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Published : March 25, 2011 | Author : sujay_ilnu
Category : Intellectual Property | Total Views : 7314 | Unrated

  
sujay_ilnu
Sujay Dixit, BA.LL.B(Hons in Corporate Law) Institute of Law,Nirma University
 

Comparative Advertisement and Infringement of Trademark
A perspective for consumers

Comparative Advertisement
Comparative advertising is a widely used form of commercial advertising in many countries. This type of advertising intends to influence consumer behavior by comparing the features of the advertiser's product with that of the competitor's product. Comparative claims are variable in nature. They may explicitly name a competitor or implicitly refer to him. They may emphasize the similarities (positive comparisons) or the differences (negative comparisons) between the products. They may state that the advertised product is “better than” (superiority claims) or “as good as” the competitor’s (equivalence or parity claims). The aim behind this concept is to allow honest (i.e. not misleading ) comparison of the factors of one trader’s products with those of another; such a comparison will inevitably involve the use of the trade marks associated with the products in question. In the absence of provisions controlling this, such use could constitute trade mark infringement. No Indian statute defines the term, but the UK Regulation defines comparative advertising as meaning any advertisement which “explicitly or by implication, identifies a competitor or goods or services offered by a competitor”.

‘Comparative advertising’ is the term used to describe advertisements where the goods or services of one trader are compared with the goods and services of another trader. Comparative advertising benefits the consumer as it usually compares the price, value, quality or other merits of different products, thereby enhancing the awareness of a consumer. However there is an important proviso attached to this: The improvement of consumers’ knowledge can only be achieved for long as the advertising does not contain
misinformation, which is always a risk if the education of consumers is entrusted to entities with vested interests

Trademark
“Trademark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours.


"A trademark includes any word, name, symbol, or device, or any combination thereof, adopted and used by a manufacturer or merchant, to identify his goods and distinguish them from those manufactured or sold by others.

The primary purpose of a trademark is to ‘distinguish the goods of one person from another’19 Therefore a trademark enables a consumer to identify the goods and their origin. Hence in case, if an
advertiser uses a competitor’s trademark to make a comparison between his goods and those of his competitor, and in the process disparages them, then such an act on the part of the advertiser would not only invoke issues related to comparative advertising and product disparagement, but would also invoke issues related to trademark infringement.

What is Trademark Infringement?
The basic issue regarding trademark infringement centers on consumer confusion. "Is one mark so close to another that an ordinary purchaser is likely to be confused, mistaken or deceived regarding the source of the goods or service?"' To make a judgment with regard to infringement, the courts would like to know what is in the customer's mind, how he is reacting to the two marks, and thus whether he is likely to be deceived. While consumer confusion has been, in most instances, the major issue with regard to trademark infringement, there are two other sources of confusion which relate to the trade rather than to the consuming public: trade confusion and "passing off." Evidence of trade confusion has been considered very valuable in infringement cases since members of the trade would not be expected to be deceived or confused as readily as ordinary consumers. Evidence of "passing off," where the trader knowingly and deliberately attempts to pass one product off as another, is also considered valuable in infringement law suits.

Comparative Advertising and Trademark Infringement-
The primary purpose of a trademark is to ‘distinguish the goods of one person from another’Therefore a trademark enables a consumer to identify the goods and their origin. Hence in case, if an advertiser uses a competitor’s trademark to make a comparison between his goods and those of his competitor, and in the process disparages them, then such an act on the part of the advertiser would not only invoke issues related to comparative advertising and product disparagement, but would also invoke issues related to trademark infringement.

The law on comparative advertising and product disparagement, in relation to trademarks, in India, is based upon the law as laid down in Irving's Yeast Vite Ltd v FA Horse-nail.Section 29(8) of The Trademarks Act, 1999enunciates situations, when the use of a trademark in advertising can constitute infringement. It says that any advertising which is not in accordance with honest practices; or is detrimental to the distinctive character, or to the repute of the mark, shall be an act constituting infringement. At the same time Section 30 (1) makes comparative advertising an exception, to acts constituting infringement under Section 29. It

provides that any advertising which is in accordance with honest practices, and does not cause detriment to the distinctive character or to the repute of the trademark will be permissible and will not constitute infringement.

