Mktg - Comparative Advertising

Comparative advertising, as the name suggests, is advertising of a product or service by comparing it with similar products or services (usually the compe-titor’s). One advantage of comparative advertising is that it improves the quality of information available to consumers, thus enabling them to make more informed decisions relating to a choice between competing products/services by demonstrating the merits of comparable products.
However, there is an implicit danger in the practice. Once an entity addresses the merits and inadequacies of competing goods or services, it may be tempted to denigrate them or derive unfair advantages from such inaccurate comparisons. In such a scenario, commercial relationships get exposed to the constant threat of unfair practices.
The Trademark Act, 1999, allows the use of a registered trademark by a person for the purposes of identifying products or services as those of the proprietor, provided the use is:
* In accordance with honest practices followed in industrial or commercial spheres;
* and does not take unfair advantage of or is detrimental to the distinctive character or reputation of the trademark.
Subject to reasonable restrictions imposed under Article 19(2) of the Constitution, an advertisement is considered to be commercial speech guaranteed under Article 19(1) (a) of the Constitution of India.
A case in point is Paras Pharmaceuticals Ltd versus Ranbaxy Laboratories Ltd and Two Others, where the dispute related to the television commercial of Volini pain reliever manufactured by Ranbaxy Laboratories. In the said ad/television commercial, a woman (presumably the mother) was shown flipping out a box of pain relievers that bore uncanny resemblance to the packaging of Moov, marketed by Paras Pharmaceuticals Ltd.
Later in the commercial, another woman was shown coming to the rescue of the first woman (mom) and suggesting another remedy. She offered a pack of Volini gel to her saying, “You need a true pain reliever.” The Gujarat High Court held that the advertisement disparaged Paras Pharmaceuticals Ltd’s product.
Another case in point is Eureka Forbes Ltd versus Pentair Water India Pvt Ltd. It was over an advertisement that claimed “Water contains contaminants that are invisible to the naked eye and to your UV water purifier.” The Court granted an order of injunction that restrained Pentair Water India from broadcasting that advertisement, or circulating or distributing any material defaming or maligning Eureka Forbes’ Aquaguard or UV Purifiers. The Court observed that since Eureka Forbes used UV technology in Aquaguard, the advertisement (though generic) mounted to disparaging the product sold by Eureka Forbes.
Similarly, in the case of Dabur India Ltd versus Emami Ltd, the Delhi High Court ruled that even though there is no direct reference to a Dabur India Ltd product and just a passing reference is made to the entire class of Chyawanprash in a generic sense, disparagement is possible.
The Godrej Sara Lee Ltd versus Reckitt Benckiser Ltd case deals with a similar issue in context to Godrej’s Hit. The product has two versions—one packaged in a red can meant for killing cockroaches, while the other comes in a black can and is meant for killing mosquitoes.
Reckitt Benckiser’s product Mortein, in contrast, is meant for killing both cockroaches and mosquitoes. The company came out with an advertisement claiming that its single version product was good for both types of insects. In other words, there is really no need to use two different products for shooing away mosquitoes and cockroaches. The Delhi High Court ruled in favour of Reckitt Benckiser.
As things stand, the current legislative position on comparative advertising is that a tradesman can declare his product the best in the world, even when the declaration happens to be untrue. In fact, with the objective of declaring his product the most superior in the world, he can compare the merits of his products with others, but therein ends his liberties. The advertiser cannot claim that his competitors’ goods are bad. In effect, self-praise is allowed; slander is not.
In other words, defamation of competitors and their products is not permissible under Indian laws (Reckitt & Colman of India Ltd versus MP Ramachandran and Another). It is also held that direct reference to another product’s inferiority cannot be carried in an advertisement (Hindustan Lever versus Colgate Palmolive).
At the same time, the courts have ruled that if a competitor makes the consumer aware of his mistaken perception about a product, the plaintiff cannot complain against such action. Thus, truth is strong defence against any assault or challenge regardless of whether any damage has been caused as a result of it (Reckitt Benckiser versus Naga Ltd and Others).
In sum, comparative advertising is allowed only if it is done within certain permissible limits, along pre-defined parameters. Advertisers must in that case be cautious and careful before targeting their competitors’ products.
The big drawback with comparative advertising however is that customers have become skeptical about claims made by a company about its competitors because in most cases, they do not present accurate information in such ads, thus making the whole comparative advertising questionable.
Above all, companies that engage in comparative advertising must be careful not to misinform the public about a competitor’s product.