffe), using kaolin powder, with the results of Dr Brown's "real use" tests. The proportion of dust (by weight) which ended up on the exhaust filter of the EPS cassette in the Dyson test, using kaolin, was around 10.6 per cent (See M2/424.), as compared with around 2.6 per cent in Dr Brown's tests (See paragraphs 49-60 of Dr Brown's first report (H/9-10) and Day 7/944.). Dr Brown agreed in cross-examination (Day 7/947.) that this showed that the clogging effect of kaolin was some four times greater than that produced by the kind of dust and debris which an EPS machine might reasonably be expected to pick up in ordinary use (Dr Brown's tests being designed so far as possible to replicate ordinary use).

Representation (4)

63. As noted earlier, this representation is admittedly false in that, at the date when the graph was published, no independent test - let alone a comparative test - had been carried out to establish the suction power of a DC01, either when empty or in use.

64. But the representation is also false in relation to the tests carried out by MWL on the EPS, using kaolin. For reasons which I have already given when considering representation (3), the use of kaolin powder does not fairly or accurately reflect the performance of an EPS machine in ordinary use, so far as suction power is concerned. It follows that no independent test had been carried out on either machine relating to its suction power in ordinary use according to the manufacturer's instructions and recommendations.

65. Of the four representations made by the graph, therefore, three were false and the remaining one required qualification. The conclusion follows that the graph was a materially false and misleading document.

Malice

66. Since Dyson is a corporation, its "state of mind" can only be ascertained by reference to the state of mind of its servants or agents. The relevant individuals in this context were Mr Dyson, Mr Bickerstaffe, Miss Rebecca Trentham (Marketing Manager for Dyson in March 1997) and Mr Martin McCourt (Group Commercial Director of Dyson). Each of these persons gave evidence and was cross-examined.

67. I am satisfied that in giving evidence each of them was doing his or her best to assist the Court by giving an honest account of events, according to the best of his or her recollection.

68. I find the facts relevant to this issue to be as follows.

69. The initial idea of publishing a graph appears to have been that of Mr McCourt. He joined Dyson on 10 March 1997 as head of a team with responsibility for, among other things, the development of marketing strategy and the production of promotional material. Virtually his first act on joining Dyson was to put in hand the production of a graph comparing the suction power of the EPS (in cassette mode) with that of the DC01, designed to show how, in contrast to the DC01, the EPS progressively lost suction power as the exhaust filter on the cassette clogged with dust. Mr McCourt had had a number of conversations with Miss Trentham during the previous week (ie. before he formally joined Dyson) in the course of which some reference had been made to the need to counter the marketing strategies of Electrolux in promoting the EPS. The idea of publishing the graph must have originated in these conversations.

70. Miss Trentham was away on holiday during the week beginning 10 March 1997, and it was left to Mr McCourt to take the initiative in arranging for a suitable graph to be produced. In consequence, Miss Trentham's role in the production of the graph was peripheral only.

71. Mr McCourt, anxious, no doubt, to mark his arrival at Dyson with some positive initiative, lost no time in requisitioning a graph from the engineering department at Dyson. A draft version of the graph (M1/231.) was produced the next day (11 March 1997). On this draft version the engineering department had shown the suction power of the DC01 at a constant level of 90 air watts (substantially as shown by the horizontal "Dyson line" on the final version). To represent the comparable performance of the EPS in terms of suction power, the engineering department had plotted the results of the MWL tests previously commissioned by Dyson, using kaolin (See page 8 above.) (as shown by the "Electrolux line" on the final version).

72. The draft graph did, however, differ from the final version in two significant respects. In the first place, instead of the words "Independent test results", which appear on the final version, the draft version contained the following note:

"Electrolux results obtained by Moores Wallisdown Ltd 3 & 4 Mar 1997".

In the second place, at the foot of the graph, instead of the words "Dust loading (grams)" which appear on the final version, the draft graph said this:

"Dust loading (g) - Kaolin Grade E"

73. Mr Jim Turner, the Head of the Graphics Department at Dyson, was also on holiday during the early part of the week beginning 10 March 1997, and in his absence Mr McCourt discussed the draft graph with Miss Michele Wall, an analyst in Dyson's marketing department. He asked her to produce a simple version in colour. For some reason this was not successful, so Mr McCourt had to wait until Mr Turner returned from holiday before an acceptable version could be produced.

