HIMACHAL PRADESH NATIONAL LAW UNIVERSITY, SHIMLA

INTELLECTUAL PROPERTY RIGHTS -I

COMPARATIVE ADVERTISING- TRADEMARKS AND COMPETITION- A
CANTER THROUGH THE CHANGING LEGAL POSITIONS AND VIEWS

SUBMITTED TO:- SUBMITTED BY:-

Mr. AYUSH RAJ MANGLAM YADAV
ASSISTANT PROFESSOR OF LAW 1020202160
BA.LLB(HONS)
7TH SEMESTER
 TABLE OF CONTENT

 INRODUCTION
 ADVERTISEMENT AND COMPARATIVE ADVERTISEMENT
 LEGAL PROVISIONS
 JUDICIAL PRONOUNCEMENTS
 CONCLUSION
 BIBLIOGRAPHY
 COMPARATIVE ADVERTISING
INRODUCTION

In today's world when wide range of products and brands eagerly look for consumer's attention,
advertisements become critical in determining product's future prospects. In the race of
promoting one's own product lot many producers adopt different styles of advertising their
product to attract consumers. Sometimes such advertising can fall between the thin line of fair
and unfair trade practices and can cause legal consequences. Comparative advertising is one such
way. Comparative advertising is a practice where a producer while advertising his product
compares it with the product of the competitor by reference or by any representation of
competitor's product. It may highlight either the similarities in the two products or even
differences. The producer uses the products of its competitor as a standard or benchmark and
claims to exceed it.1

Comparative advertising displays a comparison of two different brands on numbered variants

like price, quality by referring the alternative brand by name, visual illustrations or other
distinctive attributes. Advertisers employ this technique to increase their visibility in the market
and to promote their product.

Comparative advertising is used by many companies as an advertising tool, where an

advertisement for a product or service mentions a competitor’s product or service and compares
the two, to show that the competitor’s product is inferior.2

Trade mark owners can sometimes use their registered trademarks to prevent this type of
advertising. Article 5 of the Trade Marks Directive states that a registered trade mark shall
confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all
third parties not having his consent from using in the course of trade an identical sign in relation
to identical goods or services or an identical or similar mark in relation to identical or similar

1
http://www.lexology.com/library/detail.aspx?g=1cf2e8f0-927c-4c06-8d22-5485e6be541e, Last visited
14/11/23.
2
P.Narayanan, Law of Trademarks and Passing Off, page 221 (6th edition,).
goods and services, where there exists a likelihood of confusion on the part of the public which
includes the likelihood of association.3

The Advertising Directive (Directive (EC) 2006/114) sets out strict rules on comparative
advertising so that comparison of competitor’s products does not result in trade mark
infringement. Comparative advertising shall, as far as the comparison is concerned, be permitted
when the following conditions are met:
 It is not misleading;
 It compares the goods or services meeting the same needs or intended for the same
purpose;
 It objectively compares one or more material, relevant, verifiable and representative
features of the goods/services which may include price;
 It does not discredit or denigrate the trademarks or goods and services of a competitor;
 For products containing a designation of origin it relates to products within the same
designation;
 It does not take unfair advantage of the reputation of a trade mark;
 It does not present goods or services as imitations or replicas of goods or services; and
 It does not create confusion between the advertiser’s goods or services and the
competitor’s marks.
A trademark owner can launch an action for trademark infringement against any person who uses
a trademark in comparative advertising in a way that does not comply with the Advertising
Directive4
However, the debate in regard to the jurisprudential justification of comparative advertising is
always open. Proponents of comparative advertising consider it to be a positive thing in the
world of advertising. They think it is not misleading rather promotes healthy competition. It only
compares goods or services meeting the same needs or intended for the same purpose. As per
their view comparative advertising does not create confusion in the market place between the
advertiser and a competitor. However the opponents of comparative advertising believe that
these kinds of practices hamper the reputation of goods of the competitor.

