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Statutory Framework in India Chapter 3

3.1

3.1 POSITION IN INDIA

In this chapter we shall deal with the law on Comparative

Advertising and product disparagement, in relation to trademark law in

India. Prior to 1990s, in India the economy was a state controlled one. To

enter into the market one required to have a good understanding with the

bureaucratic-political alignment of the state to acquire the permits and

licenses. So the statutory frameworks regarding business were all formed as to

assure such arrangement and even the enforcements from the courts were to

favour the presence of state in economy.

But post 1990 as Indian economy stepped towards globalization and

liberalization, a tremendous change has been observed regarding business

practices. The state has dismantled the “license-permit” system in most of the

sectors making entry into manufacturing and services easier. The country

started moving towards free market economy so as to create competition and

produce consumer welfare. But a set of stringent and lucid legislations was

also needed to sustain such market behavior, as emphasized by the then

finance Minister and the architect of liberalization in our country in his

statements1 :

“A world class legal system is absolutely essential to support an

economy that aims to be world class. India needs to take a hard look at its

commercial laws and the system of dispensing justice in commercial matters.”

Liberalization and globalization adopted in the 1990s brought certain

substantive changes in the structure of market and lot of reforms and changes

in diverse fields were undertaken. The advent of a wider range of products

and services led to increased competition, with advertising acquired a vital

________________________________________________________________ 1. “ A View from the Outside” By P. Chidambaram Oct 26, 2003 Pg. 168


3.2

role in the determination of consumer demand and influenced the dynamics of

the market as a whole. All modes of public media, (print, radio, television or

the internet even sports, movies or cultural and political events) became

increasingly dependent on advertising revenues. These changes have been

discernible in these years and we need to comprehend the law related to

comparative representations of products and services. This has become

essential because the thrust of competition in this era of free market economy

has shifted to aggressive and vigorous promotion of products and services. In

a cut throat environment, the product or service is represented to depict what

„others are not‟ and how „it is better than the other‟. These practices raise

questions about truthfulness and fairness of representation of products and

services.

Thus it makes a sense to study the evolution of law on comparative

representation and analyses of it would definitely provide an insight to the

question that does the existing law on comparative advertising provides the

consumers adequate remedies and protection against misleading and deceptive

trade practices adopted by the business firms and that do the these firms also

have adequate defense from law against unfair trade practices, and a justice

delivery system to set the „rules of the game‟ for competing among

themselves.

Through the course of this chapter we have therefore tried to examine

the types of mechanisms both voluntary and statutorily enforceable in nature

to regulate comparative advertising in India. In evaluating the competing

interests of different stakeholders, the evolution of the law with regard to

rights of the competitor and consumer has been observed. An analysis has also

been made of certain recent judicial pronouncements on the issue, which may

help in determining the standard of tolerance in comparative advertising.


3.3

3.2 EXISTING STATUTORY PROVISIONS TO REGULATE

COMPARATIVE ADVERTISING

The study in this direction reveals that no statutory mechanism is

consecrated completely to regulate the dissemination of misleading or

disparaging information or material through comparative advertising in India

and the onus of regulating such advertising is taken up by a wide array of

governmental authorities and tribunals. Primarily, matters related to deceptive

and misleading trade practices including advertising were adjudicated upon by

the Monopolies and Restrictive Trade Practices Act, 1969 („MRTP Act‟).

Subsequently, this Act got repealed, yet another statute §66 of the Competition

Act, 1986 provides the power to enquire into complaints of unfair trade

practices. In context of „comparative advertising‟ the parties are firms (whose

products are endorsed by the advertisements), and they do not come in the

ambit of „consumers‟ to approach the consumer forum.

Section 29(8) of Trademark Act 1999 enunciates situations, where use of

another‟s mark in advertising can amount to infringement, if such use does not

comply with the conditions laid down under the section. At the same time,

Section 30(1) makes such use, an exception, if it is in accordance with the

conditions provided under this section. Nevertheless, the judicial

pronouncements are playing an important role to determine the extent of

disparagement and infringement of trademarks in comparative advertising.

In this chapter we shall try to understand the current situation and

determine the extent of the judicial approaches towards dealing with unfair use

of comparative advertising. Initially we shall review the existing statutory

framework and thereafter look towards the important judicial pronouncements

that lay the foundation of legal mechanism in this country.


3.4

3.2.1 The Indian Constitution

In the context of comparative advertising and its fair use, the study of

the Article 19 (1) (a) and its interpretation given by the Supreme Court is

important and rather very fascinating to comprehend the legal provisions laid

down in our country.

Article 19 (1) (a) of the Constitution of India renders all its citizens the

right to freedom of speech and expression for public speaking, radio,

television and press. “Advertisement” is a form of commercial speech.

We need to analyze that can it be thus protected under Article 19(1) (a)

of the Indian Constitution i.e. can an advertiser seek any defense under it

regarding his comparative representation. A meticulous study suggests that the

freedom of speech and expression granted by Article 19 (1) (a)2 has certain

limitations imposed reasonably by the state under article 19 (2) of the

Constitution.

Article 19 (2) states clearly, that the freedom of speech and expression

of a citizen granted by Article 19 (1) (a) is unchallengeable by any other law,

but permits the state to limit this freedom in those cases when it injures the

sovereignty and integrity of the country, or the security of the State or friendly

relations with foreign States or public order, decency or morality, or in relation

to contempt of court, defamation or incitement to an offence.

Can an advertisement being a “commercial speech” seek protection of

fundamental right under Article 19 (1) (a). In this light, we see the changes

that occurred with regards to interpretation by the Supreme Court of the

_______________________________________________________________ 2. The Constitution of India, 1950, Art.19(1) (a), “Protection of certain rights regarding

freedom of speech etc. “All citizens shall have the right (a) to freedom of speech and

expression”.


3.5

provision given by the Article. Initially, advertising was excluded from the

ambit of the provision, as can be understood from the Supreme Court ruling in

the case Hamdard Dawakhana v. Union of India3 in which it stated that

although advertisements constituted a form of speech, but they were not

constitutive of the concept of „free speech‟ as they were guided by the object

of commercial gain in order to promote trade and commerce.

