Disparagement & Comparative Advertising

introduction

In this cutthroat competition, companies are constantly seeking creative ways to get consumer's attention. One such strategy is comparative advertising. Comparative advertising aims at pitting other companies or brands to highlight their superiority. This approach is perfectly legal to point out the advantages of one’s product but it cannot disparage competitor’s products.

provisions regarding COMPARATIVE ADVERTISING & disparagement?

While there are provisions such as Section 29(8) of the Trade Marks Act, 1999 which says that It is considered infringement of a registered trademark when an advertising, “takes unfair advantageof and is contrary to honest practices in industrial or commercial matters; or is detrimental to the distinctive character of the registered trademark; or is against the reputation of a registered trade mark.” Further, Section 30 (1) of the act provides a safety for comparative advertisement, where if the features of the competitor’s products shown in the advertisement are honest in nature then that advertisement would not lead to disparagement.

Also, under Article 19(1)(a) of the constitution, commercial speech is not restricted but it should not be disparaging/deprecating in nature. However, the speech is disparaging/deprecatory is dependent upon case to case.

Other than the statutes, ASCI (Advertising Standards Council of India) also has guidelines in which it is stated that comparative advertising is only allowed if the products compared are factually and substantially true.

factors determining the difference

The classic case in which factors regarding the difference between disparaging & puffing are laid down in the Coca-Cola case. Where the defendant calls the petitioner’s product child’s drink as children like sweet which amounts to disparagement. When it comes to determining the question of disparagement there are the following factors that should be kept in mind:

1. i) Intent of the commercial, ii) manner of the commercial, iii) storyline of the commercial and the message sought to be conveyed by the commercial.

At the same time, the court said that advertisers should be given the freedom to exaggerate their products. However, in the Coca-Cola case, the court held that the plaintiff’s products had been disparaged by the defendant.

Whether mere inference to show competitors' product in a bad light amount to disparagement?

In the recent case, “Reckitt Benckiser India Private ... vs Hindustan Unilever Limited,” the court said that it is not important to mention a competitor’s brand/product and mere assumption drawn from the advertiser’s depiction of another’s product or anything related to that product are enough grounds for disparagement claims.

Further, there have been other instances where the advertisers used the same approach with their competitor’s product. For example- in 2021, Samsung mocked the iPhone 12 while advertising the Galaxy S21 and did the same recently while advertising its Galaxy S22 or Galaxy Flip where Samsung pitched its features such as 100x Space Zoom, and a 108-megapixel camera and “not coming soon in iPhone,”

In another case, ASCI directed Kent RO to withdraw its tagline “Kent deta hai sabse shudh paani.” The order passed and the court observed that Kent had been using this tagline for around 15 years and this exaggeration was permitted in ads. Kent approached the High Court against this order, and argued that it has the trademark rights on the tagline ‘Kent deta hai sabse shudh paani’ which is nothing but puffery and is an acceptable form of advertising. And also ASCI has no jurisdiction over Kent since it is not a member of ASCI. Further court contended that this case is premature and no other govt. institutions had raised any objections or taken any action against Kent therefore court passed an interim order of stay over the ASCI ruling.

General Disparagement

Brands have consistently reached the doors of courts stating that their competitors have disparaged them or their products by showcasing their product as market leader. In one such instance, the advertiser made nebulous references to other goods on the market that could cause allergies and skin rashes in Dabur India Ltd. v. M/s Colortek Meghalaya Pvt. Ltd.

The court further observed that the defendant’s statement was just puffery and not a disparagement of other’s product. The court held that praising of plaintiff's product containing natural ingredients and the absence of the same in other products do not come under disparagement.

impact on the consumers

Furthermore, it is irrelevant that the competitors' items were only briefly mentioned in the campaign when evaluating the advertisement's overall impact from the perspective of the average consumer. ‘What is to be seen is the context in which the product is shown’.

conclusion

At the end of the day, comparative advertising is one of the significant and accepted practices among brands to promote their products. But to determine the thin-line difference between comparative advertisement and disparaging must be checked. There is a difference when an advertiser saying ‘My product is better than the other one’ and ‘The other brand’s product is cheaper/worse than theirs.’ While an advertiser is allowed to boast its products to be the best in the market but it is not allowed to state that a competitor’s product is inferior in any manner. As a result, an advertiser must continuously walk a tightrope and make sure that its products are never disparaged, denigrated, or disparaged in any way. It is advisable for advertisers to exercise caution in order to stay on the right side of the fine line between what is and is not acceptable in comparative advertising, as stated above, by applying the principles that have been established by courts over the years.

Author:

 Kartik Sharma, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Section 29(8) in The Trade Marks Act, 1999

Section 30 (1) in The Trade Marks Act, 1999

Pepsi Co., Inc. v. Hindustan Coca Cola Ltd., 2003 SCC OnLine Del 802