Comparative Advertisement and Infringement

of Trademarks:
A perspective from Consumers

Word count: 2990

Submitted By: Apoorva Sharma
Mailing Address: Room No. A-316
Rani Laxmi Bai Hall of Residence,
IIT Kharagpur, West Bengal-721302
Mobile No. 09547166442
Email: asapoorvasharma2@Gmail.Com
Student of: Rajiv Gandhi School of Intellectual Property Law
IIT Kharagpur, West Bengal- 721302

Year of Study: IInd Year.

Electronic copy available at: http://ssrn.com/abstract=1896367

Comparative Advertisement and Infringement of Trademarks:

A perspective from Consumers

INTRODUCTION:
In words of Leo Burnett-Good advertising does not just circulate information. It penetrates the
public mind with desires and belief. And this is what an advertisement does, it not only sells a
product, it makes the product a part of ones life which is necessary and without which a person
cannot live life happily. The last half of the century has seen a remarkable change in the
marketing strategy adopted by the companies and the value the society attaches with the
advertisements. Advertising world is no longer confined to signing big celebrities to endorse the
product or to bring out the emotions people attach with it. Today, the business market is
centered on building one brands superior claim over the other.
Companies have started adopting a very cut-edge approach to leave their competitors far behind
in the race to show their products as the best amongst the lot. They adopt different kinds of
advertising techniques such as covert advertisement or celebrity advertisement to bring their
products to catch the attention of its consumers. Some of them also make use of their rivals
trademarks/ logos / trade dress and comparing their products. Such form of advertising is
known as comparative advertising.
In simple words; comparative advertising is a form of advertising in which two or more brands
of same generic products are compared in terms of one or more products or attributes. It
compares the product or services of one company with that of other or with those of
competitors. These advertisements are designed to highlight the advantages of the goods and
services offered by the advertiser as compared to those of a competitor. Although, comparative
advertisement has not been defined in the Indian statute, the UK Regulations define it as an
advertisement which explicitly or by implication, identifies a competitor or goods

or services offered by a competitor .

These advertisements are not only centered on the merits of the product as compared
to others but also highlight the differences between the products. They may state that
the advertised product is better than (superiority claims) or as good as the
competitors (equivalence or parity claims). Comparative advertisements can be classified

Electronic copy available at: http://ssrn.com/abstract=1896367

into two types- advertisement that compare the competing products directly and the one in
which comparison is done indirectly. While in some countries, like UK, both form of
comparative advertisement are allowed, there are other countries where comparative
advertisement is not allowed at all. However, it must be noted that the countries in which
comparative advertisement is legal, it is allowed as long as while comparing the goods, a trader
does not project or say that the goods of his competitor are inferior or undesirable. All he can do
is puff up his products but he cannot belittle the products of his competitor. In India puffery is
allowed as long as it is subjective i.e. an average customer is likely to comprehend it as a puff.
Thus, a company is allowed to puff his products even if such a statement is untrue, however, it
should be kept in mind that such a statement is not objective i.e. which is likely to be believed by
the consumers coz in such a case it is actionable.
USE OF COMPETITORS TRADEMARK IN COMPARATIVE ADVERTISING:
In an era where the whole world is considered as one global village, trademarks play an
important role to distinguish the products of one business house from another. Trademark can
be defined as a mark or symbol which distinguishes one product from other product of similar
nature. Its aim is to identify the source of a product and to distinguish that product from
product of similar nature. It lends individuality to a product which helps the customers to
identify the product placed with products of similar kinds. Trade mark not only identifies the
product of its origin but it also guaranties its unchanged quality and further helps to build a
brand image by advertises the products. In a rat race to present their products as the best,
companies adopt advertising techniques that make use of trademarks, trade names, and other
trade symbols combining informational and persuasive elements. Not only has the use of their
own trademark gained popularity also the use of their counterparts trade mark is fast catching
up.
In Advertising and Public Interest1, Ralph Brown argues that trademarks by themselves were
worthless to the public; the publics interest inhered in the ability of trade symbol to inform and
prevent confusion. He further asserts that the legal protection surrounding trade mark should be
driven by analysis of the degree to which advertising itself served public interest.
The public's chief interest lay in the promotion of competition through advertising, Ralph
insisted, by providing information to potential consumers about the products they might choose
to consume. Where the law enhanced or protected advertising's informative function, it
1

Ralph S. Brown, Jr., Advertising and the Public Interest: Legal Protection of Trade Symbols, 57 YALE L.J. 1165,
1206 (1948), reprinted in 108 YALE L.J. 1619, 1659 (1999).

