Comparative Advertising code of ethics
Comparative advertising is a type of business advertising that is used a lot in many countries. This kind of advertising tries to get people to buy the advertiser’s product by comparing its features to those of a competitor’s product.
The nature of comparative claims is different. They might name a competitor outright or talk about him without saying his name. They may focus on how the products are alike (positive comparisons) or how they are different (negative comparisons). They may say that the advertised product is “better than” or “as good as” the competitor’s (superiority claims or parity claims, respectively) (equivalence or parity claims).
The idea behind this is to make it possible to compare the features of one trader’s products with those of another’s in a fair way that doesn’t mislead people. To do this, you have to use the trademarks of both products. If there are no rules about this, it could be considered an infringement of a trademark.
No Indian statute defines the term, but the UK Regulation defines comparative advertising as meaning any advertisement which “explicitly or by implication, identifies a competitor or goods or services offered by a competitor”.
In this backdrop, the Delhi High Court summarized the law on the subject in the case of Reckitt & Colman v. Kiwi TTK, as follows:
- A tradesman is entitled to declare his goods to be the best in the world, even though the declaration is untrue.
He can also say that his goods are better than his competitor’s, even though such statement is untrue. - For the purpose of saying that his goods are the best in the world or his goods are better than his competitor’s he can even compare the advantages of his goods over the goods of others.
- He, however, cannot while saying his goods are better than his competitors’, say that his competitors’ goods are bad. If he says so, he really slanders the goods of his competitors. In other words he defames his competitors and their goods, which is not permissible.
- If there is no defamation to the goods or to the manufacturer of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the Court is also competent to grant an order of injunction restraining repetition of such defamation.
Statutory Provisions In India:
The Monopolies and Restrictive Trade Practices Act of 1984 (henceforth “MRTP Act”) and the Trade Marks Act of 1999 (henceforth “Trade Marks Act”) work together to set up the basic rules for comparative advertising. Ss. 29(8) and 30 of the Trademarks Act, 1999, have provisions that deal with this idea (1). Comparative advertising is allowed by law, but it can’t be used in ways that are unfair to other businesses.
The Trade Marks Act tries to find a middle ground between the rights of registered trade mark owners and the strong consumer interest in advertising that is accurate. Section 29(8) of the Trade Marks Act says that any advertising of a registered trademark is an infringement if it takes unfair advantage and goes against honest business or industrial practises, hurts the trademark’s uniqueness, or hurts the reputation of the trademark.
Section 30(1), on the other hand, gives people a way out of doing something that would have been illegal under Section 29 if they used the mark in a way that is consistent with “honest practises” in business or industry.
“Honest practices”: mandatory for CA:
Comparative advertising aims to objectively and truthfully inform the consumer, and promotes market transparency, keeping down prices and improving products by stimulating competition. Therefore, it is important to protect the interests of such competitors by not allowing comparative advertising to cause confusion, mislead, or discredit a competitor.
There is no definition or explanation as to what constitutes “honest practices”. There is a large and clear shared core concept of what constitutes honest conduct in trade, which may be applied by the courts without great difficulty and without any excessive danger of greatly diverging interpretations.
In BMW v. Deenik, the question was whether a trader, not being an authorized dealer of BMW motor cars, was entitled to use the name BMW being a registered trademark of the BMW manufacturing company, in the context of holding itself out as having specialized expertise in servicing BMW cars.
The Court held that the proprietor of the trademark is not entitled to prohibit a third party from using the mark for the purpose of informing the public that he carries out the maintenance and repair of the goods covered by that trademark, unless the mark is used in a way that may create the impression that there is a commercial connection between the other undertaking and the trademark proprietor, and in particular that the reseller’s business is affiliated to the trademark proprietor’s distribution network or that there is a special relationship between the two undertakings.
Comparative advertising is also limited in other ways by what the term “unfair trade practises” says. In 1984, the MRTP Act was changed to include a new section about unfair business practises. In Section 36A of the MRTP Act, there is a list of actions that are considered “unfair trade practises.” One of these is any unfair method or unfair or deceptive practise that gives false or misleading facts about another person’s goods, services, or business.
The goal of this section is to bring honesty and truth into the relationship between a service provider and a customer. If there is a question about whether a certain act can be called an unfair trade practise or not, the key to finding a solution is to look at whether it contains a false statement and is misleading, as well as what effect it has on the average person.
From what has been said so far, it seems that a “false representation” would be a wrong or untrue statement or expression that is meant to persuade a consumer to buy, hire, or use such goods or services and make such ads available to the public.
Concept of Disparagement:
Section 36A of the MRTP Act says that unfair business practises are those that make someone else’s goods, services, or business look bad. The word “disparagement” is not defined in any law, but courts have used the definition from the dictionary.
According to The New International Webster’s Comprehensive Dictionary, disparagement means to talk about someone in a slight way, to undervalue them, to bring them into disrepute or shame, the act of undervaluing, derogation, a low estimation or valuation, a criticism, a disgrace, an unfair comparison with something of less value, and degradation. The Concise Oxford Dictionary defines disparage as “under, to bring discredit or reproach upon; dishonour; lower in esteem; speak about or treat lightly or badmouth; undervalue, and deprecate.”
In electronic media, the negative message is sent to the viewer by showing the same commercial every day. This makes sure that the viewer gets the message, since the commercial leaves an indelible mark on their mind. But it’s important to keep in mind that Clause (x) of Section 36A doesn’t apply to opinions that aren’t facts (1).
In the case New Pepsodent v. Colgate, HLL advertised its “New Pepsodent” toothpaste as being “102% better than the leading toothpaste.” In the TV ad, saliva samples are taken from two boys, one of whom has used the new Pepsodent toothpaste and the other, “a leading toothpaste.” There are more germs in the saliva of the person who used “the leading toothpaste.” While the sample was being taken, the boys were asked what kind of toothpaste they used to brush their teeth in the morning.
One boy said “Pepsodent.” The second boy didn’t say much, but the way he moved his lips showed that he was saying “Colgate.” Also, when the muting was done, the Colgate commercial’s jingle could be heard. The Commission said that over the years, the word “toothpaste” had become synonymous with “Colgate,” and a reference to “leading brand” meant Colgate. So, it became a case of comparative advertising, which led to Colgate’s products being made fun of.