3
http://mcdanielslaw.com/comparative-advertising-and-trade-mark-infringement/, Last visited 14/11/23.
4
The Advertising Directive (Directive (EC) 2006/114), (last visited 14/11/23).
 ADVERTISEMENT AND COMPARATIVE ADVERTISEMENT

“Advertising is an instrument in the hands of the people who use it. If evil men use advertising
for base purposes, then evil can result. If honest men use advertising to sell an honest product
with honest enthusiasm, then positive good for our kind of capitalistic society can result.”5

So, advertising is a marketing tool which is used for sales promotion and publicity. Advertising
techniques are used to make the products, services or opinions familiar to the people. It is a
process of communication between the owner of the products or services and consumers. The
consumers become familiar to the effectiveness and utility of the existing products and future
products. It helps the consumer in taking right decision and it is an art of communication
technique by which the Trademark or brand of the product or service is made known to the
people.6

Comparative advertising is an advertising that specifically compares the advertised brand with
another brand of the same product. Comparative advertisement is an advertisement where a party
advertises his goods or services by comparing them with goods and services of another party. It
is an advertisement in which there is specific mention or presentation of competing brand(s) and
a comparison is made or implied. It is a practice of either directly or indirectly naming one or
more competitors in an advertising message or usually making a comparison on one or more
specific attributes or characteristics. It is a technique which compares two or more brands on the
basis of one or more product attributes. So comparative Advertising is a sales promotion
technique that compares the products or services of one undertaking with those of another or
with those of other competitors. It is aimed at to highlight the advantages of the goods or services
offered by the advertiser as compare to those of a competitor.7
Comparative advertising can broadly be divided into two types firstly, a positive comparison and
secondly, a negative comparison. In the first case, a positive reference is made to claim that one’s
own product is as good as the other. In the Second case, a negative reference is made to claim
that

5
William Cornish and David Llewelyn, Intellectual Property: patents,copyright,Trademarks and Allied Rights(5th
edition).
6
http://www.academia.edu/10258880/Comparative_Advertising_And_Infringement_of_Trademarks,
7
http://www.inta.org/index.phpm, Last visited 29/10/23.
one’s own product is better than the other. The positive comparison is also known as indirect
comparative advertisement and the negative comparison is also known as direct comparative
advertisement. In both of these cases an unauthorized reference to the competitor is made."8

Comparative advertising should not be misleading or disparaging. Because the advertisement

campaign on the visual media has an immediate impact on the viewers and possible purchasers
mind. The term “disparage” means to dishonor (something or someone) by comparison .To
unjustly discredit or detract from the reputation of (another’s property, product, or business). The
term “disparagement” means a false and injurious statement that discredits or detracts from
reputation of another’s property, product or business. As per New International Webster’s
Comprehensive Dictionary the term ‘disparage’ means to speak of slightingly; under value or to
bring discredit or dishonor upon. And the term “disparagement” means the act of depreciating,
aspersing, slighting, or undervaluing, derogation, or a reproach; disgrace. As per Oxford English
Dictionary the term “disparagement” means lowering of value, honour, or estimation; dishonour,
disgrace, indignity, discredit; something that causes this. Comparison should not be made on
false or misleading statements about the goods or services.9

8
Dr. Rega Surya Rao, Lectures on Environmental Law, page 97 Andhra Law House.
9
http://www.en.mimi.hu/marketingweb/comparative_advertisement.html,Last visited 29/10/23.
 LEGAL PROVISIONS

Use of anybody else's trademark in any advertisement becomes an illegal act if it affects the
reputation and goodwill of the trademark. Additionally comparative advertising can also lead to
disparagement of goods. Disparagement of goods is as such not defined in the statute but it can
be understood as an untrue or misleading statement about a competitor's goods made with the
purpose of persuading consumers not to buy the product. Such acts can attract serious legal
liabilities.10

Few provisions under the Trademarks Law come into picture when any comparative advertising
is done. The same is also checked under provisions relating to unfair trade practices.

Section 29(8) of Trademarks Act, 1999 says that,

A registered trade mark is infringed by any advertising of that trade mark if such advertising:

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial
matters; or

(b) is detrimental to its distinctive character; or

(c) is against the reputation of the trade mark.11

This provision of the Trade Marks Act quite clearly mentions that if an act while advertising a
particular mark is done to take unfair advantage of another mark, or is detrimental to the very
distinct character of the other mark and is also against the reputation of the trade mark, then such
act is an infringement and necessary action can be taken against the infringer. One cannot use the
mark of another for his own profit.

