It is unimaginable in this day and age for any business to sustain itself without advertising. Rapid progress of technology coupled with cutthroat competition means that businesses are willing to go at any lengths to meet their sales target & to expand their business by advertising through all feasible mediums. Businesses are willing to invest time, money & effort into coming up with a pitch for their products that will pull customers towards their products and/or services and instill a sense of warmth as well as trust in them towards their brand.
However, with a view to increase their sales and to retain their significance in a very competitive marketplace some businesses tend to sometimes engage in making comparisons of their product with those offered by their competitors.[i] Comparative advertising is therefore simply put, presenting one’s products (by referring to it either directly or indirectly) as better or superior to that of one’s competitors via. an advertisement.[ii]
Comparative advertising that merely presents one’s products as superior by exaggerating its qualities, placing it on a high pedestal vis-à-vis the products of one’s competitors is referred to as puffery and it is permissible under law. Puffery is usually done by employing the use of exaggeration or hyperbole with a view to inflate the merits of a product by using a catchy phrase / tagline or even going so far as to declaring a product to be the best among all. Puffery thereby, oversells the claims and the benefits rendered by the use of a given product. Such inflated claims serve the purpose of projecting the product’s effectiveness.[iii]
Puffery is intended to encourage consumers to buy the product. It expresses a subjective and not an objective statement and it is the kind of claim which a consumer is likely to discount.[iv] For example, ‘Red bull gives you wings’ by Redbull, ‘Thums Up, taste the thunder’ by Thums Up.
The case of De Beers Abrasive v/s. International General Electric Co.[v], is a very significant one, wherein the law pertaining to puffery was succinctly laid. It was observed therein that a trader is entitled to puff his own products, thus advertisements reading “the best tailor in the world”, “the best tailor in this town”, “the best tailor in this street”, etc., are not actionable under law.[vi] However, the situation is not the same where the trader does not puff up his own goods, but rather disparages or denigrates the products of his competitors.
Disparagement is said to occur when a false statement that disparages a person’s products is published, thereby causing such a person special damage.[vii] A comparative advertisement that is disparaging is actionable under law unlike puffery. In order for an action for disparagement of goods to be maintainable, it is necessary for plaintiff to prove the following ingredients:
- That the actionable statement was made, and pertained to his products;
- That it was untrue;
- That it was published maliciously i.e., with the scienter to injure;
- That special damage was thereby caused to him.
In order to decide whether an action for disparagement of goods is maintainable, the courts have to examine the relevant advertisement thoroughly to determine whether the concerned advertisement merely highlights the qualities of the product or is it disparaging a competitor’s product, thereby adversely affecting its reputation in the marketplace.[viii]
In White v/s. Mellin[ix], wherein the facts of the case were that the defendant used to affix to the wrappers of plaintiff’s product a label containing a recommendation to the public to try another product on the grounds that it was far more nutritious and healthier than any other preparation offered so far. The court held that, “in order to constitute disparagement which is, in the sense of law, injurious, it must be shewn that the defendant’s representations were made of and concerning the plaintiff’s goods; that they were in disparagement of his goods and untrue; and that they have occasioned special damage to the plaintiff. Unless each and all of these three things be established, it must be held that the defendant has acted within his rights and that the plaintiff has not suffered any legal injuria.”[x]
Factors that need to be taken into account to find a commercial to be disparaging:
In order for a commercial to be found disparaging the following factors have to be taken into account, namely[xi],
- The intent of the commercial;
- The manner of the commercial;
- The storyline of the commercial & the message sought to be conveyed by the commercial.
In Godrej Consumer Products Limited v/s. Initiative Media Advertising and Anr.[xii], wherein in one of the commercials a product containing label similar to that of the plaintiff’s product was depicted as being inefficacious, the court observed that it is settled law that to decide the question of disparagement, the abovementioned factors have to be taken into consideration.[xiii]
Some statutory provisions governing disparagement of goods:
Some statutory provisions governing disparagement of goods are as follows:
- Section 36A(1)(x) of the Monopolies and Restrictive Trade Practices Act, 1969[xiv]– “gives false or misleading facts disparaging the goods, services or trade of another person.”
- Section 2(47)(j) of the Consumer Protection Act, 2019[xv] – same as above.
- Section 29(8) of The Trade Marks Act, 1999[xvi] – A registered trade mark is infringed by any advertising of that trademark if such advertising – (a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matter; or (b) is detrimental to its distinctive character; or (c) is against the reputation of the trade mark.
