SpicyIP Wishes all its Readers a Safe n Happy Holi! May Rin and Tide become friends this Holi! (Wouldn’t it be anti-competitive then?)
(The conclusions originally arrived at in this post have been slightly altered after a bit of deliberation)
In my last post, I had discussed in brief the recent advertisement for Hindustan Unilever’s detergent brand “Rin”, in which a rival brand “Tide” figures prominently. Quite a few comments to that post referred to the Horlicks v. Complan judgment of the Delhi High Court. However, a more recent decision of the Delhi HC on the issue of comparative advertisement is available, namely the one delivered in the case of Dabur India v. Colortek Meghalaya (February 2010).
In this judgment, it was the case of the Appellant Dabur that its mosquito repellent brand “Odomos” was disparaged by an ad of the respondent Colortek which owned the rival brand “Good Knight”. The Division Bench of the Delhi High Court affirmed the Single Judge’s decision that there was no disparagement of Odomos in the impugned ad. Consequently, no injunction was granted against the respondent Colortek. To support its decision, the Court referred to a host of Supreme Court decisions on various aspects of the issue.
The Court first discussed the limits of “commercial speech”, as set out by the Supreme Court in Tata Press v. MTNL (1995); according to the Supreme Court, “commercial speech” is guaranteed as part of freedom of speech under Article 19(1)(a) of the Constitution. Although, the Supreme Court in that case did not define “commercial speech”, it was stated that advertisement would fall under one of the species of such speech.
It was observed that dissemination of information about a particular product was necessary since it enabled the public to evaluate its options. The Supreme Court in its turn referred to the US decision of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council (1975) and said that it is almost settled law in the United States that though “commercial speech” is entitled to the First Amendment protection, the Government was completely free to recall “commercial speech” which is false, misleading, unfair, deceptive and which proposes illegal transactions.
In another case of Colgate v. Hindustan Lever (1999), the Court explained that although a seller has the latitude to represent his product in such a manner that he attracts more customers than he normally would have, such latitude would translate into description and “reasonable assertion” of the product, but not to misrepresentation. In other words, factual representations are perfectly legitimate.
The Apex Court went a step further to state that “commendatory expressions” are not dealt with as serious representations of fact. (On SpicyIP, we have dealt with “commendatory expressions” as “puffing”. Mihir’s brilliant post on the relation between commercial disparagement and puffing is a must read)
When the SC says that “commendatory expressions” are not dealt with as serious representations of fact, it does not mean that such representations are untrue or misleading. On the contrary, what it means is that such representations cannot be taken seriously and that there is no obligation on the part of the seller to the customer with regard to the true quality, rather standing of goods merely because the seller has resorted to puffing.
To support this, the Apex Court relied on a rule of civil law, “simplex commendatio non obligat” , which means simple commendation can only be regarded as a mere invitation to a customer without any obligation as regards the quality of goods. In other words, every seller is entitled to call his goods “world’s best”, “Indian’s no.1”, “world-class quality” and so on.
However, the Supreme Court also cautioned that these principles are by no means conclusive since, by and large, cases of puffing are borderline cases, and that there exists a very thin line which separates puffing from falsehood.
In a nutshell, although commercial speech is available under the Indian Constitution to every seller, if the advertisement is false, unfair, misleading or deceptive, the seller is not entitled to seek protection behind “commercial speech”.
Having referred to the SC decisions, the Delhi High Court then referred to its earlier Pepsi v.Cola decision (2003), where it held that although a seller is entitled to glorify his product, in the process, he is not to denigrate or disparage a rival’s product.
The Court further cited Halsbury which states thus:
“It is actionable when the words go beyond a mere puff and constitute untrue statements of fact about a rival’s product.”
The Court also cited its decision in a case of comparative advertising involving Dabur and Wipro, where it held as follows:
“It is one thing to say that the defendant’s product is better than that of the plaintiff and it is another thing to say that the plaintiff’s product is inferior to that of the defendant.”
It is probably a corollarial conclusion wherein the seller is entitled to say he is better than the rest of his competition, and therefore, he is entitled to claim that he is better than a particular competitor as well.
