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HC provides Defendant right of free speech & permits to a compare generic products, rejects Dabur Chyawanprash injunction application against Emami Chyawanprash

Dabur India Ltd. vs. Emami Ltd.

In this present case, Dabur India Limited (Plaintiff) seeks an order for restraining Emami Limited (Defendant) from broadcasting, publishing and printing the ZANDU CHYANVANPRASHAD advertisements which are subject matter of this suit as they are disparaging and injuring the goodwill and reputation of Chyawanprash which includes Plaintiff’s Dabur Chyawanprash. . 

The Court vide its order in IA No. 10869/2018 (filed along with this suit) directed the Defendant not to publish the advertisement and to remove the TVC from YouTube. Court also instructed the Defendant to not to publish the ‘new advertisement’ which was yet to be aired. 

Aggrieved by this order, the Defendant filed an Appeal bearing FAO (OS) (COMM) No. 209/2018. In this Appeal, Division Bench vide its order dated 5th September 2018 allowed the Defendant to publish its ‘new advertisement’. Pursuant to this order, the Defendant aired it’s TVC in November 2018. The Plaintiff aggrieved by the said TVC filed another application bearing no. 16105/2018 seeking injunction against the Defendant from airing, broadcasting or publishing its New Television Commercial aired on 13th November 2018. On 27th November 2018, Court granted an ad-interim injunction in favour of the Plaintiff. Aggrieved by this order, the Defendant preferred an Appeal bearing FAO (OS) (COMM) No. 285/2018. The Division Bench of this Court vide its judgement dated 3rd December 2018 permitted the Defendant to publish its advertisement in the modified form, incorporating the changes suggested by the counsel during the course of hearing. Consequently, the Defendant after making the changes as directed by the Division Bench replaced the red bottle shown in the TVC with its own bottle and aired the modified TVC on 12th December 2018. This aforesaid modified advertisement has been impugned in the Interim Application bearing no. 3084/2019 under Order 39 Rule 1 & 2 read with Rule 2A of CPC. 

In the view of the stands taken by the counsels during the arguments it is evident that during the pendency of the present suit, the Defendant has undertaken not to publish the print advertisement or the TVC except in the modified form. Hence, at this stage, Court is only required to appraise the proposed modified advertisements as suggested in the affidavit. The order/injunctions granted in the applications under consideration that are in force are only ad-interim injunctions and express a prima facie view. The same are pending final adjudication and are now being finally disposed of by this common order. 

Plaintiff, through its counsel, argued that the Defendant’s product depicted in the advertisement is meant for diabetic patients. The Defendant is not comparing its sugar free product with other like products. Hence, the Defendant is misleading and misrepresentation to the consumers that Chyawanprash is harmful, even to non-diabetic consumer which is a false statement. 

Defendant argued that the advertisement is meant to inform the sugar conscious customers that all conventional or traditional chyawanprash has sugar content and the product of the Defendant does not have any sugar. Further, it was added that Plaintiff itself is manufacturing and selling sugar free Chyawanprash with the tagline “goodness of Chyawanprash with no added sugar” thereby implyin that one can enjoy the benefits of Chyawanprash even without sugar. Further, the Defendant also pointed out that the Plaintiff itself had multiple advertisements to promote other products like Honey by highlighting negative effects of sugar on our body. Hence, impugned advertisement in no manner tarnishes/disparages/slanders the product of Plaintiff.  The Defendant also claims that since they are also manufacturing and selling Chyawanprash with sugar, there is no intent to disparage Chyawanprash as it will have adverse effect on their own Zandu Chyavanprashad. 

Court before delving into this matter, looked into the law related to comparative advertising in India. As per Article 2(a) of the Advertising Directing of EEC, advertising means “the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services.” Similarly, Comparative advertising is defined in Clause 2(c) of the said Directive as “any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor.”    

Court also relies on multiple judgments including Havells India Ltd. v Amritanshu Khaitan ((2015) SCC Online Delhi 8115)  wherein Court held that

“In Mc Donalds Hamburgers Ltd. v. Burgerking (UK) Ld. [1987] F.S.R. 112 followed in Glaxosmithkline Consumer Healthcare Ltd. v. Heinz India (supra), it has been held that advertisements are not to be read as if they are some testamentary provision in a Will or a clause in some agreement with every word being carefully considered and the words as a whole being compared. In Marico Ltd. v. Adani Wilmar Ltd. CS (OS) No. 246/2013 it has been held 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”. 

