Trademark Disparagement & Advertising Ethos-Pathos: India

Trademark Disparagement & Advertising Ethos-Pathos: India* Introduction: Disparagement means, ‘criticising someone in a wrong way’.1 The New International Webster Comprehensive Dictionary defines ‘disparagement’ to mean, “To speak of slightingly, undervalue, to bring discredit or dishonour upon, the act of deprecating, derogation, a condition of low estimation or valuation, a reproach, disgrace, an unjust classing or comparison with that which is of less worth”. Whether or not goods of a trader or manufacturer are disparaged depends upon the facts and circumstances of each case. All that the court needs to be conscious of is that, while disparagements may be direct, clear and brazen, it may also be subtle, clever and covert. ‘What is the statement made by the rival trader’ and ‘how it belittles, discredits or detracts the reputation of another’s property, product or business’, is the ultimate object of judicial scrutiny in trademark disparagement cases.2 Section 2 of the Lanham Act (15 U.S.C. 1052) provides that, no trademark should be refused qua registration, unless it consists of or comprises of immoral, deceptive or scandalous matter; or matter which disparages or falsely suggests a connection with persons, institutions, beliefs, or national symbols, or brings them to contempt or disrepute. A vast majority of matters in U.S. qua disparagement concern ‘scandalous matter’ vis-à-vis Section 2(a) of the Lanham Act.3 The U.S. Federal Trade Commission Act by virtue of Section 52 prohibits the dissemination of false advertisements. In U.K. for long the standard has been that of ‘honest practices’ in industrial and commercial matters; the same finds mention in Section 10(6) of the U.K. Trademarks Act, 1994. In India, standard has been that of ‘unfair trade practice’, which find mention in Section 36A of the Monopolies & Restrictive Trade Practices Act, 1969 and Section 2(1) (r) of the Consumer Protection Act, 1986. In the case of, De Beers Abrasive v. International General Electric Co.4, the Court held as follows, “The law is that any trader is entitled to puff his own goods even though such puff as a matter of pure logic involves the denigration of his rival’s goods...Notices...reading ‘the best tailor in the world’, ‘the best tailor in this town’ and ‘the best tailor in this street’ do not commit an actionable offence. Where however the situation is not that the trader is puffing *Shivam Goel, B.Com (H), LL.B. (Delhi University), LL.M. (NUJS); Law Researcher- High Court of Delhi; Author: Allied Rights in the Sphere of Copyrights, http://ssrn.com/abstract=2530365, 25 October 2013. 1 See: Eveready Industries India Ltd. v. Gillette India Ltd., A.P.O. No.320 of 2012; C.S. No. 59 of 2012; and A.P.O. No. 321 of 2012 2 See: Karamchand Appliances (P) Ltd. v. Sh. Adhikari Brothers, Reported in 2005, Volume XXXI- Patents and Trademark Cases, Page 1 3 See: Harjo v. Pro-Football, Inc., 50 U.S.P.Q.2d 1705 (T.T.A.B. 1999); Ex- Parte Parfum L’orle, Inc., 93 U.S.P.Q. 481 (Chief Examiner 1952) 4 1975 (2) All ER 599

1

his own goods but turns to denigrate the goods of his rival... then the situation is not so clearcut. The statement ‘my goods are better than the goods of X is only a more dramatic presentation of what is implicit in the statement ‘my goods are the best in the world’ and would not be actionable. However, the statement ‘my goods are better than X’s because X’s are absolute rubbish would be actionable.” In another case, Ellison Educational Equip., Inc v. Tekservices, Inc5, it was held that, advertising claims that defendant’s letter-cutting machine was the “finest”, “most flexible” and “most versatile system available today” were not actionable qua Section 43(a) of the Lanham Act, because they constitute mere puffing. As a matter of fact, in cases of ‘trademark disparagement’, for the purpose of adjudication of disputes, the Courts in India have looked into the following criteria: (a) Intent of the Commercial; (b) Meaning of the Commercial; (c) Storyline of the Commercial; and (d) ‘Ordinary Meaning’ the Advertisement renders to a ‘Man of Average Intelligence’. In the case of, Imperial Tobacco Company v. Albert Bonnan6, the Calcutta High Court in Division Bench held as follows: “To succeed in an action of slander of goods, the plaintiff has to allege and prove that the statement complained of was made concerning his goods and that it must be with the direct object of injuring his business”. Inspiration for long has been taken by the Indian Courts from the Courts of U.K. and U.S. Some important cases, setting the law qua trademark disparagement in the right direction, worthy of mentioning are as follows: In the case of, Ucan Products Limited v. Hilti (Great Britain) Ltd.7, the High Court of Justice (Chancery Division) held that in trademark disparagement cases, it is upon the plaintiffs to make out a prima facie case that the defendants had allowed the advertisement (under challenge) to be published when they knew it was untrue, and that the defendants acted in a manner reckless and maliciously false. In cases of ‘malicious falsehood’ qua trademark disparagement it is essential for the plaintiff to plead and prove that, the defendant published about the plaintiff ‘words’ which were false; were published maliciously, and that special damages followed as direct and natural result of the publication.8

