1. law, govt and politics

COMPETITION APPELLATE TRIBUNAL
NEW DELHI
UTPE No.43/2001
CORAM
Hon’ble Justice G.S. Singhvi
Chairman
In the matter of:
Win Medicare Ltd.,
1400, Hemkunt Tower,
98 Nehru Place, New Delhi 110019.
…Complainant
Versus
Reckitt Benckiser India Ltd.,
25, Ho Chi Minh Sarani,
Calcutta – 700 061.
Appearances:
….Respondents
Shri Saif Khan, Shri Puneet Ahuja and Ms. Pachi Aggarwal,
Advocate for the Complainant.
Shri Rajshekhar Rao and Shri Kamaljeet Singh, Advocates for the
Respondent.
ORDER
Whether the advertisements issued by the respondent showing comparison of
its product, namely – Dettol with Betadine Standardised Solution manufactured by the
complainant, falls within the ambit of Section 36-A(1)(x) is the question, which arises
for consideration in this complaint filed sometime in April 2001 under Section 36-B(d)
read with Section 36-A(1)(i), (vi), (x) and Section 2(o) of the Monopolies and
Restrictive Trade Practices Act, 1969 (in short, ‘the Act’) and Regulation 51 and 75 of
the Monopolies and Restrictive Trade Practices Regulations, 1991 (in short, ‘the
Regulations’).
2.
The complainant is engaged in the business of manufacturing and marketing
medicines in India including Betadine Standardised Solution, which is sold in its final
form as per the specifications of the Indian Pharmacopoeia and is supposed to be
used without dilution. The respondent, which was earlier known as Reckitt & Colman
of India Ltd. is engaged in manufacturing and marketing pharmaceutical preparations
2
including Dettol, which is an antiseptic.
3.
In March 2000 edition of the Journal of Indian Medical Association, an
advertisement was got published by the respondent showing comparison of Dettol with
other antiseptics/ disinfectants including Betadine Antiseptic Solution. The scanned
copy of the advertisement is reproduced below:
3
4.
Another advertisement was issued by the respondent in the form of a chart
showing relative efficacy of Dettol vis-a-vis Betadine in certain concentrations. The
scanned copy of the second advertisement is also reproduced below :
5.
Shri Goutam Bhattacharya, who was then working as Product Executive of the
complainant came to know about the above reproduced chart when he saw the
brochure in Hamidia Hospital, Bhopal.
He immediately addressed letter dated
13.11.2000 to Shri Man Mohan Singh Chug, Marketing Manager of the complainant,
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who recorded a note that Dettol is projecting wrong information. The letter of Shri
Goutam Bhattacharya along with note dated 16.11.2000 recorded by Shri Man Mohan
Singh Chug is reproduced below :
“WIN- MEDICARE LIMITED
INTRAOFFICE COMMUNICATION
To
:
From :
Subject :
MMS Chng (Mkting Mgr.)
Goutam Bhattacharya, Delhi
Dettol literature
Date
:13thNov.,2000
Letter No. :
File Ref. :
Dear Sir,
While working in Bhopal, I came across the enclosed literature for Dettol,
distributed by Reckitt & Colmen. I collected the same after discussions
with the Doctors from the OPD of Surgery in Hamidia Hospital, Bhopal.
Sir, in this literature they have pointed out that Dettol is superior to
Betadine. This is creating a wrong impression in Dr’s mind and they are
pointing out this issue.
Because of this reason my sales for Betedine standardised Solutions is
suffering to a great extent.
Kindly look into the matter & advice.
Kind regards
Sd/(Gautam Bhattacharya)
Mr. Anurag Seth
Dettol is projecting wrong information in the field (copy of lit. enclosed)
Kindly do the needful.
Sd/(Manmohan Singh Chug)
16th/11”
6.
The complainant sent notice dated 16.10.2000 to the respondent and A. Wood
and D. Payne, who authored the research paper to which reference was made in the
first advertisement stating that the advertisements were misleading and was intended
to disparage Betadine Antiseptic Solution vis-a-vis Dettol. The complainant claimed
that even though a footnote was given below the box showing comparison of Dettol
and other antiseptics/disinfectants to clarify that Betadin Antiseptic Solution had not
5
been tested in organic soil, the font thereof was so small that it could not attract the
attention of the purchasers. After waiting for almost three months, the complainant
sent reminder dated 11.01.2001 reiterating its demand for withdrawal of the
advertisements.
7.
Since the respondent did not act upon the notice and reminder, the complainant
invoked the jurisdiction of the erstwhile Monopolies and Restrictive Trade Practices
Commission (for short, ‘the Commission’) by filing the present complaint and prayed
that an inquiry be held into the allegations made by it and a declaration be granted that
the respondent is indulging in unfair and restrictive trade practices, which are
prejudicial to the public interest as also the interest of the consumers.The complainant
further prayed that a cease and desist order be passed against the respondent under
Section 36D of the Act and compensation be awarded under Section 12-B of the Act
for damages/loss caused by the respondent.
8.
The substance of the complaint is contained in paragraphs 7 to 10, which are
reproduced below :-
“7.
The respondents have compared Betadine at half and quarter
concentration and have neglected to mention the fact that
Betadine Standardised Solution is not recommended by the
petitioner to be used at half and quarter concentration. Betadine
Standardised Solution is always recommended to be used at full
concentration. Thus the comparison is not a fair one. The
suggestion sought to be carried out by the advertisement is that
Dettol is more effective than Betadine, clearly thereby disparaging
the product of the petitioner. Further by not clarifying that the
comparison relates to the complainants Standardised solution, the
advertisement has the effect of disparaging all the products of the
petitioner bearing the trademark Betadine. In fact this comparison
is not applicable to any of the brands of Betadine as in the
Betadine Standardised Solution, no dilution is recommended. In
the case of Betadine gargle, this is used for different indication and
is therefore not comparable with Dettol. In relation to Betadine
6
Ointmnet/ Powder and anti Dandruff, these cannot be compared to
Dettol as they have different formulations and usage indications.
This emphasises the fact that the respondent has attempted to
portray the product of the plaintiffs Betadine in poor light and this
creates confusion in the mind of doctors.
8.
The trade practice adopted by the respondent is clearly an unfair
and deceptive trade practice. By falsely representing the strength
of Dettol qua Betadine, the respondent is asserting that the former
antiseptic is of a particular standard, quality, grade and
composition while the latter is not. The respondent is attempting to
mislead through advertisements that the strength of the former
product and its efficacy is far superior to that of the latter product.
9.
It is submitted that the above referred act has been motivated by
the intention to mislead doctors, members of the trade and
consumers alike as the first advertisement published in brochures
and trade journals is bound to influence readers. The said
advertisements are false and misleading to the knowledge of the
Respondent and has been willfully and deliberately been made by
the Respondent to promote sale of their product in the market and
disparage the product of the complainant. It is further submitted
that
misleading
advertisements
and
false
representations
constitute an unfair trade practice within the meaning of S.36-A(i),
(vi), (x).
10.
That the above said advertisements have the effect of restricting
competition in as much as the respondent is adopting dishonest,
unfair and dubious methods to promote the sale of their products
to the detriment of the Complainant/ Informant's product. The said
false and misleading statements and representations also amount
to depriving the consumer and the general public of their rights to
access to reliable and accurate information about the quality of the
products available in the market. It is submitted that for these
reasons the above referred trade practice indulged in by the
Respondent are prejudicial to consumer interest and at large
public interest and hence constitute restrictive and unfair trade
practices within the meaning of the Act.”
7
9.
In the reply filed on behalf of the respondent several preliminary objections have
been taken on the maintainability of the complaint including the following :
a)
The complaint is highly belated inasmuch as the advertisements sought
to be impugned in the complaint were published in medical journals in early 1998,
whereas the legal notice was issued on 16.10.2000 and the reminder was issued after
a gap of three months.
b)
The advertisements issued by the respondents were based on stringet
test reports which had been reverified and reconfimred by the reputed medical journals
in which they were published and the complainant has tried to cover up the long lapse
of time by issuing a notice in October, 2000 which was followed by a reminder in
January, 2001.
c)
The complaint has been filed against a wrong person because the name
of the respondent was changed w.e.f. 18.12.2000.
d)
In the absence of any challenge to the test report and the publications
made in the Journal of Indian Medical Association, the complainant cannot question
the advertisements, more so, because the journal is meant for circulation only among
the members of medical fraternity, i.e., the Doctors and medical professionals, who, on
the basis of their vast experience, are able to discern whether or not the contents of
the advertisements are correct.
e)
The complainant cannot claim to have the sole or exclusive right to the
term Betadine and arrogate to itself the right to the generic name as if it reprsents only
the complainant’s product.
10.
