Delhi High Court
Horlicks Ltd. & Anr vs Heinz India Private Limited on 17 December, 2018
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 808/2017
HORLICKS LTD. & ANR ..... Plaintiffs
Through Mr. Chander M. Lall, Senior
Advocate with Mr. Ajay Bhargava,
Mr. Ankur Sangal, Ms. Sucheta Roy
and Ms. Richa Bhargava, Advocates.
versus
HEINZ INDIA PRIVATE LIMITED ..... Defendant
Through Mr. Amit Sibal, Senior Advocate with
Mr. Sagar Chandra, Mr.Ankit Rastogi
and Mr. Bibhunanda Mishra,
Advocates.
Reserved on : 02nd November, 2018
% Date of Decision: 17th December, 2018
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J:
I.A. 13793/2017
1. Present suit has been filed for damages and permanent injunction
restraining infringement, disparagement and unfair trade practices against
the defendant. With consent of the parties, I.A. No.13793/2017, filed under
Order XXXIX Rules 1 & 2 CPC, was taken up for hearing and disposal.
The prayer clause in the application is reproduced hereinbelow:-
"A. The Defendant, its directors, principals, proprietors,
partners, officers, employees, agents, distributors, franchisees,
representatives and assigns be restrained by an ex-parte ad-
interim and interim injunction from:
i) Issuing or otherwise howsoever, communicating to the
public or publishing the Impugned advertisement or any
part thereof or any other advertisement of a similar nature
in any language or in any manner causing the Impugned
advertisement or any part thereof or any other
advertisement of a similar nature to be published or
broadcast or communicated to the public or published in
any media including digital/electronic or social media or in
any other manner disparaging the goodwill and reputation
of the Plaintiffs and their products sold under the trade
mark HORLICKS;
ii) Using the depiction of the Plaintiffs' registered trademark
HORLICKS or any other trademark or indication/product
which is deceptively similar to that of the Plaintiffs' in its
advertisement or in any other manner disparaging the
goodwill and reputation of the Plaintiff and its product sold
under the trade mark HORLICKS;
iii) using any other indicia whatsoever to associate with/depict
the Plaintiffs or their products in its advertisements issued
in any and all media whatsoever including the electronic
media;
B. Costs of the application be awarded to the Plaintiffs; and
C. Any other relief which the Hon'ble Court thinks fit and
proper in the circumstances of the case be allowed in
favour of the Plaintiffs and against the Defendants."
RELEVANT FACTS
2. The relevant facts of the present case are that plaintiff No.2, under
license from the plaintiff No.1, has extensively used the mark HORLICKS
in India since the past many decades and the revenue generated by the
plaintiff No.2 in the year 2017 (Ten Months) was Rs.2668 crores and the
expenditure on advertising and promoting the product HORLICKS for the
same period was Rs.425 crores.
3. Further, the plaintiff No.1 is the registered proprietor of the trade
mark HORLICKS in India under Classes 25, 28, 29, 30 and 32 of the Trade
Marks Act, 1999.
4. It is averred in the plaint that on 11th November, 2017, it came to the
plaintiffs‟ knowledge that that the defendant had published an advertisement
for its COMPLAN branded product in the newspaper „Telegraph‟ (Kolkata
as well as Patna Edition), which intentionally and deliberately disparaged
the plaintiffs‟ health food drink product HORLICKS. The impugned
advertisement is reproduced hereinbelow:-
ARGUMENTS ON BEHALF OF THE PLAINTIFFS
5. Mr. Chander M. Lall, learned senior counsel for plaintiffs stated that
the plaintiffs manufacture and market a health food drink under the trade
mark HORLICKS which, as of October, 2017, had 43.9% market share in
the 'Health Food Drinks' category. He stated that the impugned
advertisement compared one cup of COMPLAN with two cups of
HORLICKS and had a disclaimer at the bottom of the page, which stated
that "One cup of Complan (33g) gives 5.94g of protein while two cups of
Horlicks (27*2=54g) gives 5.94g of protein basis recommended pack
dosage...." He stated that the disclaimer in the impugned advertisement was
not an integral part of the advertisement and the font size of the super did
not comply with the ASCI guidelines regarding font size requirements for a
disclaimer.
6. Learned senior counsel for the plaintiffs contended that the impugned
advertisement wrongly stated that the amount of protein in the defendant's
product was double the amount of protein in the plaintiffs' product. He
stated that the serving size of COMPLAN had been manipulated to have
double the protein of HORLICKS.
7. He emphasised that the defendant's claim that one cup of COMPLAN
had an equal amount of protein in comparison to two cups of HORLICKS
was untrue and misleading. He stated that the defendant had not compared
HORLICKS and COMPLAN taking into account the amount of protein per
100 grams, as per normal market practice. He stated that if the comparison
of protein in COMPLAN and HORLICKS was made per 100 grams, then
the same would not be double. He pointed out that the defendant had itself
admitted in its written statement that COMPLAN had 18 grams of protein
per 100 grams, whereas HORLICKS had 11 grams of protein per 100 grams,
and hence the defendant had made a false statement that the amount of
protein in defendant's product was double the amount of protein in plaintiffs'
product.
8. Learned senior counsel for plaintiffs stated that even if the defendant
wanted to compare the two products i.e. HORLICKS and COMPLAN on the
basis of 'per serving' size, then it should have taken into account the method
of preparation of both the products. He stated that as per the suggested
method of preparation of both the Health Food Drinks, the defendant
recommended having 33 grams of COMPLAN in 150 ml. of milk, which
provided 10.9 grams of protein, whereas the plaintiffs recommended having
27 grams of HORLICKS in 200 ml. of milk, which provided 9.37 grams of
protein. He contended that if the comparison was made between the two
health food drinks on the basis of recommended method of preparation, the
claim of the defendant that one glass of COMPLAN which had 10.9 grams
of protein was equal to two glasses of HORLICKS which had 18.74 grams
of protein was wrong, untrue and misleading. He stated that the visual of
same sized cups was therefore wrong and the visual of one cup of
COMPLAN being equal to two cups of HORLICKS was to attract the
maximum consumer interest. This, according to Mr. Lall, also violated
Clause 6 of CODEX Guidelines for Use of Nutrition and Health Claims
(CAC/GL 23-1997) (hereinafter referred to as "CODEX Guidelines") which
pertained to 'Comparative Claims'. He stated that the CODEX Guidelines
prescribed "taking into account further preparation required for consumption
according to the instructions for use on the label." He pointed out that
Clause 6.2.1 of the CODEX Guidelines stipulated that, for comparative
claims, where the amount of difference related to the same quantity and was
expressed as a percentage fraction, or an absolute amount, then full details
of the comparison had to be given. He submitted that though there was no
bar in law to show 'per serving' information on packaging, but where there
was a comparison, then 'per serving' comparison was not permissible in any
country nor was it permissible under the CODEX Guidelines.
9. He stated that the impugned advertisement also wrongly showed a
direct correlation between the amount of protein consumed and growth in a
child. He contended that the impugned advertisement over emphasized the
benefits of protein and by comparing only one ingredient i.e. protein, was
trying to misguide consumers into believing that consumption of the
defendant's product directly leads to growth.
10. Learned counsel for the plaintiffs stated that the nutritional claim in
the impugned advertisement of being "2 times more" in relation to other
nutrients like phosphorus, Vitamin E, Biotin, Potassium, Pantothenate and
other such nutrients was false. He submitted that "advertisements are not to
be read as a testamentary provision in a will" and many consumers were
likely to be misled into simply seeing the depiction that the defendant's
product had double the nutrition as the plaintiffs' product. He contended that
nutrition was the very basis on which both HORLICKS and COMPLAN
were purchased by the consumers and any attack on the nutritional attributes
of the plaintiffs‟ product was a direct attack on the most essential attribute of
HORLICKS and the same was therefore impermissible.
11. Learned senior counsel for the plaintiffs stated that the defendant's
tagline "From Now On, Only Complan" was not a mere promotional
statement and the said tagline sought a rejection of HORLICKS over
COMPLAN. He stated that the impugned advertisement directly attacked
the nutritional content of the plaintiffs‟ product which was a nutritional
health food drink and such claim of the defendant was no different from the
claims "Forget Chyawanprash in summers, Eat Amritprash instead" [see
Dabur India Limited v Emami Limited, (2004) 112 DLT 73], "You need a
true pain reliever" (see Paras Pharmaceuticals Ltd. Vs. Ranbaxy
Laboratories Ltd., AIR 2008 Guj 94), "No More Good Days only Great
Days. Why have a good day, when you can have a great day" (see Unibic
Biscuits India Pvt. ltd. Vs. Britannia Industries Limited, MIPR 2008 (3)
347), all of which had been restrained by this Court.
12. Learned senior counsel for plaintiffs further stated that the defendant's
impugned advertisement was violative of the previous orders passed by the
ASCI. He pointed out that said orders had attained finality and the
defendant was bound by such orders. The orders referred to by learned
senior counsel for plaintiffs are as under:-
(i) The claim "Best Ever Formula Complan" was found by the
ASCI to be misleading by implication that it was the best product as
compared to other product formulae in the market (referred as X and Y).
(ii) In respect of the defendant's claim "2X faster growth" ASCI
had held that the increase being depicted in the pack visuals was an absolute
height of 2X, whereas the clinical study was about 2X increase (incremental
growth). This was found to be misleading by exaggeration and was found to
be objectionable.
(iii) With respect to the claim "Naye best ever Complan ke ek cup
me hain India ke do leading health drinks se bhi zyada growth protein"
accompanied with the visual of COMPLAN = Brand X + Brand Y and
calling protein as "growth protein" while making a comparison with the
product X and Y, was found to be misleading by implication and thus
objectionable.
13. Learned senior counsel for plaintiffs stated that the use of the
plaintiffs' mark by the defendant violated Sections 29(8) and 30(1) of the
Trade Marks Act, as the same did not permit use of a trade mark in an
advertisement which took unfair advantage of and was contrary to honest
practices in industrial or commercial matters or was detrimental to its
distinctive character or was against the reputation of the trade mark. He
stated that the HORLICKS brand is a market leader and COMPLAN has a
minimal share in the market and the plaintiffs had painstakingly developed
the goodwill associated with their HORLICKS brand and the defendant was
trying to take unfair advantage of it by wrongly comparing its product with
the plaintiffs' product.
14. Learned senior counsel for plaintiffs submitted that the fundamental
right to freedom of speech under Article 19(1)(a) of the Constitution of India
(for short „Constitution‟) is only available to a citizen of India and not to a
corporate entity like the defendant. He stated that till date there had been no
decision which discussed whether Article 19(1)(a) of the Constitution could
be availed by a corporate entity and according to him, the decision in Tata
Press Ltd. Vs. Mahanagar Telephone Nigam Ltd. & Ors., AIR 1995 SC
2438 was per incuriam. He pointed out that in Allagapuram R. Mohanraj
& Ors. Vs. Tamil Nadu Legislative Assembly, AIR 2016 SC 867, the
Supreme Court had categorically held that while Article 21 of the
Constitution was available to every person, the rights under Article 19 of the
Constitution were available to a citizen of India only. He submitted that the
judgment in Tata Press Ltd. (supra) was contrary to the judgment in
Hamdard Dawakhana (Wakf) Lal Kuan, Delhi and Another Vs. Union of
India and Others, AIR 1960 SC 554 wherein it had been held that the right
to publish and distribute commercial advertisements advertising an
individual's personal business could not be a part of freedom of speech
guaranteed by the Constitution. He further submitted that since the
impugned advertisement was a pure product promotion exercise, the
defendant did not have an inherent right under Article 19(1)(a) and/or the
public did not acquire any inherent right to receive such promotional
material as the defendant was claiming to provide.