5

903 F. Supp. 1350 (D. Neb. 1995) AIR 1928 Calcutta 1 (DB) 7 (1968) F.S.R. 248 8 See: Gorden Kaye v. Drew Robertson & Sport Newspapers Ltd., (1991) F.S.R. 62 6

2

In Pizza Hut, Inc. v. Papa John’s International Inc.9, it was held that, “When the statements of fact at issue are shown to be literally false, the plaintiff need not introduce evidence on the issue of the impact the statements had on consumers. In such a circumstance, the court will assume that the statements actually mislead consumers.” In the case of, Mc Donalds Hamburgers Ltd. v. Burgerking (U.K.) Ltd.10, followed in Glaxosmithkline Consumer Healthcare Ltd. v. Heinz India (MANU/DE/3273/2010), it was held that, advertisements are not be read as if they are testamentary provisions of a ‘Will’ or a clause in some agreement with every word being carefully considered and words as whole being compared; it was further held that, courts are to take into account, the fact that public expects a certain amount of hyperbole in advertising and the test to be applied is whether a reasonable man would take the claim being made as one made seriously and will have to take it with a large pinch of salt. Comparative Advertising: Comparison lies at the root of modern advertising.11 In regards to comparative advertising qua trademark disparagement, where a trader makes a statement derogatory of trade rival’s goods, the test to be applied is ‘whether or not a reasonable person would take the claim being made as serious’.12 Law in regards to ‘comparative advertising’ vis-à-vis ‘trademark disparagement’ in India is settling on a positive landscape. Earlier approach adopted emphasised upon the defamation aspect. The current approach, however, emphasises upon the aspect of consumer-education. Much inspiration has been gathered from the following case-laws of the U.K.

Cable & Wireless Plc v. British Telecommunications13: In this case, comparison of price plans (qua telephone services) was advertised by the plaintiff to show that its services are more worthy than the services offered by the defendant. The comparison was true and thus, it was held that no trademark disparagement can be pleaded by the defendant.

9

227 F.3d 489, 56 U.S.P.Q. 2d 1246 (5 th Cir. 2000) (1987) F.S.R. 112 11 See: Cornish, Intellectual Property, Fourth Edition, p.656 12 See: De Beers Abrasive Products Ltd. v. International General Electric Co., (1975) 2 All ER 599; Vodafone Group Plc v. Orange Personal Communications Services Ltd., (1997) EMLR 84; DSG Retail Ltd. v. Comet Group Plc, (2002) EWHC 116 (QB): (2002) FSR 899; Also see: Halsbury’s Laws of England, Fifth Edition (2012), Volume 32, Lexis Nexis Publication, p.494 13 1998 FSR 383 10

3



Barclays Bank Plc v. RBS Advanta14: In this case, defendant came up with an advertisement, comparing the ‘card’ issued by the plaintiff with the one issued by the defendant. In 15 ways the comparison was carried out. The comparison was mostly fair and honest. It was held that trademark disparagement cannot be alleged as the comparison was fair and was in furtherance of consumer education and protection.



Vodafone Group Plc v. Orange Personal Communications Services Limited15: In this case, tariff plan of the plaintiff was compared with that of the defendant, the comparison was not unfair. The comparison was true, thus it was held that no case of trademark disparagement can be made out.



British Airways Plc v. Ryanair Ltd.16: In this case, comparison of airplane fares by the defendant with the ‘trademark-logo’ of the plaintiff was held to be honest and fair, and in wider public interest, thus it was ruled that no case of trademark disparagement can be made out.

Position of law in India concerning ‘comparative advertising’ and ‘trademark disparagement’ can be summarised as follows: 1. Publication of advertisements being free commercial speech is protected by Article 19(1) (a) of the Constitution of India, 1950.17 Commercial speech, enjoying the protection of Article 19(1) (a) is to face the necessary curtailments imposed by Article 19(2) of the Constitution of India, 1950. Article 19(2) speaks about reasonable restrictions that can be imposed upon ‘free-speech’ protection enshrined in Article 19(1) (a), the same are in nature as follows- Interests of sovereignty and integrity of India; the Security of the State; Friendly Relations with Foreign States; Public Order, Decency and Morality; In relation to Contempt of Court, Defamation and Incitement of an Offence. The Supreme Court of India in the Tata Press Case (AIR 1995 SC 2438) held that, publication of advertisements is a free commercial speech and is protected under Article 19(1) (a) of the Constitution of India. The Court further held that, advertising is no more than a commercial transaction which involves dissemination of information regarding the product advertised. Public at large is benefited by the information made available through the advertisement. The Court in 14

