2013 (9) TMI 543 - HC - Companies Law

Interim Injunction - Whether there should be an interim injunction restraining the Defendant Hindustan Unilever Limited from publishing and/or telecasting the advertisements launched by it for its product Pepsodent Germicheck Superior Power toothpaste in the print and electronic media Held that - The Court was not persuaded to hold at this stage that the impugned TV advertisement or the impugned printed advertisement by HUL was disparaging of or denigrating the product Colgate Strong Teeth of the Plaintiffs - The Court was not satisfied that the Plaintiff had made out a prima facie case for the grant of an ad interim injunction as prayed for. The Court came to a prima facie conclusion on facts that the depiction of the use of the Plaintff s product, liquid or soap, did not lead to removal of germs to the extent the competitor s product did, and that this was disparaging of the Plaintiff s products - the facts in the present case do not persuade the Court to come to a similar conclusion at this stage. As far as the MRTPC decision was concerned, it was pointed out that the injunction against the advertisement was only till such time an expert panel verified the veracity of the claims of Colgate - It iwa stated that at that stage Colgate Strong Teeth used to be an ordinary chalk based toothpaste without any anti-germ actives - When Pepsodent was launched as a superior product, Colgate introduced Triclosan with a 0.1% concentration thus giving the consumer a superior choice - Thereafter, Pepsodent increased the Triclosan concentration to 0.2% and added fluoride to the formation - Ultimately, the complaint before the MRTPC was withdrawn since the Plaintiffs themselves had added fluoride and 0.2% Triclosan to Colgate Strong Teeth. Advertisements that compared the product of a trader with the product of a market leader can offer the consumer better information about the product - They can also help to improve the overall quality of like products in the market and, in that process, the product of the market leader - Advertisements when viewed in a positive light can be seen as challenging the market leader to offer a better product at a competitive price - In the world of marketing, these were acknowledged business strategies adopted by traders having to compete in a market dominated by one or a few players - The market leader should view this as an opportunity to offer a superior product at a competitive price. The Plaintiffs surely do not suggest that preferences of male children of a certain school-going age group would significantly impact the Plaintiffs entire market share in toothpastes, a product which by its very nature commands loyalties and habit of use by the average consumer, spread across genders over a range of age groups - The choice of toothpaste, the use of which is perhaps the first activity of the day for many an average consumer, would depend on a variety of factors - Only evidence at a trial can possible demonstrate whether the impugned advertisements showing the Colgate child switching his preference to Pepsodent GSP had the potential of swinging loyalties of all or a part of a different consumer cohort to the competitor s product - it was possible that aggressive or catchy advertising may cause a partial or temporary damage to the plaintiff, but ultimately the consumer would be the final adjudicator to decide what is best for him or her.

Issues Involved:
1. Interim injunction against Hindustan Unilever Limited (HUL) for advertisements.
2. Alleged misuse of Colgate's trademark.
3. Alleged disparagement of Colgate's goodwill and reputation.
4. Alleged misleading and false claims in HUL's advertisements.
5. Compliance with Advertising Standards Council of India (ASCI) Code.
6. Alleged misbranding under the Drugs and Cosmetics Act, 1940.
7. Historical context of HUL's advertising practices.
8. Comparative advertisement legality.
9. Prima facie case for ad interim injunction.

Issue-wise Detailed Analysis:

1. Interim injunction against HUL for advertisements:
The primary question was whether an interim injunction should restrain HUL from publishing and/or telecasting advertisements for its product Pepsodent Germicheck Superior Power (Pepsodent GSP). The court viewed the impugned television commercial and print advertisement multiple times during the arguments.

2. Alleged misuse of Colgate's trademark:
The Plaintiffs argued that HUL's advertisements misused their registered trademark 'Colgate', depicting their product without masking it and comparing it with an outdated packaging of Colgate. The court noted the need for advertisements to be truthful and not misleading as per Sections 30(1)(a) and (b) of the Trade Marks Act, 1999 (TM Act).

3. Alleged disparagement of Colgate's goodwill and reputation:
The Plaintiffs contended that the advertisements tarnished and defamed the worth and reputation of Colgate's products. The court examined the advertisements' storyline and concluded that the focus was on comparing Pepsodent GSP with Colgate Strong Teeth in terms of Triclosan content, without overt disparagement.

4. Alleged misleading and false claims in HUL's advertisements:
The Plaintiffs claimed that HUL's assertion of '130% germ attack power' was false and misleading. However, the court found that the advertisements aimed to show Pepsodent GSP as superior due to its Triclosan content, which was supported by in vivo and in vitro tests provided by HUL.

5. Compliance with Advertising Standards Council of India (ASCI) Code:
The Plaintiffs argued that the advertisements violated the ASCI Code by distorting facts and misleading consumers. The court noted that the advertisements should be viewed as a whole and not hyper-technically analyzed. The court found no clear violation of the ASCI Code at this stage.

6. Alleged misbranding under the Drugs and Cosmetics Act, 1940:
The Plaintiffs alleged that HUL's advertisements constituted misbranding under Section 17(c) of the Drugs and Cosmetics Act, 1940 (DACA). The court found that further evidence was required to conclude any violation of this provision.

7. Historical context of HUL's advertising practices:
The Plaintiffs referenced past instances where HUL made false claims about its products. The court acknowledged these references but emphasized that each case must be evaluated on its own merits.

8. Comparative advertisement legality:
The court reiterated principles from previous judgments, noting that comparative advertisements are permissible as long as they do not maliciously denigrate competitors' products. The court found that HUL's advertisements did not defame Colgate Strong Teeth but rather highlighted Pepsodent GSP's advantages.

9. Prima facie case for ad interim injunction:
The court concluded that the Plaintiffs did not make a prima facie case for an ad interim injunction. The advertisements were found to be within permissible bounds of comparative advertising, and the court was not convinced that the Plaintiffs would suffer irreparable harm.

Conclusion:
The application for an interim injunction was dismissed. The court emphasized that the observations were of a prima facie nature and not a conclusive opinion on the merits of the case. The decision underscored the importance of fair competition and the role of advertisements in informing consumers and improving product quality.

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