Disparagement Disguised As Comparison: A Critical Analysis

INTRODUCTION

The development of the law of trademarks can be traced back to the onset of the industrial revolution which enabled large scale production and distribution of goods. A trademark helps in distinguishing products from others in the market so that the consumers are not deceived by the same. This concept is also to ensure that there is a healthy competition between different sellers and ensures equal protection to all in terms of moral and economic rights. The entire concept of infringement depends upon the losses incurred due to the said action to the rightful owner. Having said that, infringement is said to be a statutory offence under the Trademarks Act, 1999 wherein the various actions are defined to be a violation of an owner's rights.

Thus, it can be clear that if there is any violation to the rights of a rightful trademark owner, there can be a remedy available under the Statute and the importance of such remedies has been held in N.R Dongre v. Whirlpool Corporation, wherein the Hon'ble Delhi High Court emphasised on the exclusive rights of an owner.

WHAT IS DISPARAGEMENT?

Disparagement means matter which is intended by its publisher to be understood or which is reasonably understood to cast doubt upon the existence or quality of another's property. In the context of goods, when a competitor brings a doubt about the other brand's goods in the minds of the customers not to buy the same, it may be called disparagement. In the case of Compaq v. Dell , 'Dell' computers published an advertisement claiming that their home computers functioned similarly to 'Compaq' computers but were way cheaper. Their claims about function were untrue in various important details. The Hon'ble Court found it to be an infringement and granted interlocutory relief in respect of injurious falsehood.

To give an example: 'A' is a company dealing with masala oats as its product line, now it can advertise that the masala oats they produce has the best ingredients for perfect health, but it cannot bring in its competitor 'B''s oats and say that 'B''s product does not have the ingredients for a good health. Thus, it can be understood that if an action lies for defamation, an injunction on the same may be granted.

The above discussion on disparagement brings us to an interesting juncture: whether comparative advertising is permissible. To answer this, we need to understand certain legal perspectives:

Freedom of speech & expression
• To what extent comparison is permissible

As far as free speech is concerned, as enshrined under Article 19 of the Indian Constitution, it should be noted that defamation is one of the restrictions in place for the fundamental right. Thus, whenever products advertise, they must keep in mind the boundaries within which they can compare their products with others in the market.

The extent of such comparison should be limited to tarnishment of the other person's trademark. For instance, in the case of Colgate Palmolive Company v. Hindustan Unilever Ltd, it was held by the Hon'ble bench that one may exaggerate claims in an advertisement, however, it is not open for a person to denigrate the goods of another.

Further, in the case of Pepsi Co. Inc v. Hindustan Coca Cola Ltd, it was held that the intent of the advertisement and the overall picture also matters; the intention must not be to merely degrade the competitors but rather to promote your own product.

Thus, it is clear that there is an implicit line drawn between commercial speech and disparagement of the trademark of another rightful owner.

A LOOK AT THE SEBAMED AD & JUDGEMENT

Recently, a product named SebaMed came into focus as it started advertising its soap, and it openly pointed out the Ph level of other soaps like Dove, LUX & Pears and ultimately concluded that SebaMed soaps are safe to use and not the rest in the market. Further, it also claimed that any level higher than 6 is not safe to use and thereafter showed the Ph level of Dove, LUX & Pears as above 6 and hence concluded it to be harmful on skin. Thus, the appellants, being Hindustan Unilever, claimed that such an advertisement is a clear disparagement of their goods and hence an injunction was demanded.

The single judge bench partially agreed with the appellants case and held that there can be a slight modification in the ad by replacing the words "safe" & "unsafe" to "ideal" and "not ideal". Thus, the appellants appealed to the Hon'ble High Court of Bombay. The matter was finally decided in January 2021, and the crux of the judgement was as follows:

Upheld the order passed by the Single Judge bench
• The mention of RIN detergent bar for comparison shall not be permitted
• The advertisement is not disparagement as it was in the interest of the public backed with scientific facts regarding Ph value.
• Advertisement was permitted with some changes; however the comparison was still permitted.

CRITICAL ANALYSIS & CONCLUSION

As per the analysis and interpretation of disparagement and trademarks law in India, the decision in the above Sebamed matter could mislead future trademark matters as it completely fails to take into consideration the rights of the owner of the defendant. In the recent case of Tata Chemicals v. Puro Wellness, it was held that advertisements disparaging other goods as unhealthy is not permitted. Thus, it is evident that in the present case as well there is an indication of the rival products being shown as unsafe for skin which would mislead or create a doubt in the minds of the customers. The ad also points out the brands openly by comparing and disparaging its ingredients, thus the current judgement may have overlooked the aspect of tarnishing of trademarks and has given a rather broad perspective of the issue by considering it a fair comparison with minor changes as suggested.

Disparagement Disguised As Comparison: A Critical Analysis

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Ms Natasha Kanneppady
Khurana and Khurana
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Uttar Pradesh
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INDIA
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