Introduction:

In today’s world, where the role of electronic media is rampant, advertising is a major tool to reach the masses. Visual representation always had a lasting impact on the mind of consumers. In Comparative Advertising, the product of one company is compared with the competitive brand either explicitly or by a passing through reference without any direct mention in the advertisement. This is mainly done to point out the differences between the fiercely competitive brands that run neck to neck in the market. When an advertiser boasts about his products in order to gain consumer attention it is known as puffing up their claims.

Puffery is where the advertisement oversells its claims and advantages of the given product. Whereby such means, the advertiser targets to show how highly functional the product is by making inflated claims.  Whether these claims are truly factual is a matter of dispute in most cases. Puffery is characterised by an exaggeration or hyperbole. This is used by advertisers to make exceeding claims about their products. This creates an impact in the minds of consumers leaving a long lasting impression about the products and thus making the advertisement memorable. Some of the examples of puffery are “Nobody Delivers Keral Better” by Malayala Manorama, “Fevicol ka mazboot jod hai Tootega nahi!” by Fevicol, “Tide Hai Toh White Hai” by Tide. The impact of Puffery Advertisement on the audience is as follows:

  1. Consumers tend to buy the product on the basics of puffed up ads but at times end up being dissatisfied. The product does not live up to their expectations.
  2. At times, puffery has a negative impact on the consumers, where instead of being brand royal they end up being brand averse.

Product Disparagement is when puffery exceeds the limit of just puffing one’s claims, when there is a direct reference made to the competing products by showing them in negative light or when there are steps taken for actively harming the reputation competing product.

Advertisements made on the basis of malafide and dishonest intentions for tarnishing the image of the competitor are covered under the umbrella of commercial disparagement. In order to prove disparagement, the following needs to be proved:

  1. The advertisement is harming the goodwill and reputation of the competitor.
  2. The advertisement is portraying the competitor’s products in a bad light which is in turn affecting consumer perceptions.

Comparative advertising is of two types – implicit and explicit comparative advertisements. Implicit advertisements are where a direct inference to the competitor’s product is not made but is essentially an insinuation of the same. Explicit advertising is where a very direct reference to the competitor’s mark or product is made which is identifiable to any reasonable. When such comparison tends to tarnish the image of the competitor it leads to disparagement.

Provisions

There is no single legislative mechanism addressing the issue of comparative advertising as a whole. However, various statutes provide provisions for the same.

Trade Marks Act

The Trade Marks Act 1999 provides for the infringement of a trademark through advertisement by the following sections:

Section 29(8) of Trade Marks Act, 1999 states:

A registered trade mark is infringed by any advertising of that trade mark if such advertising:

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or

(b) is detrimental to its distinctive character; or

(c) is against the reputation of the trade mark.

Section 30 (1) of Trade Marks Act, 1999 provides an exception to Section 29 by stating that:

(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.

From the above it is observed that although Section 29(8) elaborates cases which would amount to infringing the trademark of a registered user, Section 30(1) provides for exceptions to the same i.e., incidents wherein using another trader’s registered mark would not amount to infringement.

Consumer Protection Act

Although Consumer Protection Act, 2002 does not directly discuss comparative advertising, it has provisions related to Unfair Trade Practices under Section 2(1)(r).

Section 2(1)(r) in the Consumer Protection Act, 1986

(r) “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely: —

(1) the practice of making any statement, whether orally or in writing or by visible representation which,—

(x) gives false or misleading facts disparaging the goods, services or trade of another person.

Issue

Earlier, the concept of consumer interest wasn’t given much of due consideration in cases of comparative advertising and this is evident from the case of  Reckitt & Coleman of India v. Kiwi T.T.K[1]. in which with respect to comparative advertising the Delhi High Court stated the following:

  1. a manufacturer is entitled to make a statement that his goods are the best
  2. he can make some statements for puffing of his goods and the same will not give a cause of action to other traders or manufacturers of similar goods
  3. a manufacturer is not entitled to say' that his competitor's goods are bad so as to puff and promote his goods.

However, it is in the later years that the aspect of consumer interest was given its due importance in a country like India where the literacy rate is as low as 25-27%[2] and consumers highly rely on the information broadcasted through advertisements. This was seen in the case of Colgate-Palmolive (India) v. Anchor Health & Beauty Care Pvt Ltd[3] where the Madras High Court held thatTo permit 2 rival traders to indulge in puffery, without denigrating each other's product, would benefit both of them, but would leave the consumer helpless. If on the other hand, the falsity of the claim of a trader about the quality and utility value of his product, is exposed by his rival, the consumer stands to benefit, by the knowledge derived out of such exposure. After all, in a free market economy, the products will find their place, as water would find its level, provided the consumers are well informed. Consumer education, in a country with limited resources and a low literacy level, is possible only by allowing a free play for the trade rivals in the advertising arena, so that each exposes the other and the consumer thereby derives a fringe benefit. Therefore, it is only on the touchstone of public interest that such advertisements are to be tested.” Thus consumer interest played a significant role in determining comparative advertisements and how ads impact the consumer into changing buying habits or having a pre conceived notion about the rival brand.

In the case of Dabur India Ltd v. Wipro Ltd[4] the court was of the view that in comparative advertising, a consumer may look at a commercial from a particular point of view and come to a conclusion that one product is superior to the other, while another consumer may look at the same commercial from another point of view and come to a conclusion that one product is inferior to the other. Disparagement of a product should be defamatory or should border on defamation, a view that has consistently been endorsed by this Court. In other words, the degree of disparagement must be such that it would tantamount to, or almost tantamount to defamation. In the given case it was held that comparing two rival brands of honey is allowed as long as there is no disparagement and the main aim is not to denigrate the rival’s product but to show that one’s own product is better.

