What is the legality of using your competitors name in advertising. 

If a competitor and my company are reselling the same product, can I
say, "The widget is priced at $9.99. Our competitor, XYZ Corp, sells
the same thing for $12.95. You save $2.96 if you buy from us instead
of XYZ".

So long as the products are identical (unlike, say, Tide compariing
it's product to Wisk), can't I use that direct comparison so long as I
have proof that they advertise at a higher price (catalog, flyers,
price lists)... ?

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Request for Question Clarification by omnivorous-ga on 31 Mar 2004 07:43 PST

Macecase --

This is one area in which the difference between U.S. and U.K. law is
enormous.  Where fair trade laws in the U.S. encourage comparisons,
they are discouraged in the U.K. and can lead to slander charges.

I trust that you're referring ONLY to the U.S., as the brands and
retail prices appear to be American?

Best regards,

Omnivorous-GA

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Clarification of Question by macecase-ga on 31 Mar 2004 08:44 PST

Yes, the brands are American and we operate only in the US.

macecase-ga,

Thanks for your question.

The notion of "fair use" is well established in intellectual property
law, and clearly extends to trademarks.  As a rule of thumb, in the
U.S. you are allowed to use another product name in advertising for
the purposes of making a comparison, as long as the comparison is
clear-cut, is fair, and is not likely to generate confusion about the
identity of the products.

A good overview of the Fair Use doctrine as it applies to trademarks
can be found at the link I've provided below, from a law firm
specializing in intellectual property.

I've also included an excerpt from the article relevant to
advertising, but I would encourage you to read the entire article
yourself.

I want to add two cautions to my answer:  

(1) I am not a lawyer, and Google Answers is not a legal advisory
service.  While I am confident in the quality of the information I
have provided, you should not allow my answer to substitute for
professional legal advice.

(2) There is nothing in the law that I am aware of that would prevent
a competitor from initiating an action (a lawsuit) against you...even
if you are on firm legal grounds in your use of their product name. 
Even if the suit was ultimately tossed out on the grounds it was
without merit, there is always the chance that a competitor might
attempt legal action just the same.

There...don't you feel better now?

If anything here is not clear, please let me know before rating this
answer.  Just post a Request for Clarification, and I'll be happy to
assist your further.

pafalafa-ga

==========  


http://www.cll.com/articles/article.cfm?articleid=32

Trademark Fair Use


III. COMPARATIVE ADVERTISING AS FAIR USE:


As in the nominative use defense discussed above, comparative
advertising involves a situation where the trademark of a competitor
is used to refer to the competitor's goods. Because comparative
advertising is generally an obvious comparison of competing products
(for example, "8 out of 10 doctors surveyed prefer Acme creme to
Widget creme"), there is little likelihood of confusion as to the
source of the ad.

Because there would be no likelihood of confusion, comparative
advertising, in and of itself, is generally not actionable. However,
when such advertising is false, or results in the disparagement,
dilution or tarnishment of another's trademark, it is actionable. Such
causes of action are beyond the scope of this paper. However, a brief
discussion of satirical comparative advertising cases is warranted,
because of their relationship to the parody defense...

==============


search strategy:  Google search on: [ trademark "fair use" ]

In US case law, this is referred to as "nominative fair use."  It
means that the defendant is using the plaintiff's marks not to
describe his own goods, but the plaintiff's.  See, e.g., Brother v.
Jardine at http://caselaw.lp.findlaw.com/data2/circs/9th/0157095p.pdf.
 This is not a product comparison case, per se, but the principle is
the same.  You are referring to the other guy's products when using
his mark/name.  The only other problem you may encounter is an
allegation of false advertising if the comparison is not absolutely,
factually true.

It DOES happen in the UK ...

(Or it used to until very recently.)

If you went into Tesco, they used to show you a shopping basket of
goods and how much you would have saved relative to Sainsburys.

I seem to remember that Sainsburys did the same thing ...

With a different mix of goods, of course.

Remember the Pepsi challenge where people in a blind taste test
preferred Pepsi over Coke?