Comparative advertisements that do not specifically refer to the products of a competitor may also be found to be disparaging. This happens when an advertisement disparages a complete class or category of products without referring to a specific product. Such advertisements are equally actionable under law.
In Reckitt & Colman of India Ltd. v/s. M.P. Ramachandran and Anr.[xvii], it was held that an advertisement is defamatory even if the insinuation made by the advertisement is not aimed at any specific product but was rather directed towards all products belonging to that class, it cannot be argued that the insinuation does not lie against that specific product, as it too belongs to that class.
Some other notable decisions:
In Pepsi Co., Inc. and Ors. v/s. Hindustan Coca Cola Ltd., and others[xviii], wherein the comparative advertisement / commercial of the defendant (i.e., Coca Cola Ltd.) was found to have disparaged its competitor’s product (i.e., “PEPSI”, obliquely referred to in the commercial as “PAPPI”), as an inferior drink by describing it as a “Bachhon Wali Drink” and further with the message “that the kids who want to grow up should drink “Thums Up””. The court found that the storyline conveyed by the commercial was that “Thums Up” was a superior product to “PEPSI”, with the latter being projected by the defendant’s commercial as an inferior product not meant for adults or growing up children.
In S. C. Johnson & Son, Inc. v/s. Buchanan Group Pty Ltd.[xix], wherein both the plaintiff as well as the defendant’s products were kitchen cleaners. Thus, efficacy in cleaning the toughest kitchen stains with minimum effort should have been the core objective behind manufacturing a product of such kind. The defendant in his commercial projected that its product (i.e., “CIF Cream”) accomplished this task sooner with minimum effort in comparison to the product of its competitor. Thereby, the defendant’s commercial does seem to be prima facie disparaging of the plaintiff’s product. The court found the defendant’s commercial to be disparaging and the defendant was accordingly restrained from using the advertisement.
Comparative advertising enables businesses to project their products or services as superior or having more value in comparison with those of their competitors. It has thus become a highly prized tool for businesses in this day and age of highly competitive marketplace. However, while puffing or exaggerating the merits of one’s own goods or services is acceptable to the law, denigrating or disparaging the products or services of one’s rivals in the marketplace crosses the threshold of legality and is actionable under law. It is therefore imperative for businesses to know where the legal boundaries lie so as to steer clear of falling foul of the law.
[i] Kashish Sethi, Comparative advertisement: a powerful weapon in the brand war, IPleaders (Mar. 04, 2022, 5:34 PM), https://blog.ipleaders.in/comparative-advertisement-powerful-weapon-brand-war/#Introduction
[ii] Pratyayee Saha & Rudrani Sengupta, COMPARATIVE ADVERTISING AND GENERIC DISPARAGEMENT: A PROBE INTO ITS STATUS IN THE INDIAN LEGAL SYSTEM IN THE LIGHT OF RECENT CASES, Manupatra (Sep. 07, 2018), https://articles.manupatra.com/article-details/Comparative-Advertising-and-Generic-Disparagement-A-Probe-into-its-Status-in-the-Indian-Legal-System-in-the-light-of-Recent-Cases
[iii] Procter & Gamble Home Products v. Hindustan Unilever Ltd., 2017 SCC OnLine Del 7072.
[v] De Beers Abrasive Products Ltd. v. International General Electric Co. of New York Ltd., 1975 (2) All ER 599.
[vii] Ratanlal Ranchhodas & Dhirajlal Keshavlal, English & Indian Law of Torts 258-259 (2nd ed. 1903).
[viii] Sethi supra, note i.
[ix] White v. Mellin, (1895) A. C. 158.
[xi] Marico Ltd. v. Adani Wilmar Ltd., 2013 (54) PTC 515 (Del).
[xii] Godrej Consumer Products Ltd., v. Initiative Media Advertising and anr., 2012 (52) PTC 260 (Bom).
[xiv] Monopolies and Restrictive Trade Practices Act, 1969, §36, No. 54, Acts of Parliament, 1969 (India).
[xv] Consumer Protection Act, 2019, §2, No. 35, Acts of Parliament, 2019 (India).
[xvi] Trademarks Act, 1999, §29, No. 47, Acts of Parliament, 1999 (India).
[xvii] Reckitt and Colman of India Ltd. v. M.P. Ramchandran and Anr., 1999 1 PTC 741
[xviii] Pepsi Co. Inc. And anr. v. Hindustan Coca Cola And Ors., 94 (2001) DLT 30.
[xix] S.C. Johnson and Son, Inc. and Ors. v. Buchanan Group Pty. Ltd. and Ors., 2010 (42) PTC 77 (Del).
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