Comparative advertising: an overview

While comparative advertising was initially restricted to ‘puffery’—where a trader list facts about the product, or makes vague claims which cannot be proved or disproved—some traders, in the name of comparative advertising, have started ‘disparaging’ competitors’ goods, forcing the law to intervene. Puffery and disparagement can therefore be considered as the two fundamental facets of comparative advertising.

In India, the law on comparative advertising has developed through judicial precedent. During the late 1990s, courts took the view that while ‘puffing’ is permissible, any statement or image which demeans or disparages a competitor’s product is not. This view was consistently upheld by courts in many cases.

In all these cases the guiding principle for the courts has been that “The law is that any trader is entitled to puff his own goods even though such puff as a matter of pure logic involves the denigration of his rival’s goods. Notices reading ‘the best tailor in the world’, ‘the best tailor in this town’ and the ‘best tailor in this street’ do not commit an actionable offence. When, however, the trader is not puffing his own goods but turns to denigrate the goods of his rival then the situation is not so clear-cut.

“The statement ‘my goods are better than X’s’ is only a more dramatic presentation of what is implicit in the statement ‘my goods are the best in the world’ and would not be actionable. However, the statement ‘my goods are better than X’s because X’s are absolute rubbish’ would be actionable.”

The above cases relate to instances wherein the rival’s product was clearly identifiable. However, competitors have found an innovative way to indulge in comparative advertising, by condemning a whole class of products instead of a specific competing product, thereby creating an entirely new species of comparative advertising: ‘generic disparagement’.

In this form of comparative advertising the competitor does not merely disparage a specific product but indulges in disparagement of a complete class of products. One of the earliest cases of generic disparagement was Dabur India Ltd v Emami Ltd. In this case the court was concerned with a commercial wherein an entire class of products, ‘chyawanprash’ (a herb and spice mix), was denigrated.

One of the market leaders manufacturing chyawanprash objected to the commercial by filing a civil suit for injunction. The court held that the plaintiff enjoyed a market share of more than 63 percent for this class of products and thus had a vital interest in ensuring that its product or the class as a whole was not condemned in any manner. The Learned Single Judge therefore recognised the concept of generic disparagement and granted an injunction.

"The refusal on an injunction to colgate appears to be a sign that courts recognise the maturing of economies and consumers."

Thereafter, a series of cases have maintained that if a complete class of products is being disparaged, then it would be permissible for one manufacturer or more who constitute that particular class or are market leaders, to take action.

A review of case law clearly shows that courts in India have gone beyond the days of White v Mellin (House of Lords) and expanded the scope of comparative advertising to include a class of products and not restricted it to disputes between two competitors.

In conclusion, the four-pronged test for disparagement can be summarised as:

i. An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution;

ii. An advertisement must not be false, misleading, unfair or deceptive;

iii. Grey areas need not necessarily be taken as serious representation of facts but only as glorifying one’s product; and

iv. While glorifying its product, an advertiser may not denigrate or disparage a rival product.

In recent times the courts have held that companies should not be too sensitive when it comes to comparative advertising. The refusal of an injunction to Colgate appears to be a sign that courts recognise the maturing of economies and consumers. This may just be the beginning of a new jurisprudence requiring companies to show greater tolerance to comparative advertising and a signal that market fights ought to be fought in the markets and not in a court of law.

With the opening up of the economy, while it can be argued that comparative advertising is essential since it assists the consumers in making an informed decision, it is important to establish a comprehensive scheme of regulation to safeguard the interests of the consumer as well as the competitors.