COMMERCIAL FREE SPEECH V. BRAND PROTECTION: REASSESSING THE CONTOURS OF COMPARATIVE ADVERTISEMENT
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In the recent case of Hindustan Unilever Limited v. Kwick Private Limited[1], the Delhi High Court granted an interim injunction passed against the Defendant, restraining them from running the advertisement campaign under the name of #WarOnWhatsHidden in relation to the Plaintiff’s products VIM and SURF EXCEL. The Court ordered that the Defendant’s advertisement campaign failed the test for permissible comparative advertisement as the ad was tainted with overall effect and impact of unverified facts and misrepresentation and/or deception. The Court held, prima facie, that the campaign crossed the permissible limits of comparative advertising because its overall message was misleading and deceptive.
Background
The trajectory began when the Defendant launched an ad campaign undeniably claiming the presence of chemical ingredients which are capable of causing (emphasis supplied) skin irritation, allergic reaction and other possible physical harms.
Shortly after the launch of the campaign, the Plaintiff filed an Application under Order XXXIX, Rules 1 & 2 read with Section 151 of the CPC seeking an interim injunction to restrain the Defendant’s impugned campaign which allegedly portrayed the Plaintiff’s products falsely. It was submitted that the ad campaign was a premeditated and competitive attack on the Plaintiff’s products as it denigrated and selectively named the products by directly using the products’ trade dress, packaging and advertising expressions and insinuating their harmful effects, thus, going beyond the permissible limits of comparative advertisement. Further, it was submitted by the Plaintiff that the scientific evidence presented by the Defendants was untenable and that there was an overall clear message implication of the fear of harm to the consumer. Plaintiff’s reliance was placed on Hindustan Unilever Ltd. vs. Reckitt Benckiser (India) (P) Ltd.[2] which stated that the overall message of statements of facts, even when true, must not be misleading and also on Reckitt Benckiser (India) (P) Ltd. vs. Hindustan Unilever Ltd [3] which reiterated a previous Supreme Court decision on how false and misleading advertisements are not protected by commercial free speech. The Plaintiff further argued that the consumer base has been ridiculed through the messages in the impugned campaign.
On the other hand, the Defendant’s counsel relied on multiple decisions supporting the permissible reasonings for comparative advertisement, such as Dabur India Ltd. vs. Colortek Meghalaya (P) Ltd.[4] which states that the consumers’ interests have to be guarded even if the rival goods are being exaggerated, as it ensures public debate, which is good practice. Additionally, by citing Tata Press Ltd. vs. Mahanagar Telephone Nigam Ltd. & Ors[5], the Court reassured that, without information dissemination through advertisements, there cannot be honest marketing, which could in turn handicap the democratic values such as freedom of commercial speech. Additionally, the Court in Havells India Ltd. & Anr. vs. Amritanshu Khaitan & Ors[6] mentioned that a certain amount of comparative advertisement can be disparaging as long as there is no actionable claim against the same. Further, the Defendant’s counsel used the defence of truth to substantiate the claims made by the Defendant in the ad campaign. Their submission also laid down that every representation made in the campaign was: “(a) ingredient-specific; (b) tied to a named product-variant actually tested; and (c) framed strictly as a capability of the named chemical in the concentration found by using the qualifier “can cause” and not “does cause””. [Para 29]. Further, the Defence clearly mentioned that the scientific substantiation was relied upon after the testing, which was done through regulators and scientific bodies, the labels of the chemicals discussed herein were mentioned as warning disclosures on the Plaintiff’s products abroad and that the consumers had every right to be made aware of the same given the gap in regulatory laws in India. [Para 31].
Legal Issues
Whether the actions of the Defendants come under the contours of permissible comparative advertisement not amounting to disparagement?
Whether the defence of truth applied in defamation can be squarely applicable for commercial disparagement?
Whether the advertisement campaign contains information that could dissuade the consumers from buying the Plaintiff’s products?
Decision and Analysis
On analysing the submissions of both the parties, the Court concluded that on a prima facie level, the advertisement campaign fell out of the permissible comparative advertising limit and that the Defendant can only promote and advertise their products in legally permissible ways. Interestingly, the most essentially debated defences pleaded in this case were, the defence of truth and commercial free speech out of which the latter was clearly seen to be substantiated through the reiteration of the Supreme Court’s verdict in Tata Press by the Defence. Nonetheless, the Court ruled that the defence of truth, which the Defendants argued through the principle established in Bonnard v. Perryman, was solely for defamation and not disparagement, and that the latter requires a more prima facie level of scrutiny which could not be proven in the present case by the defence. It was accepted by the Court that truth may be a defence to commercial disparagement, but the standard of applicability differed in defamation cases as opposed to commercial disparagement ones. Further, the principle used in Bonnard v. Perryman as argued by the Defendant, was not squarely applicable to the present case of commercial disparagement as per the Court and that the Defendant must be able to demonstrate prima facie credibility of its plea of justification by truth in order to resist a pre-trial injunction.
The Court finalised that even if certain elements of the ad were factually true, the overall storyline and effect of the ad would be considered as per Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd.[7] Moreover, it was the Court’s decision that the competing scientific evidence presented by the parties would be considered at trial with experts and not at the present stage. The Court, however did consider what an average consumer would assume after seeing the impugned advertisement campaign. Therefore, the Plaintiff made a prima facie case wherein the balance of convenience lied in their favour and the Defendant was restrained from running the impugned campaign.
Conclusive Final Thoughts
Although the Court’s reasoning leading up to their decision lies in the favour of the Plaintiff, there remains an imminent need to analyze and establish the contours of free commercial speech and consumer welfare (which forms the very foundation of trademark law). The pertinent question being: do the consumers not have a right to be informed through the route of this commercial free speech, even though the Defendant’s products named the Plaintiff’s products along with the explicit possible harms it could have caused? The Court may have had an opportunity to establish a precedent that in these particular instances, the protection of a brand shall not prevail the larger democratic concern, (herein being the protection of consumers), given that trademarks (of the plaintiff’s products herein) act as a source identifier to ensure consumer protection [8]. If certain products may have potential health concerns (of which the brand mentions warnings abroad and not in India, like in this case), must the Indian consumers specifically be deprived of the knowledge being disseminated through the guarantee of free speech in Article 19(1)(a)? Moreover, certain missing links also lead to a deliberation on whether it is fair to purposely leave out the scientific evidence by way of lab reports at the interlocutory stage, and then adjudicate that the Defence could not prove “truth”?
It may be pertinent to note that the principle of serious comparative advertisement reflected in Hindustan Unilever Limited And Anr vs USV Private Limited [9], which means- comparison of rival products based on scientific opinions, should be permissible as a part of ‘honest’ and ‘fair’ thresholds in Section 30 of the Trademarks Act, as also reiterated by means of scholarly analysis.[10] Nonetheless, the Court in the present case has recorded the material in HUL v. USV which stated that scientific evidence such as pH value is a significant factor to be considered but also distinguished it with unsupported implications that competing products were “not safe”. Since scientific evidence was accepted by the Court to be considered at the trial stage only, it leads to an interesting doctrinal question: how much and what kind of substantiation must a Defendant establish to demonstrate prima facie truth to avoid an injunction especially if scientific evidence is too complex to adjudicate upon without expert evidence at the interim stage?
Another neglected aspect could be the pleading that the Defendant merely used terms like capable of causing rather than stating they actually caused, which could have formed an essential discussion on the overall intention adduced by the ad, not pointing towards falsity or misrepresentation. Last but not the least, even if the Court wished to pass an interim injunction, the Defendant’s arguendo pleading of restricting the infringing elements of the ad solely was not discussed at all, let alone thoroughly (could be yet another example of stifling free speech to serve consumer welfare).
Finally, to reiterate the submission of the Defence counsel: “It has been submitted that, given the extent of dissemination, restraining a lawful, ongoing campaign at this stage would cause serious and disproportionate prejudice to the defendant, apart from the fact that granting an interim injunction at this stage would only serve as an academic precedent to stifle commercial free speech, when such speech has already triggered the conversation that the defendant intended to start.”.
Arshya Wadhwa
Associate
[1]Hindustan Unilever Limited v. Kwick Private Limited 2026 DHC 7198 (2023) 2 HCC (Del) 417 (Division Bench)
[2] Hindustan Unilever Ltd. vs. Reckitt Benckiser (India) (P) Ltd ch) 3
[3] Reckitt Benckiser (India) (P) Ltd. vs. Hindustan Unilever Ltd (2022) 5 HCC (Del) 672. (Division Bench)
[4] Dabur India Ltd. vs. Colortek Meghalaya (P) Ltd. 2010 SCC OnLine Del 391 (Division Bench)
[5] Tata Press Ltd. vs. Mahanagar Telephone Nigam Ltd. & Ors (1995) 5 SCC 139
[6] Havells India Ltd. & Anr. vs. Amritanshu Khaitan & Ors 2015 SCC OnLine Del 8115 (Single Bench)
[7] Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd 2013 SCC OnLine Del 4986
[9] Hindustan Unilever Limited And Anr vs Usv Private Limited 2022 SCC OnLine Bom 1582
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