A comparative study of comparative advertising in vietnamese and english law

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Joint Swedish-Vietnamese Master’s Programme MASTER’S THESIS A COMPARATIVE STUDY OF COMPARATIVE ADVERTISING IN VIETNAMESE AND ENGLISH LAW SUPERVISORS: Dr. Do Van Dai LLM.Ulrika Wennersten Dr. Christoffer Wong Preface and Acknowledgements The idea for this thesis comes to me when I made a report on a Business Law subject in the Joint Swedish - Vietnamese Master Programme. Based on materials on U.K and EU Advertising laws, I realized that there are many differences in points of view and law between Vietnam and these countries regarding Comparative advertising. While Vietnamese legislators are still suspicious of the benefits brought by Comparative Advertising, it is encouraged in E.U as it can can provide useful information for consumer and enhance fair competition between undertakings. From various standpoints, it is easy to understand why the law related to Comparative advertising is set up in different ways. In the internationalized context, when the promotion of goods and services is not restricted to a single nation, how to establish legal rules compatible with a common tendency based on the harmonization of the interest of undertakings and those of consumers is an issue worth concerning. For helping me complete this thesis, I extend my deepest thanks to my professors, my friends and my colleagues for their support, help and love. I would like to express my heartfelt gratitude to my supervisors, Dr.DoVan Dai and Ms.Ulrika Wennersten, who supported and gave me valuable comments and suggestions during my work. I am grateful to Dr. Christoffer Wong for his guidance and help throughout the course. I would also like to express my special thanks to the professors in the Law faculty of Lund University and the professors of Ho Chi Minh Law University for sharing their precious knowledge with me. Finally, I would like to thank my friends and my colleagues for supporting and encouraging me throughout my study. Although I tried my best, many deficiencies and shortcomings are still to be found in my thesis. I am grateful for any comments and suggestions. Ho Chi Minh city, December 2008 1 Table of Contents Preface and Acknowledgements .................................................................................. 1 Table of Contents ......................................................................................................... 2 Abbreviations ............................................................................................................... 4 Executive Summary ..................................................................................................... 5 1. Introduction.................................................................................................... 6 1.1 1.2 1.3 1.4 Rationale ........................................................................................................ 6 Purpose........................................................................................................... 6 Methods.......................................................................................................... 7 Delimitation ................................................................................................... 8 2. The definition of comparative advertising ..................................................... 8 2.1 2.1.1 2.1.2 2.1.3 The general definition of advertising ............................................................. 8 The definition of advertising in English law ......................................... 9 The definition of advertising in Vietnamese law ................................ 12 Comparative remarks ........................................................................... 15 2.2 2.2.1 2.2.1.1 2.2.1.2 The definition of Comparative Advertising ................................................. 16 The definition of comparative advertising in English laws ............... 17 Definition and classification .............................................................. 17 Analysing the definition of Comparative Advertising ....................... 19 2.2.2 2.2.3 The definition of Comparative Advertising in Vietnamese law ........ 22 Comparative remarks ........................................................................... 24 3. Lawful comparative advertising .................................................................. 25 3.1 3.1.1 3.1.1.1 3.1.1.2 Lawful comparative advertising in English law .......................................... 25 Conditions for comparative advertising to be lawful in English law 25 Negative conditions............................................................................ 27 Positive conditions ............................................................................. 36 3.1.2 General remarks.................................................................................... 40 3.2 3.2.1 Lawful comparative advertising in Vietnamese law.................................... 41 Conditions for comparative advertising to be lawful under Vietnamese law ...................................................................................... 41 General conditions ............................................................................. 42 Special conditions .............................................................................. 44 3.2.1.1 3.2.1.2 3.2.2 General remarks.................................................................................... 46 3.3 Comparative remarks ................................................................................... 46 4. Sanctions applied for unlawful comparative advertising ............................. 