NATIONAL LAW INSTITUTE UNIVERSITY

BHOPAL

PROJECT OF
INTELLECTUAL PROPERTY RIGHTS LAW

ON THE TOPIC
“TRADEMARKS AND COMPARATIVE ADVERTISING”

SUBMITTED TO: S UBMITTED

B Y:
PROF. MONICA RAJE S OUMYA
VERMA

2019BALLB35
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ACKNOWLEDGEMENT
By the means of this project, I would like to express my heartfelt gratitude to Prof. Monica Raje,
faculty in-charge, IPR Law, NLIU, Bhopal.
I would also like to thank the Gyan Mandir officials who provided access to assorted resources
which helped me in my case analysis and without whom this research would have been
incomplete.

Soumya Verma (2019 BALLB 35)

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TABLE OF CONTENTS

TOPIC PAGE NO

Introduction 3

Trademark Laws and Comparative Advertising 5

Product Disparagement, Puffing and the Law 7

Conclusion 12

Cases Referred 13

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INTRODUCTION

Corporate wars over similarly-named goods and trademark infringement that damages a
rival's reputation are nothing new. Marketers often use the term "comparative advertising" to
refer to campaigns that pit one vendor's wares against those of another. Comparative
advertising can be highly effective, but it also carries some dangers. Ads that get their message
across in a memorable way. It has the potential to influence public opinion and boost sales.
When a service or product's target market is narrowly outlined, comparative advertising can
help it stand out from the crowd. Comparative advertising appears to be the most effective
method for this.
Despite the availability of numerous judicial decisions from England and the United States,
the development of law regarding comparative advertisement in India is a relatively new
phenomenon. In comparative advertising, one advertiser makes claims about the superiority of
his product or service by contrasting it with those of a competitor. This is typically done by
implying that the advertised product is on par with or even superior to the product being
compared to, or by making negative claims about the competing product. Consumers are
assumed to benefit from comparative advertising because it provides them with information
about the relative qualities of competing products. The ephemeral real numbers with the
compared brand may be transferred to the new brand, making comparative advertising especially
useful for new or unknown brands1.
There are three categories of advertisements:
1. Non Comparative Advertisements- Those commercials that don't mention
an alternative product, either explicitly or implicitly.
2. Indirectly Comparative Advertisements- indirect references to competing
products in advertising.
3. Directly Comparative Advertisements- Those commercials that feature a
clearly recognizable alternative product.

The last two types of ads could be considered "comparative advertising." Some countries

1
Pepsi Co Inc and Ors. v. Hindustan Coca Cola Ltd and Anr, 2003 (27) PTC 305.

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permit comparative advertisements of both types, while others prohibit them entirely. Therefore,
the famous tagline "Probably the best lager in the world" used to promote Carlsberg lager in the
United Kingdom (which permits both aspects of comparative advertising with some restrictions)
cannot be used in Germany (which does not permit comparative advertising at all) due to the fact
that it implies that all other lager are inferior to Carlsberg.2

Advertising that compares products in terms of price, value, quality, or other attributes is helpful
to consumers because it raises their level of product knowledge. There is, however, a significant
caveat to this. When entrusting the education of consumers to entities with vested interests, there
is always the risk that the advertising will contain misinformation, which would undermine the
goal of increasing consumers' knowledge3. As a result, the law permits comparative advertising
only within certain bounds. A merchant may make positive comparisons between his wares and
those of his competitors, but he may not make negative statements about the quality or value of
his rivals' offerings. If he does say something like that, it would be considered defamation of a
product. Any comparison that could be construed as an attack on a competitor's product is
forbidden4.

Indian courts have historically given advertisers wide latitude to make puff statements, or
exaggerated claims regarding their products, so long as they don't engage in disparagement. In
many cases, even false claims about such a product are tolerated, with the line becoming drawn
at criticism or slander of a competing manufacturer or its wares. Due to the prevalence of puff
statements in comparative advertising, the courts have established a set of criteria by which to
evaluate the veracity of such claims.