On merits, the respondent pleaded that the advertisements issued by it were
based on the research carried out by Mr. A. Wood and Mr. D.N. Payne, which was
8
published in the journal of Hospital Infection and it was not intended to disparage the
product of the complainant. This is borne out from paragraphs 5 to 10 of the reply,
which read as under :-
“5.
The contents of paragraph 5 are denied as they do not set out the
correct factual position. In any event the complainant does not
allege that the respondent has misrepresented about the efficacy
of
Betadine
Standardised
Solution
through
the
impugned
advertisements. It is submitted that the medical researchers in
advanced countries of the world continuously carry out research to
find out more effective ways of combating infectious diseases. The
research is carried out as an ongoing process and is not confined
to individuals and corporates. Every day new discoveries are
made in the field of medicine to evolve medicinal formulations with
lesser side effects and greater degree of effectiveness. The results
of the research exercise are published in the leading Journals of
the world to share the latest knowledge with the professionals in
the field. On such reputed Journal is the Journal of Hospital
Infection and such a research was carried out by Mr. A. Wood and
Mr. D.N. Payne on the effectiveness of Dettol, Savlon, Betadine
Antiseptic Solution and Hibicet Hospital Concentration with regard
to their response time in inactivating HIV virus in various mediums.
The research paper was published under the title “A Comparison
of the virucidal properties of commonly used disinfectants/
antiseptics”. The research paper was published in the Journal of
Hospital Infection in the year 1998, which is annexed as
Annexure-B to the complaint. Another comparison of Dettol and
Betadine Standardised Solution was made against MRSA in
different concentrations. Apparently, the result was published in
the Journal of the Royal Society of Health (1998) authored by Mr.
D.N. Payne, Mr. Saw Gibson and Mr. R. Lewis. Another article
was published in the Journal of Applied Microbiology 1998
authored by Mr. J.R. Babb, Mr. C.R. Bradley and Mr. D.N. Payne.
These research papers were published in the leading Journal in
the
year
1998
and
were
widely
read,
appreciated
and
acknowledged. Incidentally, Mr. D.N. Payne was at the relevant
time working with the respondent herein. That does not mean that
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he could not have aired his personal views which he published in
the Article and his personal views cannot bind his employer/ the
respondent herein. The crux of the research findings and data
were tabulated and published by the respondent in a leading
Indian Medical Journal namely, the Journal of India Medical
Association (JIMA). Obviously the complainant was perturbed by
the publication of the research findings which exposed the
ineffectiveness of the complainant's product and projected greater
effectiveness of the respondent's product.
6.
The contents of paragraph 6 are denied. It is submitted that the
respondent had merely published the research findings as they
were without adding anything of its own to those findings,
therefore, no fault can be found with the respondent with regard to
the research data as published. In any event, at maximum
concentration the respondent's product is more effective as
compared to the complainant's product.
7.
The contents of paragraph 7 are denied. It is submitted that it is no
part of the respondent's business to educate the customers as to
how the complainant's product should be used. The respondent
has merely advertised the research data as published. If the
complainant was not satisfied with the completeness of the
research data then it could have either taken up the matter with
Learned
Authors/
Researchers
or
issued
clarificatory
advertisements educating the customer on the correct usage of
the complainant's product. It is denied that the respondent has
attempted to disparage or portray the product of the complainant
in poor light as alleged and thereby created confusion in the minds
of the Doctors.
8.
The contents of paragraph 8 are denied. The respondent has not
indulged in any unfair or deceptive trade practice as alleged nor
has the respondent falsely represented the strength and
effectiveness of Dettol vis-a-vis Betadine. The respondent has
merely advertised what the research carried out by leading
Researchers abroad had revealed.
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9.
The contents of paragraph 9 are denied. It is submitted that the
Doctors, members of the trade and consumers have easy access
to leading Journals in the world and they in any event would be
aware of data published in the leading International Journals.
What is important and relevant however is that as a result of
publication of the research data in leading Medical and other
Journals, research findings were already available within the
public domain and the respondent has merely represented,
reasserted and published what was already available within the
public domain. Therefore, no motives can be attributed to the
respondent so as to invoke the provisions of the Section 36A of
the Act against the respondent.
10.
The contents of paragraph 10 are denied. It is categorically denied
that the respondent has adopted any dishonest, unfair and
dubious methods as alleged. If the complainant has any grievance
that lies against the leading Journals, which published the
research data, which has merely, been reproduced by the
respondent. It is denied that the research findings published in the
leading Medical Journals of the world and which have been merely
reproduced by the respondent could be said to be prejudicial to
consumer interest or public interest as alleged. On the contrary
they advance the cause of larger public interest.”
11.
Along with the complaint, the complainant filed an application under Section
12-A of the Act for grant of interim injunction, which was allowed by the Commission
vide order dated 19.10.2001. After adverting to factual matrix of the case and the
judgment of the Supreme Court in Lakhanpal National Ltd. vs.M.R.T.P. Commission
and another, AIR 1989 SC 1692, the Commission passed an order of injunction
whereby the respondent was restrained from publishing the same or similar
advertisements till the disposal of the complaint. The relevant portions of that order
are extracted below :-:
“13.
The question whether a factually correct statement can also be
misleading has been eloquently answered in para 7 of the ruling of
11
the Hon'ble Supreme Court in Lakhanpal National Ltd.'s case
(supra). The relevant portion of para 7 of the aforesaid ruling is
reproduced below :“The issue cannot be resolved by merely examining
whether the representation is correct or incorrect in the
literal sense. A representation containing a statement
apparently correct in the technical sense may have the
effect of misleading the buyer by using tricky language.
Similarly a statement, which may be inaccurate in the
technical literal sense can convey the truth and sometimes
more effectively than a literally correct statement. It is,
therefore,
necessary
to
examine
whether
the
representation, complained of, contains the element of
misleading the buyer. ....Another way of stating the rule is to
say that substantial falsity is, on the one hand, necessary,
and,
on
the
misrepresentation"
other,
and
adequate,
"that
to
where
establish
the
a
entire
representation is a faithful picture or transcript of the
essential facts, no falsity is established, even though there
may have been any number of inaccuracies in unimportant
details. Conversely, if the general impression conveyed is
false, the most punctilious and scrupulous accuracy in
immaterial minutiae will not render the representation true."
14.
From the above ruling, it is abundantly clear that even a
technically correct statement can be misleading. It all depends on
the manner of presentation and the language used. A close look at
the impugned advertisement reveals that the main message is
conveyed to the readers through the medium of symbols namely,
the tick-mark (ü), the cross (û) and the (-). At the bottom of the
table, it is explained that tick-mark stands for 'successful', cross
stands for 'failed' and dash for 'not tested'. There is no denying the
fact that whereas the main body of the advertisement is in bold
print, the footnote at the bottom of the table is in very small print.
Further, it is also common knowledge that in a tabular
representation, the reader generally forms his first impression by
the symbols used in the table without rushing to their explanations
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given elsewhere. The three and the highest number of tick-marks
awarded to Dettol on the fact of it, show that in respect of the
various parameters used to demonstrate the efficacy of the
products tested, Dettol is superior to Betadine. Further, the
impugned advertisement also suffers from concealment of vital
fact that Betadine is a standidised solution whereas Dettol is sold
in concentrated form. We also cannot ignore the fact that out of
the four parameters used, Betadine has been tested only for one
and, therefore, truly speaking the two are incomparable till
Betadine is also tested for the remaining three parameters. The
title of the advertisement is also worthy of note. It reads as
follows:“Ability of antiseptics/disinfectants to
Inactivate viruses within 1 minute”
Results as shown in the table under the above title are bound to
prejudice the readers as far as Betadine is concerned. In our view
it is totally senseless to include a product for comparison without
testing it for all the specified parameters in the chart.
15.
From the fact and circumstances discussed above, we are of the
view that a prima facie case of unfair trade practice as
contemplated in Section 36-A(1)(i),(vi) and (x) of the MRTP Act is
made out against the respondent for the purpose of the present
application for interim injunction.
16.
We do not agree with the contention of the respondent that the
impugned advertisement cannot have any impact on the common
consumers because the circulation of the Journal (JIMA) in which
the impugned advertisement has been published is confined only
to doctors and others connected with medical profession. In the
said Journal, under the title About JIMA it has been stated as
follows :“JIMA not only reaches over 1 lac copies for medical
professionals, but also for Government Institutions, NGOs
and International houses, Banking Insurance Companies,
Visa and Master Card Holders, Airways, Holiday Resorts,
13
Textile Industries, Books and others, besides Overseas
Medical Colleges and other Institutions.”
From the above, it is evident that JIMA has a fairly widespread
circulation and it reaches the outlets where it can be easily
accessible to the common consumer.
17.
The ruling of the Hon’ble Supreme Court in Colgate Palmolive
cited by the counsel for the respondent also does not come to his
rescue because the facts and circumstances of that case were
different from those of the instant case.
It is the ruling of the
Hon’ble Supreme Court in Lakhanpal’s case that really hits the nail
on the head.
18.
It is an open secret that such advertisements are aimed at
boosting the sale of the product that is favourably shown in the
advertisement.
Conversely, they adversely affect the sale
prospects of the products which are not favourably show in the
advertisements. Hence, the balance of convenience also appears
to be in favour of the complainant. If such an advertisement is
allowed to go unchecked, it may understandably cause irreparable
loss to the complainant.
19.
In view of the facts and circumstances discussed above, the
application of the complainant for grant of an ad interim injunction
deserves to be and is hereby accepted.
The respondent is
restrained from publishing the same or similar advertisements with
immediate effect, till the disposal of the complaint petition.”
12.
Though, the aforesaid restraint order was passed by the Commission after
hearing learned counsel for the parties, the first advertisement issued by the
respondent was again published in November, 2001 and January 2002 editions of the
Journal of Indian Medical Association. The complainant then filed a petition under
Section 13-B of the Act read with Section 12 of the Contempt of Courts Act, 1971 and
prayed that the respondent be punished for violating order dated 19.10.2001.
The
respondent filed reply stating that due to certain lapse, the advertisement was
14
published in November 2001, January 2002 and April 2002 issues of Journal of Indian
Medical Association.
The respondent also expressed regret for publication of the
advertisement after 19.10.2001. The Commission referred to the averments contained
in the reply and passed order dated 24.07.2003, which reads as under :
“The Complainant/ Applicant has filed an application under Section
13B of the MRTP Act, 1969 read with Section 12 of Contempt of Courts
Act, 1971 against the Respondent for violating and disregarding the order
passed by this Commission on 19.10.2001.
The respondent has filed
reply to the said application wherein it is stated in Paragraph 5 as follows:“The contents of paragraph 5 are strongly denied. It is submitted
that the certified copy of the Order dated 19.10.2001 was delivered
to the Respondent only on or about 25th January, 2002. Thereafter
the Advocate of the Respondent sent a copy to the respondent who,
in turn, sent it to its registered office in Kolkata for further
transmission to the publishers of the Journal of Indian Medical
Association
(JIMA).
Therefore,
the
publication
of
the
advertisements (Annexure A1 and Annexure A2 to the Complaint),
could not be prevented by the respondent in due time though for
sufficient cause. Consequently, the Respondent does not deny that
the said advertisements may have been published in the November,
2001 and January, 2002 issues of JIMA. The Respondent further
submits that due to certain lapse, the advertisements were
published even later in April 2002 issue of JIMA though that is not
the subject matter of the Petition under reply nor has the Petitioner
complained of the same. The Respondent sincerely regrets that for
reasons beyond its control the said advertisements were published
even in April, 2002. Upon coming across the advertisement in the
April, 2002 issue of JIMA the Respondent has immediately taken
preventive preventive action and therefore the said advertisements
have not been published in any Journal in India at the behest of the
respondent after April, 2002. The Respondent submits that there
cannot be any question of the Respondent disobeying or
disregarding the Order passed by this Hon’ble Commission and the
Respondent reiterates that it has the highest respect for this Hon’ble
15
Commission and it shall always remain duty bound to obey the
Order of this Hon’ble Commission.”
The learned counsel for the Respondent also states that the
advertisement appeared in the Journal inadvertently and at no stage it was
intended to disobey the order passed by this Commission. Unconditional
regret is offered for this lapse and we deem it appropriate not take any
further action in the matter. The application filed by the Applicant/
complainant is disposed of.”
13.
From 19.12.2001 to 26.02.2003, the matter was adjourned time and again to
enable the parties to complete the pleadings.
During this interregnum, the
complainant amended the memo of parties to incorporate the changed name of the
respondent.
14.
By an order dated 23.10.2003, the Commission framed the following issues :
“1.
Whether the respondent has been indulging in unfair and
restrictive trade practices as alleged in the Notice of Enquiry?
2.
Whether the alleged restrictive trade practices are not prejudicial
to public interest?
3.
Whether the alleged unfair trade practices are prejudicial to the
interest of the consumer/ consumers generally?”
The Commission also directed the complainant to file affidavits of
evidence and supporting documents and adjourned the case to 24.02.2004 for
admission/denial of the documents of the complainant and to 14.02.2004 for
cross-examination of the complainant’s witness.
15.
For the next nine years, the case was adjourned on 52 dates for
admission/denial of documents filed by the parties and cross-examination of the
persons who had filed affidavits. On seven of these dates – 13.07.2009, 21.09.2010,
02.12.2010, 25.11.20111, 13.01.2012, 28.02.2012 and 05.05.2014 the case was
16
adjourned because the learned counsel for the parties gave out that there is possibility
of settlement.
On one or two dates the case was adjourned for disposal of the
application filed by the complainant for amending the list of witnesses, which was
necessitated because Shri Goutam Bhattacharya left the company.
16.
On behalf of the complainant Shri Rajiv Behl, Deputy Manager (Legal) filed
affidavit dated 26.08.2004 and Shri Manmohan Singh Chugh, Assistant General
Manager (Marketing) filed affidavit dated 24.09.2004. The two deponents were crossexamined on 28.05.2008 and 24.03.2009 respectively by the advocates of the
respondent.
On behalf of the respondent, Shri Neeraj Pant, who joined the company
on 03.12.2007, filed affidavit dated 20.10.2009.
He was cross-examined by the
complainant’s advocate on 07.02.2013 and 11.04.2013.
17.
Shri Saif Khan, learned counsel for the complainant argued that the respondent
is guilty of unfair trade practice because the advertisement issued by it were not only
deceptive and misleading but were intended to disparage other antiseptics and
disinfectants’ including Betadin Standardised Solution manufactured and marketed by
his client. Learned counsel pointed out that the comparison made by the respondent
between various disinfectants was clearly deceptive because it was not indicated in the
advertisement that the Dettol is used after dilution whereas Betadin Standardised
Solution is to be used without any dilution. Learned counsel emphasized that the use
of the extremely small font for recording footnote on the left side of the first
advertisement was intended to keep the consumers in dark about the fact that Betadin
Antiseptic Solution had not been tested in organic soil. Learned counsel pointed out
that the research of A. Wood and D. Payne on which comparison made by the
respondent is based, was not published in the Journal of Hospital Infection, 1997
edition as has been tried to be made out by the respondent and as a matter of fact the
same was published in 1998 edition of that journal. Shri Khan further pointed out that
the research paper of A. Wood and D. Payne does not contain any comparison
17
between Dettol and Betadin Antiseptic Solution as is shown in the advertisement
issued by the respondent. He then argued that the research paper cannot be used by
the respondent for advertising its product without disclosing the fact that one of the
researcher’s namely D. Payne was associated with the respondent company. In the
end, Shri Khan submitted that the respondent is free to advertise its product in
superlative terms, but has no right to disparage or denigrate the products of the
competitors in the market and that too by issuing a misleading advertisement.
18.
Shri A. Rajshekhar Rao, learned counsel for the respondent argued that the
advertisements issued by the respondent, which were published in the journal of Indian
Medical Association do not fall within the mischief of Section 36-A (1)(x) of the Act
because the same were not intended to disparage the product of the complainant.
Learned counsel emphasized that the primary object of the advertisements was to
show efficacy of Dettol and there was no intention to denigrate the products
manufactured by the other including the complainant.
Shri Rao argued that the
respondent had every right to claim that its product was more efficacious than similar
products manufactured by others and such comparison is nothing more than mere
puffing, which is legally permissible. He further argued that the two advertisements do
not have the effect of misleading the consumers because the journal of Indian Medical
Association is distributed among the members of the medical community only and the
public does not have the access of the same.
19.
I have considered the respective arguments and carefully scrutinized the record
including the advertisements issued by the respondent, the affidavits of S/Shri Rajiv
Behl, Manmohan Singh Chugh and Neeraj Pant.
20.
Before dealing with the arguments of the learned counsel, I deem it necessary to
make it clear that the research paper/article prepared by A.Wood and D. Payne was
published for the first time in the journal of Hospital Infection 1998 edition and not the
1997 edition, as is reflected in the first advertisement issued by the respondent. During
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the course of arguments, learned counsel for the respondent fairly accepted this
position.