15. He submitted that under Article 21 of the Constitution, the plaintiffs
had a right to restrict commercial use of its mark which denigrated its
goodwill and reputation in its mark. He submitted that the Supreme Court in
K.S. Puttaswamy & Anr. Vs. Union of India (2017) 10 SCC 1 had held that
Article 21 of the Constitution provided a person a right to control
commercial use of his/her identity and stated that the said right would also
apply to a corporate entity like the plaintiff. The relevant portion of the
judgment in K.S. Puttaswamy & Anr. Vs. Union of India (2017) 10 SCC 1
relied upon by Mr. Lall is reproduced hereinbelow:-
"625. Every individual should have a right to be able to
exercise control over his/her own life and image as portrayed
to the world and to control commercial use of his/her identity.
This also means that an individual may be permitted to prevent
others from using his image, name and other aspects of his/her
personal life and identity for commercial purposes without
his/her consent. [ The Second Circuit's decision in Haelan
Laboratories Inc. v. Topps Chewing Gum Inc., 202 F 2d 866
(2d Cir 1953) penned by Jerome Frank, J. defined the right to
publicity as "the right to grant the exclusive privilege of
publishing his picture".]
626. Aside from the economic justifications for such a right, it
is also justified as protecting individual autonomy and personal
dignity. The right protects an individual's free, personal
conception of the "self". The right of publicity implicates a
person's interest in autonomous self-definition, which prevents
others from interfering with the meanings and values that the
public associates with her. [ Mark P. McKenna, "The Right of
Publicity and Autonomous Self-Definition", 67 U PITT L REV
225 at p. 282 (2005).]"
ARGUMENTS ON BEHALF OF THE DEFENDANT
16. At the outset, Mr. Amit Sibal, learned senior counsel for defendant
stated that the defendant, on its own initiative, had modified the impugned
advertisement. He undertook that the defendant would publish the modified
advertisement in future and not the advertisement impugned in the present
plaint. The undertaking given by Mr. Amit Sibal is accepted by this Court
and defendant is held bound by the same. The modified advertisement is
reproduced hereinbelow:-
17. Learned senior counsel for defendant stated that the advertisement of
the defendant gave a visual comparison of the protein content for each
product based on respective recommended 'per serving' size. He stated that
the recommended serving size of 33 grams for the defendant's product had
not been altered since the year 1934. He contended that the current
comparison of the protein content for each product on the basis of
recommended 'per serving' size was the most accurate, true and verifiable
method of comparison. He submitted that 'per serving' had been recognized
in the Food Safety and Standards Act, 2006 and Food Safety and Standards
(Packaging and Labelling) Regulations, 2011 (for short "Regulations,
2011").
18. He stated that the impugned advertisement showed that the protein
content of one cup of COMPLAN was equal to protein content of two cups
of HORLICKS along with the disclaimer which stated that one cup of
COMPLAN (recommended 'per serving' size of 33g) provided 5.94g of
protein whereas two cups of HORLICKS (recommended 'per serving' size of
27g each) provided 5.94g of protein. He stated that the intent of the
impugned advertisement was to educate the consumers about the protein
content of both the products in accordance with the recommended „per
serving‟ size provided by the parties on their packaging. He stated that the
impugned advertisement was neither disparaging nor defamatory and
provided an accurate, true, verifiable and representative comparison to the
consumers.
19. Learned senior counsel for defendant clarified that the disclaimer
complied with the ASCI requirement for 'comparative claims' as it had been
positioned immediately next to or immediately below the claim. He
emphasised that in the modified advertisement, the disclaimer had been
made an integral part of the advertisement and prominently displayed.
20. Mr. Amit Sibal stated that both products were meant to be consumed
as per recommended „per serving‟ size. Learned senior counsel for
defendant stated that the argument canvassed by the plaintiffs that
comparison ought to be after inclusion of Milk in the two products was
incorrect for the following reasons:-
i. Because the protein content of the beverages would change every
time, depending upon the type of milk used by the consumer. The
defendant had no control over the type of the milk used by the consumer.
He referred to the following table to illustrate the Protein content in
various types of milks:
Cow
Component Unit Whole Reduced Low Skim Goat Sheep Water
(3.25% Fat (2% Fat Buffalo
fat) fat) (1%
fat)
Protein Grams 7.86 8.05 8.22 8.26 8.69 14.65 9.15
ii. Consumers did not associate milk product either with the plaintiffs or
the defendant and therefore the consumers would not read the
Advertisement keeping in mind the said association;
iii. The plaintiffs on their packaging recommend consumption of their
product on a per serving basis along with either milk or water and it is an
admitted position that water has no protein; and
iv. It was not the plaintiffs' case that the quantity of serving size would
change in accordance with the solvent (Milk or Water) used by the
consumer for preparing the drink. This, according to him, negated the
argument of the plaintiffs that the comparison in the present advertisement
ought to be on the basis of the milk added to the recommended per serving.
21. He further stated that jurisdictions such as India, Australia, New
Zealand, Canada and United States of America recognize per serving as
nutritionally and analytically significant.
22. Learned senior counsel for defendant stated that a comparative
advertisement by its very name and nature was a comparison between two
competing products and the trade mark of each of the competing product
had to be displayed for the consumers to identify the brands sought to be
compared and such use of the competitor's trade mark was allowed under
Section 30(1) of the Trade Marks Act, 1999.
23. Learned senior counsel for the defendant emphasised that the primary
objective of Sections 29(8) and 30(1) of the Trade Marks Act, 1999, was to
allow comparative advertisement as long as the use of the competitor's mark
was honest. He submitted that the use of the plaintiffs' mark HORLICKS by
the defendant was honest and the impugned advertisement of the defendant
only compared the product on a parameter, i.e. „protein content‟, which was
material, relevant, verifiable and representative and such comparison was
factually true and correct. He stated that mere trade puffery, even if
uncomfortable to the registered proprietor of the trade mark, would not bring
the advertisement within the scope of the trade mark infringement. In
support of his contention, he relied upon Havells India Ltd. Vs. Amritanshu
Khaitan, 2015 (62) PTC 64 (Del).
