For many of us, the first thought that hits the mind on reading the heading of this Article is that of the recent comparative advertising played on the national television by a major detergent brand comparing its product with that of its competitor and showcasing its superiority. With each brand aggressively comparing and showcasing its product as better than that of its counterpart, every brand strives to show what ‘the other is not’. However, this raises the issue of the credibility of the advertisement, the reliance on the quality of the product and the fairness of the representation. With all advertisers going from “Buy me” advertisements to “Buy me because I am better than my competitor” advertisements, the convincing may become mean and spiteful. To put it simply, Competitive Advertising is the advertisement of a product or a service which specifically mentions and compares itself to another product being a competitor, of same or similar nature, in order to show why the competitor is inferior to it. For example, during the 1996 cricket World Cup, Coca Cola rigorously marketed and advertised itself to be the ‘official cold drink of the Indian Cricket team’, and immediately after this Pepsi came up with an advertisement saying ‘nothing official about it’. In contrast to this, traditional advertising consists of simply highlighting the good quality and features of one’s own products. In a world where each brand showcases itself as better than the other,and where some major honchos have even crossed the line by explicitly mentioning the names of their competitors in the race of selling, the big question that crosses our mind is, how legal is this method of selling and out- selling one’s product?
To understand the legal regime governing comparative advertising in India, The Trademarks Act, 1999 has to be read with the Monopolies and Restrictive Trade Practices Act, 1969 (now repealed) together with The Advertising Standards Council of India’s Code of Self- Regulation in Advertising which provide certain guidelines with respect to comparative advertising.
The Advertising Standards Council of India (ASCI) has laid down a code of conduct specifically for self-regulation in advertising, with the aim of regulating the content of advertisements. Chapter 1 of the Standards of Conduct deals with the honesty of representation as also with misleading advertisements. It lays down the following criteria:
However, the website of the ASCI notes that ‘The ASCI is not a Government body, nor does it formulate rules for the public or for the relevant industries. Rather it is a voluntary self-regulatory council, registered as a not-for-profit Company’. Therefore, the applicability of this Code and its compliance itself is on a rather moral footing than a legally binding regime.
The earliest legal enactment to regulate the activities of comparative advertisements was the Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) in which a chapter on ‘Unfair Trade Practices’ was inserted in 1984, section 36A of which lists several actions to be an ‘unfair trade practice’. The provision which pertained to comparative representation was contained in section 36 A(1)(x).
Section 36-A. …. ‘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 includingany of the following practices, namely :-
(x) gives false or misleading facts disparaging the goods, services or trade of another person.
Thus, section 36A(x) limited comparative advertising by recognizing that the publishing of any misleading or disparaging facts about a competitor’s goods or services amounted to ‘unfair trade practices’. The term ‘disparagement’ though not defined in the Act, has been explained by the Delhi High Court in the case of Pepsi Co. Inc. and Ors. vs. Hindustan Coca Cola Ltd. and Another [2003 (27) PTC 305 (Delhi)] where the court gave the dictionary meaning of “disparagement” as- “to speak of slightingly, undervalue, to bring discredit or dishonor upon, the act of depreciating, derogation, a condition of low estimation or valuation, a reproach,disgrace, an unjust classing or comparison with that which is of less worth, and degradation.” For the first time in the case of M Balasundaram vs. Jyothi Laboratories Ltd.[1995 (82) CC 830] the Commission explained the concept of disparagement under the Act. The Commission in that case was of the view that ‘a mere claim to superiority in the quality of one’s product’ by itself is not sufficient to attract clause (x). One of the important cases that finds mention when discussing Comparative Advertising is Palmolive (India) Limited vs. Vicco Laboratories [1997 (5) CTJ 488], a judgment of the MRTP Commission (MRTPC). This case was in relation to a television advertisement promoting Vicco Tooth Powder, where another tin, of oval shape and without any label was shown. White powder coming out from the can was described as useless. Colgate claimed before the Commission that this was disparaging its product Colgate toothpowder. The Commission found that the shape and colour combination of the can shown in the television commercial resembled Colgate’s tooth powder can. The MRTPC then noted that the advertisement did not explicitly mention Colgate. In fact, there may even have been no intention of depicting the can to be of Colgate. But since the advertisement created an impression in the viewers’ minds that the can was of Colgate, it would be a case of disparagement.
