SCHOOL OF LAW

RESEARCH PAPER

ON

“COMPARATIVE ADVERTISEMENT AND INFRINGEMENT OF

TRADEMARK”

SUBMITTED BY : SUBMITTED TO:

KUMAR AYUSH SHIVANGI SHARMA

LL.B 2nd Sem ASST. PROFESSOR

21GSOL1010026 GU,SOL

Electronic copy available at: https://ssrn.com/abstract=2281768

 ABSTRACT

In a comparative environment every representation of a product or service is about what others

are not. Comparative advertisement is advertising where a party advertises his goods or service
by comparing them with goods and services of others party. This is generally done to define or
comparing his goods or may be suggesting that this is superior or good quality product. New or
unknown brand benefit most from comparative advertisement.

In Belgium prohibits, Netherlands, no outright prohibition, Spain adopted a more lenient

position, Portugal allows, but strictly limits, Greece allows the limited use of comparative
advertising. Denmark generally allows comparative advertising provided. Although the
Benelux counties and Germany, who did not welcome comparative advertising, Prior to 1994,
comparative advertisement was relatively uncommon in the UK.

Although India have no particular law regarding to comparative advertisement as like USA,
UK, yet Delhi High court has ruled and some extent Monopolies of Restrictive Trade Practices
Act, 1984 and the Trade Marks Act, 1999 talks about comparative advertisement. A party has
a right to advertise its product making commendation about its quality. Advertisement being a
commercial speech which is a part of the freedom of speech is guaranteed under article 19(1)
(a) of the Constitution

Federal Trade Commission in US and EU both promoted comparative advertisement because

it enables consumers to reach more informed and rational purchasing decisions, increasing
consumer information and comprehensive of the brand in the process.

If a rival uses a competitor's trade mark in a comparative advertisement for identical or similar
products without the consent of the proprietor, such use would prima facia infringe the rights
of the proprietor of the mark, such advertising was not permitted under the Trade Mark Act.

Electronic copy available at: https://ssrn.com/abstract=2281768

 COMPARATIVE ADVERTISEMENT AND INFRINGMENT OF
TRADEMARK

“I am one who believes that one of the greatest dangers of advertising is not that of
misleading people, but that of boring them to death.”

Leo Burnett

INTRODUCTION

‘Any advertising, which explicitly or by implication, identifies a competitor or goods or

services offered by a competitor’ called Comparative advertisement. In the age of
liberalization and globalization of the India, economy firms have been aggressively and
vigorously promoting their products and services. In a comparative environment every
representation of a product or service is about what others are not. Comparative
advertisement is advertising where a party advertises his goods or service by comparing them
with goods and services of others party. This is generally done to define or comparing his
goods or may be suggesting that this is superior or good quality product. When it refers to the
product by name, it is known as comparative brand advertisement, though it may not contain
identical trademark just as overt reference is enough. It helps the costumer to making choice.
New or unknown brand benefit most from comparative advertisement. It basically involves
an honest and true comparison of the factors of one trader’s products and services with those
of another, so as to make an impact upon the minds of the consumers.
Comparative advertisement can rightfully be used an important business strategy for the
successful promotion of the products and service of a trade and it is not done according to rules
it may result various violations like passing off, unfair trade, infringement of trade mark etc. If
a rival uses a competitor's trade mark in a comparative advertisement for identical or similar
products without the consent of the proprietor, such use would prima facia infringe the rights
of the proprietor of the mark, such advertising was not permitted under the Trade Mark Act.

Electronic copy available at: https://ssrn.com/abstract=2281768

Although India have no particular law regarding to comparative advertisement as like USA,
UK, yet Delhi High court has ruled that comparative advertisement are allowed under the
Indian Law. Some of the principles that have been evolved from the various case laws are as
follows:

