ADVERTISING

Advertising is like electricity, which not only illuminates

but electrocutes. Its worth to civilization depends upon
how it is used.
ADVERTISEMENT LAW- REGULATION
Governmental Laws/SRO

Ofcom in UK

FTC in US

Laws/ASCI in India
 Advertising Laws: Laws that affect advertising in India

Monopolies and Restrictive Trade Practices Act, 1969

Consumer Protection Act
Drugs and Magic Remedies (Objectionable Advertisements) Act,
Trademarks Act
Cigarettes and Other Tobacco Products (Prohibition of Advertisement and
Regulation of Trade and Commerce, Production, Supply and Distribution)
Act, 2003
Emblems and Names (Prevention of Improper Use) Act
Indecent Representation of Women (Prohibition) Act
 MRTP Section 36-A Unfair trade practise
falsely represents that the goods are of a particular standard, quality, quantity,
grade, composition, style or mode;
falsely represents that the services are of a particular standard, quality or
grade;
falsely represents any re-built, second-hand, renovated, re-conditioned or old
goods as new goods;
represents that the goods or services have sponsorship, approval, performance,
characteristics, accessories, uses or benefits which such goods or services do
not have;
represents that the seller or the supplier has a sponsorship or approval or
affiliation which such seller or supplier does not have;
makes a false or misleading representation concerning the need for, or the
usefulness of, any goods or services
 KLM Royal Dutch Airlines v. Director General of Investigation
and Registration,
(2009) 1 S.C.C 230.

In this case it was held that,

Whether a statement constitute a false or misleading

representation will depend upon the facts and circumstances of
each case. It is not possible to provide an exclusive list of the
statements which may constitute false or misleading
representation, nor can there be any strait-jacket formula evolved
thereof for the said purpose. (2009) 1 S.C.C 230.
Consumer Protection Act

The MRTP Act 1969 was repealed, but Section 36A has been adopted
in section 2(1)(r) of the Consumer Protection Act.
The Drugs and Magic Remedies (Objectionable
Advertisements) Act, 1954
The intention behind the enactment of this law was to curb
advertisements with a view to prevent self-medication and self-
treatment.
 Object of the Act

in recent years there has been a great increase in the number of objectionable
advertisements published in newspaper or magazines or otherwise relating to
alleged cures for venereal diseases, sexual statements and alleged cures for
diseases and conditions peculiar to women. These advertisements tend to
cause the ignorant and the unwary to resort to self-medication with harmful
drugs and appliances or to resort to quacks who indulge in such
advertisements for treatments which cause great harm.
The Drugs and Magic Remedies (Objectionable
Advertisements) Act, 1954
"Magic Remedy" includes a talisman, mantra, kavacha and any other
charm of any kind which is alleged to possess miraculous powers for or
in the diagnosis, cure, mitigation, treatment or prevention of any disease
in human beings or animals or for affecting or influencing in any way the
structure or any organic function of the body of human beings or
animals.
The Drugs and Magic Remedies
(Objectionable Advertisements) Act, 1954
Under Section 3 of the Act a list of diseases and disorders has been
provided in respect of which advertising is banned.
The Drugs and Magic Remedies (Objectionable Advertisements)
Act, 1954
Sec. 4 - Prohibition of misleading advertisements relating to drugs
no person shall take any part in the publication of any advertisement
relating to a drug if the advertisement contains any matter which

(a) directly or indirectly gives a false impression regarding the true character
of the drug; or

(b) makes a false claim for the drug; or

(c) is otherwise false or misleading in any material particular.

The Drugs and Magic Remedies (Objectionable
Advertisements) Act, 1954

One area of concern of-late in India is the advertisements relating to

certain magic remedies especially astrological products. But the Act
does not mention anything regarding such products which make
broad promises such as good fortune, peace, prosperity and all those
claims which cannot be technically or scientifically proved.
ASCI
All 4 sections connected with advertising viz.:
Advertisers
Advertising Agencies
Media (owners of press, television, Radio etc.)
Related sectors (outdoor agencies, PR, market researchers, ad producers, business schools
etc.)
come together & agree to voluntarily comply with a set of guidelines or rules ie the code to
protect:
Consumer interest
Ensure fair play amongst competitors
Rule 7(9) of the Cable TV network Act
States that
no advertisement which violates the Code for self-regulation in
advertising, as adopted by the Advertising Standard Council of India
(ASCI), Mumbai for public exhibition in India, from time to time, shall
be carried in the cable service.
GAMA
Under the DoCA
UNSUBSTANTIATED CLAIMS
Puffery
Puffery is where the advertiser seeks to draw the consumers
attention by making superlative claims about his product which no
reasonable person would take literally

It is claims which cannot be proved or disproved eg: The best bread in

the world

Humorous and imaginative advertisements often use this technique.

