journal of intellectual property law & practice-2010-banerjee-comparative advertising and the...

12
Comparative advertising and the tort of generic disparagement Arpan Banerjee* What is disparagement? Indian advertising made its tentative beginnings towards the end of the eighteenth century. 1 But as late as the 1980s, David Ogilvy noted that there was ‘very little advertising’ in the country compared with the West. 2 The following decade saw the liberalization of the Indian economy, greatly benefiting advertisers. India’s once- dormant advertising industry has now leapfrogged to become the world’s fourteenth-largest. 3 Concomitantly, disputes stemming from comparative advertisements have rapidly sprung up in the new free-market economy. The Paris Convention for the Protection of Indus- trial Property 1883 requires states to provide ‘effective protection against unfair competition’. 4 ‘Any act of competition contrary to honest practices in industrial or commercial matters’ amounts to unfair compe- tition. 5 This includes making ‘false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commer- cial activities, of a competitor’, 6 which is known as dis- paragement. 7 Disparagement assumes great relevance in the context of comparative advertisements. Trade mark statutes are incapable of preventing the disparagement of unidentified traders. However, Indian courts have fashioned a tort of generic disparagement to offset this. In this article, I compare English and Indian precedents and argue that Indian judges have been more prag- matic by relaxing certain barriers to liability in tortious disparagement actions. However, only cases of specific disparagement ought to be actionable. Arguably, recog- nizing a tort of generic disparagement would result in undue curbs on commercial speech and increase the possibility of vexatious litigation. Disparagement and trade mark law Law in the UK Section 10(6) of the Trade Marks Act 1994 (‘TMA’) allows registered trade marks to be used ‘for the purpose of identifying goods or services as those of the proprietor or a licensee’. But if this use is ‘other- wise than in accordance with honest practices in industrial or commercial matters’ and ‘without due cause ... is detrimental to, the distinctive character or repute’ of the trade mark, it amounts to trade mark infringement. This part of section 10(6) incorporated the provisions of an EC Directive 8 and seeks to * I am grateful to Mr Soumya Ray Chowdhury, Advocate, for his valuable comments and suggestions. Mr Ray Chowdhury represented Unilever in two cases referred to herein. Any errors are my own. Email: [email protected] 1 A Chaudhuri, Indian Advertising: 1780 to 1950 AD 1–22 (Tata McGraw- Hill, New Delhi, 2007). 2 D Ogilvy, Ogilvy on Advertising 182 (Vintage Books, New York, 1985). 3 ZenithOptimedia, ‘Advertising Boom in Developing Ad Markets Compensates for Credit-Crunch Gloom in the West’ (2008) http://www. zenithoptimedia.com/gff/pdf/Adspend%20forecasts%20March%202008. pdf (accessed 23 March 2010). 4 Paris Convention for the Protection of Industrial Property 1883 Art 10(1)bis. 5 ibid Art 10(2)bis. 6 ibid Art 10(3)(ii)bis. 7 Black Law Dictionary defines disparagement as a ‘false and injurious statement that discredits or detracts from the reputation of another’s property, product, or business’. This matches the words used in Art 10(3)(ii)bis of the Paris Convention. B Garner (ed.), Black’s Law Dictionary (West Group, Minnesota, 7th edn, 1999). 8 Directive 89/104/EEC, to approximate the Laws of the Member States Relating to Trade Marks Art 5(2). Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11 ARTICLE 791 # The Author (2010). Published by Oxford University Press. All rights reserved. doi:10.1093/jiplp/jpq110 Advance Access publication on 26 August 2010 Key issues In contrast with English courts, Indian courts have regularly upheld tortious disparagement claims and shown a greater willingness to infer malicious intent. By ignoring English precedents in this area, Indian courts have also developed a tort of generic disparagement, stressing the need to protect consumers from misleading statements, even if not targeted at a particular trader, and have included venial puffing and commercially honest denigration within the ambit. The author argues that this has unduly curbed commercial freedom of speech and opened the floodgates for frivolous litigation among rival businesses. at Universidad de Chile on May 1, 2011 jiplp.oxfordjournals.org Downloaded from

Upload: sapodrilo

Post on 30-Nov-2015

57 views

Category:

Documents


1 download

DESCRIPTION

sdasda

TRANSCRIPT

Page 1: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

Comparative advertising and the tortof generic disparagementArpan Banerjee*

What is disparagement?Indian advertising made its tentative beginnings towardsthe end of the eighteenth century.1 But as late as the1980s, David Ogilvy noted that there was ‘very littleadvertising’ in the country compared with the West.2 Thefollowing decade saw the liberalization of the Indianeconomy, greatly benefiting advertisers. India’s once-dormant advertising industry has now leapfrogged tobecome the world’s fourteenth-largest.3 Concomitantly,disputes stemming from comparative advertisementshave rapidly sprung up in the new free-market economy.

The Paris Convention for the Protection of Indus-trial Property 1883 requires states to provide ‘effectiveprotection against unfair competition’.4 ‘Any act ofcompetition contrary to honest practices in industrialor commercial matters’ amounts to unfair compe-tition.5 This includes making ‘false allegations in thecourse of trade of such a nature as to discredit theestablishment, the goods, or the industrial or commer-cial activities, of a competitor’,6 which is known as dis-paragement.7 Disparagement assumes great relevance inthe context of comparative advertisements. Trade markstatutes are incapable of preventing the disparagementof unidentified traders. However, Indian courts havefashioned a tort of generic disparagement to offset this.In this article, I compare English and Indian precedentsand argue that Indian judges have been more prag-matic by relaxing certain barriers to liability in tortiousdisparagement actions. However, only cases of specificdisparagement ought to be actionable. Arguably, recog-nizing a tort of generic disparagement would result inundue curbs on commercial speech and increase thepossibility of vexatious litigation.

Disparagement and trade mark law

Law in the UKSection 10(6) of the Trade Marks Act 1994 (‘TMA’)allows registered trade marks to be used ‘for thepurpose of identifying goods or services as those ofthe proprietor or a licensee’. But if this use is ‘other-wise than in accordance with honest practices inindustrial or commercial matters’ and ‘without duecause . . . is detrimental to, the distinctive character orrepute’ of the trade mark, it amounts to trade markinfringement. This part of section 10(6) incorporatedthe provisions of an EC Directive8 and seeks to

* I am grateful to Mr Soumya Ray Chowdhury, Advocate, for his valuablecomments and suggestions. Mr Ray Chowdhury represented Unilever intwo cases referred to herein. Any errors are my own.Email: [email protected]

1 A Chaudhuri, Indian Advertising: 1780 to 1950 AD 1–22 (Tata McGraw-Hill, New Delhi, 2007).

2 D Ogilvy, Ogilvy on Advertising 182 (Vintage Books, New York, 1985).

3 ZenithOptimedia, ‘Advertising Boom in Developing Ad MarketsCompensates for Credit-Crunch Gloom in the West’ (2008) http://www.zenithoptimedia.com/gff/pdf/Adspend%20forecasts%20March%202008.pdf (accessed 23 March 2010).

4 Paris Convention for the Protection of Industrial Property 1883 Art10(1)bis.

5 ibid Art 10(2)bis.

6 ibid Art 10(3)(ii)bis.

