Comparative Advertising - Essay Example

1 Comparative Advertising Comparative advertising, as a special form of advertising sales promotion evidence that compares the products or devices of one undertaking with those of another, or with those of other competitors.. All comparative advertising is designed to highlight the advantages of the goods or services offered by the advertiser as opposed to those of a competitor. In order to achieve this objective, the message of the advertisement must necessarily underlie the differences between the goods and services compared by describing their main characteristics. The comparison made by the advertiser will necessarily flow from such a description. The rules on competitive advertising are defined by statutory law, in specific rules, in addition to the general rules on unfair competition. Main rules belong to advertising law, but they are in strong competition with the competition law rules. Interests of competitors as well as those of consumers are protected by both Acts. Before October 1994 there were various laws in the UK restricting comparative advertising, thought not prohibiting it per se. For example, the use of a trade mark registered in Part A of the trade Marks Register by a third party in its advertising constituted trade mark infringement under section 4 (1) (b) of the Trade Marks Act 1938, regardless of the content of the advertising. The 1990 White Paper, Reform of Trade Mark Law, noted that public opinion towards comparative advertising had changed, but that it was unacceptable to allow an advertiser to ride on the back of a competitors trade mark. 2 Section 4 (1) (b) of the 1938 Act was replaced by the new Act by section 10 (6), which aims to strike a balance between the interests of consumers in being informed by one manufacturer about the products of another and the interests of proprietors of trade marks in protecting their brands from competitors emphasizing features of the trade marked product of service which are not to their advantage. The section states: Nothing in the preceding provisions of this section shall be construed as preventing the use of registered trade marks by any person for the purpose of identifying goods and services as those of the proprietor or licensee. But any such use otherwise than in accordance with honest practices in industrial or commercial matters shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark. The UK courts are guided by the stipulations in section 10 (6) and are prone to give particular judicial credence and review to specific aspects as it relates to conformity: (a) honest practices in industrial and commercial matters (b) without due cause to take unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade market. The courts have analyzed section 10 (6) and concluded that an infringement must satisfy both a & b as stated. Which is to say, it must be in contrary to a reasonable standard of what constitutes honest practices in industrial and commercial matters and without due cause. Take unfair advantage of, or be detrimental to, the distinctive character or repute of the mark. The court was requested to rule on an infringement complaint in Barclays Bank 3 Ptc v. RBS Advanta (1997). In an action seeking interim relief, Barclays Bank, the registered proprietor of the trade mark BARCLAYCARD complained about the use of that mark in certain passages of RBS Advanta literature, intended to support and advertise a new credit card offered by RBS Advanta. Barclays mark had, among other things, been used in an interest rate comparison table. Barclays contended that the literature, composed of a leaflet and a brochure, would be read together, and use of the trade mark amounted to a trade mark infringement. The case centered on whether such use fell within the defence to the trade mark infringement contained with s 10 (6). It was held that the primary directive of s 10 (6) was to allow comparative advertising, and that the proviso in 2 10 (6) should not be construed as effectively prohibiting comparative advertising. The test whether the use of the trade mark was in accordance with honest practices was objective, would the use be considered honest by members of a reasonable audience of the advertisements Mere trade puffery, and hyperbole in advertisements would not constitute trade mark infringement, but use of the mark would not be honest if the advertisement was significantly misleading. Statutory or industrial codes of conduct were of little direct relevance in deciding whether use of the mark fell within honest practices or not. The use, had to take advantage of the trade mark or be detrimental to it, above a d minus level. It was likely that an advert that made use of a registered trade mark would almost always take unfair advantage of it or vice versa. Laddie J. found that any reasonable reader would take the view that RBS's adverts were honest, Barclays Bank would receive trivial benefit from the grant of an injunction 4 and would suffer limited damage as a result of their competitor's advertising. As a result, the grant of an interim injunction was denied. Further in the British sugar case, Jacob J., commented on section 11(2) which implements article 6 (1) of the Approximation Directive) as it applies to comparative advertising, he essentially stated that the hallmark was honesty and when such is determined to be the case, a competitor is within his rights to use the proprietors trademark. Moreover, he stated that the ownership of a trade mark does not grant the proprietor the right to suppress competition. Additionally, as further validation and to make the case law clear, in British Telecommunications Plc. V. AT&T Communications (UK) Ltd., Michael Crystal set out nine propositions which are