1996 RPC 307, Chancery Division 1997 FSR 34 16 2001 FSR 32 17 See: Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd., MANU/SC/0745/1995: AIR 1995 SC 2438 15

4

authoritative terms asserted that, in a democratic economy, free flow of commercial information is indispensable; there cannot be honest and economical marketing, without the public at large being educated by information disseminated through advertisements. The economic system shall stand handicapped without there being freedom of ‘commercial speech’. Bringing to sight the cases, Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India18, Sakal Papers (P) Ltd. v. Union of India19 and Bennett Coleman & Co. v. Union of India20, the Court held that, any restraint or curtailment qua advertisements, affects the fundamental right guaranteed under Article 19(1) (a) of the Constitution of India, 1950. 2. Reasonable restrictions qua which Article 19(2) in regards to ‘commercial speech’, can also be traced to the definition of the term unfair trade practice21, as provided in Section 36A of the Monopolies & Restrictive Trade Practices Act, 1969 and Section 2(1) (r) of the Consumer Protection Act, 1986. 3. Section 29(8) of the Trademarks Act, 1999 enunciates of situations when the use of a trademark in advertising can constitute infringement. Section 29(8) states that, any advertising which is not in accordance with honest practices; or is detrimental to the distinctive character; or to the repute of the mark shall be an act constituting infringement. Section 30(1) of the Trademarks Act, 1999 states that any advertising which is in accordance with honest practices and which is not detrimental to the distinctive character or to the repute of the mark shall be held to be good in law and shall not constitute infringement. Thus, Section 30(1) makes comparative advertising an exception, to acts constituting infringement under Section 29.

18

1985 (1) SCC 641 MANU/SC/0090/1961: (1962) 3 SCR 842 20 MANU/SC/0038/1972: (1973) 2 SCR 757 21 In the case of, Lakhanpal National Ltd. v. M.R.T.P. Commission, MANU/SC/0351/1989: (1989) 3 SCC 251, the Supreme Court of India held that, an advertisement may contain inaccurate facts yet convey an essentially truthful message; on the other hand, an advertisement may be entirely accurate on facts but convey a completely misleading message. The definition of “unfair trade practice” in Section 36A of the MRTP Act, 1969 is not inclusive or flexible, but is specific and limited in its contents. When a problem arises as to whether a particular act can be condemned as an unfair trade practice or not, the key to the solution would be to examine whether it contains a false statement and is misleading and further what is the effect of such a representation made by the manufacturer on the common man? The issue cannot be resolved by merely examining whether the representation is correct or incorrect in the literal sense. A representation containing a statement apparently correct in the technical sense may have the effect of misleading the buyer by using tricky language. Similarly, a statement which may be inaccurate in the technical literal sense can convey the truth and sometimes more effectively than a literally correct statement. It is, therefore, necessary to examine whether the representation, complained of, contains the element of misleading the buyer. It can be affirmatively said that the object is to bring honesty and truth in the relationship between the manufacturer and the consumer. 19

5

4. In the case of, Colgate-Palmolive (India) Ltd. v. Anchor Health & Beauty Care Pvt. Ltd.22, it was held that, an advertisement which tends to enlighten the consumer either by exposing the falsity or misleading nature of the claim made by the trade rival or by presenting a comparison of the merits (or demerits) of their respective products, is for the public good and hence cannot be taken to be an actionable wrong, unless two tests are satisfied, namely, that it is motivated by malice and that it is false. Truth is always a complete defence against any assault or challenge, regardless of whether any damage is sustained as a result of it. 5. If two trade-rivals indulge in ‘puffery’ without hitting out at each other, the consumer is misled by both, unless there is increased awareness or governmental intervention. On the other hand, if both are restrained from either making false representations or incorrect representations or misleading representations or issuing unintended warranties, then the consumer stands to gain. Two trade rivals when expose each other in a truthful manner, the consumer stands to gain. The Calcutta High Court in the case of, Chloride Industries Ltd. v. Standard Batteries Ltd. (Decided on 30-091994, Unreported) held that, if goods are disparaged maliciously or with some other such intent to injure and not by way of fair trade rivalry, the same would be actionable. 6. In the case, Boehringer Ingelheim Limited & Ors v. Vetplus Limited, it was held that, a trader who finds his trademark disparaged by a rival trader in a comparative advertisement can obtain a ‘prior restraint order’ only if he is able to show that it is more likely than not that the disparagement is wrong and misleading. Unless he can do that, then his rival, both for his own commercial interests and in the interests of the public, ought to be free to say that which he honestly believes.23 This dictum has been inspiring lately, many decisions rendered by the courts in India on matters concerning comparative advertising (See for example, the decision rendered by the High Court of Madras on 04-09-2008 in the case of Colgate-Palmolive (India) Ltd. v. Anchor Health & Beauty Care (P) Ltd.). In the year 1985, a non-statutory tribunal ‘the Advertising Standards Council of India’, was set-up by the Government of India, the same was incorporated under Section 25 of the Companies Act, 1956. The purpose of the tribunal is to dispose of complaints based on its