10
Dr. G. B. Reddy, Intellectual Property Rights and the law, page 325 (4th edition, 2004-2005).
11
The Trademark Act 1999.
Section 30 (1) of Trademarks Act, 1999 justifies comparative advertisement saying:

(1) Nothing in section 29 shall be construed as preventing the use of a registered trade mark by
any person for the purposes of identifying goods or services as those of the proprietor provided
the use--

(a) is in accordance with honest practices in industrial or commercial matters, and

(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or
repute of the trade mark.12

This provision of Trade Mark Act justifies comparative advertising authorising every person to
use a registered trade mark for the purpose of identifying goods or services of the competitor but
such use must only be done in accordance with the honest and fair trade practices. There should
not be any mala fide intent to gain advantage of competitor's goodwill behind such use.

Directives of The European Council and Views of The International Trademark Association:

Until very recently comparative advertising was essentially not allowed in European countries.
The European Union first addressed the issue of the comparative advertising in the late 1970’s.
According to current European Legislation, comparative advertisement is allowed only if it is not
misleading, compares like with like, does not create confusion and discredit or take unfair
advantage of a rivals trademark.13

The 1997 European Council Directive says that comparative advertisement shall, as far as
the comparison is concerned, be permitted if the following conditions are met:

i. it is not misleading;

ii. it compares goods or services meeting the same needs or intended for the same purpose;

iii. it objectively compares one or more material, relevant, verifiable and representative features
of those goods and services, which may include price;

12
The Trademark Act 1999.
13
Directives of the European Council.
iv. it does not create confusion in the market place between the advertiser and a competitor or
between the advertiser’s trademarks, trade names, other distinguishing marks, goods or services
and those of a competitor;

v. it does not discredit or denigrate the trademarks, trade names, other distinguishing marks,
goods, services, activities or circumstances of competitor;

vi. for products with designation of origin, it relates in each case to products with the same
designation;

vii. it does not take unfair advantage of reputation of a trademark, trade name or other
distinguishing marks of a competitors or of the designation of origin of competing products;

viii. it does not present goods or services as imitations or replicas of goods or services bearing a
protected trademark or trade name. A subcommittee on comparative advertising of the
International Trademark Association has been studying the current state of the Law14

Section 36A of MRTP Act lists several actions to be an ‘unfair trade practice’. The
provision which pertains to comparative representation is contained in Section 36A(1)(x)
which reads as follows:

36A. Definition of unfair trade practice "unfair trade practice" means a trade practice which,
for the purpose of promoting the sale, use or supply of any goods or for the provisions of any
services, adopts any unfair method or unfair or deceptive practice including any of the following
practices, namely :

1) the practice of making any statement, whether orally or in writing or by visible representation
which, xxx

(x) gives false or misleading facts disparaging the goods, services or trade of another person.15

14
The 1997 European Council Directive 1997.
15
The MRTP Act 1969.
 JUDICIAL PRONOUNCEMENTS

Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd. and Anr16 The Pepsi Company
Incorporation along with Pepsi co (India) Holdings Limited and Pepsi Foods Limited, the
appellants (plaintiff's before the trial court) filed suit against Hindustan Coca Cola and others.
Hindustan Coca Cola and others are endorsing their product with the help of a commercial which
shows that the lead actor asks a kid which is his favourite drink. He mutters the word "Pepsi",
which can be seen from his lip movement though the same is muted. The lead actor thereafter
asks the boy to taste two drinks in two different bottles covered with lid and the question asked
by the lead actor is that "Bacchon Ko Konsi pasand aayegi".? After taste the boy points out to
one drink and says that that drink would be liked by the children because it is sweet. In his words
he says. "Who meethi hain, Bacchon ko meethi cheese pasand hai". He preferred the other drink
which according to him tastes strong and that grown up people would prefer the same. And later
the stronger one came out be "Thums Up", and one which is sweet, word "Pappi" is written on
the bottle with a globe device and the colour that of the "Pepsi". Realising that he had at the
initial stage given his preference for "Pepsi" and subsequently finding it to be a drink for kids,
the boy felt embarrassed. There are other commercials by the respondents where the lead actor
said "Wrong choice baby", and that the "Thums Up" is a right choice, and "Kyo Dil Maange No
More" for the appellant’s products.

Here the issue was whether the commercial by depicting that the boy preferred Thums Up as
against "Pepsi" because Thums Up is strong drink while "Pepsi" is for children as children like
sweet, amounts to disparagement or it is only a healthy competition and puffing the product of
the respondents?

