Comparative Advertisement- Legal Spotlight On In-Mail Advertisement

Introduction

Beierdorf AG (hereinafter Plaintiff), filed a suit against Hindustan Unilever Limited (hereinafter Defendant) alleging dishonest conduct due to usage of signature elements of 'NIVEA' products. The Plaintiff sought to restrain the Defendant on trademark infringement, unfair trade practices, disparagement, dilution, and damages.

On April 9, 2024, a single judge of the Hon'ble Delhi High Court ordered the Defendant to refrain from conducting any in-mall marketing campaigns or advertisements that compare its products, especially those under the "PONDS" trademark, to "NIVEA" products. The Court held that such comparisons, whether explicit or implicit, are misleading and disparaging. It emphasizes that while comparisons are allowed, they must be based on factual information and presented in a non-misleading manner without disparaging a competitor's products.

Brief facts about the Case

Plaintiff filed a lawsuit in 2021,inter alia, seeking a permanent injunction restraining the Defendant from infringing on highly distinctive trade dress claimed by Plaintiff for its 'NIVEA' and engaging in product disparagement alleging that the Defendant is using the signature element of the Plaintiff "NEVIA" products specifically its distinctive blue colour design which is identified as 'Pantone 280C' in a misleading comparison.

Brief facts about the Case

Contentions of the Plaintiff

1. 'NIVEA' was declared a well-known trademark by this Court in CS(OS)No. 1164/2001 titled as Beiersdorf A.G. v. Ajay Sukhwani & Anr., 2008:DHC:3037 vide order dated 14th November, 2008.
2. Plaintiff Sales and Promotional Figures:

• Annual worldwide sales turnover for the year 2016 was Euro 4.2 billion (4,559,513 USD).
• Promotional expenditures wherein the range of Euro 1.5 million (1,628,022 USD).
• Specific sales and promotional figures for 'NIVEA' products for the year 2018 were Euro 119 million (1,29,220,315 USD) and Euro 30 million (32,567,950 USD) respectively.

1. The Plaintiff claims that one of its most renowned and identifiable product packaging is the "NIVEA" brand, featuring a flat cream can which is recognized by a distinctive blue color identified as 'Pantone 280C' and brand name "NIVEA" in white.
2. This is used on its packaging, particularly the NIVEA Crème. Plaintiff's 'NIVEA' mark was adopted, used and promoted extensively in other forms such as and various others.
3. Plaintiff's distinctive blue color has been used since 1925 and is a significant identifier of the 'NIVEA' brand.
4. Plaintiff has registered the NIVEA trademark in more than 175 countries. 'NIVEA' was first registered in 1943 in India in class 3 and subsequently was registered in various other classes.
5. Plaintiff further claimed that in the context of the suit, aside from the word mark, which was not feared in the impugned promotional activity, significant emphasis was placed on the distinctive blue colour within the device/logo. This particularly relevant in relation to registration numbers 1329991, 2232698 2856286, and 3263712, all falling under Class 3.
6. The Plaintiff contended that Defendant's marketing activities in malls involved comparing a cream in a blue tub, similar to NIVEA Crème, with Ponds Superlight Gel. The implication was that NIVEA's product left an oily residue, while Ponds did not.
7. Plaintiff further contended that the Defendant's campaign unfairly compared products from different categories.. Specifically, NIVEA Crème, which falls under the heavy category with 25-28% fatty matter, was compared with Ponds Superlight Gel, a gel category with 1-8% fatty matter. This comparison was deemed misleading as it did not involve similar products but rather contrasted different categories to present a favorable outcome for the Defendant.
8. Notably, the Plaintiff provided evidence of ten instances where Defendant's parent company, Unilever, was involved in similar disputes globally. In these cases, aggressive comparative advertising tactics were employed against NIVEA products, and some instances resulted in the withdrawal or modification of advertisements following complaints and legal actions. The Plaintiff also stated that the Defendant cannot claim ignorance of Plaintiff's exclusive rights to distinctive blue color (Pantone 280C), which is recognized across Unilever group globally. Further referencing the case of George V. Records (Supra), the Plaintiff highlighted application of single economic entity principal. This was further supported by pointing to previous settlement with Unilever Hamburg, Germany, concerning the use of the 'DOVE' trademark for various products in iconic blue packaging.
9. The plaintiff further emphasizing of indirect harm through advertising referred to a decision rendered by High Court of Madras in the Case titled as Gillette India Limited v. Reckitt Benckiser (India) Private Limited, 2018 SCC OnLine Mad 1126, wherein reliance was placed on the overall impression created by an advertisement, rather than any specific reference to the Plaintiff's brand. It was argued that even in the absence of direct reference, the advertisement could be considered disparaging to the Plaintiff's products due to dominance of plaintiff in that particular category.

Submissions of the Defendant

1. The Defendant's marketing activity involved a video comparison of both the Plaintiff's and Defendant's product, Ponds Super Light Gel, with a cream from a blue container applied to consumer's hands. Notably, this demonstration lacked any audio or verbal communication, relying solely on visual elements. The Defendant contended that comparative advertising is permitted as long as it does not disparage the competitor's product. Moreover, the Defendant's argument was that their comparisons did not specifically identify or disparage the NIVEA brand. Even if the NIVEA name brand was displayed, the Defendant argued that it would not constitute disparagement. They claimed that the comparison merely highlighted the differences in oily residue between the products, which could be a matter of individual preference based on skin type.
2. The Plaintiff did not have trademark registration for the 'Pantone 280C' blue color in India. The Defendant argued that trademark rights are territorial, and registration in other jurisdictions would not benefit the Plaintiff in this case.
3. The Defendant claimed that the compared products were not completely different. NIVEA Crème was marketed as an all-season moisturizer suitable for all skin types, not solely as a heavy moisturizer. Thus, both products shared the common purpose of moisturizing.

Judgement

The Hon'ble Court determined that the Defendant's marketing activity, which involved comparing NIVEA's product with Ponds Super Light Gel, was prima facie misleading and disparaging. The Court observed that the use of a blue tub, which closely resembled NIVEA's distinctive packaging, implicitly compared the products and misled consumers about the nature of the products being compared.

Further, the Court recognized the distinctive blue color 'Pantone 280C' associated with NIVEA's products. It noted that the Plaintiff had consistently used this color as a source identifier for its products since 1925 and had obtained trademark registrations for this color in various jurisdictions.

Comparative advertisement Rules

The Court reiterated that comparative advertising is allowed as long as it does not mislead or disparage the competitor's product. In this case, the Court found that the Defendant's comparison between a heavy cream (NIVEA Crème) and a light gel (Ponds Super Light Gel) was inherently misleading and unfair. The products compared were from different categories, leading to an unfair comparison.

Past Legal Dispute and Knowledge

The Court considered the history of similar disputes between the parties and noted that the Defendant was aware of the association of the blue color with NIVEA's products. This repeated pattern of disputes suggested that the Defendant was deliberately targeting NIVEA's products.

Permanent injunction Granted

The Court granted a permanent injunction restraining the Defendant, their directors, wholesalers, distributors, partners, proprietors, agents, or assignees from conducting the impugned activity or any similar marketing or advertising activity that compares NIVEA's products (either expressly or by implication or association) with the Defendant's products in a manner that disparages or denigrates NIVEA's products or business.

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