22 23

MANU/TN/0980/2008 See: Boehringer Ingelheim Limited & Ors v. Vetplus Limited, (2007) EWCA Civ. 583

6

Code of Advertising Practice (CAP). The fundamental principle to which the Code adheres to is that, ‘to ensure the truthfulness and honesty of representations and claims made by advertisements and to safeguard against misleading advertisements’. Generic Disparagement: Speaking non-elusively, ‘generic disparagement’ is no disparagement. However, courts are becoming cautious of this approach. The caution, the courts have started to exercise is implicit from the case of, S.C. Johnson & Son, Inc. v. Buchanan Group Pty Ltd.24 In this case, the respondent disparaged the goods of the plaintiff by claiming that its product is of superior quality. While drawing this comparison, the respondent depicted a container which had a striking resemblance with the product of the plaintiff. The respondent argued that the comparison was ‘generic’. The court held that the comparison was not generic and was by way of an insinuation (innuendo). Since the product of the plaintiff was shown in a poor light, disparagement was upheld. To measure the impact of the disparaging advertisement, the court laid emphasis on the sales figures qua the product of the complainant. Further in the case of, Unibic Biscuits India (P) Ltd. v. Britannia Industries Ltd.25, the court held that, ‘a word is said to not have been used generically if it is used to describe the product of the competitor, attempting to indirectly insinuate such product; the product insinuated should have strong resemblance with the product of the insinuator’. In this case, the appellant came up with a product tag-line, ‘Why to have good day, when you can have a great day’, this tag-line was promoted through advertisements. Respondent alleged that through this tagline the product of the respondent, Good-Day, has been put to disparagement. Appellant contended that the words- ‘good’ and ‘great’- are generic, hence no disparagement is caused. Holding against the appellant, the Karnataka High Court held that, disparagement has been caused. In the case of, Dabur India Ltd. v. Emami Ltd.26, controversy revolved around an advertisement that Emami came up with, to spread a message that intake of chyawanprash (health tonic) during summer days is not good for health. Although the advertisement spoke nothing in particular about Dabur and the disparagement in issue was ‘generic’, yet the advertisement was upheld to be insinuating.

24

CS(OS) No. 2173/2009, High Court of Delhi (New Delhi) MANU/KA/0240/2008 26 2004 (29) PTC 1 (Del) 25

7

Puffing v. Trademark Disparagement: Black’s Law Dictionary, Eighth Edition, defines ‘Puffing’ as follows: ‘The expression of an exaggerated opinion- as opposed to a factual misrepresentation- with the intent to sell a good or service; puffing involves expressing opinions, not asserting something as a fact. Although there is some leeway in puffing goods, a seller may not misrepresent them or say that they have attributes that they do not possess’.27 The law, generally speaking, recognises that trades-men and manufacturers can commend their goods and state that they are better than those of rival traders. Yet, this is with an added caution that the publisher or advertiser should not make any false representation as to the quality or character of the rival or competitor’s goods or products. If no such false representation as to the quality or character of the rival’s goods is made, then the advertisement of the tradesman, however commendatory or exaggerated cannot result in an actionable claim. Exaggerated claims sans such false representations are known as ‘puffing’.28 In the case of, Bubbuck v. Wilkinson29, it was observed that, mere statement that the defendant’s goods are better than that of the plaintiff’s would not be actionable. Further, in the case of, Allen v. Flood30, it was held that, mere puffing would not be actionable because it would ‘open a very wide door to litigation and might certainly expose every man who said his goods were better than those of others to the risk of action’. In White v. Mellin31, it was held that, ‘puffing’ is permissible, if not then indeed the Courts of Law would be turned into machinery for advertising rival productions by obtaining judicial determination which of the two was the better. Passing Off v. Trademark Disparagement: In cases of trademark disparagement, one who disparages another person’s product does not seeks to make his own product similar to the disparaged product; but rather, on the other hand, seeks to distinguish his product from the disparaged product. The object of disparagement is to make the ‘disparaged product’ appear to be as near / similar to the product of the competitor. The comparisons, therefore, in cases of ‘passing off’ and ‘disparagement’ are different. The law as on date is that, all traders are entitled to puff their goods, even though such puff as a matter of pure logic involve denigration of rival’s goods.32 Passing off is a wrongful invasion of property vested in the plaintiff; but the property which is protected by an action for passing off is not the plaintiff’s 27

