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The current competitive environment has triggered aggressive and vigorous publicity campaigns, many of which raise questions about the truthfulness and fairness in how products and services are represented. The war of supremacy between competitors has resulted in much mudslinging and many legal battles.

Hyper-sensitivity warning

A recent decision of Delhi High Court in Dabur India v Colortek Meghalaya centred on the issue of comparative advertising. In it Dabur alleged that Colortek, which owns a mosquito repellent brand called Good Knight, had caused the disparagement of its mosquito repellent brand Odomos. Saying that “a plaintiff (such as the Appellant before us) ought not to be hyper-sensitive” a division bench of Delhi High Court held that there was no disparagement of Odomos in the impugned advertisement.

Explaining its decision the court said: “market forces, the economic climate, the nature and quality of a product would ultimately be the deciding factors” in how a choice is made. It also said that while “aggressive or catchy advertising may cause a partial or temporary damage”, the consumer would be the “final adjudicator”.

Freedom of speech?

In the Dabur case the high court cites various sources to sum up the position of the law on comparative advertising. The court first discussed “commercial speech” as set out by the Supreme Court in Tata Press Limited v Mahanagar Telephone Limited. This case held that “commercial speech” comes within the concept of freedom of speech and expression that is guaranteed under article 19(1)(a) of the constitution and that while advertising is a species of commercial speech, the latter cannot possibly be defined.

In the Tata Press case the Supreme Court referred to a case from the US Supreme Court – Virginia State Board of Pharmacy v Virginia Citizens Consumer Council – saying it is almost settled law in the US that though commercial speech is entitled to protection under the first amendment, the government was completely free to recall commercial speech that is false, misleading, unfair, deceptive and which proposes illegal transactions.

Boasting permitted

The high court also considered Colgate Palmolive (India) Ltd v Hindustan Lever Ltd, in which the Supreme Court recognized and applied the rule that a simple commendation can only be regarded as a mere invitation to a customer without any obligation as regards the quality of goods. Every seller would naturally try and affirm that his wares are good (if not better than those of a rival). In Colgate Palmolive, the court explained that while latitude has to be given for an advertisement to attract more customers, it could do so only through permissible assertions and not by misrepresentation.

In the Dabur case the high court also sought guidance from Pepsi Co Inc and Ors v Hindustan Coca Cola Ltd, which held that while boasting about one’s product is permissible, disparaging a rival’s product is not. The Pepsi Co case said three factors about a commercial have to be kept in mind while deciding on disparagement: 1) its intent 2) its manner and 3) its story line and the message sought to be conveyed.

Setting principles

Summing up these decisions, Delhi High Court restated the following principles: a) The intention behind the advertisement – as understood from the storyline and the message sought to be conveyed; b) The overall effect of the advertisement – does it promote the advertiser’s product or denigrate or disparage a rival’s product? c) Is the manner of advertisement or comparison by and large truthful or does it denigrate or disparage a rival’s product?

Indian courts have traditionally given advertisers space when they make puff statements. Even untrue claims about a product have been allowed, with a line being drawn only at disparagement or slander of another producer or its goods. As a result puff statements regularly feature in advertisements, but if it is seen as mockery, even if its claims are well grounded, the advertiser could be liable for disparagement.

Successful strategy

Commenting on the 2008 case of Glaxosmithkline Consumer Healthcare Limited v Heinz India, Manish Bhatt, the former vice-president and executive creative director of Contract Advertising, said: “Comparative advertising, when tastefully executed, can be an example of successful advertising. Brands are built on competitive spirit, but there has to be a long-term strategy in building brands and the proposition should be unique enough to make it convincing. Else it’s akin to salesmen fighting among each other proving their brand to be better, which ends up actually mocking the product.” The key to successful comparative advertising lies in the discreet yet self-assured depiction of a rival’s goods or name.

Doyel Sengupta is an associate in the litigation department at Lall Lahiri & Salhotra, an IP boutique based in Gurgaon.