Comparative advertisement
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This article is written by Swapna Gokhale who is pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.

Introduction

Have you ever seen a very interesting advertisement of Mac and PC? 

If not, please go to YouTube and watch it. Apple has created several new ad campaigns commenting on the problems that PC users have faced with the Vista. In these series of advertisements both Mac and PC are depicted as a live person. These are very funny advertisement series. Many of us have also seen Hindustan Unilever’s RIN commercial where a pack of ‘Tide Natural’, the brand owned by rival company Procter & Gamble, was prominently displayed with a voiceover “Tide se kahin behtar safedi de RIN”.  

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All such advertisements are termed as comparative advertisements. And it is perfectly legal! 

As we know, a registered trademark carries with it several legitimate rights. Comparative advertisement is amongst one of these legitimate rights.

An advertisement is an extremely effective tool to reach out the masses. It is one of the active business growth strategies. Comparison is a common tendency to promote one’s own products and brands. In comparative advertising, one product or service is shown in comparison with the other, whether directly or indirectly. Such commercials remain for a longer time in the minds of the consumers because of the creativity involved in such visual representation. Comparative advertisement like above, is a new technique in which the advertisers make superlative statements about the utility of their product in comparison with another brand’s product, to gain commercially. This is mainly done to point out the difference between competitors’ brands that run in the market in parallel. 

But unfair usage and display of another brand sometimes attracts trademark infringement suits under the law. We will discuss here a few commonplace queries with respect to comparative advertising such as what are the law and regulations for such comparative advertisements? Do they infringe the trademark of the brand which is compared? What is the exception to the infringement of trademark? Whether use or display of the other brand for the benefit of your own brand is fair trade? 

Understanding Comparative advertising 

The very basic element of advertisements is puffery. Advertisers make overrated claims about their products. The exaggerated claims of the advertisers whether factually correct or not is a matter of dispute. But this is used by advertisers to target consumers and to gain commercially. Consumers sometimes tend to buy the products on the basis of such puffed up ads. 

But sometimes going a step ahead than puffery, the advertisers boost up their product by comparing it with similar products of another brand, to gain consumer’s attention. In the case of comparative advertisement, advertisers walk one step ahead of just puffed up their claim. They show the product or services of their competitor’s brand by indicating their trademark which is registered by the trademark owner of that product. They demonstrate therein either, implicitly or explicitly, how their product is ‘good’ or ‘best’ or ‘as good as’ when compared to that of their competitors. 

Implicit comparative advertisement

Implicit Comparative Advertisement is where there is no direct indication of any particular comparative product but there is a suggestion of the same. For example, making the brand name on the compared product blur or just muting the voice of the character while uttering the brand name of competitors’ product etc. Sometimes advertisers use the words like “world’s no. 1 product or service”. In an implicit comparative advertisement, no particular name of competitor is taken but it indicates that their product is superior than similar product/service of other brands in the world. 

Explicit Comparative Advertisement

In the case of explicit comparative advertisement, there is a direct reference of another product making it visible clearly to the people. e.g. RIN and Tide commercial wherein direct comparison was shown on quality point.  Recently in the advertisement for Dabur India Anmol Gold coconut hair oil, Marico’s Parachute Oil was directly shown in comparison with respect to the price point. 

These advertisements are usually created by analyzing common human psychology which makes a consumer buy the advertised products shown in such comparative advertisements relying on the claims made therein. However, in such cases advertisers, while amplifying their claim about their product, are not allowed to disrepute another product under the mark. Otherwise, this would amount to disparagement of the product (a misleading or untrue statement about a competitor’s goods) as explained in many cases by Indian Supreme Court, High Courts even by a court of the USA and the UK.  

What is ‘Infringement of Trademark’?

To know more about Trademark Infringement please visit

Trademark is the mark of identification of any company under the brand which could be a unique name, logo, symbol, design, or a combination of all this. Basically, the purpose of a trademark is to distinguish the goods or services from another. Thus, trademark enables the consumers to identify the goods and their origin. 

The reputation of the company depends upon its brand under the trademark. Trademark owner not only gets the exclusive right to use his mark in relation to goods or services but he also owns the right to protect his mark from being infringed by anyone. Infringement of trademark means violation of these exclusive rights in relation to the goods and services granted to the owner of a trademark under the Trademark Act, 1999. 

