FACETS OF COMPARATIVE ADVERTISING: Horlicks Limited Vs. Heinz India Private Limited
The flurry of full-page ads with competitive claims, and television commercials in which brands take sly potshots at each other have kept the spirt of marketing warfare alive. However, the days of no-holds-barred advertising wars are gone. In view of the growing competition and protection offered to the brands it becomes pertinent to demystify the fine line between advertisements which are legal and permissible and the ones which cause denigration and disparagement. The Delhi High Court in its recent judgement clarified various aspects of ad-wars and comparative advertising.
RELEVANT FACTS
The age-old rivalry between the two malt-flavored powdered milk drinks HORLICKS and COMPLAN took a new dimension when the Defendant Heinz India Pvt. Ltd. published an advertisement for its COMPLAN branded product in the newspaper ‘Telegraph’ wherein it compared one cup of COMPLAN with two cups of HORLICKS with a disclaimer at the bottom which said, “One cup of Complan (33g) gives 5.94g of protein while two cups of Horlicks (27*2=54g) gives 5.94g of protein basis recommended pack dosage….”. The said advertisement was later modified by the Defendant on its own initiative, by making the disclaimer more prominent.
The Plaintiffs i.e. Horlicks Ltd. and Anr. made a plea before the Delhi High Court in order to restrain the Defendant from publishing the impugned advertisement which allegedly disparaged the Plaintiffs’ health food drink product HORLICKS. The judgement was pronounced by a single judge bench of Justice Manmohan on December 17, 2018.
ISSUES AND QUESTIONS OF LAW INVOLVED
Can advertisement as a facet of commercial speech be protected under Article 19(1)(a) of the Indian Constitution?
Whether the information used in the impugned advertisement be protected by the Supreme Court’s verdict under Right to Privacy?
Is certain amount of disparagement in comparative advertisements legal and permissible?
The test for ‘misleading advertisements’.
Is the ‘per serving’ size a valid criterion for comparison?
Is the advertiser obliged to compare all the parameters of the other product in comparative advertisements?
PLAINTIFFS’ CONTENTIONS
It was contended that the Defendant did not compare HORLICKS and COMPLAN taking into account the normal amount of protein per 100 grams, as per normal market practice. Thus, making the impugned advertisement misleading and false.
It was also contended that the Defendant by means of the impugned advertisement had only compared one ingredient i.e. protein and had thereby overemphasized the benefits of protein.
It was argued that the tagline ‘From Now On, Only Complan’ used by the Defendant was not a mere promotional statement but was used to sought rejection of HORLICKS over COMPLAN.
It was submitted that the use of the Plaintiffs’ mark by the Defendant violated Section 29(8) and 30(1) of the Trade Marks Act, 1999 as the same did not permit use of a trade mark in an advertisement which took unfair advantage of and contrary to honest practices in industrial or commercial matters or was detrimental to its distinctive character or was against the reputation of the trade mark.
It was also submitted that the fundamental right to freedom of speech under Article 19(1)(a) of the Constitution of India is only available to a citizen of India and not to a corporate entity. The counsel on behalf of the Plaintiffs was of the view that the decision in Tata Press Ltd. Vs. Mahanagar Telephone Nigam Ltd. & Ors.[2] was per incurium and was contrary to the judgement in Hamdard Dawakhana (Wakf) Lal Kuan, Delhi and Another Vs. Union of India and others[3] wherein it had been held that the right to publish and distribute commercial advertisements advertising an individual’s personal business could not be a part of freedom of speech guaranteed by the Constitution. Thus, according to the Plaintiffs the Defendant did not have any inherent right under Article 19(1)(a).
The Plaintiffs finally contended by invoking K.S. Puttaswamy & Anr. Vs. Union of India[4] that Article 21 of the Indian Constitution provided a person a right to control commercial use of his/ her identity and stated that the said right would also apply to corporate entity like the Plaintiffs.
DEFENDANT’S CONTENTIONS
It was contended that the intent of the impugned advertisement was to educate the consumers about the protein content of both the products in accordance with the recommended ‘per serving’ size provided by the parties on their packaging. It was submitted that the comparison on the basis of ‘per serving’ size was the most accurate, true and verifiable method of comparison.
It was submitted that the impugned advertisement was neither disparaging nor defamatory and provided an accurate, true, verifiable and representative comparison to the consumers.
