Comparative Commercial Advertising

Document Type : Scientific research

Authors

• Mostafa Bakhtiarvand ¹
• Akram Aghamohammadi ²

¹ University of Qom

² Qom

https://doi.org/10.22067/le.v22i8.51460

Abstract

Nowadays, advertising companies and firms try to establish a trade name which is superior to similar ones. In order to overcome their competitors in advertising campaigns, the firms have adopted new approaches. They use the best and newest marketing and commercial advertising methods to attract potential customers and consumers. Some advertisers use their competitors' trademarks, trade name, etc. to advertise their goods and services. This kind of advertisements which has increased considerably, is known as comparative advertising and makes it possible for consumers to compare the characteristics of different brands including the quality and price of goods and services and at the same time, in some cases may mislead consumers as to the source of goods and services and lead to unfair competition.
When companies initiate advertising, comparative advertising challenges including those related to intellectual property arise; therefore, the courts are faced with many questions: does using a competitor’s brand or trademark in comparative advertising an infringement of its trademark rights? Is it possible to raise fair use defense against the trademark infringement claim? What rules govern comparative advertising in online environment? In the Unites States, comparative advertisement is used frequently. There are a plenty of legal and economical literature in this regard and a set of specific rules deal with this issue. For example, the Federal Trade Commission, in the 1979 declaration, defined comparative advertising and declared the conditions of its prohibition. In fact, until 1970 comparative advertising had not been dealt with considerably. But since then, the attitudes towards its legality changed and it was welcomed and used frequently. Bixby and Lincoln defined and explained comparative advertising in 1989 (Bixby & Lincoln, 1989). There are other literature in 1993 and 1998 reviewed in this paper (Barry, 1998). In the 20th century, more works were prepared in the United States. For instance, in 2000, Posner discussed comparative advertising and its relation to consumers' confusion (Posner, 2000). In recent years, the relation between comparative advertising and intellectual property has been raised.
In this paper, first are studied the concept and types of comparative advertising, then the rules applicable to such advertisements and finally, the relation between comparative advertising and intellectual property and its main example in this regard, i.e., trademark. The authors have tried to answer the above said questions under the legal systems of the United States, the European Union, India (as a developing country) and Iran.
Theoretical frame work
The Federal Trade Commission has defined comparative advertising as advertisement which, neutrally, compares commercial brands from the viewpoint of quantity, price, introducing by name, image or other distinct information. In simple terms, comparative advertising is a form of commercial advertising in which two or more brands of similar products of the same kind are compared from one or more characteristics of the product. Comparative advertisements compare the goods or services of a company to those of its competitors. This kind of advertising has been designed to highlight the advantages of goods and services offered by advertiser in comparison to those of a competitor.
Comparative advertising may take two forms: direct comparative advertising and indirect comparative advertising. Direct comparative advertising is where the messages encouraging the sale, illustrate the merit of advertisers products in comparison to specific products offered by the competitor recognized by a special name or trademark. In indirect comparative advertising, the relation between compared products is implicitly mentioned but it is not expressly declared that the brand used is compared.

Methodology
This paper, through a descriptive-analytic method, introduces comparative advertising from the perspective of a number of legal systems, namely: the United States as a pioneer in regulating comparative advertising, the European Union which has enacted a directive in this regard, India as a developing country whose experience can help with regulating such kind of advertisement in Iran.

Results & Discussion
In the European Union, directive 2006/114/EC on misleading and comparative advertising has, in certain circumstances, authorized comparative advertising. In India, comparative advertising has not been defined, but according to article 29 of Trade Marks Act 1999, commercial advertising must not contain unfair practices; therefore, comparative advertising may, in some way, be covered by the term unfair practices. In Iranian law, only in some scattered laws and regulations, comparative advertising has been referred to, which do not seem to be sufficient to meet the intellectual property rights holders' interests especially those of trademark holders, given the large volume of commercial advertising.

Conclusions & Suggestions
Some countries such as the United States have a strong set of rules applicable to comparative advertising both in traditional and online environments. In such systems, comparative advertising is allowed under certain circumstances. In Iran, despite scattered laws and regulations which have a limited scope or are restricted to contractual relations, there are no specific provisions dealing with comparative advertising or the possibility of infringing another's trademark in detail. Therefore, given the advantages of comparative advertising and at the same time, in order to prevent possible trademark infringement, it is necessary for the Iranian legislator to pay attention to this kind of advertising and enact new and specific rules regarding this issue and regulate comparative advertising by conditioning it to certain conditions.