74. Mr McCourt told me that it was he who decided to replace the reference to the tests on the EPS carried out by MWL (as quoted above) with the words "Independent test results". He said that he did not know at the time that no independent tests had at that stage been carried out in relation to the suction power of the DC01: to him, the graph merely demonstrated the differences between the two products in a clear and simple way (See paragraph 8 of Mr McCourt's witness statement (D/39).).

75. Mr McCourt also accepted that it was his decision to delete the reference to kaolin. He told me (Day8/1086.) that he did this because he did not believe that the reference to kaolin would be of any significance to the people who would be likely to read the cards and he thought retaining the reference to kaolin would be likely to cause confusion.

76. I accept this evidence, and acquit Mr McCourt of any intention deliberately to mislead consumers by substituting the reference to independent tests for the reference to the MWL tests on the EPS, and/or by removing the reference to kaolin. Equally, I am satisfied that he was not reckless in the sense of not caring whether the information conveyed by the graph was true or false. I find that he was concerned that the information conveyed by the graph was true, and that he believed it to be so.

77. At the same time, it is manifest that Mr McCourt was guilty of gross carelessness in not checking the accuracy of the reference to independent tests. The more so as he had only recently joined Dyson and cannot have had any direct knowledge as to what, if any, tests had previously been carried out on the DC01. He simply assumed that an independent test had been carried out on the DC01, and did not take the trouble to check whether his assumption was correct. As he put it himself in cross-examination (Day8/1086.):

"I consider myself to be a very detailed individual and those who have worked with me over the years would verify that. I did not check my assumption and that is the error that I made; no other."

78. As to the deletion of the reference to kaolin, that was an error of judgment on Mr McCourt's part, born of his ignorance of the significance of using kaolin to test the suction power of vacuum cleaners. Once again, he can be criticised for not informing himself on this matter before altering the draft version of the graph, but (as Lord Diplock made clear in Horrocks v. Lowe (above)), carelessness is not to be equated with recklessness.

79. On her return from holiday Miss Trentham approved the final form of the card containing the graph (although she told me that she had no specific recollection of having done so, or of having discussed it with the Graphics Department). She also wrote a covering circular letter to retailers (M1/238-9.). The covering letter refers encouragingly to Dyson's forthcoming television advertising campaign, and to the continuing success of Dyson products. The letter concludes:

"You and your staff have helped to make the Dyson story the outstanding success that it is. Thank you for your support, and we look forward to developing this relationship in the future. To help you in your work, please find enclosed our pocket-sized Dyson performance guide [ie. the card containing the graph]".

The intention was that two cards should be enclosed with each letter.

80. On 26 March 1997 supplies of cards and of Miss Trentham's circular letter were sent to Dyson's distribution agents for distribution to retailers.

81. 1.Miss Trentham told me in cross-examination (Day7/870.), and I accept, that it did not occur to her to question the information on the draft graph provided by the engineering department. The production and publication of the card was completed in something of a rush, and it was primarily Mr McCourt's project, in conjunction with the Graphics Department. As I said earlier, Miss Trentham's contribution to the project was essentially peripheral. I am satisfied that her conduct in relation to the graph was not motivated in any degree by malice.

82. A Board Meeting of Dyson took place on 26 March 1997. The meeting was attended by (among others) Mr Dyson, Mr Bickerstaffe and Mr McCourt. Before the meeting was a written report by Dyson's Sales Director, Mr Derek Headon. One of the matters covered in this report was the current advertising and publicity campaign then being conducted by Electrolux in support of the EPS. Under the heading "Electrolux Campaign" the report stated:

"The following information details the Sales Department's actions which are being taken to undermine the Electrolux campaign."

Then followed five numbered paragraphs. Paragraph 1 referred to a briefing to Account Managers "to counter the Electrolux threat". Paragraph 4 referred to the card containing the graph, as follows:

"Mail shot to hit 3000 stores on Thursday 27 March 1997 [ie. the day after the Board meeting] prior to the TV ad campaign breaking. This will have a clear Dyson message and will announce our TV campaign. A copy of the mail shot [ie. the card and the covering letter to retailers signed by Miss Trentham] is attached."

