Delhi High Court: In an application alleging dishonest conduct due to usage of signature elements of ‘Nivea’ products filed by plaintiff-Beiersdorf to restrain infringement of trade mark, unfair trade practice, disparagement, dilution, and damages against defendant-Hindustan Unilever Limited (‘HUL’), a Single Judge Bench of Anish Dayal, J., restrained HUL from conducting the impugned activity of comparing Nivea products with that of Ponds, while holding the same to be misleading and disparaging.
Background
In the present matter, Beiersdorf claimed to have become aware around 2021 that HUL had been conducting marketing activities that involved their sales representatives being present in various malls in Delhi and Gurgaon, comparing a crème in a blue tub that was identical to the blue tub of the Nivea crème and HUL’s Ponds Superlight Gel.
Further, Beiersdorf stated that after the sales representatives of HUL applied the Nivea crème on one hand of the customers and the Ponds gel on the other, they would use a magnifying glass to assure the customers that Nivea left an oily residue. Beiersdorf considered this to be disparaging of their product and issued a cease-and-desist notice to HUL.
Beiersdorf laid stress on the distinctive blue color in the logo of Nivea since even though it was not protected under registration in India, the same was given protection by the German Patent and Trade Mark Office. It was also contended that the distinctive blue color and trade dress of Nivea had been extensively used and advertised worldwide, for which huge amounts of promotional expenses had also been incurred.
Beiersdorf’s basic grievance was regarding inherently wrong comparisons between two different categories of crèmes. It also stated that the promotional campaign was unfair, dishonest, mala fide, and misleading since a comparison was being made between Nivea’s heavy category, which contains 25 percent fatty matter, and Ponds’ gel category, which has 10 percent fatty matter.
Analysis and Decision:
The Court, while stating that jurisprudence on comparative advertising had developed in India through various decisions, relied on Reckitt Benckiser (India) Pvt. Ltd. v. Wipro Enterprises (P) Limited, 2023 SCC OnLine Del 2958 wherein it was held that within the limits of permissible assertions, comparative advertising is protected under Article
Further, the Court stated that the analysis of this case revolves around the following principal aspects:
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The association of the blue cream tub presented as part of the impugned activity to that of the Nivea crème.
While analysing this issue, the Court stated that it was prima facie evident from the documentation filed that Beiersdorf did not use the blue colour for a decorative purpose but as a ‘source identifier’. Further, the Court said that the adoption of the colour and its consistent use would certainly lead to a conclusion that the product in this distinctive blue tub will be associated with Nivea.
The Court also stated that HUL is part of the ‘Unilever Group’ worldwide and based upon the ‘single economic entity principle’, it cannot plead ignorance regarding the association of the distinctive blue color with Beiersdorf’s product. While analyzing various case laws referred to by Beiersdorf, the Court stated that it seemed that repeated attempts were made by HUL to adopt aggressive comparative advertising that had not succeeded anywhere else in the world.
The Court stated that the blue color had been associated with Nivea for years, and its use by HUL in the impugned activity was too much of a coincidence to ignore.
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The knowledge of HUL of the distinctiveness in the blue color of Nivea crème.
The Court stated that HUL’s knowledge about the blue color associated with Nivea was evident from the instances cited by Beiersdorf. Further, it was stated that there was no reason for HUL to choose a similar blue tub even after being involved in multiple litigations on this very issue in different countries.
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The intent and objective of using only the blue crème tub as part of the impugned activity.
The Court stated that comparison by its very nature ought to be with another identified product, and by using a non-labelled blue tub, what must be considered is what comparison HUL is trying to make and with what. Further, the Court stated that by using a distinctive blue tub without a label, HUL had ventured into deception, misstatement, and disparagement.
The Court, while referring to Reckitt and Colman of India Ltd. v. M.P. Ramchandran, 1998 SCC OnLine Cal 422, said that HUL’s contention stating that a comparison with a ‘generic category’ will not amount to disparagement could not be accepted. The Court referred to other cases and stated that if the message conveyed through the advertisement is loud and clear, it would amount to a deliberate act by the defendant to reduce sales of the plaintiff.
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The comparative presented to the consumer during the impugned activity.
The Court stated that despite having three categories of crème, HUL’s choice to compare their lightest product to the heaviest product of Beiersdorf was inherently misleading. Further, it was said that the impression given about Nivea through the impugned activity would naturally lead to the consumer being extremely watchful while purchasing Beiersdorf’s product. The Court stated that the ASCI Code for Self-Regulation of Advertising Content in India mentions that comparative advertising is permitted provided, ‘it is clear what aspects of the advertiser’s product are being compared to what aspects of the competitor’s product.’
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Whether it was mere puffery or disparagement.
The Court reiterated that even though advertisements may not be disparaging, misleading elements must be excised out. It was stated that comparisons must be between like products and not unlike products.
Further, the Court stated that HUL’s contention that oily residue was not necessarily denigrating could not be accepted and that the overall effect is what needs to be seen to assess disparagement.
The Court also mentioned Tata Press Ltd. v. MTNL, (1995) 5 SCC 139, wherein it was held that commercial speech does not protect against false, misleading, unfair, or deceptive advertising. The Court noted that in an ‘in-mall’ campaign, the possibilities of imputation, aspersion, implication, overstatement, leading to even a slight disparagement, would be limitless. Therefore, the Court said that the threshold would have to be less when the possibility of the impugned activity being misleading or disparaging is to be considered.
Thus, it was held that the impugned activity carried out by HUL to compare Nivea products with that of Ponds was prima facie misleading and disparaging and caused irreversible prejudice to Beiersdorf. The Court restrained HUL from conducting the impugned activity or any similar activity which would cause disparagement or denigration of Beiersdorf’s products or business.
[Beiersdorf AG v. Hindustan Unilever Ltd., 2024 SCC OnLine Del 3443, Order dated 09-05-2024]
Advocates who appeared in this case :
For Plaintiff — Advocate M.S. Bharath, Advocate V.S. Krishna, Advocate Ayush Sharma, Advocate Ashish Sharma
For Defendant — Sr. Advocate Chander M. Lall, Advocate Pragya Mishra, Advocate Shashwat Rakshit, Advocate Ankur Sangal
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