It also deserves to be mentioned that the advertisement issued by the
respondent were published in the journal of Indian Medical Association in March, 2000
and not in early 1998, as it has been mentioned in paragraph A of the Preliminary
Objections taken in the reply of the respondent. The respondent has not placed on
record copy of any journal to show that the advertisements were published in early
1998. Another fact, of which cognizance deserves to be taken at this stage is that
about one lakh copies of the journal of Indian Medical Association are printed and the
same reaches not only to medical professionals but also the Government Institutions,
NGOs and International houses, Banking Insurance Companies, Visa and Master Card
Holders, Airways, Holiday Resorts, Textile Industries, Books, besides Overseas
Medical Colleges and other Institutions. This is proclaimed by Honorary Secretary and
Honorary Editor of the journal in the following words :
“About JIMA
Journal of the Indian Medical Association, popularly known as JIMA, a
monthly Journal Indexed in Index Medical constitutes the largest circulation
(over 1 lac copies per month) of all the indexed and other medical journals of
India and abroad. The journal is also available in microfilm through Bell and
Howels, USA. The fonder leaders of this prestigious journal include Late Sir
Nilratan Sircar, Dr. Bidhan Chandxra Roy, Dr Kumud Sankar Ray and other
scholars and doyen of the medical profession.
It was started in the pre-
Independence period (1930) with 122 doctors only. The objective was to protect
the rights and dignity of the Indian Doctors on one hand and to promise
indigenous pharmaceutical houses and publish their products through it on the
other hand.
Incidentally JIMA has completed more than 70 years of its
publication with distinction and reputation achieving wide appreciation from all
international medical forums. Over the years JIMA has built up a good relation
with almost all the pharmaceutical houses and houses of consumer products in
the country as well as abroad.
We accept ethics/advertisements irrespective of pharmaceutical and nonpharmaceutical products. We also accept donations from Individuals and Indian
as well as Foreign Medical Professions. In JIMA pharmaceutical houses find
over 1.5 lac medical professionals to reach their product message, and
19
consumer product manufacturers find over 2.5 lac of readership for exposure of
their
products,
specially
the
sophisticated
medical
equipments
and
pharmaceutical products.
JIMA not only reaches over 1 lac copies for medical professionals, but
also to Government Institutions, NGOs and International house, Banking,
Insurance Companies,
Visa and Master Card Holders, Airways, Holiday
Resorts, Textile Industries, Books and others, besides Overseas Medical
Colleges and other Institutions.
JIMA is now also available on www.jimaonline.org
This unique vehicle for your products’ campaign invites you to release,
publish and circulate your advertisements at nominal charges, considering its
readership for better dividends. We assure you of our best services always.
JIMA may also provide several other facilities and avenues for your products’
campaign which you may discuss with the office bearers of JIMA over the
telephone or across the table.
Dr. Sudipto Roy
Chaudhuri
Hony. Editor, JIMA
JIMA”
21.
Dr. Sibadatta
Hony. Secretary,
Section 36A(1)(x), which has been relied upon by the complainant for seeking
declaration that the respondent is guilty of unfair trade practice, reads as under :
“36-A – Definition of unfair trade practice - In this Part, unless the context
otherwise requires, ''unfair trade practice" means a trade practice which, for
the purpose of promoting the sale, use or supply of any good or for the
provision of any services, adopts any unfair method or unfair or deceptive
practice including any of the following practices, namely:(1) the practice of making any statement, whether orally or in writing or by
visible representation which,-
xxx
xxx
xxx
(x) gives false or misleading facts disparaging the goods, services or
trade of another person.
Explanation.-For the purposes of clause (1), a statement that is-
20
(a) expressed on an article offered or displayed for sale, or on its
wrapper or container, or
(b) expressed on anything attached to, inserted in, or
accompanying, an article offered or displayed for sale, or on
anything on which the article is mounted for display or sale, or
(c) contained in or on anything that is sold, sent, delivered,
transmitted or in any other manner whatsoever made available to
a member of the public, shall be deemed to be a statement made
to the public by, and only by the person who had caused the
statement to be so expressed, made or contained;
22.
The definition of “unfair trade practice” is very wide and comprehensive.
It
means a trade practice which, for the purpose of promoting the sale, use or supply of
goods or for the provision of any services, adopts any unfair method or unfair or
deceptive practice includes any of the practices enumerated in various clauses of subsection (1). In terms of clause (x) the practice of making any statement, whether orally
or in writing or by visible representation, which gives false or misleading facts
disparaging the goods, services or trade of another person amounts to unfair trade
practice. Explanation appearing below sub-section (1)(x) of Section 36-A contains a
deeming provision and lays down that for the purpose of clause (1), a statement
expressed on an article offered or displayed for sale, or on its wrapper or container, or
expressed on anything attached to, inserted in, or accompanying, an article offered or
displayed for sale, or on anything on which the article is mounted for display or sale, or
contained in or on anything that is sold, sent, delivered, transmitted or in any other
manner whatsoever made available to a member of the public, shall be deemed to be a
statement made to the public by, and only by the person who has caused the
statement to be so expressed, made or contained.
23.
Since the word ‘disparaging’ appearing in Section 36-A(1)(x) has not been
defined in the Act, it will be useful to notice dictionary meaning and interpretation
thereof by the Courts. The New International Websters' Comprehensive Dictionary
defines disparage/ disparagement to mean, "to speak of slightingly, undervalue, to
bring discredit or dishonor upon, the act of depreciating, derogation, a condition of low
21
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 discredit on, slightingly of and depreciate.” As per Black’s
Law Dictionary Seventh Edition (page-483), the word ‘disparage’ means - to dishonor
something or someone by comparison; to unjustly discredit or detract from the
reputation of another’s property, product, business. The noun of the word ‘disparage’
is ‘disparagement’.
It means - a false and injurious statement that discredits or
detracts from the reputation of another’s property, product or business.
24.
The word ‘puffing’ has been defined in Black’s Law Dictionary, Eighth Edition in
the following words :
“The expression of an exaggerated opinion-as opposed to a factual
misrepresentation-with the intent to sell a good or service; Puffing
involves expressing opinions, not asserting something as a fact.
Although there is some leeway in puffing goods, a seller may not
misrepresent them or say that they have attributes that they do not
possess.”
25.
The moot question which requires determination in this case is whether the
advertisements issued by the respondent amounted to mere puffing of its product or
the same were intended to disparage the product of the complainant, i.e., Betadine
Standardised Solution (which is also known as Betadine).
26.
Before proceeding further, I may refer to the judgment of the Supreme Court in
M/s. Lakhanpal National Limited vs. M.R.T.P. Commission and another [(1989 3 SCC
251], in which the Court interpreted Section 36-A (unamended). The facts of that case
were that the Commission had issued show cause notice to the appellant under
Section 36-B of the Act informing it that a proceeding had been instituted for making an
inquiry whether the company was indulging in certain unfair trade practices prejudicial
22
to public interest. The allegations in respect of which the inquiry was proposed to be
held were :
“(i) although the Company was manufacturing ‘Novino’ batteries in
collaboration with M/s Mitsushita Electric Industrial Co. Ltd. and not with
National Panasonic of Japan, it was issuing advertisements announcing
that ‘Novino’ batteries are manufactured in collaboration with National
Panasonic of Japan using National Panasonic techniques, and
(ii) the representation that ‘Novino’ batteries are manufactured by joint
venture or collaboration with National Panasonic was false and
misleading and thereby causing loss or injury to the consumers.”
In its reply the Company (appellant before us) denied to have made any wrong
representation in the advertisements. It was asserted that the Company has actually
entered into a collaboration agreement with M/s Mitsushita Electric Industrial Ltd. of
Japan for the manufacture of dry cell batteries, and was adopting the process for
manufacturing ‘Novino’ batteries as is employed by Mitsushita Ltd. The agreement has
been duly approved by the Ministry of Industry, Government of India. It is further stated
that the Mitsushita Ltd. of Japan is better known by its products described by the
names “National” and “Panasonic” and there is no question of misleading anybody by
the description of the Japanese Company by its products.
The Commission rejected the explanation of the appellant and passed an order
under Section 36-D(1) of the Act forbidding it from issuing certain type of
advertisements. The Supreme Court scrutinized the appellant’s challenge to the order
of the Commission and held :
“The show-cause notice served on the appellant does not take any
exception to the use of the word “collaboration” in the advertisement in
question. The grievance is against the use of the names of the product
“National” and “Panasonic” in place of the Company which is
manufacturing them. The issue thus is confined by the charge in the showcause notice which is very limited in its scope. The Commission has taken
note of the case of the appellant that since “National” and “Panasonic” are
23
well known names in India while their manufacturing company, the
Mitsushita Ltd., is not, the advertisements have mentioned the brand
names instead of the manufacturing company; but has refused to accept
this plea as a good defence. We do not agree.”
27.
The Supreme Court then noticed the background in which Section 36-A to
Section 36-E were inserted in the Act and made the following observations:
“The Act as it originally stood did not contain any provision for protection
of consumers against false or misleading advertisements or other similar
and unfair trade practices. By providing for measures against restrictive
and monopolistic trade practices, it was perhaps assumed that the
consumers also, as a result, will get a fair deal. However, experience
indicated otherwise, and following the recommendations of a Committee,
it was considered necessary to amend the Act. In the fast changing
modern world of today advertising goods is a well-recognised marketing
strategy. The consumers also need it, as the articles which they require
for their daily life are of a great variety and the knowledge of an ordinary
man is imperfect. If the manufacturers make available, by proper
publicity, necessary details about their products, they come as great help
to the man in the street. Unfortunately, some of the advertisements
issued for this purpose make exaggerated and sometime baseless
representations about the quality, standard and performance, with an
object of attracting purchasers. It was, therefore, considered necessary
to have statutory regulations insisting that, while advertising, the seller
must speak the truth. Accordingly Sections 36-A to 36-E in Part B wise
inserted in Chapter V of the Act by an amendment in 1984.”