However, the subsequent process of economic liberalization brought

substantive shift in the constitutional position. This is evidenced in the answer

of Supreme Court to the question raised to it in case of Tata Press Ltd. vs.

Mahanagar Telephone Nigam Ltd.,4 In this light, the Supreme Court held that

"commercial speech cannot be denied the protection of Article 19(1) (a) of the

Constitution merely because the same are issued by businessmen”, while

answering the question that can an advertisement being a “commercial

speech” seek protection of fundamental right under Article 19 (1) (a). It

further observed that advertisements were beneficial to consumers as it

facilitated the free dissemination of information, resulting in greater public

awareness in a free market economy. The Court referred it to be the „life

blood‟ of the free media as it contributes substantially to print and electronic

media organizations.

Supreme Court reversed the position as adopted in Hamdard

Dawakhana Case, and maintained that the public at large has a right to receive

the „commercial speech.‟ It interpreted the Article 19(1) (a) as the fundamental

right which not only guarantees freedom of speech and expression; but also

protects the rights of an individual to listen, read, and receive the said speech.

3 Hamdard Dawakhana v. Union of India, AIR 1960 SC 554.

4Tata Press ltd. v. Mahanagar Telephone Nigam Ltd., AIR(1995) 5 SCC 139.


3.6

From the interpretation of Article 19 (1) (a) provided by the Supreme

Court in this case, we can infer that advertising as a „commercial speech‟ is

not merely a commercial transaction as it appears from commercial viewpoint,

but it also serves as a means of dissemination of information regarding the

available product or service. In a country like ours, free circulation of

commercial information is crucial and the masses at large can get educated by

the information made available through the advertisement. The economic

system in a democracy would be handicapped without there being freedom of

„commercial speech.‟

Thus the Supreme Court verdict that a party has a right to advertise its

product making commendation about its quality is significant. We can infer

from this that advertisement being a commercial speech forms a part of the

freedom of speech guaranteed under article 19(1) (a) of the Constitution

restricted under Article 19 (2) if it does not fulfills its elements. Further as

stated by D.P. Mittal,5 any commercial speech which is deceptive, unfair,

misleading and untruthful is hit by Article 19(2) and so can be regulated /

prohibited by the state

Thus at present constitutionally, advertising is considered as a form of

„commercial speech‟, and therefore lies within the ambit of constitutional

protection conferred by Art. 19(1)(a).

3.2.2 MRTP Act:

To combat monopolies and restrictive trade practices in the market,

first, the Monopolies and Restrictive Trade Practices Act, (MRTP) was

enacted in 1969. In order to prevent unfair trade practices and regulate

comparative representation of products and services in 1984, just a few years

_______________________________________________________________

5 Mittal, D.P. (2002). Taxmann's Trademark, Passing off & Geographical indications of

goods. 1.139-1.140.


3.7

before initiation of liberalization and globalization, the Act was amended by

introducing a chapter on „Unfair Trade Practices‟. A body called the Director

General of Investigation and Registration (DGIR) was created under this. The

powers provided to DGIR were that it shall on a complaint or on its own

investigate matters related to a restrictive or unfair trade practices in India.

After investigations the DGIR next step was to file the cases before any of the

four benches of Monopolies and Restrictive Trade Practices Commission

(MRTPC), a judicial body created for the purpose. The Commission, on

ascertaining a trade practice to be unfair, had the right to order the offending

party to cease and desist the practice.

Section 36A of the erstwhile Monopolies and Restrictive Trade

Practices Act, 1969 (MRTP Act), defines6 'unfair trade practice' as a trade

practice, which, for the purpose of promoting the sale, use or supply of any

goods or for the provision of any services adopts any unfair method or unfair

or deceptive practice including oral, written or visible misrepresentations

regarding standard, quality, status, condition usefulness and price of goods or

services; false warranty, guarantee or promise regarding goods or services;

disparaging of goods and services of another person; and false advertising

and misrepresenting with regard to the gifts, prizes and offers in sale etc.

Thus it can be seen that §36 A(1)(x) of the MRTP Act contains the

provisions pertaining to comparative representation. According to this

comparative advertising would come under the ambit of this section if any of

the following practices is adopted, namely:-

Make a oral, written or a visible representation which gives false or

misleading facts.

To advertise a false or deceptive statement disparaging the goods,

services or trade of another person.

_______________________________________________________________ 6 Section 36A (vii) Monopoly Restrictive Trade Practice (MRTP) Act, 1969.


3.8

Make false representation of goods with regard to their quality,

quantity or utility.

This Act was amended several times but was subsequently repealed in

2009 by Ministry of Corporate Affairs; Government of India as need of

stronger pro-competitive laws was felt. All the cases related solely to unfair

trade practices were transferred to the National commission as constituted

under the Consumer Protection Act, 1986 to be dealt with by them in

accordance with the provisions laid down in Consumer Protection Act. Cases

related to giving false or misleading information, disparaging the products and

services of another trader were transferred to the Competition Appellate

Tribunal. The Monopolies and Restrictive Trade Practices Act (MRTP Act-

1969) has metamorphosed into the new law, Competition Act, 2002. Until it

was repealed by the new Act of 2002, Section 36A(x) of the MRTP Act 1984

provided a basis upon which a claim could be made against disparagement of

goods. Section 36A(x) limited comparative advertising by recognizing that the

publishing of any misleading or disparaging facts about a competitor‟s goods

or services amounted to „unfair trade practice‟. The Unfair Trade Practice

cases pending with the MRTP Commission were transferred to the concerned

consumer Courts under the Consumer Protection Act, 1986 and the MTP and

RTP cases pending with the MRTP Commission were taken up for

adjudication by the CCI from the stages they were in.

3.2.3 The Competition Act, 2002.

Articles 38 and 39 of the Constitution of India trigger competition Law

for India. These Articles are a part of the Directive Principles of State Policy.