It can also be a comparative advertisement

Comparative Ad
No specific legislation bans comparative advertisement per se

Possesses Two elements Puffery and Denegration

Puffery is where the advertiser seeks to draw the consumers

attention by making superlative claims about his product
Land mark case
 Calcutta High Court has stayed HULs RIN ADVERTISEMENT and has
said that the ad is a clear case of disparagement. An injunction has
been granted on the grounds that the voice-over in the ad spoke of
Tide whereas the ad showed Tide Naturals and that there were
inherent defects in the affidavits submitted by HUL to support its
claim of superior whiteness
Fundamental Law Governing Comparative Advertisement

Trade Marks Act

Sec 29(8) A registered trade mark is infringed by any advertising of the
trade mark
if such advertising---
(a) takes unfair advantage of and is contrary to honest practices in
industrial or commercial matters or
(b) is detrimental to its distinctive character or
(c) is against the reputation of the trade mark.
Sec 30 Trademark Act
Nothing in section 29 shall be construed as preventing the use of a
registered trade mark by any person for the purpose of identifying
goods or services as those of the proprietor provided the use---
(a) is in accordance with honest practices in industrial or commercial
matters. and
(b) is not such as to take unfair advantage of or be detrimental to the
distinctive character or repute of the trade mark.
Sec.103 - Penalty for applying false trade marks,
trade descriptions, etc.
Any person who

(a) falsifies any trade mark; or

(b) falsely applies to goods or services any trade mark; or

(c) makes, disposes of, or has in his possession, any die, block, machine, plate or
other instrument for the purpose of falsifying or of being used for falsifying, a trade
mark; or ...
(g) be punishable with imprisonment for a term which shall not be less than six
months but which may extend to three years and with fine which shall not be less
than fifty thousand rupees but which may extend to two lakh rupees:
 Hindustan Unilever Ltd.
v.
Reckitt Benckiser (India) Ltd.
Comparative advertisement can be best understood from the four cases between Reckitt Benkiser (India) Ltd.
v. Hindustan Unilever Ltd

1. The first advertisement portrays Dettol Kitchen Gel killing 100X more germs than the leading
dishwash of the day

 Vim was the leading dish wash with 80 % market share

the Court held that S.30, Trademarks Act permitted comparative
advertisements to the extent that they were the puffing up of the
traders own product. However, a serious comparative advertisement
that lowered the reputation of the other goods would be hit by S.30 as
it would be unfair or detrimental to the rival traders trademark. The
test was whether a reasonable person would understand the
comparative advertisement to be making a serious claim disparaging
the rival traders product.
2. In the advertisement Lifebuoy
soap was compared to Dettol anti
septic

The Court held that an unfair

comparison is made between two
products that were not meant for
the same purpose. Dettol is an
antiseptic that is supposed to be
used as a supplement to soap/
bathing gel while Lifebuoy is used
predominantly for cleansing.
Therefore, the Court held that
disparaging Dettol after showing it
in an improper context and dilution
was unfair and hit by S.30.
Therefore, an injunction was issued
against the advertisement
 Advertisement, did not directly refer to Dettol. Instead it showed a
bottle with an amber coloured liquid which was termed as an
antiseptic. This, the Court said would be understood by reasonable
persons to refer to Dettol. Moreover, the Court held that the
advertisements reference to the dangerous nature of antiseptics
when consumed had a real possibility of deterring consumers from
purchasing the Dettol Kitchen Gel. The Court ruled that this was a
serious comparative advertisement that declared one product to be
safer and consequently, more superior than the other. This resulted in
denigration of that product which lowered the reputation of the
product. The advertisement was therefore held to be detrimental and
violative of S.30.
Law relating to disparagement of goods
a) A trader can laud his product.
b) He can even say that his product is the best in the world.
c) He can declare that his product is better than his rival's and in what
respect it is better.
d) He cannot say that his rival's product is bad, injurious or
deleterious or make an intentional misrepresentation to mislead
customers.
Test of a misleading advertisement - in a comparative ad

In relation to the test of a misleading advertisement the court

holds:
two essential elements must be satisfied.
First, misleading advertising must deceive the persons to whom it is
addressed or at least, must have the potential to deceive them.
Secondly, as a consequence of its deceptive nature, misleading
advertising must be likely to affect the economic behaviour of the
public to whom it is addressed, or harm a competitor of the
advertiser.
 The question as to whether the comparison is disparaging the others
product has to be answered considering factors such as:

intent of the commercial;

manner of the commercial; and

storyline of the commercial and the message sought to be conveyed

Right to speech
An advertisement is commercial speech and is protected by Article
19(1) (a) of the Constitution.

False, misleading, unfair or deceptive advertising is not protected

commercial speech as given in Article 19(1) (a) of the Constitution.
Colgate v. HUL

The TV commercial (TVC) as well as the

print advertisement claim that the
Pepsodent product is 130% better than
the Colgate product. Both ads clearly
show the Pepsodent and the Colgate
products being compared, with brand
names clearly visible, making this a classic
case of comparative advertising.
Colgate v. HUL
 Colgate v. HUL
The Single Judge has used the Average Viewer Test, in which the Court
determines whether the product has been disparaged in the mind of the
average viewer of the advertisement.

