Comparative Advertisements & Its Legal Framework

This Article is written by KEERTHANA M, pursuing B.A. LLB, from Government Law College, Coimbatore, Tamil Nadu affiliated with Dr.Ambedkar Law University.

Table of Contents

Introduction

In the words of Leo Burnett, “Good advertising does not just circulate information. It penetrates the public mind with desires and belief.”

By reading these wordings anyone can understand that the advertisements play a vital role in promoting one’s product in this modern era. Have you ever seen an advertisement comparing their brand’s goods and services with other similar brands? If yes, have you wondered if such advertising amounts to infringement of the trademark? After reading this article you will understand the concept of comparative advertisements, their development and the legal frameworks around this concept. Before diving into the legal framework lets understand the concept.

DEFINITION

To put it in simple words, comparative advertisement also termed as “knocking copy” is a strategy where a brand compares its product or services with those of other brands that produce similar products or services, thus establishing a position in the commercial market.

Comparative advertising generally refers to “strategy of explicitly naming or identifying the name of one or more competitors of the advertised product or that alludes to them implicitly using expressions such as “brand X”, “ordinary brands”, “other brands” or the like for claiming superiority over them either on overall basis or on the selected product attributes” (Barry, 1993; Beard & Nye, 2011)

The term “comparative advertising” refers to any form of advertising in which a trademark owner draws a comparison between his product, service, or brand and that of a competitor (Romano, 2005).

The US is the pioneer of this concept. Prior to 1970, it was believed that directly comparing products or services was both illegal and unethical but this view took a turn when the USA Federal Trade Commission (FTC) adopted the concept. The USA FTC is an. independent agency whose work is to protect consumers from unfair, fraudulent and deceptive trade practices. In the statement of object regarding comparative advertisement released by the FTC on August 13,1979 supported the concept and defined it as follows:

“Comparative advertising is defined as advertising that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration or other distinctive information”

The idea of comparative advertising began in India after liberalization which introduced the competitive spirit within every individual. Before the advent of liberalization, the concept of competition was foreign.

EFFECT OF COMPARATIVE ADVERTISING

“Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace”

The use of two brands in advertisements attracts the selective attention of more people than an advertisement featuring a single brand, according to research conducted by Dhruv Grewal, Sukumar Kavanoor, Edward F. Fern, Carolyn Costley, and James Barnes titled:

Comparative versus Noncomparative Advertising: A Meta-Analysis.

Such advertisement provides consumers with more factual and additional information which helps them make well informed decisions before purchasing a product.

These advertisements also help in promoting transparency in the commercial market.

Such advertisements may at times encourage brands to up their game and be innovative.

Comparative advertising to the brands can sometimes backfire and may result in losing customers.

LEGAL FRAMEWORK TRADEMARK INFRINGEMENT

As you would have known, a trademark is an intellectual property consisting of a sign, symbol, word, phrase and so on that enables a proprietor to create an identity for his product in the market and thus enables to distinguish his product from that of others. Trademark also plays a vital role in helping customers identify a particular brand’s product or service. Trademarks may or may not be registered. Registration of a trademark has a wide range of benefits.

For instance, Bata, Coca-cola, Pepsi, McDonalds, Nike and so on.

When a sign is considered to be a trademark infringement? If a mark that is identical with, or deceptively similar to a registered mark is used by a person other than a registered proprietor or a permitted user, in the course of trade, in relation to the goods or service in respect of the registered trademark then such person is considered to have infringed the trademark as defined under Section 29(1) of the trademarks act, 1999.

So does comparative advertising amount to trademarks infringement?

This shall be cleared on reading Section 29(8) and 30 of the Act. Under section 29(8), an advertisement is held to have infringed a registered trademark when an advertiser indulges in acts of advertising which is contrary to the honest practices and thus takes unfair advantage or is detrimental to the distinctive character or reputation of the trademark. In a nutshell, anything that results in disparagement amounts to trademark infringement.

Section 30 of the act reads out that nothing amounts to infringement when it is in accordance with honest practices and is not such as to take unfair advantage.

SELF REGULATORY FRAMEWORK

The Advertising Standards Council of India established in the year 1985 is an independent, voluntary self-regulatory organization that regulates advertising in India. It aims to ensure advertisements are fair, honest and are compliant with the ASCI code. Chapter- IV of the ASCI code deals with fairness in competition to ensure that the advertisements observe fairness in competition.

Advertisements containing comparisons with other manufacturers or suppliers, or with other products, including those where a competitor is named, are permissible in the interests of vigorous competition and public enlightenment, provided:

It is clear what aspects of the advertiser’s product are being compared with what aspects of the competitor’s product.

The subject matter of comparison is not chosen in such a way as to confer an artificial advantage upon the advertiser or so as to suggest that a better bargain is offered than is truly the case.

The comparisons are factual, accurate and capable of substantiation.

There is no likelihood of the consumer being misled as a result of the comparison, whether about the product advertised or that with which it is compared.

The advertisement does not unfairly denigrate, attack or discredit other products, advertisers or advertisements directly or by implication.

Advertisements shall not make unjustifiable use of the name or initials of any other firm, company or institution, nor take unfair advantage of the goodwill attached to the trademark or symbol of another firm, its product or the goodwill acquired by its advertising campaign.

Advertisements shall not be similar to any other advertiser’s earlier run advertisements in general layout, copy, slogans, visual presentations, music or sound effects, so as to suggest plagiarism.

The Consumer complaints council constituted by ASCI looks into complaints filed by a person whenever there is objection regarding advertisements that violate the code.

It is to be noted here that the comparative advertising was covered under section 36A of the MRTP Act,1969 as unfair trade practices. The practices which provide false information is considered unfair trade practices. However, this act was repealed by section 66 of the Competition Act, 2002. Presently the concept of unfair trade practices is dealt under section 2(1)(r) of the Consumer Protection Act, 1986.

Conclusion

Comparative advertising is a marketing strategy in which a company’s product or service is presented as superior when compared to a competitor’s. In my humble opinion, the infringement provisions under the Trademark Act are not comprehensive. The provisions regarding infringement of a trademark in different scenarios are very ambiguous. Thus, such cases are required to be dealt with based on the facts and circumstances of each case.

Reference Links

https://www.ftc.gov/legal-library/browse/statement-policy-regarding-comparative-advertising

https://www.ascionline.in/the-asci-code/