While interpreting Section 36-A (unamended), the Supreme Court observed as under :
24
“The definition of “unfair trade practice” in Section 36-A mentioned above
is not inclusive or flexible, but specific and limited in its contents. The
object is to bring honesty and truth in the relationship between the
manufacturer and the consumer. When a problem arises as to whether a
particular act can be condemned as an unfair trade practice or not, the
key to the solution would be to examine whether it contains a false
statement and is misleading and further what is the effect of such a
representation made by the manufacturer on the common man? Does it
lead a reasonable person in the position of a buyer to a wrong
conclusion? The issue cannot be resolved by merely examining whether
the representation is correct or incorrect in the literal sense. A
representation containing a statement apparently correct in the technical
sense may have the effect of misleading the buyer by using tricky
language. Similarly a statement, which may be inaccurate in the
technical literal sense can convey the truth and sometimes more
effectively than a literally correct statement. It is, therefore, necessary to
examine whether the representation, complained of, contains the
element of misleading the buyer. Does a reasonable man on reading the
advertisement form a belief different from what the truth is? The position
will have to be viewed with objectivity, in an impersonal manner. It is
stated in Halsbury's Laws of England (4th Edn., paras 1044 and 1045)
that a representation will be deemed to be false if it is false in substance
and in fact; and the test by which the representation is to be judged is to
see whether the discrepancy between the fact as represented and the
actual fact is such as would be considered material by a reasonable
representee. “Another way of stating the rule is to say that substantial
falsity is, on the one hand, necessary, and, on the other, adequate, to
establish a misrepresentation” and “that where the entire representation
25
is a faithful picture or transcript of the essential facts, no falsity is
established, even though there may have been any number of
inaccuracies in unimportant details. Conversely, if the general impression
conveyed is false, the most punctilious and scrupulous accuracy in
immaterial minutiae will not render the representation true”.
(emphasis added)
28.
The law relating to disparagement or 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 to him to denigrate or disparage the goods of
another person. 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.
As long as the
advertisement is limited only to puffing, no objection can possibly be raised against the
same.
In White v. Mellin,: (1895) A.C. 154, the House of Lords while rejecting the
contention of disparagement observed as under:
“The allegation of a tradesman that his goods are better than his
neighbour's very often involves only the consideration whether they
possess one or two qualities superior to the other. Of course "better"
means better as regards the purpose for which they are intended, and
the question of better or worse in many cases depends simply upon one
or two or three issues of fact. If an action will not lie because a man says
that his goods are better than his neighbour's, it seems to me impossible
to say that it will lie because he says that they are better in this or that or
the other respect. Just consider what a door would be opened if this were
permitted. That this sort of puffing advertisement is in use is notorious;
and we see rival cures advertised for particular ailments. The Court
26
would then be bound to inquire, in an action brought, whether this
ointment or this pill better cured the disease which it was alleged to curewhether a particular article of food was in this respect or that better than
another. Indeed, the Courts of law would be turned into a machinery for
advertising rival productions by obtaining a judicial determination which
of the two was the better.”
29.
The above decision was explained by the Chancery Division in the case of De
Beers Abrasive Products Ltd. and Others v. International General Electric Co. of New
York Ltd. and Another: 1975 (2) All ER 599, wherein while considering an allegation of
false advertising causing injury to a rival traders group, the court observed as under:
“The law is that any trader is entitled to puff his own goods, even though
such puff must, as a matter of pure logic, involve the denigration of his
rival's goods...... "The best tailor in the world," "The best tailor in this
town," and "The best tailor in this street," none of the three committed an
actionable wrong.....Where, however, the situation is not that the trader is
puffing his own goods, but turns to denigrate those of his rival, then, in
my opinion, the situation is not so clear cut. Obviously the statement: "My
goods are better than X's" is only a more dramatic presentation of what is
implicit in the statement: "My goods are the best in the world."
Accordingly, I do not think such a statement would be actionable. At the
other end of the scale, if what is said is: "My goods are better than X's,
because X's are absolute rubbish," then it is established by dicta of Lord
Shand in the House of Lords in White v. Mellin (1895) A.C. 154, 171,
which were accepted by Mr. Walton as stating the law, the statement
would be actionable.”
30.
From these judgments it is clear that the claim made in an advertisement,
which merely amounts to puffery, will not warrant interference by the Court at the
27
instance of the rival in the trade. The reason for this is that puffing involves expressing
opinions and are not considered as statements of fact which can be taken seriously.
Puffery is neither intended to make a representation as to facts nor it is considered as
such by the target audience. Therefore, the advertisement involving puffery cannot be
stated to be misrepresenting facts.
31.
It is interesting to note that in majority of the reported judgments involving
challenge to disparaging advertisements the respondent herein has been one of the
parties.
In Reckitt and Colman of India Ltd. v. M.P Ramchandran [1999 (19) PTC
741], the Calcutta High Court considered the concept of negative advertisement. In
that case, the plaintiff was a manufacturer of whitener sold under the brand name
‘Robin Blue’. The defendants were also manufacturing a whitener and selling their
product under the brand name ‘Ujala’. The advertisement of the defendants depicted
that the colour blue, which was plaintiff's product, was uneconomical and the average
blue was the most expensive to whiten the clothes. It had further been added ‘what is
more, you have to use lots of blue per wash’. While making the said comment the
container of the plaintiff had been shown upside down and it had further been shown
that the liquid was gushing out. After taking cognizance of these facts, the High Court
observed :
“The object is obviously to show that the product of the petitioner priced
at Rs. 10/- gushes out as a quirt and not in drops while using and
therefore, it is an expensive way to whiten clothes. The container of the
petitioner as produced by Mr. Chakrabotry was put by me up-side-down
and I found that the liquid packed in the container comes out drop unless
one squeezes the container, which is made of plastic. It has then been
shown in the advertisement that blue is a product of obsolete technology
and Therefore, it cannot dissolve completely in water and as such forms
sediments at the bottom of the wash bucket. The said assertion it
28
appears to me is not a presentation of a technological disadvantage of
the product of the petitioner as was asserted by Mr. Chakraborty but an
insinuation to the product itself. The same is clarified by the last assertion
contained in advertisements to the effect that blue leaves dirty blue
patches on clothes because it forms sediments. The insinuation,
therefore, is sediment of blue leaves blue patches on freshly washed
clothes since blue cannot dissolve in water.
Thus it was the poor depiction of the plaintiff's product which was
aimed at in the impugned advertisement and was found to be
disparaging.”
32.
In Reckitt & Colman of India Ltd. v. Kiwi T.T.K Ltd. [1996 (16) PTC 393 (Del.)],
the product of the plaintiff, namely, Cherry Polish was shown in a disparaging manner
as the advertisement showed a bottle of KIWI (defendant's product) which does not
drip as against the bottle described as “OTHERS” which was held to be that of
plaintiff's because of red blob on the surface which represents CHERRY which
dripped. While disposing of an application filed by the plaintiff under Order 39 Rule 1
and 2 CPC, the High Court observed as under:
“12. The settled law on the subject appears to be that a
manufacturer is entitled to make a statement that his goods are the best
and also make some statements for puffing of his goods and the same
will not give a cause of action to other traders or manufacturers of similar
goods to institute proceedings as there is no disparagement or
defamation to the goods of the manufacturer so doing.
However, a manufacturer is not entitled to say that his
competitor's goods are bad so as to puff and promote his goods. It,
29
therefore, appears that if an action lies for defamation an injunction may
be granted….”
33.
In Pepsi Co. Inc. v. Hindustan Coca Cola Ltd. [2003 (27) PTC 305], a Division
Bench of the Delhi High Court held that comparative advertising, which discredits or
denigrates the trade mark or trade name of a rival is impermissible.
Some of the
observations made in that judgment are extracted below :
“What
is
disparagement.
The
New
International
Websters'
Comprehensive Dictionary defines disparage/disparagement to mean, “to
speak of slightingly, undervalue, to bring discredit or dishonor upon, the
act of deprecating, 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….. 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) Storyline 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 show one's product better or best without
derogating other's product then that is not actionable.”
34.
