Comparative advertising: “Quilmes v. Isenbeck”

On May 19, 2005, Room I of the Federal Court of Appeals for Civil and Commercial Matters of Buenos Aires issued its decision in the “Cervecería y Maltería Quilmes c/ CASA Isenbeck s/ incidente de apelacíon” case providing a comprehensive analysis on the legality of comparative advertising in Argentina.

The conflict arose when Isenbeck, the fourth largest brewery in Argentina, mentioned Quilmes, the number one market leader for beer, in their advertisements and resulted in several law suits by Quilmes in the years 2001 and 2003.

The Court of Appeals’ opinion centered on the most recent ad campaign by Isenbeck consisting of two ads.In the first ad, Isenbeck stated that it was the best beer in comparison to Quilmes and offered a free beer to anyone who would present one Quilmes beer cap.

The second ad had two beer bottles side by side, one Isenbeck and the second Quilmes.The part of the label containing the ingredients was enlarged to emphasize that Quilmes contained additives whereas the Isenbeck beer was 100% beer.

The trial court issued an injunction, forbidding Isenbeck from using Quilmes in their advertisements or making a reference to any of Quilmes’ marks.

This decision was immediately appealed and in the interim Isenbeck published a new advertisement removing the Quilmes mark and putting the word PIP in its place.

Nevertheless, the trial judge deemed this change to be a violation as well and issued a third injunction prohibiting Isenbeck from publishing the PIP ad as well.

The Court of Appeals’ opinion centered on Isenbeck’s ads attempting to see if Isenbeck’s use of the Quilmes mark amounted to trademark infringement.

As in prior cases, the court first distinguished between different types of comparative advertisements, reiterating that it is to one thing to use somebody else’s trademark as if it was their own, and it is quite another to simply quote or make reference to a third party’s trademark.Whereas in the first instance there will always be a trademark infringement, in the latter the third party’s trademark usage is legitimate, as long as it does not discredit or damage the reputation of the trademark in question.

The court went on to underline the criteria that should be followed when comparing two products, stating that the comparison must be loyal and truthful, taking into consideration products with similar features and only comparing characteristics which are essential, relevant, verifiable and representative of the goods or products.This, the court found, “brings the benefit of a comparative advertisement by balancing the market.”

Concerning the first of Isenbeck’s advertisements, the court concluded by reversing the trial court’s injunction as far as they prohibited Isenbeck from mentioning or using Quilmes’ marks.The court concluded that an advertisement which sarcastically mentions that Isenbeck is the best beer does not prima facie discredit Quilmes.

However, the court affirmed the injunction over the second advertisement after it failed the court’s bad faith test.The court concluded that Isenbeck’s enlarged photos of both beer bottles did not accurately state the ingredients in the beers and discredits Quilmes.

When addressing the third injunction covering the modified ad with PIP replacing Quilmes, the court concluded that the trial court correctly ruled that the PIP ad was a continuation of the prior ads which mentioned Quilmes outright.

Notwithstanding, the Court of Appeals, when using the test outlined above, reversed the injunction prohibiting Isenbeck from mentioning Quilmes in their ads declaring that to restrict such use would be a violation of the freedom of speech.