Comparative advertising

Comparative advertising or advertising war is an advertisement in which a particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it. Also referred to as 'knocking copy', it is loosely defined as advertising where “the advertised brand is explicitly compared with one or more competing brands and the comparison is obvious to the audience.” Comparative advertising or advertising war is an advertisement in which a particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it. Also referred to as 'knocking copy', it is loosely defined as advertising where “the advertised brand is explicitly compared with one or more competing brands and the comparison is obvious to the audience.” This should not be confused with parody advertisements, where a fictional product is being advertised for the purpose of poking fun at the particular advertisement, nor should it be confused with the use of a coined brand name for the purpose of comparing the product without actually naming an actual competitor. ('Wikipedia tastes better and is less filling than the Encyclopedia Galactica.') In the United States, the Federal Trade Commission (FTC) defined comparative advertising as “advertisement that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration or other distinctive information.” This definition was used in the case Gillette Australia Pty Ltd v Energizer Australia Pty Ltd. Similarly, the Law Council of Australia recently suggested that comparative advertising refers to “advertising which include reference to a competitor’s trademark in a way which does not impute proprietorship in the mark to the advertiser.” Comparative advertisements could be either indirectly or directly comparative, positive or negative, and seeks “to associate or differentiate the two competing brands”. Different countries apply differing views regarding the laws on comparative advertising. The earliest court case concerning comparative advertising dates back to 1910 in the United States – Saxlehner v Wagner. Prior to the 1970s, comparative advertising was deemed unfeasible due to related risks. For instance, comparative advertising could invite misidentification of products, potential legal issues, and may even win public sympathy for their competitors as victims. In 1972, the FTC began to encourage advertisers to make comparison with named competitors, with the broad, public welfare objective of creating more informative advertising. The FTC argued that this form of advertising could also stimulate comparison shopping, encourage product improvement and innovation, and foster a positive competitive environment. However, studies have shown that while comparative advertisements had increased since 1960, the relative amount of comparative advertising is still small. Prior to 1997, many European countries severely limited comparative claims as an advertising practice. For example, in Germany comparisons in advertising had since the 1930s been largely prohibited as an anti-competitive practice, with very limited exceptions for cases where the advertiser had a good reason for presenting a critical claim, and reference to a competitor was necessary in order to present that claim. Importantly, this only applied to critical claims - claims of equivalence were completely prohibited. A similar approach had been adopted in France, where comparative advertising was commonly seen as disparaging of competitors. However, the legalisation of comparative advertising in France in 1992, opened the door to a general legalisation of comparative advertising through EU law, which had first been proposed by the European Commission in 1978. The result was the adoption of Directive 97/55/EC, which came into force in the year 2000. The relevant provisions are now contained in Directive 2006/114/EC. This Directive sets out rules that comparative advertising must comply with in order to be considered permissible. These include the requirements that the comparison concern goods and services that meet the same purpose, that it objectively compare the relevant characteristics of the products concerned and that it not cause confusion or denigrate the trademarks and other distinguishing signs of competitors. The Directive prohibits comparisons that take unfair advantage of the reputation of a competitor's distinguishing marks, or present goods or services as imitations of products covered by a protected trade mark or trade name. Additionally, any comparison aimed at promoting goods bearing a protected designation of origin must refer exclusively to other goods bearing the same designation. Directive 2006/114/EC constitutes a total harmonisation of the rules on comparative advertising, meaning that the Member States are neither allowed to permit comparisons that breach the requirements of the Directive, nor prohibit ones that do. Further, while trademark rights can in principle be used to prevent comparative advertising that makes unauthorised use of a competitor's trademark, this is not the case where the comparative advertisement complies with all the requirements of Directive 2006/114/EC. Legitimate comparative advertising must therefore be seen as an exception to the exclusive rights of the trademark proprietor. However, the trademark proprietor can, thanks to the prohibition on taking unfair advantage of a trademark's reputation, oppose the use of their trademark where it is not aimed at distinguishing the products of the advertiser and trademark proprietor and to highlight their differences objectively, but rather at riding on the coat-tails of that mark in order to benefit from its reputation.