By Sadhana Madhavan

The Intellectual Property Rights protect the creators of intellectual property like patents, trademarks, designs, geographical indication, copyrights and industrial designs. This gives the creator a monopoly over the product for a certain period.

Trademark protects brands or marks and prohibit others from duplicating or replicating the owner’s mark. Trademark has been defined under Section 2(1)(zb) of the Trademarks Act, 1999 as a “mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from others and may include shape of goods, their packaging and combination of colors”. In short, trademark is helpful in creating a distinction between products.

But trademark laws are infringed because of comparative advertisements in certain cases. Comparative advertisements, as the name suggests literally means comparing one’s product/ service with another’s in the same field. The comparison usually focuses on the price, durability and quality of the two products. This helps in making the product popular and catches the attention of the consumers which results in increased profits. Question arises on how this results in trademark infringement? Many a times, we have come across a lot of advertisements where two products are being compared and one product is blurred to prevent the consumers from recognizing the product. It is generally noticeable that when one product is compared with another, the consumers immediately recognize the two different products (which are generally trademarked).[i] If a comparative advertisement confuses the consumer, it results in trademark infringement. The courts have this as the rationale when judging a case.

In this case, Hindustan Unilever Ltd (HUL), filed a suit against Gujarat Co-operative Milk Marketing Federation Ltd alleging trademark infringement. HUL accused Amul (which is a product of the defendants) of disparaging frozen desserts in their advertisement. Their contention was that the Kwality Walls (the product of the petitioner) was disparaged in this case as the petitioner had tried to imply that they were made with Vanaspati oil or hydrogenated oil which is bad for health. The Bombay High Court granted an injunction HUL’s plea for an injunction against the Amul Ads.[ii]

Background:

Settled Law in India:

Section 29(8) of The Trademarks Act, 1999 enunciates the situations when the use of a trademark in advertising can constitute infringement.[iii]Section 30(1) of the Trademarks Act, 1999 clearly states that if it a) is in accordance with the honest practices in industrial or commercial matters, and b) is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark, then it is not infringement. But it is considered trademark infringement if the advertisement falls under any of the categories mentioned under Section 29 (8) of the Act.[iv] The Trademarks Act also protects well known unregistered trademark so as to prevent the action of passing off.

The other act that prohibits comparative representation is mentioned in Section 36A(1)(x) of Monopoly and Restrictive Trade Practices Act (MRTP). It prevents the practice of making any statement, whether orally or in writing or by visible representation that gives false or misleading facts disparaging the goods, services or trade of another person.

Global Practices on Comparative Advertisements:

  1. Council Directive of 10 September 1984[v]that deals with relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising, in particular, Section 3(a)[vi] of the directive permits comparative advertising if it doesn’t deceive anyone or it isn’t likely to deceive the consumers[vii]. This very clearly indicates that comparative advertising cannot be permitted if it discredits the trade mark or trade name of the competitor.[viii] The situation in UK regarding comparative advertising with reference to trademark infringement has become clear after the O2 case[ix]. The ECJ had taken the traditional stand and held thatwhere the comparative advertisement aimed at promoting the goods and services of the advertiser and used the competitor’s trademarks, it could be prevented by the Trade Marks Directive, if it met the relevant criteria.[x]
  2. Under U.S. law, use of a competitor’s trademark in accurate and non-deceptive comparative advertising is legal. This does not constitute trademark infringement. Truthful comparative advertisements are considered to be informational for consumers and beneficial to competition, provided that the competitor’s mark is accurately depicted.[xi] In the case of infringement, the affected party can approach the Court through Lanham Act, 15 U.S.C. §1125(a). The Civil Courts have also held that while usage of competitors’ trademark is allowed, they are not allowed to modify or show the trademark in a negative light.[xii]

Judicial Pronouncements in India:

Previously, this concept has been discussed by the Courts in various cases. In Reckitt & Colman of India Ltd. v. M.P. Ramachandran and Anr[xiii], the plaintiff had filed a suit against the defendants for broadcasting an Ad claiming that their blue whitener, Ujala and in the process disparaging the plaintiff’s blue whitener named Robin Blue by showing a bottle similar to that of Robin Blue and also mentioned the price as Rs.10. During that time, Robin Blue was the only whitener available for that price. The Court based its decision on the sole mention of the price and held that the defendants intentionally disparaged the petitioner’s product and issued an order restraining the advertisement.

