Comparative Advertising by D2C Startups: Where Should Indian Trademark Law Draw the Boundary?

Ms. Meghna Choudhary (IPR RESEARCH SERIES 2026)

1.     INTRODUCTION

The direct-to-consumer (“D2C”) model in India has emerged as a structural revolution in the Indian retail economy. With over 4000 D2C brands generating over USD 4 billion of revenues in 2022, it has shown the potential to be a 40% CAGR.[1] D2C brands such as Mamaearth, Boat, Sugar Cosmetics, Wakefit, and The Man Company have disrupted traditional channels and are creating value relying on social media, influencers, and targeted performance marketing.[2] 

Comparative advertising is central to D2C brand growth. Indian D2C entrants are not entering a blue ocean, but a red ocean dominated by established incumbent competitors, with strong legacy brand equity. D2C players with limited marketing budgets, narrow distribution channels, and without their own brand equity, use direct advertising to disrupt the incumbents by comparing product qualities such as superior ingredients, price, or effectiveness. This serves a dual purpose of trust-building bridge to the consumers, and a disruptive mechanism that challenges the established competitors.[3] 

However, the law governing comparative advertising remains ambiguous. The Trade Marks Act 1999 (the 'Act') prohibits the use of another's trademark in a manner that takes unfair advantage or is detrimental to its distinctive character,[4] while permitting the “honest” use of a registered mark to indicate the intended purpose.[5] Among the two provisions, the courts have interpreted them inconsistently. The Advertising Standards Council of India (ASCI) provides soft law norms and principles to regulate advertising, but they are not legally binding[6] While the Ministry of Information and Broadcasting (MIB) focuses on traditional broadcasting standards, rather than digital advertising.[7] The objective of “The Consumer Protection Act of  2019” is to protect the consumer against misleading advertising, but it provides no clear guidelines on permissible comparative advertising.[8]

The central research question is “Where should Indian trademark law draw the boundary between legitimate comparative advertising and unlawful disparagement, particularly in the context of D2C startups in digital ecosystems?”

The paper posits that the existing jurisprudence and statutory law were developed during the broadcast era, and mainly through litigation initiated by the established incumbents. The current legal framework fails to address the realities of advertising based on digital platforms. Moreover, the ambiguity of the existing law imposes higher compliance costs on the innovative D2C advertisers.

The paper will proceed in four sections. Section 2 maps the regulatory landscape for comparative advertising and its lacunae. Section 3 examines judicial evolution. Section 4 identifies the structural misalignments with digital D2C realities. Section 5 concludes with suggestions for legislative and regulatory reforms.

2.     LEGAL AND REGULATORY FRAMEWORK: MAPPING THE REGULATORY LACUNAE 

Indian laws of comparative advertising engage with four overlapping but inconsistent layers, creating persistent ambiguity.

2.1  The Trade Marks Act 1999:- Prohibition without affirmative permission

The Trade Marks Act 1999 (the TM Act) does not provide for comparative advertising affirmatively. Section 29(8) TM Act imposes infringement liability when using a registered trademark in advertising, if such use is not in accordance with honest practices, either unjustifiably takes unfair advantage of, or is detrimental to the distinctive character or repute.[9]

Section 30(1) TM Act provides a limited defence for honest use to indicate the intended purpose of goods or services[10], though it is subject to the “honest practices” standard, which remains undefined, and the standard would have to be developed and adjudicated by the Courts rather than principled criteria.[11] Thus, the Act only operates through prohibition on misleading or unfair comparative advertising (and to a limited degree) rather than an affirmative framework for truthful comparisons.

2.2  ASCI:- Aspirational Self-Regulation without binding force

The ASCI Code mandates that a comparative advertisement shall not mislead, not discredit any competitor or its products or services unfairly, compare on material terms based on objectively verifiable information, not compare like with unlike, and be substantiated by evidence.[12] While it is structurally well-framed, it still lacks legal enforcement. Consumer Complaints Council that decides on such issues. The council’s decision may or may not be complied with by the start-up. Non- compliance may result in reputational damage, but there are no legal consequences. Further, delays in adjudication often allow campaigns to achieve the objective of the advertisements. The ASCI decisions will only be considered as a reference to industry standards, but will not have any statutory force.