7 Black Law Dictionary defines disparagement as a ‘false and injuriousstatement that discredits or detracts from the reputation of another’sproperty, product, or business’. This matches the words used in Art10(3)(ii)bis of the Paris Convention. B Garner (ed.), Black’s LawDictionary (West Group, Minnesota, 7th edn, 1999).

8 Directive 89/104/EEC, to approximate the Laws of the Member StatesRelating to Trade Marks Art 5(2).

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11 ARTICLE 791

# The Author (2010). Published by Oxford University Press. All rights reserved. doi:10.1093/jiplp/jpq110

Advance Access publication on 26 August 2010

Key issues

† In contrast with English courts, Indian courtshave regularly upheld tortious disparagementclaims and shown a greater willingness to infermalicious intent.

† By ignoring English precedents in this area,Indian courts have also developed a tort ofgeneric disparagement, stressing the need toprotect consumers from misleading statements,even if not targeted at a particular trader, andhave included venial puffing and commerciallyhonest denigration within the ambit.

† The author argues that this has unduly curbedcommercial freedom of speech and opened thefloodgates for frivolous litigation among rivalbusinesses.

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 2: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

prevent tarnishment, ie the use of a trade mark in anunwholesome context likely to evoke negative associ-ations with the trade mark by the public.9 In Barclaysv Advanta, Laddie J observed that, to attract liabilityunder this provision, the use of a trade mark ‘mustinflict some harm on the character or repute of theregistered mark which is above the level of deminimis’.10 Since making false allegations about atrader’s goods can inflict such harm and constitutetarnishment, section 10(6) appears to indirectly preventdisparagement.

In Barclays, Laddie J explained that if a trade mark’suse ‘is considered honest by members of a reasonableaudience’, there is no infringement.11 The public isaccustomed to hyperbole and the TMA does notimpose ‘a more puritanical standard’. Hence, advertis-ing which ‘pokes fun’ at competitors or merely puffs isacceptable.12 Laddie J refused to restrain Advanta fromusing ‘BARCLAYCARD’ in advertisements. Barclayshad contended that Advanta’s claim of offering ‘abetter credit card all round’ was not honest, as theyhad not mentioned benefits offered by Barclays. LaddieJ, however, thought that the advertisements would beconsidered honest by a reasonable reader. In contrast,in Emaco v Dyson,13 Dyson published a technical graphand declared that their vacuum cleaner was superior toEmaco’s. Parker J, applying Laddie J’s reasonable-readertest, found ‘a number of false representations’ and con-cluded that there was infringement.14

In addition to the TMA, an EC Directive15 (‘CAD’)regulates the conditions for comparative advertising, ie‘any advertising which explicitly or by implicationidentifies a competitor or goods or services offered by acompetitor’.16 The CAD codified the amended versionof an earlier, substantively identical Directive(‘MAD’).17 The CAD permits comparative advertisingif it, inter alia:18

† is not misleading;19

† objectively compares one or more material, relevant,verifiable, and representative features of goods andservices, which may include price;

† does not discredit or denigrate the trade marks,trade names, other distinguishing marks, marks,goods, or services of a competitor;

† does not take unfair advantage of the reputation of atrade mark, trade name, or other distinguishingmarks of a competitor or of the designation oforigin of competing products.

By virtue of the Marleasing principle,20 the TMA oughtto be interpreted in accordance with the CAD.21 InBritish Airways v Ryanair,22 Jacob J (as he then was) feltthat compliance with most of the MAD’s provisionswould ‘obviously be necessary to comply with section10(6)’ of the TMA.23 But the CAD’s impact on the TMAremains unclear.24 Particularly problematic is the CAD’suse of the word ‘denigrate’, which ordinarily means ‘toblacken, sully, or stain (character or reputation)’.25 Argu-ably, denigration differs slightly from disparagement. Fal-sehood is an indispensable ingredient of disparagementbut not necessarily of denigration. Even true statementscan blacken traders.26 Unlike the TMA, the CAD lacks acommercial-honesty proviso. What impact does the CADthen have on a commercially honest advertisementwhich, in Laddie J’s words, ‘pokes fun’ at a competitor?

In British Airways, Ryanair compared airfares andcheekily called British Airways ‘EXPENSIVE BA . . . .DS!’.British Airways alleged infringement of its registered ‘BA’trade mark. Applying Laddie J’s liberal standards, Jacob Jheld that the advertisement was commercially honest, asthe average consumer would not find Ryanair’s pricecomparison misleading.27 However, British Airwaysinvoked the MAD and argued that denigration was its‘significant extra’ provision—‘you can be offensive about

9 S Casparie-Kerdel, ‘Dilution disguised: has the concept of trade markdilution made its way into the laws of Europe?’ (2001) 23 EIPR 185, 187.

10 (1996) RPC 307, 316.

11 ibid, 315.

12 ibid.

13 (1999) WL 249783.

14 ibid [135].

15 Directive 2006/114/EC concerning misleading and comparativeadvertising.

16 ibid Art 2(c).

17 Directive 84/450/EC, amended by Directive 97/55/EC.

18 Directive 2006/114/EC Art 4.

19 A misleading advertisement is essentially defined as one which eitherimpacts consumer behaviour or injures competitors through deception,or makes false statements or contains omissions about the characteristicsof goods or services. See Directive 2006/114/EC Arts (2b), 3, and 8(1);Directive 2005/29/EC Arts 6 and 7.

20 Marleasing v LA Comercial International de Alimentacion [1992] 1 CMLR305 [9].

21 O2 v Hutchinson [2004] EWHC 2571 (Ch) [21].

22 [2001] FSR 32 [25].

23 British Airways v Ryanair [2001] FSR 32 [25].

24 L Bently and B Sherman, Intellectual Property Law (OUP, Oxford, 3rdedn, 2009) 937.

25 As defined by the OED (2nd edn, 1989), http://dictionary.oed.com/cgi/entry/50060831 (accessed 17 March 2010).

26 Apparently, in French law, a person who deprecates a competitor’sproduct is liable for denigrement even if his or her statement is true. See,WJ Derenberg, ‘The Influence of the French Code Civil on the ModernLaw of Unfair Competition’ (1955) 1 The American Journal ofComparative Law 11

27 [2001] FSR 32 [29], [41–42].

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11792 ARTICLE

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 3: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

another’s trade mark or name without being dishonest’.28

Jacob J evaded this argument by holding that the MADcould not supplant the TMA.29 Yet, in a subsequent case,the judge declared that the CAD had turned section10(6) into a ‘pointless provision’.30 The commerciallyhonest-but-denigrating argument thus seems valid afterall. Some believe that the new denigration provisioncould also restrict puffing, as ‘[e]ven the most unrealisti-cally generous comparison—“X apples are great, but oursare slightly more nutritious”—is a formula that unavoid-ably casts the X brand in an unfavourable light’.31

Law in IndiaSections 29(4) and 30 of India’s Trade Marks Act 1999(‘ITMA’) together resemble section 10(6) of the TMA.The ITMA replaced the Trade and Merchandise MarksAct 1958 (‘TMMA’). The TMMA lacked a provisionsimilar to section 10(6) of the TMA. This lacuna cameto Coca Cola’s rescue when it was sued for derisivelyusing Pepsi’s globe-shaped visual mark in an advertise-ment. The Delhi High Court held that the TMMA onlyprohibited the use of trade marks if used to denotefalse commercial origins.32

