Introduction
The main objective of a Trademark is to differentiate the goods of one person from that of others in a market. Accordingly, a TM allows a consumer to clearly recognize a particular product/ service & their genesis. Therefore, if an advertiser employs a competitor's TM in order to make a comparison between his own products/ services with that of the competitor's, & thus disparages the competitor's products/ services, that will amount to disparagement & TM violation. An advertiser can engage in subjective puffing & self-aggrandizing about their own products/ services, but they can't disparage a competitor's products/ services or violate their TM.
Fascinatingly, there is no discrete codified legislation to regulate advertisements in India. Instead, there are a few statutory provisions under different Acts. These Acts don't address comparative advertising. Rather, the standards of the Advertising Standards Council of India ("ASCI"), a self-regulatory body, alongside the Trademarks Act, 1999 ("TM Act"), and common law remedies for product disparagement, forms the fundamental framework of comparative advertising.
Convolutions of Law Involved Regarding Trademark Violation & Product Disparagement
An Advertisement means a representation in any manner in association with trade, business, skill or profession for the purpose of advancing the supply of products/ services. Comparative Advertisement is a type of an advertisement that, expressly or impliedly, recognizes a competitor or its products/ services. Advertising is now considered a type of commercial speech, which is protected under Article 19(1)(a) of the Constitution. There is a constitutional right to engage in it (including comparative advertising), subject to the restrictions under Article 19(2).
The TM Act asserts that comparative advertising is allowed but with some restrictions. A registered TM is violated by an individual if he employs another registered TM as his trade name or part of his trade name. However, Section 30(1) carves out an exception for comparative advertising. It is not a TM violation when conducted in conjunction with genuine practices, and isn't damaging to the distinguishing attribute or to the TM reputation. The expression damaging to the distinguishing attribute could be seen as a case where a registered TM is being employed by the competitor with an aim to signify the source of the alleged products being his own.
The CPA, 2019 entails a mechanism for consumers exclusively for remedying their grievances against deluding & disingenuous ads. Consequently, no producer/ competing brand could submit a complaint against comparative advertisers under it. However, this is possible under the self-regulatory governance framework of ASCI. ASCI has prescribed a Code of Advertising Practice ("CAP"). As per the Advertising Code, any advertisement which is found to be in violation with CAP cannot be broadcasted on the cable services. CAP subjects broadcasted to a fairness criteria. It forbids the utilization of certain statements, accounts or graphical display of certain things in the advertisement which have a potential to delude the consumer about the product/service publicized or the publicist or about any other product/ service or publicist. It allows self-aggrandization of a product/ service by the advertiser, so long as it's not fallacious. It allows comparative advertisements, subject to the following criteria:
- The advertisements are unequivocal on what aspects of the advertiser's product/ service are being compared with what aspects of the competitor's product.
- The substance/ content for an advertisement shouldn't be picked in such a manner that it bestows a simulated benefit upon the advertiser or deceptively indicates that the product/ service of the advertiser is better than the competitor. The comparison made must be necessarily true, correct & in a position to be validated.
- The comparison made shouldn't hold any possibility of deluding the consumer regarding the advertiser's or competitor's advertised product/ service.
- The advertisements don't wrongfully disparage, onslaught or disrepute competitor's products/ services, the advertisers or ads either directly or incidentally.
The Consumer Complaints Council of the ASCI, comprised of distinguished industry professionals, adjudicates violations of the CAP on the receipt of a complaint by any member of the public. The decisions of the Council are advisory on its members. However, in practice, due to the influence of ASCI, they are frequently honoured.
The Judicial Discourse on Comparative Advertisements & Its Effect on The Advertisers & The Consumers
Undisputedly, an efficacious advertisement can alter the perception of a person about a specific product/ service. If carried out in an honest & objective manner, one couldn't think of any way better than comparative advertising. Nevertheless, taking into account the relentless competitive market, it understandably becomes essential to overshadow other competitors in order to subsist in the market. Hence, employing competitor's TM is positively sincere & in line with the standard trade practices.
It's not fundamentally about if a consumer has sufficient remedies & protection against enterprises' unfair trade practices ("UTPs"), but it's about if the hawkish enterprises have sufficient law against the UTPs. Comparative advertising might often lead to several kinds of abuses, to name a few, false assertion & representation, product disparagement, etc. & consequently the apt legislation is necessitated to address these misuses in various ways. Mere judicial pronouncements may not suffice.
When it comes to providing damages for TM violation or product disparagement, one of the only prominent remedies available under common law is injunction, for the reason that it abolishesthe degrading advertisements from the market. In Ames Publishing Co. et al. v. Walker-Davis Publication Inc. et al. it was stated that, the grant of an injunction will at the most abolish the abusive advertisement from the market but it certainly wouldn't be capable of reinstating the beneficiary to status quo & can return back their lost repute. Astonishingly, in the context of comparative advertisement, there have been no damages provided, primarily because it is difficult to quantity the damages. Hence, it is necessary to evolve a more effective, novel remedy, such corrective advertising along with monetary compensation.
One of the respites/ forms of compensation that could be provided to the aggrieved competitor is corrective advertising. In the usual sense, corrective advertising denotes to an order of US Federal Trade Commission that an enterprise must cease and desist from its deluding & dishonest advertising for a definite duration, unless the advertiser corrects the deluding impression that its previous fallacious advertisement has created. This is regarded as an award of money precisely computed with the purpose of spending on the advertisement that will correct any misperception engendered by the advertiser's scurrilous advertisement. The advertiser at fault/ respondent is deliberated with the task of disseminating the corrective advertising. Moreover, time isn't a boundary, & corrective advertising can be ordered to correct a century long running deluding advertisement. Corrective advertising restores the loss of goodwill & repute that was encountered by the competitor (plaintiff) on deceptive advertisement by the advertiser (defendant). Furthermore, the Court could also instruct on both the content of the corrective advertisement in a particular language & the specific time period. The statement made in the corrective advertisement must be chosen with an aim to offset the deceptive or untrue message that has been communicated to the consumers.
Additionally, the aggrieved competitor should be provided with the reasonable compensation. The legislation espoused by other States provides for various remedies in the context of product disparagement. By dint of the amended (US) Lanham Act, the aggrieved competitor is sometimes entitled to the proceeds earned by the advertiser, damages suffered by the competitor, costs of the action, & the compensation up to 3 times the actual damage sustained, and attorneys' fees in the discretion of the court. The legislation in the USA constitutes four grounds on which the actual damages are required to be provided, namely, (i) the 'loss of the profit by the petitioner owing to the TM violation & product disparagement; (ii) actual trade loss (other than the already lost proceeds as mentioned in pt. (i) suffered by the petitioner which is caused due to such TM violation & product disparagement; (iii) the assessed value of profits earned by the respondent is equivalent to the profits lost by the petitioner; & (iv) the respondent has availed the profits by taking unfair & unjustifiable advantage.
Conclusion
It's already high time when India should also quaff & acknowledge these distinct legislations & the concerned provisions envisaged therein to legislate its own enactment which would certainly furnish the requirement of damages in the cases related to comparative advertising. Nonetheless, while establishing these provisions, one much be extremely careful about the notion of both over compensation,which would result in increased risk on the part of every competitor in the market which would eventually lead to reduced production resulting in lesser availability of choices to the consumers. One must also avoid under compensation, where the advertiser at fault could readily get away without actually encountering much of difficulty.
Author: Vaidehi Gupta - a Student of Tamil Nadu National Law University (Tiruchirappalli), in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.
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