83. In the course of the meeting Mr McCourt produced a copy of the final version of the card containing the graph, and informed the Board that (as was the fact) copies of it (together with Miss Trentham's circular letter) had been delivered to Dyson's distribution agents that day for circulation to retailers. The card was not passed round: Mr McCourt simply held it up so that those present could see it. In the event, the Board seems to have done no more than give it cursory glance before moving on to other business. I do not find this particularly surprising, given that steps had already been taken to circulate it to retailers. Mr McCourt was not seeking the Board's approval of the card and its contents: he was merely showing it to the Board for its information.

84. Mr Bickerstaffe had not been involved in the production of the graph (he also was on holiday during the week of 10 March 1997). At the Board meeting, he looked at the graph briefly, but did not comment on it. He told me (and I accept) that he was confident that the graph reflected the true relative performances of the DC01 and the EPS in terms of suction power, but that he did not appreciate at the time that the graph referred to independent test results (Day7/808.). He was, however, troubled by the fact that recent in-house tests on the DC01 carried out under his supervision had shown a decline in suction power as the machine was loaded with kaolin, although he attributed this to some defect in the methodology of the tests.

85. Following the Board meeting, he raised his concern about the results of these in-house tests with Mr Alan Briggs, Dyson's Legal Manager. As Mr Bickerstaffe put it in his witness statement (Paragraph 14 (D/29).):

"I told him that, fundamentally, I was sure the Graph was right but that I had a slight worry, given that I had not got to the bottom of what was happening to a DC01 in our tests."

86. On the following day, 27 March 1997, Mr Bickerstaffe and Mr Briggs went to see Mr Dyson. Mr Dyson was incredulous when told the results of Mr Bickerstaffe's in-house tests on the suction power of the DC01. I accept his evidence that his belief has always been that the DC01 suffers no loss of suction power in use. Thus, when Mr Briggs and Mr Bickerstaffe came to see him he was adamant that, in contrast to the EPS, the suction power of the DC01 remained constant when in use. He told me in cross-examination (Day5/621.) (and I accept) that he was previously unaware that this had not as yet been verified by any independent test. He did not, however, give instructions for the graph to be withdrawn. When asked in cross-examination why he did not do so, he replied:

"I could not say that because the graph had already been sent out."

He went on to say this (Day5/622.):

"... when we discovered that we had not in fact done independent tests on our own machine, I immediately requested that independent tests be done to check whether our machine performed in a similar manner..." (My emphasis.)

87. Later in his cross-examination, however, Mr Dyson corrected this evidence by substituting "ultimately" for "immediately" (See Day6/676.). The inaccuracy of his earlier evidence, on a matter directly in issue in the action, does Mr Dyson little credit. However, as I said earlier, I am satisfied that he was an honest witness, and I can only assume that in the heat of the moment he momentarily lost his objectivity and that his recollection temporarily deserted him. At all events, having had the opportunity to consider the transcript of his earlier evidence overnight he did make the necessary correction.

88. Mr Bickerstaffe was also content that the graph should continue in circulation, despite the reference to independent tests. As he put it in cross-examination (Day7/820.):

"I was content that what [the graph] conveyed to consumers was correct."

89. In support of its allegation of malice, Electrolux pleads (See paragraph (b) of the particulars of malice pleaded in paragraph 10 of the Re-Amended Statement of Claim.) that Dyson published the graph knowing:

"..... that laboratory tests using kaolin were not an adequate replication of ordinary household use of a vacuum cleaner, and knowing that such tests would grossly exaggerate the speed and extent to which the suction power of the Powersystem declined with such use...".

90. This allegation is not made out. I accept the evidence of Mr Dyson and Mr Bickerstaffe that they have at all material times believed tests using kaolin to be an appropriate and a fair method of measuring to the clogging effect of household dust on the suction power of a vacuum cleaner (See, for example, Mr Dyson's evidence in cross-examination at Day5/577 and Mr Bickerstaffe's evidence in cross-examination at Day6/760.). This belief is based on the proposition that kaolin is representative of the finer particles of household dust, and - as the expert witnesses agree - that it is the finer particles which cause filters (and bags, in the case of bag cleaners) to clog (See Mr Dyson's evidence in cross-examination at Day5/592, and Mr Bickerstaffe's evidence in cross-examination at Day6/774.). However, what Mr Dyson and Mr Bickerstaffe failed to appreciate was that (for reasons which I have given earlier in this judgment), in the context of a graph purporting to plot progressive loss of suction power as 300 grams of "dust" is loaded into an EPS in the course of ordinary use in accordance with the manufacturer's instructions and recommendations, the use of kaolin produces grossly exaggerated results.