Summing up these decisions, the Court laid down the following three-step test:
1. What is the intention behind the advertisement as deciphered from the storyline and the message ostensibly sought to be conveyed
2. Is the manner of advertisement or comparison by and large truthful or does it falsely denigrate or disparage the rival’s product?
3. Finally, does the ad have the overall effect of promoting the seller’s product or showing the rival in poor light?
1. What is the intention behind the advertisement as deciphered from the storyline and the message ostensibly sought to be conveyed
2. Is the manner of advertisement or comparison by and large truthful or does it falsely denigrate or disparage the rival’s product?
3. Finally, does the ad have the overall effect of promoting the seller’s product or showing the rival in poor light?
This particular decision of the Delhi High Court is very comprehensive because not only does it sum up the position of the law citing various sources, but also is progressive in its approach for it recognises the impact of the electronic medium. This is reflected in its observation that since the reach and influence of the medium is phenomenal, the advertiser has to per force walk a tightrope. He has to constantly ask himself if the ad runs the risk of having the effect, intended or unintended, of disparaging the rival’s product.
The Court did not stop here, but went further and said:
“we feel that notwithstanding the impact that a telecast may have, since commercial speech is protected and an advertisement is commercial speech, an advertiser must be given enough room to play around in (the grey areas) in the advertisement brought out by it. A plaintiff (such as the Appellant before us) ought not to be hyper-sensitive as brought out in Dabur India. This is because market forces, the economic climate, the nature and quality of a product would ultimately be the deciding factors for a consumer to make a choice. It is possible that aggressive or catchy advertising may cause a partial or temporary damage to the plaintiff, but ultimately the consumer would be the final adjudicator to decide what is best for him or her.”
This observation in a way balances interests of both the seller and the rival, and is of critical importance since it acknowledges market realities, which is a pleasant change for Indian Courts (One hopes that someday a similar sentiment will be adopted in “hardcore” IP matters).
More importantly, the underpinning of this observation is again the good of the consuming public (somehow “consuming public” sounds more socialist and politically correct than “customer”…).
Applying the above-stated principles to the facts of the Rin v. Tide controversy, one must assess and analyse the Rin advertisement objectively sans the mischievous light in which the media tends to portray such ads (oh yes, my last post too could be accused of it) and the vicarious pleasure we derive as humans in seeing two competitors duke it out in full public glare.
One is unable to take a strong call here on this specific case because the question of “overall effect” of the ad is very subjective and one can never be sure of side-stepping the allegation, rather the minefield of arbitrariness in such cases.
On one hand, we could say that since Rin’s contentions are backed by tests of an independent lab, they are factual. A “balanced” view could say that the ad does not really disparage Tide, it merely has an element of mischief in it. I might even say that all mischief is not necessarily disparagement and I think considering the times we live in, what with reality shows and all, ads can no more be plain Jane representations of facts. Therefore, it could be argued that they are entitled to go beyond that, provided they are within the limits of decorum.
And on the other hand, the reference to Tide and its tagline may be seen as mockery. If, despite Rin’s claims being grounded in facts, the primary focus of the advertisement is not facts such as the independent lab’s tests, there is a chance that Rin (HUL) could be held liable for disparagement.
In other words, in judging the “overall effect” of the ad, the Court may have to look into the question of what caught or catches the eye or attention of the audience. Is the ticker which mentions independent lab tests prominent enough for the average viewer of imperfect recollection to see and remember? If the answer is a no, it probably establishes disparagement.
Further, Tide could seek to distinguish the Delhi HC’s Dabur judgment on factual grounds saying that the reference to the rival brand in that case was not as obvious and as direct as it is in the Rin ad. Consequently, it could be argued that the accommodative view taken by the Court in the Dabur case cannot be the standard applicable for this case.
I realise, that in cases like these, counterpoints are bound to exist and thrive; but the one thing that comes out from such instances is that, as audiences, we still look for our own modern-day versions of the Colosseum and gladiators.
On an entirely unrelated note, if the Supreme Court is willing to acknowledge the existence of “commercial speech” under the Indian Constitution for manufacturers and sellers of products, why should it be any different for service providers, medical and legal? I await a few brickbats…
Nice Post. A very Happy (Why do we have to add a ‘safe’ on ‘Happy’ as if we are entering a Combat Op?) Holi to SpicyIP.