They mandate, inter alia, that the State shall strive to promote the welfare of

the people by securing and protecting as effectively, as it may, a social order

in which justice social, economic and political shall inform all the institutions


3.9

of the national life, and the State shall, in particular, direct its policy towards

securing it.

The Competition Act, 2002 seeks, inter alia:

to promote and sustain competition in markets,

protect the interest of consumers

ensures freedom of trade carried on by other participants in market.

The provisions laid down in this Act are :-

That the ownership and control of material resources of the community

are so distributed as best to sub serve the common good; and

That the operation of the economic system should not result in the

concentration of wealth and means of production to the common

detriment.

The philosophy of the Competition Act is reflected in provisions laid down in

Section 4 of this Act wherein it is enjoined that no enterprise shall abuse its

dominant position. Here, it has been made clear that a situation of monopoly

per se is not against public policy but, rather, the use of the monopoly status

such that it operates to the detriment of potential and actual competitors.

The Act therefore targets the abuse of dominance and not dominance per se

and steps towards a truly global and liberal economy.

3.2.4 Consumer Protection Act 1986

The Consumer Protection Act is designed so as to curtail all such

trades that engage in unfair trade practices and to provide protection for the

consumers who are subject to this trade.

_______________________________________________________________

7 The Consumer Protection Act, 1986, §9.


3.10

When the MRTP Act was repealed, by virtue of §66 of the

Competition Act, 2002, the power to enquire into complaints of unfair trade

practices was vested with the consumer grievance forums established under

the Consumer Protection Act, 1986. For such purpose, the definition of „unfair

trade practice‟ as under §36A was incorporated parimateria in §2(1)(r) of the

Consumer Protection Act. Although this provision is effective enough to

address the grievances of the consumer, it fails to provide relief to a competing

seller as the Consumer Protection Act excludes manufacturers, sellers and

service providers from its ambit.7 Such parties are often compelled to take

recourse to common law remedies and can just seek for an injunction or

monetary compensation against damages. Nonetheless, the competing

manufacturers and sellers cannot get relief in complaints involving alleged

violations of their intellectual property rights through the said advertisements8

3.2.5 Legal Interface between Comparative Advertising and Product

disparagement

The entire concept of „disparagement of goods of another

person‟ flows from the MRTP Act which leads to unfair trade practice. It is

condemned even in the section 29(8)(a) of Trademark Act also which we

shall discuss in subsequent subarticle 3.2.5. 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. The law on

„Comparative advertising and product disparagement‟ at present are as laid

down in the different judicial pronouncements referred to in the

subsequent article 3.3. The following elements are required to be established

to succeed in an action of product disparagement:

_______________________________________________________________ 8 As observed in Colgate Palmolive (India) Ltd. v. Anchor Health and Beauty Care Private

Ltd., 2009 (40) PTC 653.


3.11

i. A false or misleading statement of fact has been made about his

product;

ii. That the statement either deceived, or has the capacity to deceive

a substantial segment of potential consumer, and

iii. The deception is material, in that it is likely to influence

consumers' purchasing decisions.

In an attempt to decide whether the impugned advertisement

disparages the plaintiff‟s product or not, the Courts have pondered on certain

other aspects of the advertisement like its intent; its mannerism of portrayal;

and its theme. If the mannerism of representation such as to ridicules or

condemns the competitor‟s products, then it would amount to disparagement.

But, if the manner is only to show one's product better or best without

derogating other's product then that is not actionable.

3.2.6 Trade Marks Act, 1999

When India became a party to the TRIPs Agreement, it had to ensure

adequate protection to trademarks of domestic and international proprietors.

So new laws known as the Trademarks Act 1999 (the TM Act) and the

Trademarks Rules 2002 were brought into force from 15th September 2003.

This Act was a measure to ensure protection to marks of any goods or services

that are renowned to a substantial segment of the public using or receiving

such products or services.

According to this TM Act, the term the grounds on which trademark

infringement can be claimed are:-

likelihood of confusion,

likelihood of dilution

Disparagement of a registered trademark in comparative

advertising or spoken use.


3.12

The term use has been expanded for the purpose of ascertaining infringement.

Prior to this Act for a case of infringement of the trademark which was

unregistered in India, then the owner had to initiate the common law action of

passing off against the infringer. By the TM Act 1999 protection is granted not

only for the registered trademark but also provided to well known unregistered

marks also. This provides a statutory alternative to the passing off action

which often arises in comparative advertising disputes. The key essence of a

passing-off action is confusion.

The law on comparative advertising and product disparagement,

in relation to trademarks, in India, is based upon the law as laid down in

Irving's Yeast Vite Ltd v FA Horse-nail.9

Trademarks Act, 1999 has

incorporated the provisions related to comparative advertising and

trademark infringement in Section 29(8) and 30(1). According to the statute,

comparative advertising is permissible, with certain limitations as to unfair

trade practices imposed by section 29(8). Section 30(1) strengthens its

position.

As mentioned above, the limitations to use of trademarks in

comparative advertising are enunciated in Section 29 (8) of the TM Act, 1999

according to which the advertising infringes on a trade mark when it10

:

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 30(1) of the Trademark Act, 1999 permits comparative advertising

with situations that can act as exception to constitute infringement under

Section 29; according to it11

:

______________________________________________________________

9 (1934) 51 RPC 110 wherein it was held that use of another‟s trademark in

comparative advertising does amount to infringement, Cf Pepsi Co Inc and

Anr v Hindustan Coca Cola and Ors 2003 (27) PTC 305.

10

Section 29 (8) of Trademark Act 1999. 24

11Section 30 (1) of Trademark Act 1999.


3.13

“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.

The phrase „detrimental to its distinctive character‟ as given under the

aforementioned sections, can be perceived as a situation where a firm uses

the registered trademark of another competing firm to create confusion in

minds of consumer regarding the origin of the products as being his. In

this case although product disparagement is not involved but may give rise

to issues related to comparative advertising.12

It is deemed that any

advertiser in the course of using competitor‟s trademark would not

associate himself with such products which he ought to denigrate or

disparage. Thus under this phrase the issue of product disparagement

cannot be addressed.

