How does your advertisement compare?
Comparative advertising is now permissible in the UK, but it is not without its dangers
This paper discusses the 1994 Trade Marks Act and its implications
for comparative advertising. The new Act allows trade marks belonging
to a third party to be used to identify goods and services. Comparative
advertising using another person's reg
SOME WOULD ARGUE that the modern consumer is more informed,
discerning, and less susceptible to more traditional forms of
advertising, thus making the comparative advertisement an attractive
option. To date, this type of advertising has been high risk,
particularly in Europe. However, if it is used properly, it can
be very effective.
In the United States, more than a quarter of advertising campaigns
in recent years have involved some form of comparative advertising
- mostly in the form of direct product comparison. In that country,
this form of advertising is widely accepted and used. However,
in the UK and the rest of Europe, legislation has limited a similar
The laws of major trading countries vary significantly as to what
types of comparisons are acceptable in advertising. Under the
UK Trade Marks Act 1938, use of another person's trade mark for
comparative advertising purposes was held by the courts to constitute
an infringement, but when the UK Trade Marks Act 1994 came into
force on 31st October 1994, the law relating to the use of trade
marks in comparative advertising changed.
The 1938 Trade Marks Act did not specifically deal with comparative
advertising, in fact, it does not even mention comparative advertising,
but trade mark law became the tool most frequently used to halt
this type of campaign. For the first time, the 1994 Trade Marks
Act addresses the need for legislation to regulate this important
area, and it includes a provision which deals specifically with
the use of trade marks in comparative advertising.
In the United States, most comparative advertising has concentrated
on making a direct comparison of competing products, and advertisements
have tended to be far more aggressive than similar advertisements
Comparative advertising is considered a valuable tool in the United
States and is said to stimulate competition. It is also the view
in the United States that this type of advertising aids consumer
choice by providing additional information to help the consumer
to make a more informed decision. Accordingly, US law is very
relaxed about non-deceptive comparative advertising. However,
even in the United States where the right to free speech is strongly
enforced, the courts are very active against deceptive advertising.
Historically, comparative advertising has been a dangerous game
to play in Europe. As we have already seen, the use of a competitor's
registered trade mark has, until recently, been prohibited. Admittedly,
the law was not always strictly enforced by trade mark proprietors.
For example, it was common place in the motor trade for one manufacturer
to state that 'the X does more miles to the gallon' or 'has more
features' than equivalently priced vehicles from rival manufacturers.
For various reasons, a number of different industries have accepted
the use of registered trade marks in this way, despite the fact
that it was strictly an infringement. In those particular industries,
the overriding reason seems to have been a unilateral belief in
the benefits of comparative advertising.
With the recent changes in law in the UK and possibly elsewhere
in Europe, many advertisers are likely to be tempted to engage
in this form of advertising by the desire for increased sales.
However, it remains dangerous. Although comparative advertising
is seen as offering benefits in Europe, the principles of the
free market and freedom of speech must, according to the legislators,
be balanced against the dangers of allowing misleading, deceptive
and libellous advertisements.
Advertisements which compare one product with the product of a
competitor can take a number of forms. The most basic form is
the so-called 'knocking copy'. This form is rare, but still exists.
Typically, the comparison will be made with the brand leader and
will include a statement such as 'our product is as good as/better
than/cheaper than X's'. Alternatively, an advertisement may imply
that a product is better than that of a competitor, but may leave
it to the public to make the direct comparison and to reach a
conclusion of superiority. In other cases, advertisements compare
specifications such as size, weight or facilities.
The potential benefits of comparative advertising are obvious,
particularly if one looks at the Federal Express campaign in the
US. The company was able to position itself and establish a very
substantial market by making critical reference to 'America's
leisurely postal service'. More recent examples can be seen in
the multi-million pound washing powder industry, where Persil
Power and Ariel Ultra have been slugging it out over the relative
benefits and disadvantages of their new washing powders.
