Comparative Advertising Laws in Canada

Comparative advertising is a creative advertising technique that involves simultaneously advertising your own brand, whilst also comparing it to another brand. This allows consumers to see your brand’s superiority and its differences with other brands in the market. This may be a good tactic to divert consumers towards your brand away from the dominant player. These rivalries not only provide the consumer with greater choice but also foster a better environment for competition where each brand is trying to out manoeuvre the other. However, in order to reach checkmate before your opponent the advertising must stay within the rules of the game. In Canada, there is a few legal hurdles that need to be considered before embarking on a comparative advertising campaign.

Competition Act

As with most advertising, the Competition Act will need to be consulted. Specifically, the provisions relating to misleading or false advertising. Your brand will be liable if the facts you advertise about your own or competitors brand are false. Performance related claims need to be thoroughly tested because if they are proven to be false then they will fall afoul of the Competition Act. Therefore, before you advertise ensure that your facts are truthful and provable.

Trademark Act and Passing Off

Another issue that may arise with comparative advertising is the use of your competitor’s name or logo. Before using these details, it would be worthwhile checking numerous things. Firstly, is the competitors trademark is registered and if it is what it is registered for. Secondly, how you will be using your competitors trademark. Not complying with the Trademark Act can lead to liability for trademark infringement.

Even if Trademark infringement cannot be proven often because the trademark is unregistered, passing off may still be a concern. This is a common law tort and a statutory cause of action which protects the goodwill of the competitor’s brand. In order to avoid liability for passing off, it needs to be clear that you are not associating yourself with the competitor’s brand nor advertising their product.

The Canadian Code of Advertising Standards and Guidelines for the Use of Comparative advertising

Provision 6 of the Advertising Code is dedicated to comparative advertising. It states that “advertisements must not unfairly discredit, disparage or attack one or more products, or exaggerate the nature or importance of competitive differences.” This provision requires you to compare with care. If you only talk trash about your competitor, then not only will you be breaching the ASC code, you may also be liable for trade libel.

Alongside the code, the ASC have created a set of guidelines to further elaborate on what is acceptable in regards to comparative advertising. The guidelines state that the “comparison must be a fair and factual comparison of similar properties, features or ingredients and must not create an unsupportable negative impression of the compared to product.”

Comparative advertising is a creative way to attract new consumers. The relevant laws and Guidelines do not limit your ability to utilise this technique, the legal hurdles are surmountable. The only requirement is that you play and compare fairly. If you follow this, then your advertisement will be successful.