In the case of Godrej Sara Lee Ltd v. Reckitt Benckiser (I) Ltd[5] the court while deciding a dispute would take into account the perception of average individual who is reasonably well informed and observant. So long as the product of the adversary/competitor is not denigrated, it is left to the consumer to choose. In the given case the court held that in case the defendant highlights the best feature of its product by comparing it to that of the plaintiff it would not amount to disparagement.

Whether or not the goods of a trader or manufacturer are disparaged would depend upon the facts and circumstances of each case. There is no cut and dried formula, for general application. All that the Court need to be conscious of the fact that while disparagements may be direct, clear and brazen, they may also be subtle, clever or covert and this is what was concluded in Karamchand Appliances Pvt. Ltd v. Sh. Adhikari Bros & Ors[6]. It was held that the defendant is indeed entitled to boast that its product is the latest in the market and even the best but it cannot describe either the technology or the concept used by any other manufacturer or trader in the manufacture or sale of his products as obsolete or worthless. Comparative advertisement is permissible, so long as such comparison does not disparage or denigrate the trademark or the products of a competitor.

Market share plays an important role in deciding the disparagement of goods and this can be seen in the case of Dabur India Limited v Emami Limited[7] where Dabur was the market leader in Chyawanprash segment with over 67% share while Emami held only 12% of the total market share. Although it was contended that no direct reference to the product of the Plaintiff was made and only a reference is made to the entire class of Chyawanprash in its generic sense yet the court concluded that even in those circumstances disparagement was possible. The court in this case relied on Reckitt & Coleman of India v. Kiwi T.T.K and held a manufacturer is not entitled to say that his competitor’s goods are bad so as to puff and promote his goods.

The aspect of commercial speech in comparative advertising was discussed in Tata Press Ltd v. Mahanagar Telephone Nigam Ltd[8] where the Court held that public at large is benefited by the information made available through the advertisement. There cannot he honest and economical marketing by the public at large without being educated by the information disseminated through advertisements. The economic system in a democracy would be handicapped without there being freedom of "commercial speech". In Glaxosmithkline Consumer v. Heinz India (P) Ltd[9], the Court held that the public expects a certain amount of hyperbole in advertising. The test is whether a reasonable man would take the claim being made, as one made seriously. The more precise and specific the claim, the more likely it was that the public would take it seriously. Advertisements particularly those in the electronic media can be powerful and that the advertiser has to walk a tight rope while telecasting the commercial - and always be alive to whether what is being conveyed denigrates the rival product and the likely impact of such a message.

Another important case law which deals with what would amount to disparagement is Pepsi Co., Inc. And Ors. v. Hindustan Coca Cola Ltd. And Anr[10] where the Delhi High Court held that the visual advertisements have a far reaching impact on the psyche of the people and therefore discrediting the product of a competitor would amount to disparagement. In determining the question of disparagement the Court looked into the following three factors:(i) Intent of commercial (ii) Manner of the commercial (iii) Story line of the commercial and the message sought to be conveyed by the commercial. Out of the above, the manner of the commercial is highly important where if the advertisement is of such a nature so as to ridicule the competitor’s product then it would amount to disparagement.

The most recent judgement with regards to comparative advertising is Horlicks Ltd. & Anr v. Heinz India Private Limited where the issue in question was the advertisement of the defendant which compared the amount of proteins in one cup of HORLICKS with that of two cups of COMPLAN (product of the plaintiff). In this case the court held that advertisement published by Complan compares a material, relevant, verifiable and representative feature of the goods in question which is a protein content, one of the essential components of a health drink. The advertisement seeks only to compare the protein content in the recommended 'per serving' sizes of both products which is factually true and not misleading in any way. The Court also held that the defendant is not obliged to compare all parameters. It is open to an advertiser to highlight a special feature/characteristic of his product which would set its product apart from its competitors and make a comparison with other products, as long as it is true.[11]

Probable Solutions

Given the fierce competition between rivals, positioning a product in the market is not possible without comparative advertising. Some of the probable solutions to placing a product in the market by comparing it with the competitors-

  1. Exaggerated claims do not solely work to gain market share. The puffed up claims need to be backed up by evidence. Consumers may buy a product on the basis of superlative claims but if it does not turn upto their expectations then they become brand averse. The difference needs to be drawn between the true claims and mere “puffs”.
  2. Highlighting the limitations of the competitor without tarnishing or denigrating his image. Showcasing how the manufacturer’s product is better than the others rather than focusing on how the competitor is not better than the manufacturer.
  3. Consumer interest should be of primary importance. Consumer surveys should be conducted to decide the focus market and how consumers would perceive the given advertisement.
  4. Verifying the claims is essential of two rival products. It is necessary to prove how one product is better than the other. These claims can be substantiated by either statistical surveys, meeting industrial standards and conducting laboratory tests.
  5. In case the competitor’s product is explicitly showcased in the advertisement then it should be ensured that it is in accordance with honest practices in industrial and commercial matters.

Conclusion

From the cases discussed above, it can be concluded that product disparagement is much broader concept in relation to trademark infringement. Trademark infringement can be said to be a subset of product disparagement. Product disparagement contains a variety of aspects such as puffery, tarnishment which is between two competing brands to penetrate their product into the minds of the consumer by showing the fallacies into the competitor’s brand or by outrightly demeaning their product and also to some extent dilution which mostly happens between a senior(established) and a junior(establishing) brand, where the junior brand encashes on the goodwill and the reputation of the established brand.

The need of the hour is a comprehensive legislative mechanism that would address the above mentioned issues and provide for the guidelines to be followed during comparative advertisements. With the cut- throat competition in the market, a fine line has to be drawn between the competing interest of the advertisers on one hand and the consumer interest on the other.