OBJECTIVES OF STUDY

This paper seeks to analyze-

i. The objectives of trademark law in India, and
ii. The scope of advertising and its effects on various other marks.
2
Ryder Rodney D, Brands, Advertisements and Advertising, (LexisNexis Butterworths, New Delhi) 2003.
3
Phillips Jeremy, Trademark Law- A Practical Anatomy, 1 st edn (Oxford, London) 2003.
4
In Pepsi Co Inc and Ors v. Hindustan Coca Cola Ltd. and Anr, 2003 (27) PTC 305, the court observed, “It is
well known that merely puffing is not dishonest and mere poking fun at a competitor is a normal practice of
comparative advertising and is acceptable in the market.

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STATEMENT OF PROBLEM

Comparative advertising is permissible, but comparative advertising leading to product

disparagement is not permissible, this statement has to be understood with good observation of
the statutes.
RESEARCH QUESTIONS

The questions to be addressed in the course are as follows:

1. How has the comparative analysis been a bane to the trademark owners.
2. Is comparative marketing punishable?
3. What could be the implications of such type of marketing?

HYPOTHESIS

This is a so called strategy, but if its used in a genuine way by the marketers or not it depends on
the way it is used. Therefore, this practice has a delicate usage in terms of its chances of abuse.

REVIEW OF LITERATURE

 Law relating to Intellectual Property Rights by [Link].

Since its inception, Dr. B.L. Wadehra's book "Law relating to intellectual property" has been held
in the highest regard throughout the country. In my opinion, this book has surpassed all others as
the go-to resource for anyone interested in learning more about intellectual property, including
law students, academics, lawyers, and the general public. It's not an exaggeration to argue that dr.
B.L. Wadehra has a very unique writing style in this book. I'd also like to mention that
everything you need to know about IP rights is neatly compiled in a single place. He has
approached all questions of intellectual property with enthusiasm. I am overjoyed to announce
the publication of the 5th season of Dr. B.L. Wadehra's book, "Law Relating to Intellectual
Property," for the benefit of the legal community and anyone else with an interest in intellectual
property and the protections afforded to it.

 Law relating to intellectual property rights by [Link].

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This book highlights every single bit of information that is important for the reader to know what
is this scheme meant for. The strategy has downfalls and upgrades to the existing system and it
issues a basic idea of what it is used for and how helpful it is for a law student.

TRADEMARK LAW AND COMPARATIVE

ADVERTISING

A trademark's primary function is to "distinguish one person's goods from those of

others." In this way, a trademark helps consumers know where their favorite products come
from. Thus, in a given scenario, not only would trademark infringement concerns arise if an
advertiser used a competitor's trademark to disparage that company's products in a comparative
advertisement, but also those concerning unfair competition and misleading advertising. Many
businesses will advertise against their rivals in order to prove the superiority of their own product
by drawing attention away from the rival brand and ultimately damaging the reputation of the
rival brand and its value. The ways in which various nations tackle such problems vary widely.
The Trade Marks Act of 1999 in India permits comparative advertising, with the restriction that it
be conducted fairly and not criticize an other product or service. If not, it constitutes trademark
infringement and unfair business practices. While fair dealing and honest practices are required
for comparative advertising to be legal in England under Section 10(6) of the Trademarks Act
1994.
When it comes to trademarks in India, the law that was established in Irving's Yeast Vite
Ltd v. FA Horse-Nail5 governs issues like marketing and product disparagement. Section 36A(x)
of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1984 allowed for a claim to be
made against disparagement of goods until it was repealed by the Competition Act 2002. By
defining "the publication of any misleading as well as disparaging factual data about a
competitor's goods or services as amounting to with an unfair trade practice," Section 36A(x)
restricted comparative advertising. Advertising that: • unfairly benefits from the mark's
reputation; • is contradictory to honest practice in business or industry matters; • is detrimental to

5
(1934) 51 RPC 110 wherin it was held that use of another’s trademark in comparative advertising does amount to
infringement.