In Pepsi Co. Inc. and Ors. v.Hindustan Coca Cola Ltd. and Anr[xiv], the court held that generic disparagement of a product  is objectionable even if the name of the product is not mentioned.

Analysis:

In the instant case, the Court based its judgement not on the fact that the word ‘Vanaspati’ was used but on the whole advertisement. The advertisement seen as a whole seems to indicate that the frozen desserts are unhealthy and bad for children. They are impure and inferior to ice creams. This was the reasoning given by Justice Kathawalla.[xv]

This seems to be a reasonable observation as the impugned TVCs (one contains the word Vanaspati and the other contains the word Vanaspati Tel), clearly indicates that frozen desserts use Vanaspati oil which is an incorrect statement in itself. Under FSS regulations, both ice cream and frozen dessert are classified as dairy based desserts. The composition of icecreams include milk/milk solids and milk fat or vegetable fat. As per Indian Regulations, the products that contain nondairy fat come under the category of frozen desserts. So, the difference between the two is that icecreams must have over 10 per cent milk fat, whereas frozen desserts musthave over 10 per cent total fat (i.e. milk fat and/or edible vegetable oil). Restof the ingredients are the same.[xvi]

Coming to the difference between Vanaspati oil[xvii] and Vegetable oil[xviii], it is very important to know that while Vanaspati has been perceived bad for health, Vegetable oils are not considered bad for health. Edible vegetable oil contains lower saturated fat and doesnot contain any trans-fat or cholesterol, whereas Vanaspati contains higher saturated fat and trans-fat which is bad for health and increases the risk of coronary heart disease.

The court has also discussed the law laid down in (i) Godrej Sara Lee Ltd vs ReckittBenkiser (I) Ltd (ii) Dabur India Ltd vs Colgate Palmolive (iii) Annamalayar Agencies vs VVS & Sons Pvt Ltd. & Ors (iv) Godrej Consumer Products Limited vs Initiative Media Advertising (v) Eureka Forbes Ltd vs Pentair Water India. All the aforesaid cases clearly reiterate on the point that generic disparagement is an offence.[xix]

In Reckitt & Colman of India Ltd. v. Kiwi T.T.K. Ltd, the Court laid down five principlesregarding comparative advertisement. The fourth principle clearly states that while a person can state that his goods are best, he cannot state that his competitors’ goods are bad which results in slander.[xx] In the instant case, it is clear that GCMMF while declaring Amul as the best ice cream has also told that frozen desserts are bad.

The defendants also failed to prove that the petitioners use Vanaspati oil to make their frozen desserts and have solely relied on a single manufacture (which goes by the name ‘Heritage’) which uses Vanaspati to make their frozen desserts.[xxi]

Based on the above points discussed, it is clear that the decision or reasoning of the Court is right as generic disparagement or slander of goods of the product category of Diary based Desserts referred to as ‘frozen desserts’ has occurred here. The petitioners own about 51.3% of the market share in the area of frozen desserts. They are considered to be one of the top contenders in this field. The advertisement though did not mention the name of the product, it clearly defames the product that they manufacture.

Conclusion:

The judgement given by the Court in this case is reasonable. In the past also the judiciary has played an active role in India with respect to trademark infringement because of comparative advertisements.[xxii] Comparative advertisements are beneficial to the consumers as it gives them a fair idea and creates awareness. But there should be some regulatory authority that checks if the comparative advertisements are accurate and true rather than allowing the advertisers to call their products as the best.

