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This article is written by Arijit Mishra, from KIIT School of Law, Odisha. This article talks about the analysis of comparative advertisement and its disparagement. It also talks about how an advertisement is called disparaged.

Introduction

Advertisements of products are one of the best methods to reach the audience and provide information about a product. However, for the monetary benefit, the market players use lawful techniques which may damage the competitors image by disparagement. This form of disparagement (a misleading or untrue statement about a competitor’s goods) is comparative advertising.

In India, the Advertising Standards Council of India (ASCI) is a self-regulated voluntary organization which deals with the dispute relating to advertisements. The AISC aims at achieving fair advertising practices by controlling the content of the advertisement. Comparative Advertisement is a relevant field of IPR which is gaining importance due to the competition between various traders existing in the market economy.

When does Comparative Advertisement turn into Disparagement?

One technique that companies use during advertising their products and services is drawing comparison against their competitor’s product or services. This advertising technique is known as comparative advertising.

The common example of comparative advertising where many of us are familiar with the cellular telephone companies, where a wireless service coverage map of the United States is shown and side by side compare the leading competitor’s wireless service coverage map of the US.

The advertisements have a major impact because they show the visual comparison between the advertising company’s coverage map and the leading competitors. The purpose of these types of advertisements is to illustrate the customers about the low status of the competitors product or services and make them think that their product is better.

Comparative advertising is effective, but sometimes it can create false advertising where legal issues are created on the adviser who uses this technique. Misuse of Comparative Advertising can result in disparagement. 

A new dimension was provided for the extent of comparisons allowed under a comparative advertisement which is reflected in this case- 

Havells India Limited Vs. Amritanshu Khaitan & Others

In this case, the plaintiff was asking to restrain defendant for misleading and disparaging advertisements, where the defendant compared their product i.e “Eveready LED Bulb” with the product of plaintiff’s “Havells LED Bulb”

The Court held that comparative advertising is permitted when these following conditions are fulfilled-

  • Goods and services meeting the same needs or for the same purpose.
  • One or more material which is relevant(which can include price).
  • Applicability of the product is the same.

The court stated that care must be taken in the statements while comparing with the competitors product which should not be defamatory, libelous, confusing or misleading. The Court again stated that a certain amount of disparagement is not directly expressed in the comparative advertisement. In looking at the above statements the court held that it is open to the adviser to highlight the special feature of a product which sets it apart from its competitor and make a comparison which is true. 

The Court also stated that mere trade puffery is uncomfortable to the registered proprietor than it did not bring the advertisement within the trademark infringement.

Comparative Advertisement as the Constitution of India

Article 19(1)(a) of the Constitution of India talks about Right to Freedom of Speech and Expression in which advertisements can be also argued. It is important to analyse Article 19(1)(a) of the Indian Constitution with relation to the comparative advertisement. The freedom under this article is available for public speaking, radio, television and press but, the State has put certain limits to it under Article 19(2) of the Constitution of India.

Hamdard Dawakhana (Wakf) Lal vs. UOI 

In this case, the validity of delegation (a body of representative) was challenged. The Drugs and Magic Remedies Act, 1954 was passed to prevent self-medication and unethical advertisements. Section 3 of this Act specify certain conditions in which an advertisement can be banned.

The Supreme Court held that the advertisements of the prohibited drugs are not speech and expression under Article 19(1)(a) of the Indian Constitution. The Court said that advertisements for non-prohibited drugs come under free speech. But, the advertisements of such drugs which are prohibited by certain statutes or codes in India then it will not be protected. This is the reason that Article 19(2) provides reasonable restrictions on the freedom of speech and expression which is guaranteed under Article 19(1) of the Indian Constitution.

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Comparative Advertising and Trademark Infringement

The main objective of a trademark is to distinguish goods and services, which will help the consumer to identify the goods.

If in case, the advertiser uses the trademark of the competitor to mark a comparison between the goods than it amounts to disparagement. 

The act of the advertiser not only relates to the issues of Comparative Advertisement and product disparagement but also it is related to trademark infringement.

Legal Provisions in India relating to Comparative Advertisement

  • The Monopolies and Restrictive Trade Practices Act, 1969 provides the indication on which comparative advertising works. Under this Act, any representation which gives false information or disparages the goods and services of other products, it will be considered as comparative advertising.
  • The Trademarks Act, 1999 states that comparative advertising is permissible but with certain limitations i.e unfair trade practices and also states that a registered trademark is infringed by a person if he uses such registered trademark as his trade name or part of his trade name etc,.
  • Section 29(8) of Trademarks Act, a registered trademark is infringed by any advertisement of that trademark, if such advertisement makes any unfair advantage, or is against the reputation of the trademark and if don’t have honest practice.
  • Section 30(1) of Trademarks Act 1999, states that if someone violated Section 29 then he can be escaped by showing that it was an ‘honest practice’. When there are comparative advertisements then it might reduce the value of the trademark of the competitors. 