The ITMA belatedly came into force in September2003. Comparative advertising disputes under theITMA have been rare, but two recent cases are note-worthy. In Paras v Ranbaxy,33 a commercial showed alady using an ineffective analgesic ointment. The ladywas then handed Ranbaxy’s ointment and told: ‘Youneed a true pain reliever.’ The first ointment’s pack-aging resembled that of Paras’ MOOV ointment. Parasalleged trade mark infringement. Citing Advanta andBritish Airways, Ranbaxy adduced a puffing defenceand pleaded commercial honesty. However, the GujaratHigh Court held that the advertisement was ‘dispara-ging and denigrating’, MOOV, thus infringing Paras’trade mark.34 In Procter & Gamble v Unilever,35 theCalcutta High Court passed an interim injunctionorder restraining Unilever from claiming that its Rindetergent gave more ‘whiteness’ than Tide Naturals.Unilever’s commercial had shown a shirt allegedlywashed with Tide Naturals remaining dull. Unilever

contended that their advertisement was truthful—laboratory tests showed that Rin did give more white-ness. Thus, Unilever was apparently suggesting thatcommercial honesty could invalidate allegations of deni-gration. However, the Court took the view that rivalproducts could not be ‘proclaimed bad or rubbished’.36

These two precedents have intertwined denigrationand disparagement and set a high threshold for com-mercial honesty, effectively bringing the ITMA closer tothe TMA (in its post-CAD avatar). Thus, in bothBritain and India, the scope for comparative advertise-ments has been greatly reduced. The TMA and theITMA only prohibit the tarnishment of registered trademarks. At first glance, this leaves the door ajar for anadvertisement that tarnishes a trader’s unregisteredmark. To illustrate, the cola wars in India often sawmutual parodies. Coca Cola would make advertise-ments ridiculing ‘Pappi’, while Pepsi would mock‘Grow Up’—a reference to Coca Cola’s Thums Upcola.37 Each dummy product had a logo similar to thatof the drink it was mocking. However, precedentssuggest that such advertisements would also constituteregistered trade mark infringement.

Protecting brand imageAn unregistered mark can be an important componentof a product’s ‘brand image’ (ie the ‘cluster of attributesand associations that consumers connect to the brandname’,38 including packaging and presentation39). Thelaw of passing off protects elements of a brand imagethat are not merely registered trade marks. This includesthe ‘get-up’ of a product.40 The ‘classical trinity’ ofrequirements for a successful passing off action are ‘(1)a reputation (or goodwill) acquired by the plaintiff inhis goods, name, mark, etc., (2) a misrepresentation bythe defendant leading to confusion (or deception),causing (3) damage to the plaintiff ’.41 The ‘basic under-lying principle’42 of a passing off action is that ‘A man isnot to sell his own goods under the pretence that theyare the goods of another man . . . ’.43 Passing off generallyoccurs when a trader tries to appropriate a local rival’sbrand image—for example, by using deceptively similar

28 ibid [25].

29 ibid [26–30].

30 O2 v Hutchison [2007] RPC 16 [58].

31 P Spink and R Petty, ‘Comparative advertising in the European Union’(1998) 47 International and Comparative Law Quarterly 855, 863.

32 Pepsi v Coca Cola (2003) 27 PTC 305 [27–29].

33 (2008) AIR Gujarat 94.

34 ibid [42].

35 Civil Suit 43/2010 (Calcutta High Court, 5 March 2010, unreported).http://www.indiankanoon.org/doc/1738868/.

36 ibid.

37 R Bhushan, ‘Growing up . . . on Thums Up and Pepsi’s Lehar soda?’Business Line (New Delhi, 18 March 2010)

38 AL Biel, ‘How brand image drives brand equity’ (1992) 32 Journal ofAdvertising Research 6, 8.

39 O2 v Hutchinson [2006] RPC 29 [5].

40 Reckitt & Colman v Borden [1990] 1 WLR 491.

41 Consorzio del Prosciutto di Parma v Marks & Spencer (1991) RPC 351,368.

42 Reckitt & Colman v Borden [1990] 1 WLR 491, 510 (Jauncey LJ).

43 Perry v Truefitt (1842) 6 Beav 66, 73 (Langdale MR).

Arpan Banerjee . Comparative advertising and the tort of generic disparagement ARTICLE 793

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 4: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

packaging,44 word marks,45 or visual marks.46 In con-trast, in comparative advertisements, traders invariablydissociate themselves from the brand image of rival pro-ducts. Thus, a passing off action is of no assistance inthe context of comparative advertisements. This is alsoevident from the decision in L’Oreal v Bellure.47 InL’Oreal, the defendants claimed that their perfumessmelt like more expensive counterparts made by L’Oreal.The defendants were thus using L’Oreal’s word marksbut not pretending that their perfumes were L’Oreal pro-ducts. L’Oreal contended that the misrepresentationrequirement in a passing off action should be replacedby a broader unfair-competition requirement. Jacob LJrejected this contention and held that ‘the tort ofpassing off cannot and should not be extended intosome general law of unfair competition’.48

The Supreme Court of India has held that the classi-cal-trinity test in passing off cases applies in India.49

Therefore, it is quite likely that the dictum in L’Orealwould be valid in India. However, in Paras, the ITMAwas liberally interpreted to prohibit the unlawful use ofmarks deceptively similar to registered marks, thuscompensating for the shortcomings of the law ofpassing off. Ranbaxy’s commercial had portrayed thedummy ointment using a violet-and-white tube. Paras’ointment had MOOV written in white on a violetbackground. Ranbaxy contended that they were notinfringing Paras’ registered visual or word marks. Butthe Court felt that a ‘reasonable audience’ wouldassociate the dummy product with MOOV.50 TheCourt observed that many consumers comprised illiter-ate villagers who primarily identified products throughcolour schemes. Thus, Ranbaxy would have to show adummy ointment that was in a differently colouredtube.51

The decision in Paras was influenced by concernsabout socio-economic underdevelopment, but fasti-diousness about brand imagery could see a similarapproach being followed in Britain. In O2 vHutchinson,52 Jacob LJ remarked that if the CAD onlyprotected trade marks exactly as registered, it wouldlead to ‘absurd results’.53 The European Court of Justice

clarified that if an advertisement uses a sign similar tothe mark of a competitor and this ‘is perceived by theaverage consumer as a reference to that competitor orto the goods and services which he offers’, then thatconstitutes comparative advertising under the CAD.54

Hence, as per the Marleasing principle, section 10(6) ofthe TMA would presumably apply in cases where amark confusingly similar to a registered trade mark isused.

This shows that in both India and Britain the funda-mental language of advertising has been recast. Deni-gration of a rival product—whether identified by nameor through unregistered marks—appears to be nearlyimpossible, even if commercially honest. Even pufferyrisks being interpreted as denigration. Perhaps onlystaid, factually precise comparisons are permissible. Insuch circumstances, a possible option available to theaggressive corporation is to broadly denigrate, even dis-parage, all its competitors. For example, if Coca Colacannot say that Pepsi (or ‘Pappi’) tastes like ditchwaterand contains more fat, it can instead say that ‘othercolas’ have those qualities. If Unilever cannot say thatTide is useless, it can at least disparage ‘ordinary deter-gents’. Such non-specific advertising would, arguably,evade the ambit of comparative advertising as definedin the MAD. In India, however, courts have held thatsuch advertisements can amount to disparagementunder tort law.

