Spadika brings us her third entry to the SpicyIP Fellowship applicant series in this interesting post where she examines the recent Colgate v. HUL decision on comparative advertisements. You can view her previous posts here.
Honesty in Disparagement- The Delhi High Court decision in Colgate v. HUL
In a recent decision of the Delhi High Court, the controversial Pepsodent advertisement that compares the Pepsodent Germicheck Powder with Colgate Dental Cream has been held not to be per se disparaging. However, the 2-judge bench has remitted the case back to the Single Judge in order to determine the truth of the claims made in the advertisement by Pepsodent and finally decide the case. In the same decision, an injunction was granted against the print version of the same advertisement. In this post, my observations are restricted to the decision regarding the television advertisement, and I focus on two aspects- what does the reasonable viewer see in an advertisement, and the legal and policy implications of the Court laying emphasis on the veracity of the content in the advertisement.
The Case So Far
Earlier this year, a Single Judge bench of the Delhi High Court rejected Colgate Palmolive (India) Ltd’s application to grant an interim injunction and a permanent injunction against Hindustan Unilever Ltd for its advertisements relating to the product ‘Pepsodent Germicheck Superior Power’. The petitioners had asked for an injunction on the ground that the ads disparaged Colgate’s product, ‘Colgate Dental Cream Strong Teeth’. The Single Judge bench dismissed the petition, following which the petitioners filed a Review Petition. This was also dismissed. Subsequently, the petitions filed an appeal before a two-judge bench of the Court.
Disparaging a product with a registered trademark is an offence under S.29(8)(a) and S.29(8)(b) of the Trademark Act, which say that a registered trademark is infringed by advertising when such advertising is detrimental to the distinctive character or is against the reputation of the trademark respectively. The TV commercial (TVC) as well as the print advertisement claim that the Pepsodent product is “130%” better than the Colgate product. Both ads clearly show the Pepsodent and the Colgate products being compared, with brand names clearly visible, making this a classic case of comparative advertising.
A Novel Spin on the Reasonable Man
The main contention raised by the appellant was that the Single Judge bench had misapplied the test to determine whether there was disparagement of the Colgate product. The Single Judge has used the “Average Viewer Test”, in which the Court determines whether the product has been disparaged in the mind of the average viewer of the advertisement. The appellant’s argument was that application of the Average Viewer Test must not preclude the possibility that there could be multiple meanings that an average person can ascribe to a particular visual. In other words, if there are two meanings that can be drawn from the same visual, the fact that one of the meanings is not disparaging does not preclude the fact that the other meanings can be disparaging. This argument was based on the recent decision of the Queen’s Bench, Ajinomoto Sweeteners v. Asda Stores. Q.B. 497 The High Court agreed with this contention. It was held that while the test is still that of an average reasonable person, the possibility of there being multiple meanings cannot be ruled out. The position is aptly summarised by this quote- “The presumption that there must be a single reasonable man militates against the principle that two or multiple acceptable views may be adopted by different persons who are fully qualified to be described as reasonable persons.” Considering that Courts, especially in tortuous litigation, often confidently ascribe actions to an imaginary “reasonable man”, this interpretation taken up by the Delhi High Court is an interesting one. However, this interpretation unfortunately did not have a bearing on the final decision, as the Court considered the truthfulness of the disparagement to be a more important consideration.
Honest and Dishonest Disparagement
The advertisement shows two children using Colgate and Pepsodent products respectively. The first ground on which Colgate claimed that the ad was disparaging was that the advertisement showed that the teeth of the child who used Colgate did not look well-formed and the mother of the child looked worried, thereby implying that the Colgate product was inferior. The High Court did not find this alone sufficient evidence of prima facie disparagement.
In Dabur India v. Colortek Meghalaya,167 (2010) DLT 278 (DB) it was held that one of the considerations for disparagement was whether there was truth in the allegations made in the advertisement (this is comparable to truth as a defence for the tort of defamation). However, this goes against the established legal principle that comparative advertising is only allowed as long as the comparison does not denigrate or disparage the rival product.[See Reckitt and Colman of India Ltd v. Kiwi TTK , 1996 P.T.C 193 T 399; Reckitt And Colman of India Ltd v. M.P. Ramachandran and Anr., 1999 PTC (19) 741.] The High Court reconciled the two principles by clarifying that advertisers can compare two products and claim that one is better, as long as it is truthful. However, this is only permissible as long as the object of the advertisement must be to promote one’s own product, and not to disparage the rival one.
With the test being formulated thus, the question in consideration before the Court became whether Pepsodent was really “130% better” than Colgate. The Court refused to go into this question of fact, therefore remitting it to the lower bench. What needs to be asked here is whether Courts can sit in judgment whether one product is “better” than another product. This was exactly what was considered in the case White v. Mellin. In this 1895 decision of the House of Lords, it was observed that it would be impractical for the Courts to sit in judgment over the veracity of claims made in advertisements. It was precisely to guard against this consequence that the law evolved to allow disparagement only in the cases of puffery- where the advertiser clearly does not intend to make a serious factual allegation. This was observed by the Chancery Division in De Beers Abrasive Products.1975 (2) All ER 599
Moreover, in light of the novel observations that the Court took time to make regarding the ‘Average Viewer Test’, it would not have been incorrect for it to determine whether there was disparagement based on whether the reputation of Colgate would have been lowered in the eyes of the average viewer. After all, this is a common test that is used in the tort of defamation. The decision does not explain why this approach was not taken.
In Tata Press,(1995) 5 SCC 139 it was held by the Supreme Court that “false, misleading, unfair or deceptive” advertising is not protected commercial speech. The Delhi High Court decision, by insisting on knowing whether the allegations made by Colgate are factually true, appears to have ignored the “unfair” aspect of disparaging advertising. The Court now finds itself in the territory of having to compare subjective claims made by advertisers. As was held in White v. Mellin, “the Courts of law [have been] turned into a machinery for advertising rival productions by obtaining a judicial determination which of the two was the better”