24. Learned senior counsel for the defendant stated that the depiction of
per serve of both the drinks by way of cups was covered under creative
latitude to effectively communicate a message to the consumers. He stated
that "From Now On, Only Complan" was a mere promotional statement,
i.e., to encourage and urge consumers to purchase the product of the
defendant. He stated that the said statement was not a statement of fact and
that the plaintiff was being hyper sensitive by canvassing such a proposition
of fact or law.
25. Learned senior counsel for the defendant stated that ASCI had
rejected the objection of the plaintiffs, raised in its complaint dated 15th
September, 2017, with respect to use of „Best Ever‟ by COMPLAN and
found „Best Ever Complan‟ was not objectionable. He further stated that the
plaintiff had failed to mention that the defendant had added the following
disclaimer in the impugned advertisement: "Best Ever Formula Complan
refers to Best Ever Formula from Complan" and therefore "Best Ever
Formula Complan" was not misleading by implication and not
objectionable.
26. Learned counsel for the defendant stated that the 2X appearing on the
pack in the print advertisement of the present suit had been clarified as "2X
faster growth clinically proven", which was a true, verifiable and
sustainable claim. He stated that ASCI found the following comparison
regarding the 2X absolute increase objectionable qua the following
comparison . However, the depiction in front of the
COMPLAN pack was not found to be misleading by ASCI.
27. Learned senior counsel for the defendant stated that the ASCI did not
hold that comparison of COMPLAN per se with product X & Y or the use
of the term "Growth Protein" to be objectionable. He contended that the
ASCI held the use of the term "Growth Protein" along with comparison with
product X and Y in the sentence "Naye best ever Complan ke ek cup me hain
India ke do leading health drinks se bhi zyada growth protein" to be
misleading only in conjunction with the unverifiable claim "Clinically
Proven for 2X growth". He stated that the claim considered by the ASCI
was a different claim and not the same as "2X Faster growth Clinically
proven" as was depicted in front of the packaging of the defendant's product
COMPLAN. He further stated that the term "Growth Protein" and the
unverifiable claim "2X Faster growth Clinically proven" were not present in
the impugned advertisement and the comparison made in the impugned
advertisement was of the protein content in both products 'per serving' size
which was a true, verifiable and accurate comparison.
COURT'S REASONING
ADVERTISEMENT IS A FACET OF COMMERCIAL SPEECH WHICH IS
PROTECTED BY ARTICLE 19(1)(a) AND THE SAME CAN BE
RESTRICTED ONLY IN ACCORDANCE WITH LAW ENACTED UNDER
ARTICLE 19(2) OF THE CONSTITUTION. THE SUBMISSION THAT
TATA PRESS (SUPRA) IS PER INCURIAM IS UNTENABLE IN LAW.
28. This Court is of the opinion that advertisement is a facet of
commercial speech which is protected by Article 19(1)(a) of the
Constitution. The same can be restricted only in accordance with law
enacted under Article 19(2) of the Constitution. In a democratic country,
free flow of commercial information is indispensable and the public has a
right to receive the commercial speech. In fact, the protection given to an
advertisement under Article 19(1)(a) of the Constitution is a necessary
concomitant of the right of the public to receive the information in the
advertisement.
29. In Tata Press (supra), the Supreme Court, after considering its earlier
judgment in Hamdard Dawakhana (Wakf) Lal Kuan, Delhi and Another
(supra), equated commercial advertisement to free speech and held that a
corporate entity is entitled to protection under Article 19(1)(a) of the
Constitution.
30. Further, the Supreme Court in Bennett Coleman & Co. & Ors. Vs.
Union of India, (1972) 2 SCC 788 has held that fundamental rights of
shareholders as citizens are not lost when they associate to form a company.
The reason is that the shareholders' rights are equally and necessarily
affected if the rights of a company are affected. In any event, the
defendant's right under Article 19(1)(a) of the Constitution cannot depend on
whether the plaintiff, who alleges disparagement, makes the shareholders of
the defendant company a party to the suit or not.
31. The plaintiffs' submission that Tata Press (supra) is per incuriam is
untenable in law. The Supreme Court in South Central Railway Employees
Cooperative Credit Society Employees Union Vs. B. Yashodabai and
Others, (2015) 2 SCC 727 has held that it is not open to a High Court to
hold that Supreme Court judgment is per incuriam. The relevant portion of
the said judgment reads as under:-
"14. We are of the view that it was not open to the High Court
to hold that the judgment delivered by this Court in South
Central Railway Employees Coop. Credit Society Employees'
Union v. Registrar of Coop. Societies [South Central Railway
Employees Coop. Credit Society Employees' Union v. Registrar
of Coop. Societies, (1998) 2 SCC 580 : 1998 SCC (L&S) 703]
was per incuriam.
15. If the view taken by the High Court is accepted, in our
opinion, there would be total chaos in this country because in
that case there would be no finality to any order passed by this
Court. When a higher court has rendered a particular decision,
the said decision must be followed by a subordinate or lower
court unless it is distinguished or overruled or set aside. The
High Court had considered several provisions which, in its
opinion, had not been considered or argued before this Court
when CA No. 4343 of 1988 was decided [South Central
Railway Employees Coop. Credit Society Employees'
Union v. Registrar of Coop. Societies, (1998) 2 SCC 580 : 1998
SCC (L&S) 703] . If the litigants or lawyers are permitted to
argue that something what was correct, but was not argued
earlier before the higher court and on that ground if the courts
below are permitted to take a different view in a matter,
possibly the entire law in relation to the precedents and ratio
decidendi will have to be rewritten and, in our opinion, that
cannot be done. Moreover, by not following the law laid down
by this Court, the High Court or the subordinate courts would
also be violating the provisions of Article 141 of the
Constitution of India."
JUDGMENT IN K.S. PUTTASWAMY & ANR.(SUPRA) IS INAPPLICABLE
TO THE FACTS OF THE PRESENT CASE.
