In their fight to gain market share, consumer products manufacturers have resorted to comparative advertising, sometimes denigrating their competitors’ products. India’s courts have taken a dim view of the practice. By Chander M Lall
In today’s age of consumerism, extensive advertising campaigns are an essential component of every company’s strategy. Advertising has become a profitable business in India, as shown by the recent boom in promotional messages on highway billboards and in newspapers, magazines and the broadcast media. The proliferation of celebrity-endorsed products from soaps and mobile phones, to saris, jewellery, financial products, confectionery and more, is noticeable across all major cities.
Rivalry between multinational companies, and now foreign players in the market, has tightened competition, making it difficult for new brands to establish a market share of any significance.
Faced with these challenges, advertisers frequently use comparative strategies to convey their messages, often resulting in the denigration of a competitor’s products. With the rise of television viewing, the Indian advertising industry is witnessing the emergence of numerous comparative advertisements, many of which have resulted in legal cases concerning the alleged denigration or disparagement of other products and brands.
Market leaders victimized
In almost every court case where the issue of denigration in advertising has been raised, the alleged victim has been a market leader. New entrants have compared their merchandise with established products, presenting them in a negative light in an attempt to lure consumers away.
Since consumers are already familiar with the attributes of products promoted by established brands, comparative advertisers use that prior knowledge to their benefit when introducing their new brand.
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Some examples of leading brands which have been targeted include Exide, a market leader in automotive batteries, Cherry Blossom, a liquid shoe polish, and Robin Blue, a clothing whitener solution. Global brand Pepsi has also been a target of malicious advertising, attacked by Thums Up, a competing cola brand. Thums Up previously maintained a healthy local market share, but its sales dwindled somewhat after the launch of Pepsi and Coke in India. The advertisement was thus an attempt to reclaim lost market share by luring away Pepsi’s consumers.
Similarly, in Karamchand Appliances P Ltd v Sh Adhikari Brothers, 2005 (31) PTC 1 (Del), the comparative advertisement of Good Knight targeted All Out’s mosquito repellent vaporizers, which held a 63% market share. In Reckitt Benckiser (India) Ltd v Hindustan Lever Ltd, MANU/DE/0967/2008, the owner of the Dettol brand sued Hindustan Lever for introducing an advertisement for their Lifebuoy brand, in which Dettol soap was allegedly disparaged.
Companies which dominate the market for a particular niche product category are also frequently attacked. In Dabur India Limited v Emami Limited, 2004(29) PTC 1 (Del), for example, the defendant attacked the competitor’s product, Chyawanprash, an ayurvedic health tonic with therapeutic qualities for enhancing immunity against various diseases. The defendant attempted to establish that Chyawanprash was inferior to its own product, Amritprash, another immunity health tonic. The plaintiff, Dabur, was the dominant market leader with over 63% market share for Chyawanprash.
Prerequisites for a valid lawsuit
Comparative advertising can be executed in two ways: firstly by illustrating the superiority of a new product as compared to an established one, and secondly by criticizing the established product.
Companies that believe they have fallen victim to unfair comparative advertising must first ascertain whether the advertisement in question identifies their brand, or even their product; and second, whether the advertisement is in fact denigrating or disparaging.
One case where clear product and brand identification was discovered was in the dispute between Dettol and Lifebuoy. The court’s decision in this case was particularly significant because it recognized the importance of the relevant consuming public as the target audience of the disparagement. The “relevant public” refers specifically to the consumers of Dettol soap, rather than the general public.
The court held that individuals who do not use Dettol soap would be unable to identify the soap featured in the Lifebuoy advertisement as that belonging to the plaintiff, because the Dettol brand was not shown anywhere in the advertisement. However, consumers of Dettol soap would immediately recognize the bar of soap in the disparaging advertisement as being the plaintiff’s product, identifying “the colour, shape, size and contours, including the colour of the wrapper/packaging with that of the soap that he uses every day”.
The court further stated that since Lifebuoy sought to attract consumers to its soap and away from other competing products, it was important to analyse the advertisement from the perspective of the target group, i.e. Dettol soap users. According to the court’s decision, “the hypothetical average person (with imperfect recollection) must be picked from this target group of users of the product sought to be slandered or disparaged.”
In the past, the use of a trademark was perceived as the only method of identifying an item. However, the growing sophistication of intellectual property protection has led India’s courts to acknowledge, very consistently, that goods may be identified in diverse ways, through the use of specific colour combinations, shapes, packaging and so forth.
In the Exide case, the defendant’s advertisement depicted a dark and unlabelled battery, calling it “Ex Idea”. The fictitious brand Ex Idea was clearly intended to create an impression in the minds of the target audience that the battery being compared was in fact Exide.
Similarly, in the case involving Cherry Blossom and Kiwi, the plaintiff’s product was identified by Kiwi’s display of a bottle identical in shape and configuration to that used by Cherry Blossom, for which the latter already had a design registration. A red blob on the bottle was also placed to represent a cherry, similar to that used on the plaintiff’s bottle. The court found this objectionable, even though the bottle was introduced under the category of “others” and the brand shown in the advertisement was “brand x”.
Legal propositions governing advertising
The Indian courts have formulated a series of common law principles to guide advertisers on what kind of advertising is permissible, and also to help determine whether an advertisement has vilified another brand or product.
First and foremost, the courts have agreed that traders are entitled to proclaim that their goods are the best in the world and better than their rivals’, even if such declarations are untrue.
For the purpose of illustrating that a product is superior to a competitor’s merchandise, traders may also assert the advantages of their goods over the goods of others.