The tort of disparagementSalmond declared that every tort must fit in a pre-determined pigeonhole.55 Winfield perceived thistheory as one that hindered the creation of new torts.56

The better view is that English courts have created newtorts only ‘by the gradual and sometimes almost imper-ceptible extension of old torts’.57 Salmond’s theorypermits such extensibility.58 Indian judges haveoccasionally created new torts through this method.Prominently, in the Oleum Gas Leak case,59 theSupreme Court of India widened the pigeonhole ofnegligence and created a tort of ‘absolute liability’

44 Reckitt & Colman v Borden [1990] 1 WLR 491.

45 Asprey & Garrard v WRA (Guns) (2002) FSR 310.

46 United Biscuits v Asda [1997] RPC 513.

47 (2008) ETMR 1.

48 ibid [161].

49 Cadila v Cadila AIR 2001 SC 1952.

50 (2008) AIR Gujarat 94 [37].

51 ibid [42].

52 (2007) RPC 16.

53 ibid [77].

54 O2 v Hutchinson Case C-533/06 (2008) RPC 33 [44].

55 PH Winfield, The Province of the Law of Tort (CUP, Cambridge, 1931)32–33.

56 ibid 32–34.

57 AL Goodhart, ‘The Foundation of Tortious Liability’ (1938) 2 ModernLaw Review 1, 8–12.

58 GL Williams, ‘The Foundation of Tortious Liability’ (1939) 7 CambridgeLaw Journal 111, 114.

59 Mehta v India (1987) 1 SCR 819. Absolute negligence is a morestringent form of the English tort of strict liability negligence, allowingno exceptions to liability.

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11794 ARTICLE

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 5: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

negligence, which permits no exceptions to liability.Rejecting English precedents on strict liability negli-gence, Bhagwati CJ observed: ‘We have to evolve newprinciples and lay down new norms . . . We cannotallow our judicial thinking to be constricted by refer-ence to the law as it prevails in England. . ..’60 Thejudge thus justified his ‘venture to evolve a new prin-ciple of liability which English courts have not done’.61

Like absolute liability negligence, generic disparagementis a judge-made tort independently developed in India.Indian judges who have developed this tort haverefused to follow English precedents, emulating Bhag-wati CJ’s approach in the Oleum Gas Leak case.

Generic disparagement has been derived from thebroader tort of disparagement. Like the tort of defama-tion, the tort of disparagement concerns the protectionof reputation. But while the former tort seeks toprotect the reputation of a person the latter seeks toprotect the reputation of property and goodwill.62 Dis-paragement is also a tort ‘which passes by manynames’, such as trade libel and slander of goods,depending upon ‘the fancy of the particular judge orwriter’.63 Salmond referred to the tort as ‘injurious fal-sehood’, and this term ‘has been accepted by most legalwriters’.64 The term ‘malicious falsehood’ has also beenused by various English judges. Although the Indianjudiciary has generally preferred the term ‘disparage-ment’, it has confirmed that injurious falsehood,malicious falsehood, and disparagement are all syno-nyms of each other,65 and I shall use these terms inter-changeably.

In England, plaintiffs in injurious falsehood caseshave generally enjoyed little success.66 A major reasonis that courts have shown great hesitation in inferringmalice, an essential ingredient of the tort. In earlyEnglish cases, malice was understood to mean‘without legal occasion, without any necessity’,67 or‘without just cause or excuse’.68 In later cases, a morestringent standard was imposed.69 Malice was linkedto a ‘sinister purpose’,70 or an ‘indirect or dishonest

motive’.71 In disparagement cases, English courtsappear to have adopted the latter conception ofmalice and imposed a very high burden of proofupon plaintiffs. In contrast, Indian judges have beenmore indulgent towards plaintiffs.

English casesSpecific disparagementA string of late nineteenth-century judgments specifiedthe conditions for liability in injurious falsehood cases.In Ratcliffe v Evans, Bowen LJ held that ‘written or oralfalsehoods’ were actionable only if proof of malice,along with actual damages, could be shown.72 Theseconditions were reiterated in White v Mellin73 andHubbuck v Wilkinson.74 In White, Watson LJ affirmedthat ‘[i]n order to constitute disparagement which is,in the sense of law, injurious’, the disparagement had tobe ‘untrue’.75 Thus, Watson LJ was ostensibly providingimmunity to commercially honest, denigrating state-ments. Watson LJ also suggested, along with Morris LJ,that plaintiffs alleging tortious disparagement wouldhave to show proof of special damages.76 In Hubbuck,the court condoned a leaflet, proclaiming the superior-ity of the defendant’s product on the basis of nebulouschemical tests, as lawful puffery. Lindley J held thateven if the statements were untrue and had caused lossto the plaintiffs, there would be no cause of action.77

The judge stated: ‘[A]n allegation that the statementwas made maliciously is not enough to convert what isprima facie a lawful into a prima unlawful statement. Itis not unlawful to say that one’s own goods are betterthan other people’s.’78

The judicial reluctance to apply the tort has contin-ued in modern times. In Emaco, Parker J held that thedefendants had breached the TMA’s tarnishment pro-vision, but refused to uphold an additional claim forinjurious falsehood. The judge remarked: ‘It is plain onthe evidence that Dyson has in the past been guilty ofmaking exaggerated and misleading claims . . . . But . . .that is not sufficient to raise an inference of malice in

60 ibid 843.

61 ibid.

62 Ajinomoto v. ASDA [2010] EWCA Civ 609 [28] (Sedley LJ). The judgesuggested that both defamation and malicious falsehood could bepleaded in some cases.

63 WL Prosser, ‘Injurious falsehood: the basis of liability’ (1959) 59Columbia Law Review 425.

64 ibid.

65 See, for example, Colgate-Palmolive v Anchor (2004) 40 PTC 653 [25](Madras High Court).

66 W Cornish and D Llewelyn, Intellectual Property: Patents, Copyrights,Trade Marks and Allied Rights (Sweet & Maxwell, London, 6th edn,2007) 664–670; G Crown, ‘Malicious falsehood: into the 21st century’(1997) 8 Entertainment Law Review 6.

67 Western Counties v Lawes (1874) LR 9 Ex 218, 223.

68 Royal v Wright (1900) 18 RPC 95, 99.

69 Cornish and Llewelyn (n 65) 665.

70 Serville v Constance (1954) 1 WLR 487, 490.

71 Greers v Peerman (1922) 39 RPC 406, 417.

72 (1892) 2 QB 524, 527.

73 (1895) AC 154, 160.

74 (1899) 1 QB 86.

75 ibid 167.

76 ibid 167, 170.

77 ibid 91.

78 ibid 91–92.

