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Introduction
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repealed now.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, -
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(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
TThums 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.
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The author can be reached at :
priyabansal@legalserviceindia.com
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Use
Of Trademark In Comparative Advertising:
