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The Delhi High Court has held that advertisement is a facet of commercial speech which is protected under Article 19(1)(a) of the Constitution of India. The same can thus be restricted only in accordance with law enacted under Article 19(2) of the Constitution, it stated.
“ 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”, the Court observed.
It further added that fundamental rights of shareholders as citizens cannot be deemed to be lost when they associate to form a company.
The judgement was pronounced by a Single Judge Bench of Justice Manmohan in a plea by Horlicks Ltd. against Heinz India Pvt Ltd. The Plaintiff Company sought to restrain Heinz India from publishing its advertisement for its health-drink product, ‘Complan’, which allegedly disparaged the goodwill and reputation of the Plaintiff Company and its products sold under the trade mark ‘Horlicks’.
The impugned advertisement, published in a newspaper, had compared one cup of Complan with two cups of Horlicks. It 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….”. The said advertisement was later modified by the Defendant on its own initiative, by making the disclaimer more prominent.
The Plaintiff 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 by manipulating the serving size of Complan.
It was also argued that the impugned advertisement wrongly showed a direct correlation between the amount of protein consumed and growth in a child. By overemphasizing the benefits of protein alone, the Defendant was trying to misguide consumers into believing that consumption of the defendant’s product directly leads to growth, it was argued.
Rejecting the arguments put forth by the Plaintiff, the Court held that the impugned advertisement compared “a material, relevant, verifiable, representative feature of the goods in question and is factually true”, and that the defendant had not manipulated its serving size as it has been constant since 1934.
It observed that the purpose of the provisions in the Trade Marks Act, 1999 and the Advertising Standards Council of India Code is “to stimulate competition between suppliers of goods” and enhance consumer’s advantage. This can be achieved by allowing competitors to objectively highlight the merits of the comparative products.
Referring specifically to Sections 29(8) and 30(1) of the Trade Marks Act, the Court further said that the objective of the provisions is to allow “honest comparative advertising”, and thus a company cannot be prevented from using the trademark of its competitor for the purpose of identification of their product.
It nonetheless acknowledged that a certain amount of disparagement is implicit in comparative advertisements, yet the same is legal and permissible so long as it does not mislead.
Laying down the test to determine “misleading advertisement”, the Court stated that firstly, misleading advertising must deceive the persons to whom it is addressed or at least, must have the potential to deceive them; And secondly, as a consequence of its deceptive nature, misleading advertisement must be likely to affect the economic behaviour of the public to whom it is addressed, or harm a competitor of the advertiser.
It further clarified that in cases of comparative advertisements, a competitor company is not obliged to compare all parameters of the other product. Therefore, 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.
The Court also rejected the Plaintiff’s argument that the information used in the impugned advertisement was protected by the Supreme Court’s verdict on Right to Privacy. Holding that the judgement was inapplicable to the facts of the present case, the Court observed that the Right to Privacy cannot be asserted against information that is already in the public domain. More specifically, the Supreme Court in the said judgment did not ban or prohibit comparative advertisements, the Court clarified.
Stating that the issue (of disparagement) “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 Court held that the features being compared were not misleading.
It thus decreed,
“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.”
Plaintiff Company was represented by Senior Advocate Chander M Lall along with advocates Ajay Bhargava, Ankur Sangal, Sucheta Roy and Richa Bhargava.
Defendant Company was represented by Senior Advocate Amit Sibal along with advocates Sagar Chandra, Ankit Rastogi and Bibhunanda Mishra.
Read the Judgement.