Comparative Advertisement vis-à-vis Trademark Infringement

The basic legal framework governing comparative advertisement has been laid down by the Monopolies and Restrictive Trade Practices Act, 1984 and the Trademarks Act, 1999. This article aims at analyzing the concept of comparative advertisement vis-à-vis trademark infringement.

The Trademark Act, 1999 adequately addresses the issue of trademark infringement in the garb of comparative advertisement, thereby permitting comparative advertising by means of using another's trademark. The trademark law, while catering for usage of another's trademark in advertisement, draws a line to the extent of such permitted usage. The advertiser doing so cannot disparage the goods or services of another. Any such act disparaging the goods or services of another shall not only be an act constituting infringement of trademark, but also shall constitute product disparagement which falls within the ambit of unfair trade practices. It is pertinent to note that the protection provided in the Trademarks Act, 1999, is for a registered trademark. The Trademarks Act also stretches enough to protect well known unregistered marks. This gives the proprietor a statutory alternative to the common law action of passing off.

There is no statutory definition available for the term "Comparative Advertising" under the Indian laws. Although the judiciary has been proactive in this regard and has outlined the characteristics of Comparative Advertisement in the landmark case of Reckitt & Colman v. Kiwi TTK {63 (1996) DLT 29}. The Delhi High Court laid down the following guidelines in this case, which has gained precedential value-

a) A tradesman can make an untrue declaration that his goods are the best in the world.
b) He can also make an untrue statement to the extent that his goods are better than his competitor's.
c) For the purpose of saying that his goods are best in the world or better than his competitor's he has the leverage of comparing the advantages of his goods over the goods of others.
d) The above averments of a tradesman are acceptable only if they do not proclaim that his competitors' goods are bad, in which case it would amount to defamation of the competitor and his goods.
e) If there is no defamation to the goods or to the manufacturer of such goods then 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.

The above-mentioned guidelines were adapted in various judicial pronouncements pursuant to the judgment in Reckitt & Colman v. Kiwi TTK, settling the controversies hovering above the treatment of comparative advertisement in relation with trademark infringement. However, the decision in the case of Dabur India Limited v. Emami Limited {112 (2004) DLT 73, 2004}, brought to surface a new dimension. The judge ruled that even in absence of direct reference to the product of a competitor, a mere reference made to the entire class in a generic sense has the potential to instil a case of disparagement.

The Delhi High Court, in its recent judgment in Marico Limited v. Adani Wilmar Ltd { Delhi High Court, Case No- CS(OS) 246/2013 and CS(OS) 319/2013}, denied the interim injunction petition of the plaintiff on the grounds that for an advertisement to be categorized as disparaging, the defendant should have derogated, discredited or disgraced the product of the plaintiff. The Hon'ble High Court relied upon the judgment given in Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd {(2010) 44 PTC 254 Delhi (DB)}., and highlighted the test to ascertain whether there has been any disparagement. The key pointers to gauge disparagement are-

a) The intent of the advertisement
b) The overall effect of the advertisement
c) The story line of the commercial and the message sought to be conveyed via the advertisement.

In light of the above judgments, it is evident that the Courts have put to rest the issues hovering above the concept of comparative advertisement i.e. comparative advertising is permissible, but comparative advertising leading to product disparagement is not permissible. In order to win a battle for trademark infringement against the advertiser, it is mandatory to prove that the advertiser has puffed up his goods to the extent of derogating the competitor's products. It is essential to keep in mind the interest of the competitor and the harm that is likely to be caused to its reputation and goodwill through the advertiser's commercial.

The courts in India while interpreting the issue of comparative advertisement vis-à-vis trademark infringement have been very conservative when using the principle of 'fair use' is concerned. The Fair use doctrine in India, unlike US, is used only with respect to Copyright issues. The above-mentioned precedents are biased towards the interests of the competitor and the interest of the advertiser is not of primary importance. If the doctrine of fair use would surface, the interest of honest advertisers would be safeguarded. Therefore, the courts should try and keep the door open to interpret the issues relating to trademark infringement, due to advertiser's commercial, in light of fair use doctrine. An honest advertiser, who advertises his goods without the intention to harm its competitor and mislead public, should be protected. Having said that, the tricky task here would be to identify a honest advertiser.

Disclaimer: The sole purpose of this article is for information only; and not to be construed for any legal advice. The article was drafted, based on the information considered upto 29th July 2013.