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  • Writer's pictureRitik Agrawal

COMPARATIVE ADVERTISING AND TRADEMARK INRINGMENT

Updated: Jan 16

Author: Harsha Parakh

College: Pt. Ravishankar Shukla University (Disha Law College)


INTRODUCTION

When it comes to communicating with large numbers of people, nothing beats the power of well-crafted advertising. It is one of the active tactics for the expansion of businesses. The practice of promoting one's own goods and brands via comparison is quite popular. In comparative advertising, one product or service is displayed to be compared with another, either directly or indirectly, depending on the kind of advertisement. Because of the creative effort that goes into producing such a visual depiction, such advertisements stick in the minds of customers for a much longer period of time. Comparative advertising, such as the one described in the previous paragraph, is a relatively recent marketing strategy in which businesses seek to increase their market share by promoting their products by highlighting the superiority of their wares in relation to those of competing brands. The primary reason for doing this is to highlight the differences between the brands of various rivals that operate in parallel in the market.

However, trademark infringement proceedings may be brought against businesses that use or display another company's brand in an unfair manner. In this article, we will go over a few questions that are often asked in relation to comparison advertising. Some of these questions include: What laws and regulations apply to this kind of comparative advertising? Are they violating the brand's trademark that is being compared by using similar language? Where does the exemption lie in the concept of trademark infringement? Is it considered fair trade to make use of or show another company's brand in order to promote your own brand?

COMPARITIVE ADVERTISING

“Comparative advertising is a part of people's nature... Some of the most effective advertising is comparative, but it is not without risks. Effective advertising delivers a message that is remembered. It can change the way the world views a product or service and can generate sales. If the market for a service or product is well-defined, comparative advertising can hold the product or service distinguish itself from the competition. Nothing seems to do this more efficiently than comparative advertising.”

The word "comparative advertising" is the term that is used to describe ads in which the products or services of one merchant are contrasted with the products or services of another merchant.2 According to a survey of ads that was carried out in the United States, there are three categories that all commercials may be placed into:

  1. Non-comparative ads are advertisements that do not directly or indirectly refer to a product that is in direct or indirect competition with the advertised product.

  2. Indirectly comparison ads: These are advertisements that make reference to an alternative product in a manner that is not direct.

  3. Directly comparable advertising are commercials in which a rival product is either directly identified or is portrayed in a manner that is easily recognisable.

Comparative advertising is a term that may be applied to marketing campaigns that fit under the third and fourth categories. comparison advertisements are permitted in certain nations, whereas others do not permit any of the two types of comparison advertising. Therefore, the well-known tag line "Probably the best lager in the world," which is used in advertisements for Carlsberg lager in the United Kingdom (a country that allows both forms of comparative advertising with certain restrictions), cannot be used in Germany (a country that does not allow comparative advertising at all), as it would lead to the implication that all other lagers are inferior to Carlsberg and therefore fall into the category of indirectly comparative advertisements.

The consumer often benefits from comparative advertising because it contrasts the price, value, quality, or other attributes of other items, therefore increasing the consumer's knowledge of the various options available to them. Having said that, there is a significant stipulation that comes with this: If the education of consumers is entrusted to entities who have vested interests, there is always a risk that the advertising will contain misinformation. An improvement in the customers' knowledge can only be achieved if the advertising does not contain any false information. Therefore, from a legal standpoint, comparative advertising is allowed to the extent that: A trader is allowed to make comparisons of his goods with the another trader's goods and show that his goods are superior to the other; however, while doing so, he is not permitted to say that the goods of his competitor are subpar, undesirable, or otherwise unfavourable. If he were to make any comment along these lines, it would be considered an act that constitutes "product disparagement." It is forbidden to make comparisons that might be seen as an attack on the product of a competitors.

TRADEMARK INFRINGEMENT

A trademark is a distinctive name, logo, symbol, or design, or it might be a mix of all of these things. A trademark is the mark of identification of any company under the brand name. The primary function of a trademark is to identify a particular brand of goods or services as distinct from those of other companies. Therefore, consumers are able to identify both the items and the country of origin thanks to trademarks.

