The High Court of Delhi on May 9, 2024, in Beiersdorf AG v. Hindustan Unilever Limited (HUL)1, extensively examined the principles and boundaries of comparative advertising. The case centered around the allegations that HUL's promotional activities unfairly compared its 'Ponds Superlight Gel' with Beiersdorf's 'NIVEA Crème'.
This article analyzes the court's findings on comparative advertising, the applicable legal framework in India, and the global implications for advertisers.
Case Summary
Background
Beiersdorf AG, known for its 'NIVEA' brand, accused HUL of using deceptive comparative advertising tactics. Beiersdorf discovered that HUL's sales representatives were conducting in-mall promotions comparing 'Ponds Superlight Gel' with a product in a blue tub resembling 'NIVEA Crème'. They used a magnifying glass to show that the product from the blue tub left an oily residue while the 'Ponds Superlight Gel' did not. This comparison was claimed to mislead consumers and disparage the 'NIVEA' brand by highlighting a supposed negative attribute (oily residue) of the product in the blue tub.
Beiersdorf AG also highlighted several past instances where HUL and its parent company Unilever had engaged in similar comparative advertising tactics against 'NIVEA' products, particularly in India:
- 2012 ASCI Complaint: A complaint was made to the Advertising Standards Council of India (ASCI) regarding a TV commercial for 'Fair & Lovely Moisture Plus' cream that impliedly disparaged 'NIVEA' products by pushing a blue jar off the screen. ASCI had upheld the complaint, recommending that the advertisement be withdrawn or modified.
- 2016 ASCI Complaint: HUL complained against Beiersdorf regarding an advertisement for 'NIVEA Crème', highlighting the ongoing contention between the two companies regarding comparative advertising practices.
- 2018 Digital Media Advertisement: Beiersdorf's Indian subsidiary complained about a 'Ponds Light Moisturiser' advertisement that compared it to an unnamed product in a blue tub, leading to the ad's withdrawal. The ad was seen as an unfair comparison that misled consumers by not clearly identifying the products being compared.
- 2019 Instagram Story: A complaint was made about a 'Lakme Peach Milk Soft Crème' Instagram story that compared it to a product with iconic blue packaging, leading to its removal. The blue packaging was again associated with the 'NIVEA' brand, and the comparison was seen as an attempt to disparage the product.
These instances demonstrated a pattern of aggressive comparative advertising by HUL and its parent company, targeting Beiersdorf's 'NIVEA' products within the Indian market.
HUL contended that comparative advertising is permissible under Indian law as long as it does not amount to disparagement. It argued that the blue tub used in the comparison was not exclusively associated with 'NIVEA', and no specific brand was targeted. It further maintained that the comparisons were part of legitimate puffery and competitive advertising practices in India.
The Jurisprudence on Comparative Advertisement in India
In Wipro Enterprises (P) Limited v. Reckitt Benckiser (India) Pvt. Ltd., the Delhi High Court laid down comprehensive principles on comparative advertising in India, summarized as follows:
- Direct and Indirect Targeting: Comparative advertisements can be permissible if they do not directly or indirectly target the plaintiff's product unless such targeting is inevitable due to the market context. The implication must be clear and not based solely on market share.
- Truthfulness and Honesty: Advertisements must be truthful and honest. Misleading, false, or deceptive advertisements are impermissible, irrespective of whether they extoll the advertiser's product or criticize the competitor's.
- Puffery: Puffery is permissible but must be distinguished from misleading statements of fact. Puffery is not actionable as long as it does not mislead consumers about the competitor's product.
- Disparagement: Denigration of a rival's product is impermissible. While it is acceptable to claim one's product is superior, it is not acceptable to claim the competitor's product is inferior. The advertisement should not convey a message that directly or indirectly disparages the competitor's product.
- Consumer Perspective: The impact of the advertisement is assessed from the viewpoint of the average consumer, who can read between the lines and is not naive. The overall effect and the impression it leaves on the viewer's mind are crucial in determining whether the advertisement is misleading or disparaging.
Further, comparative advertising is permitted under Section 30(1) of the Indian Trademark Act 1999, which allows the use of a registered trademark to identify goods or services, as long as it is under honest practices and does not take unfair advantage or harm the trademark's reputation.
Furthermore, under Chapter IV of the ASCI Code, comparative advertisements are allowed if they meet certain conditions, such as, clearly stating the aspects being compared, avoiding creating artificial advantage or misleading consumers, using factual and accurate information, and refraining from unfairly denigrating other products or using the goodwill of other firms.
Court's Analysis and Findings
The court agreed that the distinctive blue color used by Beiersdorf for 'NIVEA' products was a well-established source identifier, and noted that HUL could not claim ignorance of the distinctiveness of the 'NIVEA' trade dress. The history of litigation and disputes over comparative advertising between the parties indicated that HUL had knowledge of the association between the blue tub and the 'NIVEA' product.
Further, the court noted that both plaintiff and defendant have different categories of creams, essentially three categories, each of which has a different percentage of fatty matter. HUL chose to compare their lightest product ('Ponds Superlight Gel') to the plaintiff's heaviest product ('NIVEA Crème'). Comparing HUL's lightest product with a specific distinctive blue tub cream, to show that their gel was lighter, without full knowledge being given to the consumer, was held misleading. The court held that a comparison may be made between similar products if the distinguishing feature relates to a parameter that would be different for a different category.
Moreover, the impugned ad was without audio and the lack of verbal communication in the promotional activities left room for consumers to draw their own (misleading) conclusions based on the visual comparison alone and could easily mislead consumers into believing that the 'NIVEA' product was inferior.
Furthermore, the court acknowledged that some level of puffery is allowed in advertising. However, HUL's activities crossed the line into disparagement by creating a negative impression of the 'NIVEA' product. The court emphasized that the deliberate choice of a blue tub and the misleading comparison suggested an intent to disparage the 'NIVEA' brand rather than merely promoting the 'Ponds Superlight Gel'.
Finally, the court held HUL's actions, i.e., choosing to compare the 'NIVEA' products with its own products as prima facie misleading and disparaging.
Our Analysis
The court's ruling provides significant insights into how comparative advertising should be conducted to ensure fairness and truthfulness, while also protecting the interests of competitors and consumers. Particularly, the court emphasized that for comparative advertising to be fair, it must involve products of similar categories. This reinforces the principle that comparisons should not create artificial advantages by juxtaposing dissimilar products. The ruling also highlighted that the overall impression an advertisement leaves on the average consumer is crucial. HUL's promotional activities, which lacked verbal explanation and relied solely on visual comparison, were held likely to mislead consumers. This aspect highlights the necessity for advertisements to be clear and transparent, ensuring consumers are not left to make misleading inferences.
Conclusion
The Beiersdorf AG v. HUL judgment delineates the boundaries of comparative advertising and serves as a comprehensive guide for advertisers to craft their promotional strategies within the legal and ethical frameworks.
Moreover, this case highlights a broader trend in the Indian judiciary, where courts are becoming increasingly proactive in addressing issues related to consumer protection. The Indian courts are not only interpreting the law but also setting clear precedents to ensure that advertising remains a tool for fair competition and consumer benefit, rather than a means of misleading or disparaging competitors. This proactive stance is essential in maintaining market integrity and ensuring that consumers are given true and fair information, which ultimately supports informed decision-making and healthy market competition.
Footnotes
1. CS(COMM) 300/2021
2. 2023 SCC OnLine Del 2958
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