Comparative advertising and its impact on trademark rights: lessons from Patanjali Ayurved ltd. v. Procter & Gamble Home Products Pvt. Ltd.

 INTRODUCTION

Businesses can use advertising as a valuable tool to build awareness of their brand, goods, and services. These companies use a variety of marketing and advertising strategies to reach as many target audiences as possible in an effort to sway their decisions to buy. Advertising and marketing are ongoing endeavours. To guarantee that their goods, services, and brands remain prominent in the eyes of consumers, these companies devise distinctive marketing and promotional tactics.

Comparative advertising aims to highlight the company’s brand, product, or service as being of higher quality or value than those of its rivals in the market. One common method of advertising used to contrast an advertiser's goods and services with those of their rivals is comparative advertising.

While this form of advertising can be an effective marketing tool, it often leads to disputes, particularly when it involves the use of competitors’ trademarks or when the comparison goes beyond objective evaluation and borders on disparagement. Comparative advertising thus raises critical questions about trademark infringement, false advertising, and the fine line between commercial free speech and defamation.

The Indian market has witnessed several such disputes, with one of the most significant being the case between Patanjali Ayurved Ltd. and Procter & Gamble Home Products Pvt. Ltd.. In this case, Patanjali’s comparative advertising campaign led to allegations of trademark infringement and disparagement by Procter & Gamble (P&G). This case provides valuable insights into the legal framework governing comparative advertising in India, the rights and responsibilities of brands, and the balance that courts seek to maintain between competition and consumer protection.

Statutory provisions for infringement of trademark and Comparative advertisement 

The Trademarks Act, 1999's Section 29(8) defines trademark infringement in advertising. According to this provision, an advertiser commits both trademark infringement and comparative advertisement violations if they exploit their competitor's trademark to make comparisons and criticise them in the process.

The Trademark Act of 1999, Section 29, lists instances of trademark infringement. However, a disclaimer is included in Section 30(1) of the Trademark Act of 1999. This clause states that using a trader's trademark as long as it is done honestly, does not violate trademark laws, and does not harm the unique qualities or reputation of the comparative mark in any way or take undue advantage of it.

Therefore, it will be considered an unfair trade practice and may result in legal action for trademark infringement if an advertiser uses a competitor's product to promote their own by displaying the competitor's mark on their own product in the advertisement. This harms the reputation of the competitor's mark due to its unique qualities. 

On the other hand, it will be considered an honest business and is legal if the advertising is simply restating his claims about his own goods or services without denigrating those of the rivals.

Businesses and companies are free to assert that their goods and services are better than those of any rivals in the marketplace. Even if such claims are incorrect, they won't qualify as derogatory remarks. It is forbidden, nevertheless, to assert that the products or services of rival companies are subpar in contrast. The specifics of each case must be considered in order to determine if a statement or claim violates a trademark or denigrates the products of rival companies. Analysing whether the advertising diminishes, disparages, or tarnishes the reputation of a rival company's brand or item is crucial.

Indian courts have generally allowed comparative advertising as long as the claims made are based on verifiable facts and do not cross the line into disparagement or defamation. The challenge, however, lies in determining where to draw the line between permissible comparisons and unlawful disparagement.

CASE STUDY: Patanjali Ayurved Ltd. and Procter & Gamble Home Products Pvt. Ltd.

Comparative advertising became a hot topic when Patanjali Ayurved Ltd. and Procter & Gamble Home Products Pvt. Ltd. filed a lawsuit. In an advertisement for its herbal toothpaste, Patanjali, a company well-known for its Ayurvedic and natural products, compared it to Oral-B, a popular P&G brand. In the commercial, Patanjali asserted that its toothpaste was safer, more effective, and more consumer-friendly than Oral-B, which it said contained dangerous ingredients. In addition to being deceptive, P&G claimed that Patanjali's commercial denigrated its product by implying that Oral-B was less effective and dangerous. P&G said in its lawsuit that Patanjali's campaign was intended to damage the reputation of its well-known brand and accused Patanjali of trademark infringement, false advertising, and disparagement.

Patanjali’s Defense

In an attempt to defend its advertisement, Patanjali stated that the parallels it made between its herbal toothpaste and P&G's chemical-based product were accurate. According to the corporation, it was legal in India to use comparative advertising as long as the comparisons were true and served the general public interest. Patanjali further argued that the commercial did not violate trademark rights since it did not use P&G's trademark in a way that confused or misled consumers.

Court’s Ruling and Reasoning

The court's decision was based on a thorough analysis of the contested advertising, which allowed it to ascertain if Patanjali's allegations were supported by factual data and whether they were presented in an impartial and inoffensive way.

1)      Infringement of Trademark

Regarding trademark infringement, the court decided that as long as a competitor's trademark is used truthfully and does not deceive customers, it is not always enough to constitute infringement. The court determined that Patanjali's advertisement in this instance did not utilise P&G's trademark in a way that would mislead consumers about the items' origins. Consequently, there was no infringement of trademark. This case thus teaches us that Comparative advertising must be based on verifiable facts. Brands should ensure that any claims they make in comparison to competitors are supported by evidence and do not exaggerate the benefits of their products or the shortcomings of their competitors’ products.

2)      Disparagement

Whether Patanjali's marketing was intended to harm P&G's reputation or if it was a valid comparison was the main focus of the court's consideration of disparagement. The court determined that although comparison advertising is permitted, it cannot go too far and denigrate a competitor's product by stating things that are untrue or defamatory. In this instance, the court found that several of Patanjali's assertions were overstated and without supporting data, especially with relation to the purported danger of the compounds in Oral-B. The court concluded that Patanjali's commercial did, in fact, represent disparagement as a result. It is evident from the aforementioned example that companies using comparison advertising need to exercise caution to avoid stepping over the line into defamation. While promoting the benefits of one's own product is acceptable, making untrue or disparaging remarks about a rival's goods may result in legal action and harm to the reputation of the brand.

3)      balancing trademark protection with commercial free speech

The court stressed in its decision how crucial it is to strike a balance between the requirement to preserve trademark rights and the freedom of commercial expression. Although companies can use comparison advertising to advertise their products, this is not a given. It is imperative for advertisers to verify that their assertions are veracious, grounded in facts, and do not unjustly harm the standing of their rivals. This case also highlights the need for companies to make sure their comparative advertising campaigns adhere to applicable laws, such as the Consumer Protection Act of 2019, the Trade Marks Act of 1999, and advertising guidelines established by trade associations like the Advertising Standards Council of India (ASCI). Failure to comply with these laws can result in lawsuits, penalties, and reputational harm.

CONCLUSION

By honestly contrasting its products with those of its competitors, comparative advertising will present customers the choice between a superior product and a variety of comparable options. It also leads to a healthy level of market competitiveness. The case of Patanjali Ayurved Ltd. v. Procter & Gamble Home Products Pvt. Ltd. underscores the complexities of comparative advertising and its impact on trademark rights. While comparative advertising can be a powerful marketing tool, businesses must exercise caution to ensure that their claims are truthful, non-disparaging, and compliant with legal requirements.

As Indian courts continue to grapple with the balance between commercial free speech and trademark protection, businesses should take heed of the lessons from this case and others like it. In the end, responsible advertising not only protects competitors’ trademarks but also fosters fair competition and consumer trust.

By adhering to these principles, businesses can effectively promote their products without crossing legal or ethical boundaries, thereby safeguarding both their brand and their competitors' rights in a competitive market.