Arpan Banerjee . Comparative advertising and the tort of generic disparagement ARTICLE 795

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 6: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

the publication of the graph.’79 In Cable & Wireless v BT,Jacob J did not find ‘a reasonable likelihood of signifi-cant numbers of people being misled’ by the price com-parison which was the subject of the case.80 A trademark infringement claim thus failed. Jacob J commentedthat a tortious disparagement claim did not addanything to a trade mark infringement claim except the‘burden (and costs) of proof of malice’.81 In BritishAirways, Jacob J further tightened the conditions fortortious disparagement by holding that ‘vulgar abuse’could not amount to malicious falsehood.82

There is the odd judicial observation that offers somefaint hope for future claimants. In Lyne v Nicholls,83

Swinfen-Eady J held that the defendant’s fib that hisnewspaper had 20 times the circulation of the plaintiff ’swas actionable. The case, however, failed as damagescould not be proved. In De Beers v General Electric,84 thedefendants claimed that their abrasive had ‘consistentlyoutperformed the plaintiffs’ and also required lesshorsepower. The defendants relied on the findings of thedubious-sounding ‘Application laboratory’.85 WaltonJ held that the plaintiffs had reasonable cause of action.The judge observed that while the statement ‘My goodsare better than X’s’ would not be actionable, the state-ment ‘My goods are better than X’s, because X’s areabsolute rubbish’ would. Walton J relied on the obser-vations of Shand LJ in White. Shand LJ had remarkedthat ‘when all that is done is making a comparison . . .and the statement made is that the plaintiff ’s goods areinferior in quality or inferior . . . this cannot be regardedas a disparagement of which the law will take cogni-zance’. However, there would be a ‘good ground ofaction’, not even requiring proof of special damages, incases of ‘intentional misrepresentation for the purposeof misleading purchasers’, or a statement that a productwas ‘positively injurious, or that it contained deleteriousingredients, and would be hurtful if it were used’.86

Walton J ruled that the test to be applied was ‘whether areasonable man would take the [allegedly disparaging]claim being made as being a serious claim or not’.87

In Compaq v Dell,88 Dell published advertisements dis-couraging consumers from buying Compaq computers.The advertisements claimed that Compaq’s prices were‘thousands of pounds higher’ and that Compaq custo-

mers were left ‘at the mercy of the hardware dealer’, whileDell gave ‘superior service and support’.89 Aldous J (as hethen was) granted an interlocutory injunction in favourof Compaq. The judge held that the claims did notappear to be justified and there were serious issues to betried with respect to injurious falsehood.90

Yet, in Lyne, De Beers, and Compaq, the respectivedefendants were not conclusively held to have actedmaliciously. These cases cannot rebut the obvious con-clusion that, in England, the tort of disparagement ispractically redundant.

Generic disparagementThere are few English precedents on the subject ofgeneric disparagement, White probably being the best-known. In White, the defendant affixed a label on theplaintiff ’s rival product. The label stated that the defen-dant’s baby food was ‘far more nutritious and healthfulthan any other preparation yet offered’. The plaintiffargued that the label was ‘manifestly disparaging’ and‘calculated to injure the plaintiff ’s trade’. The plaintiffssubmitted that an injunction against such advertise-ments could be granted if there existed a ‘reasonableprobability of damage, even without actual damage’.91

However, the House of Lords unanimously ruled infavour of the defendants. Herschell LJ felt that, first,the label was an ‘anonymous puff ’ of a ‘very commondescription’ which could not be said to have disparagedthe plaintiff ’s goods. Secondly, even if it was assumedthat there was disparagement, there was ‘an entireabsence of any evidence that the statement complainedof either had injured or was calculated to injure theplaintiff ’.92 Thus, Herschell LJ did not say that ageneric disparagement claim could never succeed, butpointed to the implausibility of proving the essentialingredient of malice in such cases. Watson LJ similarlyobserved that the label was merely ‘a highly colouredlaudation’ of the defendant’s product. It made ‘noreference to the plaintiff ’s goods beyond what might beimplied in the case of every other kind of food which isrecommended and sold as being suitable for consump-tion by infant children’.93

Recently, Ajinomoto, a manufacturer of aspartame,sued ASDA in what appears to be a generic

79 (1999) WL 249783 [97].

80 [1998] FSR 383, 392–393.

81 ibid 385.

82 [2001] FSR 32 [35].

83 (1906) 23 TLR 86.

84 (1975) FSR 323.

85 ibid 326.

86 (1895) AC 154, 171.

87 (1975) FSR 323, 329.

88 (1992) FSR 93.

89 ibid 99.

90 ibid 105.

91 (1895) AC 154, 156–157.

92 ibid 160–161.

93 ibid 168.

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11796 ARTICLE

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 7: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

disparagement claim. ASDA had stated that their pro-ducts did not contain ‘hidden nasties’ like aspartame.Ajinomoto claimed that ASDA was suggesting thataspartame was unsafe, ‘impliedly making a statementderogatory of products that do contain aspartame, andso of aspartame itself ’.94 Ajinomoto argued that ASDA’s‘implied derogatory statement’ was false and thatASDA knew it was false, thus making the statementmalicious.95 In the High Court, Tegendhat J affirmedthat the tort of malicious falsehood had a ‘controlmechanism, namely the need to prove malice and,either actual damage, or a statement calculated to causepecuniary damage’.96 The judge noted that numerousquestions would arise in relation to Ajinomoto’smethod of establishing malice, but did not rule out thepossibility of ASDA acting maliciously.97 In the Courtof Appeal, Rimer LJ observed, ‘If the case were allowedto go to trial and the claimant were able to prove thatsuch meaning was false, uttered with malice and calcu-lated to damage it, why should it not be entitled todamages for the injury which the falsehood will havecaused it?’98 Thus, the High Court and the Court ofAppeal did not say that generic disparagement claimswere not actionable. However, considering the greatreluctance of English courts to infer malice in specificdisparagement cases, a generic disparagement claimwould appear to have minimal chance of success inEngland.

Indian casesSpecific disparagementIn British India, the ratios of Ratcliffe, White, andHubbuck were followed by the Calcutta High Court inImperial Tobacco v Bonnan.99 The defendants were suedfor writing letters saying that the plaintiffs’ cigaretteswere inferior. The claim failed as the plaintiffs couldnot prove malice. Rankin CJ rejected the contentionthat ‘malice should be imputed to the defendant com-pany’s servants for their efforts to persuade dealers thattheir article was superior’.100 Ghose J affirmed that anaction of disparagement lies only when a trader doesnot merely say that a rival product is inferior, but ‘goesfurther and makes an untrue statement of fact . . . forexample . . . that they are rotten or unmerchantable’.

Additionally, proof of malice and special damages werenecessary.101 Almost seven decades later, in ReckittColman v Ramachandran,102 the same court took adifferent view and ‘set the trend in the direction thatthe law has taken in India’.103

In Ramachandran, the defendants’ commercial com-pared their blue (bleaching dye) with an unnamedblue, described as expensive and ineffective. The rivalblue’s get-up matched that of Robin Blue, the plaintiffs’product. As the ITMA did not exist then, the casehinged on a tortious disparagement claim. The defend-ants relied on Ratcliffe, White, and Hubbuck and soughtshelter under a puffing defence.104 However, the plain-tiffs cherry-picked Shand LJ’s and Walton J’s views inWhite and De Beers respectively. The plaintiffs arguedthat while puffing was acceptable, rubbishing the goodsof a rival was not.105 The Court held that the defen-dants had prima facie disparaged Robin Liquid Blue,because of its similarities with the dummy product,and granted the plaintiffs an interim injunction. GhoshJ laid down five guiding principles in such cases.106

First, a trader could declare his or her goods as theworld’s best, even if this was untrue. Second, the goodscould be declared as being better than rival products,even if untrue. Third, a comparison between the attri-butes of rival goods was permissible. Fourth, a tradercould not describe rival products as bad—‘If he says so,he really slanders the goods of his competitors’.107 Fifth,if a trader slanders a rival product or a competitor, aninjunction can be granted to restrain such statements.

