Deceitful Trade Names In The Era Of Social Media - An Exploration Of Influencer Marketing And Consumer Deception
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DECEITFUL TRADE NAMES IN THE ERA OF SOCIAL
MEDIA: AN EXPLORATION OF INFLUENCER MARKETING AND CONSUMER DECEPTION Joysri Mondal, Heritage Law College, Kolkata Prithwish Ganguli, Advocate, LL.M. (Cal) Advocate, MA in CL & FS (NALSAR), MA Sociology (SRU), Visiting Faculty, Heritage Law College, Kolkata
ABSTRACT
An Exploration of Influencer Marketing and Consumer Deception" delves into the evolving landscape of influencer marketing, where the power of social media has enabled influencers to play a significant role in consumer behaviour. The piece explores how influencers, often trusted for their authenticity and relatability, can sometimes engage in misleading practices by endorsing products or services under deceitful trade names. The article begins by outlining the rise of influencer marketing, emphasizing its effectiveness in reaching targeted audiences. It then examines the ethical challenges associated with this form of marketing, particularly when influencers promote products under false pretences or without proper disclosure of their affiliations.
The potential for consumer deception is highlighted, as followers may be misled by the influencer's perceived credibility, leading to uninformed purchasing decisions. The article further explores the legal implications of deceitful trade names in influencer marketing, referencing relevant laws and regulations designed to protect consumers. It discusses the responsibilities of influencers, brands, and social media platforms in ensuring transparency and honesty in advertising practices. Case studies are presented to illustrate instances where deceitful trade names have caused significant harm to consumers, demonstrating the need for stricter enforcement of advertising standards. In conclusion, the article calls for greater awareness among consumers and more rigorous oversight by regulatory bodies to combat the rise of deceptive practices in influencer marketing.
It emphasizes the importance of transparency and ethical behaviour in maintaining trust in the digital marketplace, urging all stakeholders to prioritize the protection of consumer rights in the era of social media. Keywords: Influencer Marketing, Consumer Deception, Social Media, Deceitful Trade Names, Advertising Ethics I.
INTRODUCTION
Definition of deceitful trade names and influencer marketing As influencers shape consumer choices, the truth behind the trade names they promote becomes a crucial battleground for integrity in the digital age. According to the Oxford Dictionary the word “Deceitful” means “behaving in a dishonest way by telling lies and making people believe things that are not true” and The term “trade names” means “the name given to a product by the company that produces it” it is also known as a brand name. These names help companies to become popular in the market. They are typically short, and concise and are often different from the company's registered name. A trade name may either be similar to the company's official name or may be completely different.
Company names are governed by the Companies Act of 2013 while trade names are usually protected through trademark registration governed by the Trademark Act of 1999. For example, the trade name of the Tata Motors Limited is the Tata Motors. Tata Motors Limited conducts its operation under the trade name Tata Motors. This name is used for marketing, branding, and advertising and is also used in interacting and communicating with the public. The following are examples of more trade names. Trade Name Company Name These names are widely recognized and used to build brand loyalty among consumers. By combining the terms “deceitful” and “trade names” we can understand that deceitful trade names are the names that are used as product names or business names and are capable of misleading the consumers.
These names falsely misrepresent the quality, nature, and originality of the products or services intended causing consumers to make decisions based on falsely represented information. Influencer marketing is a form of marketing where brands or companies collaborate with individuals (influencers) who have sufficient online followers on social media platforms to promote their products or services. Influencers are not always celebrities, they can be anyone and can come from any background. Their significant online following and presence on social media are what makes them “influential”. Some may have millions or less than one million followers and some may have 10,000 followers, still, they are the experts in their respective fields or niche. The brands collaborate with influencers to improve brand recognition.
The influencers promote the brands or the companies to drive engagement and brand awareness among their audiences. For example, Lenskart not only invests in traditional marketing by way of TV and print ads but also leverages influencer marketing to boost sales and attract shoppers. In a campaign through influencer marketing, Lenskart sent a stylish pair of sunglasses to actress Katrina Kaif, who then uploaded a stunning photo of herself wearing them on Instagram. Her post captured huge attention, leading to a significant increase in traffic to Lenskart’s website.
-Importance of the topic in the era of social media In the era of social media it is crucial to know the importance of these topics, where everything in the world is becoming digital, deceitful trade names undermine consumer’s trust, increase the risk of fraud, creates consumer confusion, increases the chance of brand dilution, infringes trademarks, etc. which the author will deal with these things in detail in the following segments of this paper. Again the importance of influence marketing in the era of social media can be understood in various ways. Influencer marketing helps in enhancing the visibility and recognition of the brands. Further content creation helps the brand to reach its potential customers, it also helps in building trust with their followers, etc. which the author will shed light on in detail in the following segments.
II.
BACKGROUND
Overview of trade name laws and regulations Trade names are governed by different laws and regulations including both national and international law. National Law If we talk about national law, there is the Trademarks Act, 1999 which primarily deals with trademarks in India. Before the independence of India, the first statutory protection was given to trademarks through the Trade Marks Act, of 1940, which deals with machinery for registration and safeguards trademarks. This Act was enacted based on the Trade Marks Act,
1938 of England. The Act of 1940 was repealed by the new statute the Trade and Merchandise
Marks Act, 1958. This Act was amended several times. Moreover, due to developments in trading and commercial fields and also due to the increasing globalization of trade and industry, there emerged a need to broaden and simplify trademark management systems. Hence it was necessary to enact comprehensive legislation and accordingly, The Trademark Act, of 1999 was enacted and came into effect on 15th September 2003. Some of the features of the new Act are as follows:-
1. it provides for registration of trade mark for services and goods,
2. it simplifies the procedure for registration of registered user
3. It enlarges the scope of permitted use.
4. It enhanced punishment for the offenses relating to trademarks
5. It prohibits the use of someone else’s trademarks as part of corporate names or names
of business concern. International law Now coming to international law, International law on trademarks and trade names is governed by the following major instruments:-
1. Paris Convention for Protection of Industrial Property, 1883 which states that
trademarks and trade names are the objects of industrial property. It incorporates some Articles, such as Article 1(2) and Article 8 specifically dealing with trade names which the author will shed light on in the following segments.
2. The TRIPS Agreement, 1995 established under the WTO, is the most significant
multilateral treaty for harmonizing intellectual property systems. It sets minimum standards for intellectual property protection that all World Trade Organization (WTO) members must adhere to. Articles 15 to 21 of the TRIPs agreement deal with trademark protection.
3. WIPO Model law for developing countries on Marks, Trade names, and Acts of Unfair
Competition, 1967 this law was created by BIRPI at the request of developing countries to help make intellectual property an effective tool for their national development. Sections 47 to 49 of Part IV particularly deal with trade names. Other International Conventions and Treaties on Trademarks are:-
1. Nice agreement concerning the international classification of goods and services for
Registration of Marks, 1957. Amended on September, 1979.
2. Madrid agreement concerning the international registration of marks, 1891
3. Protocol relating to the Madrid agreement concerning the international registration of
marks, 1989
4. Trademark Law Registry, 1994
5. Regulations under the Trademarks Law Treaty, 1994.
6. The Vienna Agreement established an international classification of the figurative
elements of marks, in 1973. - Rise of influencer marketing and its impact on consumer behaviour In the era of digital marketing, a new trend is going on in how brands engage with their audiences. Influencer marketing has emerged as a powerful force, transforming promotional strategies by harnessing the influence of social media personalities, celebrities, and content creators to create brand connections. In this segment, the author will explore the rise of influencer marketing and its impact on consumer behaviour. Influencer marketing is not a new idea, it is linked to the rise of social media platforms like Instagram, YouTube, TikTok, Facebook, and others have provided the opportunity for individuals to showcase their lives, talents, and expertise with wide audiences globally.
