Comparative Advertisement and Trade mark Law
A comparative advertisement would always involve the statement that the goods of the advertiser are better in some aspects than that of the competitor. But there is line that an advertiser cannot cross. He cannot disparage or defame the goods of his competitor. It is permissible for an advertiser to advertise and highlight features of his product but the message must clearly be to highlight the superior features of his product while ensuring that the product of his competitor is not disparaged or defamed.
Dr Prem Lata, Legal Head VOICE
Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. & Anr. (SC)
An appeal had been filed by Reckitt Benckiser (India) Pvt. Ltd against Hindustan Unilever Limited before the double bench (Coram Hon’ble Mr. Justice Vibhu Bakhru Hon’ble Mr. Justice Amit Mahajan) against the judgment delivered on by single judge of HC of Delhi on 09.11.2021 in the suit bearing 340/2021. Reckitt is aggrieved that the learned Single Judge has rejected its prayer for restraining the ‘HUL’ from broadcasting a TV Commercial (TVC-I’) which according to Reckitt was disparaging its product sold under the trademark ‘HARPIC’, during the pendency of the suit.
High court of Delhi now delivered Judgment on 26.09.2022 in the appeal case FAO (OS) (COMM) 149/2021 and CM Nos. 42068/2021, 42069/2021, 42070/2021 & 42071/2021.
The basic question before the Hon’ble High Court was
“Whether the prima facie view of the learned Single Judge HOLDING that the impugned TVC-1 does not disparage Reckitt’s products or infringes Reckitt’s trademark is correct as per law”.
Facts leading to dispute
Reckitt Benckiser India Private Limited is a company engaged in the manufacturing, packaging, sale and distribution of various fast moving consumer goods such as healthcare products including antiseptic liquid, toilet care products, surface care products, pharmaceuticals, insecticides and food products. It manufactures of a well-known toilet cleaner under the trade mark ‘HARPIC’ in India. Originally it was launched in England in 1920 and subsequently it is being sold in over 47 countries worldwide.
Reckitt states that on 15.03.1979, it registered the word mark ‘HARPIC’ (Application No. 347055) under Class 3. Reckitt also obtained registration for the shape of their bottle used for packaging Harpic branded products in India
HUL is engaged in the business of fast moving consumer goods, primarily of manufacturing, marketing and/or selling of various consumer products, including food and refreshments, cosmetics, toiletries, floor cleaners, toilet cleaners, toilet soaps, washing soaps and detergents. HUL also manufactures and markets a toilet cleaner, which is sold under the trademark ‘DOMEX’.
The dispute arises due to certain advertisements launched by HUL for its product Domex. HUL claims that its product is superior in fighting bad odour in comparison to Reckitt’s product Harpic. Reckitt has instituted the present action, as it claims that HUL’s advertisement campaign disparages and denigrates its product Harpic.
Reckitt has filed the said suit, seeking a decree of permanent injunction restraining HUL from telecasting, broadcasting and publishing five advertisements.
The learned Single Judge restrained HUL from publishing or broadcasting four of the impugned advertisements (one published in print and three available for viewing on the YouTube Channel) but declined Reckitt’s prayer for interim injunction, restraining HUL from publishing ban HUL from broadcasting the impugned TVC-1. The court did not accept that the impugned TVC-1 indicated a prima facie case of disparagement.
The present appeal is confined to the decision of the learned Single Judge to decline Reckitt’s request to interdict the impugned TVC-1.
Allegation by Appellant
The clear message of the advertisement is that Harpic is ineffective as a toilet cleaner; it is ineffective to combat bad odour.It referred the following cases
- Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. & Anr. (167 (2010) DLT 278 (DB) and Colgate Palmolive Company & Anr. v. Hindustan Unilever Ltd. (2014) 206 DLT 329.
“Although puffery and hyperbole to promote one’s product is permissible, it is not open for any person to denigrate or disparage the goods of another. “
As per the above case it is impermissible for any advertiser to make any untruthful statement in its advertisement. And, the impugned advertisements were untruthful.
He also referred to the decision of the Madras High Court in Gillet India Ltd. v. Reckitt Benckiser (India) Pvt. Ltd. (2018 SCC OnLine Mad. 1126) and contended that in a suit for disparagement, it would be necessary that the disparaging advertisements be restrained, as pecuniary compensation at a later stage would be insufficient to compensate the loss suffered and damage caused due to disparagement.