If someone, without your permission, uses your brand name for their own benefit, they are liable to face statutory consequences under infringement suit under Trademark Act, 1999. In short, unauthorized use of an authorized mark constitutes infringement. Infringement contains two elements. First element is the usage without authority and second element is the usage of marks for unfair advantage against honest practice. In case of comparative advertisement, the issue of trademark arises only when that mark is actually shown or closely indicated in the advertisement

Section 29 and 30 of the Trademark Act, 1999 gives provision for protecting the trademark in case of infringement.  Let’s see these provisions.

Statutory provisions for infringement of trademark and Comparative advertisement 

Trademark infringement in advertising is defined under Section 29(8) of the Trademarks Act, 1999. (click here) According to this section, if an advertiser uses the competitor’s trademark to make comparison and, in that course, disparages them, then such act not only invokes issues related to comparative advertisement but also trademark infringement. 

Section 29 of the Trademark Act, 1999 gives occasions of infringement of trademark. But simultaneously Section 30(1) of the Trademark Act, 1999 gives an exception. (click here). According to this section, using another trader’s trademark is not an infringement when it is in accordance with honest practices and is neither taking any unfair advantage of a compared trademark nor it is detrimental to the distinctive character or reputation of the compared mark.

Thus, for promoting the product or service, if the advertiser uses a competitor’s product by showing its mark on their product in the advertisement, insulting the reputation of that mark which is harmful for its special character will amount to an unfair trade practice and can attract the legal proceedings for infringement of the mark. 

But at the same time, if the advertiser is just amplifying his claim about his own product or service without disparaging the competitor’s product or service shown in the advertisement will amount to an honest practice and is perfectly allowed under the law. However, the exact definition of honest practice or unfair trade practice is nowhere defined under the relevant law of trademark. Similarly, there is no Indian statute which specifically gives provisions for regulating comparative advertisement or trademark infringement due to comparative advertising.

Nevertheless, in trademark infringement cases, many times our court has inferred from the above-mentioned section 29 and 30 of Trademark Act, 1999, that when the usage of competitor’s trademark in the advertisement fairly creates confusion in the mind of consumers with regard to the quality or utility of the product or services of that mark then such usage will amount to an infringement under Trademark Act 1999 and accordingly injunction has been granted on such advertisement. Therefore, each case of trademark infringement due to comparative advertising needs to be decided based on its distinct facts and circumstances.

Concept of Unfair Trade Practice and Honest Practice in comparative advertisement

Unfair Trade Practice

Though there are no dedicated statutory provisions regarding comparative advertising, the same is limited by the concept of unfair trade practice. Unfair trade practice means misleading advertisements which give false and misleading facts amounting to disparagement of the goods, services or trade of other brands under the trademark to gain unfair advantage. e.g. if anyone appeals to the consumers to buy its product because the competitor’s product is inferior in quality, then this would amount to unfair trade practice for the reason that he is trying to fool the customers by using unfair methods of defaming the competitor’s brand.  

Unfair trade practice was earlier governed under Section 36A of the Monopolies and Restrictive Trade Practices Act, 1969 (‘MRTP Act’). Subsequently, MRTP Act was repealed by the Competition Act, 2002. But this act doesn’t contain a specific provision of unfair trade practice. After this unfair trade practice has been addressed by Consumer Protection Act 2019 (Consumer Protection Act 1986 before amendment).

S. 2(47)(j) of the Consumer Protection Act, 2019 states that “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or service, adopts any unfair method or unfair or deceptive practice which gives false or misleading facts disparaging the goods, services or trade of another person. But again, Consumer Protection Act, 2019 is only meant for consumers and not for manufacturers, service providers etc.

Honest Practice in comparative advertisement 

The question whether the particular advertisement is honest or not is open ended. Thus, it is to be decided from the viewpoint of the consumers. The honest commercial practice is that which is not misleading and which doesn’t have any occasion to cause confusion in the consumer’s mind. There is no straight jacket formula. But the Trademark Act, 1999 permits comparative advertisements in three ways:

  1. If there is a bonafide use of trademark,
  2. If the advertisement is in accordance with the honest practices,
  3. If the advertisement does not take an unfair advantage of the reputation of the mark.

Thus, where there is no derogatory reference in the advertisement, no action lies against the advertiser even though the claim of the advertiser about it’s product is untrue. Such bonafide usage of another mark without disrupting their character either directly or indirectly, to gain commercially will come under the guard of honest practice. Also, an advertisement is not only meant for commercial gain. It actually educates the people about the product. Thus, false information misleading the consumers about the quality of the goods is not acceptable under the law. 

Thus, merely puffing up the own product is allowed in an honest trade practice, but the moment the advertiser says or indicates that his competitor’s goods are bad or substandard quality, such comparative advertisement is not permitted due to the presence of element of defamation.

