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Comparative Advertising In Indian Legal Framework

Since independence the Indian businessmen and industries faced limited competition both from within and outside the country but, in 1990's India, in pursuit of globalization, resolved to open up its economy, removing controls and various barriers. after the liberalization. But after the process of liberalization and globalization of the Indian economy, the orb of trade, industry and commerce has been greater than before to an extent that all the geographical barriers to trade have been removed as a result of which various foreign multinational companies are coming to start their business which has given rise to Competition among the various products and services has become vicious and this fanatical competition has caused massive challenges as well as threats to India.

The law relating to comparative advertising in relation to trademarks, in India, is based upon the decision laid down in the case of Irving's Yeast Vite Ltd v FA Horse-nail. Section 29(8) of The Trademarks Act, 1999 enunciates 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 legal scenario concerning comparative advertising has seen a shift from curbing monopolies to the extent of encouragement of competition. The basic legal structure has been laid down by the Monopolies of Restrictive Trade Practices Act, 1984 (M.R.T.P Act) and the Trade Marks Act, 1999 (T.M.A.)

The main reason behind the enactment of the MRTP Act, 1969 was to prevent monopolies and restrictive trade practices in the business. The MRTP Act was amended in 1984 in which a separate chapter was added and also a body was constituted under the name of Director General of Investigation and Registration (DGIR). DGIR has the function of investigating into the complaints made in reference to the restrictive or unfair trade practices.

The procedure followed by DGIR is that it takes the case and presents it before the commission's bench. And the commission on feeling it to be offensive can give the order of ceasing the activity. Section 36 A of MRTP Act listed several actions to be ‗unfair trade practices'Section36 A (1) (X) of MRTP act reads as follows:

"..Unfair trade practice‖ means a trade practice which, for the purpose of promoting the sale, use or supply of any product, adopts any unfair or deceptive practice including in any of the following practices, namely the practice of making any statement, whether orally or in writing or by visible representation, which gives false or misleading facts disparaging the products or trade of another person"

But the biggest drawback of the whole scenario is that since the MRTP act has been repealed in place of it the above mentioned are of law is covered by Consumer Protection Act. Now since only consumer can apply in these forums of justice as a result of repealing the act firms cannot apply for relief under this act. Thus under the existing law, a manufacturer whose goods are disparaged has no locus standi to seek a remedy. Even of a firm succeeded in getting an advertisement stopped through this route, it would not get any compensation for loss of profit.The Commission elaborated the meaning of the provision while deciding the decision of one of the cases. It said that:

In order to bring home a charge under clause (x) of Section 36A (1) it must be established that the disparagement is of the goods, services or trade of another ... the words 'goods of another person' have a definite connotation. It implies disparagement of the product of an identifiable manufacturer. The Commission along with the above mentioned also said that 'a mere claim to superiority in the quality of one's product' is not sufficient enough to sustain the claim under clause (x)

Comparative advertising has emerged as a very big and emerging issue in the area of law and some of the really interesting issues regarding it can be understood through the means of cases decide by MRTPC and Supreme Court.

Some of the leading cases regarding this are like the case of Reckitt & Colman of India Ltd. v Kiwi TTK13 in this case the facts of the case were like both parties were in the business of manufacturing shoe polish. The defendants name of the brand which they were marketing was 'Kiwi' and in an advertisement comparing a bottle of their shoe polish with another bottle, marked as 'Product X' whereby the virtues of the defendant's product were extolled while disparaging the other unnamed product; the plaintiff claimed that 'Product X' bore a striking resemblance in design to their own product namely, 'Cherry Blossom' and that the advertisement disparaged its product.

The Delhi High Court held that statements made by manufacturers claiming their product to be the best or puffing up their goods will not give a cause of action for disparagement but however, any statements that portrays competitors' similar goods in bad light while simultaneously promoting the manufacturers own goods is not permitted and will be tantamount to disparagement. In this particular case Delhi high court granted an injunction against defendants.

In Dabur India Ltd. v. Wipro Limited, Bangalore the judiciary finally said and added a new perspective to the existing area of law and said that for determining disparagement the degree is to be looked into. The court stated that in comparative advertising, the degree of disparagement should be such that it would be tantamount to, or almost tantamount to defamation.

Written By: Dr Farrukh Khan, Advocate
Dr Farrukh Khan is a New Delhi based Lawyer and Managing Partner of full service Law Firm, Diwan Advocates

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