Yet, the other phrases under the aforementioned sections “in

accordance with honest practices” and „is not such as to detrimental to

repute of the trademark‟ ought to address the issues from the viewpoint of

product disparagement in relation to trademark infringement. It suggest that

the application of trademarks in comparative advertising must be ‘in

Accordance with Honest Practices’ and ought not to be

‘Detrimental to the Repute of the Trademark’.

12 In general, the law on this aspect of comparative advertising is that it is neither

trademark infringement nor unfair competition to truthfully compare competing

products in advertising, and in doing so, to identify by trademark, the competitor's

goods. However, such comparative advertising will not be permitted if it is likely to

confuse buyers as to exactly what they are getting i.e. „detrimental to its

distinctive character.‟ However, several cases have found that a disclaimer of

association coupled with the comparative trademark use can prevent customer confusion.


3.14

In an attempt to construe the interpretation of the phrase „in

accordance with honest practices‟ as mentioned under Section 29 (8) and

Section 30 (1) of The Trademarks Act, 1999, it is suggested to be inferred as

prescribed in specific practices or codes of conduct developed in different

trades. However, such propositions were rejected by the courts as they

considered it would lead to disparity in standards, as infringement would be

harder to avoid in highly regulated trades than in others. The courts, while

admitting that the first part of the section was to give legal sanctity to

Comparative advertising, the proviso was referred to as „mess‟.13

The construal of the both the expressions are apparently intertwined: A

comparison that brings about detriment to the reputation of a trademark owner

ought to be dishonest. Similarly, stating the competitor‟s products in poor

remarks and slandering or defaming his trademarks would not be in

accordance with honest and fair trade practices14

. Yet auxiliary aspect

pertaining to the honesty of a specific advertisement can be left on the

subjective perspective of the consumers. It is quite probable that any

reasonable consumer who would ignore exaggerated and hyperbole claims

would say that the advertisement is honest.15

______________________________________________________________ 13Laddie J in Barclays Bank Plc v RBS Advanta [1996] RPC 307, while commenting on

the proviso to Section 10(6) f Trademarks Act, 1994 of UK referred to it as „mess‟. 14

David Kitchen, Kerly‟s Law on Trademarks and Trade Names 13th edn (Oxford,

London) p 366, 13-72. Here the term „honest practices‟ (as used under Section

10(6)) is a hybrid derived originally from the Paris Convention (Article 10 bis(2)),

“honest practices in industrial and commercial matters” (and now in Article 6 of the

Trademarks Directive of European Union) and words found in Articles 4 and 5 of

the Directive: “where use of sign without due cause takes advantage of, or is

detrimental to, the distinctive character or repute of the trademark.” 15

In Pepsi Co Inc and Ors v Hindustan Coca Cola Ltd and Anr 2003 (27) PTC 305,

the court observed, “It is well known law that merely puffing is not dishonest and

mere poking fun at a competitor is a normal practice of comparative

advertising and is acceptable in the market.”; J McCarthy, Trademarks and Unfair

Competition 4th edn (Thomson/West,) 2005, p. 27-66, § 25:52 states „Puffing‟ is

exaggerated advertising, blustering, and boasting upon which no reasonable buyer

would rely upon and is not actionable under § 43 (a) [of Lanham Act]. Puffing may

also consist of a general claim of superiority over a comparative product that is

supposed to be vague, it will be understood as a mere expression of opinion.”


3.15

Further to determine disparagement it is also required to assess how

many consumers react to not purchasing a product due to the influence of the

comparative. Another significant point to be pondered at is that when an

advertiser seeks to take unfair advantage of the reputation or of the distinctive

character of the mark would it be perceived as an honest practice by the

consumers?

No action lies against the advertiser in instances where derogatory

reference has not been made.16

To declare an Advertisement as dishonest it is

necessary to prove that it significantly misleads the consumers, even when the

comparison is among alike products or is untrue.17

Further if the comparison

is substantially true, the fact that representation is „literally false‟ shall not

render the advertisement dishonest,18

however, if comparison is „materially

false‟, it would be dishonest.19

Importantly, it is the burden of the trademark

proprietor to prove that the unauthorized use of his mark is not honest20

and

that which out of the several meanings the advertisement bears is dishonest.21

Careful analyses of both the sections suggest that the statue is framed

such as to promote comparative advertising as long as it is used in fair manner

and the intent of the legislature in enacting the aforementioned

provisions is to impose the leniencies of permitted comparative

advertising over the stringencies of trademark protection.

_____________________________________________________________ 16 Dabur India Ltd v Wipro Limited CS (OS) No 18 of 2006, decided on 27th

March, 2006 (Delhi High Court). 17 Laddie J in Barclays Bank Plc v RBS Advanta [1996] RPC 307, while 18 commenting on the proviso to Section 10(6) f Trademarks Act, 1994 of UK

(which is a counterpart to Section 29 (8) and Section 30 (1) of The Trademarks Act,

1999, and also uses the same phraseology) referred to it as „mess‟. 19 British Airways Plc v Ryan Air Ltd [2001] ETMR 235. 20 DSG Retail Ltd (t/a Currys) v Comet Group plc [2002] FSR 899 wherein

sums involved were relatively small yet price comparison was termed dishonest,

as it was observed to be materially false. 21 Vodafone Group v Orange Personal Communication Services [1997]

EMLR 84.


3.16

3.2.7 Advertising Standard Council of India: Self Regulatory Body

In our study so far we have noticed that in our country there is no

statutory mechanism dedicated to regulate fair use of comparative advertising.

In absentia of such mechanism in 1985 a self regulation model called the

Advertising Standards Council of India („ASCI‟) had been established to

regulate fair advertising in India. Basically it is a non-statutory tribunal

comprising of an association of advertisers. Chapter IV of the body‟s Code for

Self Regulation in Advertising22

clearly reflects the ASCI stance on the style

and manner of comparative advertising.