48 4.1 4.1.1 Sanctions applied for unlawful comparative advertising in English law..... 48 The enforcement authorities in English law and practice ................. 48 2 4.1.2 4.1.2.1 4.1.2.2 4.1.2.3 4.2 4.2.1 4.2.2 4.2.2.1 4.2.2.2 4.3 5. Sanctions applied to unlawful comparative advertising .................... 49 Disciplinary Sanctions ....................................................................... 49 Administrative Sanctions ................................................................... 50 Civil sanctions .................................................................................... 50 Sanctions applied to unlawful comparative advertising in Vietnamese law 52 Enforcement authority.......................................................................... 52 Sanctions ................................................................................................ 53 Administrative sanctions .................................................................... 53 Civil sanctions .................................................................................... 53 Comparative remarks ................................................................................... 54 Conclusion ................................................................................................... 55 Table of Statutes and other Legal Instruments........................................................... 57 European Community Directives ............................................................................... 57 1. Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising O.J No. L 250, 19/09/1984 p.17 – 20. .................................................................................. 57 National Legislations ................................................................................................. 58 England 58 Vietnam 58 Table of Cases ............................................................................................................ 60 Court of Justice of the European Communities ......................................................... 60 English Case............................................................................................................... 60 Bibliography............................................................................................................... 61 Official Reports and other Documents....................................................................... 61 Monographs ............................................................................................................... 62 Articles in Journals, Anthologies etc. ........................................................................ 64 3 Abbreviations ASA BCAP BPRs CAP CPRs ECJ EU MCAD Ofcom OFT Radio Code The CAP code The CMRs TMA TSS TV code UK Advertising Standards Authority in the UK Broadcasting Committee of Advertising Practice in the UK Busines Protection from Misleading Advertising Regulations 2008 of the UK, SI 2008/1276 Committee of Advertising Practice in the UK Consumer Protection from Unfair Trading Regulations 2008 of the UK, SI 2008/1277 Court of Justice of the European Communities European Union Misleading Comparative Advertising Directive Office of Communications in the UK Office of Fair Trading in the UK Radio Advertising Standards Code of the UK The British Code of Advertising, Sales Promotion and Direct Marketing 11th edition, March 4th 2003 The Control of Misleading Advertisements Regulations 1988 (amended 2000, 2003) Trade mark Act 1994 of the UK Trading Standards Service Television Advertising Standards Code of the UK United Kingdom 4 Executive Summary Comparative advertising is a sales promotion method that compares one’s own goods or services with those of another trader to emphasize price, value, durability or quality.1 In the UK, comparative advertising is regulated in three ways: self–regulation; the common law and statute law.2 Accordingly, comparative advertising is lawful if it complies with some fairly obvious conditions e.g. it is not misleading, does not denigrate the competition, objectively compares material, relevant and verifiable features of the competitor’s products. In Vietnam, comparative advertising is regulated by the Law on commerce, the Law on competition and the Ordinance on Advertising. Nevertheless, the legal provisions on comparative advertising in Vietnam are unclear and hard to apply in practice. Thus, this leads advertisers as well as the competent authority into difficulties when determining whether an advertisement is a comparative one or not and in drawing the line between lawful and unlawful comparative advertising. The first part of this thesis contains some general issues concerning the rationale, purpose, delimitation, and methodology of the thesis. The second part introduces, analyses and compares the definitions of advertising and comparative advertising in Vietnamese and English law. The third part discusses the conditions for lawful advertising in each of the two countries. Legislation, case law and practice are analysed to produced a clear picture. Sanctions applied to unlawful comparative advertising will be presented and analysed in part four. Based on the method of comparison, remarks at the end of each part will point out the similarities and differences between the issues in the laws of the two countries and suggest some improvements related to comparative advertising in Vietnamese law. Finally, part five will be a summary of the previous parts. L.Bently and B. Sherman, Intellectual property,2nd ed.,Oxford University Press 2004, p.916. Ansgar Ohly and Michael Spence, The law of Comparative Advertising:Directive 97/55/EC in the United Kingdom and Germany, Hart Publishing 2000, p.5. 5 1. 