See: Colgate Palmolive Co. & Anr. v. Hindustan Unilever Ltd., 2014 (57) PTC 47 (Del), Para 25 See: Hindustan Unilever Limited v. Reckitt Benckiser India Limited, (2014) 207 DLT 713, Para 34 29 1899 (1) OB 86 30 1898 AC 1 31 1895 AC 154 32 See: Colgate-Palmolive (India) Limited v. Anchor Health and Beauty Care Private Ltd., 2009 (40) PTC 653 (Mad) 28

8

proprietary right in the name or get up which the defendant has misappropriated but the goodwill and reputation of his business which is likely to be harmed by the defendant’s misrepresentation.33 In the case of, Perry v. Truefitt34, Lord Langdale MR summed up the rationale for ‘passing-off’ action as follows- “A man is not to sell his own goods under the pretence that they are the goods of another man; he cannot be permitted to practice such a deception, nor to use the means which contribute to that end. He cannot therefore be allowed to use names, marks, letters or other indicia, by which he may induce purchasers to believe, that the goods which he is selling are manufactured by another person.” Unlike in cases of trademark disparagement, in cases of ‘passing off’, the claimant has to establish the following- (a) the claimant has ‘goodwill’; (b) the defendant made a ‘misrepresentation’ that is likely to deceive the public; and (c) the misrepresentation damages the goodwill of the claimant.35 Testing- Trademark Disparagement: Broadly speaking, there are two tests for judging trademark disparagement, these are: (a) whether a reasonable man would take the disparaging claim being made as a serious claim or not; and, (b) whether the defendant has aimed a specific allegation qua some defect or demerit in the plaintiff’s products, which the plaintiff holds to be untrue. To determine trademark disparagement, courts (world over) have adopted various tests depending upon the facts and circumstances of each case. In words worth appreciating, the Court in the case of, Gillick v. Brook Advisory Centres36, held as follows: “The Court should give the article (or advertisement) the natural and ordinary meaning which it would have conveyed to the ‘ordinary reasonable reader’ reading the article (or advertisement) once. Hypothetical reasonable readers should not be treated as either naive or unduly suspicious. They should be treated as being capable of reading between the lines and engaging in some loose thinking, but not as being avid for scandal. The Court should avoid an over-elaborate analysis of the article, because an ordinary reader would not analyse the article as a lawyer or accountant would analyse documents or accounts. Judges should give regard to the impression the article (or advertisement) has made upon them, in considering what impact it would have made on a hypothetical reasonable reader.” From time to time, courts have re-affirmed in principle and policy that, too-literal an approach to judge a ‘disparagement’ as cognizable is bad in law. Not literal but rather a practical (or 33

See: Harrods v. Harrodian School, (1996) RPC 697 (1842) 6 Beav 66; 49 ER 749 35 See: Lionel Bently & Brad Sherman, Intellectual Property Law, Chapter 32: Passing Off, Oxford University Press, Third Edition, p.726-728 36 (2001) EWCA Civ. 1263 34

9

pragmatic) approach should suffice. The test of an ‘ordinary man with average intelligence’ is the most practical of all tests, because element of biasness tends to get minimised, if not eliminated. ‘Ordinary Man with Average Intelligence’ refers to an individual, who is mindful of carrying out for himself the necessary cost-benefit analysis, based on his needs and wants; knowing in fact particular that, all advertisements are not ‘consumer-centric’; advertisements sans puffing hardly exist. In the case of, Vodafone Group Plc v. Orange Personal Communications Services Ltd.37 (following Lord Reid in Lewis v. Daily Telegraph Ltd.) it was held that, in disparagement cases, meaning is for the court to determine when a judge sits without a jury; evidence of the meaning to others is inadmissible; it is the presumption of law that, the ordinary man does not live in an ivory tower and he is not inhibited by the rules of construction, so he can and he does read between the lines in the light of his general knowledge and experience of worldly affairs; what an ordinary man would infer in absence of special knowledge has generally been termed as natural and ordinary meaning of the word. The Australian High Court in the case of, Reader’s Digest Services Pty Ltd. v. Lamb38, held that, Lord Selborne’s ‘reasonable men’ (Capital and Counties Bank v. Henty, (1882) LR 7 App Cas 741, 745); Lord Atkin’s ‘rightthinking members of society generally’ (Sim v. Stretch, (1936) 52 TLR 669, 671); and Lord Reid’s ‘ordinary men not avid for scandal’ (Lewis v. Daily Telegraph Ltd., (1964) AC 260), signal to the fact that in ‘trademark-disparagement’ cases, courts are not to adopt ‘too-literal’ an approach; for courts are to presume consumers (or audience) to be agile and pragmatic, capable of making choices best suited for themselves. Thus, in trademark disparagement cases, two-point agenda should be, the determination of: (a) the meaning of the words used (the imputation) and, (b) the defamatory character of the imputation.39 Disparagement should be judged based on the shared moral or social standard, common to society generally.40 Words of Lord Diplock in Erven Warnink, B.V. v. Townend & Sons (Hull) Ltd.41, are worth pressing, “it is always better that the economic battles are kept confined to the market place”.