91. The fact that Mr Dyson, once he became aware on 27 March 1997 that the assertion in the graph that the suction power of the DC01 remained constant in ordinary use had not been verified by any independent test, did not take steps to withdraw the graph - or at least to make sure that no further copies of it were put into circulation - certainly indicates a regrettable lack of concern on his part (and hence on the part of Dyson) that information contained in advertising material put out by Dyson should so far as possible be correct and accurate in every respect. On the other hand, in my judgment it does not lead to the conclusion that in publishing the graph Dyson was reckless whether the representations which the graph made to consumers were true or false. On the evidence, the publication of the graph was exclusively Mr McCourt's project. It was his idea initially, and he was solely responsible for carrying it into effect. The Board saw the graph only after it had been sent to distribution agents for distribution to retailers, when Mr McCourt showed the graph to the Board for its information (not for its approval).

92. In the circumstances, it seems to me to follow that the "state of mind" of Dyson in relation to the publication of the graph must be determined primarily by reference to Mr McCourt's own state of mind in relation to that matter; since if Mr McCourt was not motivated by malice in procuring the publication of the graph it is hard to see how Dyson can have been. As I said earlier, and as Mr McCourt himself accepted, he was plainly at fault in failing to check the accuracy of his assumption that independent tests had been carried out on both machines; but I am satisfied that he was not reckless.

93. As for Mr Dyson, I have already found that he believed the information conveyed by the graph itself, both in relation to the EPS (based on the MWL tests using kaolin) and in relation to the DC01, to be true. In cross-examination Mr Dyson said this (Day5/624.):

"I was dismayed that the graph had gone out without the test having been done, but, since I believed the Dyson line was horizontal I was keen to test it and confirm that it was indeed horizontal".

I accept that evidence. I also accept Mr Dyson's evidence (Day5/531.) that Dyson has always tried to be accurate in its promotional material - although that evidence has to be accepted subject to the qualification that in relation to the statement "Independent test results" Dyson took no steps to correct what it knew to be an inaccuracy.

94. In my judgment, the fact that Mr Dyson did not take steps, ex post facto, to withdraw the graph does not serve to render the publication of the graph malicious in circumstances where, as I have found, Mr McCourt himself was not motivated by malice (either actual or inferred).

95. In due course Dyson instructed MWL to carry out tests on the suction power of the DC01 similar to those which it had carried out earlier on the EPS, using kaolin. On 9 June 1997 the results of these tests became available. They showed a reading of some 90 air watts when the machine was empty, with a progressive decline in suction power as the machine was loaded with kaolin. After 300 grams of kaolin had been loaded the suction power measured only 54 air watts. These results were not consistent with other similar (but not identical) tests carried out by MWL on the DC01, which had indicated that the suction power of the DC01 remained constant in ordinary use. Mr Wills expressed his surprise at the results of the 9 June 1997 test to Mr Sissons, Dyson's test manager.

96. In further support of the allegation of malice in relation to the publication of the graph, Electrolux relies (See paragraph (f) of the particulars of malice pleaded under paragraph 10 of the Re-Amended Statement of Claim.) on the fact that despite the results of the MWL tests of 9 June 1997 Dyson took no steps to withdraw the graph. In my judgment, this fact does not, either alone or in conjunction with the other matters relied on by Electrolux in this context, serve to raise an inference of malice on the part of Dyson at the time of publication of the graph.

97. In his cross-examination of Mr Dyson, Mr Milmo sought to establish a course of conduct by Dyson in its promotional strategy and in the advertising of its products, with a view to demonstrating a general recklessness on Dyson's part as to the truth or falsity of the representations made. It is plain on the evidence that Dyson has in the past been guilty of making exaggerated and misleading claims in the promotional material (As an outstanding example, see the flyer (at M1/2) which claimed that: "[a]fter vacuuming just 500 grams of dust, that's barely a cupful, a normal vacuum cleaner has lost 70% of its power". Mr Bickerstaffe's practical demonstration, in the course of his cross-examination, proved that "cupful" in this context can only have referred to a giant-sized breakfast cup.), but - given my earlier findings - that is not sufficient to raise an inference of malice in the publication of the graph.