The company's brand, which is protected by the trademark, is the primary factor in determining the reputation of the business. The registered owner of a trademark not only has the exclusive right to use it in connection with goods or services, but he also has the right to fight against infringement of his mark by third parties. Trademark infringement can result in legal action against the infringer. The violation of these exclusive rights in regard to the products and services that are provided to the owner of a trademark by the Trademark Act, 1999, is what is meant by the term "infringement of a trademark."

If someone uses your trade name for their personal gain without first obtaining your permission, then they run the risk of being subject to statutory repercussions in the form of infringement litigation under the Trademark Act, 1999. Infringement, in a nutshell, occurs when an authorized mark is used in an unauthorized manner. Infringement comprises two components. The first factor is the use of the marks without proper authorization, and the second factor is the use of the marks to gain an unfair advantage over honest practice. The question of trademark infringement only comes up in cases of comparison advertising where the relevant mark is either explicitly displayed or strongly suggested by the advertisement.

Provisions for the protection of the trademark in the event of an infringement are included in Sections 29 and 30 of the Trademark Act of 1999.

TRADEMARK LAW AND COMPARATIVE ADVERTISING RELATIONSHIP WITH TRADEMARK LAW

To "distinguish the goods of one person from those of another" is the basic goal of registering a trademark. A customer is therefore able to identify both the items and the source of those things when they use a trademark. Therefore, in the event that an advertiser uses the trademark of a competitor in order to make a comparison between his own goods and those of his competitor, and in the process, disparages them, then such an act on the part of the advertiser would not only invoke issues related to comparative advertising and product disparagement, but it would also invoke issues related to trademark infringement.

Only when a competitor's trademark is employed do concerns over the use of that competitor's trademark emerge in the context of competitive advertising and product disparagement. Similar to the case of Duracell International Ltd. v. Ever Ready Ltd., "the advertisement in question had referred to the corporate name of the competitor, Duracell Batteries Ltd. while depicting the appearance of a distinctive Duracell battery and without mentioning the brand name." The court decided that the plaintiff's trademark had not been violated by the defendant in this case. Additionally, despite the fact that Duracell had a trademark registered for his battery, the colours copper and black were utilised in the battery, but the hues white and black were used in the commercial made by the plaintiff. As a result, the court decided that there was no infringement of trademark on the part of the defendant.

COMPARATIVE ADVERTISING AND TRADEMARK INFRINGEMENT

When in an advertisement, goods or services of one company are compared to that one other, the term “comparative advertisement” is used to describe such advertising. It indicates that using the trademark of a third party is allowed, but while doing so, the advertiser may not make negative comments about the products or services of a third party. Any such conduct that brings another person's products or services into disrepute is not only considered to be an act that constitutes infringement, but it is also considered to be an act that constitutes product disparagement.

Today, a trademark refers to the actual mark that a company uses in order to differentiate its goods or services from those of competitors. The primary goal of this subfield of intellectual property, which is one of the categories that fall under the umbrella of intellectual property, is to safeguard the brand name of the product, which includes both products and services.

  • In India, the Trade Mark Act 1999, Section 2(1)(zb), defines a "trade mark" as a "mark that is capable of being represented graphically and which is capable of identifying the products or services of one person from those of others. This definition allows for the possibility that a "trade mark" may encompass the form of items, the packaging of goods, and a combination of colors."

When it comes to India, there are no torts against competition that are done through unfair means or infringement of trademarks. Both have been codified in the "Monopolies and Restrictive Trade Practices Act, 1969," which got repealed and replaced by the Competition Act 2002 and the Trademark Act 1999.

Even if the brand is widely recognized, comparative advertising could nevertheless be considered a violation of the trademark. The MRTP Act is the source of the whole notion of "disparagement of goods by another person," which ultimately results in unfair business practices. In addition, this activity is prohibited under the Trademark Act's Section 29(8)(a), which states as much.