1. The statement made should be accurate;

2. The statement made should not be false;

3. It should avoid negative references;

4. It should not be defamatory or libellous.

STATUTORY FRAMEWORK OF COMPARATIVE ADVERTISEMENT

IN INDIA

The main legal structure has been laid down by the Monopolies of Restrictive Trade
Practices Act, 1984 and the Trade Marks Act, 1999 and it’s interesting to note how the earlier
law came into place. The Government of India, in 1964 appointed the Monopolies Inquiry
Commission to inquire into the extent and effect of concentration of economic power in
private hands and the prevalence of monopolistic and restrictive trade practices in important
sectors of economic activity. Along with the report that the Commission submitted was a
draft bill which was passed as the M.R.T.P. Act, 1969. The main aim behind the Act was the
control of monopolies and prohibition of restrictive trade practices; however the Act was
amended several times to suit the changing circumstances until it was finally rendered
obsolete by the economic reforms of 1990s as stronger pro-competition laws were required.
The Trade Marks Act, 1999 came into place after The Trade and Merchandise Act Marks
Act, 1958 was repealed. “India enacted its new Trademarks Act 1999 and the Trademarks
Rules 2002, with effect from 15th September 2003, to ensure adequate protection to domestic
and international brand owners, in compliance with the TRIPS Agreement.” Certain rights of
trademark owners were extended such as the protection of trademarks was extended to cover
not only goods but services as well. However another provision of the TMA imports a
defence to an otherwise infringing uses of a trademark. This can be seen as a delicate

Electronic copy available at: https://ssrn.com/abstract=2281768

balancing of interests the rights of the trademark owners on one hand and the consumers’
interest in informative advertising on the other.
The various legislative developments in the law governing competitive advertising in India
have gone hand in hand with India’s economy. Comparative advertisement is permitted by
section 30 of the Trade Marks Act, 1999 which allows the use of registered trademarks
provided that it is honest use, that it does not take unfair advantage of the trademark and that
it does not damage the goodwill associated with the trademark. To infringe the use of a
registered mark, the conditions stated in the relevant provisions of the Paris Convention and
the Trademark Approximation Directive must be fulfilled. In other words, it must (a) be
otherwise than in accordance with honest practices in industrial or commercial matters and
(b) without due cause take unfair advantage of, or be detrimental to, the distinctive character
or repute of the mark. Section 36A of MRTP Act lists several actions to be ‘unfair trade
practices’. Unfair trade practices in comparative representation include any promotion of
goods or services that deceives or gives false information regarding the goods or services of
another person. Other instances of unfair trade practices include the adoption of any unfair or
misleading methods or practices in the representation of goods and services. The entire concept
of ‘disparagement of goods of another person’ thus flows from the MRTP Act. The Trade
Marks Act, 1999 provides protection against ‘passing off’ for registered trademarks as well as
well known unregistered marks. The essence of an action of passing-off is confusion. The
proprietor thereby has a statutory alternative to the common law action of passing off.1

CONSTITUTIONAL PERSPECTIVES

A party has a right to advertise its product making commendation about its quality.
Advertisement being a commercial speech which is a part of the freedom of speech is
guaranteed under article 19(1) (a) of the Constitution.2 "Publication of advertisements" which
is a "commercial speech" and protected under Article 19(1) (a) of the Constitution cannot be
denied and the public at large has a right to receive the "commercial speech". An advertisement
is no doubt a form of speech hut its true character is reflected by the object for the promotion
of which it is employed. It assumes the attributes and elements of the activity under Article
19(1) which it seeks to aid by bringing it to the notice of the public. Article 19(1) (a) not only
guarantees freedom of speech and expression, it also protects the rights of

1
www.nalsarlawuniv.org/vol2art7.pdf
2
Hindustan Lever Ltd. vs Mudra Communications Ltd. [2002] (50) CLA 1.

Electronic copy available at: https://ssrn.com/abstract=2281768

an individual to listen, read and receive the said speech. So far as the economic needs of a
citizen are concerned, their fulfilment has to be guided by the 'information disseminated
through the advertisements. The protection of Article 19(1) (a) is available to the speaker as
well as to the recipient of the speech. The recipient of "commercial speech" may be having
much deeper interest in the advertisement than the businessman who is behind the publication.
An advertisement giving information regarding a life saving drug may be of much more
importance to general public than to the advertiser who may be having purely a trade
consideration.3

Cherry Blossom case

The principle, thus, emerged that a case of disparagement arises only if the product in question
is identifiable. Identification could be explicit or drawn from the facts and circumstances. Thus,
in the advertisement of ‘Kiwi Liquid Wax Polish,’ a bottle is described as X from which liquid
is shown dripping while from a bottle marked Kiwi, liquid does not drip. From the shape of
the bottle marked X and from the fact that Cherry Blossom had a design registration for this
shape, the bottle could be identified with Cherry Blossom and the advertisement became a case
of disparagement.4