Of course, as stated above, each case has to be decided on its own facts and circumstances.

In many cases, the court has applied the principle that an advertiser is entitled to make the statement that his goods are better than his competitor or in the world, which will not give cause of action for other brands of similar goods. 

A very famous case on this point decided by Delhi High Court in ‘Pepsi Co. Inc. and Ors. V/s Hindustan Coca Cola Ltd. and Ors.’ 2003 (Delhi High Court) wherein the appellant is registered trademark Owner of mark PEPSI, PEPSI COLA, GLOBE DEVICE and also copyright owner of words “Yeh Dil Mange More” which is their famous tagline. Appellant’s contention that respondent while promoting their product “Thums Up” and “Sprite” launched series of television commercials in which the word PAPPI was written on the bottle shown in comparison and also, it was indicated that liquid in that bottle is “Bacchon wala drink” and this is disparagement of the product of appellant and thereby infringing its trademark. Respondent defense that they are just puffing up their claim to promote their product which is healthy competition in the market. 

The division bench of Hon’ble Delhi Court while granting injunction against the respondent for publication and screening of impugned advertisement observed that the comparison in the advertisement was with PEPSI. The word PAPPI written on the bottle shown in respondent’s advertisement was fairly indicating the trademark PEPSI of the appellant. In such cases the “manner of the commercial”, is very important. If the manner is ridiculing or the condemning product of the competitor then it amounts to disparaging. Respondents projected PEPSI to be only a sweet drink hence of inferior quality and by calling it as “Yen Bacchon Wali Hai”, the respondents depicted the commercial in a derogatory and mocking manner which is not at all allowed under the law. 

Comparative advertisement and right to trade and freedom of speech under the Constitution

Earlier the commercial speech was not part of freedom of speech under the Constitution of India 1950. But in Tata Press v. Mahanagar Telephone Nigam Ltd. [(1995) 5 SCC 139], the hon’ble court held that advertising to be constitutive of ‘commercial speech’, and therefore brought it within the ambit of constitutional protection conferred by Article 19(1)(a) of the Constitution. The Supreme Court of India has given certain guidelines under which the advertisement is for the benefit of the consumers as long as it gives information to the people about the product. The development of many products in the market increases the competition with advertising, which plays a vital role in the consumer’s demand. Thus, fair advertising is permissible under the law.    

 

Advertising Standards Council of India (‘ASCI’)

Under Consumer Protection Act, 2019 there is a mechanism for consumers only for redressal of their grievances against false and misleading advertisements. No manufacturer or competitor brand can file complaints against comparative advertisers under Consumer Protection Act, 2019. The absence of specific legal provisions dealing exclusively with comparative advertisements led to the formation of a self-regulatory non-statutory body called the Advertising Standards Council of India (“ASCI”).

This body has given certain guidelines which state that the advertisers should take into account the interest involved of different groups of people while making comparative advertisement, which should not mislead the people to take undue advantage over the competitor’s product or services. 

The members of this body can file complaints before their authority constituted by it, called Consumer Complaint Council (CCC), for their grievances when there is objectionable advertising. But the provisions made by this body have no force of law. These are merely recommendatory in nature. Thus the brand can directly go to the high court for redressal of their grievances without going to the Council.  

Foreign regulation

In foreign countries like U.K., USA and Australia the use of comparative advertisements are very common and liberal as compared to India. But all such advertisements are bound to follow the comparative advertising directives. The producers are generally not allowed to make any superlative claims with respect to their products without providing for any evidence. If the claim of the advertisers is valid and based on some reasonable and reliable evidence then they are also allowed to mention that the other’s product is not as good as theirs in the advertisement. 

But in countries like China, Japan, South Africa, Italy etc. such comparative advertisement is completely banned. 

