Running afoul of Australian IP law in advertising wars

Companies often use their competitor’s logos in comparative advertising campaigns. Is this legal under Australian intellectual property law?

A familiar-looking clown wearing a disguise buys lunch at Burger King. An animated straw happily jumps into Pepsi but avoids an unbranded red and white can. Many companies today are more than willing to jump into this sort of comparative advertising, more commonly known as ad wars.

These types of ad campaigns spread like wildfire on social media, entertaining consumers and providing companies with plenty of free exposure, but they also expose companies to another risk: troubles with Australian intellectual property law.

What's wrong with comparative ads?

Comparative ads can easily be in violation of Australian IP law.

Ad wars typically rely on innuendo and suggestion to imply the superiority of one product or service over a competitor or competitors. In the Burger King example mentioned earlier, for instance, consumers can infer that the disguised clown represents the Ronald McDonald mascot. Other ads, such as the Pepsi example, might use an ambiguous design or logo, similar to that of a competitor's.

The problem with these types of advertisements, at least in Australia, is that they come very close to violating the intellectual property rights of competitors. This is particularly important for advertisers who consider using a competing business' logo in an ad war.

Protections for logos and fair use

As logos are a symbolic representation of an organisation, as well as an artistic creation in of themselves, they are protected by both trade mark and copyright law in Australia.

Section 20 of the Trade Marks Act 1995 grants that the owner of a registered trade mark has the sole rights to use or authorise use of it. Section 120 stipulates that infringement can also occur if a design is used that is substantially or deceptively similar to a registered trade mark.

According to the Copyright Council Australia, logos are protected by copyright legislation, as well as laws governing trade and commerce.

The council also notes that altering a competitor's logo generally is not a protection against infringement; if significant similarities can be viewed when looking at the two side by side, infringement has likely taken place.

Removing identifying names is not enough to avoid copyright infringement.Removing identifying names is not enough to avoid copyright infringement.

While fair dealing provisions do provide a way to use parts of otherwise protected works or designs, these protections generally do not apply when there is a commercial aspect to the use. Given that advertisements are inherently commercial, it is quite unlikely that fair use protections would apply to a comparative marketing campaign.

For advice and assistance with brands and logos, contact Alder IP to learn more about trade mark registration in Australia.