Hindustan Lever Limited vs Reckitt Benckiser India Limited ...
2006 Latest Caselaw 2072 Del

JUDGMENT

A.K. Sikri, J.

Page 3645

1. In this age of fierce competition wars are fought by the competing industrial giants through means of advertisements. Advertisement has become such an important and potent weapon to promote particular products that companies think of innovative and attractive ways to woo the consumers. For this purpose services of specialised advertising agencies are hired by the companies. While healthy competition through benign advertisements is a welcome step as advertising is also a means to educate the public, what is not permissible is downgrading the product of the rival while promoting one's own product. That is what is treated as unethical and is now termed as illegal also by the courts and the courts frown upon such kind of advertisements. Law on this aspect has been developed through case law and is codified also in the form of legislation in England, USA and other European countries. In India also of late cases are pouring in complaining about such advertisements where product of the aggrieved party is allegedly disparaged. Though there is no legislation on the subject, Prasar Bharti (Broadcasting Corporation of India), which is a statutory body, had issued and adopted a code for commercial advertising. Advertising Standard Council of India has also issued code of ethics for advertising in India. These codes may provide some guidelines. Some judgments have also been given by the courts in India in last few years laying down principles Page 3646 governing comparative advertisements. Few such cases where this aspect of the matter came for consideration are the following:

1) Reckitt & Colman of India Ltd. v. M.P. Ramchandran and Anr. 1999 PTC (19) 741

2) Reckitt & Colman of India ltd. v. Kiwi T.T.K. Ltd. 1996 PTC (16) 393

3) CM No. 2430/96 in FAO(OS) No. 261/96 decided on 23.7.1996.

4) Reckitt & Colman of India Ltd. v. M.P. Ramchandran and Anr. 1999 PTC (19) 741.

5) Pepsi Co. Inc. and Ors. v. Hindustan Coca cola Ltd. and Anr. 2003 (27) PTC 305 (Del.) (DB).

6) Dabur India Limited v. Emami Limited 2004 (29) PTC 1.

7) Karamchand Appliances Pvt. Ltd. v. Shri Adhikari Brothers and Ors. 2005 (2) R.A.J. 570 (Delhi)

2. I had occasion to discuss the subject with reference to the aforesaid judgments in the case of Godrej Sara Lee Ltd. v. Reckitt Benckiser (I) Ltd. reported as (2006) III D 398 and, therefore, I am indulging into the detailed discussion. Suffice it to state that in Reckitt & Colman of India Ltd. v. M.P. Ramchandran and Anr. (supra), following proposition of law was culled out:

(I) A tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.

(II) He can also say that his goods are better than his competitors', even though such statement is untrue.

(III) For the purpose of saying that his goods are the best in the world or his goods are better than his competitors' he can even compare the advantages of his goods over the goods of others.

(IV) He, however, cannot, while saying that his goods are better than his competitors', say that his competitors' goods are bad. If he says so, he really slanders the goods of his competitors. In other words he defames his competitors and their goods, which is not permissible.

(V) If there is no defamation to the goods or to the manufacture of such goods no action lies, but if there is such defamation an action lies and if an action lies for recovery of damages for defamation, then the Court is also competent to grant an order of injunction restraining repetition of such defamation.

3. Likewise, in Pepsi Co. Inc. and Ors. (supra), a Division Bench of this Court observed that the vast majority of the views of the commercial advertisement on electronic media are influenced by the visual advertisements as these have a far-reaching influence on the psyche of the people and, therefore, discrediting the product of a competitor through a commercial advertisement would amount to disparagement. After taking note of the legal position in UK and USA, the Court noted that in those countries comparative advertisement is permitted if the following conditions are met:

(a) It is not misleading according to Articles 2(2), 3 and 7(1).

(b) it compares goods or services meeting the same needs or intended for the same purpose.

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(c) it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price;

(d) it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor.

(e) it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services activities, or circumstances of a competitor;

(f) for products with designation of origin, it relates in each case to products with the same designation;

(g) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor of the designation of origin of competing products;

(h) it does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name.

4. 'Disparagement' was defined in the following manner:

What is disparagement. The New International Webster's Comprehensive Dictionary defines disparage/ disparagement to mean: "to speak of slightingly, under value, to bring discredit or dishonor upon, the act of depreciating, derogation, a condition of low estimation or valuation, a reproach, disgrace, an unjust classing or comparison with that which is of less worth, and degradation." The Concise Oxford Dictionary defines disparage as under: 'to bring dis-credit on, slightingly of and depreciate.'