2.3 MIB Rules:- Limited Applicability of Rules Made Under Cable TV Act

The advertising standards for the broadcast networks are prescribed by the Ministry of Information and Broadcasting ('MIB') under the Cable Television Networks (Regulation) Act 1995.[13] These rules do not apply to digital advertising that has become prevalent. This is a post-broadcast world. MIB does not have the authority to monitor and prescribe advertising standards for Meta, Google, or YouTube. It creates a significant regulatory gap for D2C advertisers. 

2.4 Consumer Protection Act 2019: - Prohibition without permission

The Consumer Protection Act 2019 (the CPA) prohibits 'misleading advertisements'. Section 2(28) CPA defines a ‘misleading advertisement’ as an advertisement that in any manner falsely describes such products or services, or is not genuine, or gives false guarantees, etc.[14] However, it does not define the parameters for truthful comparisons. Guidelines issued by the Central Consumer Protection Authority on 'Misleading Advertisements' are merely interpretative rather than prescriptive. There is a need for positive law to define the boundaries of such advertising.

2.5 Comparative Analysis: What India Lacks

The European Union's Comparative Advertising Directive 2006/114/EC permits comparative advertising if it complies with conditions such as the advertising must not be misleading, must compare goods or services meeting the same needs, must be comparative in an objectively verifiable and representative way, and must not confuse or disparage the marks of the company whose products or services are being compared.[15] This results in a safe harbour for compliant comparative advertising, as the advertisers who comply with the requirements will not be liable for infringement. Similarly, the United States, through the Lanham Act, prohibits misleading claims and permits truthful comparisons.[16] 

India lacks four key features, which include affirmative permission for comparative advertisement, a harmonised enforcement approach that aligns trademark, consumer protection, and advertising standards, rules tailored to modern digital marketing platforms, and clear rules that would allow a business to design compliant comparative marketing material before launch.

Therefore, a D2C brand must navigate four separate regulatory frameworks, none of which directly address its operational environment, with an ambiguous safe harbour that would authorise comparative advertising.

3. JUDICIAL APPROACH TO COMPARATIVE ADVERTISING: A JURISPRUDENTIAL EVOLUTION

Indian jurisprudence has evolved through three distinct phases. Each phase builds on the previous one but does not completely replace its logic. All three phases are shaped by litigation, brought by large incumbent enterprises to protect their established goodwill.

Phase I: The Foundational Architecture of Disparagement

The Delhi High Court established the basic rules for Indian comparative advertising in Reckitt & Colman of India Ltd v Kiwi TTK Ltd (19960.[17] The court referred to English precedents and held that a trader may legitimately claim that their products are the best in the world or generally superior to competitors’ products. However, they may not specifically name competitors’ products and make false disparaging statements about them.[18] The Court differentiated between "puffery", in which exaggerated but unverifiable claims of one's own products are permissible, and "denigration", which involves specific false or misleading comparative assertions.[19] 

In this case, the parties involved were established brand manufacturers, Reckitt & Colman and Kiwi TTK, and the market in question was the traditional consumer goods sector. There was no question before the Court regarding whether a challenger should be permitted to advertise by comparison to overcome the advantages of incumbency. The doctrinal parameters are framed from the incumbent's perspective, asking how much comparison the established brand should tolerate before the value of its goodwill is unlawfully denigrated?

Phase II: Expanding the Puffery-Denigration Distinction

In the case of Pepsi Co Inc v Hindustan Coca Cola Ltd (Hindustan Coca Cola), the Delhi High Court held that comparative advertising may give rise to actionable disparagement when a competitor is attributed certain qualities that place it lower in the estimation of the public, and such imputation is false.[20] While the Court simultaneously acknowledged that comparison of products, including claiming superiority, would not lead to actionable disparagement as long as it is truthful and the competitor is not specifically exposed to unjustified denigration.[21]

Meanwhile, the case of Dabur India Ltd v Colortek Meghalaya Pvt Ltd. clarified and developed two aspects of the Pepsi test.

Firstly, it established a two-stage test:

      i.         Whether the advertisement disparages the plaintiff's goods. 

     ii.         If so, whether such a disparagement is justified upon a comparison between verifiable and material attributes.[22]

Secondly, it held that a competitor may advertise its product as better, but it must do so on objectively verifiable facts. Claims that amount to exaggerated assertions and subject another's goods to ridicule are actionable.[23] The Court also reaffirmed that the "honest practices" standard under section 30(1) of the Act imposes a duty of good faith upon the comparative advertiser.[24]

Thus, these principles remain sound. However, these principles were developed in the disputes between approximately equivalent players, not between a start-up and a multinational incumbent.

