ISSUE XXVII : Should comparative advertising be allowed?

Introduction

The Delhi High Court (“the Court”) by its judgment dated August 21, 2013 dismissed the injunction petition filed by Colgate against Pepsodent. The Pepsodent-Colgate ad war had started on August 9, 2013 with the release of Pepsodent’s latest advertisement that used Colgate’s name in their ad claiming 130% better protection. This led Colgate to file a case in Delhi High Court on August 13, 2013. The court was not satisfied that Pepsodent’s latest advertisement denigrated Colgate or has showed that it is better than Colgate. The present bulletin will discuss the highlights of the case filed before the Court and also visit the regulations governing comparative advertising in India.

I. Facts of the case

Colgate Palmolive (India) Ltd. (“Colgate”) filed a suit against Hindustan Unilever Ltd. (“HUL”) on August 13, 2013 for an interim injunction. HUL had launched its Pepsodent Germicheck’s advertisement on August 9, 2013 which compared the toothpaste’s germ attack power with Colgate Strong Teeth claiming that Pepsodent Germicheck has “130% superior” germ attack power over Colgate Strong Teeth after four hours of brushing. Colgate claimed the interim injunction against HUL on the following grounds:

1. The claim made by HUL that Pepsodent Germicheck had 130% attack power was a false statement and in violation of several provisions of the Code of Advertising Standards Councils of India, 1985 (“ASCI”) as well as the Drugs and Cosmetics Act, 1940 as it amounted to “misbranding”.

• The TV commercial commenced on August 9, 2013 and print advertisement appeared in the front page of the Delhi edition of “Hindustan Times” dated August 11, 2013 portrayed bad image of Colgate’s product and falsely conveyed that the use of Colgate could cause cavities. The advertisements were viewed in the Court several times during the course of arguments and the observation made was that the TV commercial portrays that Triclosan an ingredient in Pepsodent stays in the mouth four hours after brushing and qualifies a “preventive cavity test”. But Colgate contended that no such test exists in the world. Then again, the Colgate Boy was shown brushing his teeth in an improper manner, whose teeth had cavities and he seemed to be unhappy which implies that Colgate’s toothpaste could cause cavities.

• Colgate contended that HUL’s past record showed that HUL has made a habit of introducing false and misleading advertisements and increase its market share dishonestly. It had a history of making false claims in respect of its products. Cases such as: Reckitt Benckiser (India) Ltd. vs. Hindustan Unilever Ltd.¹ (hereafter Dettol vs. Lifebuoy case), Reckitt Benckiser (India) Ltd. vs. Hindustan Unilever Ltd.² (hereafter Dettol Liquid case) and Reckitt Benckiser (India) Ltd. vs. Hindustan Unilever Ltd.³ were cited.

• It was argued that the words “Pepsodent now better than Colgate Strong Teeth” in the print advertisement were meant to convey that Colgate Strong Teeth was no longer a good product. Also, the word “Attaaaack” used in the ad was an attack on Colgate and not on the cavity causing germs.
• Colgate apprehended a loss of market share if the HUL was not restrained from circulating these ads.

The submissions made by HUL in reply to the case filed were as below:

1. In this regard, the decision in Dabur India Limited vs. Colortek Meghalaya Pvt. Ltd. was cited to show that courts have allowed comparative advertising.
2. HUL asked the court not to adopt a hyper technical view and not to analyse an advertisement like a statute or a clause of an agreement. As their intent was not to denigrate the product or the brand of Colgate.
3. HUL submitted that the whole purpose of these advertisements was to compete with Colgate at the price segment at which it was selling Colgate Strong Teeth and the aim of HUL was to show that the superior product that Colgate could offer was always marketed as a premium product.

II. Judgment

On the basis of the judgments given in the earlier cases such as Dabur India Ltd. vs. Colortek Meghalaya Pvt. Ltd. and Reckitt and Colman of India Ltd. vs. M.P. Ramchandran and Anr.⁴ the Court dismissed the case by saying that HUL is not denigrating the product of Colgate. It said that it is unable to identify any unfairness in this practice that may attract the clauses of ASCI Code. Comparative advertising is permissible as long as the competitor’s product is not derogated and disgraced while comparing.

In the case Dabur India Ltd vs. Colortek Meghalaya Pvt. Ltd., it was held that certain factors have to be kept in mind while deciding a question of disparagement. These factors are (i) intent of the commercial; (ii) manner of the commercial; and (iii) storyline of the commercial and the message sought to be conveyed. Further, in the case Reckitt and Colman of India Ltd. vs. M.P. Ramchandran and Anr.⁵, it was held that (i) a seller is entitled to declare his goods to be best in the world, even though his statement is not true; (ii) He can say that his goods are better than his competitors’ goods, even though his statement is not true; (iii) he can compare the advantages of his goods over the goods of others; (iv) however, he cannot say that his competitors’ goods are bad.

