As we discussed previously, a Trademark Audit is an important inventory tool that should be used to be sure that the trademark assets of the company are being properly used and protected. Another important function of a Trademark Audit is to be sure that you are using only your own trademarks; or, if you are using your competitors’ marks that such use is correct and proper.

In general, a company should only be using its own trademarks. However, there are some circumstances where it is acceptable to use a third party’s trademark in your advertising. These exceptions are often referred to as “fair use” of the other’s mark. There are several fair use exceptions that will be discussed over the next couple of weeks. We will start today with a discussion of the proper way to use a competitor’s trademark in a comparative advertisement.

It is possible to avoid trademark infringement while using the trademark of another company in a comparative advertisement. However, there are rules and guidelines that have to be followed to avoid liability. In addition, apart from the trademark infringement issues, comparative advertising can be prone to being considered misleading or deceptive, unless it is done with care.

Comparative advertising is described as “advertising that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration or other distinctive information.” Comparative advertising is encourage in the U.S. as it gives consumers important information and promotes product improvement and innovation and can provide consumers with useful and important information to help them make rational purchasing decisions. Such advertisements must however be truthful and non-deceptive, and use of a third party’s trademark must be only for comparison purposes. For this reason, only the word mark needs to be used. In comparative advertising there is no legitimate purpose in the use of a competitor’s logo.

The following list provides guidelines to help ensure that your comparative advertising is proper so as to avoid both trademark infringement and false advertising claims:

1. The intent and connotation of the advertisement must be informational and cannot be used to discredit or unfairly attack your competitor or the competing services. The statements made in the ad must be truthful and non-deceptive. And there should be no material omissions relevant to the statements made.
2. The named product should be one that is an actual competitor for your goods or services. The comparison must be legitimate and not merely a way to use the competitor’s mark together with yours. In other words, the purpose of the ad should be honest comparison, and not merely to associate your product with your competitor’s product.
3. The ad should fairly and properly identify the competing product and the company that provides that product. The comparison of the products and/or services should be made between similar properties and the comparison should be made on a feature-to-feature basis. Again, the comparison should be truthful and factual and not be made in a manner that degrades the product or the competing company.
4. Any comparisons made should be based on facts and not opinion. Any testing needed to make the comparison should be done by an objective, preferably independent, testing source. Ambiguous or subjective comparisons should be avoided.
5. All the trademarks in the ad should be used in the same manner – the competitor’s trademark should not appear more prominently than your own, as this could lead to a likelihood of confusion. Only the competitor’s word mark should be used. There is no comparative purpose in use of competitor’s logo or slogans.

Our Insight. Your Advantage.

While a company should generally only use its own trademarks, it can be acceptable to use a competitor’s marks in comparative advertising. To ensure your company avoids liability for trademark infringement and/or misleading or deceptive advertisements, follow the above guidelines when planning a comparative advertisement and consult with your trademark counsel regarding the final ad.