98. In the result, therefore, I find that Dyson did not act maliciously in publishing the graph.

Damage

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

100. In the result, however, for the reasons I have given Electrolux's claim in malicious falsehood in relation to the graph fails.

MR DYSON'S CONVERSATION WITH THE TRADE REPORTER
Meaning

101 I find (indeed Mr Dyson accepted in evidence (Day5/629.)) that Mr Dyson said in terms to Ms Susan Dean that the Elextrolux cassette system "did not work". In context (See Susan Dean's notes of her telephone conversation with Mr Dyson (at C2/5), and see also Mr Dyson's evidence in cross-examination at Day5/629.), however, it is clear that the meaning of what Mr Dyson said was not that the cassette system was wholly inoperative in the sense that it failed to separate any dust and debris from the airflow, but that it did not work as, in his opinion, a cyclone should work. As Mr Dyson put it in cross-examination (Day5/630.):

"It does not separate the dust and dirt properly. It is pretending to be a cyclone." (My emphasis.)

102. In cross-examination, Ms Dean said that she understood Mr Dyson to mean that the EPS "did not work, full stop, did not perform" (Day2/95.). If by that answer she meant that she understood Mr Dyson to say that the EPS cassette system did not work at all (and from her subsequent answers that does appear to have been her understanding), then I can only conclude that she took Mr Dyson's words out of context.

Falsity

103. It is certainly the case, as proved by the various tests of the EPS in evidence in this case, that a proportion of the dust picked up by the EPS ends up on the exhaust filter. Indeed, that is hardly surprising since the EPS is designed to function in that manner. As I explained earlier in this judgment (See page 7 above.), that is one of the features which distinguishes the EPS from the DC01. But whether that justifies the comment that the cassette system "does not work", in the sense that it does not work as a cyclone should, is an entirely different matter. It seems to me that, in context, such a comment is more an expression of opinion, or a subjective judgment, than a representation of fact. In my judgment, in using the words which he used, in the context in which he used them, Mr Dyson was not making any untrue statement of fact such as could support a claim in malicious falsehood. He was doing no more than expressing his own view - albeit in forthright terms - as to the effectiveness of the Electrolux cassette system: a view with which, needless to say, Electrolux emphatically disagrees.

Malice

104. In the light of the above conclusions, the issue of malice does not arise. Nevertheless, so that necessary findings of fact may not be wanting, I must record that I find that in making the comment in question Mr Dyson was not acting out of malice, whether actual or inferred. He was expressing his views honestly and deliberately, as he expressed them in evidence in this court in the course of his cross-examination. The views which he expressed were his genuine views, which he believes to be justified. I am satisfied that he was not acting recklessly.

Damage

105. Had Mr Dyson conveyed the meaning for which Electrolux contend (ie. that the cassette system of the EPS did not work at all), and had he done so maliciously, then Electrolux must also have succeeded on the issue of damage. In the event, however, in the context of the claim in malicious falsehood the issue of damage does not arise. I repeat, however, observations which I made in relation to damages earlier in this judgment (See page 35 above.).

 106. In the result, for the reasons I have given Electrolux's claim in malicious falsehood in relation to Mr Dyson's comments to Ms Dean fails.

THE FLYER
Meaning

107. It will be recalled that the flyer (A/32.) purported to compare certain specified characteristics and capabilities of the EPS with those of three competitors, two being bag cleaners produced by other manufacturers and the third being a cyclonic cleaner, namely the DC01. One of the specified characteristics of the EPS shown in the comparison table was the option of using either a bag or the cyclone cassette (see the reference to "Bag/Bagless option"). The EPS is shown (correctly) as providing that option whereas the other machines are shown (correctly) as not doing so. In that context, a fair comparison between the EPS on the one hand and the DC01 on the other plainly required that the air watts figure for the EPS should relate to its performance in cassette mode. Although the customer looking at the flyer may be credited with a healthy degree of scepticism, he or she would in my judgment have assumed that, at the very least, the comparison which the flyer purported to make between the air wattage of the EPS and that of the DC01 was a fair one, in the sense that it involved a comparison of like with like. Hence, the customer would, in context, have understood the air wattage figure for the EPS to relate to its performance both in bag and in cassette mode.