1.1 Introduction Rationale Advertising plays a very important role in the competitive strategy of many undertakings3 since advertising not only notifies customers of goods and services but also encourages, attracts and orients them in their purchases. Comparative advertising, as a special form of advertising, is also a sales promotion device that compares the products or services of one undertaking with those of competitors.4 It can be a useful source of information to the consumer, as well as an important tool in promoting competition.5 Thus, most countries have permitted comparative advertising. The UK was one of the first countries in the EU to permit comparative advertising if it complies with some provided conditions. In Vietnam the current legal provisions on comparative advertising are vague and incomplete. In fact, a definition of comparative advertising as well as the way of distinguishing between direct and indirect comparative advertising - which is very important for determining the legality of comparative advertising - have not yet been provided by the law. It is in fact necessary to set up some specific legal provisions concerning comparative advertising in Vietnamese Law. Based on these legal provisions, undertakings will be able to determine the boundary between lawful and unlawful comparative advertising and adjust their advertising activities appropriately. This would enhance fair and equal competition between undertakings. From these reasons along with my own interest in it, I have chosen the topic “A comparative study of comparative advertising in Vietnamese and English law” for my thesis. 1.2 Purpose By researching comparative advertising in Vietnamese and English law, this thesis will analyse and compare the definitions of advertising and of comparative advertisJulian Petley, Advertising:Technology,People,Process, BlackRabbit Books publishing, 2004 p.5. athttp://books.google.com.vn/books?id=aREzFOQ9jsC&printsec=frontcover&dq=%22+advertisi ng%22&sig=ACfU3U2oAabErVdot9cOWmtSWD_MZs8GoQ#PPA3,M1. As the BPRs states "Comparative Advertising means advertising which in any way, either explicitly or by implication, identifies a competitor or product offered by a competitor." Theo Bodewig, “The regulation of Comparative Advertising in the European Union”, 9 Tulane European & Civil Law Forum, 1994, 179-214, at p.185. Also see Samia M. Kirmani,“Crossboder Comparative Advertising in the European Union, 19 Boston College International & Comparative Law Review, No.1, 1996, 201-215, at p.201. 6 Fel! Använd fliken Start om du vill tillämpa Heading 1 för texten som ska visas här. ing and point out the similarities and differences in the definitions in two countries. Moreover, this thesis will present and analyse the conditions of lawful comparative advertising in both Vietnamese and English law through legislation, case law and practice to review the similarities and differences in the rules of legal comparative advertising under Vietnamese and English law. In addition, it will evaluates and compare the sanctions applied to unlawful comparative advertising. Finally, the thesis will suggest some ways of improving the provisions on comparative advertising in Vietnamese law. 1.3 Methods In the process of writing this thesis, several methods such as description, synthesis, analysis, interpretation and especially comparison were used. The descriptive and synthetic methods6 were used to collect all materials on comparative advertising and to give the main contents of the provisions on comparative advertising in Vietnamese and English law. In addition, based on the analytic method, fundamental concepts and conditions concerning the legality of comparative advertising in Vietnamese and English law will be examined. The comparative method, a study of the relationship between the laws of more than one country, is not limited to comparing legal rules but requires comparing the relevant non- legal (political, economic, ethical, religious, ect.) aspects of the two countries as well7. It can lead to a better understanding of Vietnamese laws on comparative advertising. In addition, the comparative method can help us to find out the similarities and differences in the laws related to comparative advertising and explain why these differences or similarities exist. Moreover, after having compared how to Vietnamese and English law deal with the laws of comparative advertising, we can evaluate the solution used in Vietnamese and English law in order to determine which of them is the best one.8 Finally, based on comparative method, the good legal rules of comparative advertising developed in English law can be implemented to Vietnamese law.9 The descriptive method is a way of presenting and explaining provisions and cases, and the synthetic method is a process by which we collect materials and combine them together resulting in the formation of something new. Michael Bogdan, On the value and method of rule- comparison in comparative law, in Heinz – Peter Mansel, Thomas Pfeiffer, Herbert Kronke, Christian Kohler, Rainer Hausmann, Festschrift fur Erik Jayme, Sellier. European Law Publishing 2004, p.1239. Ibid. p.1240. Although I am aware that other factors can be used in comparing two legal systems, in this thesis I do not have enough time to examine geography, climate and racial development or, relig- 7 A Comparative Study of Comparative Advertising in Vietnamese and English law 1.4 Delimitation My research is limited to English law and Vietnamese law. Further, the UK law is based on EU Directives, therefore, this thesis also will examine these Directives related to comparative advertising as well as cases from the ECJ interpreting of the Directives. Moreover, special rules applicable to comparative advertising related to certain goods or service such as medicinal products or solicitors are beyond the scope of this thesis. In addition, it does not mention criminal sanctions but concentrates on civil and administrative sanctions. 