32. This Court is also of the view that the judgment in K.S. Puttaswamy
& Anr. (supra) was rendered in relation to the right of a person to claim
privacy which includes rights in relation to commercial use of identity of
such person. However, the right to privacy cannot be asserted against
information that is already in the public domain. The product packaging of
HORLICKS freely disseminates the information used in the impugned
advertisement. Moreover, the Supreme Court in the said judgment did not
ban or prohibit comparative advertisements. Consequently, the judgment in
K.S. Puttaswamy & Anr. (supra) is inapplicable to the facts of the present
case.
THIS COURT IN HAVELLS INDIA LTD. & ANR. VS. AMRITANSHU
KHAITAN & ORS., (SUPRA) HAS HELD THAT THOUGH IN
COMPARATIVE ADVERTISING A CERTAIN AMOUNT OF
DISPARAGEMENT IS IMPLICIT, YET THE SAME IS LEGAL AND
PERMISSIBLE SO LONG AS IT DOES NOT MISLEAD.
33. This Court in Havells India Ltd. & Anr. Vs. Amritanshu Khaitan &
Ors., (supra) after defining what is advertising and comparative advertising
has held that though in comparative advertising a certain amount of
disparagement is implicit, yet the same is legal and permissible so long as it
does not mislead. The relevant portion of the said judgment is reproduced
hereinbelow:-
"26. In the opinion of this Court, Comparative advertising is legal
and permissible as it is in the interest of vigorous competition and
public enlightenment. In fact, Chapter IV of the ASCI Code, relied
upon by the plaintiffs, itself specifically deals with Comparative
Advertising. The relevant portion of the ASCI Code reads as under:-
"CHAPTER IV
To ensure that Advertisements observe fairness in competition such
that the Consumer‟s need to be informed on choice in the Market-
Place and the Canons of generally accepted competitive behaviour
in Business are both served.
1. Advertisements containing comparisons with other
manufacturers or suppliers or with other products including those
where a competitor is named, are permissible in the interest of
vigorous competition and public enlightenment provided:
(a) It is clear what aspects of the advertiser‟s product are being
compared with what aspects of the competitor‟s product.
(b) The subject matter of comparison is not chosen in such a way
as to confer an artificial advantage upon the advertiser or so as to
suggest that a better bargain is offered than is truly the case
(c) The comparison are factual, accurate and capable of
substantiation.
(d) There is no likelihood of the consumer being misled as a
result of the comparison, whether about the product advertised or
that with which is compared.
(e) The advertisement does not unfairly denigrate, attack or
discredit other products, advertisers or advertisements directly or
by implication."
27. In O2 Holdings Ltd.& Anr. v. Hutchison 3G UK Ltd, Court
of Justice of the European Communities [2009] Bus. L.R. 339, has
held that the use in advertising of a sign similar to a competitor‟s
trade mark is one of the ways of identifying that competitor or that
competitor‟s goods or services, at least by implication, within the
meaning of Article 2(2a) of European Union, Council Directive
84/450. It has further been held that where the proprietor of a trade
mark seeks to contest the use in comparative advertising of a sign
similar to that trade mark, he must base his own claim on the breach
of one of the conditions laid down in Article 3a of Directive 84/450.
Article 3a(1) of Directive 84/450 [as inserted by Article 1(4) of
Directive 97/55] reads as under:-
"Comparative advertising shall, as far as the comparison is
concerned, be permitted when 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, (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, "344 (g) it does not take unfair advantage of the
reputation of a trade mark, trade name or other distinguishing
marks of a competitor or 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."
28. However, comparative advertising can be resorted to only
with regard to like products. After all one cannot compare apples and
oranges. In the opinion of this Court, comparative advertising is
permitted when the following conditions are met:-
(i) goods or services meeting the same needs or intended for the
same purpose;
(ii) one or more material, relevant, verifiable and representative
features (which may include price); and
(iii) products with the same designation of origin (where
applicable).
29. It is pertinent to mention that in Win Medicare Ltd. vs.
Reckitt Benckiser India Ltd. (supra), the comparative advertising was
stayed as it compared two incomparable products namely, Betadine
sold in standardised solution and Dettol sold in concentrated form.
Further, it compared the petitioner‟s Betadine product without testing
it for all the specific parameters mentioned in the chart.
Consequently, the judgment in Win Medicare Ltd. vs. Reckitt
Benckiser India Ltd. (supra) offers no assistance to the plaintiffs.
xxx xxx xxx
36. A comparison, which is unfavourable to a competitor, does
not necessarily mean that it is dishonest or unduly detrimental. A
Division Bench of this Court in Colgate Palmolive Company & Anr.
vs. Hindustan Unilever Ltd., 2014 (57) PTC 47 [Del](DB] has held
that in comparative advertising, a certain amount of disparagement is
implicit and as long as the advertisement is limited only to puffing,
there can be no actionable claim against the same. The relevant
portion of said judgment reads as under:-
"27. The law relating to disparaging advertisements is now well
settled. While, it is open for a person to exaggerate the claims
relating to his goods and indulge in puffery, it is not open for a
person to denigrate or disparage the goods of another person. In
case of comparative advertisement, a certain amount of
disparagement is implicit. If a person compares its goods and
claims that the same are better than that of its competitors, it is
implicit that the goods of his competitor‟s are inferior in
comparison.
To this limited extent, puffery in the context of comparative
advertisement does involve showing the competitor‟s goods in a
bad light. However, as long as the advertisement is limited only to
puffing, there can be no actionable claim against the same......
37. The judgment of Glaxosmithkline Consumer Healthcare Ltd.
(supra) relied upon by learned counsel for plaintiffs is clearly
distinguishable as in that case the plaintiff‟s product had been called
„cheap‟ by the defendant, which expression was held to denigrate and
disparage plaintiff‟s product. It is settled law that an advertiser can
call his product the best, but at the same time, cannot rubbish the
products of a competitor.
COMPETITORS CAN CERTAINLY COMPARE BUT CANNOT
MISLEAD
38. In the opinion of this Court, the purpose of the provisions in
the Act, 1999 and the ASCI Code which lists the conditions under
which comparative advertising is permitted is to stimulate competition
between suppliers of goods and services to the consumer‟s advantage,
by allowing competitors to highlight objectively the merits of the
various comparative products while, at the same time, prohibiting
practices which may distort competition, be detrimental to
competitors and have an adverse effect on consumer choice.
