Comparative advertising – my brand is better than yours

05 May 2014

Comparative advertising is a well-known marketing technique. Because in such comparisons one brand always comes out on top, this type of advertisement regularly generates controversy.

Comparative advertising is a double-edged sword: used in a legitimate manner, it helps stimulate competition between suppliers of goods and services in the interest of consumers. Used in an unfair manner, it can be detrimental to competitors and have an adverse effect on consumer choice. Comparative adverts must find a balance between these conflicting interests.

In the EU, the use of another's trade mark in the framework of a comparative advert is permitted where it complies with the conditions laid down in the directive concerning misleading and comparative advertising (2006/114/EC).

If the advert meets the requirements set out in this directive, a brand owner cannot invoke its exclusive rights on its trade mark to oppose the advertising. If the advert does not meet those criteria, a trade mark owner has at its disposal several means to prohibit the unlawful use of its mark and to cease this unfair practice.

For instance, an advert must not mislead the consumer. This is often an issue with price comparisons, as the comparison may be based on only a limited sample of products but suggests an overall price advantage (e.g. "often more than 20% cheaper than in stores"), or provides an incomplete or outdated picture.

A comparative advert can only be a legitimate means of informing consumers if it objectively compares one or more material, relevant, verifiable and representative features of goods and services. 'You can't compare apples and oranges'. This can be tricky for an advertiser as in certain sectors it's hard(er) to identify appropriate features (e.g. subjective features depending on preference, objective features such as pricing but which constantly fluctuate).

The goods or services being compared must also meet the same needs or be intended for the same purpose. In substance, they must display a sufficient degree of interchangeability for consumers. Examples of such interchangeable goods can be found in the case-law: innovator drugs and generic drugs, beer and wine, mobile telephony and fixed telephony, etc.

In addition, the advertiser may not discredit or denigrate the competitor, its brand or activity. To fall foul of this, it is of course not enough to place a brand in a bad light factually, which is more or less the essence of comparative advertising, but there are limits to be found in case-law (e.g. "Welcome X and its rock-bottom prices. Goodbye Y and its very expensive flights"). In the same vein, the advertiser may not take unfair advantage of the reputation of its competitor's mark and may also not present its products or services as imitations or replicas of its competitor. Finally, the comparative advertisement must not create confusion between the advertiser's product, service or brand and that of his competitor.

All these criteria are useful tools for tackling a competitor’s advertising but are also aspects to be considered when designing a new campaign based on comparative advertising.