THE BITTER SWEET AMUL VS HUL TUSSLE COMES TO AN END AS AMUL GETS PARTIAL RELIEF BY THE BOMBAY HIGH COURT

Introduction

A not so old advertisement of Amul found itself in trouble when a frozen dessert manufacturer found the advertisement to be disparaging its product. The advertisement can be viewed here, in the advertisement it is shown that all frozen desserts are manufactured using Vanaspati, which in Indian society is considered unhealthy.

The matter was taken to Court by HUL in 2017 and an injunctive relief was secured by HUL putting a restraint on Amul from continuing to air the advertisement and/or similar advertisements.

The Hon’ble Division Bench comprising of their Lordships Justice Riyaz Chagla and Justice B. R. Gavai granted relief to the Gujarat Co-operative Milk Marketing Federation Ltd. (popularly known as Amul) and upheld the impugned judgment of the learned Single Judge with certain modifications.

I. What are the facts giving rise to this appeal?

(i) What was the case of the Plaintiff (Kwality Wall’s) in its suit?

It was shown that the products of the Plaintiff were made using Vanaspati whereas the products of the defendant are made using 100% milk. Vanaspati is vegetable oil which is considered to be unhealthy in the Indian society.

(ii) What was the defense taken by the Defendant in the suit?

(a) Defendant did not show the Plaintiff’s products.

(b) Defendant argued that 30% of the manufacturers of frozen desserts used Vanaspati and hence brought up a factual position.

(iii) What was held by the learned Single Judge in the impugned judgment?

Justice S. J. Kathawalla vide judgment dated 16^th June, 2017, restrained the Defendant from –

(a) Howsoever communicating to the public the two impugned TVCs or any part thereof or any other advertisement of a similar nature in any language.

(b) Disparaging or denigrating Kwality Wall’s (Plaintiff therein) products or business in any manner whatsoever.

II. What was argued in the present appeal?

(a) By the Appellant:

1. The Plaintiff therein had indulged in suppression of material facts and on the very ground of the conduct of the Plaintiff, the Notice of Motion ought to have been rejected. The correspondence between the Plaintiff and The Advertising Standard Council of India (ASCI) was not placed on record in the suit by the Plaintiff.
2. It was submitted that, to find out whether a particular TVC disparages the product of a rival or not, the Court has to apply the test of an ordinary person with reasonable intelligence. However, a perusal of the judgment of the learned Single Judge would reveal that, he has discerned the advertisement in great detail and after doing that exercise, he found the advertisement to be disparaging.
3. Appellant did not refer to the product of the Plaintiff and therefore the Plaintiff had no ground to file a suit on the ground of generic disparagement.
4. Reliance was placed on the following judgments–

6. It was submitted that, while considering an advertisement, rival is not expected to be hypersensitive to the advertisement. Additionally, if the TVC is considered as a whole, the impression an ordinary person with reasonable intelligence may get is that the Appellant uses milk for manufacturing its products, whereas producers of frozen desserts also use edible oils, which is a matter of fact. Therefore, the learned Single Judge had erred in granting the injunction.
7. The learned Single Judge had injuncted the Appellant from airing even similar advertisements without defining its scope, thereby exposing the Appellant to the risk of contempt proceedings, in as much as its competitors may challenge any advertisement aired by the Appellant on the ground that it is similar to the one which is the subject matter of the present proceedings.
8. The injunction granted in clause (ii) of the operative part of the impugned order is not sustainable in law as there has been no material to show that the Appellant was even attempting to disparage the products of the Plaintiff.

b) By the Respondent:

1. It was submitted that the message the advertisement intends to convey to the public at large was apparent from the advertisement. He also submitted that, insofar puffing up the product of the Appellant is concerned, nobody could have objection, even if an untrue statement is made. However, the advertisement carrying the message which disparages the product of the competitors, would not be permissible in law.
2. It was also submitted that in common parlance the word Vanaspati is identified with hydrogenated vegetable oil, therefore, the word Vanaspati is identified to be an unhealthy product and therefore such advertisement showing that the product of the Plaintiff is only made of Vanaspati is nothing else but disparagement.

III. What were the observations of the Hon’ble Division Bench?

The Hon’ble Division Bench opined as under–

(i) To decide the question of disparagement, Court will take into consideration-

• intent of the commercial
• manner of commercial
• story line of the commercial along with the message sought to be conveyed

(ii). The Appellant in its submissions has submitted that 30% of the manufacturers of frozen dessert use Vanaspati. As such, even according to the Appellant, 70% of the manufacturers do not use Vanaspati. The Appellant has admitted many times that Vanaspati has harmful effects. However, what is being conveyed by the Appellant’s advertisement is that all manufacturers of frozen dessert use Vanasapti to manufacture their products. If, with this knowledge, the Appellant has aired the impugned advertisement, showing that all the manufacturers of frozen desserts use Vanaspati or Vanaspati tel, there can be no manner of doubt that intent of the advertisement is to show that frozen desserts are manufactured by using Vanaspati and that the said products which are manufactured with the use of Vanaspati are dangerous to the health.

(iii). As held in catena of cases, Appellant can very well make a false claim to puff up their product. It can also make statements which are not true to its knowledge to show how its product is superior. It can even compare its products with the competitors. However, the Appellant cannot be permitted to air the advertisement which disparages the product of its competitors.

(iv) The Hon’ble Bench then went on to deal with the judgments relied upon by the Appellant-

IV. What was held in the present appeal?

The Hon’ble Divison Bench held as under-

1. Finding of the learned Single Judge that TVC-1 and TVC-2 amount to disparaging frozen desserts, is upheld, however with modification that, parts from snap-shots ‘H’ to ‘J’ in TVC-1 and parts from snap-shots ‘8’ to ‘10’ are only found to disparaging to frozen desserts.
2. The Appellant will be free to use the said TVCs after deleting the aforementioned disparaging snap-shots.
3. The word ‘similar’ used in the clause (i) of the operative part of the learned Single Judge’s order is clarified to be similar to the parts of the advertisement which have been found to be disparaging to the frozen desserts.
4. Clause (ii) of the operative part of the impugned judgment is quashed and set aside.

V. Conclusion

The Bench partially allowed Amul to use the TVCs after making modifications that involve removal of portions of the TVCs that disparage the frozen dessert products.

Would it be farfetched to think that such advertisements are nothing but a marketing gimmick? Is this a conscious call by companies to gain some PR and disparage the rivals products?

The thought sparks from the occurrence of such litigations which are preceded by a plethora of judgments that would in more than one way serve as a guiding light to parties in the business.

Image source: here