39. This Court is of the view that it is duty bound to interpret the
Act, 1999 and the ASCI Code in a sense favourable to comparative
advertising while at the same time always ensuring consumers are
protected from possibly misleading advertising.
MISLEADING ADVERTISING
40. Misleading advertising has been defined in Article 2(2) of the
European Union Council Directive 84/450 as "any advertising which
is in any way, including its presentation, deceives or is likely to
deceive the persons to whom it is addressed or whom it reaches and
which, by reason of its deceptive nature, is likely to affect their
economic behaviour or which, for those reasons, injures or is likely to
injure a competitor."
41. This Court is also of the view that for any advertisement to be
considered misleading, two essential elements must be satisfied. First,
misleading advertising must deceive the persons to whom it is
addressed or at least, must have the potential to deceive them.
Secondly, as a consequence of its deceptive nature, misleading
advertising must be likely to affect the economic behaviour of the
public to whom it is addressed, or harm a competitor of the advertiser.
(See Lidi SNC v Vierzon Distribution SA [2011] E.T.M.R. 6].
42. However, the same has to be harmonized with competitive
interests. In the present case, the features being compared are not
misleading and the said issue has to be seen not from a hyper sensitive
viewpoint, but from the eyes of an average consumer who is used to
certain hyperbole and rhetoric."
THE CONCEPT OF 'PER SERVING' SIZE IS WELL RECOGNIZED NOT
ONLY BY THE INDUSTRY BUT ALSO UNDER THE STATUTE. THE
PLAINTIFFS THEMSELVES PRESCRIBE A RECOMMENDED 'PER
SERVING' SIZE ON THEIR PACKAGING TO ENSURE SAFE
CONSUMPTION OF THEIR PRODUCTS.
34. The concept of 'per serving' size is well recognized not only by the
industry but also under the Statute. The Regulation No. 2.2.2.(3) of the
Regulations, 2011 prescribes that all pre packaging food labels must provide
the nutritional information / nutritional facts either per 100 grams or per 100
ml or 'per serving' of the product. Regulation No. 2.2.2.(3) of the
Regulations, 2011 reads: "3. Nutritional information - Nutritional
Information or nutritional facts per 100 gm or 100 ml or per serving of the
product shall be given on the label......"
35. The plaintiffs themselves prescribe a recommended 'per serving' size
on their packaging to ensure safe consumption of their products in
accordance with Regulation No. 2.12.1(6) of Regulations, 2011. The said
Regulation reads as under:-
"(6) The Food Business Operator shall be fully responsible for
safety of the proprietary food in respect of human consumption."
36. The reason for recommending a 'per serving' size by both the parties
on their respective packagings is that consumption of any health food drink
in excess of the recommended dietary allowance could distort the macro and
micro nutritional requirements of a consumer. This Court is of the view that
in the absence of a recommended 'per serving' size, a consumer may drink
the parties' product in excess and jeopardize his health. In such a situation,
the parties feel that they may be held liable for such harm. Consequently,
„per serving‟ size is a prudent industry practice and the parties prescribe a
recommended 'per serving' size with intent to protect themselves from such
liability.
37. This Court is also in agreement with the submission of the defendant
that a comparison of hundred (100) grams of plaintiffs and defendant's
products would be incorrect and misleading as it would induce the
consumers to consume three times the recommended 'per serving' size i.e.,
ten (10) spoons of HORLICKS per cup which could risk the safety of the
consumers.
38. Since both parties recommend 'per serving' on their labels as a method
of preparation before consumption, 'per serving' is the only correct way in
which a comparison can be made. In any event, the plaintiffs cannot be
permitted to approbate and reprobate at the same time.
THE IMPUGNED ADVERTISEMENT COMPARES A MATERIAL,
RELEVANT, VERIFIABLE, REPRESENTATIVE FEATURE OF THE
GOODS IN QUESTION AND IS FACTUALLY TRUE. THE DEFENDANT
HAS NOT MANIPULATED ITS SERVING SIZE AS IT HAS BEEN
CONSTANT SINCE 1934.
39. This Court is of the opinion that the impugned advertisement
compares a material, relevant, verifiable and representative feature of the
goods in question.
40. The defendant in the impugned advertisement has compared an
important component of the health drink i.e. the protein content.
Admittedly, protein is one of the essential components of a health drink. No
one can deny that a large number of nutritionists believe that protein is good
for bones and increases muscle mass and strength. It is also believed that
protein can boost metabolism, increase fat burning and help the body repair
itself after injury. Consequently, the advertisement deals with one of the
important characteristics/parameters of a health drink. It is also not possible
to lay down an exhaustive list of features which should be mentioned in a
comparative advertising as such features differ from proprietor/manufacturer
to proprietor/manufacturer and also from consumer to consumer.
41. The allegation that the serving size of COMPLAN had been
manipulated to have double the amount of protein of HORLICKS is prima
facie incorrect as the recommended serving size of 33 grams for the
defendant‟s product has not been altered since the year 1934.
42. As per the comparison made by the defendant, COMPLAN contains
eighteen (18) grams of protein per hundred (100) grams of the product and
HORLICKS contains eleven (11) grams of protein per hundred (100) grams
of the product. The protein comparison as per recommended per serving
sizes is as under:-
1 Cup of COMPLAN : 18/100 x 33 grams = 5.94 grams
1 Cup of HORLICKS : 11/100 x 27 grams = 2.97 grams
1 Cup of COMPLAN =1 Cup of HORLICKS + 1 Cup of HORLICKS
5.94 = 2.97 + 2.97
43. Consequently, the impugned advertisement seeks only to compare the
protein content in the recommended 'per serving' sizes of both products
which is factually true and not misleading in any way. In fact, the
information is nutritionally and analytically significant for the recipient
customer.
