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Disparaging Advertisements : The Law

The Delhi High Court recently had the opportunity of dealing with a matter relating to alleged Disparaging Advertisements by Colortek Meghalaya Pvt. Ltd. (Goodknight Naturals) against the products of Dabur India Ltd (Odomos). The Bench while dealing with the matter culled out the principles and the law with regard to disparaging advertising in India. The Delhi High Court inter alia held:

10. In Tata Press Ltd. v. MTNL & Ors., (1995) 5 SCC 139 (paragraph 25) the Supreme Court held that "commercial speech" is a part of freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution. However, what is "commercial speech" was not defined or explained. In fact, it does not appear to be possible to clearly define or explain "commercial speech" and, in any event, for the purposes of this case it is not necessary for us to do so. The reason for this is that the Supreme Court has said in Tata Press Ltd. (paragraph 23 of the Report) that advertising as a "commercial speech" has two facets thereby postulating that an advertisement is a species of commercial speech. The Supreme Court further said as follows:- "23. .Advertising which is no more than a commercial transaction is nonetheless dissemination of information regarding the product advertised. Public at large is benefited by the information made available through the advertisement. In a democratic economy free flow of commercial information is indispensable. There cannot be honest and economical marketing by the public at large without being educated by the information disseminated through advertisements. The economic system in a democracy would be handicapped without there being freedom of "commercial speech" .."

11. Earlier, the Supreme Court referred to Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council Inc., (1975) 421 US 748 and observed in paragraph 15 that it is almost settled law in the United States that though "commercial speech" is entitled to the First Amendment protection, the Government was completely free to recall "commercial speech" which is false, misleading, unfair, deceptive and which proposes illegal transactions.

12. In Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd., (1999) 7 SCC 1, the Supreme Court observed in paragraph 36 of the Report that a distinction would always have to be made and latitude given for an advertisement to gain a purchaser or two. This latitude cannot and does not mean any permission for misrepresentation but only a description of permissible assertion. In this context, reliance was placed by the Supreme Court on Anson's Law of Contract (27th Edn.) which says that commendatory expressions are not dealt with as serious representations of fact. The view remains the same in the 28th Edition (page 239). "A similar latitude is allowed to a person who wants to gain a purchaser, though it must be admitted that the borderline of permissible assertion is not always easily discernible."

13. The Supreme Court recognized and applied in Colgate Palmolive (India) Ltd. the rule of civil law, "simplex commendatio non obligat" simple commendation can only be regarded as a mere invitation to a customer without any obligation as regards the quality of goods. It was observed that every seller would naturally try and affirm that his wares are good enough to be purchased (if not better than those of a rival).

14. On the basis of the law laid down by the Supreme Court, the guiding principles for us should be the following:-

(i) An advertisement is commercial speech and is protected by Article 19(1)(a) of the Constitution.

(ii) An advertisement must not be false, misleading, unfair or deceptive.

(iii) Of course, there would be some grey areas but these need not necessarily be taken as serious representations of fact but only as glorifying one's product.

To this extent, in our opinion, the protection of Article 19(1)(a) of the Constitution is available. However, if an advertisement extends beyond the grey areas and becomes a false, misleading, unfair or deceptive advertisement, it would certainly not have the benefit of any protection.

15. There is one other decision that we think would give some guidance and that is Pepsi Co. Inc. & Ors. v. Hindustan Coca Cola Ltd., 2003 (27) PTC 305 (Del.) (DB). In this decision, a Division Bench of this Court held that while boasting about one's product is permissible, disparaging a rival product is not. The fourth guiding principle for us, therefore, is: (iv) While glorifying its product, an advertiser may not denigrate or disparage a rival product. Similarly, in Halsbury's Laws of England (Fourth Edition Reissue, Volume 28) it is stated in paragraph 278 that "[It] is actionable when the words go beyond a mere puff and constitute untrue statements of fact about a rival's product." This view was followed, amongst others, in Dabur India Ltd. v. Wipro Limited, Bangalore, 2006 (32) PTC 677 (Del). "[It] is one thing to say that the defendant's product is better than that of the plaintiff and it is another thing to say that the plaintiff's product is inferior to that of the defendant."

16. In Pepsi Co. it was also held that certain factors have to be kept in mind while deciding the question of disparagement. These factors are: (i) Intent of the commercial, (ii) Manner of the commercial, and (iii) Story line of the commercial and the message sought to be conveyed. While we generally agree with these factors, we would like to amplify or restate them in the following terms:- (1) The intent of the advertisement - this can be understood from its story line and the message sought to be conveyed. (2) The overall effect of the advertisement does it promote the advertiser's product or does it disparage or denigrate a rival product?

In this context it must be kept in mind that while promoting its product, the advertiser may, while comparing it with a rival or a competing product, make an unfavourable comparison but that might not necessarily affect the story line and message of the advertised product or have that as its overall effect.

(3) The manner of advertising is the comparison by and large truthful or does it falsely denigrate or disparage a rival product? While truthful disparagement is permissible, untruthful disparagement is not permissible.

