India: Disparaged or Not? Dabur v. Colortek Clarifies the Difference

Last Updated: 15 May 2010

The advent of electronic media, particularly television a few decades ago, brought along with it a boom in advertising. With a rising number of private channels and increasing marketing budgets competition has come about, giving rise to issues such as disparagement, trade libel, slander of goods, malicious falsehood etc. Black 'Law Dictionary defines "disparagement" as a false or injurious statement that discredits or detracts from the reputation of another's property, product or business.

In the recent case of Dabur India Ltd vs Colortek Meghlaya Ltd 2010 (42) PTC 88 (Del.), Dabur India Ltd. filed for an injunction vide Order 39 Rules 1 & 2 of the Civil Procedure Code, 1908 in respect of telecast of Good Knight advertisement alleging that it disparages the advertisement for Odomos cream.

The case exclusively revolves around Good Knight Natural Cream's advertisement (aired on Zee News Channel on October 8, 2009). Dabur India submitted the statistics of its mosquito repellent cream's strong market share (84-86%) as the reason, owing to which, the advertisement of Good Knight targeted their product. Further, Dabur India contended that an injunction should be granted since Good Knight Natural Cream's advertisement denigrated Dabur's product, Odomos, implying that it caused rashes and allergies. The contention was supported by stating even if 'overt' and 'covert' disparagement or, that disparagement is generic in nature or in cases where goods are slandered as a class, an injunction must be granted.

Responding to this contention raised by Dabur India, Colortek Meghalaya Pvt. Ltd replied, seeking dismissal on a variety of grounds, ranging from the lack of cause of action to the extensive research behind the manufacture of Good Knight Naturals, which mitigated allergies or rashes. The Counsel for Colortek Meghalaya, responding to the claims of Dabur India, pointed out that in a case of disparagement a clear intention of causing harm must be established, followed by the damage caused by the alleged slanderous action.

He also brought into purview Section 30A(x) of the Monopolies Restrictive Trade Practices, 1969, wherein specific disparagement of goods is elucidated as also Article 19(1)(a) of the Constitution of India which encompasses advertising as a form of commercial speech.

On the basis of the above contentions made by both parties, the Single Judge noted that both the creams used a common ingredient - Oil of Citronella - as an insect repellent. The only difference, according to Colortek Meghalaya Pvt. Ltd, is that its cream contains milk-based protein that does not cause rashes or allergy.

The court opined that the statement made by Colortek may be an idle boast of puffery, but it certainly does not constitute disparagement. It was further observed that the defendant couldn't generally be seen to disparage mosquito repellent creams because it manufactures the same as well.

The Court made reference to Royal Baking Powder Company vs. Wright Crosssley & Co., (1901) 18 R.P.C 95 where it was enumerated that three main ingredients should be included in a malicious prosecution, namely, the impugned statement in untrue, the statement is made maliciously, without just cause or excuse and that the plaintiffs have suffered special damage thereby.

Various other cases were referred to and taken into consideration by the Division Bench of the High Court of Delhi while hearing the appeal of the case. The Division Bench affirmed the Single Judge's decision that there was no disparagement by the impugned advertisement.

However, it was concluded by the Court that at the interlocutory stage it would be best for the Court to step into the shoes of a reasonable and prudent man and asses for itself the impact of the impugned advertisement. Going by this rationale, it was held that the impugned advertisement prima facie did not commit the tort of "malicious falsehood", hence no disparagement being caused.

© Lex Orbis 2009

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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