Introduction
Advertisements have a significant impact on consumer choice. Therefore, it is crucial that advertisements are both truthful and fair. False and misleading advertisements are not only unethical, but they also distort competition and consumer choices. These advertisements violate several basic consumer rights, such as the right to information, the right to make choices, the right to be protected against unsafe goods and services, and the right to fair trade practices. Although advertisements aim to promote products or services, they often exaggerate the product’s benefits. However, when they intentionally utter falsehoods or misrepresent facts, thus misleading the consumer, it becomes unacceptable. Big brands deceive people by using misleading trademarks as the name of the product, which eventually misleads the consumers.
Understanding “Trademark”
The word Trademark is defined under the Indian Trademark Act, 1999 under section 2 (zb) “Trademark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colours. The Act also defines false trade description under section 2(i) “false trade description” means-
I. a trade description which is untrue or misleading in a material respect as regards the goods or services to which it is applied or
II. any alteration of a trade description as regards the goods or services to which it is applied, whether by way of addition, effacement or otherwise, where that alteration makes the description untrue or misleading in a material respect;
Trade descriptions that are trademarks can still be false descriptions under this Act. The Trademark Act protects registered marks from unauthorised use. The Controller General for Patents, Designs and Trademarks shall manage the registration and dispute of marks. People who are suffering from false advertising and trademark infringement may file complaints with the Intellectual Property Appellate Board (IPAB), and ask for damages such as injunctions or cease and desist orders.
The Trademarks Act of 1999 safeguards registered trademarks from unauthorized utilization. Individuals can lodge complaints with authorities to tackle misleading advertisements or trademark infringements, seeking remedies like cease-and-desist orders, damages, or injunctions. To evade legal consequences and maintain market trust, businesses must ensure the accuracy of their advertisements. The Guidelines are designed to monitor advertisers, preventing misleading or false advertising practices.
Defining Misleading Advertising
Advertisement plays a crucial role in influencing consumers’ buying decisions. However, advertisements must not mislead consumers or make false claims. For instance, an edible oil advertisement should not provide the impression that using a particular oil will make you immune to heart problems. Similarly, a water purifier advertisement claiming to provide 100% safe water should clearly state whether it filters viruses or not. If a cell phone service provider promises STD calls for 40 paise per minute, it should specify that the rate is only applicable when calling numbers serviced by the same provider. Any claims made by manufacturers, such as a refrigerator being the best or keeping food germ-free, should be backed by adequate data. Otherwise, the claims become false statements. Certain brands register trademarks such as “Fresh Juice” or “Fresh Tomato Ketchup.” However, they include a disclaimer on the back of the packaging, stating that the trademarked name does not necessarily reflect the actual characteristics of the product. Given that consumers often do not thoroughly read all the details on the packaging, they may make purchasing decisions based solely on the prominently displayed front-label information.
Global Perspectives on False Advertising
In the USA there is an act known as the Lanham Act which provides a cause of action for false advertising, which allows individuals and companies to bring legal action against false advertisers. To prove false advertising as a form of trademark infringement, the plaintiff must show that the advertising is false or misleading and that the false or misleading advertising has a material effect on the purchasing decision of consumers.
If the plaintiff prevails in a lawsuit for false advertising, they may be entitled to various remedies, such as injunctions, damages, and attorney’s fees. The plaintiff can also seek an injunction to stop the false advertising.
It’s important to note that the standard for false advertising under the Lanham Act is whether the advertising is likely to mislead a significant portion of consumers, even if the advertising is not intended to be misleading. This means that a company can be held liable for false advertising even if it did not intend to deceive consumers.
Examples of False Advertising Trademark Cases
- POM Wonderful LLC vs. Coca-Cola Co.: In this, POM accused Coca-Cola of falsely advertising its pomegranate-blueberry juice blend as being made mostly of pomegranate and blueberry juice, when it contained mostly apple and grape juice.
- Skechers USA, Inc. vs. Nike, Inc.: In this case, Skechers accused Nike of false advertising by claiming that its “Shape-ups” shoes provided health benefits, such as improved posture and weight loss, without sufficient scientific evidence.
- Dannon Company, Inc. vs. General Mills, Inc.: In this case, Dannon accused General Mills of false advertising for claiming that its Yoplait yoghurt contained “active cultures” when some of its products did not contain live and active cultures.
- The Lanham Act provides a legal framework to address false advertising, ensuring that businesses adhere to truthful practices in their marketing efforts.
Companies found guilty of false advertising may face significant legal consequences, emphasizing the importance of transparency and accuracy in product promotion.
Misleading Trademark Ads in India
In India, there has been an increase in misleading ads on trademarks in the past decade. Big brands are misleading consumers by using slogans and including misleading nutrition-related claims especially targeting children, senior citizens and people with certain health problems like diabetes or heart problems. These ads promote health cures, drugs with questionable efficacy, and health gadgets of unknown value. For instance, Vicks Vaporub is not good for inhalation or use in warm water as it contains camphor which is harmful as it can have toxic effects on our body. Ingesting camphor is especially dangerous for young children. Regular ingesting of camphor can cause seizures and death.