The same principle was reiterated in Reckitt Benckiser (India) Ltd. v. Hindustan
Lever Limited [2008 (38) PTC170], and it was held that for a claim of commercial
disparagement to succeed in cases of comparative disparagement, the court is to
approach the issue from the perspective of the hypothetical “average person of
imperfect recollection” picked from the target group of consumers. A tradesman is
entitled to declare that his goods are the best in the world-even if such a declaration is
30
untrue. Mere puffing is permissible, but slighting or rubbishing or otherwise denigrating
or disparaging another's product is not. The relevant portion of that judgment is
reproduced below:
“Two recent English decisions; one of 2000 and another of 2002
need to be noticed. In Jupiter Unit Trust Managers Trust Ltd v. Johnson
Fry Asset Managers plc (2000) Unreported 19 April, QBD Morland J.
observed as under:
22. In my judgment when considering comparative advertising in relation
to a claim for malicious falsehood the test that the Court should apply
whether in relation to slander of goods or slander of a financial product is
whether the financial service provider in puffing his own product has
overstepped the permissible limit of denigration or disparagement of his
rival's product so that a reasonable man would take the claim seriously.
In DSG Retail Ltd. v. Comet Group PLC (2002) EWHC 116, while
considering the question as to where the line is to be drawn between
mere puffery and actionable statements, it was noticed that this question
had been addressed by Walton J in De Beers Abrasive Products Ltd v.
International General Electric Co Ltd. (1975) 1 WLR 972, as under:
What precisely is the law on this point? It is a blinding glimpse of
the obvious to say that there must be a dividing line between
statements that are actionable and those which are not; and the
sole question upon a dry point of law such as we are discussing
here is: where does that line lie? On the one hand, it appears to
me that the law is that any trader is entitled to puff his own goods,
even though such puff must, as a matter of pure logic, involve the
denigration of his rival's goods. Thus in the well-known case of the
31
three adjoining tailors who put notices in their respective windows
reading: “The best tailor in the world”, “The best tailor in this town”,
and “The best tailor in this street”, none of the three committed an
actionable wrong.
This is, I think, a proposition which extends to a much wider field
than the slander of goods; for example I think it extends to other
vague commendatory statements about goods or services on
offer. Principal among its applications has been the case of
auctioneers, who, within limits, have always been allowed to use
language which has been strictly perhaps not literally true; thus for
example to take note of one instance, in Hope v. Walter [1900] 1
Ch 257: “I do not attach any importance to the word ‘eligible’: it is
the ordinary auctioneer's language”. In other words, in the kind of
situation where one expects, as a matter of ordinary common
experience, a person to use a certain amount of hyperbole in the
description of goods, property or services, the courts will do what
any ordinary reasonable man would do, namely, take it with a
large pinch of salt.
Where, however, the situation is not that the trader is puffing his
own goods, but turns to denigrate those of his rival, then, in my
opinion, the situation is not so clear cut. Obviously the statement:
“My goods are better than X's” is only a more dramatic
presentation of what is implicit in the statement: “My goods are the
best in the world”. Accordingly, I do not think such a statement
would be actionable. At the other end of the scale, if what is said
is: “My goods are better than X's”, because X's are absolute
rubbish”, then it is established by dicta of Lord Shand in the House
32
of Lords in White v. Mellin [1895] AC 154, which were accepted by
Mr. Walton as stating the law, this statement would be actionable.
Between these two kinds of statements there is obviously still an
extremely wide field; and it appears to me that, in order to draw
the line, one must apply this test, namely, whether a reasonable
man would take the claim being made as being a serious claim or
not.
Finally, McCarthy on Trademarks and Unfair Competition: Fourth
Edition, Volume 4 at 27:38 explains “Puffing” to be exaggerated
advertising, blustering, and boasting upon which no reasonable buyer
would rely and is not actionable. It was also observed that “Puffing” may
also consist of a general claim of superiority over comparable goods that
is so vague that it will be understood as merely the seller's expression of
opinion. It was further noted that an exaggerated advertising claim which
is placed with an intent to influence the consumer's buying decision
cannot be dismissed as mere puffing.
These two decisions, and what is stated in McCarthy, stress the
point that (a) between clear-cut cases of permissible comparative
advertising and impermissible “rubbishing” of a rival's product there may
yet be a wide field of cases and (b) the dividing line in such cases would
have to draw based on the test whether a reasonable man would take
the claim of the alleged slanderer seriously or take it with the proverbial
‘large pinch of salt’ and dismiss it as mere puffery. If it is the former then,
it is a case of disparagement and if it is the latter then, it is a case of
mere puffery which is not actionable.”
33
In Colgate Palmolive (India) Limited v. Anchor Health & Beauty Care Pvt. Ltd.
(supra), the Madras High Court while deciding an application under Order 39 Rule 1 &
2, held as under :
“52. It is the overall impression that customer gets as to the source and
origin of the goods from visual impression of colour combination, shape
of the container, packaging etc. If illiterate, unwary and gullible customer
gets confused as to the source and origin of the goods which he has
been using for longer period by way of getting the goods in a container
having particular shape, colour combination and getup, it amounts to
passing off. In other words if the first glance of the article without going
into the minute details of the colour combination, getup or lay out
appearing on the container and packaging gives the impression as to
deceptive or near similarities in respect of these ingredients, it is a case
of confusion and amounts to passing off one's own goods as those of the
other with a view to encash upon the goodwill and reputation of the latter.
54. May be, no party can have monopoly over a particular colour but if
there is substantial reproduction of the colour combination in the similar
order either on the container or packing which over a period has been
imprinted upon the minds of customers it certainly is liable to cause not
only confusion but also dilution of distinctiveness of colour combination.
Colour combination, get up, lay out and size of container is sort of trade
dress which involves overall image of the product's features. There is a
wide protection against imitation or deceptive similarities of trade dress
as trade dress is the soul for identification of the goods as to its source
and origin and as such is liable to cause confusion in the minds of
unwary customers particularly those who have been using the product
over a long period.
34
55. The difference in the style of the words appearing on the container or
packing identifying its manufacturers by way of style, colour combination
or textures or graphics is certainly significant or relevant for determining
the overall imitation of the container but if a product having distinctive
colour combination, style, shape and texture has been in the market for
decades as in this case it is in the market since 1951 it leads to
ineluctable inference of having acquired secondary meaning on account
of its reputation and goodwill earned at huge cost.
56. It is not the diligent or literate or conscious customer who always
remain conscious to the quality of goods he has been purchasing which
determines an offence of passing off. It is the unwary, illiterate and
gullible persons who determine by arriving at a conclusion whether the
infringed goods are confusingly similar in colour combination, get up, layout printed over the container or packing. If it is not so then the offence of
passing off will cease to have its existence once the guilty party chooses
a different trade name.”
35.
In Reckitt Benckiser (India) Ltd. v. Hindustan Unilever Limited, 2013 [(55) PTC
126], a learned single Judge of the Delhi High Court, while disposing of an application
for interim injunction filed by the plaintiff against telecasting of a television commercial
of the defendants Lifebuoy soap, considered the distinction between disparagement
and puffing, referred to a large number of precedents and laid down prepositions to
which reference shall be made hereinafter. In that case, the plaintiff had alleged that
the television commercial got prepared by the defendant showing the alleged ill-effect
of the usage of Dettol as antiseptic liquid in bathing water as compared to Lifebuoy
soap, amounted to disparagement of its product. The learned Single Judge noticed
the pleadings of the parties, arguments advanced by their counsel as also the
35
advertisement, which formed part of the television commercial, referred to a number of
judicial precedents and proceeded to observe :
“63. Adverting to the facts of the present case, having gone through the
commercial not only in its text (as reproduced above) but also having watched it
on a DVD, the question here is whether the advertisement disparages or
denigrates the antiseptic liquid of the plaintiff and also whether it only seeks to
project the superiority of the defendant's LIFEBUOY soap over an ordinary
antiseptic liquid? The advertisement begins with the scene showing a sick child
lying with a few toys around in the display and the doctor entering the house
and commenting that he has been invited yet again. Thereafter, the doctor
inquires about the hygiene habits of the child and the doctor asks: “kya ye
nahata hai roz”, to which the mother of the child replies: “haan nahane ke paani
mein do dhakkan antiseptic liquid be daltehai” and the doctor mocking and
ridiculing in reply says: “aap bhee nahane mein sirf do dhakkan, use balti toh
bimar nai padegi, paani ke kitanu shayad nikal jayen, lekin body ke, yeh yahan
se yahan, fir zukam, khansi, flu”. In the meanwhile, the commercial runs to
demonstrate a lady pouring brown liquid with a tilted bottle in the bucket of
water. The mother of the child then proceeds to ask the doctor: “to nahane mein
isse better? And the doctor replies: “100% germ protection, Advanced Lifebuoy”
and then appears two different shields of protection, green signifying Dettol and
Red signifying Lifebuoy wherein, the green side is left with a few germs and the
red shows “kill of all”. Once again lifebuoy is shown to have excellent germ
killing capability whilst an antiseptic liquid is completely ineffective. The voiceover also indicates the same. It is obvious that the advertisement displays the
said so called “antiseptic liquid” in bad light and as something harmful.
