Legality of Comparative Advertisements in India

The average person is estimated to be exposed to about 6000 advertisements a day. A marketing strategy that has captured the attention of the masses is comparative advertisements. Comparative advertisement encompasses all forms of advertisements that involve comparison of two or more products or services.

In an era that constantly demands you to come up with competitive marketing strategies, comparative advertisements make it simpler for customers to identify their needs and buy the product/service that shall fulfill their unique requirements.

Comparative advertisement has not been defined under any statute enacted by the Parliament or any state legislature. Even the Code for Self-Regulation of Advertising Content in India setup by the Advertising Standards Council of India (ASCI) does not include any definition related to comparative advertisements. They may simply be defined as advertisements where the goods or services of a company are compared with the goods or services of another company.

If done within the limits of the law, comparative advertisements can play a major role in significantly boosting consumer awareness, where customers usually compare the price, quality and other merits of different products. It helps customers makes well-informed choices when it comes to buying a product. This method of advertisements can act as an excellent tool in eliminating key market barriers, which may help a newly established company enter a market ruled by prominent brands.

It must be noted that a certain level of disparagement may be hinted in comparative advertisements.

What is Disparagement and Puffing?

Disparagement

As per the 8th Edition of the Black’s Law dictionary, disparagement may be defined as a derogatory comparison of one thing with another; the act or an instance of castigating or detracting from, especially unfairly or untruthfully, or a false or injurious statement that discredits or detracts from the reputation of another’s property, product or business.

Puffing

As per the 8th Edition of the Black’s Law dictionary, puffing may be defined as the expression of an exaggerated opinion - as opposed to a factual misrepresentation - with the intent to sell a good or service. Puffing involves expressing opinions, not asserting something as a fact. Although there is some leeway in puffing goods, a seller may not misrepresent them or say that they have attributes that they do not possess.

Comparative advertisements may be in a direct or indirect form. In the direct form, the advertising company plans to compare its product with that of another company by directly naming such a company. For example, Wendy’s and McDonalds often go at each other with eye-catching advertisements.

In case of an indirect form of advertisement, a company may subtly compare their products with that of its competitors without exclusively naming them. For example, Samsung comparing the wide range of features of Galaxy S-III with those of iPhone 5 without mentioning Apple or showing their logo in their advertisements.

Legality of Comparative Advertisements

Comparative advertisements are not considered illegal in India as long as they are in accordance with certain well-established regulations. In cases where comparative advertisements can be deemed as infringement, laws related to trademarks are referred to.

Section 29 of the Trademarks Act, 1999 covers provisions that may be referred to when a registered trademark is infringed. Section 29(8) states that a registered trademark is infringed by advertising of that trademark if that specific advertisement:

• Takes unfair advantage of and is against the honest practices in industrial or commercial issues.
• Is harmful to its unique character.
• Goes against the reputation of the trademark.

As per this section, it is clear that simply using a registered trademark does not by the very fact result in infringement of the trademark. It shall only be considered infringement if any of the above-mentioned conditions are fulfilled. This basically means that as the usage of a registered trademark is permitted in comparative advertisements, the responsibility of proving any form of infringement lies on the owner of the trademark for the case to be legit under Section 29(8).

Section 30(1) of the Trademarks Act acts as an exception to the provisions of Section 29(8) and states that nothing in Section 29 shall be construed as preventing the usage of a registered trademark by any person for the purposes of identifying goods or services as those of the proprietor, provided the use is in line with the honest practices in industrial or commercial matters and is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trademark.

When in effect, Section 30(1) automatically implies and allows comparative advertising as long as it meets the above-mentioned conditions.

When it comes to comparative advertisements, a certain level of disparagement is quite expected.

• Although it is up to one person to exaggerate the claims related to their goods and indulge in puffery, it is not up to a person to denigrate or disparage the goods of someone else.
• If a person through a comparative advertisement claims their products to be better than their competitors, it automatically implies that the competitor’s products are inferior in comparison.

To this limited extent, puffery does involve showing the competitor’s products in a bad light in comparative advertisements. However, as long as the advertisement is limited to puffing, no claim can be made against the same.

While comparing your goods with that of another is permissible in comparative advertisements, while doing so, you are not allowed to state that others’ products are bad, inferior or undesirable as that would amount to defamation or denigration, which is an actionable offense.

Chapter IV of ASCI’s Code of Self-Regulation of Advertising Content in India must be referred to as well. It states that comparative advertisements including those where a competitor has been named are permissible, if:

• It is clear what aspects of the advertiser’s products are being compared with what aspects of the competitor’s products.
• If the subject of comparison is not chosen in any way as to gain an artificial advantage upon the advertiser or imply that there is a better deal available other than what is actually available.
• The comparisons are accurate, factual and capable of substantiation.
• The customer is not being misled due to the comparison.
• Directly or indirectly, the advertisement does not wrongly denigrate, attack or discredit other products, advertisers or advertisements.

Role of ASCI and Nature of Its Guidelines

• ASCI is a non-government, voluntary self-regulatory organization of the advertising agency.
• ASCI and its Consumer Complaints Council (CCC) deal with complaints received from consumers and industry against fake, illegal and misleading advertisements.
• The ASCI Code has been legally recognized through reference in the Cable Television Network Rules, 1994 (Cable Rules).
• Rule 7(9) of the Cable Rules categorically provides that no advertisement can violate the code for self-regulation in advertising as adopted by ASCI, Mumbai for public exhibition in India.

Conclusion

Although comparisons can be made with competitors to present your product as better than theirs, however, it should in no way be derogatory and defame the other party or their products. Further, it should be in accordance with the various regulations that govern advertisements in India.


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