Keywords

• Comparative advertising
• intellectual property rights
• trademark
• fair use

References

[1] Act on the Registration of Inventions, Industrial Designs and Trademarks, (2007). Available at: http://rc.majlis.ir/fa/law/show/133809. (last visited: 2016/6/5). (In Persian).

[2] Aitkeni, Benjamin. (2005). Keyword-linked advertising, trademark infringement, and googles contributory liability, Duke Law & Technology Review, No 21.

[3] Apoorva, Sharma. (2011).Comparative Advertisement and Infringement of Trademarks: A perspective from Consumers , Rajiv Gandhi School of Intellectual Property Law, Avaialable at: http://www.legalserviceindia.com/article/l182-Comparative-Advertising-laws.html., (last visited: 2016/7/5).

[4] Barigozzi, Francesca, Peitz, Martin. (2004). Comparative Advertising and Competition Policy, International University in Germany Working Paper No. 19.

[5] Barry, T. E. (1993). Comparative advertising: What have we learned in two decades? Journal of Advertising Research, 33(2).

[6] Beard, F., & Nye, C. (2011). A history of the media industry’s self-regulation of comparative advertising. Journalism History, 37(2).

[7] Bixby, M.B. and D. Lincoln. (1989). Legal Issues Surrounding the Use of Comparative Advertising: What the Non-Prescriptive Drug Industry Has Taught Us, Journal of Public Policy and Marketing 8.

[8] Bojinca, Moise. (2009). The Concept of Comparative Advertising and Conditions of Legality, Dny prava, Days of Law: the Conference Proc eedings, 1. edition. Brno: Masaryk University.

[9] Bondar, Peter, Miskolcz. (2004). Definition Comparative advertising, European Integration Studies, Miskolc, Volume J. Number I.

[10] Chhabra, Medha. (2010). Comparative Advertising in India.

[11] Civil Responsibility Act, (1960). Available at: http://rc.majlis.ir/fa/law/show/95202. ( last visited: 2016/7/6). (In Persian).

[12] Collection of standards of radio and TV advertisements, IRIB General Commercial Office. (1998). Available at: http://www.ad.gov.ir/cn/print.php/staticPages/22, (last visited: 2016/5/8) (In Persian).

[13] Consumer Protection act, (2009). Available at: http://rc.majlis.ir/fa/law/show/136112,(last visited: 2016/4/3) (In Persian).

[14] Crawford, Tad. (1998) American Institute of Graphic Arts, AIGA Professional Practices in Graphic Design, Skyhorse Publishing Inc.

[15] Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising(2006), available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32006L0114, (last visited: 2016/4/5).

[16] Draft Bill on Commercial Advertising, (2014), available at: http://press.farhang.gov.ir/fa/news/122337/(last visited: 2016/8/16)(In Persian).

[17] Dudley, Alfreda. (2011). Investigating Cyber Law and Cyber Ethics: Issues, Impacts and Practices: Issues, Impacts and Practices Advances in Information Security, Privacy, and Ethics, IGI Global.

[18] Electronic Commerce Act, (2003). Available at: http://rc.majlis.ir/fa/law/show/93997,( last visited: 2016/4/7) (In Persian).

[19] Everett, C. (2006). Key issues in comparative advertising – what you can and cannot do.

[20] Fernandes, Semila. (2013). Comparative Advertisement And It’s Relation To Trademark Violation – An Analysis Of The Indian Statute, Journal of Business Management & Social Sciences Research (JBM&SSR) Volume 2, No.6.

[21] Gangwar, Pinkeshwar. (2013). Comparative Advertisement and Infringment of Trademark. ,http://www.inta.org/TrademarkBasics/FactSheets/Pages/FairUse.aspx.(last visited: 2015/9/5).

[22] Garner, Bryan, A. (2009). Black's Law Dictionary, 9th ed, West.

[23] Ghane, Ahmad Ali. (2013) Pathology of Commercial Advertisements from an Islamic Jurisprudence and Ethics, Studies of Culture-Communications, 14th year, n.21. (In Persian).

[24] http://technology.findlaw.com/modern-law-practice/search-engine-comparative-adware-tising-under-scrutiny.html., (last visited: 2016/6/5).

[25] http://www.ftc.gov/bcp/conline/pubs/buspubs/dotcom/index.pdf,( last visited: 2016/4/8).