108. On that basis I conclude that, giving the flyer its natural and ordinary meaning (ascertained in accordance with the general principles set out above), it made the following representations:

(1) that the suction power of the EPS (whether in bag or in cassette mode) was 207 air watts;

(2) that the EPS (whether in bag or in cassette mode) maintained that suction power at all times during use (ie. for "100% of the time");

(3) that the suction power of the EPS (in cassette mode) exceeded that of the DC01 both when empty and at all times during use (ie. "More suction power, 100% of the time"); and

(4) that the above facts had been verified by independent tests carried out by Southampton University.

109. Although not formulated in the precise terms in which I have formulated them, each of the above representations is in my judgment sufficiently pleaded in Dyson's Counterclaim (See paragraph 17 of the Defence and Counterclaim (A/25-26).).

Falsity

110. I will consider the above representations in turn.

Representation (1)

111. This representation is false. The figure of 207 air watts admittedly relates only to the EPS in bag mode: the corresponding figure in relation to the EPS in cassette mode (tested by USITT at the same time) would have been 97.25 air watts (See paragraph 17 of Mr Downham's witness statement (B22).) (alternatively, on a "best result" basis, around 133 air watts (See paragraph 19 of Mr Downham's witness statement (B/23).)).

112. Moreover (as with the corresponding representations made in the graph) the flyer is misleading in that it implies that all machines of the same model and having the same specification achieve a uniform level of suction power. In fact, the figure of 207 air watts was achieved by a single EPS machine tested by USITT. On the available evidence, no other tests have given such a high figure for the suction power of an EPS in bag mode. The USITT tests (carried out in accordance with IEC Standard 312, ie. on empty machines) showed the suction power of the DC01 machine as 102.1 air watts, as compared with 97.25 air watts for the EPS machine in cassette mode. Mr Downham explained the lower suction power of the EPS machine by pointing out that the relief valve opened early, thereby preventing the machine from achieving its full suction power (See paragraph 18 of his witness statement (B/22-23).). To my mind, however, this incident demonstrates just how variable can be the results of tests of suction power carried out to the same protocol, and just how unsafe it is to rely on such results as the basis for comparative advertising.

Representation (2)

113. This representation is also admittedly false (See Mr Downham's evidence in cross-examination (Day3/248-9).).

Representation (3)

114. This representation is also admittedly false (See ibid.).

Representation (4)

115. This representation is also admittedly false (See the results of the USITT tests as set out in paragraph 17 of Mr Downham's witness statement (B/22).).

116. I should make it cleat that, in the case of each of the above representations, Electrolux's defence (which I have rejected) was not that the representation was true but that, giving the flyer its natural and ordinary meaning, it was not made.

Malice

117. Evidence on this issue was given by Mr Richard Chapman (Head of Marketing at Electrolux at the time the flyer was published), by Miss Elizabeth Farmer (Product Planning Manager at Electrolux), and by Miss Rosemarie Newby (an Area Sales Development and Training Manager at Electrolux). Each of these witnesses was cross-examined.

118. I found Miss Farmer and Miss Newby to be entirely honest witnesses, concerned to assist the court to the best of their recollection.

119. Mr Chapman suffered what one might charitably describe as an unhappy experience in the witness box. In the witness statement which formed the basis of his evidence-in-chief, he presented himself as being at all stages directly involved in and responsible for the design and publication of the flyer. However, as his cross-examination proceeded it became increasingly apparent (both from his own evidence and from an examination of the contemporary documentation) that his role was a very much more limited one. For example, in paragraph 5 of his witness statement (B/14.) he referred to a meeting which took place on 9 July 1997 in terms which clearly implied that he was present at the meeting. In cross-examination, however, after some uncomfortable to-ing and fro-ing, he finally admitted that he had not been present (Day4/517.) at the meeting. In other respects too his evidence in cross-examination departed materially from his witness statement (See, for example, Mr Chapman's initial denial in cross-examination that the slogan on the flyer was a play on Dyson's slogan "100% suction power 100% of the time" - a denial which he had to retract when referred to his express assertion in his witness statement that that was the case (Day5/493).).

120. In the circumstances I am bound to treat Mr Chapman's evidence on contentious issues as unreliable, save to the extent that it is corroborated by the evidence of other witnesses or by the contemporary documentation. As it happens, the contemporary documentation does corroborate much of what Mr Chapman said in his witness statement about the genesis of the flyer, notwithstanding that, as I have already observed, the witness statement seriously overstates Mr Chapman's own role in relation to the flyer. In the circumstances, I infer that Mr Chapman had little or no direct recollection of events surrounding the production and publication of the flyer, and that in a misguided (and, in the event, unsuccessful) attempt to disguise that lack of recollection he sought to construct his witness statement from the contemporary documentation.