With respect to comparative advertising, the code laid down by

Advertising Standards Council of India are as follows:

“It is stated herein that advertisements containing comparisons with

competing manufacturers and sellers are permissible in the interests of

vigorous competition and free dissemination of information, subject to the

following requirements being satisfied:

(a) It is clear what aspects of the advertiser‟s product are being

compared with what aspects of the competitor‟s product.

(b) The subject matter of comparison is not chosen in such a way as to

confer an artificial advantage upon the advertiser or so as to suggest

that a better bargain is offered than is truly the case.

(c) The comparisons are factual, accurate and capable of

substantiation.

(d) There is no likelihood of the consumer being misled as a result of

the comparison, whether about the product advertised or that with

which it is compared.

______________________________________________________________ 22

ASCI Code for Self Regulation in Advertising (2007). Id., Chapter IV (1).


3.17

(e) The advertisement does not unfairly denigrate, attack or discredit

other products, advertisers or advertisements, directly or by

implication.

Advertisements shall not make unjustifiable use of the name or initials

of any other firm, company or institution, nor take unfair advantage of

the goodwill attached to the trade mark or symbol of another firm or its

product or the goodwill acquired by its advertising campaign.

Advertisements shall not be similar to any other advertiser‟s earlier run

advertisements in general layout, copy, slogans, visual presentations,

music or sound effects, so as to suggest plagiarism.

The above mentioned code of advertising laid by ASCI is to assure that

the activities related to advertising are done such to secure and protect the

interest of all associated with it and unfair methods are curbed. ASCI keep a

check on its members for adherence to the prescribed norms. Situation

becomes intricate only when grievances are sought for against the unfair

practices of non-members. Also due to absence of any effective enforcement

mechanism to implement the above mentioned principles ASCI„s role has

reduce to be just a recommendatory body.23

3.3 JUDICIAL PRONOUNCEMENTS’ ON VARIOUS FACETS OF

COMPARATIVE ADVERTISING

The authors have examined the significant case laws on the subject to

comprehend a more comprehensive scheme of regulation of comparative

advertising keeping in mind the diverse interests of the various stakeholders.

The findings of the study are: it is seen that the courts have prohibited

_______________________________________________________________

23 Supra Note 5


3.18

both active and implied denigration; and there is an increase of consumer

protection jurisprudence in recent years.

The judicial pronouncements in our country regarding comparative

advertising, product disparagement and trademark infringement have

undergone a paradigm shift; initially it had an indifference regarding the rights

of the consumer, which being replaced by an attitude that seeks to develop a

more inclusive position on the subject. Initially the judicial declarations

limited the scope of Comparative Advertising. As liberalization of economy

was adopted, the courts started witnessing an overflow of cases regarding the

claims of disparagement or false claims by the competitors. With little judicial

precedents available in this arena, at that time the courts were mostly giving

the judgments in favor of the competitors and asked the sponsor brands to

withdraw or modify the advertisement. However, looking at the benefits

reaped by other countries like USA by promoting Comparative Advertising it

was realized that Indian Courts needed to have a more accepting approach and

an attempt was made to form provisions and guidelines to distinguish the false

advertising from a genuine one. Thus a number of cases have laid the

framework to decide the permissible extent of comparative advertising

maintaining a balance between the interests of the competitor and the

consumer.

The two fundamental facets of comparative advertising are puffery and

denigration, with there being a need to comprehensively differentiate the

nature of the two in order to develop any broad mechanism of regulation. An

attempt may be made towards the same by way of an analysis of certain recent

case law on the subject. An understanding of the judicial opinion herein might

help in determining a uniform standard of tolerance to differentiate cases of

simple puffery from those of actionable denigration.


3.19

Puffery vs Product Disparagement

This facet of comparative advertising was substantively dealt with by

an Indian court for the first time in Reckitt & Colman of India Ltd. v. M.P.

Ramchandran & Anr.24

In this case the plaintiff Reckitt & Colman of India

Ltd. manufacturers of clothing whitener “Robin Blue” contended that the

defendant M.P. Ramchandran & Anr. Manufacturer of clothing whitener

“Ujala” had intentionally in his advertisement displayed that a bottle identical

to his product‟s registered design depicting the same price tag as of its own

product “Robin Blue” was an uneconomical, ineffective and obsolete one as it

fails to dissolve completely in water leaving blue patches on the clothes. The

plaintiff alleged it to be a case of product disparagement and infringement of

his registered design of the bottle in the comparative ad. The defendant denied

the resemblance of the bottles and its intentions of disparagement of

competitor‟s product and stated that the comparison shown was to assert the

technological superiority of „Ujala‟ over other competing products.

The Court while delivering its verdict in this case enunciated the

following principles to state the law on the product disparagment25

:

1) A tradesman is entitled to declare his goods to be best in the world,

even though the declaration is untrue.

2) He can also say that his goods are better than his competitors‟ are, even

though such statement is untrue.

_______________________________________________________________

24,25Reckitt & Colman of India Ltd v M P Ramchandran and Anr 1999 PTC (19) 741;

followed in Rickett & Coloman of India Ltd v Kiwi TTK Ltd 63 (1996) DLT 29; Pepsi Co

Inc and Ors v Hindustan Coca Cola Ltd and Anr 2003 (27) PTC 305; Dabur India Ltd v

Emami Ltd 2004 (29) PTC 1; Dabur India Ltd v Wipro Limited CS (OS) No 18 of

2006, decided on 27th March, 2006 (Delhi High Court)


3.20

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 advan-

tages 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 the

repetition of such defamation.

Here the court has clearly established the borderline when an

advertisement merely puffs the advertiser‟s product and when it slips to

denigrate the product of its competitor. A significant aspect of this case is the

liberal interpretation of puffery, which allows the advertiser to boost the

perceived utility of his product, even by using untrue and imprecise

statements. This liberal attitude for puffery at the expense of factual accuracy

was just to secure the interests of the competing manufacturer or seller from

disparagement and did not address the concerns of the consumers.