37

(1997) F.S.R. 34 (1982) 150 CLR 500 39 See: Byrne v. Deane, (1937) 1 KB 818, 833 40 See: Miller v. David, (1874) LR 9 CP 118; Myroft v. Sleight, (1921) 90 LJKB 883; Tolley v. J.S. Fry & Sons Ltd., (1930) 1 KB 467, 479 41 1980 RPC 31 38

10

Single Meaning Rule & Multiple Meaning Rule: The ‘single meaning rule’ adopted in the law of defamation (qua disparagement) in strict sense of the term is highly artificial; given the range of meanings the impugned words sometimes bear.42 The argument that pulls in favour of the ‘multiple meaning rule’ as against the ‘single meaning rule’ is that- the law attributes to the words only one meaning (qua the context), although different readers are likely to read the words in different sense, thus interpretation of words qua the context in which they are expressed forms the necessary ground upon which the adjudication shall rest. To pull the argument in favour of the ‘multiple meaning rule’ against the ‘single meaning rule’, it is important to note that the U.S. Federal Circuit usually allows registration of a mark possessing a double meaning, opting for the interpretation which is not immoral or scandalous.43 In the case of Ajinomoto Sweeteners Europe SAS v. ASDA Stores Limited44, it was observed in Para 40 and 43 of the judgment that, the single meaning rule in defamation (qua disparagement) is the product of an accident of history resulting in a fiction that assumes that the reasonable man will understand a particular statement in only one way- the supposed single natural and ordinary meaning. The application of the single meaning rule carries with it the potential for swinging the balance unfairly against one party of the other, resulting in no compensation in cases when fairness might suggest that some should be due. Amidst the controversy relating to ‘single meaning rule’ and ‘multiple meaning rule’, qua which should be adopted and which should be abandoned; setting the course right, the Supreme Court of South Australia in Entienne v. Festival City Broadcasters45, held as follows: “To insist upon an innocent interpretation where any reasonable person could, and many reasonable people would, understand a sinister meaning is to refuse reparation for wrong that has in fact been committed.” Similarly, Neill LJ, in Hartt v. Newspaper Publishing Plc (26 October 1989, CA, Unreported at p.15) held that, the hypothetical (reasonable) reader must be treated as being someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available. Thus, multiplemeaning rule is the approach that law recognises in trademark disparagement cases, as against, the single-meaning rule. 42

See: Exposition by Lord Nicholls in Bonnick v. Morris, (2003) 1 AC 300; Exposition by Diplock LJ in Slim v. Daily Telegraph Ltd., (1968) 2 QB 157, 171-172 43 See: Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, Fourth Edition (1999), 19:77 44 (2010) EWCA Civ. 609 45 (2001) SASC 60