121. I find the facts in relation to the genesis of the flyer to be as follows.

122. The flyer was prepared by Mr Paul Colley (Electrolux's then marketing communications manager) in conjunction with Mr Adam Marshall (at that time a trade sector manager with Electrolux), Mr Robert Patterson (Electrolux's then sales manager in Scotland) and Mr John Greenhalgh (of The Electric Artwork Company, one of a number of graphic design companies regularly used by Electrolux). Mr Chapman was not directly involved in the design of the flyer or in the decision to publish it.

123. The first draft of the flyer (C/25.), which is handwritten, differs from the final version in the following respects:

- the slogan at the top reads: "About the only thing it leaves behind is the competition" (in the final version, the slogan reads: "More suction power, 100% of the time");

- the EPS is pictured in bag mode (in the final version it is shown in cassette mode);

- the legend against the second line of the comparison table is "Best suction power" (in the final version it is "Most powerful motor on the market");

- the second line contains a tick against the EPS and a cross against the other three machines (instead of air wattage figures, as in the final version); and

- the reference to the USITT tests is omitted.

124. The second draft of the flyer (C/31.) substitutes the legend "Most powerful motor on the market" against the second line of the comparison table (repeating the legend against the first line), and underneath the one tick and three crosses which complete that line it includes the air wattage figures which appear in the final version. The air wattage figure for the EPS (207 air watts) has an asterisk against it with a footnote (appearing immediately below the comparison table) stating:

"When used in bag mode. 169 Air Watts in Cyclone mode."

125. The second draft of the flyer incorporates a further change in showing the EPS in cassette mode instead of in bag mode. A fax from Mr Greenhalgh to Mr Colley dated 9 July 1997 (C/30.) indicates that these changes were made on Mr Colley's instructions.

126. By a handwritten memorandum (At C/32.) from Mr Colley to Mr Greenhalgh dated 14 July 1997 Mr Colley asked Mr Greenhalgh to make two further changes to the form of the flyer. The first was to change the slogan at the top of the flyer (referred to in the memorandum as "the Headline") to that which appears in the final version, ie. "More suction power, 100% of the time". This change was prompted by a suggestion made by Mr Patterson, following the meeting on 9 July 1997 to which Mr Chapman refers in his witness statement - and at which (as he eventually accepted) he was not present. The new slogan was intended as a play on Dyson's much-published slogan: "100% suction power, 100% of the time". The second change was to delete the footnote stating the suction power of the EPS in cassette mode.

127. The changes which Mr Colley requested were duly made, and the result was the final version of the flyer.

128. Mr Colley was not called as a witness in this action. There was evidence that he has left the employment of Electrolux, but there was no evidence as to what (if any) attempts had been made by Electrolux to trace his whereabouts. I have no reason to doubt that Electrolux genuinely believed that in calling Mr Chapman to give evidence it was calling the person responsible for the form and the publication of the flyer (in accordance with Mr Chapman's own witness statement), but, as I explained earlier, it subsequently transpired that that was by no means the case.

129. I am therefore faced with a somewhat unsatisfactory situation, in that I have not heard any evidence from Mr Colley, who appears from the contemporary documentation to have been the one person within Electrolux (at the material time) who took the relevant decisions in relation to the flyer. At the same time, I am not in a position to draw any adverse inference against Electrolux arising out of the fact that Mr Colley was not called; nor can I conjecture what evidence Mr Colley might have given if he had been called.

130. In the absence of any evidence from Mr Colley, and on the evidence before me, I am satisfied that the decisions to show the EPS in cassette mode and to remove the footnote - the implementation of which decisions gave rise to the falsity referred to above - was not inspired by malice, actual or inferred. Rather, it was the result of muddle, poor communication and downright carelessness within Electrolux.

131. I should add, for completeness, that in support of its allegation of malice in relation to the flyer (and in rebuttal of the allegation of malice on its part in relation to the graph) Dyson relied (See paragraphs 5 and 19 of its Amended Defence and Counterclaim.) on a document compiled by Miss Farmer entitled "Performance Comparison" (K/285.), in which the suction power of the DC01 is compared with that of the EPS in cassette mode. In my judgment, however, this document takes the matter no further.

