An analysis on comparative advertising

Comparative advertising means comparing different brands on price, services and other factors and focusing on advertising one of the brands in a way to show how their rivals are inferior as compared to it. This comparison would be very obvious to the audience due to its explicit comparison.

The Federal Trade Commission (USA), defined comparative advertising as “advertisement that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration or other distinctive information.” The case Gillette Australia Pty Ltd. v Energizer Australia Pty Ltd. (2002) 193 ALR 629 seconded this definition.

The types of comparative advertising can vary from evaluating one single attribute in one product with the same attribute in another product, but absent in other products that exist in their relevant market. The focus of the advertising would first be on how the potential customer would rely on seeing it and be of the belief that the superior product is indeed the right choice as compared to the inferior product shown in the commercial. The evaluation should also be convenient and easy to measure. The next criteria would be remembrance level. The consumer should not put an extra effort in recalling about the advertisement.

Comparative advertising should not be confused with parody advertisements as in the case of parody, a fictional product is made as a spoof of the original product. Here, the competitor is not even blatantly named whereas in comparative advertising, both the brands are clearly named. Further, comparative advertising could be indirect or direct. The main intention should successfully compare, associate and differentiate the two competing brands.

One type of comparative advertising is called disparaging advertising. This method of advertising is a mockery at a brand which can sometimes appear scandalous or baseless.  Potential consumers would not respond to advertisements if they believe the substance in it is misleading or deceptive. It is believed that disparaging advertising does not amount to trademark infringement because it is not technically used as a trademark. This has not been legislated against in Australia. USA, China and Japan have taken up this concept under Unfair Competition Laws. In China, the trademark system works on the concept of first to register basis in order to protect their mark.

In the USA, comparative advertising is regulated through stringent federal, state, local laws as well as self-regularly codes of conduct. The Federal Trade Commission is the primary federal agency responsible for regulating public advertisements. It regulates advertising by prescribing rules under the Federal Trade Commission Act, investigating suspected violations of the said Act and governing lawsuits filed against companies conducting illegal activity. Additionally, the authoritative agency would be brought into the picture according to the product, i.e. the Food and Drug Administration (FDA) would have the authority to oversee advertising claims made to their industry specific products. Additionally, Section 43(a) of the Lanham Act [(15 U.S.C. 1125(a)] protects consumers and competitors against false advertising and false designations of origin.

Apart from these civil remedies, a demand letter can be sent to the competitor directly instructing him to take the advertisement down. The take down request can even be sent to the media outlet displayed that advertisement. A litigation suit, apart from the above federal authorities, can be filed in the NAD  (National Advertising Division) too.

Coming closer home, we saw a series of advertising rivalries between Pepsi-Coke (Nothing official about it, remember?) ,the Complan-Horlicks war (Both the companies ended up in denigrating their competitor’s product, while running advertisements for their own product) or Rin-Tide (Where Hindustan Unilever who’s product is Rin, released an advertisement which makes Procter & Gamble’s Tide look inferior)

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.

About the Author: Mr. Mohinder Vig, Trade Mark Attorney at Khurana & Khurana and can be reached at: Trademark@khuranaandkhurana.com

Follow us on Twitter: @KnKIPLaw .

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