2. The definition of comparative advertising 2.1 The general definition of advertising Advertising originated from the word “adverture” in Latin language means attractiveness, charm and allurement.10 According to the Vietnamese dictionary, Advertising means “propagandize, introduce goods, services or undertakings to consumers in many way with the purpose of persuading them to buy these goods or services and thus promote the goods and services”.11 According to the Oxford dictionary, advertising is drawing attention to or describing favourably (goods or services) in a public medium to promote sales or making them generally or publicly known, or seeking by public notice to make them so known.12 Advertising is a paid form of a nonpersonal message communicated by business firms, non-profit organizations, or individuals and is transmitted to a target audience through mass media such as television, radio, newspapers, magazines, direct mail, outdoor displays or mass - transit vehicles13 The ion. I focus on the statutory, case law and preparatory and secondary sources such as articles and books. 10 Truong Dai Hoc Luat Ha Noi, Giao trinh Luat Thuong Mai Viet Nam tap 2 (Text book on Vietnamese Commercial Law volume 2 by the Law College of Hanoi), Cong An Nhan Dan Publishing 2006, p.151. Also see Nguyen Thi Dung, “Khai niem quang cao trong phap luat Viet Nam và anh huong của no đen viec hoan thien phap luat ve quang cao” (The definition of advertising in Vietnamese law and its influences on improving law on advertising), 12 State and Law Journal (2005), pp.33- 37, at p.33. 1 Nguyen Nhu Y, Đai Tu Dien Tieng Viet (Great Vietnamese Dictionary),Van Hoa Thong Tin Publishing 1998, p.1365. Oxford Dictionary of current English, Oxford University Press 1993, at p.12. http://www.answers.com/topic/advertising. 8 Fel! Använd fliken Start om du vill tillämpa Heading 1 för texten som ska visas här. main objectives of advertising is14 informing and persuading consumers to purchase specific brands offered by the advertisers, thereby getting profits.15 However, advertising is also used to inform, educate and motivate the public about non-commercial issues, such as AIDS, political ideology, energy conservation, religious recruitment, deforestation and charity.16 Thus, as far as language alone is concerned, the notion of advertising not only covers the giving of information about goods and services to promote sales but also its use to inform, propagandize and motivate the public regarding social and cultural life. 2.1.1 The definition of advertising in English law In the UK, advertising is regulated through self-regulation, case law and statutes. Self-regulation which has a long tradition in U.K commerce,17 plays an essential role in advertising.18 The most important element of this self-regulation is the code of advertising, the CAP code.19 It lays down standards for non-broadcast advertisements, sales promotions and direct marketing communications. This code reflects the principles of the International Code of Advertising and Practice issued by the International Chamber of Commerce20 The code is monitored by The Committee of Advertising Practice (CAP). Although the code does not provide a definition of advertising, it does lay down the scope of the regulation of advertising activities. Pursuant to this code, statutory, public, police and other official notices/information, produced by public authorities and the like as opposed to marketing communications, are outside its scope.21 14 Armand Dayan, Le marketing (translated into Vietnamese by Do Duc Bao), Ho Chi Minh City publishing 2001 p. 8 (Originally publishing by Presses Universitaires de France 1985). 15 Monle Lee, Carla Johnson, Principles of Advertising: A Global Perspective, The Haworth Press Publishing 2005, p. 3. http://en.wikipedia.org/wiki/Advertising. The first voluntary codes were introduced to regulate some professions at the end of the 19th century: see L. Brandmair, Die Freiwillige Selbstkontrolle der Werbung, Carl Heymanns publishing 1978, p. 35. G. Miracle and T.R. Nevett, Voluntary Regulation of Advertising, D.C Heath and Company publishing 1987, p.1. British Code of Advertising, Sales Promotion and Direct Marketing 11th version 2003. Ohly & Spence, supra note 2, p.6. British Code of Advertising, Supra note 19, Art 1.2 (f). 9 A Comparative Study of Comparative Advertising in Vietnamese and English law In relation to broadcasting advertising, the BCAP TV Code22 and The Radio Code23 set out the rules that govern advertisements on television and radio respectively. According to TV Code, advertising means “any publicity by advertisers in breaks during or between programmes. This is irrespective of whether payment is made.”24 From this definition as well as from the regulations in the code, we can conclude that it regulates not only advertising related to commerce but also advertising concerning religion, faith, philosophies, beliefs25 and charity.26 The code applies to undertakings which use advertising to promote their business as well as to any other relevant organisation or individual. The Radio Code states “Advertising refers to any items, including spot advertisements and promotions with advertisers, which are broadcast in return for payment or other valuable consideration to a licensee or which seek to sell to listeners any products or services.27 This definition seems narrower than the one in TV Code as it is restricted to paid broadcasting advertising for the purpose of selling goods and services to listeners. Yet, the