Use of Trademark In Comparative Advertising: Situation In India

India enacted its new Trademarks Act 1999 (the TM Act) and the Trademarks Rules 2002, with effect from 15th September 2003, to ensure adequate protection to domestic and international brand owners, in compliance with the TRIPs Agreement.

As a measure to protect international proprietors, the Act defines a well known mark in relation to any goods or services to be a mark well-known to a substantial segment of the public using such goods or receiving such services. Further, the TM Act has increased the grounds on which trademark infringement can be claimed, such as likelihood of confusion, likelihood of dilution or disparagement of a registered trademark, comparative advertising and spoken use. The term use has been expanded for the purpose of ascertaining infringement. If a trademark is not registered in India, a foreign trademark owner can initiate a passing-off action against the potential infringer.

This paper is dealing specifically with the concept of ‘comparative advertising’ in India. There are several IPRs involved in advertising, here specifically the trademark rights are dealt. Comparative Advertising can be defined as advertising that compares one product or service with another or that states that one product works with or is compatible with another.

Trademarks Act, 1999 has incorporated the provisions related to this concept in Ss. 29(8) and 30(1). According to the statute it is permissible, with certain limitations as to unfair trade practices. ‘Unfair trade practice’ has been defined u/s 36A of Monopolies and Restrictive Trade Practices, 1969 that stands repealed now. Another statute Consumer Protection Act, 1986 provides protection against unfair trade practice but in the cases of ‘comparative advertising’ the parties are firms (whose products are endorsed by the advertisements), which would not come in the ambit of ‘consumers’ to approach the consumer forum.

Nevertheless, judicial pronouncements are playing an important role to determine the extent of comparative advertising. How the extent is determined? And what is the current situation? To deal with these questions is the objective of this paper.

Related Statutory Provisions
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.

Passing off can often arise in comparative advertising disputes. The key essence of a passing-off action is confusion. The entire concept of ‘disparagement of goods of another person’ flows from the MRTP Act which leads to unfair trade practice. And that is what is condemned in the section 29(8)(a) of Trademark Act also. Therefore as the MRTP Act stands repealed now, it creates ambiguity in the section. Nevertheless, courts are relying upon the precedents and Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising, to determine the extent of comparative advertising.

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 Reckitt & Colman of India Ltd. v. M.P. Ramachandran and Anr. , The facts were that the plaintiff was the manufacturer of blue whitener under the name and style of "Robin Blue". The" defendant had also started manufacturing blue whitener and with a view to promote their products they issued an advertisement allegedly making disparaging representations to the plaintiffs Robin Liquid Blue.

The defendants had depicted the product of the petitioner showing the container in which the product of the petitioner was sold and in regard to which the petitioner had a registered design. It was further shown in the advertisement that the product contained in the said container was priced at RS.IO.00. By giving the price, the respondent had in no uncertain terms identified the product of the petitioner since the only blue whitener sold in the market at the relevant time priced at around RS.10.00 was the product of the petitioner. It was contended in the advertisement that the said blue was uneconomical and it was then contended that at RS.10.00 the average blue is the most expansive to white your clothes. Thereafter it was added "What is more, you have to use lots of blue per wash". By making this comment the container of the petitioner had been shown upside-down and had been further shown that the liquid was gushing out. The object was obviously to show that the product of the petitioner priced at RS.10.00 gushed out as a squirt and not in drips while being-used and, therefore, it was expansive way to whiten the clothes.

It was in these circumstances that the Court held that the assertion made in the advertisement was clearly related to the product of the petitioner in that case and was made with a view to disparage and defame the petitioner's product. The Court had based its decision mainly on the fact that the price of the container shown in the advertisement was RS.10.00 and no other blue whitener except that of the petitioner was at the relevant time priced at. RS.10.00 and it, therefore, held that the advertisement was directly related to the product of the petitioner. The Court, therefore, in that case restrained the respondent from issuing the advertisement in question.