based in the courts decisions found in Barclays and Vodafone: a.) the primary objective of section 10 (6) is to permit comparative advertising. b.) as long as the competitors mark is honest, there is nothing wrong with informing the public of the relative merits of competing goods or services and using registered trade marks to identify them. c.) the onus is on the registered proprietor to show that the use takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark. d.) there will be no infringement unless the use is not in accordance with honest practices. e.) the test is objective: would a reasonable reader, upon being given the full facts, be likely to say that the advertisement is not honest f.) statutory or industry agreed codes of practice are not a helpful guide as to whether an advertisement is honest for these purposes. This has to be gauged against what is reasonably expected by the relevant public of advertisements for the goods or services in 5 question. g.) the general public is used to the ways of advertisers and expect hyperbole. h.) the 1994 Act does not require the courts to enforce a more puritanical standard than the general public would expect from advertising copy. i.) an advertisement which is significantly misleading is not honest for the purpose of the sub-section. Additionally, in Vodafone v. Orange, and in Cablewireless v. British Telecommunications, except for Vodafone which was a trial, the other case was an interlocutory injunction. However, none of the plaintiffs were successful in any of these cases. The court has been very careful in its attempts to avoid deciding on the merits between competing claims for products. In instances where the court has been called upon to decide on competing claims, such as in Compaq v. Dell computer, the courts test of what constituted an infringement was not found. The case was dismissed, and the court demanded that the plaintiff would pay the cost of the defendants for the motion. The issue concerning copy rights is straightforward. If a manufacturer reproduces any representations of a competitors product in its advertising, this may constitute an infringement. The courts have dealt with a number of cases regarding this issue; IPC Magazines Ltd. V. MGN Ltd., the claimant, OPC Media Ltd., argued that the use of its front cover was an infringement of its copyright. The Sunday Mirror ran a television commercial featuring a woman holding an issue of IPC Magazines' woman magazine. The woman magazine had a black band superimposed across the middle of the 6 cover with "57P" the price of the magazine, printed on it. The commercial went on to show the same woman holding a copy of the Mirrors magazine across which the slogan free with the Sunday Mirror appeared. New Group Ltd. The defendant, argued fair dealing on the basis of the defence provided by section 30 of the copyright, Designs and Patents Act 1988, which states that, the use of a work for the purposes of criticism or review or for the purpose of reporting current events does no[t infringe any copyright in the work provided that it is accompanied by a significant acknowledgement. Subsequently, the defendant construed its use of the claimant's TV listing as an example of comparative advertising, which is an allowed practice in the UK and EU. Mr justice Hart pursued a similar arguing line to that applied in the case of Gillette Group Company and La Laboratories Ltd. Oy, by the European court of first instance, to determine which requirements need to be satisfied in order to consider the lawful use of a third party's trademark. Therefore, he dealt with the requirement of '[necessity', saying that the identification of the magazine could readily have been achieved without the use of the copyright, so the first requirement was not met in this case. The second requirement of 'honest use' was not found in this case to advance its own competing commercial prospect at IPC's expense, a practice which can not be understood as a use in an honest manner. As none of the aforesaid principles were met in the present case, the use of IPC's copyright material by News Group was in this case unlawful and therefore lacked legal protection. Also in comparative advertising, the courts have been called upon to deal with the essential elements of passing off. Albeit they do arise in respect to competitive 7 advertising, it is rare. Since the whole point of a comparative advertisement is normally to distinguish one company's good from another's. Most passing off claims ipn this area usually fail. In one of the leading cases ( Caldbury Schwepps Pty Ltd. V. Pub Squash Co. Pty. Ltd. (1981) 1 ALL ER 213 (PC), Cadbury Schwepps launched a lemon drink in Australia which was novel in that it was specifically aimed at the adult male market. The themes of its advertising were manly sports and nostalgia for the old Australian pubs. A rival company copied the taste of the drink itself and both promotional themes, but their product and the advertising for it were easily distinguishable. Cadbury Scherpps failed to establish passing off. Also on McDonalds hamburgers Ltd. V. Burger King (UK) Ltd. (1987) FSR 112 was a somewhat surprising exception to this general rule, although once again the courts were skeptical when it came to damages. McDonalds sued Burger King in connection with an advertisement which used the line "Its Not Just Big Mac". The High Court held that this was passing off and ordered an injunction to stop Burger King running the advertisement, but refused an inquiry as to damages on the ground that there was no prospect of McDonalds recovering any damages. McDonalds appealed and the Court of Appeals agreed, but only held that it was impossible to say that McDonalds had no chance of recovering any damages. Read More