Case Note: Havells (vs.) Eveready to Play Spoiled Sport!

Aishwarya Bedekar, IV BSL LLB, ILS Law College, Pune

In the present case, Havells v. Amritanshu Khaitan, the Plaintiff Company filed a suit for permanent injunction against the Defendant Company restraining them from publishing misleading advertisement that led to disparagement and misrepresentation. The image of the impugned advertisement is given below:

The Plaintiff Company contended that the statement in the advertisement “check lumens and price before you buy” was an invitation to the consumers to compare only two aspects of a bulb, i.e. its lumens and price. This was a mischievous strategy of the Defendant Company to compare only two aspects whereas they were obliged to compare all.

The Plaintiff Company relied upon the Advertising Standards Council of India (ASCI) Code. The Code states that the “advertisement must not mislead the consumers by omissions or implications that may abuse the trust of the consumers or exploit their limited knowledge.”

The Plaintiff Company also relied upon Section 29(8) and 30(1) of The Trademarks Act, 1999 which provide that commercial advertisement should be carried out with honest practices without taking any unfair advantage or by creating detrimental effect to the distinctive character of the trademark.

The Defendant contended that there was no requirement to state each and every factor in comparative advertisement. The packaging of all other rival companies also did not contain all parameters and that brightness is the most essential element of any bulb and the Defendant is justified to advertise the same. The Court’s observations and reasoning are:

What is advertising?

The Court relied on the ASCI Code and Article 2(1) of the Advertising Directive of EEC:

“Advertising means a representation made to the public at large to influence their opinions with respect to goods or services.”

Further the Article 19(1) of the Constitution protects freedom of commercial speech.

What is Comparative Advertising?

The ASCI Code does not define comparative advertising, thus the Court relied upon the definition provided by Advertising Directive of EEC under Article 2(2a) “any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor.”

Comparative Advertising permissible under some conditions

Chapter IV of the ASCI Code specifically deals with comparative advertising. The Court concluded that, comparative advertising is permissible if certain conditions are followed:

goods or services meeting the same needs or intended for the same purpose;

one or more material, relevant, verifiable and representative features (which may include price); and

products with the same designation of origin (where applicable)

 

Objective of Section 29(8) and 30(1) of the Trademarks Act,1999:

The Court concluded that the objective of these sections is to allow comparative advertising as long as the use of the competitors mark is honest.

 

Competitors can certainly compare but not mislead:

The Court observed that in accordance with the ASCI Code and the relevant sections of the Trademarks Act, 1999, the objective of comparative advertising is to stimulate competition among suppliers of goods and services. The main aim is to never mislead the consumers.

The Court observed that for an advertisement to be considered misleading; two essential elements must be satisfied.

“First, misleading advertising must deceive the persons to whom it is addressed or at least, must have the potential to deceive them.

Secondly, as a consequence of its deceptive nature, misleading advertising must be likely to affect the economic behaviour of the public to whom it is addressed, or harm a competitor of the advertiser.”

The Court observed that, in the impugned advertisement the tagline is “Switch to the brightest LEDs” and not to the “best LED”. The advertiser has the liberty to highlight a special feature of its product which distinguishes its product from its competitors. Such comparison must be true. It is open to an advertiser to compare one or more material, including price, as long as the comparison is true. The present advertising campaign is not misleading and there is no disparagement of plaintiff’s mark. Further, the factors compared are material and relevant. Thus, the Plaintiffs suit was dismissed.

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