If we take the example of YouTube and Instagram, YouTube was launched in 2005, a videosharing platform providing the opportunity for content creators to create and share them in front of wide audiences. India has the largest YouTube audience, with approximately 462 million users, accounting for about 38. 4% of adults in the country. In comparison, the USA ranks second in total users, with around 77. 7% of adults aged 18 and over using the platform. Again Instagram is one of the fastest-growing platforms in social media marketing. Since its launch in 2010, it has emerged as a powerful tool for online shopping, enabling marketers to engage with consumers by sharing photos and videos. In India, 358. 55 million people use Instagram whereas 158. 45 million users in the United States and 122. 9 million users in Brazil. This is where influencers play a crucial role in social media marketing.
By partnering with influencers, brands leverage social media platforms to highlight their products and services, produce "how-to" tutorials, incorporate customer testimonials, and more. Brands deliver their marketing messages through diverse content and viewers enjoy and engage with their content and take it as entertainment. Initially, influencer marketing focused mainly on collaborations with celebrities and macroinfluencers who had vast followings. However, as social media evolved, so did the landscape of influencer marketing. It expanded beyond celebrities to include micro-influencers and even nano-influencers, who, despite having smaller audiences, possess highly engaged and nichespecific followings. The growth of influencer marketing has been remarkable; a Business Insider Intelligence report estimated ad spending in the sector at 3.
8 billion in 2021, with projections reaching $22. 3 billion by 2024. This dramatic increase highlights the growing trust brands place in influencers as genuine connectors to their target audiences. In the past, businesses heavily depend on traditional advertising like TV, billboards, and print ads to promote their products. After the emergence of social media, the number of social media influencers (SMIs) started increasing and the effectiveness of marketing has been changing.
Studies reveal that 92% of consumers trust influencer marketing more than traditional advertising. Influencer marketing enables businesses to leverage the audience of their chosen influencers, with 75% of marketers finding it highly effective. Influencers, who have gained loyal followers who trust their opinions and recommendations, can significantly influence their followers' purchasing decisions through product endorsements. The trend of influencer marketing has seen remarkable growth across businesses of all sizes. It is projected to reach a value of $21.1 billion in 2023. But how does influencer marketing impact consumer behaviour? Now the author will dive into how influencers affect consumer decision-making and brand perception. Influencer marketing affects consumer behaviour in various ways, which are:-
1. The Impact of Influencer Marketing on Consumer Decision-Making Processes.
Consumer decision-making involves several stages when making a purchase or choice. The traditional model mentions five key steps: need, searching for information, alternatives, purchase, and post-purchase decision. Influencer marketing can affect each of these stages by offering information, advice, and motivation to guide consumers through their decision-making journey. a) Need: In the initial stage of consumer decision-making, individuals identify a need or desire. Influencer marketing impacts this stage by creating awareness and generating interest with content that demonstrates how a brand, product, or service can solve a problem, fulfill a need, or improve a situation. b) Information Search: In this stage, consumers seek information and options to meet their needs or desires.
Influencer marketing affects this phase by offering valuable content that includes details like features, benefits, prices, reviews, and testimonials. It also guides consumers to the brand’s website, landing page, or social media profiles, influencing where they look for information and options. c) Alternatives: In this stage, consumers compare various brands, products, or services, assessing their pros and cons based on personal criteria and preferences. Influencer marketing affects this process by shaping these criteria and preferences, as well as influencing attitudes and perceptions. This is achieved through content that emphasizes the benefits and value of a brand, product, or service, and by providing proof. d) Purchase: In this stage, consumers decide whether to purchase a brand, product, or service based on their evaluation of alternatives.
Influencer marketing impacts this decision by shaping purchase intentions and behaviours, and by reducing perceived risk or uncertainty. This is achieved through content that features strong calls to action and by offering incentives such as discounts, rewards, or free samples, which boost consumer motivation and confidence in making a purchase. e) Post-purchase: In this stage, consumers assess their purchase decision, reflecting on their satisfaction or dissatisfaction and their loyalty or disloyalty to the brand, product, or service. Influencer marketing influences this phase by affecting post-purchase satisfaction and loyalty. This is done through content that offers after-sales support, feedback, or guidance and by encouraging user-generated content and word-of-mouth, such as asking consumers to share their experiences, opinions, or recommendations.
2. Impact of Influencer Marketing on Brand Perception. Brand perception is how consumers
think, feel, and act toward a brand based on their experiences, associations, and impressions. This perception influences brand awareness, reputation, loyalty, and ultimately, market share and profitability. a. Enhancing brand reputation: Influencer marketing enhances brand reputation by building trust and credibility. It creates a positive image and impression among consumers through content that delivers valuable information—such as features, benefits, prices, reviews, and testimonials which also boost the brand's attractiveness and desirability. b. Building brand loyalty: Influencer marketing fosters brand loyalty by enhancing consumer satisfaction, engagement, and advocacy. It strengthens the emotional connection between a brand and its consumers through authentic, engaging, and relatable content. III.
TYPES OF DECEITFUL TRADE NAMES In the competitive world of commerce, businesses and companies often seek to distinguish themselves and capture consumer attention through innovative branding and marketing strategies. However, some companies resort to deceitful trade names and tactics to mislead consumers and gain unfair advantages. These deceptive practices can undermine trust and mislead the marketplace, causing harm to consumers and businesses alike. This segment deals with various types of Deceitful trade names. Before going into details the author will shed some light on the meaning of deceitful trade names. In legal terms the definition of a trade name is included under the definition of trademark, therefore before understanding the concept of trade name, first we need to know what is a trademark and whether the terms “trade name” and “trademark” are the same or different.
A consumer is deceived if he buys a commodity thinking that the commodity originated from a certain identified source when actually it is not, and later he finds the truth and the reputation of the trader suffers in the process. Therefore the interests of both the buyer and seller can be saved if a particular symbol that marks out the origin of goods from a definite trade source is attached to the commodities coming from such source. Such a symbol is known as trade mark. The Sind High Court in Bechari Lal v. Firm Adam1, defined a trademark as a symbol, typically a picture, label, or word that is affixed to goods to distinguish them from those of other traders. This symbol serves to identify the goods as originating from a particular trader or their successors.
The use or adoption of a trademark grants the user rights to it, as the mark, once employed in the market to signify that the goods come from a specific source, becomes the property of the firm. Consequently, a trademark is recognized as a property right, protected by law, and functions as a visual representation indicating the trade origin of the goods. Let’s take the example of the trademark ‘Lakme’ which distinguishes the goods of Lakme Lever Company from those of say, the ‘Revlon’. The word ‘Revlon’ is a separate trademark that distinguishes the goods of Revlon.
Section 2(1) (m) of the Trade Marks Act, 1999 defines a mark as “mark includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof;” Section 2(1) (zb) defines the term ‘trade mark’ as “trade mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from
1 Firm Koonerji Bechari Lal v. Firm Adam Hazi Pir Mohammad, AIR 1944 Sind 21
those of others and may include shape of goods, their packaging and combination of colours;” After carefully reading the definitions of ‘trademark’ and ‘mark’ it becomes clear that names are also included under the definition of trademark. Names include any abbreviation of a name as it was held in the case of Laxmikant v. Chetanbhat Shah2. In the Act of, 1999 there is no direct provision for deceitful trade names but there is a provision for deceptively similar marks. The expression “deceptively similar” in relation to a mark has been defined as that which so nearly resembles the other mark as to be likely to deceive or cause confusion. Deceitful trade names come in various forms, each designed to manipulate consumer perception and drive sales through misleading means.