Damage

132. This issue does not arise (but I refer once again to my earlier observations on the issue of damages in the context of malicious falsehood (Page 35 above.)).

133. In the result, for the reasons I have given Dyson's claim in malicious falsehood in relation to the flyer fails.

THE CLAIMS OF INFRINGEMENT OF TRADE MARK
Liability

134. The reciprocal claims of infringement of trade mark relate to the graph and the flyer respectively.

135. Although, as I have already held, neither the graph nor the flyer was published maliciously, the fact remains that each was a thoroughly misleading document, containing a number of false representations. Given that the test of an "honest practice" for the purposes of the proviso to section 10(6) of the Trade Marks Act 1994 is agreed to be an objective one (See page 15 above.), the conclusion is in my judgment inescapable that in each case the use made of the competitor's trade mark was "otherwise than in accordance with honest practices in industrial or commercial matters" within the meaning of the proviso. To hold the publication of documents such as these to be an "honest practice" for this purpose would in my view be to render the proviso of negligible practical use or effect.

136. The next question which arises is whether the use made of the competitor's trade mark, besides being "otherwise than in accordance with honest practices", was made (a) without due cause, and (b) "[took] unfair advantage of, or [was] detrimental to, the distinctive character or repute of the [competitor's] trade mark". Plainly, in my judgment, this requirement is met in each case.

137. The conclusion accordingly follows that in each case the proviso to section 10(6) of the 1994 Act applies, with the consequence that the use of the competitor's trade mark constitutes an infringing use.

138. In the result, therefore, each party succeeds in its claim of infringement of trade mark.

Remedy

139. The question what (if any) remedy or remedies should be granted in the event that either party or (as has happened) both parties should succeed in establishing infringement of trade mark was not addressed at any length by either party in the course of the hearing. In the circumstances, I find it necessary to invite further submissions on this question.

140. My current concerns in relation to the question of remedy are as follows.

141. As at present advised it seems to me that injunctive relief of any kind may well be inappropriate, given:

(a) that each party has been guilty of infringing the other's trade mark by means of comparative advertising in circumstances which did not amount to an "honest practice" for the purposes of the proviso to section 10(6) of the 1994 Act;

(b) that, as I understand the position, neither party is threatening to continue to circulate the offending material;

(c) that the specification of at least one of the models (ie. the DC01) has changed since the graph and the flyer were published, with the consequence that the comparisons which the graph and the flyer sought to make are in any event out of date; and

(d) that, as I observed earlier (See page 16 above.), both sides appear to be more concerned with winning than with the obtaining of any particular remedy.

142. As to damages, I have three particular concerns.

143. In the first place, as at present advised it seems to me to be a real possibility that any damage caused by the particular infringements which have been established in this case - ie. by the publication of the graph and the flyer respectively - may be negligible, if not nominal. It occurs to me to wonder how many consumers are significantly influenced by a single piece of promotional material such as the graph or the flyer, to the point where they are deterred from purchasing a particular type of machine and/or persuaded to purchase a different type of machine. It must, after all, be remembered that, as I pointed out earlier (See page 16 above.), the graph and flyer were but single incidents in the course of a continuing marketing war between Electrolux and Dyson.

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

145. In this connection, I refer once again to the general observations which I made about damages earlier in this judgment (See page 35 above.) in the context of the malicious falsehood claims: the same observations apply, mutatis mutandis, in the context of the claims of infringement of trade mark.

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

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

"In my view the court must have a degree of discretion to refuse [an inquiry as to damages], with its attendant trouble and expense, if it is satisified that such an [i]nquiry would be fruitless."

See also The Sanitas Company Ltd v. Condy (1887) 4 RPC 530 at 533 per Kekewich J, cited by Fox LJ later in his judgment in the Macdonalds case (See ibid. p.118.).

148. In the instant case no evidence has been led by either party on the question of damages, and as matters stand I am not satisfied that an inquiry as to damages at the suit of either party would be justified. In particular, the mere fact that any party prosecuting such an inquiry would do so at its own risk as to costs does not seem to me (as at present advised) to provide sufficient justification for taking up the court's time in an exercise which may ultimately prove fruitless.

149. Accordingly, there will have to be a further hearing at which I will hear submissions as to the appropriate remedy or remedies (if any) to be granted on the respective claims of infringement of trade mark.

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