regulations of this code state that advertising is not only used to promote the commercial activities of undertakings but also to solicit donations by organisations28 and related to religion, systems of belief or philosophies of life.29 According to the Town and Country Planning Act (Control of Advertisements) Regulations 1992 and the Town and Country Planning Act 1990, “advertisement means any word, letter, model, sign, placard, board, notice, awning, blind, device or representation, whether illuminated or not, in the nature of, and employed wholly or partly for the purposes of, advertisement, announcement or direction.”30 The UK is a member of the EU. Thus, advertising activity is also regulated by the regulations which is enacted to implement the EU Directive regulating advertising into national law. With the purpose of unifying the European common market, har- Television Advertising Standards Code November 2004 (The Code is an updated edition of the 2002 ITC Advertising Standards Code.) 23 Radio Advertising Standards Code November 2004 (The Code is an updated edition of the former Radio Authority’s advertising and Sponsorship Code). Television Code, supra note 22 , Introduction (g). Ibid Article 10.1. Ibid Article 11.3. Radio Code, supra note 23, section 1. Ibid, section 3, rule 2. Ibid section 3, rule 3. The Town and Country Planning Act 1990, section 336(1). 10 Fel! Använd fliken Start om du vill tillämpa Heading 1 för texten som ska visas här. monising the laws of its Member States and protecting the economic welfare of consumers by acting against unfair competition, the EU has adopted many directives concerning advertising e.g. Directive 89/552/EEC concerning the pursuit of television broadcasting activities31, Directive 97/36/EC32 amending Directive 89/552/EEC, Council Directive 84/450/EEC concerning misleading advertising (Directive 84/450/EEC),33 Directive 97/55/EC of European Parliament amending Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising (Directive 97/55/EC)34 and Directive 2006/114/EC of the European Parliament and the Council concerning misleading and comparative advertising (Directive 2006/114/EC).35According to Directive 84/450/EEC “advertising” means the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations36. Directive 2006/114/EC, which repeals Directive 84/450/EEC, also provides the same definition of advertising at article 2(a). Thus, the advertising regulated in these directives is mainly that used by undertakings to promote their business. The UK has enacted The CMARs 1988 (amended 2000, 2003)37to transpose Directive 84/450/EEC into its national law and enacted The BPRs38 to implement Directive 2006/114/EC. Pursuant to the BPRs, “advertising” means any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of a product.”39 “Product” in BPRs means any goods or services and includes immovable property, rights and obligation.40 so the definition of advertising in BPRs is the same as that in Directive 2006/114. O.J No. L 298, 17/10/1989, p.23. O.J No. L 202, 30/07/1997, p.60. O.J No. L 250 , 19/9/1984, p. 17 – 20. O.J No. L290, 23/2/1997, p.18- 23. O.J No L376, 27/12/2006, p.21- 27. Dir 84/450, Supra note 33, Article 2. The Control of Misleading Advertisements Regulations 1998 (amended 2000,2003), SI 1988/915. This regulations regulated business to business relations and business to consumers relations in misleading and comparative advertising but it is now invalid. The Busines Protection from Misleading Advertising Regulations 2008, SI 2008/1276. Ibid Part 1.2 (1). Ibid. 11 A Comparative Study of Comparative Advertising in Vietnamese and English law The definition of advertising is also covered in the case Richard Butler v Derby City Council.41 The claimant displayed a banner in the front elevation of his property with the phrase “Save Five Lamps” in red capital letters and below this appeared the logo, telephone number and website of the “Derby Heart” organisation. The judge held that a banner is an advertisement if it is “in the nature of and employed, wholly or partly for the purpose of, advertisement, announcement or direction..”. The Derby Heart logo and the blue lower- case lettering giving its telephone number and website were advertising the existence of Derby Heart. It matters not whether, when combined with the words “Save Five Lamps”, the logo and lettering are regarded as being in the nature of (and for the purpose of) an advertisement for Derby Heart and one of its aims, or as an announcement of its existence and one of its aims, or as a direction to those who might wish to support one of its aims.42 The court affirmed that the banner fell within the extended definition of advertisement in section 336(1).43 According to this, the definition of advertisement is clearly intended to have a wide meaning, covering not only materials which promote a product or service but also an announcement or direction publicizing the activities of a noncommercial organization. In short, in English law, definitions of advertising can be found in regulations, statutes and case law. Based on the purpose and the applicable entities of each code, regulation or statute, advertising can be understood in a broad or narrow sense. In the narrow sense, advertising is the making of a representation in connection with trade to promote the supply of goods or services. In its broader sense, it covers not only the making of representations about goods or service in public to promote sales but also any announcement or direction about the activities of non-commercial organisations such as charities or religious organisations. 