Consumers remain sceptical of some comparative advertisements
but are clearly swayed by others. If the consumer perceives that
accurate comparative information about the product of interest
is provided and that they are, as a result, better informed, then
they tend to regard the advertisement as 'valuable'. However,
traders with well-known brands regard some forms of comparative
advertising as unfair competition, particularly where the well-known
brand is being used to sell cheaper goods of apparently the same
quality by listing the products side by side. This is an example
of 'parasitic trading'.
Some well-known illustrations of comparative advertising include:
The new UK Trade Marks Act allows trade marks belonging to a third
party to be used in advertisements to identify goods and services.
It provides that a trade mark may be used by any person to identify
a proprietor's goods, provided:
Accordingly, cerain types of comparative advertising using another
person's registered trade mark are now permitted. In determining
the allowability of advertisements, certain value judgments have
to be made. What are 'honest practices in industrial or commercial
matters'? When is 'unfair advantage' taken of the repute of the
trade mark? What is 'detrimental to the distinctive character
or repute of the mark'?
These questions may well be interpreted differently in relation
to different industries. For example, comparative advertising
has been used for some time in the motor and airline industries,
and although certain practices have become generally accepted
within them, such may not be the case with other industries. Indeed,
what is considered acceptable in any specific industry as a result
of practice will probably change from time to time; it is probable
that familiarity will breed acceptance.
The courts do not like grappling with such questions. In the debate
on this section of the 1994 Trade Marks Act when it was progressing
through the House of Lords, Lord Strathclyde stated:
At each end of the spectrum, whether the claims in an advertisement
are honest or not, will be fairly clear, for example an attribute
claimed in goods but not possessed will not be regarded as honest.
However, there is bound to be a grey area where the answer is
not clear, for example, if that attribute exists only in certain
conditions. When interpreting 'honest practices', the court will
consider evidence from experts in the relevant industry. There
is no hard and fast rule. Each situation will have to be dealt
with on its own merits. The closer you sail toward the wind the
more risk you run.
Whether or not unfair advantage is seen to have been taken will
again depend on particular facts. Clearly, advertising a cola
flavoured soft drink using the distinctive Coke can and style
alongside a similarly coloured product would be taking unfair
advantage. However, simply showing two cans of cola soft drink
side by side with the different prices underneath would not generally
Once again, each case will be decided on the specific facts. In
a case which recently came before the courts, a smell-a-like perfume
manufacturer provided salesmen with manuals, which were shown
to customers. These manuals compared the original and smell-a-like
products. Smell-a-likes do not usually have the same quality of
ingredients. Under the 1938 Act this was held to be trade mark
infringement. Under the 1994 Act this is likely to be held to
be 'detrimental' because such an advertisement includes an inference
that the copy is of the same quality as its original when it was
Whilst comparative advertising is now allowed, it is likely that
the courts will be called upon requently, at least in the early
days, to determine whether honest and fair comparisons have been
made. To decide whether or not use is legitimate, the courts will
take account of the nature of the information contained in the
advertisement. Although each case will be different, one thing
is clear: despite the 1994 Act there is still considerable risk
involved in using another's trade mark for comparative advertising
One point of note, unchanged by the new Act, is that in circumstances
where a trade mark forms part of a full company name, the risk
of challenge is reduced if that company name is used to identify
the product by reference to the manufacturer rather than the trade
mark. In a relatively recent case Duracell Batteries Limited,
who owned a registration of the trade mark Duracell, alleged that
Ever Ready Ltd had infringed that trade mark by use of the following
words in an advertisement:
The judge stated that his inclination was 'to recoil from the
suggestion that use of a name (as part of a corporate title) can
be an infringement of a trade mark'. Further, in
Mr. Justice Aldous stated 'An advertisement saying Compaq Computer
Ltd manufacture computers depicted below
I would have thought
When engaging in comparative advertising, account must be taken
not only of the Trade Marks Act 1994, but also of:
Copyright can subsist in original, literary works, artistic works,
films and sound recordings and it may subsist in the design or
label of a competitors product. For example, the Mirror Group's
use of the 's masthead logo was considered to be an
infringement of the artistic copyright in that logo.