11

Adjudicatory Trend- Trademark Disparagement- India: The decision rendered by the Calcutta High Court in the case of, Reckitt & Colman of India Ltd. v. M.P. Ramachandran & Ors46, has laid the law in regards to trademark disparagement in India; the same has attained an authoritative status and has been since followed for more than over a decade. The five principles enunciated in the decision are as follows: (a) A tradesman is entitled to declare his goods to be the best in the world, even though the declaration is untrue; (b) He can also say that his goods are better than his competitors’, even though such a statement is untrue; (c) For the purpose of saying that his goods are the best in the world or his goods are better than his competitors’ he can even compare the advantages of his goods over the goods of others; (d) He, however, cannot while saying his goods are better than his competitors’, say that his competitors’ goods are bad. If he says so, he really slanders the goods of his competitors. In other words he defames his competitors and their goods, which is not permissible under law; (e) If there is no defamation to the goods or to the manufacturer of such goods then no action lies, but if there is such defamation, an action lies and if an action lies for recovery of damages for defamation, then the court is also competent to grant an order of injunction restraining the repetition of such defamation. Adjudicatory trend qua India, in regards to ‘trademark disparagement’ can be traced as follows: (1) In the case of, Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., 2003 (27) PTC 305 (Del) (DB), it was held that, though comparative advertising is permitted but only so long as it does not discredit or denigrate the trademark or trade name or disparages the product of the competitor; (2) In the case of, Dabur India Ltd. v. Colgate Palmolive India Ltd., 2004 (29) PTC 401 (Del), it was held that, generic disparagement of rival product without specifically identifying or pin-pointing the rival product is equally objectionable; (3) In the case of, Karamchand Appliances Pvt. Ltd. v. Sh. Adhikari Brothers, 2005 (31) PTC 1 (Del), it was held that, where a rival tradesman carries on an advertisement campaign disparaging or defaming the product of another tradesman, the latter is entitled to the relief of prohibitory injunction; (4) In the case of, Dabur India Ltd. v. Wipro Limited, 2006 (32) PTC 677 (Del), it was held that, it is permissible for an advertiser to proclaim that its product is the best even though that necessarily implies that all other similar products are inferior; (5) In the case of, Unibic Biscuits India (P) Ltd. v. Britannia Industries Ltd., MANU/KA/0240/2008, the Karnataka High Court held as follows: comparative advertising is permissible, only if, such an advertising does not disparage or denigrate the trademark of the competitor; right to 46

1999 PTC (19) 741

12

advertise does not permit to go extravagant, so much so, that the product of the competitor is put to irreparable loss or damage; and ‘balance of convenience’ lies more in favour of the party that will be put to great hardship, if temporary injunction is not granted; (6) In the case of, Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd., (2010) 44 PTC 254 Del (DB), it was held that, in view of the law laid down by the Supreme Court of India in the case of Tata Press Ltd. v. MTNL, (1995) 5 SCC 139, it can be held that false, misleading, unfair or deceptive advertising is not protected commercial speech and the earlier judgments holding that a tradesman is entitled to declare his goods to be the best in the world, even though the declaration is untrue and to say that his goods are better than his competitors’, even though such statement is untrue are no longer good law. It was further held that ‘hyped-up’ advertising may be permissible, but it cannot transgress the grey areas of permissible assertion, and if does so, the advertiser must have some reasonable factual basis for the assertion made; it is not possible for anybody to make an ‘off the cuff’ or ‘unsubstantiated’ claim that his goods are the best in the world or that his goods are better than that of a rival; (7) In the case of, Hindustan Unilever Limited v. Cavincare Private Limited, 2010 (44) PTC 270 (Del), it was held that every disparagement is not actionable and for disparagement to be actionable it should be brought within the tort of malicious falsehood and the plaintiff should as such be shown to have suffered special damages.47 Remedies qua Trademark Disparagement: Two remedies are available to the party that alleges and is aggrieved of trademark disparagement; one is injunction and the other is the claim for damages. If trademark disparagement is proved by the contending party, bringing to fore the fact that pecuniary losses have been suffered by the contending party, then in such a case claim for damages shall subsist. In the case of, Niche Products Limited v. Mac Dermid Offshore Solutions LLC48, it was held that, if the statement published by way of an advertisement by the defendant is likely to cause pecuniary damage to the plaintiff, then it can be presumed that there is a nexus between the alleged falsity qua advertisement and the claimant’s economic interest. The court shall see the following, before agreeing to grant pecuniary damages to the suffering party- (a) the words on which the claim rests are capable of causing trademark disparagement, product denigration and insinuation; (b) due to publication of the insinuating words, the trademark of claimant stands disparaged. In assessing the appropriate damages for injury to the reputation, the most important factor is

47 48

See: Marico Limited v. Adani Wilmar Ltd., 2013 (54) PTC 515 (Del), Para 3 & 4 (2013) EWHC 3540 (IPEC)

13

the gravity of the libel; the more closely it touches the complainant’s integrity, professional reputation, honour, courage and loyalty, the more serious it is likely to be. The extent of publication is also very relevant as a libel published to millions has a greater potential to cause damage than a libel published to a handful of people.49 Quantum of damages qua trademark denigration, thus, is to be determined depending upon the facts and circumstances of each case.50 An important caveat that needs to be borne in mind is that, when damages are claimed, the claim is not only in regards to the harm the reputation of the complainant suffers, but it is also in furtherance of the mental agony that the complainant suffers on account of the fact that, the defendant persists that its assertions are true and it owes no apology to the complainant. A case for the grant of injunction shall subsist, if the plaintiff is able to proof that balance of convenience lies in his favour and non-grant of the interim relief (in the nature of injunction) will ensue him irreparable loss and damage.51 No injunction will be granted if, after judicialscrutiny of the facts of the case, the court arrives at the conclusion that, the advertisement which the defendant has published speaks of truth and no case of malicious falsehood or illwill qua trademark disparagement can be made out.52 In the case of, Boehringer Ingelheim Limited & Ors v. Vetplus Limited53, it was held that, “The court normally considers who is actually likely to win and grants or refuses an interim injunction on that basis. For if the plaintiff is likely to win and the court foresights the damage to be irreparable, injunction will be granted; if not, no injunction will be granted”. In the case of, American Cyanamid v.