I have a pure ‘unlegal’ view. Leave aside all the ‘ethics’…Marketing is all about ‘selling’. The ultimate winner out of this whole drama will be the P&G (read TIDE). Reason: For those who are not very comfortable with ‘marketing’- It is very simple. The more you are ‘on air’ the more you are in the market. So, HUL is actually paying for P&G’s ‘airing’. Coca Cola long back paid hefty sum to be the official broadcaster of the World Cup. Pepsi just said: ‘Nothing Official About It!!!’
Pepsi Won.
It is only a matter of time that P&G comes with an answer on the lines of Pepsi. (hopefully not in a court of Law.)
Secondly, Tide started ‘fooling’ the customers by dolling out its variant (read cheap) ‘Tide Naturals’ and cashing the goodwill of ‘TIDE’. So, from a customers point of view, what actually the order is (in order of value for money): TIDE> RIN> TIDE NATURALS.
(Remember, Tide is costlier than RIN but Rin is Cheaper than Tide Naturals. This simply means Tide is better than Rin but at a cost. Tide Naturals is NOT Tide.)
Hope this helps a bit. Wait for the next act in the Drama.
One of the more thought thru posts on the topic. good to see that knee jerk reactions are giving way to more indepth thinking now on the net. clarifies the legal aspects. I think its a good thing that comparative communication is allowed. It finally empowers the consumer and brings transparency. forces corporates to constantly keep ahead of competition.
Guess tide naturals would first eat into Tide itself as consumers will take a while to figure out that its not the same as tide and the second casualty would be Rin. Hence, the price drop and the dramatic superior performance message from Rin. Bold move.
Rin vs. tide, is the perfect example of comparative advertisement,
Trademark Act, 1999 permits comparative advertising u/s 30(1) which reads as:
Nothing in section 29 shall be preventing the use of registered trademark by any person with the purposes of identifying goods or services as those of the proprietor provided the use:-
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.
But with certain limitations which are provided u/s 29(8) which reads as: A registered trademark is infringed by any advertising of that trademark if such advertising:-
a) takes unfair advantage and is contrary to honest practices in industrial or commercial matters; or
b) is detrimental to its distinctive character; or
c) is against the reputation of the trademark.
But on a second thought will not all comparative advertisement intend to take advantage or be determinental to the reputation of a competitors mark..!?
The ad is illegal because of two things:
1. Ad voice over says “Rin is better than Tide” while the visual shows “Tide Naturals” a cheaper variant of Tide. hence if the tests which HUL claims are true against “Tide Naturals” then pointing out “Tide” is blatant lie and HUL should be sued for millions of dollars for defaming a brand againt which it doesnt hold superiority.
2. while it’s been an industry practice to say my brand give amazing benefit Vs. “ordinary brand” and exxagerate the benefit for dramatic effect. But if this ordinary brand is given a “name” (like “Tide ” in this case) one cannot exxagerate benefit. So even if Rin is able to claim “better whiteness” than the cheaper version of tide , “Tide Naturals” the difference in shirts show it’s an exaggerated difference as what’s shown can never be reality even if the other shirt is washed with plain water! This is again disparagement of a competitor’s brand.
The back ground to HUL’s desperation is the culmination of two things:
1. Rin is at it’s lowest share in 7 years at 4.6% (down from 7.2% in 2003) . on the other hand Tide at 8.8% has become almost double the size of Rin powders despite being a very new player (up from 2.4% in Jan 2003)
2. The pressure from global Unilever on the Indian arm to deliver results at any cost has led to such unethical aggression. But for sure approval for such ads cannot have been given by anyone below the rank of Inits India head.
http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/Polman-tries-carrot-stick-to-drive-HUL/articleshow/5563008.cms
but there is a chance for offence .
bcoz very long before hul—->nirma
case …….
at last hul spends their own money for nirma. very well i expect that
only way to escape hul need to prove …………..?????????
Dear Anon:
These are 2 very valid points you raise and I completely agree with you. In fact, these two points are very critical in establishing disparagement and I am surprised I didn’t point these out in my post.
As for the market figures, I have mentioned them in one of my later posts on the controversy.
Thanks once again for sharpening the focus of the discussion.
Bests,
Sai.