Once it is made out that trademark has been used, the next issue to make out infringement has to be determined as to whether it has been used in disparaging the goods of the owner of the trademark. And when the latter is established it gives rise to the action against trademark infringement. Use of the trademark to disparage the goods of another has been dealt in Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd. and Anr., , in which Court has referred to KERLY'S LAW OF TRADE MARKS AND TRADE NAMES BY DAVID KITCHIN AND ANR. Which in Appendix 16, deals with Council Directive 84/450 of September 10, 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising where the Council of the European Communities having regard to the Treaty establishing the European Economic Community, and in particular Article 100 thereof while taking into consideration the effect of misleading advertisement which reaches beyond the frontiers of individual Member States, adopted the directives in the form of Articles. Article 3(a) deals with Comparative advertising which shall, as far as the comparison is concerned, be permitted if the following conditions are met:
a) "it is not misleading according to Articles 2(2), 3 and 7.
Art. 2(2) reads as: ‘misleading advertising’ means any advertising which in any way including its presentation, deceives or is likely to deceive the persons to whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitior.

Art. 3: in determining whether advertising is misleading, account shall be taken of all its featured, and in particular of any information it contains concerning:

(a) the characteristics of goods or services, such as their availability, nature, execution, composition, method and date of manufacture or provision, fitness for purpose, uses, quantity, specification, geographical or commercial origin or the results to be expected from their use, or the results and material features of tests of checks carried out on the goods or services.
(b) The price or the manner in which the price is calculated, and the conditions on which the goods are supplied or the services provided;
(c) The nature, attributes and rights of the advertiser, such as his identity and assets, his qualifications and ownership of industrial, commercial or intellectual property rights or his awards and distinctions.

Art. 7: This Directive shall not preclude Member States from retaining or adopting provisions with a view to ensuring more extensive protection for consumers, persons carrying on a trade, business, craft or profession, and the general public.
b) it compares goods or services meeting the same needs or intended for the same purpose;
c) it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price;
d) it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor;
e) It does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor;
f) for products with designation of origin, it relates in each case to products with the same designation;
g) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor of the designation of origin of competing products;
h) It does not present goods or services as imitations or replicas of goods or services bearing a protected trademark or trade name.

This shows that comparative advertising cannot be permitted which discredits or denigrates the trade mark or trade name of the competitor.

The Pepsi Company Incorporation along with Pepsi co (India) Holdings Limited and Pepsi Foods Limited, the appellants (plaintiff's before the trial court) filed suit against Hindustan Coca Cola and others. Hindustan Coca Cola and others are endorsing their product with the help of a commercial which shows that the lead actor asks a kid which is his favourite drink. He mutters the word "Pepsi", which can be seen from his lip movement though the same is muted. The lead actor thereafter asks the boy to taste two drinks in two different bottles covered with lid and the question asked by the lead actor is that "Bacchon Ko Konsi pasand aayegi".? After taste the boy points out to one drink and says that that drink would be liked by the children because it is sweet. In his words he says. "Who meethi hain, Bacchon ko meethi cheese pasand hai". He preferred the other drink which according to him tastes strong and that grown up people would prefer the same. And later the stronger one came out be "Thums Up", and one which is sweet, word "Pappi" is written on the bottle with a globe device and the colour that of the "Pepsi". Realising that he had at the initial stage given his preference for "Pepsi" and subsequently finding it to be a drink for kids, the boy felt embarrassed. There are other commercials by the respondents where the lead actor said "Wrong choice baby", and that the "Thums Up" is a right choice, and "Kyo Dil Maange No More" for the appellant’s products.

Here the issue was whether the commercial by depicting that the boy preferred Thums Up as against "Pepsi" because Thums Up is strong drink while "Pepsi" is for children as children like sweet, amounts to disparagement or it is only a healthy competition and puffing the product of the respondents?

Disparagement as per The New International Websters' Comprehensive Dictionary means, to speak of slightingly, undervalue, to bring discredit or dishonor upon, the act of depreciating, derogation, a condition of low estimation or valuation, a reproach, disgrace, an unjust classing or comparison with that which is of less worth, and degradation." The Concise Oxford Dictionary defines disparage as under, to bring dis-credit on, slightingly of and depreciate."

In the electronic media the disparaging message is conveyed to the viewer by repeatedly showing the commercial everyday thereby ensuring that the viewers get clear message as the said commercial leaves an indelible impression in their mind. To decide the question of disparagement we have to keep the following factors in mind namely;
(1) Intent of commercial
(2) Manner of the commercial
(3) Story line of the commercial and the message sought to be conveyed by the commercial.