Another example of misleading ads is Colgate toothpaste, which claims to be recommended by the Dentist as the best toothpaste but this paste has very harmful chemicals such as Sodium Lauryl Sulfate which is used in detergent, it is used as a foaming agent in toothpaste for almost 100 years. Too much fluoride can cause fluorosis (discoloured spots on teeth). Nevertheless, fluoride intake poses potential risks of severe adverse health effects, encompassing neurological and endocrine dysfunction. A study conducted in 2012 by researchers from Harvard School of Public Health and China Medical University established a compelling association between fluoride exposure and adverse impacts on cognitive development in children. The existing body of knowledge regarding fluoride’s effects remains incomplete, underscoring the need for prudence in incorporating it into our diets.
Moreover, a 2006 study by the US National Research Council of the National Academies, found evidence that fluoride affects normal endocrine function. The endocrine is a system of glands that help control many functions within the body by releasing hormones. Such functions help determine how your heart beats, and how your bones develop and grow, to name a few. Parabens are used to preserve the shelf life of a range of cosmetics, including toothpaste.
Parabens can disrupt hormone function by mimicking the hormone estrogen. In some cases, parabens may lead to breast cancer. Some sites also claim that parabens are linked to developmental and reproductive issues, however, this has yet to be confirmed.
There are various cosmetic products which claim to make the skin lighter in colour, these kinds of ads not only are false but also make a person feel bad about themself. For instance, the famous face cream product by the name of “Fair & Lovely” was very significant in the past decade but after multiple cases of false advertisements the product changed its name to “Glow & Lovely”. There is another example of energy drinks for children which claims that by drinking their energy drinks the child’s height will grow or their energy level will increase not only this but their intellect will increase by that drink but in reality, all these claims are not true, most of the energy drinks for kids contains high sugar which is not ideal for the child growth. Most of these drinks claim to have vitamins and even amino acids which are ideal for bodybuilding but it’s not true, rather simply buying these vitamins is way cheaper. Another drawback of these drinks is that they contain caffeine which is addictive in nature.
The rise of deceptive and false advertising is causing significant concern. In the past, such misleading ads were primarily confined to print media, billboards, and pamphlets. However, with television now reaching a broader audience, including those who are illiterate, there is worry about the increased dissemination of these ads. Moreover, there’s apprehension regarding the extensive use of television networks to promote unverified health remedies and cosmetic products, impacting even the remotest parts of the country. Television’s visual impact surpasses that of newspapers, amplifying the influence of these misleading images.
The internet is also flooded with numerous misleading ads, particularly those promising miraculous health cures. This issue is not localized but rather affects the global community. For instance, in 2002, a worldwide network of consumer protection and health authorities discovered 1400 websites offering unproven health claims and miracle cures, underscoring the widespread presence of false advertising on this relatively new communication platform.
Regulating Bodies in India to Prevent Misleading Ads
Advertising Standards Council of India (ASCI)
The Advertising Standards Council of India (ASCI) was established in 1985 as a voluntary body comprising advertisers, advertising agencies, and the media. It developed an advertising code for self-regulation, centred on four fundamental principles:
- Ensuring truthfulness and honesty in ad claims to prevent misleading representations.
- Preventing advertisements from being offensive to public decency standards.
- Safeguarding against promoting hazardous products unacceptable to society.
- Ensuring fairness in competition by informing consumers and adhering to accepted business competition practices.
ASCI encourages consumers to report false, misleading, or unethical ads through its Consumer Complaints Cell (CCC). The CCC assesses complaints and presents them for decision-making. If an advertisement breaches ASCI’s code, the advertiser is urged to modify or withdraw it. ASCI members must comply with the CCC’s decision, using peer pressure to influence compliance.
Several instances highlight ASCI’s interventions in misleading advertisements. For instance, ASCI found an advertisement by Ajanta Dento White Toothpaste claiming Indian Dental Association endorsement to be false in 2002. Additionally, a Ford India advertisement showcasing “Ford Ikon NXT” specifications and offers for different models was flagged for misleading details.
ASCI has received complaints regarding various advertisements, including claims by Piramal Healthcare’s Superactiv Complete, Airtel Digital TV’s lifetime free regional pack promise, and Nuzen Herbal Pvt. Limited oil commitments for hair growth, black hair, dandruff reduction, no side effects, and no age restrictions. Additionally, United Spirits Ltd’s billboards promoting McDowell’s Platinum Whisky and Romanov Vodka, and Hindustan Unilever’s TV ad for Clinic Plus Strong and Long Shampoo have faced criticism.
Despite ASCI’s commendable efforts, there are challenges in their process. It takes four to six weeks for the Consumer Complaints Council to review an advertisement and for ASCI to communicate its decision. Advertisers are given two weeks to modify or withdraw the ad. However, ASCI does not issue corrective advertisements. Issues related to self-regulation emerge, including members violating the code or industry members not participating actively. In a specific instance in 2010-2011, while ASCI enrolled 20 new members, 14 did not renew their memberships. This highlights potential challenges within ASCI’s self-regulatory framework.