The Settled Law on Trademark Infringement and Comparative Advertisement-
The law on ‘comparative advertising and use of a competitor’s trademark could be summarized as:
(a) The primary objective of Section 29 (8)and Section 30 (1) of The Trademarks Act, 1999, is to permit comparative advertising.
(b) As long as the use of a competitor’s mark is honest, there is nothing wrong in telling the merits of competing goods or services and using registered trademarks to identify them.
(c) The onus is on the registered proprietor to show that the factors indicated in the proviso to the section are applicable.
(d) There will be no infringement unless the use of the mark is not in accordance with honest practices.
(e) The test is objective: Would a reasonable reader be likely to say, upon being given the advertisement that it is honest.
(f) Statutory or industry agreed codes of conduct are not sufficient guide as to whether a practice is honest for the purposes of Section 29 (8) and Section 30
(1) Honesty has to be gauged against as what is reasonable for the relevant public of advertisements for the goods or services in use.
(g) It should be borne in mind that general public are used to these ways of advertising.
(h) The Act does not impose on the courts an obligation to try and enforce through the legislation a more puritanical standard than the general public would expect from an advertisement.
(i) An advertisement, which is significantly misleading is not honest for the purposes of Section 29 (8) and Section 30 (1).
(j) The advertisement should be considered as whole.
(k) If the background of an advertisement, as a whole, justifies the description then even if it is misleading for interlocutory purposes, it should be permitted.

Settled law on trademark infringement and Comparative Advertisement in India-
Trademark Act, 1999 permits comparative advertising u/s 30(1) which reads as:
Nothing in section 29 shall be preventing the use of registered trademark by any person with the purposes of identifying goods or services as those of the proprietor provided the use:-
a) is in accordance with the 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.

But with certain limitations which are provided u/s 29(8) which reads as: A registered trademark is infringed by any advertising of that trademark if such advertising:-
a) takes unfair advantage 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 trademark.

Section 36A of MRTP Act lists several actions to be an ‘unfair trade practice’. The provision which pertains to comparative representation is contained in Section 36A(1)(x) which reads as follows:
36A. Definition of unfair trade practice: ...."unfair trade practice" means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, 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, -
xxx
(x) gives false or misleading facts disparaging the goods, services or trade of another person.

The protection has been provided in the Trademark Act, 1999, is for the registered trademark. The Trademarks Act also applies to references to well known unregistered marks. This gives the proprietor a statutory alternative to the common law action of passing off.

Judicial Pronouncements
Though mark is not substantially used, but if the reference made points towards the product of another person and results in its disparagement, the user can be held liable.

In Reckitt & Colman of India Ltd. v. Kiwi T.T.K. Ltd. the plaintiff company is engaged in manufacture and sale of consumer products and one of the products of the plaintiff is liquid shoe polish being manufactured and marketed by them under the name and style of Cherry Blossom Premium Liquid Wax Polish. Defendant is also engaged in the manufacture of polish and one of the brand being manufactured and marketed by the defendant is "KIWI" brand of liquid polish. It is alleged that the liquid polish being marketed by the defendant and some other manufacturers have much less wax contents and more acrylic contents as compared to the liquid polish of the plaintiff. The acrylic base allegedly tends to form a film on the footwear which over a period of time is liable to crack and thus damage the footwear. It is, therefore, stated that the liquid polish of the plaintiff having wax rich formula is better than the other polishes. The liquid polish of the plaintiff is sold and marketed in angle neck bottles which is alleged to have easy application of the polish to the footwear. An imported applicator is alleged fitted on to the bottle which is strengthened by chemical flocking on the surface as also by riveting the sponge on to the plastic applicator base. The plaintiff has claimed its product to be superior than the similar product of the other competitors in every respect and it is stated that the plaintiff has 68% market share of the liquid shoe polish whereas the defendant has only 20% of such share.

The defendant with a view to promote its product is displaying an advertisement through the electronic media. The advertisement of the defendant shows a bottle of "KIWI". From which the word "KIWI" is written on white surface which does not drip as against another bottle described as "OTHERS" which drips. The product shown to have been flowing from the bottle of "OTHERS" is from a bottle marked "Brand X" and allegedly looks like the bottle of the liquid shoe polish of the plaintiff for which the plaintiff allegedly has a designed registration granted in 1993 under design No. 165756. The bottle of "OTHERS" marked "Brand X" also has a red blob on its surface, which allegedly represents "CHERRY" which appear on the bottle of the plaintiffs product. Besides the advertisement in the electronic media, defendant had also been circulating a "point of sale" poster material at shops and marketing outlets selling similar products. It is alleged that in the said poster material circulated by the defendant, the bottle shown, as "OTHERS" with a faulty applicator allegedly resembles the applicator of the plaintiff.

The advertisement was regarded as comparative advertisement and five principles laid down by the Court to decide as to whether a party is entitled to an injunction were as under: -
1. A tradesman is entitled to declare his goods to be best in the words, even though the declaration is untrue.

2. He can also say that my goods are better than his competitors', even though such statement is untrue.

3. For the purpose of saying that his goods are the best in the world or his goods are better than his competitors' he can even compare the advantages of his goods over the goods of others.