THIS COURT IS OF THE VIEW THAT IN ACCORDANCE WITH
SECTION 6 OF THE CODEX GUIDELINES, THE DEFENDANT HAS
TAKEN INTO ACCOUNT METHOD OF PREPARATION REQUIRED FOR
CONSUMPTION ACCORDING TO INSTRUCTIONS FOR USE ON
LABEL.
44. Codex General Guidelines on Claims state that the comparative
claims must be made taking into account preparation required for
consumption according to the instructions for use on the label. As both the
parties recommend 'per serving' size on their labels as a method of
preparation before consumption, 'per serving' is the only basis on which a
comparison can be made.
45. Further, the defendant has taken into account method of preparation
according to instructions for use on label. The products of both the parties
are to be consumed in the same recommended 'per serving' size regardless
whether they are mixed with 'milk' or 'water' and it is an admitted position
that water has no protein. All reasonable readers would appreciate that the
impugned advertisement is not about the type of milk they may use as they
do not associate milk production with either the plaintiffs or the defendant.
This Court is of the view that a variable like milk cannot be taken into
account, while comparing the protein content in both the products,
especially when plaintiffs‟ product can be had with water. Consequently,
this Court is of the opinion that in accordance with Section 6 of the CODEX
Guidelines, the defendant has taken into account method of preparation
required for consumption according to instructions for use on label.
THE DEFENDANT IS NOT OBLIGED TO COMPARE ALL PARAMETERS
46. The defendant is not obliged to compare all parameters. It is open to
an advertiser to highlight a special feature/characteristic of his product
which would set its product apart from its competitors and make a
comparison with other products, as long as it is true. This Court in Havells
India Ltd. (supra) has held as under:-
"47. In Barclays Bank Plc v. RBS Advanta [1996] R.P.C. 307,
an application for interlocutory injunction to restrain the
defendant from distributing advertising literature which
included a brochure carrying a comparative table of fees and
interest rates for various credit cards was dismissed. It was
argued in the said case that the failure of the defendant to point
out the advantages of the plaintiff bank services was misleading
and not honest. The English Court after referring to Section
10(6) of the English Trademark Act of 1994 which is almost
identical to Sections 29(8) and 30(1) of the Act, 1999 has held
as under:-
"The nub of the plaintiff's complaint is that the contents of
the leaflet are not honest. As Mr. Young explained it, the
leaflet indicated the 15 `bullet points' which were being
put forward by the defendant as showing that its credit
card was better than the plaintiff's. He accepted that the
plaintiff could not complain if the defendant merely said
that its credit card was better. However he said that in this
case the defendant had descended to detail - to be
precise, 15 details - and these were not accurate since
they did not compare like with like. In particular he relied
on paragraph 15 of the affidavit of Mr. Macfarlane sworn
on behalf of the plaintiff which complains that the
defendant's literature makes no mention of other ancillary
benefits which the plaintiff offers its cardholders and
which the defendant does not have, such as a 24 hour
service relating to emergencies on the road and an
overseas emergency service.........
xxxx xxxx xxxx xxxx
In my view the plaintiff's case on this issue is very weak. It
has the onus of showing that the defendant's use of the
BARCLAYCARD mark in its advertising is not honest. It
appears to me that it is most unlikely that any reasonable
reader would take that view. On the contrary, read fairly,
the advertisements convey the message that the package
of 15 features, taken as a whole, is believed by the
defendant to offer the customer a better deal. It seems
most unlikely that a reasonable reader, and particularly
one to whom this advertisement is being directed - that is
to say one who is being tempted to change from an
existing VISA card - would be mislead into thinking that
the 15 features in the defendant's leaflet are, individually,
only available to users of the defendant's credit card. For
example it is a matter of common knowledge that all VISA
cards are accepted wherever a VISA sign is displayed
and can be used to draw cash from VISA ATM machines.
Furthermore the advertisement does not say, and I think it
is unlikely that a reasonable reader would take it to mean,
that there are no features of the plaintiff's service which
are better than the defendant's. The advertisement
merely picks out the features taken together which are
being promoted as making the defendant's product a
good package."
48. In the opinion of this Court, it is open to an advertiser to
highlight a special feature/characteristic of his product which
sets it apart from its competitors and to make a comparison as
long as it is true. For instance, if a chocolate biscuit
manufacturer issues a comparative advertising highlighting
that his product has the highest chocolate content and the
lowest price, then in the opinion of this Court the rival
manufacturer cannot seek an injunction on the ground that
fibre content or calorific value or protein content had not been
compared.
49. In other words, it is open to an advertiser to objectively
compare one or more material, relevant, verifiable and
representative feature of the goods and services in question
which may include price. There is no requirement in law to
disclose each and every factor/characteristic in comparative
advertisement. No reasonable observer would expect one
trader to point to all the advantages of its competitor‟s business
and failure to do so does not per se take the advertising outside
what reasonable people would regard as „honest‟.
xxxx xxxx xxxx xxxx
52. In fact, mere trade puffery, even if uncomfortable to the
registered proprietor, does not bring the advertising within the
scope of trade mark infringement. Much advertising copy is
recognised by the public as hyperbole. The Act, 1999 does not
impose on the courts an obligation to try to enforce, through the
back door of trade mark legislation, a more puritanical
standard."
OBJECTIVE OF SECTIONS 29(8) AND 30(1) OF THE TRADE MARKS
ACT, 1999, IS TO ALLOW HONEST COMPARATIVE ADVERTISING.
FAILURE TO POINT OUT A COMPETITOR'S ADVANTAGES IS NOT
NECESSARILY DISHONEST
47. The primary objective of Sections 29(8) and 30(1) of the Trade Marks
Act, 1999, is to allow comparative advertising as long as the use of a
competitor's mark is honest. In the present case, there is no detriment to the
distinctive character of the plaintiffs' mark, as there exists a clear distinction
between the plaintiffs and defendant's product. HORLICKS remains the
source indicator of plaintiffs' product. In the opinion of this Court, plaintiffs
cannot prevent use of their trade mark for the purpose of identification of
their product.
