All is fair in love and war.” This axiom is frequently thrown about and is often used as a basis to justify certain actions. If it is true about love and war, what about business? These days the competitiveness to sell products or services can be very intense. What is fair between competitors in the marketplace? Is it like love and war? Anything goes? Actually, not everything is OK, even in love and war, and the same goes for the marketplace.
THE STORY OF FRANKIE LEE AND JUDAS PRIEST
Frankie Lee, your client, walks into the office — or in these times respecting social distancing arranges for a video conference – and says, “Look at Judas Priest’s website. I thought he was my friend! Can he do this? I want you to stop him! He is not playing fair.”
So, you take a look and discover that Judas Priest’s website is comparing Frankie’s product Frankie Lee’s Seltzer Tabs with Judas Priest’s Fizz Pills. In bold brash letters the website declares: “Frankie Lee’s Seltzer Tabs cost twice as much and the fizz isn’t what it is. If you want a reliable fizz in your juice at a reasonable price, buy Judas Priest’s Fizz Pills.”
WHAT IS COMPARATIVE ADVERTISING?
Judas Priest’s claim is an example of comparative advertising. Comparative advertising is a marketing tactic where a competitor compares its product with your client’s product, usually denigrating your client’s product somehow such as by relative cost, value, quality or some other attribute. In a typical situation the client’s trademark is involved and this often becomes a primary point of indignation. “How can they use my trademark?” is the outcry. The short answer is, “They probably can.” We leave to your judgement as to whether this should be your initial response to Frankie Lee.
Why can Judas Priest get away with using Frankie’s trademark in this way? Frankie has an incontestable federal registration for his mark that gives Frankie exclusive rights throughout the entire United States. As you can surmise, there is no such thing as a short legal answer.
First and foremost, for trademark infringement to be actionable Judas Priest’s actions have to be such that they are likely to cause confusion. 15 USC § 1125. A trademark is a source indicator, such that when a buyer views the trademark the buyer believes that the goods/services come from a particular source. If the goods actually come from another source, there may be infringement. This is the basis, and in many respects the extent of, Frankie’s trademark rights. Frankie has exclusive rights under the guise of likelihood of confusion to stop others from selling carbonation tablets or similar products under his Seltzer Tabs trademark.
MY PRODUCT IS BETTER THAN YOURS!
But Judas Priest is not selling product under Frankie Lees’ Seltzer Tabs trademark. Judas Priest is running an ad distinguishing the two products by comparing them. Judas Priest is doing something radically different from trademark infringement. He is saying, “My product is better than yours.” to Frankie Lee and to potential consumers.
However, Judas Priest has to be careful. He has to speak the truth. The price of the products is what it is. There can be no contention here. If Frankie is selling at a higher price, then Judas Priest is likely in the clear.
What about reliability? Here’s where the story gets real. If Judas Priest’s Fizz Pills do not perform as claimed, then Frankie can confront Judas Priest with a “misleading description of fact” claim under 15 USC § 1125. Frankie says to you, “Judas Priest is telling lies. My Seltzer Tabs fizz and fizz and fizz, and do not fizzle out as Judas Priest wrongly claims. I want to sue because I have been aggrieved by Judas Priest and he no longer is my friend.”
“Whoa. Not so fast!” you say to Frankie Lee. “Judas Priest may be well prepared. His product assertations in a court of law may be judged not to be the reason for your distress. What if Judas Priest actually has comparative fizz product data between your Seltzer Tabs and his Fizz Pills?” If his product comparison claims are true, the story probably ends. If his product comparison claims are false, the story continues.
Comparative advertising issues are complicated. The use of another’s trademark in such a comparison is generally permitted, but any claim must be true, preferably with backup data. If the ad puffs up certain product attributes in its comparison, the issues become more complicated and beyond the scope of this article.
The moral of this story, the moral of this tale, . . . is that when you run an ad, make sure it’s true and you may have a chance to prevail. Thank you, Bob Dylan! (The Ballad of Frankie Lee and Judas Priest)