POSITION IN OTHER COUNTRY

In Belgium, a 1991 law prohibits comparative advertising where the other vendor is
identifiable. In the Netherlands, no outright prohibition of comparative advertising exists; the
law only prohibits disparaging and misleading advertising. The Netherlands, however,
complies with the Benelux Uniform Trademark Act which forbids the use of another's
trademark in advertising. Italy does not prohibit comparative advertising, as long as it is not
misleading. Spain adopted a more lenient position. Article 10 of its 1991 Law on Unfair
Competition allows some comparative advertising but “forbids comparisons that relate to
factors that are not similar, relevant or comparable.” In contrast, Portugal allows, but strictly
limits, the practice of comparative advertising. In 1991, Greece similarly adopted a Consumer
Protection Law that allows the limited use of comparative advertising. Denmark generally
allows comparative advertising provided that it is not misleading or disparaging.

3
Tata Press Limited v Mahanagar Telephone Nigam Limited and Others. [1995] AIR 2438 (SC).
4
Reviewed in Reckitt and Coleman India Ltd. vs Jyothi Laboratories Ltd [1999] (34) CLA 46.

Electronic copy available at: https://ssrn.com/abstract=2281768

Although there were some, especially the Benelux counties and Germany, who did not
welcome comparative advertising and who was in opposition to the new Directive which
allowed it, such advertising was regarded as necessary. On January 18, 1992, the French
amended their civil code to allow comparative advertising as long as it is “fair, true, objective
and not misleading to consumers.”

Prior to 1994, comparative advertisement was relatively uncommon in the UK. This was partly
due to the fact that such campaigns were fraught with legal difficulties since a reference to
competitor’s trademark brought with it the risk of an action for trademark infringement.

Since the implementation of the Trade Marks Act 1994 (TMA) in the UK which permits the
use of a third party’s registered trademark subject to certain condition, comparative advertising
has become more widespread, particularly in fiercely competitive markets, such as the mobile
telephone market and indeed the telecom industry generally.

Macdonalds Hamburgers Ltd v Burger King.5 By saying ‘this is not just a Big Mac’ Burger
King attempted but failed to differentiate the competing products. The failure resulted in a
finding that a misrepresentation had been made as consumers would think that the two burger
products were related rather than competing.

WHY USE COMPARATIVE ADVERTISEMENT

“The primary basis for marketer’s interests in this phenomenon is its potential for increasing
profits through market share gains.”

Advertisement can be divided in three types

1. NCA (Non comparative advertisement)

2. ICA (Indirectly comparative advertisement)

3. DCA(Directly comparative advertisement)

Although marketers are attracted to comparative advertising because of its supposed persuasive
influence upon consumers, there is little published data available to substantiate the claim that
it is more persuasive that NCA’s.
5
[1987] FSR 112.

Electronic copy available at: https://ssrn.com/abstract=2281768

Federal Trade Commission in US and EU both promoted comparative advertisement because
it enables consumers to reach more informed and rational purchasing decisions, increasing
consumer information and comprehensive of the brand in the process. There appears to be an
underlying assumption that comparative advertisement is in the interest of the consumer
despite the absence of any real evidence.

EU report specifically states that the advertisement should not be required to restrict the content
of advertisements to purely objective information as that runs counter to the very spirit of
advertising. Instead it is said that the person who should be assumed to be the information
independently in the light of his/her own particular preferences and needs.

Although it has been suggested by some that there is a lack of evidence to substantiate the
claim that comparative advertisement are effective in term of their persuasive value, other
argue is that there is due in part to the inadequate of the system by which such preference swing
are measured. The net result is that there remains no clear evidence that comparative
advertisement actually result in changed purchasing decisions.6

