Trademark Infringement Through Product Disparagement In Comparitive Advertisements
The world today is the world of consumerism. Consumerism is on its rise and the velocity is very high. Every year, over 20,000 products are added to the world market from 49 countries. The common objective of the companies producing such goods is to maximize their profit. They invest a lot of money on research and development of their products. The marketing is mainly done through advertisements. Advertisements are the methods to let the people be aware of their products. On the other hand, they want to make the consumers believe that whatever product they use is outdated, and that, they are supposed to skip to the latest in order to be called modern. The research and development by a company on the same product, makes the product more effective and efficient. Then, the campaign starts for promoting the new product and to undermine the older ones. This increases, undoubtedly, the quality of the products as well and innovation keeps on happening. Besides, it keeps Consumerism accelerating on its way.
With the liberalization and globalization of the Indian economy, firms have been aggressively and vigorously promoting their products and services. In a competitive environment, every representation of a product or service is about what “others are not.” Comparative advertisement is an advertisement in which a particular product, or service, specifically mentions a competitor by name for the express purpose of showing why the competitor is inferior to the product naming it. Comparative advertising, also referred to as ‘knocking copy’, is loosely defined as advertising where “the advertised brand is explicitly compared with one or more competing brands and the comparison is oblivious to the audience. It is no question of being unethical if a company promotes its own products and services by making comparison with other goods and services wherein it expressly mentions its own goods better and does not raise objections about others’ goods’ quality. But it becomes perilous for the reputation and goodwill of a company when other explicitly derogates former’s goods or services in their advertisements while doing comparisons
Trademark Disparagement by Comparative advertisements
Trademark disparagement simply means defamation: trade libel or slander of goods. Generally the term used in common business language is Product Disparagement. It is a false statement about a product that hurts its maker. Use of trademark of another maker in order to gain advantage over it by undermining it with respect to its own goods causes disparagement of “trademark”, Consumers may develop a kind of repulsion from the product bearing disparaged mark. Generally in any advertisement, the product compared with is blurred but the intention of the advertising company and maker is to make the people understand what the product is. In pursuance of this strategy, the blur is as such that the artistic work is visible, or the design is presumable. In a very famous case discussed below it was held by Calcutta High Court,
(6) “Disparagement is not dependent on the trade marks act or on the copyright act but depends on whether the product of the competitor is being rubbished or proclaimed bad, vis-à-vis the product of the advertiser.”
In this famous case (also known as Rin v. Tide case):
An advertisement on electronic media was shown by HUL wherein a frame shows two baskets. In each of the baskets there is a packet of “Rin” and “Tide Naturals”. In another Frame, the Tide woman is heard to say “Tide Hai” followed by Tide has not only “khushbu” (fragrance) but also “safedi” (whiteness). In next frame, a child is shown getting out of the bus, who after a few second is followed by another child, whose shirt is whiter than that of the first child. It is after this child alights from the bus that “Tide se kahi behtar safedi de Rin” is heard and along with this voice, two shirts are depicted side by side; one of them with the packet of Tide of it and the other with Rin. It is depiction of the child in the dull shirt followed by the shirt kept side by side one of which is dull while the other shirt is sparkling white. This was aggravated by the Tide packet being imposed on the said dull shirt as by the said it is depicted that shirts washed by Tide remain dull while those washed by Rin acquired sparkling whiteness. In the sequence of the frames the attribution of dullness to the Tide shirt becomes clear when the packet of “Tide” is put on the dull shirt.
Here in this case the blurriness is left far behind. Company compares directly. The Hon’ble court observed in the said case that:
(8) “The media chosen by the respondent is electronic by satellite channel which has a very strong impact because of it being visual and reaching out to millions of people in this modern age. This is not a case of mere puffing its products by the respondent. Both the advertiser and the competitor deal in detergents and while saying the goods of the advertiser are better than its competitors, the competitor’s goods cannot be proclaimed bad or rubbished by the said advertisement. There is no bar to comparative advertising but when such comparative advertising tends to denigrate the product of the advertiser vis-a-vis the product of a competitor; this is where the element of disparagement enters.”
A healthy competition which involves comparative advertisements is agreeable, and in general invited. But in colour of this competition, one cannot dilute the reputation of other’s trademark in the market.
In Dettol v. Lifebouy Case Hon’ble Justice A.K. Sikri derived out the following proposition of law culled out in Reckitt & Colman of India Ltd. v. M.P. Ramchandran and Anr.:
(2)…. (I) A tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.
(II) He can also say that his goods are better than his competitors’, even though such statement is untrue.
(III) 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.
(IV) 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.
