This article has been written by Pranali Shetye pursuing Diploma in Intellectual Property, Media and Entertainment Laws and edited by Shashwat Kaushik.
This article has been published by Sneha Mahawar.
Table of Contents
Introduction
Advertising is an important tool for businesses to create awareness about their products, services and brand. Various marketing and advertising techniques are adopted by these businesses in order to reach the maximum target audiences with the intention of influencing their purchasing decisions. Marketing and advertising are continuous processes. In order to ensure that their products, services, and brands do not fade away from consumer’s minds, these businesses come up with unique marketing and advertising strategies. Trademarks ensure that their products or services are identifiable and indicate their quality and source to the company. This article aims to discuss comparative advertising and analyse trademark infringement due to such advertising.
Before discussing the concept of comparative advertising, a brief understanding of the term will be helpful. It is usually a paid communication by the promoters of the product, service, or brand. Advertising aims to inform, influence, stimulate sales, create a brand and/or product loyalty and gain a competitive advantage. Advertising plays an important role in influencing consumers’ purchasing decisions. Frequently, it can be seen that in order to gain a competitive edge, competitors adopt a comparative advertising strategy.
In comparative advertising, an attempt is made to showcase the company’s product, service, or brand as having superior quality or value than that of the competitors existing in the market. Comparative advertising is one of the popular forms of advertising adopted to compare the products and services provided by the advertiser to those of their competitors. In comparative advertising, there can be an explicit or implicit reference to the competitors of the brand advertised.
Purpose of comparative advertising
- To make the company’s product or service stand out in a saturated marketplace,
- To increase public awareness of the product and services through honest comparison,
- To increase the market share of the advertiser’s brand, and
- To promote the advertiser’s brand.
Concept of trademark
Trademarks can be anything that identifies the source of goods and services. It distinguishes the source of goods and services from competitors in the market. Trademark law prohibits the use of third-party trademarks, which is likely to cause confusion for consumers about the original source of products and services.
The trademark, while identifying the product of one enterprise from the other, also reflects the brand value. A brand identity gives preference in the marketplace over other brands and it becomes necessary to have legal protection under trademarks to avoid others from usurping the name and causing confusion. The trademark gives brands an additional edge, as consumers are willing to pay extra for the products bearing their trademarks. A trademark grants exclusive rights to the owner over the use of a brand identifier as well as the power to bar others from creating confusion or unfair competition through lawsuits. A trademark gives protection against the misuse of the brand. Trademarks are used to restrict others from using the mark as well as to prevent them from creating similar marks likely to cause confusion among customers.
Importance of trademark in marketing
A trademark is of great importance for the protection of brand identity. As mentioned earlier, the trademark enables the consumer to identify the source of the goods and services from various competitors. The products and services provided under the name create a brand identity over time that enhances the brand value. A trademark provides protection to the company against unfair competition in the form of representation or passing off one’s goods as those of its competitors. The presence of a trademark benefits consumers as it confirms the quality and prevents any other form of adulteration or inferior quality.
Infringement of trademark
The object of the trademark law is to grant an exclusive right to the registered proprietor to use the mark on their goods or services, prevent others from making unauthorised use, and take legal action for trademark infringement. A registered trademark generates a reputation among customers with respect to the standard quality and value of goods or services. The trademark enables consumers to differentiate the product and services from those of their competitors.
The trademark law confers various rights upon the registered proprietor of the trademark. To take action against the infringement of the trademark is one such right. Section 29 of the Trademark Act of 1999 defines the infringement of a trademark. Trademark law provides protection when any advertisement takes an unfair advantage or uses dishonest practises that are detrimental to the trademark.
Provisions under trademark law governing advertising
Section 29(8) of the Trademarks Act deals with the infringement of trademarks in advertising. It states that if an advertisement takes unfair advantage of the trademark, uses dishonest practises, is detrimental to the trademark’s distinctive character, and is against the trademark’s reputation, the advertisement is considered a trademark infringement.
