Hereby please be informed that on 12 November 2019 the Ukrainian Parliament adopted the draft law on amendments to some legislative acts of Ukraine (on the harmonization of legislation with the law of European Union in the field of comparative advertising) dated 29 August 2019 No. 0953 (the “Law on Comparative Advertising”), which is aimed at the adaptation of Ukrainian legislation to the legislation and practice of the European Union. Now the document is being prepared for signature by the Chairman of the Parliament and the President of Ukraine.
Please note that previously the use of comparative advertising has been limited by the impossibility to use the trademark without the consent of the competitor, as well as by other general legal restrictions on advertising. As for advertising of medicinal products, medical devices, methods of prevention, diagnosis, treatment and rehabilitation, there has been a general prohibition on the dissemination of comparative advertising for purposes of enhancing the advertising effect. Since the concept of “advertising effect” has not been defined, and in fact the primary goal of any advertising is to create or maintain awareness of and interest in the respective goods, comparative advertising of pharmaceutical products has remained actually blocked.
By the above-mentioned amendments advertising containing a comparison with other persons and/or goods or activities of another person have been expressly permitted. Thus, advertising can both directly and indirectly identify competitors or goods or services they offer. Accordingly, advertising may include images, references to goods, trademarks or other designations under which the product is marketed, as well as the competitor’s name.
Please pay attention to the fact that the use of comparative advertising has been allowed under the fundamental conditions as follows:
- absence of any evidence of unfair business practices;
- comparing homogeneous (similar) products that satisfy the same needs or have the same function;
- objective comparison of material, comparable and representative characteristics of homogeneous goods (in particular, even the prices);
- absence of any defamation or false information regarding the quality of such products manufactured by other companies;
- absence of any mixing between the advertiser and a competitor, between the goods, trademarks and so on.
Hence, in case of implementation of the Law on Comparative Advertising in the current edition in the nearest future pharmaceutical companies may obtain the right to carry out comparison of product properties with the ones of their competitors not only within the promotional activities aimed at healthcare professionals, but also at consumers directly (printed advertising, advertising on TV, radio, etc.).
Meanwhile, please note that the Law on Comparative Advertising does not take into account the essential features of the functioning of the pharmaceutical market. In particular, the Law on Comparative Advertising does not stipulate any specific features or limitations for promoting pharmaceutical products. Presently, in our opinion, the document raises a number of questions concerning its implementation in practice, in particular:
- the issue of determining the homogeneity (similarity) of goods with which a comparison can be performed (by ATX code, name of active ingredient or, for instance, a list of claimed indications);
- the question of determining the characteristics of the goods as significant, comparable and representative;
- the issue of integrity, adequacy and objectivity of the comparison of the goods only on the basis of price;
- range of information and the way it may be provided which can be regarded as discrediting the reputation of the brand of a competitor or of the company itself etc.
The final point of interest is the fact that the legislator provides no transitional period for gradual adaptation to the changes described. In particular, the Law on Comparative Advertising shall come into force starting from the day following the date of its publication. Thus, in case the document is signed by the President of Ukraine, we expect the first creative wars of brands in the near future and, perhaps, the first lawsuits on protection of business reputation.
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Please note that the information contained in this Newsletter is intended to be used for general guidance only and cannot be considered as legal advice. We hope that this information has been helpful. Should there be any necessity to provide more detailed comment on the legislative provisions, please feel free to contact us at your convenience.
Igor Ogorodniychuk, Partner
+380 44 391 30 01
Natalia Mozgovaya, Senior Associate
+380 44 391 30 01
“Law Firm “OMP” LLC, Associate office of GRATA International