It was held that one of the considerations for disparagement was

whether there was truth in the allegations made in the advertisement.

The High Court reconciled the two principles by clarifying that

advertisers can compare two products and claim that one is better, as
long as it is truthful. However, this is only permissible as long as
the object of the advertisement must be to promote ones own product,
and not to disparage the rival one
 Havells V Eveready
The ad warned the consumer check lumens and price before you buy.
The comparison was limited to the these two factors

The comparison was not done on features such as

power factor
over all life.

Judgment
there was no requirement in law to disclose and compare every feature
in a comparative advertisement.
Further, the law allowed an advertiser to compare and highlight the
advantages of his goods over the goods of a competitor.
Havells V Eveready
In relation to the test of a misleading advertisement the
court holds: two essential elements must be satisfied.

First, misleading advertising must deceive the persons to whom it

is addressed or at least, must have the potential to deceive them.

Secondly, as a consequence of its deceptive nature, misleading

advertising must be likely to affect the economic behaviour of the
public to whom it is addressed, or harm a competitor of the
advertiser.
Surrogate Advertising/Brand Extension
Soda, Mineral Water, Music CD, Mega Cricket team clubs, Friends
clubs are shown in advertisement.
Eg: Bagpiper Club Soda. Intention behind such advertisement is to
popularize the whisky, liquor products.

Deeply under-regulated in India courts have more often taken the

side of the advertisers.
Ex-Union Health Minister Mr .
Anbumani Ramadoss had
challenged the name of the
Bangalore Indian Premier League
(IPL) cricket team, Royal
Challengers, as a form of surrogate
advertising for liquor brand Royal
Challenge. But the Supreme Court
of India has pointed out that the
team was not named Royal
Challenge the liquor brand Only
those who drink can be attracted
 Some regulations do exist for example Indian Broadcasting Federation has ruled that
if liquor companies promote any juice, mineral water or soda, these should be
shown in a proper manner and not as trimmings to liquor advertisement.
ASCI has very specific regulation for surrogate advertising as per ASCI code
Brand Extension Product or Service should be registered with appropriate
Government authority eg. CENVAT / VAT/FDA/FSSAI/TM etc.,

2a. In store availability of the product must be at least 10% of the leading brand in
category the product competes as measured in the Metro Cities where the product
is advertised.

OR

2b. Sales Turnover of the product or service should exceed Rs.5 cr per annum
nationally or Rs 1 cr per annum per state where distribution has been established.
Dabur Chyawanprash on their packaging claims that it provides "3 times more immunity". The fine print says that
the claim of "3 times more immunity" is based on "preclinical study on NK cells". It also claims that it is
scientifically proven. 1. Preclinical studies means that it has not been tested on humans yet. Any drug or compound
cannot claim to bring said benefits unless Phase - III trials are done. If it works for rats then it doesn't mean that it
works for humans too.

Hence asked to discard 3 times more immunity claim.

Discrimination against female child, hence asked to withdraw the
advertisement
Disrespecting National Flag; flag code of india
 Use of Flag for commercial purpose and writing on the flag
Celebrity liability
 Section 24 - Food Safety and Standards Act,
Restrictions of advertisement and prohibition as to unfair trade practices.-
(1)No advertisement shall be made of any food which is misleading or deceiving or contravenes the
provisions of this Act, the rules and regulations made thereunder.
(2) No person shall engage himself in any unfair trade practice for purpose of promoting the sale,
supply, use and consumption of articles of food or adopt any unfair or deceptive practice
including the practice of making any statement, whether orally or in writing or by visible
representation which-
(a) falsely represents that the foods are of a particular standard, quality, quantity or grade-
composition;
(b) makes a false or misleading representation concerning the need for, or the usefulness;
(c) gives to the public any guarantee of the efficacy that is not based on an adequate or scientific
justification thereof: Provided that where a defence is raised to the effect that such guarantee is
based on adequate or scientific justification, the burden of proof of such defence shall lie on the
person raising such defence.
 Section 53
Food Safety and Standards Act, 2006 (FSSA) expressly provides that

"any person who is party to an advertisement" that falsely describes any

food, or is likely to mislead as to the nature or quality of the food can be
held liable for a penalty of up to Rs 10 lakh.
Indian Penal Code
Indian Penal Code under
1. Sections 270 (malignant act likely to spread infection of disease
dangerous to life),
2. 273 (sale of noxious food or drink), and
3. 420 (cheating and dishonesty)
 FTC - 2009 Guidelines
[t]he celebrity has decided to earn money by providing an
endorsement. With that opportunity comes the responsibility
for the celebrity or his or her legal representative to ensure in
advance that the celebrity does not say something that does
not reflect honest opinions, findings, beliefs, or experience.
FTC
Dot com disclosure.

"Required disclosures must be clear and conspicuous."

./ad/

Celebrities have a duty to disclose their relationships with advertisers while

endorsing outside the context of traditional ads
Example
Shooting movie beach scene. Had to lose 30lbs in 6 wks. Thanks Fat-away
Pills for making it easy."