In the electronic media the disparaging message is conveyed to the viewer by repeatedly showing the commercial everyday thereby ensuring that the viewers get clear message as the said commercial leaves an indelible impression in their mind. To decide the question of disparagement we have to keep the following factors in mind namely; (i) Intent of commercial (ii) Manner of the commercial (iii) Story line of the commercial and the message sought to be conveyed by the commercial. Out of the above, "manner of the commercial", is very important. If the manner is ridiculing or the condemning product of the competitor then it amounts to disparaging but if the manner is only to shown one's product better or best without derogating other's product then that is not actionable.

5. This principle of law, therefore, stands firmly established that disparaging advertisement, whereby the product of the competitor is denigrated, is not permissible. Law would consider any slanderous complaint or comment to be an actionable injury which the courts would step in to prevent in appropriate cases. Thus, in a given case the court is required to find out as to whether the advertiser is merely trying to promote his product for which even he is allowed to puff up his product and can even go to the extent of saying that his goods are better than his competitor's, but at the same time he cannot brand the competitor's product as bad. Keeping in view the aforesaid principles it is to be examined whether in the present case the impugned advertisement has crossed this Laxmanrekha.

6. The plaintiff is manufacturing and marketing various fast moving consumer goods (FMGC) such as soaps and detergents, personal products, foods and beverages. It is a subsidiary of Unipolar Plc, incorporated under the laws of United Kingdom, which is a multinational company having the most modern research centers and qualified manpower. Some of the FMGC Page 3648 products manufactured and marketed by the plaintiff in India are Lifebuoy, Lux, Surf, Vim, Rin, Pepsodent, Close-Up, Sunsilk, Clinic All Clear, Fair & Lovely, Brooke Bond, Lipton, Taj Mahal etc. In the present case, the product in question, which is allegedly brought into disrepute by the defendant is Lifebuoy soap. It is claimed that Lifebuoy, through extensive marketing network across the country and its intrinsic quality enjoys considerable goodwill and reputation among the Indian consumers. It is a global brand which was launched in the United Kingdom in the year 1894 and the oldest toilet soap brand in India.

7. The defendant No. 1 is also engaged in the manufacture and marketing of several FMCG. One of its product is toilet soap marketed under the brand name Dettol'. It is the TV commercial of the Dettol which is cause of concern to the plaintiff. The defendant No. 2 is the advertising agency, engaged by the defendant No. 1, which has produced the said TV commercial and, therefore, in that capacity it is also imp leaded. The said TV commercial is shown on various channels of Star India Pvt. Ltd. and as it is responsible for telecast of this TV commercial, the plaintiff has arraigned Star India Pvt. Ltd. as the defendant No. 4. The plaintiff has also imp leaded Prasar Bharati (Broadcasting Corporation of India) as the defendant No. 3 because of the reason that it is this statutory body which is responsible for informing and entertaining the public through public broadcasting service and mass development of broadcasting on radio and television and had issued and adopted a code of commercial advertising, which is to be followed by the advertisers.

8. The claim of the plaintiff is that its product Lifebuoy, which is India's oldest toilet soap brand, was and is a 'red coloured soap' and the red colour has become synonymous with Lifebuoy. The consumer and public at large also perceive the red colour to be synonymous with Lifebuoy because of its user for over 110 years, extensive marketing and sale. It is mentioned that red colour also figured on the lables of Lifebuoy toilet soaps, which is registered as trademark from the year 1943. The plaintiff is also showing red coloured toilet soap prominently in TV advertisements issued by it from time to time and continue to figure in the current TV advertisements. According to the plaintiff, the Indian consumers bestow trust on the soap, which is reflected in its leadership position as it had 18.6% market share in the year 2005 and it reaches nearly 70% of all Indian households in a year. Thus, according to the plaintiff, for mass market in India, Lifebuoy is synonymous with 'Lal Sabun'. It is also claimed that over the years, the plaintiff, who is an established player in the FMCG business, has built a substantial goodwill in its products. The products sold under the trademark Lifebuoy are the leading soap range in the country and have been developed into popular brands based on extensive investment and monetary commitments by the plaintiff over decades and through long and extensive usage and association with the customers. The intrinsic quality of the product, the care and skill exercised by the plaintiff and its agent marketing the same, moneys and labour expended by them for promoting sale of the product, brand Lifebuoy has come to be associated by the members of the trade and public exclusively with that of the plaintiff. It is stated that these products are being sold mostly in rural markets through retail outlets to the general public throughout India and are consumed by a large number of public who are literate, illiterate and also semi-literate who mostly connote the product of Red Soap with that of Lifebuoy.