Trademark infringement issues emerge in the context of comparative advertising and product disparagement only when the trademark’s used by such person; for example, in Pepsi Co. Inc. and Others v. Hindustan Coca-Cola Ltd. and Anr. (2003)

Pepsi has launched a lawsuit against Coca-Cola for the improper use of their trademark in a commercial. Coca-Cola was found guilty by the court of disparaging the plaintiffs' goods and undervaluing the goodwill associated with those items in violation of the TM and Copyright Acts. The trademark that was filed was being infringed upon by employing a Globe Device or the phrase PAPPI, both of which are confusingly similar to the trademark PEPSI.

When the owner of a registered trademark wants to stop other companies from using his mark in comparison advertising, he may depend on the Trade Marks Act, namely the infringement clauses. This will stop other companies from using his mark.

LEGAL PROVISIONS ON TRADEMARK INFRINGEMENT AND COMPARATIVE ADVERTISEMENT

Infringement of a trademark in advertising is referred to as "trademark infringement" in Section 29(8) of the Trademarks Act, 1999. According to this provision, concerns relating to comparative advertising as well as trademark infringement might be triggered when a marketer uses the trademark of a rival to draw comparisons and, in the course of doing so, disparages the competitor.

Perspective in India

Advertising in India is governed by a number of different pieces of legislation and rules, including the Constitution of India, the Trademarks Act of 1999, the Consumer Protection Act, and the standards established by the Advertising Standard Council of India (ASCI), among others. According to Section 29(5) of the Act, "the use of a registered mark in an advertisement is considered to be an act of trademark infringement if the advertisement takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; if the advertisement is detrimental to the distinctive character of the trade mark; and if the advertisement affects the reputation of the trade mark." On the other hand, subsection (1) of Section 30 states that comparison ads that are honest and truthful do not cause damage to customers, and, as a result, the use of registered trademarks by third parties should not be restricted to prevent such advertising.

Aside from this, the guidelines that are provided by the "Advertising Standards Council of India (ASCI)" state that "comparative advertising is allowed as long as the aspects of the products being compared are clear, factual, and substantial; such comparison does not confer artificial advantages on the advertiser; there is no unfair denigration of the competing product; and it is unlikely to mislead the consumer."

Constitutional Perspective

The right to freedom of speech and expression is guaranteed by Article 19(a) of the Constitution of India, and many advertisers might claim that they are entitled to the same protection. In light of the fact that comparative advertising is of utmost significance to us, it is essential for us to examine Article 19 (1) (a) of the Constitution. As is well known, the freedom guaranteed by this article may be exercised in areas such as public speech, radio, television, and the press. The right to freedom of speech and expression does, however, have certain constraints, and according to Article 19(2) of the Constitution of India, these restrictions may be imposed by the state as long as they are considered reasonable. The Supreme Court of India ruled in the case of Tata Press Ltd. vs. Mahanagar Telephone Nigam Ltd. that "commercial speech cannot be denied the protection of Article 19(1)(a) of the Constitution simply because the same is issued by businessmen."

AVAILABLE REMEDIES

Where there is a right, there must also be a cure; this is what the Latin phrase "ubi jus ibi remedium" implies. In the event of infringement litigation or a passing-off suit, relief may be granted by any court that is not lower than a district court and has jurisdiction over the matter. The following is a list of the many forms of relief to which a plaintiff is entitled:

  1. an injunction that prevents the infringing mark from being used in the future.

  2. compensation for loss1es or a statement of earnings.

  • an order for the destruction or removal of any infringing marks or labels that have been delivered to the court.

In the case of “M/s South India Beverages Pvt. Ltd. v. General Mills Marketing Inc. & Anr.”

In a recent trademark appeal, the Delhi High Court considered the cases of 'HAAGEN DAZS' and 'D'DAAZS. The similarities between the two markings are too greatt to be ignored. The appellants and the respondents were both engaged in the business of selling ice cream and other dairy products to the general public, although at different price ranges. The court upheld the lower court's temporary injunction against the defendant-appellant's use of the latter mark..