2.1.2 The definition of advertising in Vietnamese law In Vietnam, advertising has been prominent for some time.44 In the years of implementing the Centrally Planned Economy, advertising was not a concern of business Case Richard Butler v. Derby City Council [2005] EWHC 2835 (Admin). Ibid paragraph 29 of the judgement. Ibid paragraph 30 of the judgement. In the book “Thương hoc phương cham”(Guideline on commercial studies) in 1928 by Luong Van Can, it states that if a trader would like to increase the number of his consumers, to develop business, advertising should take place as it has much power. Thus, to make advertisements, it should not be regretted that it costs much money. Also see, Le Tai Trien, Luat Thuong Mai Viet Nam dien giai (Interpretation on Vietnamese Commercial law) Vo.1, Kim Lai Publishing 1976, p. 32. 12 Fel! Använd fliken Start om du vill tillämpa Heading 1 för texten som ska visas här. entities because at that time the need to promote goods and services as well as competition between undertakings seem nonexistent. When Vietnam changed the country from one having a Centrally Planned economy to one with a market economy with a Socialist Orientation45, advertising become a vital promotional tool frequently used by business entities. From 1990 on, legal documents regulating advertising have been enacted.46 One of the important of these is Decree No.194 /CP on the 31st of December, 1994 of the government on advertising activities on Vietnamese territory.47 According to this Decree, advertising activities comprise the presentation of announcements regarding businesses, commodities, services, trade-marks, names and logos as required by the activities of the production-business-service establishments.48 It is also affirmed that the information activities of the agencies of the Party and State aimed at disseminating and popularizing their policies, undertakings and laws are not covered by this Decree. The definition of advertising in this Decree is thus a narrow one. The advertising only aims to cover businesses, commodities, services, trademarks, names and logos. Information in the form of announcements, messages or classified advertisements is not considered as advertising. Advertising activities are currently regulated by two main groups of legal norms. The first is legal documents drafted or enacted by the Ministry of Culture and Information49 which include the Ordinance on Advertising 2001 of the Standing Committee of National Assembly and these guiding documents such as Decrees or Circular which also regulate advertising. The second is legal documents promulgated by the Ministry of Trading50which regulate commercial advertising. Pursuant to the Ordinance on Advertising 2001, advertising is interpreted in a broad sense, and means introducing business activities and goods and services to consumers, including services both with and without a profit-making objective.51 Advertising of profit45 Vietnam launched its Open Door policy called “Doi Moi” (renovation) in 1986. See the sixth Party Congress Document. 46 See (a) Circular No.738/VP on August 10th,1990 of Ministry of Culture Information – Sports and Tourism on Advertising management, (b) Joint Circular No.1191- TT/ LB on June 29th 1991 regulating on “label administration and product advertising“, (c)Decision No.3248/QĐUB on December 12nd on regulations of panel advertising in Hanoi. This Decree is now invalid. See Decree No.194/ND- CP on December 31st, 1994, Article 1. Now, It is changed into the Ministry of Culture, Sports and Tourism. Now, It is changed into the Ministry of Trading and Industry. See Ordinance on Advertising No.39/2001/PL-UBTVQH 10 of 16 November 2001, Article 4(1). 13 A Comparative Study of Comparative Advertising in Vietnamese and English law making services means advertising economic and social services, aiming to generate profits for service-providing organizations or individuals while advertisement of nonprofit services means advertising services for realizing social policies and providing information in the form of announcements, messages or classified advertisements52. These regulations provide that advertising with a non-profit making objective should still be regulated to ensure the unified treatment, truthfulness and exactness of advertising; to protect the welfares of advertisers as well as the receiver; and to improve morality, lifestyles and ethnic culture.53 Decree No.24/2003 expressly stipulates that political information is not subject to regulation by the Advertisement Ordinance or this Decree.54 The Law on Commerce does not define advertising but it does give a definition of commercial advertising: “activities of commercial enhancement conducted by a business entity aimed at introducing customers to the business activities in goods and services of such business entity.”55 In practice, the case between Kymdan and Van Thanh,Uu Viet56 illustrates how this definition works. The case arose from the fact that, in 2001, KimDan Mattress Company placed a notice in some newspapers57 with the following content “KymDan has the honour to inform our honourable consumers that in a spring mattress, the force supporting the body is irregularly distributed and, in addition, its quality will decreased over time due to inferior raw material. If the elastic level of the springs is low, the mattress will become flat after being used for a long time. Conversely, if the elastic level of spring is high, springs can easily be broken and this causes danger for users. In poly-urethane foam mattresses, the plasticity is very high. This kind of mattress is inelastic and as a result of this, it will quickly fatten. For these reasons, KymDan does not produce spring mattress or poly-urethane foam mattresses. All of KimDan’s products are made of 100% natural rubber has 52 See Decree No. 24/2003/ND-CP of March 13, 2003 detailing the implementation of the ordinance on advertising, Article 2. 