encouraged competition and advanced the public interest2. According to him, the focus of law
should be to protect the integrity of trade symbol in order to prevent consumer confusion or
deception; that would protect the ability of product sellers to supply information through
advertising.
The main crux of Ralfs analysis was that trademarks alone had no legitimate intrinsic value apart
from the symbolized information they provided about the products they accompanied. However,
looking today at the way companies use their trade marks to promote their symbols, the
aforesaid assumption seems untrue. Nowadays, consumers seem to attach lot of value and faith
to the trade mark and the product it is associated with. It will not be wrong to say that these
days trade symbols are themselves often products devised for no better reason than to serve as a
vehicle for the trade symbol du jour3.
Since trade mark is an intellectual property owned by a company, it has all the rights to protect it
from being misused. Any unauthorised use by a competitor in which it seeks to ride on the coat
tails of the mark and benefit from the marks goodwill and reputation results in the dilution of
the mark. A competitor can use its rivals trademark in accordance with the honest practise in
industrial commercial matters and as long as such use does not take unfair advantage or or is
detrimental to the distinctive character and or reputation of mark. It must be kept in mind that
even though the company is allowed to puff up its produt and declare it as best in the world
while comparing it with its rivals products, it cannot in anyways say or depict that the products
of his rival are bad. Slander or defamation of the rivals trademark is also not permissible.
THE LAW RELATING TO COMPARATIVE ADVERTISEMENT IN INDIA:
The advertisement which shows the comparison between the products belonging to same class
carry with it the risk of being involved in inaccurate comparisons between goods and services of
different undertakings resulting in unfair trade practises and thereby misleading the consumers
regarding the merits of the products.
The Consumer Protection Act, 1986 protects two key rights and the right of the
consumer to be informed about the quantity, potency, purity, standards and price of
goods to guard against unfair trade practices; and the right to consumer education.

Jessica Littman, Breakfast with Batman: The Public Interest in the Advertising Age, The Yale Law Journal, Vol.
108, No. 7 (May, 1999), pp. 1717-1735
3
Ibid

The provision on comparative advertising and product disparagement with respect to

trademarks is given in sections 29(8) and 30(1) of the Trade Marks Act, 1999.
Section 29(8) enumerates the situations where use of another's mark in advertising can
amount to infringement, if such use does not comply with the conditions laid down
under the section. At the same time, section 30(1) makes such use, an exception, if it is
in accordance with the conditions provided under this section. Section 29(5) of the Act
provides that the use of a registered mark in an advertisement is infringing if it takes
unfair advantage of and is contrary to honest practices in industrial or commercial
matters; if it is detrimental to the distinctive character of the trade mark; and if it
affects the reputation of the trade mark. On the other hand, Section 30(1) creates an
exception to the owner's right to use the trade mark by permitting third-party use in
comparative advertisement provided it is in accordance with the honest practices in
industrial

or

commercial

matters.

Section

30(1)

provides

that

comparative

advertisements which are fair and accurate do not harm the consumers and accordingly
should not be prohibited by the use of registered trademarks by third parties.
Apart from the above mentioned statutes concerning the law relating to comparative
advertisement in India, the guidelines of "Advertising Standards Council of India (ASCI)"
specifies that comparative advertisement is permissible if the aspects of the products compared
are clear, factual and substantial, such comparison does not confer artificial advantages on
advertiser, there is no unfair denigration of the competing product and is unlikely to mislead the
consumer.
The Supreme Court held in Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd 4 that "Public at large is
benefited by the information made available through the advertisement." As a matter of fact the very basis of the
law relating to Trade Marks is also the protection of public interest only, since the courts think of an unwary
purchaser, who may buy a spurious product on the mistaken impression that it was brand 'x'. The same logic
should form the basis for an action in respect of disparaging advertisements also.
In Reckitt Benckiser v. Hindustan Lever5, the court noted that Sections 29(8) and 30(1) of the
Trademarks Act 1999 address the issue of comparative advertising and product disparagement
with respect to trademarks. Justice Badar Durrez Ahmed in numerated the following legal

4
5

AIR 1995 SC 2438.

2008 (38) PTC139

requirements that must be met to establish commercial disparagement in cases of comparative

advertising:
-

A link between the product shown in the advertisement and the plaintiffs product
In determining whether such a link exists, the Courts must adopt the test of an average
person of imperfect recollection, who must be picked from the target group of users of
the product sought to be slandered or disparaged.

- A tradesman is entitled to declare that his goods are the best in the world; and that they are
better than his competitors goods even if such declarations are untrue. In doing so,
however, he may not say that the competitors goods are bad.
- The intent and the manner in which the defendants goods are advertised are relevant.
Merely puffing ones goods is not actionable, unless this results in slander of the
plaintiffs goods.
Similar decision was given by the court in case of Hindustan Lever Limited v Colgate Palmolive (I)
Limited6 and Pepsi Co Inc v Hindustan Coca Cola Ltd 7, where both Colgate and Hindustan Coca Cola
Ltd liable for disparaging their competitors products, respectively. Even though in both
advertisements the competitors product name could not be heard but could clearly be made out
from lip movement. Such a method of circumventing the law was held to fall clearly within the
ambit of disparagement. The courts further stated that any claims made in comparative
advertisements must be backed by verifiable statistical data.
In case of Colgate-Palmolive (India) Limited vs. Anchor Health & Beauty Care Private Ltd8, the Madras
High Court for the first time looked at the comparative advertising claims taking into account
the principles of unfair trade practice and the Consumer Protection Act, indicating that a
comparative advertising claim involves not just the rights of the two parties but also the interests
of the consumers. In paragraph 67 of the judgement, the court recognised the rights of the
consumers and held that:

AIR 1998 SC 526

2003 (27) PTC 305 (Del)(DB)

2009 (40) PTC 653 (Mad.)