Misleading product names promise more than they deliver, fake celebrity endorsements exploit popular figures without their consent, hidden sponsorships obscure the true nature of promotional content, and deceptive branding mimics established brands to confuse and mislead. Understanding these deceitful practices is crucial for consumers to make informed choices and for businesses to foster transparency and integrity in their operations. By recognizing these tactics, consumers can better navigate the marketplace and hold companies accountable for ethical conduct. - Misleading product names Misleading product names are those names that create false or exaggerated expectations about a product’s capabilities or benefits. These names can deceive consumers into believing that a product offers more than it does.
They involve names or branding elements that mislead consumers about the nature, origin, or quality of goods and services. Misleading trade names are designed to create false impressions about a product or service, often by imitating or closely resembling well-known brands or by making exaggerated claims about the product’s qualities. Such practices can lead to consumer confusion and undermine the integrity of the marketplace. Suppose you want to register the name SHOOTING STAR ORGANIC as a trademark for dietary supplements. But your supplements are not organic. The name SHOOTING STAR ORGANIC misrepresents your products since it includes the term "organic," but your
2 Laxmikant v. Chetanbhat Shah, AIR 2002 SC 275
supplements do not meet this description. Consumers are likely to assume that your dietary supplements are organic because they are accustomed to seeing various supplements labelled as organic. The incorrect labelling of your supplements as “organic” is likely to influence consumer purchasing decisions, as many shoppers specifically look for organic options when choosing dietary supplements. Consequently, SHOOTING STAR ORGANIC would be deemed a deceptive trademark if used for dietary supplements that are not organic. Again consider the name TREEHOUSE VEGAN RESTAURANT for a restaurant that does not primarily serve vegan food. The name TREEHOUSE VEGAN RESTAURANT includes the term "vegan," which inaccurately describes the restaurant’s offerings, as it does not primarily serve vegan dishes.
Consumers would likely expect that the restaurant serves primarily vegan food because many other restaurants use the term "vegan" to indicate their menu is entirely or mostly vegan. The misleading nature of the name could influence consumer decisions, as individuals who specifically seek out vegan options for health or ethical reasons may be misled into visiting the restaurant. Thus, TREEHOUSE VEGAN RESTAURANT would likely be considered a deceptive and misleading trademark if used for a restaurant that does not primarily offer vegan food and would not qualify for registration. Thus Misleading trade names pose a significant risk to both consumers and businesses. They can lead to confusion, undermine brand reputation, and create unfair market conditions.
- Fake celebrity endorsements Celebrity endorsement is a marketing approach that leverages a celebrity’s popularity and image to advertise a brand or product. Celebrity marketing is highly effective for a brand, such as launching a new product, entering new markets, or repositioning the brand. There are several ways a celebrity can endorse a brand or a product such as Celebrity Ads and Commercials, Celebrity Appearances at Live Events, Celebrity Signature Product Lines, Celebrity Spokesperson, etc. Manufacturers, marketers, and advertisers constantly face the challenge of capturing their audience's attention and building a connection that can lead to purchase decisions. Celebrity endorsement is a popular strategy used to influence consumer attitudes and purchasing intentions.
Various media platforms leverage celebrity advertising, featuring wellknown figures such as celebrities, influencers, actors, athletes, chefs, and more, to gain recognition and build trust with a broader audience. Significant investments are made in endorsements. Different celebrities are chosen to promote a wide range of products, including cosmetics, electronics, food and beverages, banking, insurance, health-related items, education, and more. A renowned personality helps advertisers and marketers reach a large audience quickly and fosters a strong association and recall in the minds of consumers. This approach often leads to converting that audience into actual consumers. Now the question is did a celebrity really endorse that product? Maybe not. “But it looks and sounds real, so it must be true,” right? Not necessarily.
The technology used to create fake endorsement videos is continually advancing. Before you invest in that celebrity-endorsed products take a moment to pause and think. Are you certain that a genuine celebrity or influencer is actually endorsing the product or program? There’s a possibility that a scammer is behind those endorsements. For years, scammers have exploited social media by using celebrities to gain money. However, their tactics have become more sophisticated. According to the Better Business Bureau, scammers now utilize artificial intelligence to fabricate fake celebrity endorsements for various products. By creating images and videos of popular celebrities, they aim to build trust and deceive consumers. These scammers post on social media with fabricated photos and videos that falsely show celebrities endorsing products.
The posts may feature images of celebrities using these products or videos with voices that appear to belong to the celebrities. They often make these posts look as if they come from the celebrities' real social media accounts. In reality, these images and videos are fake. Scammers use AI technology to generate realistic-looking photos and audio clips that mimic celebrities, leveraging this deceptive content to gain consumer trust and exploit it for their gain. - Hidden sponsorships Hidden sponsorship refers to a form of marketing where the relationship between the sponsor and the content creator is not clearly disclosed to the audience. This lack of transparency can mislead viewers or readers into believing that the content is unbiased or independent when, in reality, it is influenced by a financial or promotional arrangement.
The audience is not informed about the financial or promotional relationship between the sponsor and the content creator. This means that the sponsorship or promotional nature of the content is not clearly stated. Content with hidden sponsorship may be presented in a way that makes it seem like genuine, unbiased advice or information, making it harder for the audience to recognize it as advertising. For example, an influencer might promote a product in their posts or videos without disclosing that they are being paid by the brand, making it appear as though their endorsement is genuine rather than sponsored. Therefore Hidden sponsorship undermines trust and can lead to a loss of credibility for both the content creator and the sponsoring brand.
It is crucial for content creators and brands to clearly disclose any sponsorships or paid promotions to maintain transparency and trust with their audience. More than three-quarters of influencer advertisements on Instagram have their disclosures hidden somewhere within the post— whether in the middle, at the end, or in a comment. - Deceptive branding Deceptive branding refers to the practice of intentionally misleading consumers through branding strategies. This can involve a range of tactics designed to create a false impression about a product or company. The primary goal of deceptive branding is to influence consumer perception and behaviour in a way that benefits the brand, often at the expense of transparency and honesty. Some of the key tactics in deceptive branding are first, Companies may make exaggerated claims about their products.
For instance, a product might be labelled as "natural" or "organic" when it contains synthetic ingredients. Secondly, Using vague terms like "clinically proven" without providing details or evidence can mislead consumers about the product's effectiveness. Thirdly, the design and size of packaging can be deceptive. For example, products may be packaged in oversized containers that make the product seem larger than it actually is. Fourthly, Brands might use retouched images or idealized representations of their products, making them appear more desirable or effective than they really are. Fifthly, Brands may create misleading associations with high-status or luxury elements to convey a sense of premium quality or exclusivity. For example, a budget product might use a high-end design or prestigious name to give the impression of luxury.
Lastly, A brand may present itself as eco-friendly or socially responsible while engaging in practices that contradict these claims. Companies often use influencers who may not genuinely use or endorse a product but are paid to promote it can mislead consumers into thinking the product is more popular or effective than it is. Companies might generate fake positive reviews or testimonials to create a false sense of credibility and popularity. IV. INFLUENCER MARKETING AND DECEPTION According to ASCI Guidelines for Social Media Influencers, an influencer is defined as an individual who has access to an audience and can influence their purchasing decisions or opinions about a product, service, brand, or experience due to their authority, knowledge, position, or relationship with their audience.
Additionally, the guidelines describe virtual influencers as fictional, computer-generated entities or avatars that possess realistic human characteristics, features, and personalities and behave like traditional influencers. Influencer marketing leverages social media personalities to promote products and services to their followers. While it can be an effective strategy for reaching target audiences, it is also susceptible to deceptive practices. These practices undermine trust and can lead to negative consequences for both consumers and brands. - Lack of transparency in sponsored content One of the most significant issues in influencer marketing is the lack of transparency regarding sponsored content. Influencers may not always clearly disclose when a post or endorsement is paid for or sponsored by a brand, leading to potential deception of their audience.