4. He, however, cannot while saying his goods are better than his competitors', say that his competitors' goods are bad. If he says so, he really slanders the goods of his competitors. In other words he defames his competitors and their goods, which is not permissible.

5. If there is no defamation to the goods or to the manufacturer of such goods 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.

It was held that a manufacturer is entitled to make a statement that his goods are the best and also 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 to institute proceedings as there is no disparagement or defamation to the goods of the manufacturer so doing. However, a manufacturer is not entitled to say that his competitor's goods are bad so as to puff and promote his goods.

In Dabur India Limited Vs. Colgate Palmolive India Ltd. , Trade rivalries which lead to advertisements in which the product of an advertiser is extolled and the rival product deprecated have led to this suit by the plaintiff Dabur India Ltd. who makes Dabur Lal Dant Manjan Powder, against the defendant Colgate Palmolive India Ltd. who manufacture Colgate tooth powder. This suit and this application for interim injunction is occasioned by an advertisement aired on the visual media by the defendant. The sum and substance of the TV advertisement complained of is that a Cinestar Sunil Shetty is seen stopping the purchasers of Lal Dant Manjan powders. He further inform them of the ill effects of such Lal Dant Manjan by rubbing it on the purchaser's spectacles which leave marks which are termed by Sunil Shetty as being akin to sandpapering. He also endorses the defendant Colgate's tooth powder as being 16 times less abrasive and non damaging to the spectacles. He is heard telling the purchaser that it is easy to change spectacles but not the teeth.

Court relied upon, Reckitt & Coleman v. Kiwi T.T.K. Ltd., 1996 PTC (16) 393; Dabur India Ltd. v. Emami Ltd., IA No. 2124/2004 in CS (OS) 453 of 2004; and the following paragraph can quoted from Reckitt & Colman of India Ltd. v. M.P. Ramachandran and Anr., 1999 PTC (19) 741

"Therefore, in a suit of this nature one has to look at whether the advertisement merely puffed the product of the advertisement advertiser or in the garb of doing the same directly or indirectly contended that the product of the other trader is inferior. There cannot be any dispute that in the concerned advertisements blue was stated to be of inferior quality. Although, for having depicted the container and the price in the advertisement together it is difficult to proceed on the basis that the defendant No. 1 was not referring to Robin Blue, but assuming in the advertisement insinuations are not made against Robin Blue and the same were directed to all blues as has been stated is no uncertain terms in the affidavits, can it be said that it was not made against Robin Blue. The answer is a definite 'no', because Robin Blue is also blue.

It was sought to be contended that insinuations against all are permissible though the same may not be permissible against one particular individual. I do not accept the same for the simple reason that while saying all are bad it was being said all and everyone is made and anyone titting the description of everyone is affected thereby."

Court also relied upon Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd. and Anr., 2003 (27) PTC 305 (Del)(DB) and Wander Ltd. and Anr. v. Antox India P. Ltd., 1990, Supp. SCC 727, particularly in which it was said that

An infringement action is available where there is violation of specific product right acquired under and recognised by the statute. In a passing-off action, however, the plaintiff's right is independent of such a statutory right to a trademark and is against the conduct of the defendant, which leads to or is intended or calculated to lead to deception. Passing-off is said to be a species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation, which another has established, for himself in a particular trade or business. The action is regarded as an action for deceit. The tort of passing-off involves in misrepresentation made by a trader to his prospective customs calculated to injure, as a reasonably foreseeable consequence, the business or goodwill of another which actually or probably, causes damages to the business or good of the other trader.

It was held that as the mark could not be established as registered trademark, S. 29(8) could not be stressed. But relying upon the above authorities court held that the generic disparagement of a rival product without specifically identifying or pin pointing the rival product is equally objectionable. Clever advertising can indeed hit a rival product without specifically referring to it. No one can disparage a class or genre of a product within which a complaining plaintiff falls and raise a defence that the plaintiff has not been specifically identified.

When the statement disparaging the plaintiff’s product is true in comparative advertising, no relief can be given to the plaintiff. In Reckit Benckiser (India) Limited Vs. Naga Limited and Ors. , the Plaintiff has filed this Suit for permanent and mandatory injunction, being aggrieved by the Defendant's television commercial which depicts a woman in an advanced stage of pregnancy needing urgent medical assistance during a train journey. The doctor calls for hot water and is handed a cake of soap which she rejects, stating that an antiseptic soap is needed. It is not in dispute that the soap which was handed over to the doctor is identifiable by viewers as the Plaintiff's product, namely, Dettol Soap. The doctor further states in the commercial that "at a time like this, you do not need just antiseptic, you need a protector". The Defendant's Ayurvedic soap is then shown and it is concurrently stated that it is a body 'rakshak' soap, the first Ayurvedic soap that completely removes all seven kinds of terms and protects from infection. The Plaintiff's grievance is that this commercial disparages its Dettol Soap. It is averred that the intention behind the commercial is malicious, especially in view of the trade literature which shows that Dettol Brand sales are about 30-35 crores out of a total sales of Rs. 230 crores. The Plaintiff has vehemently stressed that Dettol is the leader in brand equity.