However, traders are prohibited from denigrating their competitors’ goods. Any slandering or defamation of another trader’s products is actionable and traders may risk being liable for the payment of damages, or receiving an injunction restraining the repetition of such defamation.
Although these principles are not currently enshrined in any law, any malicious marketing which results in harm to the reputation of a brand or product is prosecutable.
In the Cherry Blossom case, the bottle marked “brand x” was shown to have a faulty applicator. The Kiwi advertisement was thus intended to convey to the public that its product dripped less than Cherry Blossom.
Kiwi voluntarily agreed to withdraw the advertisement, which had been published online and in various sales materials. Where online marketing was concerned, the court decided that since Cherry Blossom’s bottle with “brand x” was shown only fleetingly, the public would not associate the bottle with the plaintiff, as long as Kiwi removed the red blob from the bottle. For purposes of an interlocutory injunction, the court believed such an order would be sufficient to protect the interest of both parties.
Likewise, an injunction was issued to Good Knight following its advertisement which dismissed the device of its rival, All Out, as an obsolete 15-year-old method of chasing away mosquitoes. The defendant’s advertisement compared All Out’s product with its own, which it claimed chased away mosquitoes at twice the speed and was the latest machine available on the market.
Lifebuoy was also prosecuted for its campaign to deliberately damage Dettol’s business. The Lifebuoy advertisement featured a doctor and his children ridiculing the lady of the house, who was about to shower with a product that clearly resembled Dettol soap. The distinct orange-coloured, contoured soap was portrayed as being harmful and used only by naive and unwise people.
The court did not object to the second part of the advertisement, in which Lifebuoy’s product was depicted as superior in providing protection against dry, cracking skin, and eliminating germs. However, it required Lifebuoy to pay punitive damages, for deliberately aiming to increase its own sales by labelling Dettol’s goods as harmful and dangerous.
Unsuccessful cases
While there are numerous examples of plaintiff success, a number of companies have failed to prove that their product or brand name was damaged by disparaging advertising. In these cases, courts have held either that the plaintiff’s product is not identifiable in the advertisement, or that there is no apparent denigration.
In Hindustan Lever Limited v Reckitt Benckiser India Limited, MANU/DE/3643/2006, the court rejected the argument of the plaintiff that the red-coloured soap in the defendant’s advertisement would be identified as the plaintiff’s Lifebuoy soap. Even on the merits of the case, the court held that the statement made by the defendant – that its Dettol soap was ten times more efficacious than ordinary, no-additive soaps in the market – appeared to be true.
In Godrej Sara Lee Ltd. v Reckitt Benckiser (I) Ltd, 2006 (32) PTC 307 (Del), the plaintiff failed on both issues. The plaintiff, the owner of Hit branded insecticides, initiated proceedings against the owners of Mortein insecticides.
The defendant’s advertisement claimed that Mortein was effective in killing both mosquitoes and cockroaches and was therefore more convenient than other insecticides, which require two different products to kill two different insects. The court held that the advertisement by no means disparaged the plaintiff’s product, or those manufacturing two different products for destroying two different insects. The court also rejected the argument that the plaintiff’s cans were identifiable by consumers, merely by the use of red and black-coloured cans in the advertisement.
Dabur Honey suffered a similar fate in Dabur India Ltd v Wipro Limited, 2006 (32) PTC 677 (Del). The plaintiff lost its case after the court observed that the intent of the commercial was to suggest that the product of the defendant, Wipro Sanjivani Honey, was far superior to that of the plaintiff, Dabur Honey.
The plaintiff failed, despite the fact that the defendant’s advertisement depicted Dabur Honey’s bottle, which had a design registration. A judgment was delivered stating that the bottle of the plaintiff was shown for a fleeting moment, immediately followed by another unnamed and undisclosed brand of honey, which was unidentifiable. The court thus held that the idea behind the commercial was to project the defendant’s honey as better than every other brand of honey in the market; a depiction which could not be objectionable unless it led to disparagement.
Safeguarding a brand
In order to safeguard against the disparagement of their brands or products, companies should maintain a constant watch on advertising, in particular advertisements created by their competitors. There are several agencies in India which may be consulted to help track such advertising, and subscribing to their services may be a helpful starting point.
Companies should also carefully monitor new product launches, which are designed to compete with their established brand or product. An analysis of the competing product and its efficacies should be made, ideally by an established independent research agency. The strengths and weaknesses of a rival’s product should be carefully analysed in order to prepare a comparative advertisement, or to attempt to stop the rival from launching an advertising campaign. Time is of the essence in the advertising world, so prompt action is always helpful.
Perhaps the best way to protect a brand is to safeguard the product’s most familiar features. These include the product’s shape, the broad packagaing features, the logo and slogan, and so on. Once these features have been isolated, companies should seek to protect them under different statutes such as the Trademark Act, the Copyright Act, the Designs Act or the Patents Act.
Designs and patents can only be registered and protected before they are launched in the marketplace. If the appropriate design registrations are secured, they will undoubtedly aid in protecting companies from damage caused by disparaging advertising.
Alternatively, launching a carefully designed comparative advertising strategy can be extremely effective in fighting competition, provided it is fair and honest and does not denigrate or disparage a competitor’s product.
Facts should only be used in advertisements if they can be independently verified. Companies can create elaborate campaigns to illustrate the superiority of their brand, and this is not objectionable as long as a competitor’s product is not directly presented as faulty or poor.
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Chander M Lall is the Managing Partner at Lall & Sethi Advocates, a New Delhi-based IP boutique.