Influencers are often required by regulations to disclose paid partnerships or sponsored content clearly. This typically involves using hashtags like #ad or #sponsored. However, the effectiveness of these disclosures can be diminished if they are buried in the middle of a post. Lack of transparency can erode consumer trust in both the influencer and the brand, as followers may feel misled about the nature of the endorsement. Brands associated with deceptive practices may suffer from reputational damage and loss of credibility if consumers feel they were deceived. - Fake or bought followers and engagement To appear more influential and attract brand partnerships, some influencers artificially inflate their follower count and engagement metrics. This can involve purchasing followers or engagement (likes, comments) to create a false impression of popularity and influence.
Fake accounts or bots can be used to boost follower numbers, making it appear as though an influencer has a larger and more engaged audience than they actually do. Some influencers buy likes, comments, and shares to artificially inflate their engagement rates. This can mislead brands and consumers about the actual level of interaction. Identifying fake followers and engagement can be challenging for brands and consumers, as these practices often involve sophisticated techniques to do so. - Misleading product claims Influencers often make misleading or exaggerated claims about the products they endorse, whether intentionally or unintentionally. These claims can be about the effectiveness, benefits, or results of a product, leading to consumer deception. Influencers might promote products with claims that are not supported by evidence or scientific research.
For example, endorsing a skincare product as a “miracle cure” without credible backing. Influencers might present products as delivering results that are unrealistic or not achievable, such as claiming rapid weight loss or instant improvements. Influencers may lack the expertise to accurately assess or communicate the efficacy of a product, leading to potentially misleading recommendations. Misleading product claims can lead to consumer dissatisfaction, wasted money, and potential health risks, depending on the product in question. - Unfair comparisons Influencers may engage in unfair comparisons between products, often to promote a brand or product they are endorsing. These comparisons can be biased, misleading, or incomplete, designed to favour the product being promoted.
Influencers might compare a product to competitors in a way that highlights only the strengths of the promoted product while ignoring its weaknesses or the strengths of other products. By selectively presenting data or features, influencers can create a skewed comparison that is not fully representative of the products in question. Unfair comparisons can mislead consumers and impact their purchasing decisions, potentially leading them to choose products that are not the best fit for their needs. Brands involved in unfair comparisons risk being perceived as dishonest or manipulative, which can damage their reputation and consumer trust. V. DECEPTION Deception, in various contexts, involves misleading or manipulating individuals by distorting the truth or presenting information in a misleading manner.
This phenomenon can be observed in several areas, including marketing and personal interactions to understand the dynamics of deception, it is crucial to explore how cognitive biases and heuristics contribute to deceptive practices, the role of emotional appeal versus factual information, and the impact of trust and credibility in influencer marketing. - Cognitive biases and heuristics Cognitive biases are systematic deviations from rationality that affect human judgment and decision-making. They often lead individuals to make errors in thinking, which can be exploited for deceptive purposes. Some relevant cognitive biases include:
1 Confirmation Bias
Individuals tend to seek out or give more weight to information that confirms their pre-existing beliefs or attitudes. Deceptive practices can exploit this by presenting information that aligns with the audience's existing views, making it more likely they will accept the deceptive information as true.
2 Anchoring Bias
This bias occurs when people rely too heavily on the first piece of information they encounter (the "anchor") when making decisions. Deceptive marketers may use an initial piece of misleading information to set a reference point, influencing how subsequent information is perceived.
3 Availability Heuristic
People often judge the probability of events based on how readily examples come to mind. Deceptive practices can use vivid or memorable but misleading examples to skew perceptions and create a false sense of reality.
4 Bandwagon Effect
This bias occurs when individuals adopt beliefs or behaviours because others are doing so. Deception can leverage this bias by creating the appearance of widespread acceptance or popularity to encourage people to follow suit. Heuristics are mental shortcuts that simplify decision-making processes. While they are useful for quick judgments, they can also lead to errors and susceptibility to deception:
5 Representativeness Heuristic
People judge the probability of an event based on how similar it is to a prototype. Deceptive practices may use misleading representations or stereotypes to make their claims seem more credible or typical.
6 Sunk Cost Fallacy
This heuristic involves continuing an investment based on the amount already invested, rather than future value. Deceptive strategies may exploit this by encouraging people to commit further resources based on past decisions, even when it is not rational. - Emotional appeal vs. factual information Emotional appeal is a powerful tool in persuasion and deception. It leverages emotions such as fear, joy, or sympathy to influence decision-making, often at the expense of rational evaluation: Deceptive practices may use fear to create urgency or manipulate behaviour. For instance, alarmist advertising may exaggerate potential risks to persuade consumers to buy a product or service. Brands or individuals may use positive emotions like happiness or nostalgia to create favourable impressions, sometimes overshadowing factual information.
For example, advertising might depict a product in idealized scenarios to evoke positive feelings rather than focusing on its actual benefits. Appeals to sympathy or empathy can be used to manipulate individuals into supporting causes or making purchases. By focusing on personal stories or emotional pleas, deceptive practices can obscure factual information and manipulate consumer behaviour. While emotional appeals can be compelling, factual information is essential for informed decision-making. Providing accurate and transparent information is crucial for building trust and making sound decisions. Deceptive practices often obscure or distort factual information to mislead individuals and create a false impression of reality. Encouraging critical thinking and skepticism helps individuals assess the credibility of information.
Relying solely on emotional appeal without verifying facts can lead to poor decision-making and vulnerability to deception - Trust and credibility in influencer marketing Influencer marketing involves leveraging individuals with significant social media followings to promote products or services. Trust plays a critical role in this form of marketing. Influencers often build trust by appearing authentic and relatable. However, deceptive practices may exploit this trust by promoting products that do not meet their claims or endorsing products for financial gain rather than genuine belief. Influencers often engage with their audience through comments, likes, and personal messages. Deceptive practices may take advantage of this interaction to foster a sense of connection and trust, making it more difficult for consumers to discern deceit.
Credibility and transparency are essential for maintaining trust in influencer marketing. Transparency about sponsored content is crucial. Influencers are often required to disclose when they are paid to promote a product. Failure to disclose sponsorships can be deceptive and undermine credibility. Influencers who are perceived as genuine and authentic are more likely to maintain trust. However, when influencers prioritize commercial interests over their genuine opinions, it can lead to a loss of credibility and trust among their audience. Educating consumers about the potential for deceptive practices in influencer marketing helps them make more informed decisions. Awareness of sponsored content and the commercial nature of endorsements can help consumers critically evaluate the information presented.
VI. CASE STUDIES
Examples of deceitful trade names and influencer marketing campaigns Following are the examples of deceitful trade names:
1. The word “Taaza” in Amul Taaza Milk
It's a daily ritual in many households to wake up and grab a packet of milk for their morning tea. Many people have seen its packets and cartons at the local grocery store. But have you ever stopped to read the print on the back of the packaging? If you read the disclaimer on the carton of Amul Taaza Milk which reads as "This is only a brand name or trademark and does not represent its true nature. ”. The disclaimer suggests that the term "Taaza" is used purely for branding purposes and does not reflect the actual characteristics of the milk. Amul Taaza Milk is a prominent dairy product in India, marketed as a source of fresh, highquality milk. However, a closer examination of the product reveals potential issues with the marketing and labelling, specifically concerning the use of the term "Taaza," which translates to "fresh" in English.
The term "Taaza" is intended to convey freshness, a key attribute that consumers associate with high-quality milk. The term "Taaza" is employed to evoke a sense of freshness and purity, suggesting that the milk is as fresh as possible. However, in practice, the milk is processed and packaged with a shelf life that extends beyond the typical freshness of raw milk. The use of "Taaza" could lead consumers to believe that they are purchasing milk that is more freshly delivered than it actually is. This perception aligns with the desire for fresh dairy products and can influence purchasing decisions. When the milk does not meet these expectations, it can lead to disappointment and a sense of being misled. The presence of this disclaimer may not be immediately obvious to all consumers, as it is often located in smaller print.