Thereafter, the advertisement proceeds with the introduction of the defendant's
LIFEBUOY soap and the manner in which it spreads a protective red wall
thereby removing and dissipating the germs.
64. The advertisement can be viewed in two parts. One part is where as the
advertisement begins, its showing display of a few toys with the sick child which
is a similar aspect to that of the plaintiff's advertisement. The other part is the
“two dhakkans” of liquid is shown as being harmful and ineffective, which as per
the visualisation of the television commercial, does lay an adverse connotation
and a lady pouring a brown liquid in the bucket, in the same manner and display
36
as that of the plaintiff's television commercial and where the defendant's product
is shown as having the qualities of providing a 100% germ protection. There can
be no grievance in respect where the qualities of the defendant's soap are
sought to be demonstrated: whether those qualities exist or not is not an issue.
That part, even if untrue, would be mere puffery. However, the part of the
advertisement, where the antiseptic liquid has been slighted and shown in bad
light and in fact, as something which is ineffective, cannot but be construed as
disparagement and denigration of the antiseptic liquid shown in the
advertisement. It is one thing to say that a person's product is the best or that
his product is better than somebody else's product, but, it is entirely a different
matter to say that his product is good whereas another's product is bad and
harmful.
65. With aforesaid discussion, it is ostensibly clear that the advertisement
disparages the plaintiff's antiseptic liquid and it is not an advertisement which
seeks merely or only to promote the superiority of the defendant's ‘LIFEBUOY’
soap over an ordinary antiseptic liquid. When the commercial is displayed
before the public at large, the basic principle that is followed is that the public
tries to find the connectivity and the impact that advertisement probably creates
on them. If ‘X’ would raise the standards of its product by claiming the rivals
products ‘Y’ to be bad and not effective displaying similar/comparative attributes
of the two, the same would be bad in law. If it were a case of mere promotion of
superiority of the defendant's product, alone, the plaintiff would not have had a
case as that would have only betokened a permissible “better” or “best”
statement. The advertisement comprises of two parts; one which denigrates and
disparages the product of the plaintiff and the other which promotes the
purported superiority of defendant's LIFEBUOY soap. There is thus a hint of
some malice involved in the commercial in respect of the defendant's product indeed, it would be appropriate to delete certain relevant attributes of the
defendant's advertisement which clearly hits on the plaintiff's product and
portrays the same in bad light. Without a doubt comparative advertising is
beneficial as it increases consumer awareness and therefore, it is permissible
but not by pulling down the reputation of your competitor by showing its product
in debauched light. Moreover, advertising is a medium through which an
advertiser can establish his brand in the market, but at the same time there are
certain set of laws that cannot be deserted. Denigrating or causing direct harm
to one's product which has attained appreciation in its genre in terms of usage
and application, would amount to slander, which would also cause great
37
prejudice to the public interest, as the question is not of deciding which product
is better, but also of public awareness. Because, misleading and disparaging
advertisement would not only mellow down the faith of the public but would also
result in misleading them.”
36.
In Hindustan Unilever Ltd. vs. Reckitt Benckiser (India) Ltd., 2014 (57) PTC 495,
the Division Bench of the Delhi High Court approved the order passed by the learned
Single Judge, who held that the advertisement issued by the appellant had disparaged
the plaintiff’s product namely – Dettol. In the suit, plaintiff had sought an injunction to
restrain the defendant (appellant before the Division Bench) from telecasting an
advertisement disparaging the Dettol soap. The defendant claimed that its product
namely – Lifebuoy enjoys considerable goodwill and reputation among the consumers
and the advertisement was not intended to disparage the product of the plaintiff. The
learned Single Judge considered the pleadings and evidence of the parties and held :“The new shape of the DETTOL Original toilet soap with the
curved edges and the curvature in the middle is clearly displayed on the
product packaging, which is further indicative of the importance given to
the shape by the plaintiff in its marketing of the product. The packaging
(Ext. PW1/8) also establishes the fact that although white is also used,
green is the pre-dominant colour. Although, the brand name, logo or the
sword device does not appear in the orange bar of soap shown in the
advertisement (Ext. PW1/2), there can be no misgiving that the bar of
soap which has been shown in the said advertisement is of a colour
similar to that of the plaintiff's DETTOL soap. The contours, curvature as
well as the overall shape of the orange bar of soap in the advertisement
itself, are virtually the same as that of the contours, curvature and overall
shape of the plaintiff's DETTOL Original soap. Moreover, the clear
impression given in the advertisement is that the said orange bar of soap
has been taken out from a green wrapper/packaging. It must also be
38
noted that the design of the plaintiff's soap has been registered by the
plaintiff as indicated by Ext. PW1/DX-1. While it is true that there may be
other orange coloured soaps and other soaps sold in the pre-dominantly
green packaging and other soaps which have an oval shape, it is also
true that it is only the plaintiff’s soap which has a combination of all the
three elements, i.e., orange colour, curved oval shape and predominantly
green packaging. Apart from this, it is only the plaintiff’s soap which has
contours in the manner indicated in the bar of soap in the said
advertisement. No evidence has been produced by the defendant to
show that there is any ordinary antiseptic soap with the same
combination of the aforesaid elements of colour, shape, design and
packaging. I have absolutely no doubt that the orange bar of soap shown
in the advertisement refers to the plaintiff’s DETTOL Original soap.”
37.
While rejecting the argument of the appellant that the plaintiff had failed to
adduce any evidence to prove disparagement, learned Single Judge observed :-
“It has been contended on behalf of the defendant that the plaintiff has
not produced any evidence of consumers to indicate that the orange bar
of soap in the said advertisement appears to be the plaintiff's DETTOL
Original soap. In response the learned counsel for the plaintiff submitted
that producing such evidence would be counter-productive and is not
necessary. He submitted that the plaintiff could produce witnesses
stating that the orange bar of soap shown in the advertisement had
reference to the plaintiff's DETTOL Original soap. Similarly, the
defendant could also produce witnesses to state the contrary. Ultimately,
it would be for the court to make a judgment from the perspective of an
average person with imperfect recollection, a test which has been well
established, particularly in passing off cases. Though slander of goods
39
and disparaging advertisements stand on a slightly different footing to
passing off cases, I find myself to be in agreement with the submissions
made by the learned counsel for the plaintiff. Ultimately it is a question of
perception and the perception has to be determined from the stand point
of an average person man with imperfect recollection but, with a
corollary, which shall stated be shortly. One could normally expect that
there would be a difference in perception between two distinct classes of
persons--(1) Persons who are using DETTOL Original soap and (2)
persons who do not use that soap. A person belonging to the latter
category may not be aware of the orange coloured bar of soap of the
plaintiff with its distinctive shape, curvature and contours. He may also
not be aware of the packaging employed by the plaintiff. Therefore, such
a person may not link the bar of soap shown in the advertisement with
the plaintiff's product when he sees the advertisement or when he comes
upon the plaintiff's product in a shop. Such a person, in all likelihood,
would perceive the orange bar of soap shown in the advertisement as
being some unbranded bar of soap. On the other hand, a person
belonging to the former category, being a user of the plaintiff's DETTOL
Original soap, would immediately recognise the bar of soap shown in the
advertisement as referring to the plaintiff's DETTOL Original soap. This is
because, such a person is familiar with the plaintiff's product. He is
"intimately" aware of the look and feel of the soap because he uses it
everyday.”
38.
The learned Single Judge then highlighted the difference in approach in a
passing off action and one for disparagement in the following words :-
“In a case of passing off, the question invariably is whether the trade
mark or trade dress employed by A for his product is so deceptively
40
similar to the established mark or trade dress of B's product that A's
product could be confused by or passed off to consumers as B's
product? Here the comparison is of rival products having a similar trade
mark, get-up or trade dress. Familiarity with the established mark, trade
dress or get-up is presumed. Because, it is this familiarity that the person
intending to pass off his goods as those of the famous or more popular,
exploits. In the case of disparagement, the one who disparages another's
product, does not seek to make his product similar to the disparaged
product, but to distinguish it from the disparaged product. The object of
disparagement is to make the disparaged product appear to be as near
or similar to the competitor's product. The comparisons, therefore, in
cases of passing off and in cases of disparagement are different.
Consequently, the comparison must be from the perspective of an
average person with imperfect recollection but, that person must be
picked from the category of users of the product allegedly sought to be
disparaged or slandered.”
39.
The Division Bench referred to large number of precedents on the subject,
approved the judgment of the learned Single Judge and observed :
“In the present case, the Court has to be sensitive and alive to the fact
that viewership of television channels and electronic media is diverse
and widespread. The learned Single Judge found, and we see no
infirmity in this regard, that DETTOL's market leadership in the antiseptic
liquid
market
made
it
particularly vulnerable in
the
impugned
advertisement. In this context, the Court usefully recollects what was
stated in a previous disparagement action (Glaxo Smithkline Consumer
Healthcare Limited & ors v. Heinz India Private Limited & Anr., I.A. No.