Passing off is based on the concept of someone using the reputation
in a trade mark or get- up to confuse or deceive consumers into
suspecting that there may be some association.
In the case of ('BK'), BK advertised
its hamburgers using the words, 'It's not just a Big Mac' and
referred to its 'Whopper' as 'Unlike some burgers it's 100 per
cent pure beef, flame grilled never fried, with a unique choice
of toppings'. The Judge found that a significant number of people
reading the advertisement might be misled into thinking that a
'Big Mac' could be obtained from BK.
The three main ingredients required to support a trade libel action
In the 'Big Mac' case referred to above, a claim of trade libel
failed. The Judge was not satisfied that BK intended to suggest
that McDonalds' hamburgers were not 100 per cent pure beef.
In the case of , Compaq alleged that two systems
which Dell had compared in advertisements were not essentially
the same, since they had different storage capacity and access
times. Mr. Justice Aldous held that no jury could find the two
systems were essentially the same. He went on to say that malice
would be inferred if the words were calculated to prove damage,
and the defendant knew that the words were false or was reckless
as to whether they were false or not.
The Trade Descriptions Act 1968 provides that it is a criminal
offence to advertise using a statement which constitutes a false
indication, direct or indirect, of various matters relating to
goods including fitness for purpose, any physical characteristics
Under the Trade Descriptions Act 1968, it is an offence to supply
or to offer to supply goods by reference to a false trade description.
Accordingly, if in the advertisement it is explicitly stated or
implied in the comparison being made that the goods or services
being advertised have a particular advantage or attribute which
they do not have, then an offence will be committed.
Price comparisons in advertisements are regulated by the Consumer
Protection Act 1987 and the Code implemented by the DTI under
that Act. This Act makes it an offence to give a misleading price
indication, which includes 'price comparison'. According to the
Code, where products are compared the name of the other trader
should be given and the price quoted should apply to the same
or substantially the same products.
The British Code of Advertising Practice provides a nonstatutory
body of rules regulating advertisements. The fundamental principle
of the Code is that all advertisements should be 'legal, decent,
honest and truthful'. It further states that 'All advertisements
should conform to the principles of fair competition generally
accepted in business'.
The detailed provisions of the Code provide that advertisements
containing comparisons should deal fairly with competitors, and
should be designed so that there is no likelihood of a consumer
being misled. Although this Code applies to printed media, there
is also a Code of Practice containing similar principles which
governs the broadcasting industry.
In addition, there are the Control of Misleading Advertisement
Regulations 1988. These provide that an advertisement is misleading
if it deceives or is likely to deceive the persons to whom it
is addressed or whom it reaches; where due to its deceptive nature
it is likely to affect economic behaviour; or because it injures
or is likely to injure a competitor.
The other piece of legislation which may affect comparative advertising
in the future is a Draft EU Directive on Comparative Advertising.
However, the EU States remain unable to reach agreement and it
is unlikely that the Directive will be implemented for some considerable
The draft permits comparative advertising, provided that it objectively
compares the 'material, relevant, verifiable and fairly chosen
features of competing goods', subject to it not being misleading,
causing confusion in the marketplace between the advertiser and
a competitor, and not discrediting or bringing a competitor or
his trade marks into contempt. This Directive is not expected
to come into force until December 1995, if at all, and there are
likely to be substantial changes before a final version is settled.
As comparative advertising becomes more prevalent, the amount
of regulation relating to its various forms is likely to increase.
For the advertiser and the advertising agency the 1994 Trade Marks
Act means that, within certain limits, products and services can
now be advertised with reference to the registered trade marks
of a competitor. A new form of advertising is now available in
the UK, but it should be noted that despite the new Statute, the
use of comparisons is not totally without risk.