This position on puffery was reconsidered to a limited extent in the

case of Glaxo Smith Kline Consumer Health Care Limited v. Heinz India

Private Limited and Ors.26

In this case Heinz compared its nutritional product

“Complan” with “Horlicks” of Glaxo in an advertisement through which it

_______________________________________________________________ 26

Glaxo Smith Kline Consumer Health Care Limited v. Heinz India Private Limited and

Ors.(2007)( 2CHN 44)


3.21

claimed that by drinking Complan the teenagers could gain in height declaring

its product had “extra growing power”.

Horlicks charged Complan with allegations of implied disparagement

for showing his product in an imprecise and untruthful manner as there being

no substantive basis to prove that use of Complan ensures an increase in

height. As there are several other factors like amount of physical activities,

environmental conditions, hereditary factors etc which contributed to growth

in height of children apart from nutritional food, it was contended that such

portrayal is an attempt to misguide consumers regarding the product‟s reality

and could make the plaintiff suffer loss due to it. In favour of its advertisement

Complan argued that the consumers shall take such claims as attempt at

puffery and thus do not require accountability in this regard. Adhering to the

principles laid down in the case of Ramchandran, the Court held that an

advertiser was at liberty to engage in puffery so long as the product of a

competitor was not slandered in any manner. Nonetheless, it laid emphasis

that there was a urgent requirement of regulation of such representations to

substantiate their tenability.

From Competitor’s Interest to Consumer’s Benefits

Yet another significant evolution of the law on false and imprecise

puffery was seen in the case of Colgate Palmolive (India) Limited v. Anchor

Health and Beauty Care Private Ltd.27

In this case it was contended that in the

contentious advertisement the defendant had stated that its product „Anchor‟

as the „only‟ one that contained three ingredients, namely calcium, fluoride

and triclosan and that it was the „first‟ toothpaste that could provide „all round

protection‟. The plaintiff objected to these assertions as false and disparaging,

_______________________________________________________________ 27

Colgate Palmolive (India) Limited v. Anchor Health and Beauty Care Private Ltd. 2009

(40) PTC 653 (Mad.)


3.22

with the same exceeding the tolerable limits of puffery, as its products also

contained all of the three named ingredients and as it had established itself as a

pioneer in this field, the act of Anchor claiming itself to be first product to

provide all round protection was to denigrate its product in an implied manner.

Anchor replied that the word „only‟ in its advertisement was intended to mean

that its product was the only one containing the three ingredients within the

specific range of white toothpastes and that the usage of the word „first‟ was

related to the adoption of the slogan „all round protection‟, and not the utility

of the brand. The Court felt that by this advertisement a sensible consumer

shall understand that „Anchor‟ was the „only‟ product containing the said

ingredients, and that it was the „first‟ to provide optimal protection. The Court

accepted that there had been no active disparagement of the plaintiff‟s product

but held that the use of the terms „only‟ and „first‟ in an deceptive manner in

the advertisement could mislead the consumer and considered this to be

constitutive of an unfair trade practice.

This is important shift in the interpretation of law regulating puffery as

the courts not only considered the protection of competitors‟ interest but also

considered protection of consumer‟s interest. By this judgment the Court

considered the Consumer also as an significant stakeholder in the market and

helped providing protection to the consumers from being gullible targets of

advertising campaigns.

Here we find that the statutory framework in India initially failed to

provide consumer justice despite having statues like Consumer protection Act

1986. The position in the Ramchandran case was less attentive to consumer as

the law had been based on the decision of English Courts in De Beers case.

Subsequently, the Courts noticed that the English law on this matter had itself

undergone a significant change and hence the continued validation of the De

Beers opinion by Indian courts was now contrary to the stated objectives of

legislations such as the Consumer Protection Act, 1986. So they sought for


3.23

changes in the existing regulations such that it may not be possible for

manufacturers to make „false, misleading and harmful‟ claims in their

advertisements. The Court herein referred to the concept of „unfair trade prac-

tice‟ as has been defined under §2(i)(r) of the Consumer Protection Act, 1986.

Clause (x) of the same brought any statement giving false or misleading facts,

or disparaging the goods of the competitor, within the ambit of the provision.28

Hence, the advertisers privilege to make false statements regarding the utility

of the product so as to puff it was terminated.

Permissible Commendations vs. Implied Disparagement

The case of Dabur India Ltd. v. M/S Colortek Meghalaya Pvt. Ltd.29

laid down certain principles to help ascertain the importance of implied dis-

paragement in comparative advertising. Herein, the manufacturer of mosquito

repellent creams, namely „Odomos‟ and „Odomos Naturals‟ contended that his

competitor brand „Good Knight Naturals‟ had disparaged its product in an

implied manner in an advertisement. The Court concurred that there was

always a scope for the seller to portray his product for attaining maximum

purchases but it held that this implies only for permissible description and not

for misrepresentation. The Court substantiated its argument by stating the

principle of civil law, “simplex commendation on obligate”, which indicates

that simple commendatory expressions can only be regarded as a mere

invitation to a customer, without any obligation as regards the quality of

goods. Thus, the Court purported that each seller has the right to state that his

products are of superlative quality and better enough to be bought.

The Court thus laid down the guiding principle to differentiate puffery

from denigration. Any representation may contain commendatory statements

_______________________________________________________________28

DeBeers Abrasive v/s. International General Electric Co. 1975 (2) All. ER 599 29

Dabur India Ltd Vs Colortek Meghalaya Pvt Ltd. (2010 (42) PTC 88 (Del.))


3.24

to glorify the product even if these are not true representations of fact,

provided that it should not denigrate or disparage a rival product or be

deceptive to mislead the consumers. A cause of action would arise when the

subject of the advertisement goes beyond mere commendatory statements to

constitute untrue statements of fact about a rival‟s product.