Page 3649

9. In nutshell, the claim of the plaintiff is that the moment an ordinary person would see a red colour soap in any advertisement, he would imagine the same as Lifebuoy soap. It is for this reason the plaintiff's case is that the advertisement issued by the defendant No. 1 in respect of its product Dettol soap disparages the plaintiff's product Lifebuoy toilet soap. The TV commercial for Dettol toilet soap launched by the defendant No. 1 runs along the following lines:

(i) The TV commercial opens with a football floating in dirty water and a bunch of kids looking into a pool of dirty water in a construction pit at a construction site.

(ii) There are four kids huddled together in the TV commercial including a kid with glasses and a kid wearing a red cap, who are looking concerned, worried and upset at not being able to get the football from the middle of the construction pit at the construction site.

(iii) The four kids are wanted to take the football out of the construction pit at the construction site but are scared to do so since one of the boys says that he will drown. The other boy declines to get the football from the construction pit full of dirty water since they claim that they have just had a bath.

(iv) In direct contrast to the four scared boys, the fifth boy who represents and depicts Dettol soap of the defendant No. 1 is shown to be extremely confident and determined to get the football from the construction pit at the construction site full of dirty water. He goes into the pool and kicks the football out of the construction pit with the refrain: "Be Healthy, Live Strong". The four kids look sheepish and thank the Dettol boy.

(v) The frame shows four soaps including a green soap, brown soap and white soap in the background and a red soap (which looks similar to the red colour Lifebuoy bar soap) of the plaintiff. There is a prominent inscription, which says that as compared to the four soaps including Lifebuoy, Dettol soap of defendant No. 1 is "10 times better". There is an inscription at the bottom of the next three frames, which state in small letters: "As per Standard Testing Protocol". A boy is shown having a bath with Dettol soap, which is claimed to be 10 times better.

(vi) The TV commercial ends on the young boy lifting his mother who says: "That is the reason my family remains healthy and lives strong".

10. What is projected in the first four paragraphs above is not offensive to the plaintiff. It may be mentioned at this stage that though the plaintiff has stated that the depiction of the fifth boy as Hero, who depicts Dettol soap, is unethical inasmuch as it may cause heroic act of jumping into the pit full of dirty water harmful to the young kids of impressionable age, this submission was given up at the time of arguments. The main grievance is about the frame shown in sub-para (v) above where four other soaps in green, brown, white and red colours are shown and the advertisement shows that Dettol soap of the defendant No. 1 is 10 times better than those soaps. Admittedly, in none of these four coloured soaps name of any soap is inscribed. Only the plaintiff's soap bars with those colours are shown. However, contention of the plaintiff is that since red colour is synonymous with Lifebuoy, anybody watching the said commercial would get an impression that it is the Lifebuoy soap which is compared with Dettol and that Dettol is 10 times better than Lifebuoy as per the advertisement. In support of this plea, the plaintiff has produced on record a copy of the market share report of M/s. AC Nielsen and consumer report of IMRB. It is also stated that Lifebuoy is the only red coloured toilet soap with Page 3650 Trichlorocarbanilide (TCC). As per the report of M/s. AC Nielsen, Lifebuoy has a market share of 18% and red colour soap of Lifebuoy enjoys a market share of 15%. As per IMRB report, which conducted consumer survey of those who had seen the infringing Dettol TV commercial, showed that 80% of the consumers thought that red coloured soap shown therein is Lifebuoy. Thus, the contention of the plaintiff is that by making a statement that Dettol is '10 times better' while depicting other soaps including a lookalike of the Lifebuoy in red colour, the defendant No. 1 has disparaged the plaintiff's goods, namely, Lifebuoy red, which is clearly malicious or injurious falsehood and amounts to slander of the plaintiff's goods. It is further submitted that the statement '10 times better' than Lifebuoy red cannot be made because such an act cannot be justified against soaps without actives. The packaging material used by the defendant No. 1 says so in clear terms in the following manner:

New Modern Shape

Improved Formulations for Every Day Use

10 Times Better at Fighting Gems*

* as per standard testing protocol against soaps without actives.

