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Comparative Advertisement and Product Disparagement

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Comparative Advertisement and Product Disparagement..and the laws related to it.

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Comparative Advertisement and Product Disparagement

  1. 1. Shubhi Verma (102)
  2. 2. What is Comparative Advertisement ?
  3. 3. What is Disparaging Advertisement ? MRTP ACT 1969 Competition Act 2002 Consumer Protection Act 1986 Trademarks Act 1999
  4. 4. Objective Methodology Hypothesis The objective of the research is to bring out the liberties given to the companies to in order to promote their goods though not disregarding the goods of its rival partners. Towards the end of the research we will be able to clearly understand the difference between comparative advertising and product disparagement: what is permissible and what is prohibited. We will also be comparing the laws established in various countries regarding comparative advertisements. The sole motto of the research is to explore, describe, explain, compare, evaluate, criticize and draw inferences to bring about reforms if necessary or to simply commend the existing system. In sight of the present topic for research, mainly case laws, conventions and most importantly laws of the land will be taken into consideration to frame an outline of the entire scenario. It can be hypothesized that comparative advertising can lead to stronger competition however one fact remains undoubtedly accepted that disparaging products is illegal.
  5. 5. USA & GERMANY
  6. 6. USA Lanham Act 1946 Federation of Trade Commission (FTC) Suit is maintainable or Not ?
  7. 7. Here is a look at a case study: In the case, ITC Ltd. v. Punchgini (482 F.3d 138 (2d Cir. 2007) ITC operated a “Bukhara” restaurant in India and sold “Dal Bukhara” packaged foods in the U.S. Punchgini operated a “Bukhara Grill” restaurant in the U.S. ITC’s claim was that the defendants implied that their restaurant was affiliated with ITC’s products and this constituted as false advertising. The lower court dismissed ITC’s claims for lack of any substantial ground. The U.S. Court of Appeals for the Second Circuit affirmed this decision and held that ITC’s mere plans of opening “Bukhara” restaurants in the U.S. did not give rise to any claim. Since Punchgini (the defendants) were not comparing their restaurants to ITC’s packaged food products, ITC’s use of “Dal Bukhara” name on its products, did not exactly amount to any claim of false advertising. In conclusion, it is one of those concerns where the legal team works in close connection with the marketing team. It is imperative to keep a close watch on this issue so as to prevent any misuse by defamation or any innuendo of negativity. This has ironically disturbed the credibility and innovative use of advertising. This negativity, surely brings better recall to a potential consumer, but in the hindsight, it can differ from person to person.
  8. 8. The New German Law Against Unfair Competition Came into force on 8th July 2004 (Revised) For the advancement of the German law with relation to EC laws
  9. 9. Section 3-6 talks about the unfair competition 1. Section 3 – Defines unfair competition 2. Section 4- components of unfair competition 3. Section 5 – Misleading Advertisements 4. Section 6 – Comparative Advertisements Remedies Available Under This Act Section 8 – If the reputation of the plaintiff is harmed the suit can be maintained in three ways – • Loss of Profit • Plaintiff can demand for a legal license • Claim for the actual damage
  10. 10. Comparative Advertising Directly Comparative Non Comparative Indirectly Comparative
  11. 11. Advertising Law In INDIA Truthfulness and Honesty Not offensive Safeguards & Fairness Constitutional Sources ASCI Hamdard Dawakhana Article 19
  12. 12. c) Reference to the major brand instead of referring to the competitor by name directly, but such reference makes the customer recognise the major brand. a) Reference to a competitor’s name; There are different methods of Comparative Advertising which are usually taken up by the traders to promote their products or services, which include: b) Reference to a competitor’s trade mark;
  13. 13. Colgate v. Pepsodent CS (OS) No. 1588 of 2013 Dismissing Colgate Palmolive India Ltd’s plea for interim injunction against HUL, Justice S Muralidhar said, “ The court is not persuaded to hold at this stage that the impugned TV advertisement or the printed advertisement by the HUL is disparaging of or denigrating the product.
  14. 14. Tata Press Ltd v. MTNL & ORS Comparative advertisment is often supported on the basis of the argument established in this case which states freedom of speech as stated under article 19(1) of the constitution of India.
  15. 15. Duracell International Ltd V. Ever Ready Private Ltd • Ever Ready (Pty) ltd had lodged a complaint with the A.S.A in 2004 protesting the Duracell advertisement and claim that Duracell batteries last up to “6 times longer than the ordinary zinc carbon batteries.” • Ever Ready (Pty) Ltd provided evidence in the form of the tests conducted by the South African Bureau of Standards (SABS) that the Duracell clain is untrue and misleading to the south african consumer. • As a result the case was sent to legal arbitration • The arbitrators finding was “ Ever Ready’s complaint is valid and Duracell’s claim is invalid and misleading to the public..”
  16. 16. Section 29 (8) of the Trademarks act 1999 states that “ a registered trademark is infringed by any advertising of the trademark if such advertising • Takes unfair advantage of and is contrary to honest practices in industrial and commercial matters • Is detrimental to its distinctive character or • Is against the reputation of the trademark
  17. 17. CONCLUSION Section 29 (8) and section 30 (1) of the trademarks act, are adequate to address issues related to trademarks 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 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.
  18. 18. Bibliography •Disparaging Advertising and the Media War •Comparative advertisement and product disparagement vis-à-vis Trademark Law 1999 •Law comparing advertisement and disparagement • But Names Won’t Necessarily Hurt Me: Considering the Effect of Disparaging Statements on Reputation •The tort of disparagement and the developing first amendment Journal – Blog – •Disparaging advertising (IIPRD) •Disparaging advertisement ( Legal blog) •Comparative advertising ( LawMantra)