17. In our opinion, it is also important to keep in mind the medium of the advertisement. An advertisement in the electronic media would have a far greater impact than an advertisement in the print media. In D.N. Prasad v. Principal Secretary, 2005 Cri LJ 1901 the Andhra Pradesh High Court observed that a telecast reaches persons of all categories, irrespective of age, literacy and their capacity to understand or withstand. The Court noted that the impact of a telecast on the society is phenomenal. Similarly, it was observed in Pepsi Co. that a vast majority of viewers of commercial advertisements on the electronic media are influenced by visual advertisements "as these have a far reaching influence on the psyche of the people " Therefore, an advertiser has to virtually walk on a tight rope while telecasting a commercial and repeatedly ask himself the questions: Can the commercial be understood to mean a denigration of the rival product or not? What impact would the commercial have on the mind of a viewer? No clear-cut answer can be given to these questions and it is for this reason that this Court has taken a view that each case has to be decided on its own facts. (See Reckitt Benckiser (India) Ltd. v. Cavinkare Pvt. Ltd., ILR (2007) II Delhi 368, paragraph 17). Consequently, this Court has been called upon to decide the same issue time and time again resulting in the same and very large number of decisions being cited.

Find the entire Judgment here.

Fix Age Limit for Heads of Sports Bodies: Delhi High Court to Centre

Source : Outlook India.com

The Delhi High Court today directed the Centre to implement its National Sports Policy, which fixes 70 years as the upper age limit and 12 years as the maximum tenure for the chiefs of various sports federations.

A bench of Chief Justice Dipak Misra and Justice Manmohan gave the direction while turning down a plea by Indian Olympic Association and five other federations to restrain the government from implementing the policy.

"At present, we are not inclined to direct the stay of the operation of the guidelines and also the steps taken in pursuance of the guidelines," the bench said.

The Centre had on May 1 come out with the guidelines, fixing 70 years as the upper age limit for the heads of the sporting bodies and stipulating that they would not continue in the post beyond 12 years, with or without a break.

The guidelines also provided that the secretaries and treasurers of national sports federations (NSF) and also the IOA should not have more than two successive tenures of four years each.

Giving a clear signal to the sports bodies to implement the guidelines, the bench said they cannot dilly-dally on the pretext that the matter is pending in the court.

"No excuse can be adopted by either of the parties that the restraint has to be applied because the matter is subjudice when this court has categorically stated that it is not inclined to grant stay in respect of the guidelines or action taken thereon," the bench said.

The sports bodies, which had gone to the court against implementation of the guideline including those for badminton, swimming, shooting, athletics, archery. They had approached the court after the Centre framed guidelines and issued notices to them, seeking adherence to the new rules.

Challenging the policy, the counsel, appearing for the sports bodies, contended the government guidelines were arbitrary and that the government had no power to frame them as only the legislative bodies were empowered to enact such laws.

Find the original article here.

Cabinet clears Sexual Harassment Bill

Source: CNN-IBN

New Delhi: Women employees in India can now sue their colleagues for sexual abuse and harassment after the Union Cabinet on Thursday finally approved the introduction of the Protection of Women against Sexual Harassment at Workplace Bill, 2010 in Parliament.

The bill seeks to ensure protection of women against sexual harassment at the workplace, both in public and private sectors whether organised or unorganized.

Women can now complain against harassment ranging from physical contact, demand or requests for sexual favours, sexually coloured remarks or showing pornography.

The bill, applicable to all organised and unorganised sectors, also has a penalty provision for employers who do not comply.

Implementation of the Bill will be the responsibility of the Central Government in case of its own undertakings/establishments and of the State Governments in respect of every workplace established, owned, controlled or wholly or substantially financed by it as well as of private sector establishments falling within their territory.

Through this implementation mechanism, every employer has the primary duty to implement the provisions of law within his/her establishment while the State and Central Governments have been made responsible for overseeing and ensuring overall implementation of the law. The Governments will also be responsible for maintaining data on the implementation of the law.

Salient features of the Bill are as follows:

1) The Bill proposes a definition of sexual harassment, which is as laid down by the Honourable Supreme Court in Vishaka vs State of Rajasthan (1997). Additionally it recognises the promise or threat to a woman's employment prospects or creation of hostile work environment as 'sexual harassment' at workplace and expressly seeks to prohibit such acts.

2) The Bill provides protection not only to women who are employed but also to any woman who enters the workplace as a client, customer, apprentice, and daily wageworker or in ad-hoc capacity. Students, research scholars in colleges/university and patients in hospitals have also been covered. Further, the Bill seeks to cover workplaces in the unorganised sectors.

3) The Bill provides for an effective complaints and redressal mechanism. Under the proposed Bill, every employer is required to constitute an Internal Complaints Committee. Since a large number of the establishments (41.2 million out of 41.83 million as per Economic Census, 2005) in our country have less than 10 workers for whom it may not be feasible to set up an Internal Complaints Committee (ICC), the Bill provides for setting up of Local Complaints Committee (LCC) to be constituted by the designated District Officer at the district or sub-district levels, depending upon the need. This twin mechanism would ensure that women in any workplace, irrespective of its size or nature, have access to a redressal mechanism. The LCCs will enquire into the complaints of sexual harassment and recommend action to the employer or District Officer.

4) Employers who fail to comply with the provisions of the proposed Bill will be punishable with a fine which may extend to Rs 50,000.

5) Since there is a possibility that during the pendency of the enquiry the woman may be subject to threat and aggression, she has been given the option to seek interim relief in the form of transfer either of her own or the respondent or seek leave from work.

6) The Complaint Committees are required to complete the enquiry within 90 days and a period of 60 days has been given to the employer/District Officer for implementation of the recommendations of the Committee.

7) The Bill provides for safeguards in case of false or malicious complaint of sexual harassment. However, mere inability to substantiate the complaint or provide adequate proof would not make the complainant liable for punishment.

The Original article can be found here.


The Entire Text of the Judgment in Vishaka v. State of Rajasthan is available here.