Out of the above, "manner of the commercial", is very important. If the manner is ridiculing or the condemning product of the competitor then it amounts to disparaging but if the manner is only to show one's product better or best without derogating other's product then that is not actionable. Mere puffing of goods is not actionable. Tradesman can say his goods are best or better. But by comparison the tradesman cannot slander nor defame the goods of the competitor nor can call it bad or inferior. It has been so held in Hindustan Lever v. Colgate Palmolive (I) Ltd., 1998 (1) SCC 720,

Hindustan Lever introduced new toothpaste called New Pepsodent, claiming to be 102% better than the leading toothpaste. Advertisement showed New Pepsodent superior in killing germs than any other toothpaste. Lip movement in the ad indicated Colgate as the other toothpaste referred, although voice muted. Also, same jingle as used in the Colgate ad is played. Court held that direct reference about inferiority need not be shown and such reference amounted to disparagement. Advertisement likely to leave doubt in minds of viewers that Pepsodent was being compared with Colgate. Injunction was granted.

By calling the Cola drink of the appellants "Yeh Bachhon Wali Hai, Bachon Ko Yeh Pasand Aayegi". "Wrong Choice Baby", the respondents depicted the commercial in a derogatory and mocking manner. It can't be called puffing up. Repeatedly telecasting this commercial will leave an impression on the mind of the viewers that product of the appellant i.e. "PEPSI" is simply a sweet thing nor meant for grown up or growing children. If they choose PEPSI, it would be a wrong choice. The message is that kids who want to grow should not drink "Pepsi". They should grow up with "Thums UP". The manner in which this message is conveyed does show disparagement of the appellant's product.

When the reference has been made in generic sense, but it still results in disparagement of the product of another, cause of action lies. In Dabur India Limited v. Emami Limited , It was held that even if there be no direct reference to the product of the Plaintiff and only a reference is made to the entire class of Chayawanprash in its generic sense, even in those circumstances disparagement is possible. There is insinuation against user of chayawanprash during the summer months, in the advertisement in question, for Dabur Chayawanprash is also a Chayawanprash as against which disparagement is made. To the same effect is the judgment of Calcutta High Court in Reckitt & Colman of India Limited v. M.P. Ramachandran and Anr.

When the Defendant is propagating in the advertisement that there should be no consumption of Chayawanprash during the summer months, it is also propagating that the Plaintiff's Chayawanprash should not also be taken during the summer months as it is not good for health and instead Amritprash, which is the Defendant's product, should be taken. Such an advertisement is clearly disparaging to the product of the Plaintiff as there is an element of insinuation present in the said advertisement.

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
The vast majority of the viewer of the commercial advertisement on electronic media are influenced by the visual advertisements as these have a far reaching influence on the psyche of the people, therefore, discrediting the product of a competitor through commercial would amount to disparagement as has been held by the High Courts and the Supreme Court of India as well as the Law laid down by Courts in U.K. & U.S.A.

In the authority of Pepsi Co. Inc. and Anr. v. Hindustan Coca Cola and Ors. , which was decided in 2001, court dealt with the issue whether use of trademark in comparative advertising amounts to trademark infringement or not and decided it in negative as infringement occurs when two essentials are fulfilled that is, if the defendant has used the substantially similar mark and that too for passing off his own goods as that of the plaintiff’s. In comparative advertising one or both may be absent sometimes. As it may be possible that only a reference is made to the mark and not the substantially similar mark is used. And the mark is not used to pass off the goods but to compare both the goods.

Whereas now the position of law in India in respect of disparaging advertisements of rival products is well settled. Although a tradesman is entitled to make an untrue declaration that his goods are the best, better than his competitors, and for that purpose can even compare the advantages of his goods over the goods of the others; he cannot say that his competitors’ goods are bad. Further, such use generally/specifically of a proprietor's product for a comparison with the rival product of another proprietor violates the first proprietor's intellectual property rights. But if a competitor makes the consumer aware of his mistaken impression, the Plaintiff cannot be heard to complain of such action.

Trademark Related Articles
Registration of shape of goods as Design
Trade Secrets & Competition Act: A bird's eye view
Passing off under trademark
Infringement of trademark and what constitutes honest practice in relation to trade and business
Economic Dimensions in Trademark Law
Registration of Unconventional Trademarks
Trade Mark Law in India and Its Violation
Trans border reputation of Trade Marks
Protecting Trade Marks
Use of Trademark In Comparative Advertising
Section 25 of The Trade Marks Act, 1999

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