Permanent injunction

Permanent injunctions, which are often sometimes referred to as perpetual injunctions, are those that are issued at the same time as the final ruling. As a result, permanent injunctions typically remain in effect for much longer periods of time. In this situation, the Defendant is permanently prevented from carrying out an act or refraining from carrying out an act that would work against the interests of the Plaintiff. Alternatively stated, the Defendant is prohibited from carrying out either conduct..

Other Remedies

"The other laws under which the aggrieved parties can claim for infringement of trademark in comparative advertisement are as follows:

  1. The Consumer Protection Act of 1986

  2. The Prevention of Food Adulteration Act of 1954

  3. The Emblems and Names (Prevention of Improper Use) Act of 1950

  4. The Drugs and Magical Remedies (Objectionable Advertisement) Act of 1954

  5. The Indecent Representation of Women (Prohibition) Act of 1986

  6. The Drugs and Cosmetics Act of 1940

  7. The Pre-Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994

"Other Acts include the Young Persons (Harmful Publications) Act of 1956, the Motor Vehicles Act of 1988, the Prize Competition Act of 1955, the Transplantation of Human Organs Act of 1994, etc. Under all these Acts, a person can also claim compensation for infringement of their rights."

However, legal recourse is available for trademark violations in nations such as the United States, the United Kingdom, and the European Union. In the United States, trademark infringement is protected by the Lanham Act. In order to gain a remedy for trademark infringement, the plaintiff must establish two things: (1) that it has a valid mark, and (2) that the defendant's use of the same or similar mark is likely to create confusion in the minds of consumers. In other words, the plaintiff must prove that it has a legal mark.

Damages are calculated in EU nations by taking into account the quantity of products that the claimant might have sold if the defendant had not violated the claimant's rights. This is done in order to determine an appropriate amount of compensation for the claimant. The courts in the EU have a propensity to put trademark owners in the same situation as they would have been in had the defendant not violated the rights of the claimant. This is because the courts believe that this is fair. When evaluating damages, the courts also take into consideration the length of time that the infringement occurred. Courts have been known to award a lump sum payment on the grounds of royalties, which the claimant would have received if the defendant had acquired consent from the claimant. This occurs in situations when the claimant is unable to establish real damages. In addition to this, compensation is given for the decrease in value of the trademark's goodwill and reputation. In every other member state of the European Union (EU), save for Bulgaria, courts do not have the authority to impose punitive damages. These may take the form of larger fines, increased royalties, or even forced payments.

As can be seen from the above, not only does the Trademark Act 1999 allow for recourse in the event that a trademark is infringed, but other laws and other nations also contain measures to prevent the trademark of the owner from being infringed.

CONCLUSION

People are able to have their impressions of a good or service altered by advertising, provided that it is executed well. Nevertheless, in light of the cutthroat rivalry that exists in the sector, holding an advantage over one's rivals becomes critically important. Because of the effects of globalization, companies now have a presence in a number of different jurisdictions. As a result, "If done honestly and objectively, there is no better way to achieve this than comparative advertising." Because of this, it is of the utmost importance to utilise a competitor's trademark in an honest manner and in accordance with the norms of the industry. When making claims about the value of their goods or services, advertisers have a responsibility to avoid exaggeration and to support their claims with facts wherever possible.

Analyzing the legal framework, the judicial journey of several important cases, and the legislations that regulate comparative advertising in India, it is clear that as a result of the absence of a dedicated legislative framework to regulate the practice, a largely haphazard framework has been adopted, with various aspects of the practise based on contradictory standards. This is because there is no dedicated legislative framework to regulate the practise. When taking into consideration the core of such depictions in order to arrive at a consistent standard or level of acceptance, it is necessary to have a conversation about the twin components of simple puffery and denigration. It is important to note that despite the fact that the level of permissibility for puffery has evolved through time, the attitude on denigration has remained relatively same. In addition, it is essential to take into account the requirements of all parties who have a vested interest in the matter, including consumers, advertising, suppliers, and rivals. The dominant viewpoint, which had been upheld by our judicial system for close to ten years, was unable to live up to the requirements of consumer justice. "The self-regulatory process as it has been established by the advertising industry has been relegated to a purely recommendatory function, with it having no enforcement mechanism to ensure compliance with its directives."


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