INFRINGEMENT OF TRADEMARK AND COMPARATIVE

ADVERTISEMENT

“Around each trade mark there is an “exclusion zone” which other marks may not enter. The
extent of the zone will vary according to circumstances. An identical or extremely similar mark
must be kept at a greater distance in terms of the goods or services covered. Conversely, a
mark used for identical or extremely similar products must be kept at a greater distance in
terms of similarity with the protected mark.”
As per the section 29(1) of the Trade Mark Act 1999, A registered trade mark is infringed by
a person who, not being registered proprietor or a person using by way of permitted use in the
course of a trade, mark which is identical with, or deceptively similar to, the trade mark in
relation to goods or services in respect of which the trade mark is registered and such a manner
as to render the use of the mark likely to be taken as being used as a trade mark. The expression
“in relation to any goods in respect of which the trade mark is registered” in section 29(1)
marks in relation to same goods covered by registration.
Trade mark is indicate the origin to the goods to which it is applied is fundamental right and
in order to constitute infringement, the defendants must be infringed the trade in the
6
Rodney D Rydu Brand, Trading and Advertising (Butterworths India 2003) 226-228

Electronic copy available at: https://ssrn.com/abstract=2281768

comparative advertisement. The right conferred by registration is right to use mark in course
of trade. The use in course trade means in the course of business. It did not mean use as trade
mark.
Section 30 (1) of the Trade Mark Act 1999 in effect permits comparative advertisement, stating
that Nothing under the section 29 shall be preventive the use of Trade Mark by any person
with the purpose of identifying good or services as those of those proprietor the use:
(a) is in accordance with the honest practice in industry (b) is not such as to take unfair
advantage of or be detrimental to the distinctive character or repute of the trade mark.
Section 28(8) of this act discussing what form of advertisement is amount to infringement. If
such advertising: (a) take unfair advantage and is contrary to honest practise in industrial or
commercial matters; (b) is detrimental to its distinctive character; (c) is against the reputation
of the trademark.

CONCLUSION

Lewison J had considered how to assess the likelihood of confusion, he stated, it must be
judged through the eyes of consumers of the relevant goods or services. These consumers are
deemed to be reasonably well informed, observant and circumspect but they rarely have the
chance to make direct comparisons between marks relying instead upon the imperfect picture
of the marks that they have retained in their minds. The average consumer would not analyse
the various details of the marks, so the overall visual aural and conceptual similarities of the
mark must be assessed with reference to the overall impression created by the marks bearing
in mind their distinctive and dominant components. There is a greater likelihood of confusion
where the earlier trade mark has a highly distinctive character either per se of because of
distinction acquired through use. Mere association, the later mark bringing the earlier mark to
mind, does not amount to confusion unless the association would make the consumer think
that the goods or services came from the same or economically linked undertakings.
Consumer Education Truthful comparative advertising educates the consumer. It has found
that this type of advertising may assist consumers in making informed purchases by providing
them with important product information. When consumers are uninformed or misinformed
about a product, the demand for that product will not reflect its true utility. Comparative
advertising may even help transform the modern consumer. One commentator

Electronic copy available at: https://ssrn.com/abstract=2281768

has suggested that the very phenomenon of comparative advertising motivates the consumer
to compare before buying.

Willimsky sait that:

“Competition by its very nature is unfair and leaves no room for sentimental paternalism. The
very reason competitor enter a market is to culminate as many competitor as possible and to
acquire the largest possible market share. All competitors advertising does is to verbalise
commercial activity ......Comparative advertising mirror free market activity and any
restriction other than the condition of truly are unjustifiable and therefore, not to be imposed.”

In the same way it is said that the comparative advertisement should be restricted. Although
there is no factual basis for the assumption that comparative advertisement will increase the
level of information available to consumers, so we cannot accept in the lack of evidence. In
India neither the law nor the statutory provision for the comparative advertisement although
general principle regarding the comparative advertisement and the limited protection available
through the Competition Act as well as Consumer Protection Act are available to some extent
which we have discussed above.
In case of Pepsi Co. Inc. and Anr. v. Hindustan Coca Cola and Ors.7 court dealt with the issue
whether use of trademark in comparative advertising amounts to trademark infringement or
not and decided it in negative as infringement occurs when two essentials are fulfilled that is,
if the defendant has used the substantially similar mark and that too for passing off his own
goods as that of the plaintiff’s. In comparative advertising one or both may be absent
sometimes. As it may be possible that only a reference is made to the mark and not the
substantially similar mark is used. And the mark is not used to pass off the goods but to
compare both the goods.
India doesn’t have condition like in USA or UK but it should be permitted because it is in the
favour of the consumer and public at large.

Electronic copy available at: https://ssrn.com/abstract=2281768