An earlier post had noted recent decisions of the Delhi High Court on the issue of comparative advertising and commercial disparagement. It is becoming increasingly commonplace today to see advertising battles fought out in Courts. A recent decision of the Madras High Court, however, has substantially changed the law on the point – Colgate Palmolive v. Anchor Health and Beauty Care Pvt. Ltd., MANU/TN/0980/2008, decided on September 4, 2008.
Anchor telecast an advertisement claiming that its toothpaste was the “only” toothpaste to contain certain important ingredients, and also the “first” toothpaste providing all round protection. Colgate took exception to these claims and filed an application seeking an injunction against the telecast of this advertisement. This judgment is significant not because of these facts, but because it applies entirely new principles to ascertain disparagement.
The settled law until this decision was based on English precedent, and in brief, was that a tradesman could puff his own goods even by making false claims, so long as these claims did not contain misrepresentations about a competitor’s goods. This principle had been applied by several High Courts in
As to what principles apply in Indian law, the Court turned to analogous statutory instruments, since there is no law directly regulating comparative advertising, and since the Advertisement Code does not explicitly deal with it. The Court considered the definition of ‘unfair trade practice’ in Section 36A of the MRTP Act, and concluded that although this Act has been repealed by the Competition Act, the definition in Section 36A has been incorporated into the Consumer Protection Act, 1986. Thus, the Court held that once the section repealing the MRTP Act is notified, a manufacturer can still have recourse to civil courts to in effect apply the definition contained in the Act.
The Court then found that the question of disparagement involves ‘balancing’ two rights – the fundamental right under Art. 19(1)(g) of the Constitution protecting commercial speech, and the right of consumers to reliable information. The Court held that the existing law in
Thus, there is now a conflict between different High Courts in the country on the law applicable to cases of commercial disparagement, which is likely to continue until it is resolved by the Supreme Court.