49

See: John v. MGN Ltd., (1997) QB 586 In the case of, Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555 (1931), it was held that, “Where the tort itself is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it is enough if the evidence shows the extent of the damages as a matter of just and reasonable inference, although the result be only approximate. The wrongdoer is not entitled to complain that they cannot be measured with the exactness and precision that would be possible if the case, which he alone is responsible for making, were otherwise. If the damage is certain, the fact that its extent is uncertain does not prevent a recovery.” 51 The case of, Reckit Benckiser (India) Limited v. Naga Limited & Ors, 2003 (26) PTC 535, makes an interesting read. In this case the High Court of Delhi was concerned with an advertisement in which the Dettol soap was allegedly shown in poor light by the manufacturer of the Ayurvedic soap. The plaintiff sued only for injunction and did not claim any damages. The learned judge of the Delhi High Court refused the grant of injunction on the ground that in absence of a primary and substantive claim for damages, the relief of injunction would ordinarily be barred. 52 In the case of, Godrej Sara Lee Ltd. v. Reckitt Benckiser (I) Ltd., 2006 (32) PTC 307, the High Court of Delhi concerned itself with an advertisement in which an insecticide (‘MORTEIN’) was shown to be more effective in destroying cockroaches and mosquitoes than the plaintiff’s product (‘HIT’), which had two versions, one for cockroaches and the other for mosquitoes. A.K. Sikri, J., refused the grant of injunction on the ground that the plaintiff was guilty of concealment of material facts and also on the ground that the advertisement just highlighted the product of the defendant as better than that of the competitor. 53 (2007) EWCA Civ. 583 50

14

Ethicon54, the court held, injunction is to be granted if there is a serious issue to be tried and the judge thinks that the balance of convenience so requires. Conclusion: To ascertain ‘what’ constitutes trademark disparagement is more of a factual exercise than legal. Following principles emerge from the above analysis qua ‘trademark disparagement’: (a) The court should give to the material complained of the natural and ordinary meaning which it would have conveyed to the ordinary reasonable reader reading the article or viewing the programme once; (b) The hypothetical reasonable reader (viewer) is not naive and also, he is not unduly suspicious. He can read between the lines. He can read an implication more readily than a lawyer and may indulge in a certain amount of loose thinking. But he must be treated as being a man who is not avid for scandal and someone who does not, and should not, select one bad meaning where other non-defamatory meanings are available; (c) While limiting its attention to what the defendant has actually said or written the court should be cautious of an over-elaborate analysis of the material in issue; (d) A reasonable reader does not renders, a newspaper item the analytical attention, that a lawyer gives to the meaning of a document; an auditor to the interpretation of accounts; and an academician to the content of a scholarly article; (e) In deciding what impression the material complained of would likely to have on the hypothetical reasonable reader, the court is entitled (if not bound) to have regard to the impression it made on them; (f) The court should not be too literal in its approach.55 With utmost precision it can be said that, it is in the interest of freedom of speech and expression, that the courts should forbear themselves from restraining the publication of statements alleged to be defamatory, whether a trade libel or personal one, where the defendant asserts that he is going to justify the use of statements made (asserting them to be non-libellous and non-defamatory); except where the court finds the statements to be obviously untruthful and libellous.56 Post the understanding of the concept of trademark disparagement it is important to carve out the necessary intelligible differentia as between ‘disparagement’, ‘puffing’ and ‘passing-off’. More over to see that the law qua trademark disparagement develops in positive strides, the 54

(1975) AC 396 See: Tesla Motors Ltd., Tesla Motors Inc. v. British Broadcasting Corporation, MANU/UKWA/0169/2013: (2013) EWCA Civ. 152; Skuse v. Granada TV, (1996) EMLR 278; Jeynes v. News Magazines Ltd., (2008) EWCA Civ. 130 (Unreported); Colgate Palmolive Co. & Anr. v. Hindustan Unilever Ltd., 2014 (57) PTC 47 (Del), Para 37 56 See: Bestobell v. Bigg, (1975) FSR 421 55

15

necessary caveats that must be borne in mind are the following: ‘commercial speech enjoys the necessary protection under Article 19(1) (a) read with Article 19(2) of the Constitution of India, 1950’, ‘comparison lies at the root of modern advertising’ and ‘generic disparagement as such is no disparagement’.

16