On the basis of English precedents, recognises the right of producers to puff their own products even with untrue
claims, but without denigrating or slandering each other's product. But the recognition of this right of the producers
would be to de-recognise the rights of the consumers guaranteed under the Consumer Protection Act, 1986. To
permit 2 rival traders to indulge in puffery, without denigrating each other's product, would benefit both of them,
but would leave the consumer helpless... If on the other hand, the falsity of the claim of a trader about the quality
and utility value of his product is exposed by his rival, the consumer stands to benefit, by the knowledge derived out
of such exposure. After all, in a free market economy, the products will find their place, as water would find its
level, provided the consumers are well informed. Therefore, it is only on the touchstone of public interest that such
advertisements are to be tested.
Therefore, on one hand the Madras High Court has taken into account unfair trade practise and
consumer protection into account, on the other hand, the Delhi High Court in Reckitt Benckiser v.
Hindustan Lever9, maintained that mere puffery is not actionable. In this case the court allowed
puffery only in context of tort claims between competitors. They did not in any way sanction
puffery if it violated statutory provisions of the Consumer Protection Act.
POSITION IN USA AND EU:
In the United States comparative advertising has been a well-recognised and acceptable form of
advertising. The Federal Trade Commission has supported the use of brand comparisons where
the bases of comparison are clearly identified. Comparative advertising, when truthful and nondeceptive, 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."10
On the other hand, initially the European countries were hostile to the idea of comparative
advertisement but after the EC legislation, comparative advertisement was accepted as a
legitimate means of providing product information to the consumers. The European Directive
on Comparative Advertising11 is intended to promote "fair" comparative advertising between
competitors. "Fair" comparative advertisements must not mislead or confuse the consumer and
must not denigrate or discredit a competitor's trade mark. It must not hold out goods and
9

2008 (38) PTC 139 (Del)

10

Statement of Policy Regarding Comparative Advertising, Federal Trade Commission, Washington, D.C., August 13, 1979

11

Directive 97/55

services as imitations of the goods or services of the trade mark owner. And neither should it
take unfair advantage of the goodwill or reputation in that trade mark.
Therefore, by comparing the laws relating to India, USA and EU, it is clear that use of trade
mark in comparative advertisement is legitimate as long as the emphasis is on promoting the
product based on the differences and not the similarities between the two products.
Further, the advertisement should inform and not mislead the consumer.
COMPARATIVE ADVERTISING- CONSUMER PROSPECTIVE:
In a century where consumers are spoilt for choices, comparative advertisement plays an
essential role by making a point of difference between the companys products from the rest.
The whole idea is to make a consumer centric advertising campaign by carefully highlighting the
merits of your products while comparing it with that of the competitors. Differentiating ones
own product from the rest and compelling differentiation; works best in case where one is trying
to establish its identity as a viable alternative in a crowd of similar lined products. For instance,
Tides ability to compete with Rin and Surf excel was driven by price and parity, which in turn
shifted the buying criteria of many consumers. If used carefully, comparative advertisements
help to bring out more information regarding products giving opportunity to the consumers to
make an informed choice. It can stimulate competition between suppliers which intern works to
the consumers advantage. It not only helps the consumers to make an informed and efficient
choice it also helps to maintain market transparency. Comparing the two products works in
public interest. The competition between the products to win more consumers results in
improvement of product quality as well as slashing of market prices.
However, on the other hand, these advertisements have made the consumer more sceptical
about the claims made by a company about its product being superior as the accurate
information has not always been provided. Consumer has an expectation of both fairness and
balance and if not done carefully, these advertisement leads to more confusion and anxiety in the
minds of the consumer.
CONCLUSION:
Consumer welfare is the by- product of market competition. According to Ralph Brown
while devising the rules of trademark law focus should be on competition. As the realm of
trademark protection expands, it necessarily does so at the expense of competition12.With an
12

Supra at footnote number 2

aim to have a larger consumer base many companies make use of the power of
advertisement as business strategy to maintain, enhance and develop brand equity.
Many of them enter into comparative advertisement using the design trademark of their
rivals product. Even though comparative advertisement is legal in India, care must be
taken while using the trademark of others. Advertisement involving the use of
competitors trademark should emphasise on promoting the product based on
difference and not on similarities between the two products. Comparative advertisement is
allowed as long as while comparing the goods the trader does not belittle the products of his
competitor. Since the main focus of advertisement is to attract the consumers to a particular
product, care must be taken as to what information it provides. If done in a fair manner these
advertisements helps the consumer to make an informed and efficient choice. The aim of
comparison should be for consumer welfare and not to befool them.