Does comparative advertising amount to trademark infringement
Advertising has various benefits for the company as well as the consumers. However, it is important to note that certain forms of advertising can have severe implications for the company. Comparative advertising is one such double edge sword. Making false claims against a competitor’s products or services is not permissible under the law.
Disparagement means “a derogatory comparison of one thing with another; the act or an instance of castigating or detracting from the reputation of, especially unfairly or untruly; a false and injurious statement that discredits or detracts from the reputation of another’s property, product, or business.”
A statement about a competitor’s goods or services that is untrue or misleading and is made to influence or tend to influence the public not to buy is a disparagement of goods.
It is to be ensured that comparative advertising is not with the intent to mislead consumers. Advertising that is in honest practise and does not cause detriment to the distinctive character or repute of the trademark will not amount to infringement.
When does comparative advertising amount to trademark infringement
Companies and businesses are allowed to make claims that their products or services are superior to any other competitors available in the market. If such statements are untrue, they still won’t amount to disparagement. However, one is restrained from claiming that the goods or services of the competitors are inferior in comparison. In order to examine whether a statement or claim made infringes the trademark or disparages the goods of other competitors, it depends on the facts and circumstances of each case. It is essential to analyse if the advertising belittles, discredits, or defames the reputation of a competitor’s trademark or product.
To put it simply, an exaggerated statement in an advertisement can be made to promote goods. But if any statement is made to disparage or defame the products of the other competitors, it will give rise to the cause of action to institute proceedings against the advertiser company. Today, advertising is done on multiple platforms, including (but not limited to) social media platforms, gaming platforms, OTT platforms, various third-party mobile applications, and websites. Advertising on these platforms is repetitive and consistent; it leaves a permanent impression on the minds of the viewers. In turn, it influences their buying decision. Hence, the following factors are to be considered when deciding the disparagement of a trademark by comparative advertising:
Manner of the commercial- If the manner is just to show that the company’s product is superior without defaming or derogating the competitor’s products, it does not amount to infringement of a trademark. However, if the manner is defaming, derogatory or ridiculing the product of the competitors, it will give rise to a cause of action against the disparagement of the product.
The storyline of the commercial and the message sought to be conveyed by the commercial- From the above factors, the ‘manner of the commercial’ is crucial. As the purpose of an advertisement is to create awareness about a product or service and influence consumer purchasing decisions, consideration of the impression made by such an advertisement on its target consumers is necessary. In such a situation, if any reasonable person perceives that the impression presented in the advertisement is derogatory, defamatory, or disparaging for the goods and services of the competitors, the existence of other simple non-disparaging meanings will be taken into consideration. The degree of disparagement must be such that it would amount to defamation.
Without direct reference to the products of the competitors but only generic reference to the entire class of products, this can also amount to disparagement. Generic disparagement is also prohibited. It is when there is no specific reference to the competitor’s product. The court held that a class or genre of a product cannot be disparaged and raises a defence for lack of specific identification or reference of the product.
In order to establish that comparative advertising amounts to disparagement, the following is necessary:
- Statements or claims made in the advertisement are false or misleading.
- Such a statement or claim has the potential to deceive a substantial number of prospective consumers.
- The deception is likely to influence the consumer’s purchasing decisions.
Conclusion
Comparative advertising, making honest claims against the competitor’s products, will provide consumers with the opportunity to opt for a better product from the available range of similar products. It also results in healthy competition in the market. One must note that it is permitted to declare that the goods or services are the best in the world or are superior to the competitor’s, even when it is untrue, by comparing the advantages of both products. However, while making such a declaration, one cannot say that the competitor’s goods are bad. It amounts to slander of goods or defamation of the competitor’s and action lies for recovery of damages. The order of injunction restraining repetition of such defamation is granted.
References
- https://www.wipo.int/trademarks/en/
- https://www.upcounsel.com/trademark-vs-brand
- https://www.britannica.com/topic/trademark
- https://www.jetir.org/papers/JETIR2302325.pdf
- https://blog.ipleaders.in/analysis-infringement-trademark-comparative-advertising
- V. K. Ahuja, Law Relating to Intellectual Property Rights Third Edition (Reprint 2021), Lexis Nexis, p. 339
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