Phase III: The Reputation Reasoned Judgement in the Post-Digital Era  

Judgments in recent cases like Reckitt Benckiser (India) Ltd v Wipro Enterprises Pvt Ltd. demonstrate that the court has now begun to incorporate brand reputation into the comparative advertising debate as an independent value to be protected.[25] The judgment emphasized the injury to "goodwill," a recognized value attached to established brands, as a sufficient basis for granting injunctive relief even without finding the factual claims to be "false."[26]

Similarly, the Bombay High Court in Hindustan Unilever Ltd v USV Pvt Ltd adopted the same approach, which has begun to extend protection of reputation, rather than considering the competitive advertising function more carefully.[27] These cases indicate a gradual shift toward a legal framework, interpreted in light of incumbent brand-protection interests, that becomes more hostile to the comparative advertiser's claims about the competitive nature of their speech.

The Structural Bias of Doctrine

Across all these three phases, doctrine has evolved from an incumbent perspective, seeking to restrain a challenger's comparative claim to protecting brand reputation as a primary value. The Court has yet to address a fundamental issue of market asymmetry. Whether a D2C startup's use of comparative advertising serves a legitimate economic function that the law should affirmatively protect, not merely tolerate at the margins.

So far, the judiciary has considered comparative advertising likely to harm incumbent goodwill rather than likely to benefit consumers and markets. While this approach is doctrinally consistent within its limits, it is normatively incomplete. It is the most important intellectual gap that must be addressed through reforms.

4.     CHALLENGES IN THE D2C DIGITAL ECOSYSTEM: THE DISJUNCTURE BETWEEN LAW AND TECHNOLOGY

The current framework is structurally misaligned with the D2C digital advertising realm.

There are 3 misalignments:

4.1  Platform Governance Beyond the Purview of Trademark

The primary channels that D2C Startups leverage to conduct comparative advertising (Meta's advertising platform, Google Ads, and YouTube) operate with their own set of IP and advertising policies that lie completely beyond the scope of Indian Trademark law.[28] Meta's advertising policies are strict against the use of third-party trademarks in ad copy in a manner that would likely confuse consumers. However, the evaluation is within the lens of Meta's global policy framework and is not aligned with Indian Trademark law. Similarly, Google’s trademark policy permits the use of a competitor's trademarks as ad copy and keywords in certain cases, again, with no relation to Indian law.[29]

The practical result is that a D2C Startup constructing a comparative advertising campaign must simultaneously navigate two completely separate compliance regimes, which include the statutory and case law structure of Indian Trademark law, and the contractual platform policy frameworks of Meta and Google. Different frameworks may come to different conclusions about the same advertisement. An advertisement that passes Indian trademark checks might be removed by Meta's automated moderation based on a competitor's complaint. An advertisement that violates Indian trademark law may still appear on a platform that does not view the comparison as a violation of policies.

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 impose duties on major social media platforms but do not connect platform content moderation standards with trademark law.[30] This creates a regulatory gap, the main areas where D2C comparative advertising occurs are governed by norms that Indian trademark law neither influences nor controls.[31]

4.2  The Temporal Gap Between Virality and Legal Relief

Indian civil procedure may not provide timely relief for disputes over comparative advertising in D2C campaigns. Interim injunctions under Order XXXIX of the Code of Civil Procedure 1908, along with section 135 of the Trade Marks Act, usually require notifying the defendant, allowing them to be heard, and judicial consideration of the balance of convenience. This process often takes days or weeks, even under expedited conditions.[32] 

On the other hand, a D2C comparative advertising campaign may reach its target audience within hours of launch. Its commercial objective is to build awareness, encourage trial, and disrupt brand loyalty, which is often achieved before any court evaluates its legality.[33] If an injunction is later granted, it mainly serves to stop a campaign that has already achieved its objective. A startup facing an injunction from an established competitor may choose to abandon a legitimate comparative campaign to avoid the costs of litigation, even if the comparison is honest and substantiated.

This temporal asymmetry creates a chilling effect. Established companies with resources to litigate may strategically use injunctions, not to address real trademark issues, but to restrict competitive comparative speech by raising its transaction costs. Thus, the temporal structure of law reinforces market dominance rather than serving as an impartial arbiter of competing claims. 

