Ad code applies to trademarks too, says regulator ASCI

Descriptive trademarks are often false and dishonest and must comply with the ASCI advertising code, said a report jointly unveiled with intellectual property firm K&S Partners.

ASCI is a not-for-profit, self-regulating body under the Companies Act.

Business entities often register descriptive words as trademarks, which can be inaccurate or misleading. But when the regulator objects to such claims, they are citing their statutory rights conferred by the registered trademark, the report said.

The report, Deceptive Advertising and Trademarks: A Registration Puzzle, said it is not unusual for the Trade Marks Office to allow the registration of such descriptive or laudable marks.

For example, clothing has a descriptive mark like ‘All Wool’ to indicate that the product contains only wool.

Since the Trade Marks Office does not check its veracity, goods sold under the trademark ‘All Wool’ are not actually made of wool alone.

When cases of such misleading claims are taken up by ASCI’s Consumer Complaints Council (CCC), advertisers who have secured registration for a descriptive trademark often rely on their registration to claim that the trade mark’s Registration is prima facie evidence of its validity and that the ASCI Code cannot restrict the use of a registered trademark.

“These defenses are devoid of any merit and, therefore, must be dismissed. Just as the registration of a company name by the inclusion of a trade mark is a defense against infringement of a trade mark or in passing of action,” the ASCI said. Similarly, registration of a trade mark cannot serve as a defense to untrue or dishonest claims.

Although the ASCI Code does not specifically prohibit the use of registered trademarks, there is an explicit prohibition on the use of statements or visual representations that directly or indirectly make untrue or dishonest claims.

“Therefore the ASCI Code shall certainly apply to those trademarks which are characteristically unverified or untrue,” it said.

“The issue relating to false, baseless and dishonest advertisements in the guise of descriptive or laudable trademarks is a serious one. Protecting consumers from fraud is one of the core principles of the ASCI Code, the Trade Marks Act and the Consumer Protection Act,” said Prashant Gupta, Partner, K&S Partners.

“The Trademark Office needs to raise the threshold for descriptive or laudable trademarks, failing which, the rights of consumers to be protected from fraudulent marks and to make informed choices will be severely compromised,” he said.

To address this issue, the Registrar (Trade Marks) should exercise greater restraint in allowing registration of descriptive trademarks. The report states that the prudent exercise of the Trade Marks Office’s discretion will significantly reduce the number of untrue claims.

Manisha Kapoor, CEO and General Secretary, ASCI said, “At ASCI, we see cases where an advertiser uses trademark registration to defend its direct or implied claims, claiming that trademark registration means That claim is good in law.

This is not true, and we ask brands to be cautious in using untrue, exaggerated or misleading phrases to describe their products, whether they are trademarked or not.”