53 Ministry of Culture and Information, Introduce some explainations on Ordiance on Advertising on December 5th 2001. See Decree No.24, supra note 52, Article 1. Law on Commerce No. 36/2005/QH, Article 102. Case Kim Dan v Van Thanh,Uu Viet, Quyet dinh giam doc tham cua Hoi dong tham phan Toa an nhan dan Toi cao (the review judgements of the council of judges of the Supreme Peope Court No.20/2003/ DS – GDT, June 23rd 2003 ) 2003- 2004, Vo.1, pp. 119-124. 57 The newspapers include Sai Gon giai phong (Sai Gon Liberation newspaper), phu nu ( Woman Newspaper), Tuoi Tre Newspaper, Nguoi lao dong (The Labour newspaper), Sai Gon Tiep Thi (SaiGon Marketing Newspaper). 14 Fel! Använd fliken Start om du vill tillämpa Heading 1 för texten som ska visas här. high durability and do not become flat over time…” The Council of Judges of the Supreme People Court affirmed that this notice is an advertisement of Kymdan. From this, it can be concluded that an announcement in the public media made by a company to introduce its goods will be an advertisement. Although Vietnamese law makes a distinction between advertising and commercial advertising and commercial advertising seems to be just a part of advertising, in practice, there is no distinction between the terms. In a word, pursuant to Vietnamese law, advertising involves introducing business activities and goods and services to consumers, including services both with and without a profit-making objective. 2.1.3 Comparative remarks Both English and Vietnamese law have defined advertising and regulated advertising activities doubtless because of the important role of advertising in the economy and society. Both laws defined advertising to cover the making of representations by undertakings about goods or services to promote sales and the announcements made by individuals or non-profit organizations giving information about their activities. Nevertheless, in Vietnamese law, the subjects subject to regulation as advertising have been restricted due to the use of the term “consumers” in the definition of advertising. This means that advertising is only directed toward consumers while the subjects of advertising could be any audiences e.g. the watchers, listeners or readers of these advertisements in general. On the other hand, English law does not mention the person whom advertising is directed towards. It might be better to replace the term “consumers” in the definition of advertising in Vietnamese law by the term “audience” or “public”. This is reflected in the draft of the Law on Advertising.58 Accordingly, advertising means introducing business activities and goods and services to the public, including services both with and without a profit-making objective. English law only uses the one term “advertising” for advertising made by undertakings with a view to profit and advertising made by non-profit organisations or individuals. Contrariwise, Vietnamese law use two terms “advertising” and “commercial advertising” to refer to different kinds of advertising though there are few regulations relating to the advertising of non-profit services. Most of the provisions related to advertising are in the Ordinance on Advertising 2001 and the Commercial Law 2005, which is used to regulate commercial advertising. This creates an unnecessary redundancy in advertising law. In the draft Law on Advertising, there are still See the 4th Draft of Law on Advertising, Article 1.1, available at http://www.vibonline.com.vn/vi-VN/Drafts/Details.aspx?DraftID=310&Version=4. 15 A Comparative Study of Comparative Advertising in Vietnamese and English law no provisions related to the advertising of non-profit services.59By contrast, English law has special regulations covering special kinds of such as appeals for charitable donation or advertising related to religious or belief issues.60 Any future Law on Advertising in Vietnam should contain more provisions related to the advertising of non-profit making purposes. 2.2 The definition of Comparative Advertising Comparative Advertising is a special form of advertising61, a sales promotion device that compares the products or services of one undertaking with those of another, or several competitors.62Comparative Advertising persuades consumers of the superiority of one brand in a product category by comparing it implicitly or explicitly to another brand in the category63. It is also a useful source of information to the consumer, as well as an effective promotional tool for the advertiser64. Comparative advertising has been widely used in the United States65 with 80% of all television advertisements66 and 30% to 40% of all advertisements, containing comparative claims.67 Nevertheless, before the adoption of the EU directives related to comparative advertising, in some Member States, comparative advertising used to be considered “bad” and unnecessarily harmful to competitors68. Thus, in order to enhance Ibid. See TV code, supra note 22, rule 10 and Radio Code, supra note 23, section 3, rule 2, rule 3. Péter Miskolczi- Bodnár, “Definition of Comparative Advertising”, 3 European Integration Studies (2004), pp. 25- 44, at p. 25. 62 Ibid at p.25, also see Opion on the Amended Proposal for a Council Directive concerning Comperative Advertising and Amending Directive 84/450 concerning Misleading Advertising, 1992 OJ.(C49) 35, p.35. http://www.answers.com/%22%20comparative%20advertising%22. See Opion on Amended Proposal supra note 62. Charlotte J. Romano, “Comparative Advertising in the United States and in France”, 25 Northwestern Journal of International Law and Business (2005), pp.371- 413, at p.371 Ibid. Naveen Donthu, “A Cross-Country Investigation of Recall of and Attitude Toward Comparative Advertising”, 27 J. Advert.