Advertisements can be comparative in nature, disparagement be restricted to gross cases

Delhi High Court: Procter & Gamble Home Products Pvt. Ltd. (P&G) – manufacturer of Head & Shoulders Anti-dandruff Shampoo priced Rs. 3 per sachet and Hindustan Unilever Ltd. (HUL)-manufacturer of Clinic Plus shampoo priced Re 1 per sachet filed suits against each for comparative advertising of their products. The advertisement impugned in each of the suit indisputably compares the two products and though does not name the product of the other but, besides showing the sachet of the advertiser‘s own product, shows sachet of the other‘s product. All the three suits were dealt with together by the  Court.

Before approaching the Court, HUL had approached Advertising Standards Council of India (ASCI) which rejected the said complaint. The High Court Judge considered the rival contentions and highlighted that ASCI was established in 1985 as a company under Section 25 of the  Companies Act, 1956 and with advertisers, media, advertising agencies and other professional/ancillary services, industries connected with advertising as its sponsors and with the purpose of self-regulating the advertisements and to ensure that the advertisements conform to the Code of self-regulation. The Code for self regulation in Advertising (the Code) of ASCI has been drawn up by people in the profession and industries in or connected with advertising.

Justice Rajiv Sahay Endlaw ruled that none of the advertisements impugned was disparaging observing that all the advertisements fell in the genre of ‘Comparative Advertising’ which permits comparing own product with that of competitor‘s and calling own superior / better than competitor’s. The Court further observed that the Advertising Code of ASCI incorporated therein permits comparative advertising in the interest of “vigorous competition and public enlightenment.” However, the Court elucidated further on this saying that fetters which are placed therein are that there should be no likelihood of the consumer being misled as a result of the comparison and the advertisement does not unfairly denigrate, attack or discredit other products directly or by implication.

The Judge applied the dual test of balancing the fundamental right of advertiser under Article 19(1)(a), with the Constitutional right of the competitor under Article 21 to reputation of his goods and also applied the test of proportionality observing that the advertisement/s in neither of the three suits could be found as defamatory or having the impact of changing the opinion of the ordinary man/consumer to the prejudice of the plaintiff in the suit.

The Court brought in notice that the disparagement claimed was with respect to shampoo sold in sachets and each sachet was for one wash and said that even if a consumer changes opinion on watching the advertisement about the shampoo and switches to another one, he/she may immediately shift to the earlier one if doesn’t find the results satisfactory and hence, concluded that this way, the market forces would prevail in long run. The Court finally observed that today, the consumers are vigilant enough o find their best interest and are armed with the laws for their protection from false claims in advertising, is requiring the producers/manufacturers also to be cautious in making the same and therefore, in the face of such consumer law developments, reliefs for disparaging advertising have to be restricted to gross cases, the court concluded and dismissed the suits. [Procter & Gamble Home Products Private Limited V. Hindustan Unilever Ltd., 2017 SCC OnLine Del 7072, decided on 17.02.2017]

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