Counter Reply by HUL
The above allegations were countered by the contesting party HUL. They also referred to the decisions of Court in Colgate Palmolive Company & Anr. v. Hindustan Lever Ltd. as well as Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. & Anr. and contended that the law relating to disparagement is well settled. The Appellate Court in Wander Ltd. And Anr. v. Antox India P. Ltd (1990 Supp. SCC 727) contended that
“It is impermissible to interfere with the discretion exercised by the learned Single Judge unless it is shown that the discretion was exercised arbitrarily, capriciously or perversely.”
He submitted that in the present case, the learned Single Judge had rightly applied the law and declined the interim injunction as, in his view, the impugned TVC-1, viewed as a whole, did not disparage and denigrate Reckitt’s product.
High Court Conclusion with Reasons
Tata Press Limited v. Mahanagar Telephone Nigam Limited, the Supreme Court authoritatively held that commercial speech is a part of the freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution of India.
The Court also accepted, in unambiguous terms, that advertisements were a part of commercial speech. It is, thus, necessary that fair amount of latitude be available to advertisers. This has also been emphasized in the case of Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd. Above referred. However, such protection cannot be extended to misrepresentation or where the advertisements fall foul of the validly enacted law.
US Supreme Court in Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, whereby the Court had held that “untruthful speech, commercial or otherwise, has never been protected for its own sake.” and that it saw no obstacle for a State to deal effectively when the commercial speech is “deceptive or misleading”.
Observation and order by the double bench of High Court
In view of the above decided judgments, the court observed as hereunder
- We have visually seen the advertisement and find HUL has clearly crossed the line. It not only claims that its products are better than Reckitt’s but it also, prima facie, disparages Reckitt’s product.
- The TVC-1 not only projects a message that Domex fights odour for a longer period of time, it also sends a clear message that Harpic does not address the problem of foul smell that emanates from toilets.
- It also sends the message that whoever chooses Harpic would have to live with their toilets smelling foul. This is a message that disparages Reckitt’s product and, in our view, cannot be permitted.
Hence By an order dated 01.12.2021 passed by this Court, HUL was restrained from airing the impugned TVC-1. We make the said order absolute. The same shall continue till disposal of the suit.
However none of the observations or views expressed should be construed as final or dispositive of the Reckitt’s claim in the suit. (VIBHU BAKHRU, J)
Referred Cases by Court
PepsiCo. Inc. And Ors. vs Hindustan Coca Cola Ltd. had restated the principles
(1) The intent of the advertisement – this can be understood from its story line and the message sought to be conveyed.
(2) The overall effect of the advertisement – does it promote the advertiser’s product or does it disparage or denigrate a rival product?
(3) The manner of advertising – is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.
Reckitt and Colman India Ltd. vs M.P. Ramchandran and Anr. In that decision the court set out the following propositions:
- a) A tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.
(b) He can also say that his goods are better than his competitor’s, even though such statement is untrue.
(c) For the purpose of saying that his goods are the best in the world or his goods are better than his competitors’, he can even compare the advantages of his goods over the goods of others.
(d) He however, cannot, while saying that his goods are better than his competitors’, say that his competitors’ goods are bad. If he says so, he really slanders the goods of his competitors. In other words, he defames his competitors and their goods, which is not permissible.
(e) If there is no defamation to the goods or to the manufacturer of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the Court is also competent to grant an order of injunction restraining repetition of such defamation.
De Beers Abrasive Products Ltd. and Others v. International General Electric Co. of New York Ltd. and Another
“The statement: “My goods are better than X’s” is only a more dramatic presentation of what is implicit in the statement: “My goods are the best in the world.” Accordingly, I do not think such a statement would be actionable. At the other end of the scale, if what is said is: “My goods are better than X’s, because X’s are absolute rubbish.” then it is established by dicta of Lord Shand in the House of Lords in White v. Mellin  A.C. 154, 171, which were accepted by Mr. Walton as stating the law, the statement would be actionable.”
It is open for a person to claim that he is the best seller in the world or a best seller in the street but it is not open for him to denigrate the services of another.
Guiding principles set by SC through various judgments in a comparative advertisement
- An advertisement is commercial speech and is protected by Article 19(1) (a) of the Constitution.
- An advertisement must not be false, misleading, unfair or deceptive.
- There would be some grey representations of fact but can be permitted only to this extent as glorifying one’s product & protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.