Generic Brand Disparagement

In today’s world where consumers rely on online reviews before buying every small thing, it has become important for brands to make a lucrative advertisement that stands out. While doing so, sometimes brands and brand owners tend to get carried away and start maligning their competitors. Calling your own brand or product superior is acceptable. However, in order to establish the superiority of the same, how clever is it to bring down someone else? And even if one brings down another, is it legally permissible? In this article, we are going to analyze the current trends regarding brand disparagement in the light of case laws.

Brand disparagement can be defined as an act of creating doubt in the minds of the consumer regarding another brand, especially one’s competitors. Generic brand disparagement occurs when an advertiser states something that targets the entire industry. For example, if I am selling lemon juice, statements like “Only my brand makes lemon juice from real lemon, while others use artificial lemon flavours." Such a statement has the power to put all other lemon juice sellers in question. Usually, the acts or statements made in this regard are not true and are made only in order to show the other brand in question in a bad light. Because of such acts, actual damage occurs.

While there are no legal provisions that define or condemn the said practice, Section 29(8) of the Trademark Act, 1999 talks about the conditions where a registered trademark is infringed because of an advertisement that is against the reputation of a brand or is contrary to the honest trade practices, is detrimental to its distinctiveness,  or is against the reputation of the mark.

There is a very thin line between Comparative Advertisement and Brand Disparagement. The comparison of one’s product or service with that of the competitor is called “Comparative Advertisement”. The same is permissible and even encouraged under Article 19(1)(a) of the Indian Constitution as freedom of speech and expression. However, while doing so if a brand tries to malign a competitor brand by stating a false, defamatory statement because of which the business of the other party suffers, that amounts to “Brand Disparagement”.

In order to understand the difference it is pertinent to mention the case of Reckitt Benckiser (India) Pvt. Ltd. vs. Wipro Enterprises (P) Ltd whereby the plaintiff had sued the defendant for disparaging their famous product “Dettol” by showing a similar shaped product. In which the Delhi High Court observed that “puffery is permissible as it is mere exaggeration and embellishment and an element of untruth is bound to be in it.” The Court further stated that  “even if cumulatively seen, no case of denigration, disparagement, of Dettol is made out as the impugned advertisement does not denigrate either Dettol or any other hand wash, in fact it does not comment either directly or indirectly on any other handwash or its moistourizing or its softening ability."

Now that we know the difference between the two, it is important to note the key ingredients that constitute brand disparagement.

In the case of Pepsi Co. vs. Hindustan Coca Cola Ltd, the Court laid down certain components to determine brand disparagement such as:

(a) Commercial expectation of the advertiser as to what they are expecting to achieve from the advertisement.

(b) Manner of the commercial.

(c) Storyline of the commercial or the message it wants to convey. 

The same ingredients have been restated in various cases as highlighted below.

In the case of Reckitt & Colman of India Ltd. vs. M.P Ramachandran & Anr, it was held that while promoting one’s product, the producer could declare his goods to be the best or even better than that of the competitor even if the statement is not true. But while doing so, he cannot term the competitor bad.

In the case of Hindustan Unilever Limited vs. Gujarat Cooperative Milk Marketing Federation and Other^, the defendant released an advertisement where it suggested that their ice creams are made with real milk and not vanaspati. Hindustan Unilever filed a case accusing Amul of “Generic Disparagement/slander of goods." The Court restrained the airing of the advertisement and stated that the said advertisement was disparaging as it was looking down upon the products of all competitors, including the applicant’s.

In another case of generic disparagement of Zydus Wellness Product Ltd. vs. Dabur India Ltd which involved an advertisement for orange glucose, whereby it was shown that “Glucoplus - C” is the superior glucose in comparison to other glucose available in the market. While delivering the judgment the Court went through various components to determine generic disparagement such as “whether the competing product in the TVC is that of the plaintiff, assessing the category in which the comparative advertisement will fall in and an assessment of the disparaging element.”  When a comparative advertisement is done highlighting the strength of the products of the advertiser, such advertisements should be permissible, the Court said.

In another case of generic brand disparagement Dabur India Limited vs. Dhruv Rathee And Ors a specific video, by influencer Dhruv Rathee, compared fruit juices with carbonated soft drinks. The plaintiff alleged that the defendant had made direct reference to the product sold by them. It was also said that such a comparison was a direct attack against all packaged drinking fruit juices. To this, the Court pointed out that while the intention of the video cannot be questioned, while making direct and brazen references against the plaintiff’s products, the defendant has committed brand disparagement.

Such cases of brand disparagement are not only limited to India but are a widespread concept. In the United States, Section 43(a) of the Lanham Act talks about disparagement and defines it as when anyone uses a tradename, word, term, or device and commits false representation of the same in a commercial advertisement shall be liable in civil action. Following the same, in the case of Tommy Hilfiger Licensing, Inc., vs. Nature Labs, LLC the defendant was accused of trademark dilution for using the name Tomy Hole Digger for pet perfumes. The Court had held that the similarity between both the marks would not result in trademark infringement as the defendant only wanted to make a parody to make their consumers laugh.

From the cases cited above, it is clear to say that while deciding brand disparagement, the courts have always given the liberty to brand owners/ advertisers to speak highly about their product or services. However, a few questions need to be asked in this regard:

(a) If the brands are allowed to use exaggerated claims, are they allowed to put false information as well?

(b) If the answer to the first question is yes, then what happens to the welfare of the consumer?

(c) If a person for the public at large is making informative content after proper research, should such an act be considered a comparative advertisement in the first place?

With little to no clarity in this regard, it has become very difficult for advertisers to endorse their products on various platforms. So, what can be done? Instead of relying on a handful of legislations, such areas should be well-explored and well-identified. Otherwise, the only people benefiting from this will be giant conglomerates.

About the authors: Priya Mamgain is a Partner and Shilpa Chaudhary is a Senior Associate at Saga Legal.