India: Court Differs With View That All Publicity Is Good

Last Updated: 10 January 2018
Article by Raashi Jain

PT Barnum, an American showman, is believed to have said "there's no such thing as bad publicity". In the past few years, this seems to have become a mantra for businesses. While most advertisements reflect the desire to outshine rival products, there has been a recent trend of crossing the invisible line between puffery and disparagement.

A clash recently arose between two giants in the fast-moving consumer goods sector. A suit filed by Hamdard Group against Divya Pharmacy seized the attention of the public and media, alike.

Hamdard, a manufacturer and seller of unani and ayurvedic products for more than 100 years, produces sweet almond oil under the brand Roghan Badam Shirin. In addition to having numerous trademark registrations, Hamdard claims that Roghan Badam Shirin bottles and boxes bear a unique trade dress, which due to long-standing use since 1998, has garnered widespread goodwill and reputation.

In the first week of October, Hamdard came across Divya Pharmacy's video advertisement for the product Divya Badam Rogan, which in Hamdard's view showed its product in an unfavourable light. The advertisement displayed a virtually identical product with the narration "Badam Roghan Shirin ke naam pe ho rahi loot se khud ko bachaayein" (Save yourself from the theft that is taking place in the name of Badam Roghan Shirin).

Hamdard contended that the advertisement created an impression amongst people that its product is of substandard quality and indeed spurious. The words Badam and Roghan – the order of which had been swapped in the advertisement – formed the essential feature of the registered trademarks and were deliberately used and calculated to denigrate Hamdard's product. The advertisement was such that a viewer would incontrovertibly assimilate an erroneous impression of Hamdard's product, resulting in hesitation to purchase it.

Delhi High Court considered whether to grant an interim injunction in favour of Hamdard, noting that the following three factors have to be taken into account:

  • Whether a prima facie case has been established in favour of the aggrieved party;
  • Whether the balance of convenience is in favour of the aggrieved party; and
  • Whether irreparable loss or damage will be suffered by the aggrieved party if the interim injunction is not granted.

The law regarding disparagement in advertisements is well settled and espoused in more than a decade of jurisprudence. Simply put, although puffery of one's own product is acceptable, it should not extend to the disparagement of competitors' goods.

The court, relying on precedents, held that a prima facie case was made in favour of Hamdard and that the balance of convenience also lay with it. The court held that irreparable damage would be suffered by Hamdard if Divya Pharmacy's advertisement was continued to be broadcast. Thus, the court passed an ex parte interim injunction order restraining Divya Pharmacy from broadcasting, publishing or republishing its advertisement through any medium.

The courts have adopted a stringent approach against brand disparagement. In the present case, the court passed an ex parte interim injunction order against Divya Pharmacy within a day of filing of the suit. Such expeditious relief indicates that courts view disparaging advertisements with intolerance since they are well aware of the potential far reaching repercussions.

While competition has always existed, the growing trend of maligning rival products, through an array of available media, must be restrained. Though such disparaging advertisements are amusing to audiences, they may gravely impact the goodwill and reputation of the concerned competitors. Dwindling public confidence in these competitors, which is an obvious by-product of disparaging advertisements, may also lead to monetary losses.

Given the current judicial climate, a negative advertisement strategy may not be in the best interests of businesses. As courts have now become quick to strike down disparagement, businesses may find that the time and money spent on vilifying competitors' products would be better spent on promoting their own product.

Coming up with ingenious concepts for advertisement and promotion may be arduous, but not inconceivable. Over the past decade, there have been ample instances where a marriage between creativity and imagination has given birth to perceptive and unfeigned advertisements that are fondly remembered by the public, even years after being discontinued. Thus, there is great need to champion the cause of responsible advertising and promotion.

Originally published in Vantage Asia, December 13, 2017

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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