Problems or Shortcomings of Comparative Advertisement and Disparagement in India 

There should be some new laws to strengthen its application in India from the disputes arising out of comparative advertising. Judicial Decisions have an important role in determining the disputes arising from comparative advertisement, but they are very adequate precedence. Certain changes are required to boost the laws relating to comparative advertisement. There are certain abuses used in disparagement like false claims, false representation, unfair trade practices etc.

There must be certain laws to prevent these abuses. The injunction is the only remedy given by the Court in the methods related to disparagement.  

Relationship between Comparative Advertising and Disparagement

Comparative Advertisement can be supported on the basis that advertising is a commercial speech which can be protected under Article 19(1)(a) of the Indian Constitution. However, freedom of speech and expression do not allow defamation.

So, it would be wrong to say that, advertiser has the liberty to disparage the product of his competitors, under the freedom of speech and expression.

Product disparagement is not only limited to the comparative advertisement but, the act of the third party can also constitute product disparagement.

Case Studies

Reckitt and Colman of India Limited vs. Kiwi T.T.K Limited

In this case, Colman is the plaintiff and Kiwi is the defendant, the advertisement was between two liquid polish companies. The defendant while advertising state ‘KIWI’ on one side and ‘OTHERS’ on the other side with their respective liquid wax showed that the wax which was used to write ‘OTHERS’ fell from the surface,  but the wax which was used to write ‘KIWI’ was stuck properly.

The bottle named brand X which was used to write ‘OTHERS’ was on a shape as that of a registered designed bottle of Cherry Blossom. This advertisement was used both in electronic media and by different posters which were hung in the public market.

So, the plea of an injunction was filed by the plaintiff to prevent the defendant’s company from giving such advertisement.

Court held that the defendant was disparaging the goods and told to restrain from advertising in a disparaging manner. The High Court added to this judgement and held that the advertiser can make a statement that his goods are one of the superior quality but should not disparage or defame the competitors product.

Dabur India Limited Vs. Colgate Palmolive India Limited

In this case, a film actor was rubbing the plaintiff’s dental powder on the surface of the purchaser’s spectacles which left marks on spectacles depicting that it was sandpaper. This advertisement shows how the defendant’s product was sixteen times less effective than the plaintiff’s product and was also less damaging to the teeth. 

Relating to the precedents in the Pre-Trade Marks Act era, the Court held that this is a case of disparagement which cannot be allowed to do such an act under any circumstances and hence the plaintiff is entitled to an injunction and accordingly the defendant is restrained from telecasting such advertisement

Colgate Palmolive India Limited v. Hindustan Unilever Limited

In this case, the advertisement of the new Pepsodent disclosed that their product is better than the other leading toothpaste available in the market. In an add sample of saliva was taken from two boys, where one person brushed with the Pepsodent toothpaste and another brushed with a leading toothpaste.

This experiment shows that the maximum amount of germs in the saliva are present after brushing leading toothpaste. When the boys were asked which toothpaste they brush in the morning, from those two boys, one boy answered Pepsodent toothpaste. But during the time of the other boy’s response, it was muted. But looking at his lip movement, it was seen that the boy was referring to Colgate. As Colgate is used by a maximum number of people, it will be considered as the leading toothpaste brand.

The Court gave a temporary order to restrain the respondent from referring to any Colgate toothpaste in any manner, either directly or indirectly by means of any hint in any television ads, etc by comparison of its New Pepsodent with any of the Colgate products or Colgate Dental Cream in particular.

UK Jurisdiction on Comparative Advertisement

In the UK, comparative advertising is very liberal. The UK government thinks Comparative Advertising as a legitimate, useful, effective marketing tool and also helps in increasing the competition among the companies and educate consumers about such market practices.

Section 11(2) of the UK Trade Marks Act, 1994 permits only for the fair comparison of goods to be done between the advertiser and the competitor. The comparison must be an honest one. If these conditions are met then it will be admissible in this provision, if it isn’t met then won’t be admissible under any provision

Barclays Bank v. RBS Advanta 

In this case, RBS Advanta distributed a brochure which contained a comparative table of the fees and interest rates of different credit card companies which include Barclaycard Visa, which is a registered mark of the Barclays Bank. So, Barclays Bank considered this act of the defendant that it has infringed his mark.

The Court held that the objective of the defendants act was honest to inform the consumers. The defendant also stated that comparative charts gave them a better deal with the consumers. Hence comparative advertisement was allowed by the Court.

British Airways plc v. Ryanair Limited

In this case, Ryanair prepared comparative advertising by means of the banner where at the top of the banner, a comparison of the pricing was made which shows that British Airways airfare is five times costlier than Ryanair air fair but in reality, it was three times costlier than the Ryanair airfare. So, British Airways alleged that Ryanair infringed the trademark of British Airways.

Even though the Ryanair has made the wrong statement of comparison, the Court felt that it did not infringe the plaintiff’s trademark. But, the Advertising Standards Authority(ASA) stated that the statement by Ryanair makes false offences against British Airways.

Conclusion

From the above article, we have learned that when an advertiser takes unfair advantage or gives any statement which is misleading or untrue than it is a disparagement. An act done by a third party can also cause disparagement. Some laws should be made to stop disparagement. An injunction is the only remedy given by the Court for the offences related to disparagement. 

References


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