In Ghosh J’s five principles, the crucial point ofdeparture with English case law was the suggestion thatmalice is implicit in a disparaging statement—Ajino-moto’s position in their dispute with ASDA. In Rama-chandran, the defendants, referring to Clerk & Lindsellon Torts, had argued that a prerequisite of tortious dis-paragement was ‘spite’ on the part of a defendant.108

While Ghosh J did not dispute this, he did not imposeany additional burden on plaintiffs to prove malice.Ghosh J thus deviated from the English and British-Indian position. The judge suggested that simply sayingthat someone’s products are rubbish is enough toattract liability. Also significant was the non-impositionof any actual-damages or special-damages criterion.

94 Ajinomoto v ASDA (2009) EWHC 1717 [9].

95 ibid.

96 ibid [38].

97 ibid [68–70].

98 Ajinomoto v ASDA [2010] EWCA Civ 609 [41].

99 (1928) AIR Calcutta 1 [56–58], [74].

100 ibid.

101 ibid [75].

102 (1999) 19 PTC 741.

103 Colgate-Palmolive v Anchor (2008) 7 MLJ 1119 [29].

104 (1999) 19 PTC 741, 745.

105 ibid 746.

106 ibid 746–747.

107 ibid 746 (emphasis added).

108 ibid 749.

Arpan Banerjee . Comparative advertising and the tort of generic disparagement ARTICLE 797

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 8: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

Soon after, the Delhi High Court applied theRamachandran principles and restrained the use of acommercial for Kiwi shoe polish.109 Kiwi’s commercialhad shown a dummy shoe-polish, marked ‘X’, drippingwith wax. The dummy product had a red blob on itslogo. The plaintiffs alleged disparagement of theirCherry brand shoe-polish. The Court was of the primafacie opinion that the average consumer would get theimpression that the red blob was a reference to theplaintiffs’ visual mark (a cherry). The Court ruled thatthe commercial could be shown only if the red blobwas removed.110

In Pepsi v Coca Cola,111 Pepsi alleged tortious dispar-agement after their trade mark infringement claimunder the TMMA failed. Coca Cola’s commercial hadshown a macho Bollywood actor preferring the bitter-sweet Thums Up to the sweet-tasting ‘Pappi’, describingit as a children’s drink. The Court held that the com-mercial had prima facie disparaged Pepsi. Coca Colaargued that describing Pepsi as sweet and better-suitedfor children was not disparagement. The Court,however, felt that Coca Cola had shown Pepsi in a‘derogatory and mocking manner’, thus denigrating it.112

The word ‘denigrate’ was neither used in Ramachandrannor Kiwi. In Pepsi, the Court initially referred tothe MAD’s provisions and declared that it would‘keep all these factors in mind’.113 It is thus possiblethat the wording of the MAD may have influencedthe Court. Significantly, the Court also observed thateven ‘puffing or poking fun’ could amount todenigration.114

In Heinz v GlaxoSmithKline,115 the Calcutta HighCourt upheld an earlier order restraining Glaxo-SmithKline’s commercial for its Complan health drink.The commercial had claimed that Complan was morenutritious that ‘Brand H’. Heinz sued for tortious dis-paragement, alleging that Brand H was a reference toits product Horlicks. GlaxoSmithKline conceded thatBrand H was a reference to Horlicks, but put forward apuffing defence. The Court, however, observed that theadvertisement had prima facie disparaged Horlicks.The Court declared that ‘when an advertisement cam-paign proceeds to make assertions of fact which itclaims to be backed by scientific data tending to

show that the product of the rival is not suitable . . . itwould clearly fall within the realm of actionabledisparagement’.116

Generic disparagementThe genesis of the tort of generic disparagementin India can be traced back to Ramachandran. Thedefendants had argued that they had not referred toRobin Blue but to ‘the generic class of blues’, whichthey were ‘perfectly entitled’ to do.117 Ghosh J,however, remarked:

[I]t is difficult to proceed on the basis that the defendant . . .was not referring to Robin Blue, but assuming in the adver-tisement insinuations are not made against Robin Blue andthe same were directed to all blues . . . can it be said that itwas not made against Robin Blue? The answer is a definite‘no’, because Robin Blue is also a blue. . . .118

Ghosh J thus concluded that if a trader describes all ofhis or her competitors as ‘bad’, then ‘anyone fitting thedescription of everyone is affected’.119

Some years later, Ghosh J’s observations were reliedupon by the plaintiffs in Dabur v Emami.120 Emamimanufactured Amritprash, an invented portmanteauword whose latter half was derived from chayawanprash(a traditional Indian herbal tonic). Emami’s commer-cial had the tagline: ‘Forget Chayawanprash . . . EatAmritprash Instead’. Dabur, Emami’s main competitor,alleged tortious disparagement. Emami argued thatchayawanprash was a common word and that theircommercial had not made the ‘slightest reference’ toDabur.121 The Delhi High Court, however, stated:‘[E]ven if there be no direct reference to the product ofthe plaintiff and only a reference is made to the entireclass . . . in its generic sense . . . disparagement is poss-ible . . . ’.122 The Court accordingly stayed the broadcastof the commercial.

This decision opened the floodgates for generic dis-paragement claims. A few months after the decision,Dabur sued a competitor for boasting that its tooth-powder was 16 times less abrasive than others. TheDelhi High Court granted an interim injunction inDabur’s favour. The Court confirmed that generic dis-paragement was indeed actionable.123 The Court ruledthat while puffing was acceptable, ‘running down’ a rival

109 Reckitt Colman v Kiwi (1996) 63 DLT 29.

110 ibid [13].

111 (2003) 27 PTC 305.

112 ibid [18–21].

113 ibid [3].

114 ibid [19].

115 (2009) 2 CHN 479.

116 ibid 482.

117 (1999) 19 PTC 741, 749.

118 ibid 750–751.

119 ibid.

120 (2004) 29 PTC 1.

121 ibid [8].

122 ibid [9].

123 Dabur v Colgate-Palmolive (2005) AIR Delhi 102 [11–12].

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11798 ARTICLE

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 9: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

product, even in generic terms, was not.124 The defend-ants cited English precedents and argued that genericdisparagement is not an offence. However, the Courtremarked: ‘The practice of undue obeisance to Englishjurisprudence . . . should . . . be discouraged. . . . Whenthere is a judgment [in India] . . . directly on the pointof generic disparagement, I see no reason why oneshould travel westwards . . . ’.125

In Karamchand v Adhikari,126 the Delhi High Courtonce again held that generic disparagement was action-able. The Court stayed the broadcast of a commercialwhich had shown the defendants’ mosquito repellentgiving better results than an anonymous rival product.The Court observed:

A disparagement even if generic would remain a disparage-ment and can be restrained at the instance of a party, whomanufactures or trades in that class of goods. . . . Thedefendant is indeed entitled to boast that its product is . . .the best but it cannot describe either the technology or theconcept used by any other manufacturer or trader . . . asobsolete or worthless.127