(2008), pp.111- 128 , at p.111. 68 Paul Spink and Ross Petty, “Comparative advertising in the European Union”, 47 International and Comparative Law Quarterly (1998), pp. 855- 876, at p. 855. The explicit identification of competitors is banned in Belgium, Italy and Luxembourg and generally prohibited as unfair 16 Fel! Använd fliken Start om du vill tillämpa Heading 1 för texten som ska visas här. market transparency, provide information for customers, promote competitiveness between suppliers and create conditions for the free movement of goods and services69, the EU has enacted many directives to regulate comparative advertising70. In these directives, “comparative advertising” means any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor.71 2.2.1 2.2.1.1 The definition of comparative advertising in English laws Definition and classification Comparative advertising is fairly popular in the UK. It has been calculated that more than 30 per cent of advertising there is comparative to some degree.72 Even before the EU promulgated Directive 97/55 regulating comparative advertising, a definition of comparative advertising has already appeared in English case law. In the case Bismag Ltd v. Amblins (Chemists) Ltd,73 Amblins issued an advertising pamphlet in which they claimed that most patent medicines were sold at too high a price by comparing its product formula and prices with those of well known proprietary medicines, including Bismag’ product, to highlight its own lower prices. In this case, the court held that although the defendant had only used the plaintiffs' trade mark as a convenient method of describing the merits of their own goods, they had infringed the exclusive right of the plaintiffs.74In Compaq Computer Corporation and Another v. Dell Computer Corporation Limited and Another,75 Dell Ltd placed two advertisements which used the plaintiffs' trade mark COMPAQ in respect of the plaintiffs' personal computers to compare the plaintiffs' computer system with the defendant’s. In this case, the court also held that there was a clear case of infringement of the reg- competition in Germany and France. It is permitted in Spain and the Netherlands but only in very limited circumstances. Dir 97/55 supra note 34, recital 1, 2, 3, 5 and Dir 2006/114, supra note 35 recital 3, 4, 5, 6 , 20. Dir 84/450/EEC, Dir. 97/55/EC and Dir 2006/114/EC. Dir 2006/114, supra note 35, Article 2c. Hazel Carty, “Registered Trade Marks and Permissible Comparative Advertising”[2002] E. I. P.R, pp. 294- 300, at p. 294. Case Bismag Ltd v. Amblins (Chemists) Ltd [1940] EWCA, Ch.D 667. It is noted that at that time the Trade Mark Act 1938 is valid. Case Compaq Computer Corporation and Another v. Dell Computer Corporation Limited and Another [1992] EWHC Ch.D. 17 A Comparative Study of Comparative Advertising in Vietnamese and English law istered trade mark. From these cases, it could be concluded that comparative advertising is a form of advertising in which a trader refers to the trade marks of other traders (usually its competitors) to compare its products or prices with those of the other traders to highlight its products. In statutes, comparative advertising was first defined in the Control of Misleading Advertisement Regulations(amendment) 2000 now in the BPRs. The definition of comparative advertising in BPRs is similar to that in CMRs. According to rule 2(1) of BPRs “comparative advertising means advertising which in any way, either explicitly or by implication, identifies a competitor or a product offered by a competitor.”76 The term “comparative advertising” may cover different forms of advertising claims.77 For Theo Bodewig, comparative advertising consists of single product comparative advertising, system comparative advertising or personal comparative advertising, depending on the nature of the object of comparisons 78. Usually the objects of the comparison are the product or service offered by the advertiser and those of his competitors. The claim may be, for example, that X has as many features as Y but X costs less. In that case, a product or service is directly addressed and its producer is identified. However, the object of the comparison may not be a single product of an identified or identifiable competitor, but a whole range or category of products with certain properties. This kind of comparison is most often found in advertisements of trade or industry associations promoting the products of their members, and comparing them to near substitute products of other branches of the industry. The association of producers of glass bottles may, for instance, place an advertisement alleging that glass bottles are better for the environment than plastic bottles. This kind of advertising is “systems comparisons” in which reference is made not to one brand or producer but to a whole class of products and a whole branch of industry. A third category of comparative advertising does not directly compare the products or services of a competitor, but is instead directed to the competitors themselves and their personal characteristics. This category includes, for instance, reference to race, gender, religion, nationality, professional conduct and experience. Apart from the object of comparison, other criteria for distinguishing different kinds of comparative advertising can be used. One such criterion is the degree of explicitness of the comparison. Comparative advertising may consist of direct comparative advertising and indirect comparative advertising. The reference to the competitor may be explicit when the competitor is expressly mentioned in the advertis- The BPRs, supra note 38, regulation 2(1) Bodewig, supra note 5, at p.182. Ibid. 18
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