This can obscure its visibility and effectiveness in clarifying the nature of the product. As a result, consumers might not fully understand that "Taaza" is a marketing term rather than a literal description of the milk's freshness.
2. The word “Fresh” in Amul Fresh Paneer
The brand's name carries significant weight in the market, with "Fresh" being a key component of its paneer product line. The term "Fresh" is intended to convey the product's quality and suitability for immediate consumption. The term "Fresh" in the product name is a trademark and does not necessarily reflect the product’s actual freshness. The term "Fresh" is used in the product name to suggest that the paneer is newly made and has not been stored for long periods. However, in practice, Amul Fresh Paneer, like many processed dairy products, undergoes manufacturing and packaging processes that may not align with the common understanding of "freshness. " The product is often pasteurized and packaged to extend its shelf life, which can contradict the freshness implied by the name.
Consumers might interpret "Fresh" as an indication that the paneer is made from freshly curdled milk and has a short shelf life. This perception can influence their purchasing decisions, as they might believe they are getting a product with minimal processing and higher quality. Consumers may not always be aware that "Fresh" is a trademark rather than a guarantee of the product's immediate freshness. This lack of awareness can lead to misunderstandings about the nature of the paneer, especially if the term is prominently displayed on packaging without sufficient clarification
3. The word “Real” in Real Fruit Juice
Real Fruit Juice is a well-known Indian company with a long history in the food and beverage industry. The term "Real" is used in the product name to suggest that the juice is made from genuine fruit, as opposed to artificial flavours or additives. The term "Real" is employed to imply that the juice is made from actual fruit and is not diluted or artificial. However, in practice, Real Fruit Juice products may include added sugars, preservatives, and other ingredients that are not strictly "real" in the purest sense. Consumers are likely to interpret "Real" as an assurance of the juice's authenticity and purity. This perception suggests that the product is made from 100% fruit with minimal processing. When the actual composition includes a mix of fruit juice concentrate, water, and additives, it can lead to consumer dissatisfaction and a sense of being misled.
The term "Real" in the product name is a trademark used for branding purposes rather than a strict representation of the product's composition. Many consumers may not be aware that "Real" is a trademark rather than a guarantee of the product's purity. This lack of awareness can contribute to misunderstandings about what "Real" signifies in the context of the product. As a result, consumers might have inflated expectations about the juice's content and quality.
4. The word “Fresh” in Fresh Tomato Ketchup
Fresh Tomato Ketchup is a popular condiment known for its rich flavour and versatility. Fresh Tomato Ketchup is a staple in households around the world, used as a topping, dip, or ingredient in various recipes. The term "Fresh" in its name suggests that the ketchup is made from freshly processed tomatoes and maintains a high quality. Several brands use the term "Fresh" to market their ketchup, suggesting superior quality and a high level of freshness. However, the reality of ketchup production often involves processes that may not align with the implied freshness of the product. The term "Fresh" is used in the product name to imply that the ketchup is made from tomatoes that are freshly harvested and minimally processed. However, in reality, ketchup is made from tomato concentrate, sugar, vinegar, and spices, and undergoes a preservation process to extend its shelf life.
Consumers may interpret "Fresh" as an indication that the ketchup is made from recently processed tomatoes without significant processing or additives. This perception can lead to a belief that the product retains more of the natural flavour and nutritional benefits of fresh tomatoes, which may not be the case. The term "Fresh" is used as a trademark for branding purposes rather than as a strict description of the ketchup's processing or ingredients. The trademark does not necessarily reflect the actual freshness or purity of the ketchup. Many consumers might not realize that "Fresh" is a marketing term rather than a factual statement about the product's composition. This lack of awareness can lead to misunderstandings about what "Fresh" means in the context of ketchup and contribute to inflated expectations about the product.
5. POM Wonderful LLC vs. Coca-Cola Co.3
The case of POM Wonderful LLC vs. Coca-Cola Co. is a landmark legal battle that addresses issues of deceptive labelling and truth in advertising within the food and beverage industry. POM Wonderful, known for its 100% pomegranate juice, sued Coca-Cola alleging that Coca- Cola's Minute Maid pomegranate juice was misleadingly labelled. POM argued that the product, which contained only a small percentage of pomegranate juice mixed with apple and grape juices, deceptively suggested that it was predominantly pomegranate juice. Coca-Cola defended its labelling by asserting compliance with FDA regulations and claiming that the term "pomegranate" was meant to indicate the presence of pomegranate juice, not to mislead consumers. The case initially resulted in a ruling in favour of Coca-Cola, based on the argument that FDA regulations pre-empted POM Wonderful’s claims.
However, POM Wonderful appealed, and the Ninth Circuit Court supported their right to sue. The U. S. Supreme Court ultimately ruled that POM Wonderful could bring a Lanham Act claim against Coca-Cola,
3 POM Wonderful LLC vs. Coca-Cola Co. 573 U.S. 102 (2014)
allowing the lawsuit to proceed despite FDA regulations. This decision emphasized that the Lanham Act enables competitors to challenge deceptive advertising practices, reinforcing the principle that federal law does not prevent private parties from addressing misleading marketing. The ruling had significant industry implications, setting a precedent for challenging deceptive labelling practices even when products comply with FDA regulations. It highlighted the limitations of FDA oversight and underscored the importance of both regulatory and competitive measures to ensure truthful advertising and protect consumer interests.
6. The Martin Lewis and Facebook scam case
This case highlights how scammers exploit high-profile individuals and popular platforms to deceive the public. Martin Lewis, a respected British financial journalist and founder of MoneySavingExpert. com, was targeted by scammers who used Facebook to create fraudulent ads featuring his name and image. These misleading ads, which falsely claimed Lewis endorsed fake financial schemes, included doctored photos, altered videos, and fabricated testimonials. In 2018, Lewis sued Facebook for failing to act on his complaints about the fraudulent ads. He argued that Facebook had not adequately addressed the misuse of his image or removed the deceptive content in a timely manner. The legal action led to a settlement in which Facebook donated £3 million to set up a Citizens Advice scams action project and introduced a new reporting tool for scam ads.
The case underscores the ongoing issue of fake celebrity endorsements and the need for effective measures to combat online fraud.
7. The Fyre Festival scandal case
This case is a prominent example of hidden sponsorship. Promoted as a luxury music festival on a private Bahamian island, the event promised high-end accommodations and exclusive experiences. Social media influencers and celebrities like Kendall Jenner and Bella Hadid shared glamorous promotional content on Instagram but failed to disclose that these posts were paid promotions. When the festival took place, it was far from the promised luxury, leading to significant backlash and legal issues. Organizers, including Billy McFarland, faced multiple lawsuits, and McFarland was sentenced to six years in prison for fraud. The scandal underscored the importance of transparent disclosure in advertising and the risks of misleading promotions.
8. Marico Limited v. Abhijeet Bhansali4
In this case, the Bombay High Court issued an interim injunction against Abhijeet Bhansali, a YouTuber known as 'bearded chokra. ' Marico Limited alleged that Bhansali made damaging and scathing reviews of their product, Parachute Coconut Oil, which he claimed smelled like rotten coconut and harmed his hair. Marico argued that this negatively affected the product's reputation. Bhansali contended that his remarks were honest opinions and that his video did not necessarily dissuade viewers from buying the product. However, the Court ruled that as a social media influencer, Bhansali had a higher responsibility to ensure the accuracy of his statements due to his significant impact on public perception. The Court noted that social media influencers have substantial influence and, therefore, must be more diligent in their statements.
