Right of commercial speech wins over generic disparagement

The fundamental law of comparative advertising is that while a person may exaggerate the claims relating to his own goods, such exaggeration must not denigrate or disparage the goods of another person. The laws governing comparative advertising have evolved by way of judgments which are supported by certain provisions of code of the Advertising Standards Council of India (ASCI).

Recently, in Dabur India Ltd. v. Emami Ltd. [CS (COMM) 1074/ 2018], the Delhi High Court juggled between the laws of disparagement and right to free speech and ruled in favour of innovation and fair competition, stating that courts must not stifle innovation and the defendant must be allowed to use marketing skills, thus protecting the defendant’s right of free speech.

In this case, Emami Ltd. had created an advertisement and TVC promoting its sugar free variant of chyawanprash. Aggrieved by the same, Dabur India Ltd., the plaintiff filed a suit praying for restraint against the broadcast/publication of these advertisements which it felt was meant to disparage “chyawanprash”. Caught in a to-and-fro cycle of injunctions and appeals, the defendant modified its advertisement in accordance with the appellate Court’s judgment and submitted an affidavit stating that it will not publish its advertisement/TVC without making the modifications. Despite this, the plaintiff pressed on impugning the advertisements. The subject matter of this dispute was solely based on the modified advertisement.

Plaintiff’s contention

The plaintiff contended that the defendant’s advertisement pertaining to sugar free chyawanprash was meant for diabetic patients. It argued that by comparing its sugar free product with the general chyawanprash, the defendant was comparing two products which fall into different categories which is impermissible in law. It further claimed that such misleading and misrepresentation portrays that chyawanprash is harmful, even for non-diabetic consumer which is a false statement. Alleging that the defendant’s ad failed to disclose that its product is made for diabetic patients, it argued that the entire campaign is a misrepresentation of facts, misleading, malicious and disparaging.

Defendant’s contention

Dismissing the plaintiff’s allegations, the defendant submitted that its advertisement is informative, providing consumers with a sugar free alternative of chyawanprash. It emphasized that its advertisement nowhere depicted that sugar is bad for health and was a mere informative advertisement. Further, it contested that since it was a producer of chyawanprash, any adverse advertisement criticizing the same would be injurious to its own commercial interests. It also contended that the modified advertisement could not be regarded as disparaging in any manner.

Reasoning

In order to evaluate whether the modified advertisement amounted to disparagement, the court extensively discussed the laws and guidelines pertaining to comparative advertising and mentioned the following guidelines:

  1. An advertisement is commercial speech and is protected by Article 19 (1) (a) of the Constitution.
  2. An advertisement must not be false, misleading, unfair or deceptive.
  3. 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.
  4. While glorifying its product, an advertiser may not denigrate or disparage a rival product.

Issues

The three primary issues dealt by the court were:

I. Whether the defendant, while advertising its product, can be permitted to compare its sugar free variant Chyavanprashad with the Chaywanprash which contains sugar?

The court noted that the plaintiff’s case was of generic disparagement as the plaintiff’s allegation revolved around the disparagement of “chyawanprash” and not its own product. The advertisement makes it apparent that the comparison has been made with the generic product “chyawanprash” and thus, the plaintiff’s product was not the subject matter of comparison. The court asserted that a competitor can declare his goods to be the best in the world, however while claiming that its goods are better than the competitor, he cannot refer to them as “bad”. Reinstating the established principle that puffery is allowed, but slander and defamation of the goods of the competitor is impermissible, the court observed that the proposed print advertisement is only making a comparison with the generic product “chyawanprash” where a declaration has been made that its product does not contain “sugar”.

It further noted that the print advertisement as well as the TVC was only aimed at providing information to the consumer about a healthier alternative to the general chyawanprash. It stated 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.

Further, the court did not see any merit in the plaintiff’s contention that the advertisement is malicious and misleading, as the same does not compare defendant’s sugar free variants with other sugar free similar products. The court reiterated the main thrust of the subject advertisement was 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 contended by the plaintiff.

II. Is the defendant misleading and misrepresenting the consumers that chyawanprash is harmful?

Dismissing the plaintiff’s allegations that by comparing different categories of products i.e. sugar-free chyawanprash with sugar-based chyawanprash, the defendant is suggesting that chyawanprash is harmful even for a non-diabetic consumer, the court held that there was no misrepresentation or misleading declarations as the defendant was merely indicating that a healthier alternative is available and the same is in no way jeopardizing the plaintiff’s product. Further, the court stated that no material has been shown to say that the defendant’s product is only meant for diabetic patients.

III. Whether the defendant has disparaged the entire category of chyawanprash by stating in its advertisement that it contains high level of sugar.

Upon examination of the advertisement and TVC, the court concluded that the defendant’s limited comparative analysis cannot be comprehended to be depicting the rival product negatively.   The modified advertisement was not disparaging or denigrating the plaintiff’s product or chyawanprash in any manner. The court stated that the pivotal aspect of the case was to examine if the “look and feel” of the advertisements conveys a message that influences the mind against the competitors in a negative way. It observed that the theme of the subject advertisement was to focus on the benefits of healthy sugar free alternatives and not directed to the plaintiff’s product.

Noting that since sugar is the key differentiator of the defendant’s product; naturally, the comparison of a sugar free product would necessarily be with a sugar based one, as the absence of sugar is the unique selling attribute. The court further asserted that in order to send a message that is long lasting and effective, the advertisement has to convey a message comparatively, highlighting the benefits of a sugar free product and thus, the defendant’s right to ensure widespread awareness of the benefits of its products cannot be ignored. It further warned that parties should not be hyper sensitive about the messages conveyed in the advertisement.

The court further explained that the framework of advertisements is designed with the objective to sway the consumers and coax them to buying a particular product or service. There is bound to be creativity, pun and a storyline in such messages, so that it creates an impact on the viewers or the readers. The court stated that while some leeway has to given to the advertiser, the right to free speech cannot be stretched to allow them to become defamatory, disparaging or denigrating. It indicated that the intent behind comparative advertising will invariably be to persuade the consumers to give preference to one of the competing products which is permissible in law.

It further stated that the court cannot restrain the defendant merely because the stakeholders in the industry feel that the advertisement is hurting them. It asserted that courts should not be asked to suffocate the competitors on a perceptive understanding of the competitor that the message delivered through the advertisement is disparaging. The defendant’s right of free speech needs to be weighed upon and protected.

Conclusion

In view of the aforementioned reasoning, the court concluded that cautionary messages of sugar content cannot be termed as disparagement and did not restrain the defendant from publishing the proposed modified print advertisement or the TVC. Since the parties did not advance any arguments on trademark infringement, the court did not examine the same.

The court gave a disclaimer that the opinion expressed in this judgment will not have any binding effect on the final adjudication of the case.


Right of commercial speech wins over generic disparagement by Smrita Sinha

https://www.lexology.com/library/detail.aspx?g=c836142c-a516-4ab3-bada-69bd5ab802ea

Article was 1st published on Lexology

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