It was argued that the primary objective of Sections 29(8) and 30(1) of the Trade Marks Act, 1999 was to allow comparative advertisement as long as the use of the competitor’s mark was honest. Relying upon Havells India Ltd. Vs. Amritanshu Khaitan[5], the Defendant stated that mere trade puffery, even if uncomfortable to the registered proprietor of the trade mark would not bring the advertisement within the scope of trade mark infringement.
It was stated that the tagline ‘From Now On, Only Complan’ was a mere promotional statement, i.e., to encourage and urge customers to purchase the products of the Defendant.
COURT’S DECISION AND REASONING
The Court opined that advertisement is a facet of commercial speech which is protected by Article 19(1)(a) and the same can be restricted only in accordance with law enacted under Article 19(2) of the Constitution. In a democratic country free flow of commercial information is indispensable and the protection given to an advertisement under Article 19(1)(a) of the Constitution is a necessary concomitant of the right of the public to receive the information in the advertisement. Further, the Court took note of the judgement in Bennett Coleman & Co. & Ors. Vs. Union of India[6], wherein the Supreme Court held that fundamental rights of shareholders as a citizen are not lost when they associate to form a company. Thus, the Court held that the Plaintiffs’ submission that Tata Press[7] judgement is per incurium is untenable in law
The Court was of the view that the judgement of K.S. Puttaswamy & Anr.[8] is inapplicable to the present case because of the reason that right to privacy cannot be asserted against information that is already in public domain. The product packaging of HORLICKS freely disseminates the information used in the impugned advertisement.
Citing the judgement in Havells India Ltd. & Anr. Vs. Amritanshu Khaitan & Ors[9]., the Court reiterated that though in comparative advertising a certain amount of disparagement is implicit, yet the same is legal and permissible so long as it does not mislead. The Court in the Havells[10] judgement referred to the provisions in the Trade Marks Act, 1999 and the ASCI Code, and was of the opinion that comparative advertising is permitted to stimulate competition between suppliers of goods and services to the consumer’s advantage, by allowing competitors to highlight objectively the merits of the various comparative products, while at the same time, prohibiting practices which may distort competition, be detrimental to competitors and have an adverse effect on consumer’s choice.
The Court while laying down the test for misleading advertisements, reiterated the definition of ‘misleading advertising’ as “any advertising which is in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor”; as given in in Article 2(2) of European Union Council Directive 8/450.
The Court took the view that the primary objective of Sections 29(8) and 30(1) of the Trade Marks Act, 1999, is to allow comparative advertising as long as the use of a competitor’s mark is honest. In the case herein, there was no detriment to the distinctive character of the Plaintiffs’ mark, as there exists a clear distinction between the Plaintiffs’ and Defendant’s product. The Court affirmed that the test of honest use is an objective test which depends on whether the use is considered by members of a reasonable audience.
The Court stated that ‘per serving’ size is a prudent industry practice and the parties prescribe a recommended ‘per serving’ size so as to avoid the consumers drinking the parties’ product in excess and jeopardize their health. Thus, the comparison made by the Defendant was factually true and in no way misleading.
The Court also stated that an advertiser, the Defendant in the present case is not obliged to compare all parameters and it is open to him to highlight a special feature/ characteristic of his product which would set his product apart from its competitors, as long as it is true.
Finally, the Court citing the judgement in Marico Ltd. Vs. Adani Wilmar Ltd.[11] laid down that in determining the meaning of an advertisement, the Court has to take into account the fact that public expects a certain amount of hyperbole in advertising and the test to be applied is whether a reasonable man would take the claim being made as one made seriously. Thus, the tagline ‘From Now On, Only Complan’ was not disparaging and did not amount to denigration or rejection of the Plaintiffs’ products.
It was thus decreed, “From the aforesaid discussion, it is apparent that the impugned modified advertisement is not misleading and there is no denigration or disparagement of Plaintiffs’ mark. Further, the factor compared is material, relevant, verifiable and representative feature. Consequently, present application is dismissed, but with no order as to costs.”
[1] CS (COMM) 808-2017
[2] AIR 1995 SC 2438
[3] AIR1960 SC 554
[4] (2017) 10 SCC 1
[5] 2015 (62) PTC 64 (Del)
[6] (1972) 2 SCC 788
[7] Supra note 2
[8] Supra note 4
[9] Supra note 5
[10] Ibid.
[11] CS(OS) No. 246/2013
The article was originally published on www.lexology.com on December 21, 2018 and can be accessed here.