Yes, I do Agree that law on advertisements formed a part of the Unfair Trade Practices under the Monopolies and Restrictive Trade Practice Act. Despite the repeal of MRTP Act, the same protection against Unfair Trade Practices has been available under the Consumer Protection Act. Very often, one witnesses the spectacle of a large number of non-essential, sub-standard, adulterated, unsafe and less useful products being pushed through by unscrupulous traders by means of unfair trade practices and deceptivemethods. Transparency in the dissemination of information is conspicuous by its absence. Furthermore, if a trade practice is expressly authorized by any law for the time being in force, the MRTP Commission is barred from passing any order against the charged party. The provisions on Unfair Trade Practices, in the course of being copied from the MRTP Act into the structure of the Consumer Protection Act, have acquired a new meaning. Within the Consumer Protection Act, a ‘consumer’ cannot take up a case of an Unfair Trade Practice before a consumer forum. It can only be taken up by a consumer association, Central Government or the State Governments. Thus, within the existing law, a manufacturer whose product is disparaged, has no locus standi to seek a remedy. The only option is to bring it to the notice of a consumer association or represent to the Central or State government. These are only oblique routes of seeking justice. Even if a firm were to succeed in getting an advertisement stopped through this route, as it is not a party to the case, it would not get any compensation for loss of profit. Thus, effectively, the field of comparative representation has become unregulated.
Indian businesses today are not following the parameters prescribed under our legal framework. Business market today is very belligerent. Comparative Advertising is not new to India, rather it is the trend today. It allows the market to stay competitive and at the same time it assists the consumers todecide between two products or services. If it is taken positively then comparative advertising acts as a source for users/consumers to receive useful and critical information about respective products and services. Companies tend to promote their products and services by comparing them with those of their competitors to gain consumers attention and enhance their sales. Comparative advertising takes place either directly, by using the competitor’s trade mark products, or indirectly by making a reference to the competitors’ products by insinuation or by allusion.
Legislation necessitates that the comparative advertisements should be based on true facts so that consumers can get the correct information to make their selections in easy manner. Presently companies are superfluously accountable to consumers as well as to public in general. The Indian law, although interpreted to allow comparative advertisement, does not address the issue in a direct or comprehensive manner in any legislation. It must also be noted that several important terms related to the concept of comparative advertising such as “disparagement” and “honest practices” are not defined in any legislation, and the dictionary meaning or judicial interpretations have to be used in ascertaining the meaning of these terms. Therefore, it is for businessman and corporate houses to understand the parameters which are permissible in comparative advertising laws and regulation. If they will do so, it will result in better corporate environment to make investment; furthermore it will reflect their trustworthiness and reliability before consumers.
Where the primary purpose of a trademark is to distinguish one product from the other, comparative advertising comes in the way when an advertiser uses a competitor’s trademark and uses it to compare its own goods with that of another without any permission to use such other trademark and in the process disparages them. It also causes trademark dilution. However, issues relating to trademark infringement and dilution arise in the comparative advertising only when the competitor’s trademark is explicitly used.
Section 29(8) of the Trademarks Act limits certain types of advertisements. It reads, “A registered trademark is infringed by any advertising of that trademark if such advertising- (a)takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; (b) is detrimental to its distinctive character; or (c)is against the reputation of the trademark.” Thus, any advertisement violating the above constitutes an infringement of the mark under the Act. At the same time, section 30(1) of the same Act makes comparative advertising an exception to the infringement laid down in section 29(8) providing that any advertisement in accordance with honestpractices, and not causing detriment to the distinctive character or the repute of the trademark does not constitute infringement. What follows from reading the two provisions of the Act together is that comparative advertising is not as such prohibited by the Trademarks Act in India as long as the use of the competitor’s mark is not dishonest.