The Court's decision emphasized that Bhansali's recklessness in his reviews could cause greater harm to Marico's reputation compared to a similar statement by an ordinary person. However, a Division Bench of the Bombay High Court overturned the injunction issued by the Single Judge and permitted Bhansali to post the video, provided he removes and modifies specific parts of the video as directed by the Court.
9. Kim Kardashian and EthereumMax case
The Securities and Exchange Commission (SEC) has charged Kim Kardashian for promoting a crypto asset security from EthereumMax on social media without disclosing her payment for the endorsement. Kardashian has agreed to settle the charges by paying a total of . 26 million in penalties, disgorgement, and interest, and to cooperate with the SEC’s ongoing investigation. The SEC's order reveals that Kardashian failed to disclose that she received $250,000 to post about EMAX tokens on her Instagram account. Her post included a link to EthereumMax’s website, which guided potential investors on how to buy the tokens. The SEC found that Kardashian violated federal securities laws by not disclosing this payment, which is considered an unlawful promotion under the anti-touting provisions. Without admitting or denying the SEC’s findings, Kardashian has agreed to pay .
26 million, comprising approximately $260,000 in disgorgement (equal to her promotional payment) plus prejudgment interest, and a million penalty. Additionally, she has committed to refrain from promoting any crypto asset securities for the next three years.
4 Marico Limited v. Abhijeet Bhansali AIRONLINE 2020 BOM 3109
Analysis of consumer responses and reactions The rise of influencer marketing in the era of social media has profoundly impacted consumer behaviour, often blurring the lines between genuine endorsements and deceptive practices. Consumers, influenced by the trust they place in social media personalities, may be more susceptible to deceitful trade names and misleading product claims. When influencers promote products under false pretences or fail to disclose sponsorships, consumers may unknowingly purchase items that do not meet their expectations. This deceptive practice not only undermines consumer trust but also leads to a skewed perception of product quality and value, ultimately damaging the credibility of both the influencers and the brands they represent.
Consumer responses to such deception can vary, ranging from dissatisfaction and distrust to more severe reactions, such as public backlash or legal action. The immediacy and reach of social media amplify these reactions, as dissatisfied consumers can quickly share their negative experiences with a global audience. This can result in significant reputational damage for both the influencer and the brand, as well as potential legal consequences under consumer protection laws. As consumers become more aware of these deceptive practices, they may also develop a heightened skepticism towards influencer marketing, demanding greater transparency and authenticity in brand endorsements. This shift in consumer expectations highlights the need for stricter regulations and ethical standards in influencer marketing to protect consumers from deceitful trade practices in the digital age.
VII. LEGAL AND REGULATORY FRAMEWORK
Existing laws and regulations governing trade names and influencer marketing The Trade Marks Act, 1999 The concept of "trade name" was first introduced into Indian trademark law in the Ayyangar Committee Report of 1958, which was prepared to revise the earlier Trademarks Act of 1940. While the report did not extensively address the scope of trade names, it modified Section 79 of the previous act to allow the introduction of trade name evidence in trademark infringement cases, provided the trade name was relevant to the disputed mark. In response to significant changes in market conditions and the need to align with TRIPS provisions for international
consistency, it became necessary to repeal and replace the Trade and Merchandise Marks Act of 1958 with new legislation the Trade Marks Act of 1999. Section 29 of the Trademark Act contains nine subsections, each addressing different aspects of trademark infringement, including likelihood of association and well-known marks. These provisions extend the relative grounds for refusing trademark registration. The subsection related to trade names is as follows: Section 25(5) states that “A registered trademark is infringed by a person if he uses such registered trademark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered”. This subsection was introduced in the 1999 Act and was not present in the earlier Trade and Merchandise Marks Act of 1958.
It was specifically designed to address disputes between trademarks and corporate or firm names. Unlike other subsections, Section 29(5) does not rely on factors such as likelihood of association, deceptive similarity, or public confusion to determine the grant of an injunction. Instead, it operates as a "no-fault" provision, focusing on a different set of criteria. Following the enactment of the Trademark Act of 1999, the Supreme Court addressed factors relevant to trademark and name disputes in the Laxmikant case, even though the judgment was based on present legislation. In this case, the plaintiff had been trading under the name "QSS - Muktajivan Colour Lab" since 1982, while the defendant initially operated under the name "Gokul Studio" and adopted the plaintiff’s name in 1997.
The court examined whether the defendant's decision to change the name from "Gokul" to "Muktajivan" was intended to divert the plaintiff's business to himself, noting that the defendant was aware of the plaintiff's use of the name in the same business sector. The court concluded that this created a likelihood of harm to the plaintiff’s business due to the similar name. It observed that the law prohibits false advertising that misleads consumers by associating one’s goods or services with those of another’s established products. Subsequently, Raymond Ltd. v. Raymond Pharmaceuticals5, the first case under the new provision was heard by a single bench of the Bombay High Court. The suit sought an injunction to prevent the defendants from using the mark "RAYMOND" as part of their trade name. It is important to note that the parties were engaged in different types of goods or services.
The court observed that even if the entire mark was used as part of the trade name, it would not
5 Raymond Ltd. v. Raymond Pharmaceuticals 2007 SCC OnLine Bom 133
constitute infringement as long as the defendant used it with "due cause" and did not unfairly benefit from or harm the reputation of the mark. On appeal, the plaintiff argued that the case fell under Section 29(4) of the Act, which would require the court to restrain the use of the name since the parties' goods were related. However, the court rejected this argument, stating that Section 29(5) of the Trademark Act was specifically introduced to address disputes involving marks and trade names. According to this subsection, the defendant's use of the mark does not constitute infringement if they are not dealing in the same goods as those covered by the plaintiff's trademark, regardless of whether the goods are similar or dissimilar. In the case of Cipla Limited v.
Cipla Industries Private Limited6, Cipla Pharma faced a similar issue, where a suit for trademark infringement was filed before a single judge of the Bombay High Court. Dissatisfied with the previous decision in the Raymond case, the judge requested a full bench to address specific issues related to the interpretation of Sections 29(4) and 29(5) of the Trademark Act. The primary issue was whether a trademark owner has legal recourse if the mark is used as part of a corporate name for dissimilar goods. The court concluded negatively, explaining that two conditions must be met to establish infringement under Section 29(5): (i) the mark must be used as part of a trade name, corporate name, or business name, and (ii) the defendant must be trading in goods or services for which the trademark is registered.
The court applied a literal interpretation of the statute, determining that Section 29(5) applies only to disputes involving marks and names associated with similar goods. Regarding whether Sections 29(1) to 29(4) operate independently of Section 29(5), the court found that Sections 29(1) to 29(4) address disputes between marks, while Section 29(5) deals specifically with disputes between marks and names. The court also noted that aggravating circumstances are not required under Section 29(5) for protection. Consequently, a trademark owner cannot seek relief under Section 29(4) for disputes involving a mark and a name, as this would render Section 29(4) ineffective. The court ruled that these provisions operate in mutually exclusive spheres. In a similar case, Mankind Pharma v.
Tiwari7 before the Delhi High Court, the plaintiff sought a permanent injunction to prevent the defendants from using the mark "Mercykind" or any
6 Cipla Limited v. Cipla Industries Private Limited MANU/MH/0609/2016
7 Mankind Pharma v. Tiwari2018 SCC OnLine Del 9678
viii. The Trade Marks Act, 1999 (Act 47 of 1999), ss. 2(1)(m), 2(1)(zb), 25, 29 ix. The Consumer Protection Act, 2019 (Act 35 of 2019), ss. 2(28), 10, 18, 89, x. R. Anuja, “Infringement of Trademarks and Trade Names: A Comparative Approach to the Trademark Laws in India and European Union” 25 Annals of the Romanian Society for Cell Biology (2021). name with the prefix or suffix "KIND" in their trade or corporate names. Both parties were involved in the pharmaceutical industry, with the plaintiff using the name and mark "MERCYKIND" and the defendant trading under the name "Mankind". The court first needed to determine whether the defendants used the plaintiff's registered trademark as a trademark. The defendants argued that their products contain different trademarks, each with the prefix or suffix "Mercy," which they claimed did not conflict with the plaintiff's trademark.