41
15233/2008 in CS (OS) No. 2577/2008, decided on 12.11.2010) though
in the course of interlocutory injunction proceedings):
“This Court is conscious of the powerful and lasting impact that
audio visual images have on viewers. Unlike the printed word,
which is processed analyzed, and assimilated uniquely by each
individual, an advertisement in the electronic media, particularly,
has a different impact. First, it has a wider spread; it is perceived
aurally through different senses, such as sound, visual, and
printed. The suggestive power of this medium is greater. Second,
such advertisements use several different tools, like music,
dialogue, colors, and other aids, to bring home the message.
Advertisements through this medium can, and do operate at
conscious and subconscious levels; their power of suggestion
extends not just to the discerning, or educated viewer, but to an
entire range of viewership, with diverse income earning capacities,
educational attainments, tastes, and so on. They influence even
children. The impact of a catchy phrase, a well acted skit or story
line, or even distinctive sounds or distinctive collocation of colors,
can well define the brand or product's image, by imprinting it in the
public memory forever.”
Here, though at a superficial level, HUL targeted antiseptic soaps
and elaborated the ill-effects of antiseptics on the skin, the combined
effect of this message with the three visuals, two distinctly (though
briefly) showing Dettol soap, with its unique colour, curvature and shape
suggested powerfully to ordinary and reasonable viewer that the soap
being spoken against in the advertisement was none other than a Reckitt
product. Though not strictly accurate, the innuendo was in the nature of a
42
commercial double entendre where the hidden meaning was intended to
impact the viewer more than the obvious, superficial one. This plainly is
disparagement, and a slander of Reckitt's DETTOL Original; the Single
Judge arrived at the correct finding in that regard and the Court hereby
affirms it.”
40.
The Division Bench of the High Court then considered whether the damages
awarded by the learned Single Judge were appropriate and adequate, referred to
several judgments of the British and American Courts as also the judgment of the
Supreme Court and observed :-
“69.
Reverting to the facts of this case, the defendant clearly
was aware about its wrong doing and the harm which would ensue to
HUL because of the published disparagement. Yet it went ahead and
aired it in almost all the national and a large number of regional channels
with repetitiveness. The deliberation points at an aim to denigrate the
plaintiff’s product and harm its reputation. At no stage did it even in these
proceedings -- offer to make amends. In the circumstances, the award of
punitive damages was warranted. The award of general damages
through this judgment (although of a figure of Rs. 20 lakhs) is moderate,
since the advertisement was aired over 2700 times and seen -- and
intended to be seen -- by millions of viewers. As observed in John
(supra)
“The extent of publication is also very relevant: a libel published to
millions has a greater potential to cause damage than a libel
published to a handful of people.”
43
Having regard to all these circumstances, the court is of opinion that the
award of Rs. 5 lakhs as exemplary damages in the facts of this case was
justified and not disproportionate; it is accordingly upheld.”
41.
In the light of the propositions laid down in the above noted judgments it is to be
seen whether the two advertisements issued by the respondent merely amounted to
puffing of its product i.e. ‘Dettol’ or the same amounted to disparaging the
complainant’s product i.e. ‘Betadine Standardized Solution’/’Betadine’.
The first
advertisement has the following caption :
“
Dettol
®
inactivates HIV
within 1 minute”
The comparative table contains the following title :“Ability of antiseptics/ disinfectants to
Inactivate viruses within 1 minute”
42.
In the first column of the table the name of the products has been given. The
title of the second column is “In organic soil” and the last column carries the following
heading “In blood”. In the box relating to ‘In organic soil’ there are three sub-heads,
i.e., HSC, HIV, Human Coxsackie virus and in the box titled ‘In blood’ the word HIV
has been written. By giving symbols i.e. the tick mark (ü), the cross (x) and the
hyphen (-), the respondent wanted to convey a message to the readers and buyers
through the medium of symbols that the Dettol is effective as an antiseptic whereas
others are not. Against Dettol the “ü” (tick mark) has been written for HSC, HIV as also for
HIV ‘in blood’ and “û” (cross) is written in Human Coxsackie Virus. This means that the
Dettol is successful for viruses – HSC and HIV (In organic soil) and HIV (In blood) only,
and it has failure for Human Coxsackie Virus in the box relating to ‘In organic soil’.
Dettol Hospital Concentrate is shown to have tick marks under all the heads, which
44
means it is successful in all respects. Savlon carries one tick mark and two crosses
and one hyphen. Hibicet Hospital Concentration has been given ‘dash’ for all the
items in the box of ‘In organic soil’ and ‘tick mark’ in the box relating to ‘In blood’.
Betadine Antiseptic Solution has been given ‘hyphen’ marks in respect of all the three
items in the box of ‘In organic soil’ and ‘tick mark’ in the box relating to ‘In blood’.
Although at the bottom of the table, an attempt has to be made to clarify that the tick
mark stands for successful, cross stands for failed and hyphen for ‘not tested’ but font
of the footnote is so small that no person of ordinary prudence, who reads the
advertisement will pay attention to the same.
The respondent has not given any
explanation as to why the main body of the advertisement is in bold print whereas the
footnote at the bottom of the table is in extremely small print. The print of the footnote
is just like statutory warning printed on the packets of the cigarettes till some time ago
and such print had no impact whatsoever on the readers or the buyers of the packet.
Any person of ordinary prudence who reads the advertisement will be impressed by
the ‘tick marks’ given against Dettol and Dettol Hospital Concentrate. At the same
time, he will have an impression that Betadine Antiseptic Solution is worthless and is
totally ineffective in dealing with HSC, HIV and Human Coxsackie Virus. Whenever
an advertisement is issued in a tabular form, the reader’s attention is immediately
attracted towards the substance of the advertisement. He rarely pays attention to the
notes given at the bottom, more so, when the font of the note is too small. Not only
this, the other note appended at the end of the table contains a false and misleading
statement. Admittedly, the research paper with the title “A comparison of the virucidal
properties of commonly used disinfectants/ antiseptics by Wood and Payne DN” was
not published in the Journal of Hospital Infection 1997. As a matter of fact, it was
published in 1998. That apart, the article does not contain any tabular comparison of
Dettol with a Savlon, Hibicet Hospital Concentration and Betadine Antiseptic Solution.
It is thus, evident that the advertisement issued by the respondent was based on
wrong facts and was clearly misleading. The whole object of the respondent was to
45
berate or denigrate the product of the respondent. The same is the purport of the
second advertisement, which shows comparative slabs of Dettol and Betadine with the
different concentrations without disclosing that Dettol is marketed in a concentrated
form and Betadine Standardised Solution is marketed in diluted form. Any person
reading the second advertisement will get an impression that Betadine is ineffective in
dirty conditions and will not be a useful antiseptic solution.
43.
No exception could be taken to the respondent’s projection that Dettol is better
than other antiseptics/ disinfectants. That could be treated as mere puffery, but what is
most crucial is that the advertisements in question do not contain any indication that
Dettol is used after dilution, whereas Betadine Antiseptic Solution is marketed in diluted
form. That apart, the respondent had deliberately used extremely small fonts in the
footnotes given at the bottom of the table. This was done with a view to ensure that
the attention of the consumers is attracted to the fact that Betadine was not tested in ‘In
organic soil’.
Even the research paper to which reference has been made in the
second note given below the table is misleading inasmuch as it does not contain any
comparison of Dettol with Betadine Standardised Solution in a tabular form, as has
been done in the first advertisement.
44.
The respondent’s argument that the advertisement issued by it were not meant
for the public at large is belied by the statement contained in the Journal of Medical
Association that one lakh copies thereof are printed and distributed among medical
professionals, Government Institutions, NGOs, Banking and Insurance Companies,
Visa and Master Card Holders, Airways, Holiday Resorts, Textile Industries etc. This
shows that the Journal in which the advertisements were published has a wide reach
and is accessible by the consumers.
45.
In the result, it is held that the advertisements issued by the respondent, fall
within the ambit of unfair trade practice as defined under Section 36-A(1)(x) of the Act.
The respondent is directed to ‘cease’ and ‘desist’ from publishing the two
46
advertisements or any other similar advertisement disparaging the product of the
complainant.
46.
For causing damage to the reputation and credibility of the product of the
complainant, the respondent is directed to pay compensation of Rs.5,00,000/- (rupees
five lakhs). This direction has been given keeping in view the judgment of the Division
Bench of the Delhi High Court of the Hindustan Unilever Ltd. vs. Reckitt Benckiser
(India) Ltd., [2014 (57) PTC 495].
[G.S. Singhvi]
Chairman
19th March, 2015