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. 1.1 1.2 1.3 1.4 2. 2.1 2.1.1 2.1.2 2.1.3 2.2 2.2.1 2.2.1.1 2.2.1.2 2.2.2 2.2.3 3. 3.1 3.1.1 3.1.1.1 3.1.1.2 3.1.2 3.2 3.2.1 3.2.1.1 3.2.1.2 3.2.2 3.3 4. 4.1 4.1.1 Introduction 6 Rationale 6 Purpose 6 Methods 7 Delimitation 8 The definition of comparative advertising 8 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 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 The definition of Comparative Advertising in Vietnamese law 22 Comparative remarks 24 Lawful comparative advertising 25 Lawful comparative advertising in English law 25 Conditions for comparative advertising to be lawful in English law 25 Negative conditions 27 Positive conditions 36 General remarks 40 Lawful comparative advertising in Vietnamese law 41 Conditions for comparative advertising to be lawful under Vietnamese law 41 General conditions 42 Special conditions 44 General remarks 46 Comparative remarks 46 Sanctions applied for unlawful comparative advertising 48 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 quali- ty.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 regu- lated by the Law on commerce, the Law on competition and the Ordinance on Ad- vertising. 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 com- parative 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 ad- vertising 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, re- marks 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 under- takings3 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 com- plies 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 dis- tinguishing between direct and indirect comparative advertising - which is very im- portant 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 provi- sions, 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 advertis- Julian Petley, Advertising:Technology,People,Proc ess, BlackRabbit Books publishing, 2004 p.5. athttp://books.googl e.com.vn/books? id=aREzFOQ9jsC& printsec=frontcover &dq=%22+advertisi ng %22&sig=ACfU3U 2oAabErVdot9cOW mtSWD_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 Tu- lane European & Civil Law Forum, 1994, 179-214, at p.185. Also see Samia M. Kirmani,“Cross- boder Comparative Advertising in the European Union, 19 Boston College International & Com- parative Law Review, No.1, 1996, 201-215, at p.201. 6 [...]... definition on comparative advertising in Vietnamese law at all even though the nature of comparative advertising is different from that of general advertising Determining whether an advertisement is a comparative one is an important step prior to examining whether it is permitted or prohibited The definition of comparative advertising in English law has also been examined by case law and the ECJ According... comparative advertising In addition, this would allow traders to be more flexible in their promotional activities and would create a fair competitive environment between undertakings The definition of comparative advertising in English law could be used as a starting point for Vietnamese law It should be supplemented by a definition of comparative advertising in the law of advertising Comparative advertising. .. European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council O.J L- 149, 11/06/2005 27 A Comparative Study of Comparative Advertising in Vietnamese and English law ing action can include false product information or deceptive presentation.126 Misleading actions also cover any marketing of a product (including comparative advertising) which creates... Unlike English law, Vietnamese law does not accept case law or the judgement of courts as sources of law Thus, the judgement of the court in KymDan case only has value as a reference and is not a rule for determining whether advertising is comparative Therefore, it is necessary to provide a definition of Comparative advertising in Vietnamese law as this will help traders draw a line between advertising and. .. 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. .. 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. .. 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... 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. .. 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,... 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 . Definition and classification 17 Analysing the definition of Comparative Advertising 19 The definition of Comparative Advertising in Vietnamese law 22 Comparative remarks 24 Lawful comparative. English law 9 The definition of advertising in Vietnamese law 12 Comparative remarks 15 The definition of Comparative Advertising 16 The definition of comparative advertising in English laws. 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