It is a common practise by companies to make comparison of their products with respect to similar products of other companies, to ascertain their products are better than others and such advertising is called Comparative Advertising, however when the company crosses line by advertising false, misleading and derogatory claims against the other company, then it will amount to...
It is a common practise by companies to make comparison of their products with respect to similar products of other companies, to ascertain their products are better than others and such advertising is called Comparative Advertising, however when the company crosses line by advertising false, misleading and derogatory claims against the other company, then it will amount to Product Disparagement. Comparative Advertisements are legal and permissible if they adhere to the guidelines by The Advertising Standard Council of India (ASCI) and are in consonance with the respective sections of Trademarks Act,1999. Section 29(8) states that a registered trademark is said to be infringed, when such mark is advertised in such a way to take unfair advantage of and is contrary to the honest practises in industrial or commercial matters or is detrimental to its distinctive character or is against the reputation of the trademark. However, section 30(1) provides certain limits for the above conditions if the advertisement has been made in accordance with honest practises in industrial or commercial matters and has not been done with the intent to take unfair advantage.
The Trademarks Act does not define the terms disparagement, honest practises but they can be very well understood by plethora of judgements, which have provided various principles governing advertisement disparagement.
In Tata Press Ltd. v. MTNL, the Supreme Court held that advertising is a "commercial speech", and it is a part of freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution. The Supreme Court also stated that advertising is dissemination of information regarding the product advertised and the public at large is benefited by the information made available through the advertisement and the economic system in a democracy would be handicapped without there being freedom of "commercial speech".
In the case of Reckitt and Colman of India Ltd. v. M.P. Ramchandran 1996 PTC (16) 393, following propositions were made relating to comparative advertisement:
(a)A tradesman is entitled to declare his goods to be best in the world and (b)can also state his goods are better than his competitors, even if such declarations are untrue, (c)A tradesman can also compare his goods with that of the competitors to compare the advantages of his goods, over those of others.(d)But the tradesman while saying his goods are better than the competitors is restricted from saying the competitor's goods are bad, (e)if he does so it will amount to defamation and if there is a claim of defamation, the courts are competent to grant an order of an injunction restraining repetition of such defamation.
The division bench of Delhi High Court in Dabur India Vs Colortek Meghalaya Pvt. Ltd., relying on the law laid down in Tata Press(supra) laid down the following guiding principles:
An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution. An advertisement must not be false, misleading, unfair or deceptive and in case of certain grey areas, they don't have to be taken as serious representations but only as glorifying of one's product and while glorifying one's product, the advertiser may not disparage rival's products.
The protection accorded under Article 19(1)(a) can only be availed under the above circumstances and no protection will be extended to such advertisements which are false, misleading, unfair or deceptive advertisement.
The division bench while relying on law laid down in Tata Press Ltd that false, misleading, unfair or deceptive advertising is not protected commercial speech, held that the propositions (a), (b), (c) laid down in Reckitt and Colman of India Ltd. v. M.P. Ramchandran are not good in law. The Court held that while hyped-up advertising may be permissible, it cannot transgress the grey areas of permissible assertion, and if does so, the advertiser must have some reasonable factual basis for the assertion made. It is not possible, therefore, for anybody to make an off-the-cuff or unsubstantiated claim that his goods are the best in the world or falsely state that his goods are better than that of a rival.
The Division bench while also relying upon the factors laid under Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., 2003 (27) PTC 305(Del.) for deciding the question of disparagement, restated the factors in own terms:
The intent of the advertisement can be understood from its story line and the message sought to be conveyed; To see if the overall effect of the advertisement intents to promotes the advertiser's product or does it disparage or denigrate a rival product; and the manner of advertising whether the comparison is truthful or does it falsely disparage a rival product, if the disparagement is truthful it is permitted, whereas untruthful disparagement cannot be permitted.
Reliance should also be placed on the medium of the advertisement, as an advertisement in the electronic media will have a farther reach and impact, when compared to an advertisement in print media. In D.N. Prasad v. State of A.P. 2005 SCC Online AP 105: 2005 Cri LJ 1901 the Andhra Pradesh High Court observed that a telecast reaches person of all categories, irrespective of age, literacy and their capacity to understand or withstand. The Court noted that the impact of a telecast on the society is phenomenal.
Similarly, it was observed in Pepsi Co. that a vast majority of viewers of commercial advertisements on the electronic media are influenced by visual advertisements "as these have a far reaching influence on the psyche of the people" Therefore, an advertiser has to virtually walk on a tight rope while telecasting a commercial and repeatedly ask himself the questions: Can the commercial be understood to mean a denigration of the rival product or not? What impact would the commercial have on the mind of a viewer? No clear-cut answer can be given to these questions and it is for this reason that this Court has taken a view that each case has to be decided on its own facts.
The Division Bench of High Court of Madras in Gillette India Limited v. Reckitt Benckiser (India) Pvt. Ltd., besides laying down the principles to ascertain whether an advertisement is disparaging or not, also noted the distinction between an advertisement in the electronic audio visual media and the print media.
The Court held that Advertisements in the electronic audio visual media leave an indelible impression in the minds of viewers. This medium of advertisement has a far greater impact on its viewers than a print advertisement, by relying upon the Delhi High Court in GlaxoSmithkline Consumer Health Care Limited v. Heinz India Private Limited, A catchy phrase, a well enacted skit or story line, or even distinctive sounds or distinctive collocation of colors make a lasting impact and more so, when viewed repeatedly.
In the case of Horlicks Limited vs Zydus Wellness Products, the Delhi High Court while deciding an application for injunction against the defendants, who have made a comparative advertisement on TVC by comparing two cups of Horlicks with one cup of Complan, the court held that the defence taken by the defendants that they have mentioned the serving size does not hold the ground, as the advertisement is only of 6 seconds and there is no voice over of serving measures(Complan 33g, Horlicks 27g) and it is not possible or expected of the customers to notice the disclaimer on the TVC. The Court while relying upon the various decisions discussed above held that the intent of the advertisement is understood from its storylines and message sought to be conveyed, and the comparison should not be untrue, misleading or false and the defendant need to highlight difference of all the parameters and can make the comparison based on one particular quality.
From the above cited judgements, it can be concluded that comparative advertisements are allowed, if they are made with a honest bonafide intent and that mere puffing up of one's products or services in comparison with others would not constitute disparagement, and the factors laid by the court to determine the question of disparagement have to be considered on case-to-case basis.
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