In today's world when wide range of products and brands eagerly look for consumer's attention, advertisements become critical in determining product's future prospects. In the race of promoting one's own product lot many producers adopt different styles of advertising their product to attract consumers. Sometimes such advertising can fall between the thin line of fair and unfair trade practices and can cause legal consequences. Comparative advertising is one such way. Comparative advertising is a practice where a producer while advertising his product compares it with the product of the competitor by reference or by any representation of competitor's product. It may highlight either the similarities in the two products or even differences. The producer uses the products of its competitor as a standard or benchmark and claims to exceed it.
Comparative advertising displays a comparison of two different brands on numbered variants like price, quality by referring the alternative brand by name, visual illustrations or other distinctive attributes. Advertisers employ this technique to increase their visibility in the market and to promote their product.
The debate in regard to the jurisprudential justification of comparative advertising is always open. Proponents of comparative advertising consider it to be a positive thing in the world of advertising. They think it is not misleading rather promotes healthy competition. It only compares goods or services meeting the same needs or intended for the same purpose. As per their view comparative advertising does not create confusion in the market place between the advertiser and a competitor. However the opponents of comparative advertising believe that these kinds of practices hamper the reputation of goods of the competitor. They argue that the major objective behind comparative advertising is to gain unfair advantage at the cost of competitor's goodwill.
Use of anybody else's trademark in any advertisement becomes an illegal act if it affects the reputation and goodwill of the trademark. Additionally comparative advertising can also lead to disparagement of goods. Disparagement of goods is as such not defined in the statute but it can be understood as an untrue or misleading statement about a competitor's goods made with the purpose of persuading consumers not to buy the product. Such acts can attract serious legal liabilities.
Few provisions under the Trademarks Law come into picture when any comparative advertising is done. The same is also checked under provisions relating to unfair trade practices.
Section 29(8) of Trademarks Act, 1999 says that,
A registered trade mark is infringed by any advertising of that trade mark if such advertising:
(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or
(b) is detrimental to its distinctive character; or
(c) is against the reputation of the trade mark.
This provision of the Trade Marks Act quite clearly mentions that if an act while advertising a particular mark is done to take unfair advantage of another mark, or is detrimental to the very distinct character of the other mark and is also against the reputation of the trade mark, then such act is an infringement and necessary action can be taken against the infringer. One cannot use the mark of another for his own profit.
Section 30 (1) of Trademarks Act, 1999 justifies comparative advertisement saying:
(1) Nothing in section 29 shall be construed as preventing the use of a registered trade mark by any person for the purposes of identifying goods or services as those of the proprietor provided the use--
(a) is in accordance with honest practices in industrial or commercial matters, and
(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark.
This provision of Trade Mark Act justifies comparative advertising authorising every person to use a registered trade mark for the purpose of identifying goods or services of the competitor but such use must only be done in accordance with the honest and fair trade practices. There should not be any mala fide intent to gain advantage of competitor's goodwill behind such use.
Comparative advertising is legal to the extent where it does not hamper the reputation of competitor's mark and is in accordance with the honest practices in industrial matters. A person while advertising his goods can compare the advantages of his goods over the goods of his competitor, but one cannot say that his competitor's goods are bad as this may lead to disparagement of goods of his competitor. A person cannot use any false or misleading statement while promoting his goods.
Advertising Standards Council of India has specified the certain norms or guidelines which should be kept in mind while promoting their goods through ads in its Code of Conduct, 1985. The guidelines states as follows:
- The producer must only make honest representation in the ads;
- The ads must not be offensive in any way to the general public;
- Ads must not be used for the promotions of products, hazardous or harmful to society or to individuals particularly minors, to a degree unacceptable to society at large;
- Ads must not in any way hamper competition.
Few points of caution are given by the High Courts also in the same regard in order to raise awareness among the producers of their rights and limitations allowing them to prevent all kind of legal liabilities.
The Delhi High Court in Reckitt & Coleman of India v. Kiwi T.T.K.1, explained the concept of disparagement in regard to comparative advertising, stating that "a manufacturer is entitled to make a statement that his goods are the best and also make some statements for puffing of his goods and the same will not give a cause of action to the other traders or manufacturers of similar goods to institute proceedings as there is no disparagement or defamation or disparagement of the goods of the manufacturer in so doing. However, a manufacturer is not entitled to say that his competitor's goods are bad as to puff and promote his goods," and concluded that comparative advertising cannot be permitted which discredits or denigrates the trade mark or trade name of the competitor.
There is no specific legislative mechanism regulating comparative advertising in India therefore the precedents set by various courts are followed while adjudging such matters. Though the Courts rule in favour of liberty to advertise but do not hesitate in granting injunctions and imposing damages against infringers.
[1996 PTC (193) T 399]
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