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the mark's distinctive character; or • damages the mark's reputation is considered to be infringing
under section 28(9) of the Trademarks Act, 1999.
However, under Section 30(1)6 of the Trade Marks Act 1999, acts of comparative
advertising are not considered to be infringing activities under Section 29. While comparative
advertising can be helpful in some contexts, it can also mislead consumers, leading to financial
harm and potential legal action, if used improperly or with malicious intent.
Only when a competitor's trademark is used do roughly similar advertising and product
condemnation raise trademark issues. In the case of Duracell International Ltd. v. Ever Ready
Ltd7., for instance, the offending advertisement had depicted the look of a distinctive Duracell
battery without mentioning the brand name, but had instead referred to the competitor's corporate
name, Duracell Batteries. The court ruled that the defendant did not violate the plaintiff's
trademark. Even though Duracell had trademarked its battery, the colors copper and black were
used, while white and black were used in the plaintiff's ad. Since the defendant did not infringe
on the trademark, the case was dismissed.

PRODUCT DISPARAGEMENT, PUFFING AND THE LAW

Black's Law Dictionary defines disparage as "a false and injurious comment that debunks
or detracts first from reputation of (another's property, product, or business)." It can also mean
"to connect unequally" or "to dishonor someone or something by comparison."
Puffing, on the other hand, refers to overstated advertising, blustering, and showcasing on
which no plausible buyer would rely and is therefore not legally actionable. It also includes a
blanket statement of superiority over alternatives. Since such a statement lacks specificity,
buyers will likely view it as the seller's opinion.
Many people argue that the First Amendment protects comparative advertising because
advertisements are a form of commercial speech. To say, however, that a marketer has the

6
s. 30-Limits on effect of registered trade mark:
(1) Nothing in section 29 shall be construed as preventing the use of a registered
trade mark by any person for the purposes of identifying goods or services as those of
the proprietor provided the use-
(a) is in accordance with honest practices in industrial or commercial matters, and
(b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade
mark.
7
(1998) FSR 87.

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freedom to demean the product of his rival companies even without check, under the guise of
freedom of speech, would be a bit of a stretch 8. While it's clear that market conditions and
intense competition necessitate comparative advertising, its scope must be limited so as to
prevent unfair product criticism. At first, owners of competing businesses saw comparative
advertising as an infringement on their rights because it was seen as "free riding" on the other
business's reputation. However, within certain parameters, the current law permits comparative
advertising9.

While rejecting the disparagement claim in White v. Mellin 10, one of the soonest
decisions on this issue noted that: Comparative banner ads were admissible. However, the ad
should not be written in a way that makes negative comments about the rival company's
products. Promotion of a product without any criticism is not actionable. The number of potential
buyers who might be swayed away from one product and toward a competitor's must be
determined before the Court can rule on the issue of disparagement. It is common practice in
comparative advertising to make light of the offerings of competitors, and it is not considered
dishonest for a company to do so.
Generic condemnation of a competitor ’s product without specifically identifying or
pinning down the rival product is equally objectionable, the Court reasoned in Dabur India
Limited v. Colgate Palmolive India Ltd 11, another case in which the Court adopted this line of
thinking. Ads can be effective even if they don't directly mention the competitor's product. A
claimant cannot be dismissed on the grounds that he or she cannot be specifically identified if the
defendant attacks the category or type of product to which the claimant belongs.

J. Sikri provided examples of two last several English decisions to back up his claim.
After citing the case of Jupiter Unit Trust Managers Trust Ltd v. Johnson Fry Asset Managers 12,
he said, "In my judgment, when assessing comparative advertising in relation to an allegation for
malicious falsehood, the exam that the Court should apply whether in connection to slander of
8
Tata Press Ltd. v. Mahanagr Telephone Nigam Ltd., AIR 1995 SC 2438.
9
Dabur India Ltd v Wipro Limited, CS (OS) No 18 of 2006, decided on 27th March, 2006 (Delhi High
Court).
10
1895 A.C. 154, 165.
11
2004 (29) PTC 401 (Del).
12
PLC (2000) Unreported 19 April (Lexis Nexis Universe).

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goods or slander of an investment products is whether the finance service provider in puffing his
own commodity has overstepped the acceptable limits of denigration or disparagement of his
rival's product."