In Eureka Forbes v Pentair,128 the defendant manufac-tured a water purifier which supposedly used a technol-ogy different from that of traditional ultraviolet (UV)water purifiers. Their advertisement claimed that watercontained contaminants that were ‘invisible even to theUV water purifier’. The Karnataka High Court heldthat this statement had prima facie disparaged theplaintiff ’s ‘Aquaguard’ UV water purifier.129 The Courtheld that merely because ‘there was no mention of theword ‘“Aquaguard”’, it would ‘not take away the dis-paraging effect of the advertisement’.130

In Colgate-Palmolive v Anchor,131 Anchor claimed tobe the first ‘all round protection tooth paste’ and theonly toothpaste containing certain chemicals. TheMadras High Court held that the use of these adjectiveswas factually incorrect but not disparaging. However,Anchor would still have to remove them as their usewas prima facie an ‘unfair trade practice’. The Courtborrowed the definition of ‘unfair trade practice’ fromthe Consumer Protection Act 1986 (‘CPA’).132 The CPA

defines ‘unfair trade practice’ to cover statementswhich, inter alia, make false or misleading represen-tations about goods.133 The CPA empowers specializedtribunals to discontinue unfair trade practices.134 Theplaintiffs had not lodged a complaint under the CPA,which only permits complaints from consumers, con-sumer groups, or the state.135 The Court observed thatthe CPA was enacted only as a supplementary law.Thus, any consumer or manufacturer could still bring atortious action in a civil court against a trader for anadvertisement that amounted to an unfair trade prac-tice.136 Hence, the Court essentially recognized a tortof unfair competition, setting a precedent that is boundto be the subject of discussion in future cases.

In contrast with the approach followed in the abovejudgments, some Indian judges have shown a reluct-ance to entertain generic disparagement claims. InDabur v Wipro,137 Wipro compared its honey with aninsipid anonymous product. Lokur J of the Delhi HighCourt asked Dabur, which alleged disparagement, ‘notto be hyper-sensitive’.138 In Dabur v Colortek,139 LokurJ similarly refused to ban a commercial where a mos-quito-repelling cream had been compared with adummy product. Dabur had contended that the com-mercial had impliedly referred to their product, as theywere market leaders in the segment. Lokur J felt that,in the interests of protecting commercial speech, ‘anadvertiser must be given enough room to play aroundin’ what he described as ‘the grey areas’ of disparage-ment.140 The judge observed that market forces andconsumer choice ought to be final adjudicators in suchmatters, and once again asked Dabur not to be ‘hyper-sensitive’.141 In both these cases, Lokur J did notactually deny that generic disparagement was notactionable. However, that suggestion was seeminglymade in Hindustan Lever v Reckitt Benckiser.142 Here,the makers of Dettol had compared their soap with adummy product and claimed that the former was 10times more effective. Sikri J of the Delhi High Courtheld that since the defendant’s commercial was ‘not dis-paraging any product in particular’, it was ‘at best . . .

124 ibid [20].

125 ibid.

126 (2005) 31 PTC.

127 ibid [30].

128 (2007) 35 PTC 556.

129 ibid [24].

130 ibid [29].

131 (2009) 40 PTC 653.

132 ibid [56], [70–74].

133 Consumer Protection Act 1986 2(r)(1).

134 Consumer Protection Act 1986 14.

135 Consumer Protection Act 1986 2(b).

136 (2009) 40 PTC 653 [68].

137 (2006) 32 PTC 677.

138 ibid [25].

139 MANU/DE/0225/2010 (2 February 2010).

140 ibid [18].

141 ibid [18], [22].

142 MANU/DE/3643/2006 (17 November 2006).

Arpan Banerjee . Comparative advertising and the tort of generic disparagement ARTICLE 799

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 10: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

merely puffing the defendant’s product Dettol, which ispermissible’.143 In light of the numerous cases that haveupheld generic disparagement claims, Sikri J’s obser-vation appears to be an outlier.

Have Indian judges been overprotective?In a seminal passing off case, Diplock LJ had observedthat since the nineteenth century, beginning with theenactment of trade mark legislation, the British Parlia-ment had intervened in the interests of consumers andgiven ‘increasing recognition’ to ‘the need for more rig-orous standards of commercial honesty’.144 Diplock LJthus remarked:

Where over a period of years there can be discerned asteady trend in legislation which reflects the view of suc-cessive Parliaments as to what the public interest demandsin a particular field of law, development of the commonlaw in that part of the same field which has been left to itought to proceed upon a parallel rather than a divergingcourse.145

Today, the ‘steady trend’ that Diplock LJ spoke of hasintensified with the enactment of the CAD. Englishjudges have thus been criticized for their unwillingness toinfer malice in tortious disparagement claims, ‘laggingbadly behind the “steady trend” of legislation . . . infavour of increased consumer protection’.146 On theother hand, Indian courts have more readily acceptedtortious disparagement claims. In Anchor, the Courteven moulded the tort to match statutory consumer-protection laws and suggested that a general tort ofunfair trading could exist. Significantly, the Court alsoruled that the Ramachandran principles were toolenient towards traders. The Court pointed out that thefirst two of the Ramachandran principles—which allowtraders to falsely declare their products as the best orbetter than rival products—were borrowed from nine-teenth-century English law, but with the arrival of theCAD, English law had ‘taken a swing from one extremeto the other’.147 The Court opined that although Indialacked a codified advertising law, the country had wit-nessed a similar regulatory trend through the CPA.148

Thus, untrue puffery ought not to be permitted.149 TheCourt also justified its approach by saying that Englishprecedents should not apply in India, where literacyrates were much lower.150

Since what English courts have termed ‘venial’puffing151 is permitted under the Ramachandran prin-ciples, the decision in Anchor has brought about someamount of confusion. Only the Supreme Court ofIndia can authoritatively declare whether, in Anchor,the High Court was right to swim against the judicialtide. Yet, even if it is assumed that the position inAnchor is incorrect, the more lenient previous verdictshave still drawn a clear line between venial puffing anddisparagement. As far as specific disparagement is con-cerned, the Indian judiciary’s approach has some praise-worthy aspects. By diluting the impenetrable malicestandard, Indian courts have been more pragmatic. Ifplaintiffs can show tarnishment under statutory trademark law without proving malice, it makes little sense toimpose a high standard for proving malice in tortiousdisparagement cases. Moreover, the Paris Conventiondoes not qualify the prohibition of disparagement byimposing a malice criterion. English law appears toimpose a higher test.152 To this extent, the Englishapproach is unfeasible.

Alleging tortious disparagement in most registeredtrade mark infringement cases would be superflu-

ous, especially since the ITMA has been inter-preted to cover the tarnishment of deceptively

similar unregistered marks

Alleging tortious disparagement in most registeredtrade mark infringement cases would be superfluous,especially since the ITMA has been interpreted to coverthe tarnishment of deceptively similar unregisteredmarks. The tort could come in handy, however, if acomparative advertisement disparages a specific traderwithout using his or her trade mark. An example ofthis would be a situation where an advertisement dis-parages a rival company by mentioning its address ordisplaying its shop-front.153 It is arguable that this isalso a form of specific disparagement which deserves tobe actionable in order to protect traders. However,Indian courts have been over-protective by equatingcommercially honest denigration with disparagement

143 ibid [15].

144 Warnink v Townend (1979) AC 731, 742–743.

145 id 743.

146 Crown (n 65) 10.

147 (2009) 40 PTC 653 [19], [49].

148 ibid [50–52].

149 ibid [68].