Issue was whether the Defendant could be held to have disparaged the Plaintiff's product even though no false statements have been made by the Defendant? And it was held that If a competitor makes the consumer aware of his mistaken impression, the Plaintiff cannot be heard to complain of such action. I find it difficult, nay impossible, to hold a party liable for libel when all that has been stated by the competitor is the truth. Truth is always a complete defence against any assault or challenge regardless of whether any damage is sustained as a result of it. The public perception is that Dettol soap shares the same medicinal and curative qualities as the Dettol liquid. It matters little whether this misunderstanding has been contrived by the manufacturer or has developed in the consumers mind independently. If any party, such as the Defendant, helps in correcting the error, it commits no illegality. The tortious injunction, which is the backbone of the present action, is predicated on falsehood, and in the present circumstances, the falsehood can be laid at the door of the Plaintiff and not of the Defendant.

Conclusion
Section 29(8) and Section 30(1) of the Trademarks Act, are adequate to address issues related to trademark infringement, made in the garb of comparative advertising. Judicial pronouncements on the issue have also made it clear that there is no harm in comparing your goods with those of a competitor, but the comparison should be fair and should not bring disrepute to the competitor’s products or trademark, i.e. comparative advertising is permissible, but comparative advertising leading to product disparagement is not permissible. The position is more or less the same in almost all the countries, which allow use of another’s trademark in comparative advertising. No doubt that comparative advertising is beneficial as it increases consumer awareness and therefore, it should be allowed. Moreover, it enables an advertiser to establish his brand in the market by stating his superiority over the established brands. But, at the same time there have to be regulations, to check abuses. If the courts had accepted the proposition that trade rivalries should be settled in the market (as the courts are not equipped to decide which product is better), it would have caused great prejudice to public interest; as the question is not of deciding which product is better, but of public awareness. Because, as we say that comparative advertising increases public awareness, misleading and disparaging advertisement should not mislead the public.
**************************
# Although the term ‘comparative advertising’ is missing from all the major provisions of international trademark law, it does however appear in Council Directive 84/450/EEC of 10 September, 1984 concerning misleading and comparative advertising (as amended by Council Directive 97/55 of the European Parliament and of Council Amending Directive 84/550 Concerning Misleading Advertising as to Include Comparative Adverting).
# Ryder Rodney D, Brands, Advertisements and Advertising (LexisNexis Butterworths, New Delhi) 2003, p 326.
# Title 15, U.S. Code Section 1127.
# Section 29 (8) of The Trademarks Act, 1999 where use of a purpose of identifying the equivalent ‘smell like fragrance.trademark in advertising could constitute an act of infringement
# Judge Hand in Dupont Cellophane Co., Inc. v. Waxed Products 85 F. 2nd at 81, 30 USPQ 332 at 338 (CA 2, 1936).
# Harry D. Nims, Unfair Competition and Trademarks (New YorkBaker, Voorhis & Co., Inc., 4th Edition, 1947), section 331, pg 1035.
# Definition of trademark under Section2(zb) of The distributor’s manual a comparison chart which incorporate Trademarks Act, 1999.
# Section 29 (8) of The Trademarks Act, 1999 where use of a trademark in advertising could constitute an act of infringement Cf Pepsi Co Inc and Anr v Hindustan Coca [2001] ETMR 235.Cola and Ors 2003 (27) PTC 305..
# (1934) 51 RPC 110 wherein it was held that use of another’s trademark in comparative advertising does amount to Infringement.
# Section 29 (8) of Trademark Act 1999.
# Section 30 (1) of Trademark Act 1999.
# As laid down in Barclays Bank Plc v. RBS Advanta [1996] RPC 307 and in the subsequent case of Vodafone Group v Orange Personal Communication Services Ltd [1997] EMLR84; and as summarized by Mr Michael Crystal (sitting as deputy judge) in British Telecommunication Plc v AT &T Communications (UK) [2001] ETMR 235. In these cases the issue dealt with Section 10 (6) of the Trademarks Act, 1994 of UK.
# 63 (1996) DLT 29
# AIR 2005 Delhi 102

Authors contact info - articles The  author can be reached at: sujay_ilnu@legalserviceindia.com




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