Advertisement for cooking oil held not to disparage competitor's product

India

In Marico Ltd v Adani Vilmar Ltd, the Delhi High Court has rejected Marico Ltd's application for an interim injunction restraining Adani Vilmar Ltd from advertising its Fortune cooking oil in television and print media. The court found that Marico had failed to make a prima facie case that Adani’s advertisement was disparaging of Marico's Saffola product.

Marico and Adani are competitors in the edible oil business. Marico’s Saffola product is blended with rice bran oil and sold in four variants with different compositions of rice bran oil and other oils. Adani’s Fortune product is composed of 100% rice bran oil. In its advertisements, Adani claimed, among other things, that its Fortune product was healthier and better than other cooking oils, as it contained 100% rice bran oil and had a high content of oryzanol (a healthy micro-nutrient).

Marico filed two suits for permanent injunction, along with an application for interim injunction to restrain Adani from broadcasting, printing and publishing its advertisements on the grounds that they disparaged Marico's product, and made misleading and false claims. The first action sought to restrain Adani from broadcasting its advertisements on television, while the second sought to restrain Adani from publishing its advertisements in the print media.   

Marico argued that Adani's television advertisement compared its product to that of Marico. Further, Marico submitted that, even though its trademark was not visible, the shape of the container was distinctive of its product. The print advertisement compared the oryzanol content of Marico’s product and other similar products to the oryzanol content of Adani's product, and claimed that Fortune contained more oryzanol, which was more beneficial to human health. Thus, according to Marico, it made a clear comparison between Marico's and Adani’s product.

Marico further argued that the advertisement claimed that 100% rice bran oil is better because it has the highest oryzanol content. However, under the Food Safety and Standards Act, rice bran oil is required to have an oryzanol content of no less than 1%. Thus, the fact that Adani's product contained oryzanol only complied with statutory requirements.  

Marico also contended that Adani's health claim with regard to oryzanol was false, since the documents relied upon by Adani to support the claims originated from sponsored agencies or from newspaper articles, and had no authenticity.

Further, Marico pointed out that a document filed by Adani stated that the blend of seven parts of rice bran oil and three parts of safflower oil had enhanced the cholesterol-lowering potential of rice bran oil. Hence, Adani’s claim in its advertisement that 100% rice bran oil was better than Marico's blended oil was false and misleading. Marico thus concluded that Adani's advertisements not only exaggerated the benefits of its own product, but also disparaged Marico's product.

In contrast, Adani contended that there is a difference between disparaging the goods of a competitor and puffing up the virtues of one’s goods. The advertisement at issue merely exaggerated the virtues of Adani’s product and did not disparage Marico's product. Further, Adani argued that the claim that rice bran oil is the healthiest did not constitute a wrong representation, and a disclaimer in that respect was prominently visible.

Adani also contended that the container shown in the advertisement was not distinctive of Marico’s product, since there were other containers which had a similar shape. Further, it submitted that other rice bran oil manufacturers claimed that rice bran oil was the healthiest oil.

Adani referred to Hindustan Unilever Ltd v Cavincare Private Ltd (2010 (44) PTC 270 (Del)), in which it was held that every type of disparagement is not actionable per se and that, for a claim of disparagement to be actionable, it must be brought within the ambit of the tort of malicious falsehood. Marico should have thus shown that it had suffered damages. The attention of the court was also drawn to Dabur India Ltd v Wipro Limited (2006 (32) PTC 677 (Del)), in which it was held that it is permissible for an advertiser to proclaim that its product is the best, even though this implies that all other similar products are inferior.

The court discussed principles laid down in various judgments relating to comparative advertising in order to ascertain which principles should be applied to the present facts. The court referred to De Beers Abrasive v International General Electric Co (1975 (2) All ER 599), where it was held that a trader is entitled to 'puff up' its own goods, even though this involved the denigration of rival goods. However, a trader cannot engage in slander or defamation, and cannot claim that a competitor's products are bad or inferior.

The court also referred to the Division Bench judgment in Dabur India v Colortek Meghalaya ((2010) 44 PTC 254 (Del)), where it was held that, in deciding the issue of disparagement, certain factors had to be taken into consideration:

  1. the intent of the advertisement;
  2. its nature;
  3. its story line; and
  4. the message sought to be conveyed.

The court observed that the intent of the advertisement can be inferred from the story line and the message sought to be conveyed. The overall effect of the advertisement - that is, whether the comparison is largely truthful or whether it falsely denigrates or disparages a rival product - is also relevant.

The court applied these factors to the present case and held that the advertisements at issue did not disparage Marico’s product. The court reasoned that the advertisements merely informed the consumer that the oryzanol content of Marico’s product was less than what is required, and that the oryzanol content of Adani’s product satisfied the daily requirement for oryzanol. The intent, storyline and the message sought to be conveyed by the advertisements - both print and television - was that Adani’s product was the healthiest oil, and was healthier and better than other cooking oils. Thus, the advertisements amounted to a mere comparison of Adani’s product with the products of others, and nothing in the advertisements stated that Marico’s product was bad.

The court also considered the view taken in Dabur-Colortek, in which the court, relying on the Supreme Court’s decision in Tata Press v Mahan agar Telephone Nigam Limited (AIR 1995 SC 2438), had held that misleading, false or deceptive commercial speech is not covered by the freedom of speech and expression, and can be restrained by the state under Article 19(2) of the Constitution. Even considering the ruling in Dabur-Colortek, the court held that there was no actionable case, as the advertisement merely stated that Adani’s product contained a higher amount of oryzanol, while the other products did not. Moreover, the advertisement did not seek to highlight the cholesterol lowering ability of oryzanol. Therefore, it could not be said that Adani's failure to highlight or disclaim the cholesterol lowering ability of oryzanol in Marico’s product came in the way of its claim that 100% rice bran oil was better than other oils. Consequently, Marico had failed to make out a case of disparagement on this ground.

The court concluded that Marico had failed to make a prima facie case for the grant of an interim injunction. A final adjudication is still awaited in this case.

Ajay Chandru, Rakhi Jindal and Gowree Gokhale, Nishith Desai Associates, Mumbai 

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