Comparative advertising is a marketing strategy in which a company’s product or service is presented as superior when compared to a competitor’s. A comparative advertising campaign may involve printing a side-by-side comparison of the features of a company’s products next to those of its competitor. It may also feature a comparison based on value or cost. Typically, the competing product is shown in a disparaging light.
It has both its advantages and disadvantages. It is healthy for the market if done within a limit but can also lead to disparagement, defamation, and hate speech if not regulated. Comparative advertisements can lead to trademark infringement in two ways: harm to the reputation of trademarks and basic trademark infringement. The major issues with regard to trademark infringement are trade confusion among experienced traders and passing off.
Legal Status of Commercial Speech in India
There is no proper law in India to regulate Comparative advertisements, only judicial precedents exist. Comparative advertisements fall under commercial speech, so if commercial speech is to be protected under fundamental rights then so are comparative advertisements.
In the case of Hamdard Dawakhana vs Union of India case, it was held that commercial speech is not guaranteed under Art.19 as it is just for economic gain, but later in MTNL v Tata, the court held commercial speech to be a fundamental right so comparative advertising is allowed.
The Advertising Standards Council of India (ASCI) also permits comparative advertising, but it should not be disparaging. You are allowed to state that your articles are better than the others or the best but you cannot say that others’ products are bad.
In comparative data charts, facts should be true and accurate. In Reckitt and Colman vs KIWI, Kiwi tried to disparage the opponent’s nail paint brand by impersonating a similar bottle in their ad and showing that it drips. The court held it to be an unfair practice.
There is also a requirement that there should be no resemblance to any specific product. In the famous Colgate vs Pepsodent– it was held that Colgate was disparaged since it was very clear that the child was mumbling Colgate in the advertisement of Pepsodent.
SImilarly, in Dabur vs Emami, disparagement was held even though the products were referred to in a generic sense the word Chyawanprash was popular as Dabur’s and defamed the product Chyawanprash’s reputation. In Dabur vs Wipro it was decided that the degree of disparagement should be such that it might cause defamation or actually causes defamation.
Comparing products is a vibrant and memorable way for competitors to fight in the market. However, unregulated comparison of products would mean that the goodwill and reputation of any defamed products would be adversely affected.
While the judicial precedents listed above cannot be discounted, the lack of an actual law regarding the matter is likely to affect brands, particularly smaller brands. Without the strength of established statutory law, there are less deterrents for competitors who want to damage their rival’s reputation.
Author: Radhika Verma, Legal Intern at PA Legal.
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