Judicial aspect and understanding of Comparative Advertising 

  1. Britannia v Unibic Biscuits India (2007)– Britannia is the owner of a registered trademark ‘Good Day’ for their biscuit product. A manufacturer Unibic India launched a biscuit named ‘Great Day’ along with its tag line – ‘Why have a Good Day, when you can have a Great Day!’ This was a direct comparison to Britannia’s Good Day biscuits which states that consumers must not try any plaintiff’s biscuit when Great Day biscuit is available. The plaintiff’s allegation that the defendant has directly infringed their trademark Good Day. Bangalore City Civil Court on 12 December 2007 granted an injunction to the defendant for disparaging the ‘Good Day’ biscuits of the plaintiff. While deciding this case, the court has taken into consideration the intent of the advertiser, the manner and the message communicated to the public. 
  2. Hindustan Unilever Ltd v Reckitt Benckiser (India) Ltd on 23 September, 2013, (VIM and Dettol Case) order dated April 23, 2013 by Calcutta High Court. In this case four advertisements were involved. Two have been published by Hindustan, the other two by Reckitt. Each company contended their advertisements that the other has disparaged their products. Hindustan is the owner of the brand names “Lifebuoy” and “VIM”. Reckitt also manufactures these products, in addition to its well-known antiseptic liquid, “Dettol”. It had introduced a utensil cleaning liquid in the market, called “Dettol Healthy Kitchen Gel”. The white plate shown in the advertisement divided into two halves in which it was depicted that after cleaning with these liquids, the one halves of the plate left with several germs for which Yellow color Gel was depicted to be used and other half of plate is clean since it was washed with Dettol liquid. While granting the injunction on the defendant, Hon’ble court observed that comparison should not be more than ‘Puff’. Though the advertisers did not show ‘VIM’ in their commercials, it referred to it as a ‘leading dishwash’ which would lead any reasonable person to think that the dishwash being referred to was ‘VIM’. Thus, this will not amount to an honest practice. The comparison shown in the commercial is not just puffing up the product but it’s a serious comparison thereby lowering the reputation of the defendant’s product. 
  3. Colgate Palmolive Company and Anr. v Hindustan Unilever Ltd.:  In this case the Pepsodent toothpaste of HUL was shown as 130% better than Colgate. The basic contention of the HUL that their product has higher efficiency in dealing with dental cavities as compared with Colgate and it was substantiated on the basis of detailed study about retention of Triclosan on dental plaque. Hon’ble Delhi High Court while disposing of the matter opined that, The advertisement must be viewed in its entirety and it is not necessary to dissect each word or expression.  It is also important to examine the storyline and the message that the impugned TVC conveys to an average person who is a consumer or a prospective consumer of the products that are advertised. No injunction granted against the respondent but directed was given to suitably modify the commercial on the basis that the trader cannot, while saying that his goods are better than his competitors’, say that his competitors’ goods are bad. If he says so, he really slanders the goods of his competitors.

Real-Life Examples for Understand Comparative Advertising

To survive in this competitive world, brands need to be more creative, smart and think out of the box. The stunt of Kingfisher to dominate their rivals gave new connotation to the marketing strategy.  In 2007, Jet Airways had released an outdoor campaign by putting up a hoarding with the phrase “We’ve Changed!”.  This was with reference to their makeover in 2007. In probably one of the most brilliant campaigns that the Indian advertising scene has exhibited, Kingfisher almost immediately put up a hoarding right above, with the words “We made them change!”. Jet Airways almost immediately pulled down its hoarding, with no reply to Kingfisher’s tongue-in-cheek advertising, since there was no disparagement of the brand, nor a use of Jet’s trademark in any manner. There were different types of hoarding that Kingfisher put up directly targeting the Indigo. All the hoardings are using comparative advertising.

Technically such type of advertising doesn’t contain elements of violation of law under the current Indian statute due to the reason that neither these commercials violate any IP rights nor is there any infringement of the trademark of their rivals. But such campaigns certainly have changed the form of advertisement in the industry.

Conclusion 

There is no harm in making use of the trademarks of your rivals for promoting your product or service. But the same should not cross the boundaries under the law by disrespecting your competitor’s product or services. You are entitled to puff up your brand in any manner without defaming another mark thereby taking undue advantage of them. Even if your superlative statements are not factually correct, you are perfectly allowed to promote your product under Indian statute.

The content and manner of the advertisement need to be analyzed to find out the actual intent behind the advertisement.  And advertisers also need to ensure that no design or logo to be used in their advertisements resulting in the breach of permissible comparative advertisements. The overall effect of the advertisement from the perspective of the consumer is the key point while deciding such issues. 

However, the infringement provisions under the Trademark Act are not comprehensive. The provisions regarding occasions of infringement of a trademark in different scenarios are very ambiguous. Thus, such cases are required to be dealt based on particular from the facts and circumstances of each case.

Further, I think, the formula of reasonable and reliable evidence implemented in foreign countries should also be adopted in India, since making superlative claims about the products without them being tested by any evidence, fails the main purpose of protecting the consumers from deceptive practices of traders. Advertisements showing the proof of differences between the two products will help the consumers to choose the better product and it will also support the competitor to improve the quality of his goods. 

References 

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