Comparative Advertisement under the Trademark Regime

Introduction:

Advertising is a proven and effective way to attract potential consumers in a market. Comparative advertising, also known as "comparison advertising," is a type of marketing that involves a brand comparing itself with its competitors to showcase parity or superiority. Comparative claims can vary in nature and may emphasize similarities or differences between the compared products or services. It may also state that the advertised product is "better than" or "as good as" the competitors.

Comparative advertisement can be divided into two categories: Direct Comparative Advertisement and Indirect Comparative Advertisement. In Indirect Comparative Advertising, the name of the competitor or the product being compared is not directly mentioned, but the same is implied. It indicates that their product is superior to or similar to the product/service of other brands in the world. For example, Dove's advertisement shows consumers that their moisturizer is better than its competitors. While the competitor's name is not mentioned directly, the bottle with spikes represents Dove's competitor in the market.

In Direct Comparative Advertisement, the name of the competitor or product being compared is directly mentioned. For example, Samsung and Apple, where Samsung announced the Galaxy S22 Ultra, which features a 108MP main camera and its 100x Super Zoom, for having the highest resolution camera in any smartphone and claimed that "it is not coming to any iPhone near you."

Statutory Laws on Comparative Advertisement

In India, the practice of comparative advertising is permissible as long as it is in compliance with the law. However, if an advertiser uses a competitor's trademark and, in doing so, belittles or disparages their goods or services, it could lead to trademark infringement issues under the Trademarks of Act, 1999.

To be more specific, according to Section 29(8) of the Trademarks Act, 1999, advertising that does not conform to ethical practices or harms the trademark's unique identity or reputation constitutes an act of infringement. As per this section, any advertising that is misleading, false, or deceptive in nature, or that makes an unfair comparison with a competitor's products or services, is considered to be unethical and can lead to legal consequences.

However, Section 30(1) of the Trademarks Act, 19993, makes an exception for comparative advertising that does not amount to infringement under Section 29. This means that if an advertiser simply emphasizes the benefits of their own goods or services without belittling or disparaging their competitors' offerings, it is considered an honest and legal practice.

Advertisers in India can use comparative advertising as long as they adhere to the ethical standards and guidelines laid down by the Trademarks Act of 1999. Any advertising that is misleading or harms the reputation of a competitor's trademark is not allowed and can lead to legal action.

Honest practice in comparative advertisement

Comparative advertising is a marketing strategy in which a company compares its own products or services to those of its competitors. However, the question of whether a comparative advertisement is honest or not depends on various factors, such as the impression that the advertisement or commercial registers in the viewer's mind. In general, an honest practice does not mislead customers, does not disparage the goods or services of competitors, and does not create any confusion in the consumer's mind.

Under Section 30(1) of the Trademarks Act, 1999, comparative advertisements are permitted in three ways. Firstly, if there is a bona fide use of the trademark, it means that the use of the trademark is in good faith and not intended to deceive or mislead the consumer. Secondly, if the advertisement is in accordance with honest practices, it means that the claims made in the advertisement are truthful and not misleading. Finally, if the advertisement does not take unfair advantage of the reputation of the mark, it means that the advertisement does not make false or misleading claims about the competitor's product or service.

Thus, while puffing up one's own product is generally allowed in an honest trade practice, the moment there is a derogatory reference to the competitors' good or service in the advertisement, such a comparative advertisement is not permitted due to the presence of an element of defamation. Ultimately, companies must ensure that their comparative advertisements are truthful, accurate, and not misleading in any way, in order to maintain consumer trust and avoid legal repercussions.

Comparative Advertising and Trademark Infringement-

A trademark is used primarily to distinguish the goods of one person from another. Therefore, it helps consumers identify the origin of the goods. If an advertiser uses a competitor's trademark to make a comparison between their goods and those of the competitor and in the process disparages them, then this could lead to issues related to comparative advertising, product disparagement, and trademark infringement.

In India, the law on comparative advertising and product disparagement in relation to trademarks is based on Section 29(8) of The Trademarks Act, 1999. This section states that the use of a trademark in advertising can constitute infringement if it is not in accordance with honest practices or is detrimental to the distinctive character or repute of the mark. However, Section 30(1) makes comparative advertising an exception to acts constituting infringement under Section 29. It allows any advertising that is in accordance with honest practices and does not cause detriment to the distinctive character or repute of the trademark. Such advertising will be permissible and will not constitute infringement.

Conclusion:

Comparative advertising is a powerful tool for businesses to highlight their strengths in relation to competitors. However, it is crucial to navigate the legal landscape, especially concerning trademark infringement. In India, the Trademarks Act, of 1999, regulates comparative advertising, emphasizing the importance of adhering to ethical practices. While honest comparative advertising is permitted, misleading practices or harm to a competitor's trademark reputation is not tolerated. Maintaining honesty and transparency in comparative advertising is essential to foster healthy competition and consumer trust. Striking the right balance between promoting one's product and respecting competitors' rights is key to a successful and legally sound advertising campaign.