150 (2004) 40 PTC 653 [18], [19], [67], [74].

151 Warnink v Townend (1979) AC 731, 742.

152 T Alkin, ‘Should There Be a Tort of Unfair Competition in English Law’(2008) 3 JIPLP 48, 51.

153 See, for example, Pippig v Hartlauer Case C-44/01(2004) ETMR 5.

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11800 ARTICLE

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 11: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

and imposing an exacting standard of honesty for theformer. For example, the statement that Pepsi is sweeterthan Thums Up and is better-suited for children maysound denigrating, but it is somewhat correct and,therefore, commercially honest. Such a statementshould not to be equated with disparagement. More-over, a parody defence also ought to be allowed in tor-tious disparagement and trade mark infringement cases,if the use of a trade mark is non-confusing.154 AsAustralia’s Attorney-General had argued while advocat-ing a parody defence in copyright law, ‘taking the micky’out of someone should not be an offence.155

Nevertheless, the greatest significance of tortiousdisparagement in India has been the fact it has beenextended to cover cases of generic disparagement.In White, Herschell LJ had warned that if courtsentertained generic disparagement claims, ‘a verywide door . . . would be opened to litigation’, andcourts would ‘be constantly employed in trying therelative merits of rival productions’.156 This is pre-cisely what has happened in India, the most recentillustration being a rather trivial dispute betweenUnilever and Procter & Gamble.157 In a country witha notoriously overburdened judiciary, it is undesir-able to create a tort of such wide, indeterminatescope. Furthermore, in some cases, even simple,anonymous puffing has been held to constitutegeneric disparagement (for example, the statementForget Chayawanprash . . . Eat Amritprash Instead’).Such a pernickety standard unduly quells thefreedom of commercial speech. Although generic dis-paragement disputes have generally been betweenlarge corporations, a monopolistic corporation coulduse the tort to hound smaller, poorer competitorswho merely boast that their products are the best.Following Anchor, where the Court outlawed venialpuffing and suggested that even a general tort ofunfair trading can exist, vexatious corporate litigantsmay end up having a field day.

Also questionable is the paternalistic judicial assump-tion that generic disparagement needs to be actionablebecause consumers in economically underdevelopedareas are more susceptible to such advertising. Studiesshow that Indian villagers rely greatly on word-of-mouth recommendations and do not easily changebrand loyalties.158 One survey has revealed that ,4 percent of rural consumers choose a soap based on adver-tisements.159 This demonstrates that rural folk do notreally need any extra protection from venial puffingthan their urban counterparts. It can even perhaps beargued that individuals with limited amounts of moneyat their disposal make more perspicacious consumers.

Hence, there are cogent reasons for not recognizing atort of generic disparagement, the leading one being thefear of vexatious litigation from a vaguely-defined tort.If a trader does indulge in misleading puffery, anaggrieved competitor can always seek the alternativeremedy of approaching the Advertising StandardsCouncil of India (ASCI). The ASCI is a voluntary,self-regulatory body modelled on Britain’s AdvertisingStandards Authority. The ASCI has framed an advertis-ing code that prohibits statements which, inter alia,‘distort facts’ or ‘mislead consumers’.160 The ASCI’sConsumer Complaints Council (CCC) hears complaintsagainst advertisements allegedly breaching the ASCI’sadvertising code. Because the CCC’s orders are notlegally binding, the ASCI was described, in Anchor, aslacking ‘the necessary teeth’.161 However, this is tooharsh a view. A perusal of the CCC’s recent orders showsthat it restrained many cases of untrue puffery.162 Forexample, a company which claimed to provide ‘thefastest mobile broadband service in India’ was asked towithdraw this claim, which it could not substantiate.163

Similarly, another company was asked to refrain fromsaying that its lamps lasted three times longer thanother brands.164 The ASCI claims a compliance rate that‘has hovered between 75 and 80 per cent’ and jumped to94 per cent in 2008.165 Thus, the ASCI is a fairly effective

154 See MA Naser, ‘Trade marks and freedom of expression’ (2009) 40 IIC188.

155 P Ruddock, ‘Protecting precious parody’ Daily Telegraph (Sydney, 30November 2006), http://www.dailytelegraph.com.au/news/opinion/protecting-precious-parody/story-e6frezz0-1111112605033 (accessed 17March 2010).

156 (1895) AC 154.

157 Unilever alleged generic disparagement after Procter & Gamble claimedthat its skin-lightening cream worked from ‘within’. The judge had toconsider the question of whether the skin-lightening chemicalniacinamide penetrated the dermis rather than the epidermis. Unilever vProcter & Gamble Civil Suit 12/2010 (Calcutta High Court, 15 February2010, unreported), http://www.indiankanoon.org/doc/222583/.

158 MJ Etzel and others, Marketing: Concepts and Cases (Tata McGraw Hill,New Delhi, 13th edn, 2008) 726.

159 S Patro and S Varshney, ‘Brand awareness and rural markets’ (2008),http://dspace.iimk.ac.in/bitstream/2259/458/1/RM168.pdf (accessed 30March 2010).

160 ASCI, ‘Code for self-regulation in advertising’ (2007), http://www.ascionline.org/regulation/ASCI_Code_of_Self_Regulation.pdf (accessed30 March 2010).

161 (2004) 40 PTC 653 [53].

162 ASCI, ‘Complaints that were upheld by the Consumer ComplaintsCouncil’ (2009), http://www.ascionline.org/feedback/CCC%20Decisions%20April-November’09.pdf (accessed 30 March 2010).

163 ibid 10. (Reliance Communications case).

164 ibid 1. (Surya Roshni case).

165 P Chatterjee, ‘Self-Regulation is working better today’ Business Line(New Delhi, 1 October 2009), http://www.thehindubusinessline.com/catalyst/2009/10/01/stories/2009100150130300.htm (accessed 17 March2010).

Arpan Banerjee . Comparative advertising and the tort of generic disparagement ARTICLE 801

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from

Page 12: Journal of Intellectual Property Law & Practice-2010-Banerjee-Comparative Advertising and the Tort of Generic Disparagement

body and a suitable alternative forum for hearinggeneric disparagement cases.

Lastly, since I advocate the abolition of generic dis-paragement but the retention of specific disparagement,a potentially problematic area could concern advertise-ments that are ambiguous enough to fall into eithercategory. In such cases, courts could perhaps apply atest which envisages how an average person would per-ceive the alleged disparagement.

Constricting the pigeonholeIndian courts have pragmatically dispensed with theneed for plaintiffs to separately prove malice in

tortious disparagement cases by automatically inferringmalice. However, by expanding the pigeonhole ofdisparagement to include generic disparagement, thejudiciary has been most impractical. Equating commer-cially honest denigration with disparagement is objec-tionable, as is the proscription of venial puffing thatdoes not specify a particular competitor. A tortiousdisparagement case is yet to be finally decided by theSupreme Court of India, the ultimate interpreter of thelaw in India. If and when this happens, it is hoped thatthe Supreme Court will constrict the pigeonhole oftortious disparagement in the manner suggested, vizby prohibiting specific disparagement alone (excludingcommercially honest denigration).

Journal of Intellectual Property Law & Practice, 2010, Vol. 5, No. 11802 ARTICLE

at Universidad de C

hile on May 1, 2011

jiplp.oxfordjournals.orgD

ownloaded from