11. It is also argued that the defendant No. 1 has accepted this position in para 9 of preliminary reply dated 6.6.2006. Reliance is placed on the judgments referred to above, as per which there can be an injunction against those advertisements which constitute disparagement. In addition, reliance is also placed on the decision of the MRTP Commission dated 16.9.2005 by which an order of injunction has been issued by the Commission wherein the Commission rejected the argument on behalf of the defendant therein that the advertisement was not directed against any particular product or person and held that since it disparaged the whole class of products, the complainant-petitioner was entitled to make a grievance against it being one member of that class. The aforesaid order of injunction was continued by the Hon'ble Supreme Court vide orders dated 15.12.2005 and 7.4.2006 in Civil Appeal No. 7188/2005. Pertinently the aforesaid proceedings were between the defendant No. 1 (complainant) and the plaintiff (respondent) therein. The defendant No. 1, therefore, cannot be permitted to urge entirely the same submissions, which when raised against it before the Commission, were negated. The defendant No. 1, having urged successfully that disparagement can take place even when the whole class of products are disparaged, is estopped from contending otherwise. It is also submitted that there is no justification by the defendant No. 1 in launching the advertisement in question and all the objections raised are of technical nature. Relying upon the judgment of the Supreme Court in Colgate Palmolive (I) Ltd. v. Hindustan Lever Limited , it is argued that such an attempt of the defendant No. 1 to convert these proceedings for injunction into a mini-trial deserve to be defeated. The plaintiff has shown a prima facie case and the balance of convenience demands an order of injunction.

12. The defendant No. 1 only has appeared and contested the prayer of grant of injunction. Preliminary reply dated 6.6.2006 is filed and various objections are taken refuting the averments made by the plaintiff and these are summarised by the defendant No. 1 in the following manner:

Page 3651

1. The Plaintiff is guilty of making false statements in the Plaint. In paragraph 11 (v) at Pg 11 the statement:

There is a prominent inscription, which says that as compared to the four soaps including Lifebuoy, Dettol soap of the Defendant No. 1 is "10 times better".

There is no such inscription in the advertisement.

2. In paragraph 15 of the Plaint the Plaintiff is guilty of making a wrong statement about the AC Nielson Report. In fact almoist 80 percent of the respondents did not think that the soap being removed is LIFEBUOY.

3. The first Plaintiff has failed to disclose the objectionable feature in the impugned advertisement has been on air since July 2005.

4. The following facts were necessary in a suit where the Plaintiff is attempting to establish an association of the red colour rectangular shape with the Plaintiff alone:

(i) Availability of third party products in identical rectangular shape and red colour including NIRMA and numerous others in the unorganized sector

(ii) Plaintiff's LIFEBUOY is available on 4 colours

(iii) Plaintiff themselves have changed the shape of their soap and LIFEBUOY is no longer rectangular in shape

(iv) Sales figures in Plaint for 2004 and 2005 in particular do not relate to red coloured rectangular soap but to 4 different coloured soaps in a shape other than rectangular

(v) The shape of the old LIFEBUOY soap is also different from the soap displayed in the Defendant's advertisement

5. The Plaintiff has failed to disclose that the red coloured LIFEBUOY also came in at least 3 formulations:

(i) The old red rectangular shape which did not contain TCC (LIFEBUOY).

(ii) The new shaped product in 4 colours with TCC (LIFEBUOY STRONG).

(iii) The new shaped product in 4 colours with TCC and a new formulation (LIFEBUOY TOTAL). According to the latest report DETTOL is significantly better than the new formulation LIFEBUOY.

To state this in the Plaint was extremely important because admittedly the DETTOL soap now advertised in the impugned advertisement is at least 10 times more efficacious than the soaps mentioned under (i) and (ii) above.

6. The report comes to a conclusion on disparagement when it is not competent to come to such a conclusion.

7. In the "warm up question" the respondents are shown 4 soaps only to tutor the respondents.

8. The following responses are relevant which support the first Defendant's case -

Chart 2 on page 91 - questions on scene of soap being removed.

(i) 20% of the Respondents (15 out of 75) did not even notice the scene of the soap being removed.

(ii) Of the remaining 80% respondents (60) 67% (40.2) did not think that any soaps being removed were of a particular brand.

Page 3652

(iii) Of the remaining Respondents only 16 respondents thought that one of the soaps being removed was LIFEBUOY. Conclusion: Only 16 out of 75 respondents who are "core users of LIFEBUOY" thought that one of the soaps being removed was LIFEBUOY. This constitutes only 21.33% of the respondents.

Chart 1 on page 92 - questions on the voice over "10 Times Better

(i) Out of 75 respondents over 62% did not think that the expression "10 Times Better" was referring to any particular brand.

(ii) Only about 26 respondents felt that the expression "10 Times Better" was referring to LIFEBUOY.