Thereafter, the HC refers to Colgate Palmolive Company v Hindustan Unilever Ltd. (2014 (57) PTC 47 [Del] (DB)) and Reckitt & Colman of India Ltd. v M.P. Ramchandaran & Anr.  (1998 SCC Online Cal 422) along with the code of Advertising Standards Council of India (ASCI). In view of the afore-noted provisions and the case laws, Court observes that comparative advertising is permissible in law provided they follow a certain guideline. On this issue, the following observations of the Court in Reckitt Benckiser (India) Pvt. Ltd. v Gillete India Ltd (2016 (68) PTC 67 (Del)) where it was held as follows – 

“Nonetheless what is important is that such commercial speech should not be false, misleading, unfair, deceptive and which proposes illegal transactions. Explaining the aforesaid concept, the Supreme Court in Colgate Palmolive Company & Anr. (Supra) observed that commendatory expressions may not be serious representations of fact and some latitude is given in the field of advertising for gaining customers. The difficulty in identifying the borderline of permissible assertion in such advertisements which more often than not may not be discernible, was also admitted. CS (COMM) 1074/2018 Page 25 of 41 

A Division bench of this Hon’ble Court in Dabur India Ltd. (Supra) summarized the law and the guiding principles as hereunder: 

(i) An advertisement is commercial speech and is protected by Article 19(1) (a) of the Constitution.

 (ii) An advertisement must not be false, misleading, unfair or deceptive. 

(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one’s product.” 

To the above extent, such advertisements would have the protection of article 19(1)(a); but any venture outside the permissible limits of puffery would surely be in the realm of false, misleading, unfair and deceptive representation and may not be entitled to any constitutional protection.”

Thereafter, in order to resolve the issue whether the Defendant can be permitted to compare its sugar free variant Chyavanprashad with the Chyawanprash which contains sugar observed that the Court has to examine the intent and overall effect of the advertisement. Court observed that as per the modified print advertisement, it is evident that subject matter of comparison is Chyawanprash a generic product and not the Plaintiff’s product. 

In reference to the generic disparagement, HC refers to Pepsi Co. Inc. & Ors. v. Hindustan Coca Cola Ltd. & Another, 2003 (27) PTC 305 (Del.) (DB) wherein Court had defined certain factors while deciding the question of disparagement. These factors are: (i) Intent of the commercial, (ii) Manner of the commercial, and (iii) Story line of the commercial and the message sought to be conveyed.  

Hence, in the present case HC observes that the story line emphasizes that there is a sugar free variant which gives the same benefit of immunity that comes from Chyawanprash. Thus, the comparison here is only limited to show that Chyawanprash traditionally contains 50% sugar and that Defendant has a sugar free variant. Therefore the comparison, is not slanderous or denigrating the generic product Chyawanprash and is therefore permissible. 

As per the law of advertising, while making a comparison a competitor can declare his goods to be the best in the world even though the declaration is untrue but while claiming so he cannot say that the competitor’s goods are bad. The proposed Print advertisement is only making a comparison with the generic product where a declaration is being given that the product of the Defendant does not contain sugar. It is highlighting the benefits of the sugar free variant. Court further held that it cannot be said that the advertisement is in any manner implying disparagement of ‘Chyawanprash’ generically. 

Further, Court also observed that the Defendant’s right of free speech permits it to state the benefit of its product and is also entitled to make a comparison to the extent it has been done in the advertisement in question. 

Similarly, in the story board of the TVC has no component of comparison with the Plaintiff’s product. The comparison in both TVC’s is with ‘Chyawanprash’ generically. Court also stated that in no manner this TVC was misleading or malicious. The main thrust of the advertisement is to showcase the benefit of Chyawanprash without sugar and therefore the Defendant was not required to compare the product only with other similar products as has been contented by the Plaintiff. 

While dealing with whether Defendant is misleading and misrepresenting the consumer that Chyawanprash is harmful, Court observed that it is not able to perceive any such misrepresentation or misleading declarations or statement in the impugned advertisement. In fact, the Defendant is not stating that ‘Chyawanprash’ is harmful but stating that it is healthier option. 

While dealing with whether Defendant disparaging the entire category of Chyawanprash by stating in its advertisement that it contains high level of sugar, Court observed that the Defendant in no way made any direct reference to the Plaintiff’s product. Court also highlighted that it cannot ignore the Defendant’s right to free speech, which includes right to ensure widespread awareness of the benefits of its products. Further, Court observed that the Defendant has to be allowed to manifest the differentiators in the competing products and also to give justification for encouraging the consumers to prefer its product over that of the competitors. The paramount consideration for the Court to discern disparagement is to go into the heart of the matter and see the impact and impression the advertisements create. 

Court also went on to state that “Advertisements often contain valuable information for the consumers and can promote healthy competition in the market. If this is the message conveyed, the courts would be resilient and allow the negative derivatives of comparison. This is because the final outcome is positive. However if it can be gauged that the message broadly demonstrates slanderous or indiscriminate negative comparison or insinuation, Courts should not be slow in ensuring that such messages do not spread. If it does hurt or annoy the Plaintiff, it is nothing but display of an over sensitive approach, that can’t be helped.

 In view of the abovementioned reasons, Court allowed the Defendant to publish the proposed modified print advertisement and the TVC which is currently running. 

 

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