According to the court too much could not be read into the expressions of each individual character in the advertisements. Also, the court noticed that the teeth of the Colgate Boy had not been zoomed into and no gaps or cavities could be seen. The expressions and effects used in the advertisement only showed that Pepsodent was a better product but did not disparage Colgate’s product. Also, the court said that as there is a comparison of products and an attempt to show that one is better than the other, then obviously both boys cannot have happy faces. Also, the court held that the word “attack” in the print ad was related to Pepsodent’s germ fighting capability and was not an attack on Colgate.

III. Analysis

The ASCI has adopted a Code in 1985 for Self-Regulation in advertising. It is a commitment to honest advertising and to fair competition in the market place. ASCI Code deals with the various provisions pertaining to advertisements. Colgate claimed that HUL has violated the provisions of chapter IV of ASCI Code. Chapter IV of the Code pertains to the fairness in competition. The broad aspects covered by it are as under:

• Advertisements containing comparisons with other manufacturers or suppliers or with other products including those where a competitor is named are permissible in the interests of vigorous competition and public enlightenment, provided:

• It is clear what aspects of the advertiser’s product are being compared with what aspects of the competitor’s product.
  • 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.
  • The comparisons are factual, accurate and capable of substantiation.
  • There is no likelihood of the consumer being misled as a result of the comparison, whether about the product advertised or that with which it is compared.
  • The advertisement does not unfairly denigrate attack or discredit other products, advertisers or advertisements directly or by implication.

• Advertisements shall not make unjustifiable use of the name or initials of any other firm, company or institution, nor take unfair advantage of the goodwill attached to the trade mark or symbol of another firm or its product or the goodwill acquired by its advertising campaign.

• Advertisements shall not be similar to any other advertiser’s earlier run advertisements in general layout, copy, slogans, visual presentations, music or sound effects, so as to suggest plagiarism.

• As regards matters covered by sections 2 and 3 above, complaints of plagiarism of advertisements released earlier abroad will lie outside the scope of this Code except in the under-mentioned circumstances:

• The complaint is lodged within 12 months of the first general circulation of the advertisements/campaign complained against.
  • The complainant provides substantiation regarding the claim of prior invention/usage abroad.

Keeping in view the above points, it cannot be concluded that HUL disparaged the product of Colgate. However, in the case of Tata Press Ltd. vs. MTNL⁶, the Supreme Court opined that it is not good to declare own goods to be the best and better than his competitors’ but if it does so, the advertiser must have some reasonable factual basis for the assertion made. In the case, Marico Limited (Saffola) vs. Adani Wlmar Ltd. (Fortune) the plaintiff claimed that the defendant denigrated Saffola by making false, unsubstantiated and misleading claims that Fortune RBO is healthier than Saffola but the learned Judge declined the injunction saying that the intent, manner and message of the ad of defendant is of its product containing a higher quality of Oryzano sufficient to meet the daily requirement of human body of Oryzanol, and which the other products do not. Hence, after taking into consideration all the above judgments ASCI contended that comparative advertising by means of using other’s products is known to be admissible; however, while doing so, the advertiser should not in any way disparage the goods or services of the other. Comparative advertisement is different from disparagement. Disparagement of a competitor’s product may be specific or generic without specifying rival, both are equally objectionable in a court of law. Comparative advertising is something that the challenger brand should undertake. A brand owner has to keep in mind how strong the competition is. You have to be in a disadvantageous position in order to challenge and comparison should result in some loss of reputation, goodwill or business. Changes in the market take place and competitors need to stay on top of this change. Comparative advertising is bound to get more and more aggressive and competitive. Most brand owners say that it is their right to keep consumers informed. If Pepsodent is superior to Colgate by a precise 130%, it is Pepsodent’s right and duty to keep consumers informed.

Conclusion

In comparative advertising a company shows how its product or service is superior to that of its competitors by comparing the benefits and costs within the advertisement itself. While interpreting, the content and manner of the advertisement shows the intent behind the advertisement. Therefore, the seller must ensure that no designs applied to the advertisement result in a breach of the threshold of permissible competitive/comparative advertising. In other words, in judging the “overall effect” of the advertisement, the Court may have to look into the question of what caught or catches the eye or attention of the audience. As far as the Colgate-Pepsodent case is concerned, it has created a buzz for both the brands and experts feel it will create publicity for Pepsodent as well as Colgate.

Authored by: Jaya Moorjani

1 Reckitt Benckiser (India) Ltd. vs. Hindustan Unilever Ltd. 200 (2013) DLT 563

2 Reckitt Benckiser (India) Ltd. vs. Hindustan Unilever Ltd. 2013 V AD (Del) 94

3 Reckitt Benckiser (India) Ltd. vs. Hindustan Unilever Ltd. 151 (2008) DLT 650

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

5 Reckitt and Colman of India Ltd. vs. M.P. Ramchandran and Anr. 1999 (19) PTC 741