The laws followed in USA are no doubt progressive. They allow comparative advertisements if the claims are true and accurate. This is done to ensure that the consumers get a clear idea and they can base their opinions on honest claims rather than on false claims. But the question that arises here is if the blind adoption of USA laws help Indian society.

In India, chances are high that the advertisers will openly start using the trademarks of their rivals without proper evidences or base to their accusations. This will in turn result in a lot of defamatory cases and trademark infringement which will be a burden on the judiciary.

The legislature should constitute a proper authority to check and regularize the Comparative Advertisements and provide adequate checks so that trademark infringement is prevented and the consumers’ rights are protected at the same time.

[i] https://www.lexology.com/library/detail.aspx?g=1cf2e8f0-927c-4c06-8d22-5485e6be541e (24 September 2017)

[ii]https://indiankanoon.org/doc/55113949/ (25 September 2017)

[iii]http://www.legalservicesindia.com/article/article/comparative-advertisement-&-infringement-of-trademark-604-1.html (26 September 2017)

[iv] ibid

[v] (84/450/EEC)

[vi] Article 3: In determining whether advertising is misleading, account shall be taken of all its features, and in particular of any information it contains concerning: (a) the characteristics of goods or services, such as their availability, nature, execution, composition, method and date of manufacture or provision, fitness for purpose, uses, quantity, specification, geographical or commercial origin or the results to be expected from their use, or the results and material features of tests or checks carried out on the goods or services;

[vii] Article 2(2) of the Council Directive (84/450/EEC)

[viii]http://www.legalserviceindia.com/articles/tadv.htm (23 September 2017)

[ix]O2 Holdings and O2 (UK) Limited (together, O2) v Hutchison 3G UK Limited (H3G)

[x]http://www.nortonrosefulbright.com/knowledge/publications/20005/comparative-clarity-comparative-advertising-and-trade-mark-infringement-in-europe (25 September 2017)

[xi] http://www.metrocorpcounsel.com/articles/4632/ours-works-better-use-competitors-trademark-advertising

[xii]Deere & Co. v. MTD Prods, Inc., 41 F.3d 39 (2nd Cir. 1994)

[xiii] 1999 PTC (19) 741

[xiv] 2003 (27) PTC 305 (Del)(DB)

[xv] http://www.livelaw.in/disparaging-rivals-bombay-hc-restrained-amul-broadcasting-two-tv-ads/ (25 September 2017)

[xvi] https://drive.google.com/file/d/0BzXilfcxe7yuaXdTa2hXVDRhOUk/view (22 September 2017)

[xvii]Hydrogenated vegetable oils: 1. Vanaspati means any refined edible vegetable oil or oils, subjected to a process of hydrogenation in any form. It shall be prepared by hydrogenation from groundnut oil, cottonseed oil and sesame oil or mixtures thereof or any other harmless vegetable oils allowed by the Government for the purpose.

Refined sal seed fat, if used, shall not be more than 10 per cent of the total oil mix….” (emphasis supplied)

[xviii] “Vegetable oils” means oils produced from oilcakes or oilseeds or oil bearing materials of plant origin and containing glycerides.

[xix] Even if there is no direct reference to the product of the plaintiff and only a reference is made to the entire class of products in its generic sense, even in those circumstances, disparagement is possible.

[xx]4. He, however, cannot while saying 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.

[xxi] https://drive.google.com/file/d/0BzXilfcxe7yuaXdTa2hXVDRhOUk/view (24 September 2017)

[xxii]Dabur India Ltd. v. Emami Ltd., IA No. 2124/2004 in CS (OS) 453 of 2004; Reckitt & Colman of India Ltd. v. M.P. Ramachandran and Anr., 1999 PTC (19) 741; Pepsi Co. Inc. and Ors. v. Hindustan Coca Cola Ltd. and Anr., 2003 (27) PTC 305 (Del)(DB);Wander Ltd. and Anr. v. Antox India P. Ltd., 1990, Supp. SCC 727

 

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