Claiming one’s superiority implies inferiority of another

However, when an advertiser promotes his product through puffed

statements, it implies at the inferiority of compared product. Whether this

constitutes disparagement or not can be understood by looking into the famous

case of Pepsi Co. Inc. & Ors. v. Hindustan Coca Cola Ltd30

. Herein, the Court

formulated certain tests to determine any cause of action for disparagement:

1. What is the intention behind the advertisement, as deciphered from the

storyline and the message ostensibly sought to be conveyed?

2. Is the manner of advertisement or comparison by and large truthful or

does it falsely denigrates or disparage the rival‟s product?

3. Finally, does the ad have the overall effect of promoting the seller‟s

product or showing the rival in poor light?

Curbing monopoly

The judgment delivered in Dabur India29

is of high significance as it

helps to assess the tolerable limit of puffery and baseline of disparagement of

a product. This case helps to understand the law regulating comparative

advertising as it tells us clearly what amounts to tolerable puffery and what

may amount to denigration. The respondent merely enlisted the virtues of its

mosquito repellant cream while comparing it with other product and advanced

that his cream would cause less side-effect on skin in the disputed commercial.

_______________________________________________________________

30Pepsi Co. Inc. & Ors. v. Hindustan Coca Cola Ltd, 2003 (27)PTC 305 (Del )


3.25

The appellant argued that the allegation that other creams caused stickiness

and mosquito repellant cream causes rashes and allergy on skin amounted to

disparagement of its product and that it was the implied target of denigration

since it had a dominant market share.

The Courts‟ approach was rational and commendable one. The

underlying rationale behind rejecting the appellants plea that it was the

implied target of denigration since it had a dominant market share, would be to

curb the practice of creating or entrenching the established monopoly in the

market. If such argument was allowed, then no new firm would be able to

advertise its product as doing so would intend that the appellant‟s product was

being targeted. The Court found that the respondent had only listed the

qualities of his product in the commercial and contained no content to suggest

overt or even implied denigration. The Court held that “while comparing its

product with any other product, any advertiser would naturally highlight its

positive points but this cannot be negatively construed to mean that there is a

disparagement of a rival product.”31

Further the Court also rejected the appellant‟s submission that the use

of expressions such as “an apprehension of getting rashes and allergy with the

use of mosquito repellent creams’, or an allegation that other creams caused

stickiness,” amounted to disparagement of its product. The Court considered

this to be a general proposition advanced by the respondent as there was no

suggestion that any specific product caused rashes or allergies or was sticky.

The Court observed the fact that as the respondents were also promoting a

mosquito repellent cream, there was no reasonable apprehension that they

would denigrate all mosquito creams; and considered that the respondents

were only suggesting that there was a lesser chance of suffering from any side

effects as their product contained certain exclusive ingredients.

___________________________________________________________________________________________________________________

31Pepsi Co. Inc. & Ors. v. Hindustan Coca Cola Ltd, 2003 (27)PTC 305 (Del )


3.26

In conclusion, however, the Court also mentioned that while puffed-up

advertising may be permissible, it cannot transgress the grey areas of

permissible assertion. In case it does so, the advertiser must have some rea-

sonable factual basis for the assertion made.

Rising Impact of Media

The impact of electronic media on society was held to be phenomenal

and as a factor to determine disparagement as it can reach far and wide, to all

people irrespective of age, literacy and their ability to comprehend the minute

details. The Court, however, did not contemplate the general public as being

blindly influenced by a commercial puffed up advertisement and

acknowledged the consumer as one who was capable of comprehending

market realities to make a rational purchase decision.

Explicit disparagement & Measurable claims

In yet another case of Procter & Gamble Home Products v. Hindustan

Unilever Limited,32

the Calcutta High Court highlighted the difference

between explicit denigration and puffery. The petitioners, manufacturer of

detergent powder brand „Tide‟ contended that their market rival, the

manufacturer of the detergent powder „Rin‟ had in their aired commercial had

claimed itself to be more effective than „Tide‟ in providing „whiteness‟ to

clothes. Rin argued that the comparison was strictly restricted to the whiteness

provided by its product. The Court found the advertisement content and

depiction manner to be in contrast with the principles laid down in Dabur

India Case 33

and held that had the overall effect of portraying the competing

product in a poor light rather than promoting the seller‟s own product. Thus it

considered it as an explicit denigration of the petitioner‟s product.

__________________________________________________________ 32

Procter & Gamble Home Products v. Hindustan Unilever Limited 33

Dabur India Ltd v. Colgate Palmolive India Ltd., 2004 (29) P.T.C. 401 Dabur India Ltd. v. Wipro Limited, Bangalore, 2006 (32) PTC 677 Dabur India Ltd. v. M/S Colortek Meghalaya Pvt. Ltd, 2010 (42) PTC 88


3.27

Foul Cry

In addition, while drawing a line between simple puffery and

denigration, the Court has also taken into account the ambiguous differences

between fair and foul conduct. In a recent case34

(2011) Procter & Gamble

(„P&G‟) put up hoardings which showed Pantene as an “mysterious shampoo”

claiming that „„80% women say is better than anything else.‟‟; this was

immediately countered by Hindustan Unilever Ltd („HUL‟), which came out

with a parallel campaign of „Dove‟, claiming, “There is no mystery. Dove is

the No.1 shampoo‟‟. Unilever contended that the advertisement of the P & G

„s shampoo brand „Pantene‟ was false and misleading and disparaging in

asserting that the said product was the most preferred one in the Indian market,

as P&G‟s original assertion of popularity were based on an old study

conducted in Thailand, rather than indicating recent trends in the Indian

market.

Infringement of Trademarks & product disparagement

An action against trademark infringement in comparative advertising

arises when a trademark is been used in disparaging the goods of the owner of

the trademark. Use of the trademark to disparage the goods of another has

been dealt in Pepsi Co. Inc. and Ors. vs. Hindustan Coca Cola Ltd. and Anr35

.