4.3  Applying Inflexible Legal Standards to Dynamic Creatives

Based on litigation, Indian comparative advertising law views an advertisement as a fixed object. Courts analyze a specific advertisement, such as a TV commercial, a print campaign, or a digital creative, to see if it crosses the boundary from permissible comparison to actionable disparagement.

However, D2C advertising does not operate this way. Digital campaigns are constantly adjusted through A/B testing, algorithmic optimization, and ongoing creative changes. A startup may run several creative versions simultaneously, each targeting different audience segments based on machine learning. For example, Mamaearth continuously tests creative options across various platforms while tracking performance at the variant level.[34] 

Upon evaluation of such a campaign, it selects a single or representative creative for analysis. The court concludes that whether the advertisement is disparaging, which may not accurately reflect all the creatives used, some of which might meet the standard, while others do not. More importantly, the court's analysis is retrospective. It considers a fixed version at the time of litigation, when the startup may have already updated to a different version. The conception of an "advertisement" as a stable object is fundamentally incompatible with the dynamic, ever-changing nature of digital advertising.

These three misalignments support a thesis that goes beyond legal critique. Indian trademark law governing comparative advertising is not just doctrinally incomplete, but also incapable of responding effectively to digital marketing. The law targets fixed advertisements, bilateral brand disputes, and broadcast distribution channels. This does not match the actual situations it is supposed to govern, such as dynamic creatives, platform-mediated distribution, and the imbalance between startups and established players. The disconnect between regulatory structure and operating reality is fundamental and cannot be addressed through gradual legal development.

5.     CONCLUSION AND SUGGESTIONS

Comparative advertising by D2C startups should be protected as a pro-competitive way to enter the market, subject to safeguards from actual harm. The appropriate boundary should be drawn where it becomes objectively false, misleading, or reputationally damaging without a factual foundation.

5.1  Suggestions

1.     Amendment of the Trade Marks Act 1999 is required to create a direct statutory safe harbour for comparative advertising. This provision should be based on the EU Comparative Advertising Directive.[35] Comparative advertising shall be permitted when

a.  Compared goods satisfy the same needs or purpose.

b.  Use material, relevant, verifiable, and represents features (particularly price).

c.  Does not confuse or mislead.

d.  Does not discredit or denigrate the trademark or tradename of a competitor.

e.  The advertisement does not take unfair advantage of, or is not detrimental to, the reputation of a trade mark or trade name of a competitor.[36]

An advertiser meeting these criteria should not face infringement liability under section 29(8).

2.     Trademark, consumer protection, and advertising regulation should be unified under one institutional framework. A joint regulatory committee with members from the Trade Marks Registry, the Central Consumer Protection Authority, and ASCI should be allowed to issue binding guidelines and offer expedited pre-clearance requests within a set timeframe.

3.     Introduction of an expedited interim resolution process similar to the current domain name procedures for resolving comparative advertising disputes. Considering the time-sensitive nature of online advertising, any interim relief must be decided within 48 hours of the application.

4.     Developing specific evidentiary standards to reflect the dynamic nature of D2C digital advertising that permits courts to review entire campaigns, including the algorithmic context behind how specific variants were shown rather than isolated creatives.

5.     Directing courts to incorporate market-entry imbalance as an important factor. If the advertiser is a newcomer and the complainant is a well-established brand, courts should apply an adjusted balance-of-convenience analysis that addresses the chilling effect of injunctions on competitive speech.

5.2  Final Normative Statement

Deciding where Indian trademark law should set boundaries in comparative advertising ultimately influences the kind of market the law aims to foster. Favouring incumbent brand equity at the cost of truthful competition leads to disadvantageous markets for D2C innovation and limited information to the consumers about competing products. Setting a boundary on objectively false, misleading, or damaging claims, allowing strong but truthful comparisons, fosters efficient markets, competitive growth, and meaningful consumer choice. Indian trademark law should draw a boundary at the latter point, following the suggested reforms. D2C startups are market disruptors, whose comparative speech plays a social role. The law must acknowledge, protect, and regulate that function appropriately.