It is worthwhile to mention the case of Dabur India Ltd vs. Colgate Palmolive India Ltd. [2004 (29) P.T.C. 401] where the Delhi High Court held the case to be one of product disparagement. The facts of the case were that a commercial showed a film actor rubbing the plaintiff’s dental powder on the surface of a purchaser’s spectacles, leaving marks and depicting it to be akin to sandpapering. The advertisement went onto to show that the defendant’s product was sixteen times less abrasive than the plaintiff’s product and thereby less damaging to the teeth. The court stated that this was a straightforward case of disparagement, which could not be allowed under any circumstances. In 2006, the case of Dabur India Ltd. vs. Wipro Limited, Bangalore [2006 (32) P.T.C. 677], laid down certain tests to decide whether a particular advertisement amounted to product disparagement, viz., the intent of the commercial; the manner of the commercial; and story and the message conveyed by the commercial. The case also laid down certain parameters which decided which comparative advertisements were permissible. However, these guidelines were not complete because they could not address the issue of whether an advertisement was in accordance with the condition of honest use as stipulated in the section.
In one of the leading cases, Reckitt & Colman of India Ltd. vs. Kiwi TTK [(1996) 63 DLT 29], the court laid down five principles with regard to comparative advertising of a product:
A recent case in the point is Dabur India vs. Colortek Meghalaya (2010), where the Appellant Dabur claimed that its mosquito repellent brand “Odomos” was disparaged by an ad of the respondent Colortek which owned the rival brand “Good Knight”. However, the Division Bench of the Delhi High Court affirmed the Single Judge’s decision that there was no disparagement of Odomos in the said advertisement. Consequently, no injunction was granted against the respondent Colortek.
Recently, the television was flooded with an advertisement showing two women, where the first one praises Tide, with a Tide packet featuring prominently. A bus then arrives with their children. The Tide woman’s son steps out of the bus first and his shirt is a dull shade of white. A second boy comes out and his shirt is an immaculate clean white. He moves towards the other woman who uses Rin. This woman’s son asks the TideWoman,“AuntyKyunChaunkGai ?” with the obvious reference to Tide’s caption “Chaunk Gaye !” as the advertisement concludes with a voice-over that Rin is better than Tide when it comes to whiteness and comes at a better price. Following this advertisement, the company Procter and Gamble (P&G), which owns the detergent Tide approached the Calcutta High Court against Hindustan Unilever Limited (HUL), the manufacturers of Rin. The Court stayed HUL’s advertisement stating that it was a clear case of disparagement and an injunction was granted on two grounds, namely, (a) The HUL Advertisement depicted “Tide Naturals” whereas the voice-over was for “Tide”; and (b) The laboratory reports produced by HUL under cover of two affidavits in support of its claim of superior whiteness had inherent defects i.e. the advertisement drew comparison of samples of “Tide” and “Tide Naturals”.
This particular advertisement campaign refreshed the debate on comparative advertising. The moot issue being whether HUL’s explicit TV commercial of Rin being superior to P&G’s Tide amounts to disparagement or is it a permitted form of free speech protected under ”commercial speech” as part of freedom of speech under article 19(1)(a) of the Constitution, the decision in the case will throw much light on the scope of comparative advertising.
Advertisements create a deep impact on the minds of the viewers and comparative advertisements make a stronger point. While the position of law may seem clear after reading the numerous judgments of the various courts with regard to comparative advertising, the law for resolving disputes arising out of comparative advertising needs to be strengthened. With the MRTP law also being repealed, there arises a strong need to enact a statute to deal with situations arising out of comparative advertising. The possible solutions to fight this type of advertising could be by way of granting injunctions, claiming monetary relief, issuing corrective advertisements, etc, but codifying it all is important for compliance. Even though comparative advertisements make things clearer to the consumers and are beneficial for them in making a better and informed choice, there is a need to check its abuse else the fight between the brands will only become worse. Much remains to be resolved in this still- evolving area and only time will tell how far the legal machinery is able to restrict and regulate the brands from indulging in comparative advertising.
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