Court held that by calling the Cola drink of the appellants "Yeh Bachhon Wali Hai, Bachon Ko
Yeh Pasand Aayegi". "Wrong Choice Baby", the respondents depicted the commercial in a
derogatory and mocking manner. It can't be called puffing up. Repeatedly telecasting this

16
2003 (27) PTC 305 Del.
commercial will leave an impression on the mind of the viewers that product of the appellant i.e.
"PEPSI" is simply a sweet thing nor meant for grown up or growing children. If they choose
PEPSI, it would be a wrong choice. The message is that kids who want to grow should not drink
"Pepsi". They should grow up with "Thums UP". The manner in which this message is conveyed
does show disparagement of the appellant's product.

In Hindustan Lever v. Colgate Palmolive (I) Ltd17. Hindustan Lever introduced new
toothpaste called New Pepsodent, claiming to be 102% better than the leading toothpaste.
Advertisement showed New Pepsodent superior in killing germs than any other toothpaste. Lip
movement in the aid indicated Colgate as the other toothpaste referred, although voice muted.
Also, same jingle as used in the Colgate aid is played.

Court held that direct reference about inferiority need not be shown and such reference amounted
to disparagement. Advertisement likely to leave doubt in minds of viewers that Pepsodent was
being compared with Colgate. And injunction was granted by the court.

17
(1998) 1 CompLJ 171 MRTPC.
 CONCLUSION & SUGGESTION

After going through various books, online materials and other data sources, the researcher has
concluded that, his hypothesis is false, So, from the above discussion, the researcher is in the
opinion that comparative advertisement should stay. It has many advantages if accompanied with
true facts. It helps the market to be competitive and helps the consumers to decide between two
products or services. Comparative advertising has become more effective and helpful to the
consumers in the era of globalization. Now we are living in the global village. Nature of market,
trade and commerce has completely been changed in this era of globalization. Consumers are
badly in need of more and more information about a particular product or service in order to
make their choice and decision accurate and correct. Here is the importance and efficiency of
comparative advertisement. But, comparative advertisement has many disadvantages and should
not be allowed if it is accompanied with false information about the products and services and
intends to discredit, denigrate or disparage the products or services of rival competitors.
Comparative advertisement will be harmful to the consumer in particular and society at large if it
consists of false, wrong and concocted information. It will become harmful to the rival
competitors if it is accompanied with disparagement.

The researcher is also of the opinion that – the existing legal provisions in India are not strong
enough to prevent the evils of disparagement in comparative advertising. In this era of
globalization the sphere of trade and commerce is widening day by day. India is heading to
achieve the status of one of the powerful economic giant of the world. Various foreign
companies including Multinational companies (MNC’S) are coming to establish business here.
This has prompted the rapid increase in the war of advertisement among various brand owners. It
is the need of the hour to strengthen the existing legal provisions and/or to introduce a new
provision in the existing Acts to restrict and check commercial disparaging in comparative
advertising. Otherwise Indian courts will be flooded with these types of cases. However, in doing
that balancing of interest must be made judiciously. That is the interest of advertisers in
promoting their products and the interest of
rival competitors who are supposed to suffer a loss from that advertisement. The interest of the
public in getting accurate and fair information is also to be protected.

While a trader is allowed to declare his product as the best in the world, care must be taken while
using the trademark of others. Many of the ads portray the design trademark of their rival’s
product in a negative light by damaging the reputation of the product by belittling it. What the
aim of comparative advertising should be is consumer welfare and not a business strategy to
make more money; because that does not always go well.
 BIBLIOGRAPHY

 PRIMARY SOURCE: -
STATUTE: -

 THE CONSTITUTION OF INDIA, 1950.

 TRADE MARKS ACT, 1999

 SECONDARY SOURCE: -
BOOKS: -

 P.Narayanan, Law of Trademarks and Passing Off, 6th edition

 William Cornish and David Llewelyn, IntellectualProperty:patents,copyright,Trademarks
and Allied Rights, 5th edition
 Dr. Rega Surya Rao, Lectures on Environmental Law, Andhra Law House
 Dr. G. B. Reddy, Intellectual Property Rights and the law, Gogia Law Agency, 4th
edition, 2004-2005
 Justice P.S. Narayana’s Intellectual Property Law in India, 3rd Edition 2005

ONLINE SOURCES-

 http://www.lexology.com/library/detail.aspx?g=1cf2e8f0-927c-4c06-8d22-
5485e6be541e/
 http://mcdanielslaw.com/comparative-advertising-and-trade-mark-infringement/
 http://www.academia.edu/10258880/Comparative_Advertising_And_Infringement_of
_Trademarks
 http://www.inta.org/index.phpm