[1] Shiprocket, Confederation of Indian Industry & Praxis Global Alliance, D2C in India: The Next Frontier (2022), https://www.praxisga.com/reports-and-publications/consumer-and-internet/india-d2c-report-2022-cii-shiprocket-praxis-global-alliance.

[2] India Brand Equity Foundation, India’s Direct-to-Consumer (D2C) Growth Is Powered by Tier 2–3 Cities with 66% New Orders in FY26, https://www.ibef.org/news/india-s-direct-to-consumer-d2c-growth-is-powered-by-tier-2-3-cities-with-66-new-orders-in-fy26.

[3] S. Paul Barooah & S. Bhattacharya, Comparative Advertisements: Balancing Consumer Interest vis-à-vis IPR Infringement, 2 Indian J. Intell. Prop. L. 116, 120 (2009), https://ijipl.nalsar.ac.in/volume-2/.

[4] Trade Marks Act, 1999, § 29(8) (India), https://ipindia.gov.in/tm-act-1999.

[5] Id. § 30(1).

[6] Advertising Standards Council of India, The ASCI Code for Self-Regulation in Advertising ch. III (2021), https://www.ascionline.in/the-asci-code/.

[7] Cable Television Networks (Regulation) Act, 1995 (India); Cable Television Networks Rules, 1994 (India), https://www.trai.gov.in/sites/default/files/2024-10/CableTelevisionNetworksRules1994.pdf.

[8] Consumer Protection Act, 2019, §§ 2(28), 21 (India), https://indiacode.gov.in/act/1b6c1754-47b1-411e-9607-1712a9caf368/sections.

[9] Trade Marks Act, 1999, § 29(8) (India), https://ipindia.gov.in/tm-act-1999.

[10] Id. § 30(1).

[11] Central Consumer Protection Authority, Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (2022), https://thc.nic.in/Central%20Governmental%20Schemes/Guidelines%20for%20Prevention%20of%20Misleading%20Advertisements%20&%20Endorsements%20for%20Mislaeding%20Advertisements,%202022.pdf.

[12] Advertising Standards Council of India, supra note 6, ch. III.

[13] Cable Television Networks (Regulation) Act, 1995 (India); Cable Television Networks Rules, 1994 (India), supra note 7.

[14] Consumer Protection Act, 2019, § 2(28) (India).

[15] Council Directive 2006/114, art. 4, 2006 O.J. (L 376) 21 (EC).

[16] Lanham Act § 43(a), 15 U.S.C. § 1125(a).

[17] Reckitt & Colman of India Ltd. v. Kiwi TTK Ltd., (1996) 16 P.T.C. 393 (Del. HC).

[18] Id. at 398.

[19] Id. at 400–01.

[20] Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., (2003) 27 P.T.C. 305 (Del. HC).

[21] Id. at 315–16.

[22] Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd., (2010) 42 P.T.C. 88 (Del. HC).

[23] Id. at 96.

[24] Id. at 99–100.

[25] Reckitt Benckiser (India) Pvt. Ltd. v. Wipro Enterprises (P) Ltd., 2023 SCC OnLine Del 2958.

[26] Id. ¶ 107.

[27] Hindustan Unilever Ltd. v. USV Pvt. Ltd., 2022 SCC OnLine Bom 1471.

[28] Meta Platforms, Inc., Advertising Policies: Intellectual Property, Meta, https://www.facebook.com/policies/ads (last visited Apr. 10, 2024).

[29] Google LLC, Google Ads Policies: Trademarks, Google Ads Help, https://support.google.com/adspolicy/answer/6118?hl=en (last visited Apr. 10, 2024).

[30] Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (India).

[31] Department-Related Parliamentary Standing Committee on Commerce, Rajya Sabha, 172nd Report: Promotion and Regulation of E-Commerce in India (2022).

[32] Code of Civil Procedure, 1908, Order XXXIX, rr. 1–2 (India); Trade Marks Act, 1999, § 135 (India).

[33] India Brand Equity Foundation, supra note 2.

[34] Honasa Consumer Ltd., Annual Report 2022–23, at 18–22 (2023).

[35] Council Directive 2006/114, supra note 15, art. 4(a)–(h).

[36] Trade Marks Act, 1999, § 30(1)(a)–(b) (India).

Suggested Citation:

Meghna Choudhary, “Comparative Advertising by D2C Startups: Where Should Indian Trademark Law Draw the Boundary?”, NIDAN Centre for Legal and Policy Research (2026).