While ASCI’s efforts are laudable, there are criticisms regarding the time taken (four to six weeks) for the Consumer Complaints Council to review ads and communicate decisions. Although advertisers have two weeks to modify or withdraw ads, ASCI doesn’t issue corrective advertisements. Challenges exist in self-regulation, with instances of non-compliance from certain industry members or new members failing to renew their membership. For instance, in 2010-2011, while ASCI enrolled 20 new members, 14 did not renew their membership, indicating potential issues within the self-regulatory framework.
Central Consumer Protection Authority (CCPA)
The Consumer Protection Act, 2019 defines misleading advertisements as those that falsely describe a product or service, provide false guarantees, or may mislead consumers regarding the nature or quality of the product. To oversee consumer rights and prevent deceptive advertisements, the Central Consumer Protection Authority (CCPA) was established. The CCPA can initiate inquiries into misleading ads either on its own or upon receiving complaints.
Recently, the CCPA gained attention for instructing the discontinuation of an advertisement for a toothpaste brand that showcased endorsements from overseas dentists. It also initiated an investigation into the toothpaste’s bold claims, such as being “recommended by dentists worldwide” and touted as the “world’s no. 1 sensitivity toothpaste.” India’s Consumer Protection Act, 2019 is a key law regulating misleading advertisements and trademarks. The Central Consumer Protection Authority (CCPA) is responsible for investigating complaints and imposing penalties. For violation of provisions related to misleading advertisements under the Guidelines, the CCPA can impose a penalty of INR 10 lakhs on manufacturers, advertisers and endorsers. For subsequent violations, the CCPA may impose a penalty extending up to INR 50 lakhs. As per the CPA, the CCPA may also prohibit the endorser of a misleading advertisement from making any endorsements for up to one year, which can extend to 3 years on subsequent non-compliance.
The Central Consumer Protection Authority (CCPA), marking two years since its establishment in July 2019, issued 129 notices, with 71 aimed at misleading advertisements, 49 for unfair trade practices, and nine for violating consumer rights.
The Chief Commissioner of, Nidhi Khare, revealed that these notices aim to launch a nationwide campaign against counterfeit goods breaching Quality Control Orders (QCOs) by the Central Government. These actions also intend to educate consumers about buying products conforming to BIS Standards.
Specific safety notices were issued regarding various household goods, alerting consumers to avoid products lacking valid ISI marks that could pose safety risks. The CCPA addressed e-commerce platforms, directing them to reveal seller details and product information for consumer protection. Notably, the CCPA’s Class Action provision, a new feature introduced by the 2019 Consumer Protection Act, enables action against unfair trade practices and misleading advertisements affecting consumers collectively. The CCPA’s actions involved halting misleading ads, penalizing companies for false claims, and addressing issues with e-commerce entities, including unfair practices and consumer grievances. The authority also issued guidelines against misleading ads, outlined rules for service charges, and focused on health-related consumer concerns.
Efforts were made towards environmental sustainability, advocating the “Right to Repair” framework to reduce e-waste, aligning with global practices. Several companies withdrew misleading ads following CCPA actions, emphasizing the authority’s efforts toward consumer protection without stifling innovation or imposing excessive restrictions on businesses. The CCPA aims to update and align consumer protection laws with market changes for fair outcomes. The list of companies withdrawing misleading ads includes Siyaram Silks, Lifebuoy, Kent Ro, Asian Paints, Blue Star, Zodiac, Safal Hospitality and Maintenance Services, Berger Paints India Limited, AM Webshop India Pvt. Ltd (Spaces), Naaptol, Sure Vision India, Sensodyne, and Bhanwar Rathore Designer Studio.
There is growing apprehension about the rising prevalence of false and misleading advertisements. Previously confined to print media, pamphlets, and billboards, such ads are now prevalent on television, reaching a wider audience, including those who are illiterate. The surge in advertisements endorsing unproven health cures and beauty gadgets through television marketing networks is particularly worrying, given their reach even in remote areas. Visual impact on television screens surpasses that of newspapers, intensifying concerns, especially when certain television channels actively broadcast such misleading ads.
The misuse of mass mobile text messaging has become a common strategy for disseminating false information about weight reduction products and devices. They often promise satisfaction and a money-back guarantee, but inquiries for refunds go unanswered, raising red flags. Likewise, mass marketing campaigns through emails (viral marketing) frequently promote deceptive get-rich-quick schemes, dubious health claims, or miraculous cures. These practices pose significant concerns and demand attention and resolution.
Conclusion:
Misleading trademark advertisements pose a significant threat to consumers, brands, and the overall integrity of the market. While regulatory bodies in India are actively working to address this issue, consumers must stay informed, critically assess advertisements, and report deceptive practices. Only through collective efforts can India ensure a fair and transparent marketplace where trademarks are used ethically and responsibly.
This article is written and submitted by Riya Sood during her course of internship at B&B Associates LLP. Riya is a 3rd year LLB student at Panjab University.