The court differentiated between the tests for infringement under Sections 29(4) and 29(5) of the Trademark Act. It noted that aggravating factors such as identical or deceptive similarity are relevant only under Section 29(4). Applying this test, the court found that the defendant's trade name "MERCYKIND" was merely deceptively similar, not identical, and therefore did not attract infringement proceedings. The court affirmed the reasoning in the Raymond Pharmaceuticals case, concluding that a trademark owner can only restrain the use of a name when it is identical to the registered trademark, not merely similar or deceptively similar. The review of the aforementioned cases reveals a confusing situation regarding trade names. In each case, the courts primarily focused on whether the goods or services of the parties involved were identical, similar, or dissimilar.
The decisions in the Raymond and Cipla cases xi. Karlijn De Bont, “Influencer Endorsements: How Deception and Identification Affect the Source Credibility of Product Reviews by Influencers” School of Humanities and Digital Sciences Tilburg University, Tilburg (2022). xii. David A. Hyman, David Franklyn, et. al. , “Influencer Marketing on Instagram and TikTok: Entertainment or Deception? ” Social Science Research Network (2024). xiii. Riya Sood, “Misleading Advertising of Trademarks and Consumer Rights” B&b Associates Llp (2023). xiv. Jooyun Hwang, Sejung Oh, et. al. , “Consumer Perceptions of Influencer Marketing: Application of Q Methodology and Implications for Business Communication” Business Communication Research and Practice (2021). xv. Morris E. Turek, “What is a Deceptive Trademark for Purposes of Trademark Registration? ” Your Trademark Attorney. xvi.
Swati Raghuwanshi, “Company Name V/S Trade Name: Understanding the Difference” StartupFino (2024). xvii. Surabhi, “Top Influencer Marketing Examples to Inspire Your Brand in 2023” Https://Blog. velocity. in/ (2023). xviii. K. Gokul, “The Rise of Influencer Marketing” Bannari Amman Institute of Technology (2023). xix. Brian Dean, “Instagram Statistics: Key Demographic and User Numbers” Backlinko (2024). xx. “The Impact of Influencer Marketing on Consumer Behavior” Influnance (2024). xxi. Pymnts, “SEC Hits Kim Kardashian with . 26M Fine for Crypto IG Posts” (2022) xxii. “Martin Lewis Settles Lawsuit Against Facebook Over Scam Ads”, Sky News, Jan. 23, 2019, available at: https://news. sky. com/story/martin-lewis-settles-lawsuit-against-facebook-over-scam-ads-11615288 (last visited on Aug. 24, 2024). xxiii.
Anshika Saxena, “Misleading the Ingenuous: Advertising by Influencers” The Daily Guardian (2021). xxiv. “SEC Charges Kim Kardashian for Unlawfully Touting Crypto Security”, U. S Securities and Exchange Commission, Oct. 03, 2022, available at: https://www. sec. gov/newsroom/press-releases/2022-183 (last visited on Aug. 24, 2024). xxv. Isheta T. Batra and Sherry Shukla, “An Insight into ASCI Guidelines for Social Media Influencers” Mondaq (2023). xxvi. Government of India, “Centre Issues ‘Guidelines on Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’” (Ministry of Consumer Affairs, Food & Public Distribution, 2022) are particularly contradictory concerning the interpretation of Sections 29(4) and 29(5). In the Raymond case, the court ruled that if the goods are dissimilar, an injunction cannot be granted under Section 29(4).
This implies that the only recourse for disputes involving dissimilar goods would be through a passing-off action, rather than Section 29(4). This creates complications regarding how well-known marks fit into Section 29(5), which is narrowly defined and does not provide the broader protection seen in Section 29(4). As a result, claims for passing off become necessary. Conversely, in the Cipla case, the court held that trademark owners could seek recourse under Section 29(4) even if the goods or services are not identical, provided they meet specific conditions such as proving unfair advantage, the mark’s reputation, and detrimental use. This ruling has also led to complications, particularly in cases where trade names are only subtly different but deceptively similar to the registered mark, thereby avoiding infringement under Section 29(5).
It is noteworthy that neither court considered Sections 4 and 16 of the Companies Act 2013, which provide a rectification procedure for company names that are identical or similar to registered trademarks. This provision does not specify that the trade name must deal with identical goods or how closely the trade name must resemble the registered trademark to trigger rectification proceedings. Unlike the narrower provisions of the Trademark Act, the Companies Act's approach is broader, yet both laws fail to address all potential scenarios for trade name disputes comprehensively. Paris Convention for Protection of Industrial Property, 1883 Article 1(2) of the Paris Convention specifies that industrial property includes trademarks and trade names.
According to the commentary on the Paris Convention, a trade name is generally defined as a name or designation that identifies the enterprise of a natural or legal person and is typically protected against unlawful acts. Article 8 of the Convention deals specifically with the protection of trade names, elevating their status by requiring member states to offer protection regardless of whether the trade name is part of a trademark, as the Convention views trade names as independent of trademarks. However, the Convention does not specify the extent of protection; this is left to national laws to determine. Therefore, it is clear that the Paris Convention establishes a standard of 'likelihood of confusion' for protecting both national and foreign trade names, provided that these names are well-known in the relevant state.
WIPO Model law for developing countries on Marks, Trade names, and Acts of Unfair Competition, 1967 The Model Law allows trade names to be an invented name, a description of the enterprise, or the name of the proprietor and identifies the enterprise of a natural or legal person. Despite this broad range of options, there are limitations on trade names. They must not (i) contravene public order or morality, (ii) deceive the public or trade circles, or (iii) be identical or similar to a widely known name, even if it is not currently used by another company. Consequently, the selection of trade names is more restricted compared to trademarks. Section 48 of the Model Law specifies that using a similar or identical trade name as a mark, if likely to mislead the public, constitutes an unlawful act.
It also outlines the criteria for granting an injunction, including the likelihood of confusion, the elimination of distinctiveness, and the principle of priority use. Thus, the Model Law serves as a framework for member states to develop or amend their trade name provisions in line with the Paris Convention, promoting uniformity in trade name laws. The Consumer Protection Act, 2019 (COPRA, 2019) The Consumer Protection Act, 2019 (COPRA, 2019) is the primary legislation governing advertisements across various media platforms. This Act is notable for being the first to address advertisements made through electronic media or records. Given the significant impact of advertisements by influencers and celebrities on large audiences, deceptive endorsements can harm numerous consumers simultaneously.
Under COPRA 2019, a misleading advertisement is defined as one that falsely describes a product or service or misinforms consumers about its nature, substance, quantity, or quality. Misrepresenting the ‘quality, quantity, grade, composition, style, or model’ of goods and services is considered an unfair trade practice and is punishable under the Act. If an influencer intentionally deceives consumers by providing false information about a product’s effectiveness or viability, affected consumers can file complaints against such unfair practices. The Advertising Standards Council of India (ASCI) has established a Self-Regulatory Code that outlines the rules for advertising in India. These rules have been officially recognized by the Ministry of Information and Broadcasting under the Cable Television Network Rules.
The Code sets forth a comprehensive set of guidelines to ensure the authenticity and credibility of advertisement content.
