Author- Kartik Gill
Concept of Disparagement
Advertising is known as a paid for communication which is addressed to the public for the
purpose of influencing their opinions and behaviours for a product or service1
. It is one of best
methods for connecting with the target audience but at times it can also be exploited by the
companies by using unlawful tactics like trademark disparagement.
Trademark disparagement refers to a tactic employed by companies to build their brand value
by damaging the reputation of the other rival companies2
. In this, the company makes a false
statement or claim that their goods are better than opponent’s goods as their opponent’s goods
are adulterated or inferior in nature.
It is to be noted that mere comparison with another company’s product does not constitute
disparagement because there is also a concept of comparative advertising in which a company
presents its products or services as superior then the rival company’s products or services3
.
This kind of advertising is allowed in India but the moment that company uses false statements
to compare with the rival company, then it becomes disparagement which is not allowed in
India.
In India, the Trademarks Act of 1999 governs disparagement and comparative advertisements.
Section 29 of this act states that no company can infringe a registered trademark of another
company by following unfair trade practices or making false claims which detrimentally affects
the reputation of the trade mark4
. Section 30 of the trademarks act further states that any
company who violates section 29 can only escape liability if it shows that their action was in
accordance with the ‘honest practices’ of the industry.
Reading these sections together show that comparative advertising is allowed in India It as long
as the company does not follow any unfair trade practices and show that the competitor
company’s trademark was used in a honest manner. Apart from the trademarks act, we also
1 Chadha, ‘Comparative Advertising and Disparagement’ (Lexology, 3 October 2018)
https://www.lexology.com/library/detail.aspx?g=c200e9b5-d6a9-4584-9e9d-01ede06d2f56
2
‘Trademark Disparagement Under the Indian Law’ (Unimarks, 26 July 2022)
https://unimarkslegal.com/blog/trademark/trademarkdisparagement/#:~:text=Trademark%20disparagement%20
means%20building%20the,be%20termed%20as%20trademark%20disparagement.%E2%80%9D
3
Ibid.
4 Trademarks Act 1999, s 29(8).
need to keep in mind that commercial advertisement or speech is considered as a part of article
19(1)(a) which provides the right of freedom of speech and expression to the citizens of the
country. This reasoning was decreed by the supreme court of India in the case of Tata Press
Ltd v. Mahanagar Telephone Nigam Ltd.5
. Thus, comparative advertisement is protected by
the fundamental right of freedom of speech and expression under article 19(1)(a). However,
the court furthered said that defamation is not protected under article 19(1)(a) so trademark
disparagement is not allowed in the country.
What factors does the court look into while deciding whether one mark is disparaging
that of the other?
In the case of Pepsi Co. Inc v. Hindustan Coca Cola Ltd6
. the court provided certain factors to
look for establishing disparagement of trademark. They stated that one needs to look at: –
I) The aim or intent of the commercial advertisement.
II) Meaning of the advertisement.
III) Product Advertised.
IV) Background of the advertisement
V) The Storyline of the advertisement and the message sought to be conveyed through this.
Important Judicial Decisions on Disparagement
In the case of Colgate Palmolive Company v. Hindustan Unilever Ltd7
, the Delhi High Court
held that one can exaggerate their claims in an advertisement but they cannot denigrate the
goods of another.
In the case of Horlicks Ltd and Anr v. Heinz India Private Limited8
, the court held that the
primary aim of section 29(8) and 30 of the Trademarks Act, 1999 is to protect competitive
advertisements by restricting unfair trade practices.
5 Tata Press Ltd v. Mahanagar Telephone Nigam Ltd [1995] SCC (5) 139.
6 Pepsi Co. Inc v. Hindustan Coca Cola Ltd 2003 (27) PTC 305 (Del).
7 Colgate Palmolive Company v. Hindustan Unilever Ltd FAO (OS) 396/2013.
8 Horlicks Ltd and Anr v. Heinz India Private Limited [2019] 256 DLT 468.
In the case of Gujarat Co-operative Milk Marketing Federation Ltd. (Amul) v. Hindustan
Unilever Ltd and Ors9
, the court held that false advertisements that create confusion among
the consumers constitute disparagement.
In the case of Chloride Industries Ltd. v. Standard Batteries Ltd10 , the court held that if goods
are denigrated maliciously with the intent to harm and not through fair trade competition, then
the same would be actionable.
In the case of Tata Chemicals Ltd. v. Puro Wellness Pvt. Ltd.
11
, the Delhi High Court held that
advertisements disparaging other goods as unhealthy is not permitted.
Conclusion
Comparative advertisements are important for maintaining competition in the market and to
push the companies to keep on creating better products than the last. It also helps the consumers
in differentiating between products so that they can make a sound and informed decision in
selecting the desired product. However, when a company starts to disparage other goods in
order to earn money through dishonest ways then such actions cannot be permitted that’s why,
Indian law makers have incorporated section 29(8) and 30 in the Trademarks Act of 1999 to
disallow companies from belittling each other.
Even though the provisions contained in the trademarks act and the case laws interpreting them
are strong enough to protect the interests of the companies and ensure fair competition in the
market. Nonetheless, there is still one limitation that plagues the statutory provisions i.e., there
is no provision for dealing with the disparaging advertisements made on internet portals. Thus,
there is need for reform in this area to establish a new institution to deal with the online mode
of advertisements to protect the goodwill and reputation of the trademark holders as well as
keep the law up to date with the needs of the society.
9 Gujarat Co-operative Milk Marketing Federation Ltd. (Amul) v. Hindustan Unilever Ltd and Ors [2017]
10 Chloride Industries Ltd. v. Standard Batteries Ltd 1993 (44) ECC 60.
11 Tata Chemicals Ltd. v. Puro Wellness Pvt. Ltd CS. (OS). No. 403 of 2018.