[26] Jacobson, Jeff. (2010). Legal: Comparative Advertising, Competitors’ Trademarks, and Infringement. Available at: http://www.practicalecommerce.com/articles/2387-Legal-Comparative-Advertising-Competitors-Trademarks-and-Infringement-, last visited: 2016/4/3.

[27] Katouzian, Naser; Abbas Zade, Mohammad Hadi. (2013).Good faith in Iranian Law, Law Quarterly, Journal of Law and Political Sciences, volume 43, n.3, , pp.167-186. (In Persian).

[28] Lawdit Solicitors. (2008). “Comparative Advertising and Trade Mark Infringement” Law society of England and Wales, available at: http://www.lawdit.co.uk/reading_room/room/view_article.asp?name=../articles/Comparative%20Advertising%20and%20Trade%20Mark%20Infringement.htm.( Last visited: 2016/3/3).

[29] Leighton, R.J. (2004). Materiality and Puffing in Lanham Act False Advertising Cases: The Proofs, Presumptions, and Pretexts, Trademark Reporter 94(3).

[30] Lott, Leslie J. (n.d). Intellectual Property Issues in Comparative Advertising, Lott & Friedland, PA Miami/Ft. Lauderdale.

[31] Marek, T.; Karwowski, W; Frankowicz, M.; Kantola, J.; Zgaga, P. (2014). Human Factors of a Global Society: A System of Systems Perspective, CRC Press.

[32] Mccarthy J., Thomas.(2003). Mccarthy on Trademarks and Unfair Competition, West Group, 4th ed.

[33] Morasch, Manuel. (2004) Comparative Advertising, A comparative study of trade-mark laws and competition laws in Canada and the European Union, Master of Laws (LL.M.), Graduate Department of the Faculty of Law University of Toronto.

[34] Murthy. (2009). Advertising, Excel Books India.

[35] O’Donnell, Ryan W; O’Malley, John J.; Randolph J., Huis; Halt, Gerald B. (2008). Intellectual Property in the Food Technology Industry: Protecting Your Innovation, Springer Science & Business Media.

[36] Operating Instruction of Urban Advertising, (2006). Available at: http://www.ad.gov.ir/staticPages/15/ (last visited: 2016/5/6) (In Persian).

[37] Phillips, Jeremy. (2006). Trademark at the limit, Edward Elgar Publishing.

[38] Rachel Jane, Posner. (2000). Manipulative Metatagging, Search Engine Baiting and Initial Interest Confusion, 33 COLUM. J.L. & Soc. PROBs. 439.

[39] Raymond P.D. (2004). Damage Control: What to do if you get sued over advertising, available at: http://www.adlaw.com/rc/handbk/rf_damage.html

[40] Regulation of article 7 of Consumer Protection Act (2012). Available at: http://rc.majlis.ir/fa/law/show/816767/( last visited: 2016/6/7). (In Persian).

[41] Regulation on Establishment and Supervising the Practice and Activity of Advertising Centers, (1979). Available at: http://rc.majlis.ir/fa/law/show/99508/ (last visited: 2016/5/1) (In Persian).

[42] Romano, Charlotte J. (2005). Comparative Advertising in the United States and in France, Northwestern Journal of International Law & Business, Volume 25, Issue 2Winter.

[43] Rothman, Jennifer E. (2005). Interest Confusion: Standing the Crossroads of Trademark Law, Cardozo law review, Vol.27:2.

[44] Safaei, Seyyed Hossein et al. (2005). The Law of International Sale, Comparative Study, University of Tehran Publications, 2005. (In Persian).

[45] Saraf, Rashi; Das Yamini. (2008). Comparative Advertising laws.

[46] Statement of Policy Regarding Comparative Advertising, Federal Trade Commission, Washington, D.C., August 13, (1979)

[47] Thomson, David I. C. (1982). Problems of Proof in False Comparative Product Advertising: How Gullible is the Consumer?, 72 Trademark REP. 385, 1982

[48] Villafranco, John E. (2010). The Law of Comparative Advertising in the United States, I P Litigator, Voloume16.

[49] Whrnston, Andrew B. (1997). The Economics of Electronic 256 (Macmillan Technical Publishing).

[50] Wildes, Joy J.; DAVIS & GILBERT LLP. (2004). Intellectual Property Issues in Comparative Advertising “Ours Works Better”: Use Of A Competitor’s Trademark In Advertising, The Metropolitan Corporate Counsel.