Brands have to face cutthroat competition in the market in order to get their product into the best seller’s list. The market is flooded with competing products, and the companies spend numerous resources on their marketing. One of the strategies that the brands often indulge in is comparative advertising. They compare their product with a similar one of a competitor and claim superiority. It has been observed that advertisers inculcate creativity in their ads by including storylines and puns to leave an impact on the consumers. Comparative advertisements are an extension of this creativity. The advertisers try to make the storyline engrossing by bringing in another brand and comparing with their own.
Advertisers are allowed to compare their products under the garb of freedom of expression and maintaining a healthy competition. It is understood that a seller would naturally try to affirm that their product is the best in the market and better than the rival. However, there is a thin line between a healthy comparison and a disparagement. An advertisement that crosses this line loses all protection and becomes open to action by the compared brand. An example was seen recently in an ad campaign launched by the Hindustan Unilever Limited brand. It explicitly compared its product Domex with Reckitt Benckiser’s Harpic. One ad shows television actors Divyanka Tripathi in the Hindi version and Revathy in the Tamil version comparing the products by claiming that Domex incorporates “fresh guard” technology to eliminate the stink that Harpic is unable to achieve.
In Tata Press Limited v. Mahanagar Telephone Nigam Limited & Ors.[1], the supreme court had held that advertisement as a “commercial speech” is protected under Article 19(1)(a) as part of freedom of speech and expression. However, a reasonable restriction is imposed upon this, as held in Colgate Palmolive (India) Ltd. vs. Hindustan Lever Ltd. (1999)[2], that latitude is given to the advertiser to gain a few consumers cannot extend to misrepresentation. When dealing with cases of comparative advertisement, the courts often follow a three-part guiding principle laid down by the supreme court,
- An advertisement as a commercial speech is protected under Article 19(1)(a) of the constitution.
- An advertisement must not be false, misleading, unfair or deceptive
- There would be a certain grey area where enough room is given to the advertiser to play around, which is not taken as a serious representation of fact but only glorifying one’s product.
Hence, while advertising is protected under Article 19(1)(a), when it extends beyond the grey area and becomes false, misleading, unfair or deceptive, it loses the protection.
Defining the playground known as ‘Grey Area’
Puffery is Allowed, and Certain Disparagement is Implicit
As a general rule, it was held in Pepsi Co Inc & Ors vs. Hindustan Coca Cola Ltd & Anr[3], that while boasting one’s product is permissible, disparaging a rival product Is not. This principle is often stated to be the fourth guiding principle, i.e., it is allowed and accepted that while promoting one’s product, the advertiser may indulge in puffery and glorify one’s product as the best in the market. However, it becomes actionable when the words cross the line of puffery and lead to untrue statements regarding a rival’s product. A strict differentiation must be maintained between saying one’s product is better than that of the competitor and saying that competitor’s product is inferior to that of the defendant.
However, the courts also accept that in the case of comparative advertisement, there is a certain amount of disparagement that is implicit. It was held in Colgate Palmolive co and Anr v. Hindustan Unilever Ltd[4]., that when one compares and claims that their goods are better than that of their competitor’s, it is implicit that the goods of the competitor are inferior. It is safe to conclude that puffery can extend to showing the competitor in a bad light, however, to a limited extent of mere puffing.
As explained by the court, the reasoning behind the principle is that puffing consists merely of opinions and is not taken as a serious statement of fact. The intent behind puffery is not to make a factual statement. The target audience is also aware of the difference between puffery and facts. Extravagant and exaggerated claims, with a certain embellishment of one’s product, are customary in advertisements and acceptable. Such puffery is not expected by an advertiser to be taken seriously by the consumer.
Compare, But Do Not Mislead
Having established that particular disparagement as a part of puffery is implicit, it is also a well-settled rule that a trader is not entitled to denigrate or defame the competitor’s goods or mislead the consumers in the process. An advertiser is permitted to highlight special features of their product and objectively compare a few features, as long as the same is true. As highlighted in Reckitt & Colman of India Ltd. v. M.P. Ramachandran[5], the problem for the advertiser arises when they exceed the limits and proceed to slander the competitor’s products by stating that their products are bad. Such defamation of the competitor is not permissible. Defamation makes the advertiser liable for an action of recovery of damages.
Factors to be examined by the courts
The position in India is that while the comparative advertisement is permissible in law, certain guidelines are to be followed. The guideline followed by the courts while examining such cases is evaluating the message and effect of the advertisement. ‘Comparison positive’ advertisements containing valuable information for the consumers and promoting healthy competition are accepted. In such cases, the courts are reluctant to interfere even if there is a certain negative light on the competitor, as the overall outcome is positive. The courts examine the intent and message of the advertisement via the storyline. It was held in Colgate Palmolive Company Ltd. v. Hindustan Unilever Ltd[6] that a detailed analysis of advertisement via a frame-by-frame examination of the TVC is to be avoided. The advertisement is to be viewed in its entirety. In Pepsi Co., Inc. v. Hindustan Coca Cola Ltd[7]., the Delhi High Court had laid down certain essential factors required to be considered, i.e., the intent of the advertisement, manner of the advertisement, storyline, and the message sought to be conveyed. It is the overall “look and feel” of the advertisement that is to be judged.
Earlier last year, the Bombay High Court in Hindustan Unilever Limited and Another v. USV Private Limited[8] comprehensively dealt with the topic of comparative advertisement and the line between comparison and disparagement. The defendant USV had compared its soap Sebamed with Plaintiff’s soaps Lux, Dove and Pears based on PH value and claiming that their soap is more suitable. Moreover, the defendant claimed that the plaintiff’s soaps were unsafe for the skin and compared them to detergent. While the comparative advertisement backed by scientific data was permitted, the court directed the defendant to make changes in the advertisement and remove the disparaging content. The court held that actual denigration came from the use of the term ‘not safe’ and directed the defendant to switch to ‘not ideal’. However, the court also held that there was nothing wrong comparing the products based on PH and claiming that the defendant’s product was not ideal as there was some scientific basis for saying so.
Findings of the court
Relying on several precedents, the court simplified the legal standing on comparative advertisements. The general principle is that advertisement must not be false, misleading, unfair or deceptive. Regarding the grey area, while glorifying and establishing one’s superiority is permitted, the same cannot exceed to stating that goods of the competitor are bad, inferior or undesirable as that would lead to denigrating or defaming the goods of the other.
With respect to the impugned advertisement, the court held that the overall impression is that the defendant claims Domex to be a better solution because it removed bad odour. It does not denigrate, disparage or malign Plaintiff’s product, Harpic. The court reiterated that enough room is to be given to the advertiser to play around and the plaintiff need not be hypersensitive to such claims.
Hyperlink to the judgment.
[1] (1995) 5 SCC 139
[2] (1999) 7 SCC 1
[3] 2003 (27) PTC 305 (Del.) (DB)
[4](2014) 206 DLT 329 (DB)
[5] (1999) 19 PTC 741
[6] Supra note 4
[7] (2003) 27 PTC 305 (Del.)
[8] Interim Application (L) No.1921 OF 2021 IN Commercial Appeal (L) NO.1919 OF 2021, Bombay High Court, order of Division Bench dated 21 January 2021.
Leave a Reply