After that, he referenced the case DSG Retail Ltd. v. Comet Group 13, in which it was
decided that the test to be applied when thinking about the question of where the line is to be
drawn among both mere puffery and prosecutable statements is whether or not a plausible man
would take the allegation being made to constitute a serious claim. It was also mentioned that an
overstated advertising claim made with the intention of swaying the consumer's purchasing
decision can't be written off as empty bravado.
The law on comparative advertising and product disparagement can be summarized as
follows:
Despite the fact that it's not true, a business owner can claim that his wares are the finest
in the globe. A false claim that his products are superior to those of his rivals is also within his
purview to make.
In order to argue that his wares are superior to those of the competition, he can make
direct comparisons between the benefits of his products and those of the competition.
He cannot, however, falsely imply that his rivals' products are inferior to his own while
simultaneously claiming that his own products are superior. If he does, he smears his rivals and
their products in a way that is not allowed: • if there isn't any defamation of the goods or the start
manufacturing of such commodities, no action lies; if there is any false reporting, an intervention
for damage recovery lies; and if the defamation is repeated, the court has the authority to issue an
injunction.

Thus, the established rules regarding the use of a competitor's trademark in

comparative advertising are as follows:

Sections 29(8) and 30(1) of the Trademarks Act, 1999 were enacted with the intention
of facilitating comparative advertising.

13
PLC (2002) EWHC 116 (QBD).

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No harm can come from truthfully discussing the benefits of competing products or
services by making reference to their registered trademarks, as long as the use of the
competitor's mark is not fraudulent.

• It is up to the registered owner to prove that the exceptions listed in the section's
proviso apply.

If the trademark is used in a dishonest manner, however, there will be no infringement.

The test is objective because it asks if a reasonable reader would conclude that an
advertisement is truthful if presented with it.

For the purposes of Section 29(8) and Section 30: • Statutory or industry agreed codes
of conduct are not sufficient guide as to whether a practice is honest (1). Truthfulness
in advertising needs to be evaluated in light of what can reasonably be expected from
the target demographic.

Keep in mind that people are accustomed to these types of advertisements.

A more stringent morality than the public at large would expect from an advertisement
is not imposed on the courts by the Act and must not be enforced through legislation.

For the purposes of Section 29(8) and Section 30: • An advertisement that is
significantly misleading is not honest (1).

Take into account the advertisement as a whole.

Even if the description is ambiguous for interlocutory purposes, the advertisement

should be allowed to use it if the context supports it.

• A reasonable peruser of an advertisement does not engage in a detailed textual

examination.

• The court should not promote a detailed analysis of the construction of an

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advertisement in response to a motion for preliminary injunction.

CONCLUSION

The Trademarks Act's Sections 29(8) and 30(1) are sufficient to deal with trademark
infringement claims that are disguised as comparative advertising. Comparing one's
own products to those of a competitor is not illegal, as has been made clear by judicial
rulings; however, such comparisons must be accurate and must not bring disrepute to
the competitor's products or trademark. There's no denying that allowing comparative
advertising is the right thing to do for both businesses and consumers. Furthermore, it
allows the advertiser to differentiate his brand from competitors by emphasizing its
superiority. However, there must also be rules in place to prevent abuse. Therefore, it is
the job of the judiciary to make sure that people don't break the law excessively to
advertise their wares.

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BIBLIOGRAPHY

CASES REFERRED

 Pepsi Co Inc and Ors. v. Hindustan Coca Cola Ltd and Anr, 2003 (27) PTC 305.
 Duracell International Ltd. v. Ever Ready Ltd., (1998) FSR 87.
 Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd., AIR 1995 SC 2438.
 White v. Mellin, 1895 A.C. 154, 165.
 Dabur India Limited v. Colgate Palmolive India Ltd, 2004 (29) PTC 401 (Del).
 Jupiter Unit Trust Managers Trust Ltd v. Johnson Fry Asset Managers, PLC (2000)
Unreported 19 April (Lexis Nexis Universe).
 DSG Retail Ltd. v. Comet Group, PLC (2002) EWHC 116 (QBD).
 Reckitt & Colman of India Ltd. v. M.P Ramachandran and Anr, 1999 PTC (19) 741.
 Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd and Anr, 2003 (27) PTC 305.
 Dabur India Ltd. v. Emami Ltd., 2004 (29) PTC 1.
 Paras Pharmaceuticals Ltd. v. Ranbaxy Laboratories Ltd. and Ors., AIR 2008 Guj 94.
 British Telecommunication Plc v. AT & T Communications (UK), [2001] ETMR 235.

Web Sources for caselaws:

 [Link]
 [Link]/universe
 [Link]

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