In order to push up sales of its product “Thumps Up” Hindustan Coca Cola

aired a commercial on TV in which alleged by the Pepsi Company

Incorporation along with Pepsico (India) Holdings Limited and Pepsi Foods

Limited, as mocking on their product “Pepsi” to be a “Bacchon wali Drink” or

“Wrong Choice Baby”. In the advertisement a bottle on which word "Pappi" is

written with a mark and colour identical to that of Pepsi was shown. Thus the

_______________________________________________________________

34 Procter & Gamble Home Products v. Hindustan Unilever Limited, High Court of Calcutta,

G.A. No. 614 of 2010, C.S. No. 43 of 2010.

35Pepsi Co. Inc. & Ors. v. Hindustan Coca Cola Ltd, 2003 (27) PTC 305


3.28

issue here was that the depiction of resembling bottle constituted trademark

infringement and that the depiction of a boy preferring Thumps

Up against "Pepsi" as “Thumps Up was a strong drink while Pepsi was sweet

liked by children”, amounts to disparagement or is it just healthy competition

through puffing of the respondents‟ product?

For trademark infringement claim, the Court 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.

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.

To decide on the facet of disparagement involved in the advertisement,

the Court referred to the Article 3 (a) of the Councils Directives of the

European Union on Comparative Advertising36

. We shall mention them here

in brief and the details can be seen in the next chapter.36

Article 3(a) of the

Council Directives which deals with Comparative advertising permits

comparisons only if it is not misleading according to Articles 2(2), 3 and 737

;

or it does not create confusion or discredits and denigrates or take unfair

_____________________________________________________________ 36

The Court mentioned KERLY'S LAW OF TRADE MARKS AND TRADE NAMES BY DAVID KITCHIN AND

ANR. ; Appendix 16, of it deals with Council Directive 84/450 of September 10, 1984 relating to the approximation of the laws, regulations and administrative provisions concerning misleading advertising. 36These have been elaborately discussed in Chapter 4 37According to Article 2(2) „misleading advertising‟ is advertising which in any way including its presentation, deceives 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 competitor.

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:

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

the price or the manner in which the price is calculated, and the conditions on which the goods are supplied;

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.


3.29

advantage of the reputation of a trade mark, trade name or other distinguishing

marks of a competitor; and does not present goods or services as imitations or

replicas of goods or services bearing a protected trademark or trade name.

Since through an 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. So the Court laid the following factors to

decide whether disparagement of the product is done:

Intent of commercial

Manner of the commercial

Story line of the commercial and the message sought to be

conveyed by the commercial.

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.

A 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.38

Hindustan Lever claimed its newbie toothpaste Pepsodent to be 102%

better than the leading toothpaste in an advertisement. In order to show that

New Pepsodent was superior in killing germs than any other toothpaste it

_______________________________________________________________

38Hindustan Lever v. Colgate Palmolive (I) Ltd., 1998 (1) SCC 720


3.30

compared the samples of two toothpaste keeping the voice muted but the lip

movement in the ad indicated Colgate as the other toothpaste referred to. Also,

the jingle in the background resembled to the one used in the Colgate ad.

Court held that such advertisement were likely to leave any doubt in minds of

viewers that Pepsodent was being compared with Colgate and that direct

reference about inferiority need not be shown and such reference amounted to

disparagement.

Disparagement in Generic Sense

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 Limited39

, 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.40

.It was 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 defense that the plaintiff

has not been specifically identified.

_______________________________________________________________ 39

Dabur India Ltd v. Emami Limited, 2004 (29) P.T.C. 1 40

Reckitt & Colman of India Ltd. v. M.P. Ramchandran & Anr.PTC (19) 741


3.31

True claim not actionable

When the statement disparaging the plaintiff‟s product is true in

comparative advertising, no relief can be given to the plaintiff. This can be

understood from the case details and the verdict that follows in the Reckit

Benckiser (India) Limited Vs. Naga Limited & Ors41

case. The Defendant's

television commercial depicts a pregnant woman in need of urgent medical

assistance during a train journey. The co-passenger doctor calls for hot water

and is handed a cake of soap which she rejects, stating that you just don‟t need

an antiseptic soap but also a protector at time like this. The soap which was

handed over to the doctor was identifiable by viewers as the Plaintiff's

product, namely, Dettol Soap. Then the defendant's Ayurvedic soap is shown

with a concurrent voice stating it to be a body 'rakshak' soap, the first

Ayurvedic soap that completely removes all seven kinds of germs and protects

from infection. The Plaintiff's averred that this commercial disparages its

Dettol Soap and defendant‟s act was malicious, especially in view of the trade

literature which reveals Dettol‟s sales to be 30-35% of the market share

The issue herein 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? The Honourable Court gave an significant verdict

stating 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

_______________________________________________________________

41Reckit Benckiser (India) Limited vs Naga Limited & Ors. , 2003 (26) PTC 535


3.32

complete defense 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 tortuous 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”.

Thus it can be inferred from an analysis of the legal framework

governing comparative advertising in India reveals that due to absence of a

concrete legislative mechanism in this matter, a largely makeshift approach

has been followed, with diverse aspects of the same being determined with

reference to inconsistent standards. Such an approach is insufficient on a

sustainable basis, as the selective application of diverse laws leaves behind a

trail of lacunae in any attempt to determine the question in a comprehensive

manner. In order to arrive at a uniform standard or level of tolerance, the twin

components of simple puffery and denigration have to be addressed keeping in

mind the nature of such representations. Herein, it is relevant to note that

while the level of permissibility with regard to puffery has been varying, the

position on denigration has been largely consistent. Further, it is essential to

incorporate the interests of all the concerned stakeholders, including

manufacturers, advertisers, competing parties and consumers. The Consumer

Protection Act, 1986, though commonly viewed as an effective mechanism to

regulate the subject, has proved insufficient as it excludes from its purview

competing manufacturers and sellers. On the other hand, the traditional view

as had been adhered to by our courts for almost a decade fell short in terms of


3.33

addressing the demands of consumer justice. The self-regulatory process as

has been established by the advertising industry has been relegated to a purely

recommendatory function, with it having no enforcement mechanism to ensure

compliance with its directives.

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,

regarding law on trademark infringement, the use of a proprietor's trademark

in comparative advertising 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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