(V) If there is no defamation to the goods or to the manufacture 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.
The Court considered following factors to determine when a comparative advertisement turns into product disparagement:
(4)… (i) Intent of commercial (ii) Manner of the commercial (iii) Story line of the commercial and the message sought to be conveyed by the commercial. Out of the above, “manner of the commercial”, is very important. If the manner is ridiculing or the condemning product of the competitor then it amounts to disparaging but if the manner is only to shown one’s product better or best without derogating other’s product then that is not actionable.
More often it is seen that comparison is done which explicitly is generic but when an intelligent viewer watches the advertisement he is in a position to make out that another product is being compared with. Delhi High Court also observed recently relying on Marico Ltd. v. Adani Wilmar Ltd. which further relies on Dabur India Limited Vs. Colgate Palmolive India Ltd to state that generic disparagement of a rival product without specifically identifying or pin pointing the rival product is equally objectionable.
In this case, the plaintiff came up with a new product in the market DETTOL HEALTY KITCHEN Dish and slab gel which is purportedly the first kitchen cleaner with Lactic Acid as an active ingredient. The defendants launched an advertisement campaigning that their product i.e., VIM is better than “harsh antiseptic”. The question asked in the initial portion of the advertisement is: “A Harsh Antiseptic or the power of 100 lemons – which one would you choose to clean your child’s tiffin?” Plaintiff’s claim was that reference in the advertisement was clearly directed to the plaintiff’s brand DETTOL being referred to as a Harsh Antiseptic. The plaintiff contends that an attempt has been made to misrepresent to the consumers that the plaintiff’s DETTOL ANTISEPTIC LIQUID and DETTOL HEALTHY KITCHEN have the same ingredients. It was also contended by the plaintiff that the defendant has attempted to misrepresent that the plaintiff has done nothing but repackage its Antiseptic Liquid as DETTOL HEALTHY KITCHEN and the reference to “harsh antiseptic” in itself is denigrating of the plaintiff’s brand DETTOL. On the other hand defendants claimed that the impugned advertisement made no reference to DETTOL HEALTHY KITCHEN Dish & Slab Gel. The ad-campaign was only meant to inform the consumers that harsh antiseptics were not fit for cleaning utensils. The use of the term HARSH ANTISEPTIC is for those antiseptics which are particularly strong in concentration and that the plaintiff’s product, by their own classification does not fall under the category of harsh antiseptic.
Thus the courts in almost all the cases pressed upon the dictum that comparative advertising is permissible as long as while comparing own with rival/competitors product, the latter’s product is not derogated, discredited, disgraced. Trademark disparagement takes place when, in the eyes of intelligible consumers, the goodwill and reputation of the trademark associated with compared product is lowered and perception is created estopping him from further use.
Under Reckitt Benckiser v. Hindustan Lever, for a claim of commercial disparagement to succeed in cases of comparative advertising, the Court is to approach the issue from the perspective of the hypothetical “average person of imperfect recollection” picked from the target group of consumers. Now, “Tata tea is the best tea” is unlikely to make much of an impact on a group of tea lovers; “Red Label sells the cheapest tea” may well cause them to think about switching over to Red Label from Tata tea. Thus the Delhi High Court concluded that a tradesman is entitled to declare that his goods are the best in the world – even if such a declaration is untrue. Mere puffing was not an actionable wrong. But Madras High Court declared all kinds of puffing as actionable claims. Court relied on consumer protection ethics and thus even claiming oneself to be “only” or “first” in the market may lead to undue advantages. The court asserted that consumer interest is an element which must be considered when assessing comparative advertising.
Puffing in any type of claim may result in the infringement of trademark of another company if disparage others by comparison with competitor’s product and claiming oneself to be best.
While researching on this issue and writing this article, I have understood and came to the conclusion that laws in India related to product disparagement are very subjective. On the other hand court also takes a different view each time it comes across such cases. With the increasing competition issues related to trademark disparagement have become prominent and companies act in a way as to take the revenge from one another every time. At one instance its HUL taking on Reckitt Benckiser and at another instance it is the vice versa. The reason attributed to this phenomenon is the blunt boundary-line separating the “ethical” and “unethical” comparisons. It may become necessary for a company to prove its products better than another for successful survival, but unknowingly they may cross this boundary and cause disparagement of another product. Thus it is very necessary that a set of extensive guidelines should be given by the courts to regulate the advertisements and trademark disparagement therein. Mere assumption that a particular advertisement has disparaged their product and they will undergo huge loss, should be discouraged; instead proper study of the market is supposed to be done. Ultimately, no company would wish to “spend” their profits over hefty litigation costs!