According to Section 89 of COPRA 2019, penalties for misleading advertisements that harm consumer interests include imprisonment for up to two years and a fine of up to ten lakh rupees. For repeat offenses, the punishment can extend to imprisonment for up to five years and a fine of up to fifty lakh rupees. The Central Consumer Protection Authority Guidelines, 2022 The Central Consumer Protection Authority (CCPA), operating under the Department of Consumer Affairs, has issued the ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’. These guidelines are designed to address misleading advertisements and protect consumers from being deceived by unsubstantiated claims, exaggerated promises, misinformation, and false assertions.
Such misleading advertisements infringe upon consumers' rights, including the right to be informed, the right to choose, and the right to protection from unsafe products and services. Established under Section 10 of the Consumer Protection Act, of 2019, the CCPA is responsible for regulating issues related to the violation of consumer rights, unfair trade practices, and misleading advertisements that harm public and consumer interests. The guidelines were notified under the authority granted by Section 18 of the Consumer Protection Act, 2019. The term "misleading advertisement" is defined under Section 2(28) of the Consumer Protection Act, 2019. The new guidelines further define terms such as “bait advertisement,” and “surrogate advertisement,” and outline what constitutes “free claim advertisements.
” Given the sensitivity of children and the profound impact of advertisements on young minds, the guidelines include specific provisions for ads targeting children. These provisions prohibit advertisements from exaggerating product or service features to create unrealistic expectations among children, and from making unsubstantiated health or nutritional claims. Additionally, the guidelines forbid featuring celebrities from sports, music, or cinema in ads for products that require a health warning or that children are legally prohibited from purchasing. Disclaimers in advertisements are critical as they limit the company's liability. The guidelines mandate that disclaimers must not obscure material information or attempt to correct misleading claims. Disclaimers should be presented in the same language and font size as the main claim to ensure clarity and transparency.
The guidelines also outline the responsibilities of manufacturers, service providers, advertisers, and advertising agencies, emphasizing the need for due diligence before endorsing products. They aim to enhance transparency and clarity in advertising practices, enabling consumers to make informed decisions based on accurate information rather than misleading claims. Penalties for violating these guidelines are clearly specified. The CCPA can impose fines of up to ₹10 lakh on manufacturers, advertisers, and endorsers for misleading advertisements. For repeated offenses, the fine can increase to ₹50 lakh. Additionally, the CCPA may prohibit an endorser from making endorsements for up to one year, with the prohibition extending up to three years for subsequent violations.
ASCI Guidelines for Social Media Influencers The Advertising Standards Council of India (ASCI) released the Guidelines for Influencer Advertising in Digital Media on June 1, 2021. These guidelines emphasize the need for clear disclosure of promotional content and the importance of due diligence concerning the products being advertised.
1. The Influencer Guidelines mandate that social media influencers or their representatives
must clearly disclose to consumers when the content they are promoting is an advertisement. This disclosure should be present on their account whenever they promote a product or create an advertisement. The responsibility falls on the influencer or their representative to ensure the required disclosures are made on their publishing account. The 'advertiser' ensures that influencers comply with the ASCI Code and its guidelines. Advertisers must also request that influencers delete or modify disclosures to align with these guidelines.
2. The guidelines stipulate that influencers must use a "disclosure label" whenever they post an
advertisement on social media. Additionally, the disclosure should be "upfront" and "prominent," ensuring it is clearly visible and easily noticed by the average person.
3. Disclosures should be positioned in locations where they are "hard to miss." They must not
be placed in areas that require additional effort, such as clicking or searching. Disclosures should not be situated in the 'ABOUT ME' section of the profile, at the end of the post, in the influencer’s bio, or anywhere else on the post wall.
4. For videos up to 15 seconds, the disclosure label must be displayed for at least 3 seconds.
For videos longer than 15 seconds but less than 2 minutes, the disclosure label should appear for one-third of the video's total length. For videos that are 2 minutes or longer, the disclosure label must remain visible throughout the entire portion where the promoted brand or its features and benefits are mentioned.
5. Disclosures should be clear and upfront, not buried among numerous hashtags. The
guidelines also recommend using a "platform disclosure tool" provided for influencers. Disclosures must be easily understandable to users. The guidelines include a list of acceptable disclosure labels, such as #ad, #advertisement, #sponsored, #collaboration, #partnership, #employee, and #freegift. This list is not exhaustive and will be updated regularly. While the primary language for disclosures should be English, other languages that are easily understood by users may also be used.
6. For photos or videos, the disclosure should be superimposed directly on the image or video
so that it is immediately visible to the consumer. For live streams and audio, the disclosure should be announced at both the beginning and the end of it. - Gaps and limitations in current frameworks Each of the above-mentioned frameworks ranging from national trademark laws to international conventions and guidelines for influencer marketing addresses different aspects of trade names and advertising practices. However, they often have limitations and gaps in their scope, implementation, and enforcement. The Trade Marks Act, of 1999 focuses primarily on trademarks and does not provide extensive coverage for trade names, particularly regarding their protection when used in dissimilar goods or services. Section 29(5) addresses disputes involving trademarks and trade names but is limited in its scope.
It only provides recourse when the trade name is used in connection with similar goods or services. This narrow interpretation can leave gaps in protection for wellknown trademarks when used in dissimilar contexts. The distinction between Sections 29(4) and 29(5) has led to confusion. Section 29(4) applies to similar goods or services, while Section 29(5) addresses trade names and marks used in different goods or services. This dichotomy can complicate enforcement and lead to inconsistent rulings. The Act does not clearly outline how well-known trademarks are treated under Section 29(5), leading to uncertainty in protection and enforcement. Paris Convention for the Protection of Industrial Property, 1883, While the Convention provides a broad framework for protecting industrial property, including trademarks and trade names, it lacks specific details on implementation.
It obliges member states to protect trade names but leaves the extent and manner of protection to national laws. The Convention's provisions on trade names are less detailed compared to trademarks, leading to varying interpretations and protections across member states. The Convention does not offer comprehensive guidelines on enforcement or penalties for violations, relying instead on national legislation. WIPO Model Law for Developing Countries on Marks, Trade Names, and Acts of Unfair Competition, 1967 serves as a guideline rather than a binding regulation. Its recommendations are not mandatory, leading to varied implementation and effectiveness across different countries.
The Model Law provides a general framework for the protection of trade names but does not address specific issues such as the treatment of well-known trade names or the interaction between trade names and trademarks in detail. While the Model Law addresses unfair competition, it may not cover all contemporary issues related to digital advertising and online platforms. The Central Consumer Protection Authority Guidelines, 2022, while the guidelines address misleading advertisements, they may not fully cover all forms of deceptive practices, especially in the context of emerging digital and social media trends. The effectiveness of the guidelines relies heavily on the enforcement capabilities of the CCPA, which may vary and could face challenges in dealing with complex, multinational advertising campaigns.
The guidelines are primarily consumer-focused and may not address broader issues related to trade name protection or the interplay between trademarks and trade names in a comprehensive manner. ASCI Guidelines for Social Media Influencers emphasize disclosure but may not cover all aspects of influencer marketing, such as the nuances of how different types of endorsements are treated. The guidelines are primarily aimed at ensuring transparency and disclosure in influencer marketing but may not address broader issues and the impact of misleading endorsements on consumer behaviour. Ensuring compliance with the ASCI guidelines can be challenging, especially in a rapidly evolving digital landscape.
To address these issues effectively, there is a need for harmonization and more detailed regulations that consider the evolving nature of commerce and influencer marketing. VIII.
CONCLUSION
Summary of findings The research paper delves into how influencer marketing on social media platforms can lead to consumer deception through misleading trade names and endorsements. The study finds that deceptive trade names and practices are widespread in influencer marketing. Many influencers use ambiguous or misleading product names to create a favourable image that may not accurately reflect the product's true nature or effectiveness