48. The test of honest use is an objective test which depends on whether
the use is considered honest by members of a reasonable audience. Failure
to point out a competitor's advantages is not necessarily dishonest. This
Court in Havells India Ltd. & Anr. Vs. Amritanshu Khaitan & Ors.,
(supra) has held as under:-
"33. Failure to point out a competitor‟s advantages is not
necessarily dishonest. However, care must be taken in ensuring
that statements of comparison with the competitors‟ products are
not defamatory or libelous or confusing or misleading. In a recent
decision of R (Sainsbury's Supermarkets Limited) v. The
Independent Reviewer of Advertising Standards Authority
Adjudications v. Advertising Standards Authority Limited, Tesco
Stores Limited, CO/17656/2013, the High Court of Justice Queens
Division Bench Division Administrative Court of the UK upheld the
decisions of Independent Reviewer of Advertising Standards
Authority Adjudications (IR) and of the Council of the Advertising
Standards Authority (ASA) and held there was no flaw in the
advertising campaign involving price comparison carried on by
Tesco Stores. In the complaint before the ASA, one of the
contentions advanced by Sainsbury was that non-price elements,
relating to product quality, corporate responsibility, sustainability
and other ethical matters, had not been factored in by Tesco in
their product comparison and that Tesco had failed properly to
weigh the non-price elements. Sainsbury also contended that higher
cost of the product was worth paying as its products were
certifiably superior in the aforementioned categories. Sainsbury‟s
argument before all three forums was that considering these non-
price elements would render the "sufficiently interchangeable" test
as not satisfied and thus, Tesco could not have compared the
products. The ASA had concluded,
"The Code allowed advertisers to objectively compare one
or more material, relevant, verifiable and representative
feature of products which could include price. We
considered that Tesco had objectively compared price and
the ad made clear that Tesco were comparing their own
prices against brands, own labels, and fresh produce prices
at "Sainsbury‟s, Asda, and Morrisons and that some
products would be excluded from the comparison. While we
noted Sainsbury‟s concerns, in the context of an ad which
explained clearly the basis of Tesco‟s pricing comparison we
concluded the claim "You won‟t lose out on big brands, own
label or fresh food" had been substantiated and was not
misleading. In addition, we concluded the basis of the
comparison was clear and did not breach the Code."
34. The Court, analysing the appeal preferred to the IR held that
the conclusion arrived at in the appeal was that the essential
feature or the key element being compared in the impugned
advertisement was price and not quality, provenance or ethical
treatment. The Court upheld the decisions of the two authorities
and held that the Claimants (Sainsbury) were calling for an
"inflexible application of the „sufficiently interchangeable‟ rule by
asserting that provided the non-price factors were capable of being
objectively established and were material factors or considerations
for a reasonable proportion of customers, then the „sufficiently
interchangeable‟ test could not be found by the ASA to have been
satisfied." The Court held that there was no such hard-edged rule
and thus, there was no irrationality in the decisions of the ASA and
the IR.
35. In Indian law similarly, there is no rule which requires that
all the features of a product have to be necessarily compared in an
advertisement....."
IMPUGNED ADVRTISEMENT IS PRIMA FACIE NOT VIOLATIVE OF
THE PREVIOUS ORDERS PASSED BY THE ASCI. ALLEGATIONS WITH
REGARD TO 'BEST EVER FORMULA' OR THE FONT SIZE OF
DISCLAIMER, DO NOT SURVIVE AS DEFENDANT IN THE MODIFIED
ADVERTISEMENT USES THE TERM 'BEST EVER FORMULA OF
COMPLAN' AND THE SAID DISCLAIMER HAS BEEN MADE AN
INTEGRAL PART OF THE ADVERTISEMENT. THE CLAIM OF BEING "2
TIMES THE NUTRIENTS" HAS BEEN DELETED.
49. ASCI has allowed the depiction on the packaging as . In
any event, in the present proceedings only the advertisement of the
defendant is impugned and not its packaging.
50. This Court finds that the modified advertisement neither uses the
expression "growth protein" nor claims that drinking COMPLAN gives 2X
faster growth than drinking HORLICKS.
51. The allegations with regard to the heading 'Best Ever Formula' or font
size of the disclaimer with regard to recommended „per serve‟ size, do not
survive as the defendant in the modified advertisement has clarified the
heading as 'Best Ever Formula of Complan' and the disclaimer has been
made an integral part of the advertisement.
52. This Court is of the view that depiction of per serving of both the
drinks by way of cups is covered under creative latitude. Further, in the
modified advertisement, the claim of providing '2 times the nutrients' has
been deleted. Moreover, impugned advertisement does not make any
comparison between Formula of COMPLAN with Formula of HORLICKS.
The modified advertisement compares the protein content between the two
products only and that too on basis of 'per serving' size.
53. The statement "From Now on, only COMPLAN" is an exhortation, to
urge consumer to purchase defendant's product and the target customers
expect a certain amount of hyperbole. In Mc Donalds Hamburgers Ltd. vs.
Burgerking (UK) Ld. [1987] F.S.R. 112 followed in Glaxosmithkline
Consumer Healthcare Ltd. Vs. Heinz India (supra), it has been held that
advertisements are not to be read as if they are some testamentary provision
in a Will or a clause in some agreement with every word being carefully
considered and the words as a whole being compared. The advertisements is
to be viewed as readers normally view it. In Marico Ltd. vs. Adani Wilmar
Ltd. CS(OS) No.246/2013 it has been held that in determining the meaning
of an advertisement, the Court has to take into account the fact that public
expects a certain amount of hyperbole in advertising and the test to be
applied is whether a reasonable man would take the claim being made as one
made seriously. Consequently, the said statement in the modified
advertisement is certainly not disparaging and does not amount to rejection
or denigration of plaintiffs' product.
CONCLUSION
54. From the aforesaid discussion, it is apparent that the impugned
modified advertisement is not misleading and there is no denigration or
disparagement of plaintiffs‟ mark. Further, the factor compared is material,
relevant, verifiable and representative feature. Consequently, present
application is dismissed, but with no order as to costs.
MANMOHAN, J
DECEMBER 17, 2018
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