9. The report does not disclose which LIFEBUOY soap was shown. Which colour, which shape?

10. The report is even otherwise tutored. 70% of the respondents think that the two other boys in the advertisement also had a bath with DETTOL (first panel on pg. 91). AC Nielson concludes that "this portion of the ad isn't actually clear w.r.t. its intent". The basis of this conclusion is tutoring rather than based upon respondent responses. What this clearly establishes is that over 70% of the respondents did not perceive that the other boys did not jump into the dirty pool on account of their having had a bath with an inferior soap.

11. All aspects of which a complaint has been made also appear in the Plaintiff's advertisement:

(i) The Plaintiff's advertisement also shows a pink coloured soap being discarded by the protagonist in favor of LIFEBUOY.

(ii) The Plaintiff's product also makes a claim that it is "100% better than other soaps".

(iii) While the making the claim of being 100% better the comparison is made with soaps "without actives".

(iv) In their advertisement where they use 100% there is no mention that the comparison is with soaps "without actives".

12. There is truth in the statement that DETTOL is 10 times more efficacious than soaps without Actives.

13. The soaps displayed in the advertisement are unbranded soaps and do not display any particular brand.

14. Even vis-a-vis the old LIFEBUOY soap which was without additives and even their old formulation i.e. LIFEBUOY STRONG with additives there is evidence to show that DETTOL is 10 times more efficacious.

15. Even if DETTOL was not 10 times more efficacious, such a claim would at best be merely "puffing" and not product disparagement.

13. I have given due consideration to the submissions made by counsel for both the parties. Shorn of all technicalities, the moot question is as to whether the advertisement of the defendant No. 1 disparages the plaintiff's product Lifebuoy. As mentioned above, in the advertisement where soaps of other colours are discarded and it is shown that Dettol soap is superior and '10 times better' than other soaps, name of the plaintiff's soap Lifebuoy is not specifically mentioned. These are all four coloured soaps including red colour. The attempt of the plaintiff is to show that the moment red colour is shown, it is perceived by the general public and masses as Lifebuoy. Whether this claim is prima facie substantiated? After analysing the entire material on record and watching the TV commercial in question, Page 3653 I am of the opinion that it is not so. This prima facie opinion is based on the following factors:

(a) As per the plaintiff's own showing, it has 18% market in toilet soaps out of which market share of red coloured soap is 15%. One cannot claim itself to be the market leader with 18% or 15% share.

(b) There are many other soaps available in the market in red colour. Even the plaintiff's Lifebuoy is available in four colours and is not confined to red colour exclusively.

(c) Even as per AC Nielson Report, 16 out of 75 respondents thought that one of the soaps being removed was Lifebuoy, which constitutes only 21.33% of the respondents. These respondents were those who are 'core users of Lifebuoy'.

(d) The four coloured soap bars, which are being removed, appear to be ordinary soaps and not branded soaps like Lifebuoy. It is a matter of record that normally the unbranded soaps which are available in the market bear red colour. Therefore, after watching the TV commercial, one gets an impression that the soaps which are removed are ordinary and cheap quality unbranded soaps available in the market and it is not the good quality soap like Lifebuoy which is being disparaged.

14. Even the remote possibility of red coloured soap, identifying with Lifebuoy, is also removed when soaps being removed are in as many as four colours. Things would have been different had it been a soap of red colour alone being removed in the advertisement. The overall impression one gets is that there are certain unbranded soaps available in the market which are being removed. Learned Counsel for the defendant No. 1 has produced photographs to show that such soaps, including green, brown, white and red coloured soaps, are available in the market and red colour is prominent for unbranded soaps.

15. The statement in the advertisement that Dettol is 10 times more efficacious is in comparison with those soaps which are without actives. Therefore, this statement would not have any reference to the plaintiff's Lifebuoy soaps and even otherwise the said statement is claimed to be true by the defendant No. 1 and the plaintiff could not dispute that if Dettol soap is to be compared with soaps without actives, then this statement is factually correct. Further, in any case, when it is not disparaging any product in particular, such a claim would, at best, be merely puffing the defendant's product Dettol, which is permissible.

16. It was also the submission of learned Counsel for the defendant No. 1 that the plaintiff has approached this Court belatedly inasmuch as the defendant No. 1 introduced its Dettol soap with actives and launched the advertisement campaign in July 2005 and the present suit was filed only in June 2006. It was submitted in this behalf that the advertisement launched in July 2005, though some what different in nature, did make a claim that it was '10 times better' and the plaintiff has chewed said campaign without making protest and, therefore, it could not file this suit when identical claim is made in another TV commercial of the defendant No. 1. However, as I have held that present campaign of the defendant No. 1, prima facie, does not amount to disparaging the plaintiff's product Lifebuoy, it is not necessary to go into this issue.

17. In view of the aforesaid, this application is dismissed.