Budweiser says cheers after Delhi High Court Rules in its favour

In today’s world of technology, a major part of our lives are lives are spent virtually via social media.  Social media is no longer just a way for people to connect but an indispensable means for brands to advertise and promote their products. Influencers on social media platforms act as links between the public and the brands, and what is endorsed by them can have a huge impact on the viewers. Any sort of criticism or negative review by the influencers can lead to significant damage to the brand’s reputation and goodwill. Of late, there has been a rise in satire and sarcasm, where influencers “roast” a particular person or a product under the garb of comedy. One such incident that came to light last year was that of a satirical website, www.fauxy.com, and their comedy video featuring Budweiser, the famous beer brand.

The defendants posted a “comedy video” on their website and their social media handles, depicting a news report,  testing the claims that Budweiser beer tastes like urine. The impugned video showed the defendant tasting a sample of urine and the beer and then concluding that the claims were false because the beer tastes worse than urine. In the end, the defendants state that the claim is as false as the claim that Corona beers contains coronavirus.

A suit was consequently filed by the Plaintiff, owner of the brand that manufactures Budweiser. The plaintiff claimed that the video caused a violation of their intellectual property rights and tarnished their reputation as a brand. It was further claimed that the video led to perpetration of fake news on various social media platforms containing the claims that employees of Budweiser are urinating in the beers. The plaintiff also brought to light the fact that the video had caused the hashtag of the brand “#Budweiser” to trend on Twitter India on 2nd July, 2020. Further, the video was also not accompanied by any disclaimers stating that the video contents are “fake news” or “based on fictitious reports”. As a consequence, legitimate news publications were also misled into believing that the claims are valid. Publications such as The Hans India and NDTV reported the fictitious news as legitimate facts. Plaintiff also brought into the notice of the court, a tweet by NDTV India which read as follows: “Budweiser admits several employees have been pissing into their beer tanks for years“.

Trademark Infringement

Section 29 of the Trade Marks Act, 1999 lays down provisions relating to infringement of trademark, where any use of a trademark that tarnishes its reputation amounts to infringement. Section 29(4) of the Act deals with claims of trademark dilution or tarnishment. It prohibits using a registered trademark without the owner’s permission with goods or services not similar to that of the trademark so that it is detrimental to the distinctive character or repute of the mark[1].

With respect to the current factual matrix of the case, the High Court of Delhi had observed that the records put forward by the plaintiff successfully showed infringement of trademark via tarnishment of reputation.

The Concept of Commercial Disparagement

Commercial disparagement refers to the publication of false and derogatory statements concerning a brand or a business, to deter the consumers from consuming the said services or purchasing the product. As opposed to defamation that is concerned with personal reputation, commercial disparagement deals with reputation and goodwill of the business’s economic aspect or the brand.

The concept of commercial disparagement was explained by the Bombay High Court in Hindustan Unilever Limited v. Gujarat Co-operative Milk Marketing Federation[2], where it was held that in order for a statement to be considered as commercial disparagement, the following three criteria must be fulfilled,

  1. it must be false
  2. it must be made with a malicious intent
  3. the statement must cause special damage to the plaintiff’s business

In the present case, it is clear that the claims made by the video were false, fulfilling the first criterion, doubts arise with respect to the second one. Being a satirical video, made with the motive of entertainment, malice on the part of defendants is hard to prove. However, even if made with the intent of fun and entertainment, the fact that it did cause harmful consequences to the reputation of the plaintiff cannot be ignored. The fact that even reputed news publications were misled into believing the veracity of the video is a testament to the same.

Indian courts while dealing with cases between disparagement or defamation and freedom of speech and expression have chosen to side with latter. In Ashutosh Dubey v Netflix Inc. and Ors[3], the High Court of Delhi had stated that, “The very essence of democracy is that a creative artist is given the liberty to project the picture of the society in a manner he perceives. One of the prime forms of exposing the ills of the society is by portraying a satirical picture of the same”.

Deviating from the above viewpoint in the present case and siding with the plaintiff, the court issued a notice of injunction against the defendants. The court opined that a prima facie case was made out by the plaintiff, along with a balance of convenience in their favour. The defendants were restrained from reproducing, broadcasting, communicating to the public, screening, publishing and distributing the impugned video or any other video on any media or platform and promoting the impugned video on various social media amounting to infringement of Plaintiff’s registered mark ‘Budweiser’ and also amounting to commercial disparagement of the plaintiff’s products.

[1] Section 29(4), Trade Marks Act, 1999

[2] 2017(71)PTC396(Bom)

[3] MANU/DE/1008/2020

About Sonal Sinha 15 Articles
I am currently in the fourth year of BA LLB at Symbiosis Law School Noida. Over the years at law school, I have developed a keen interest and passion for IPR laws and like to research upon and write blogs on topics related to Trademarks and Copyrights law. I hope to bring some intriguing content your way through my articles at this platform. Apart from that, I am also an avid reader and a fitness enthusiast

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