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Pepsodent vs. Colgate: The legal angle

12-August-2013
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Pepsodent vs. Colgate: The legal angle

The long weekend was put to use by toothpaste major Pepsodent from the HUL stable with the launch of a new campaign attacking market leader in the toothpaste category Colgate.

This is on the back of ending their nearly decade-long war on comparative advertising recently, on Monopolies and Restrictive Trade Practices Commission (MRTPC) Act of 1969.

In the latest advertisement, Pepsodent has made a direct claim that Pepsodent Germicheck is 130 per cent better than Colgate. And it has done this not with subtle innuendoes pointing towards Colgate, but using the brand’s name quite clearly.

The advertisement which has two children using Pepsodent and Colgate showcases both the brand names visibly, leaving no doubt in the consumer’s mind. 

The legal angle
Some of the legal aspects to be kept in mind whilst undertaking comparative advertising are…

Indian courts have time and again clarified the position on competitive or comparative advertising under Indian laws, including in the famed cases of Horlicks vs. Complan [Glaxosmithkline Consumer Healthcare Ltd. Vs. Heinz India (P) Ltd., MIPR2010(3)314], Pepsi vs. Coke [Pepsico Inc. vs. Hindustan Coca Cola, 2003(27)PTC305], Colgate vs. Hindustan Lever [Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd., (1999) 7 SCC 1], Dabur vs. Godrej [Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. and Godrej Sara Lee, FAO 625/2009] and Fortune vs. Saffola [Marico Limited Vs. Adani Wilmar Limited, 199(2013)DLT663].

Based on a study of the diverse judicial observations on the issue, the following principles must be kept in mind:

While ‘puffing’ or exaggeration by a person of its business / products / services is permissible, disparaging a rival’s business / products / services would not be justified. This implies that X company can say that its business / services/ products are best or better, but by comparison, it cannot slander nor defame the business / products / services of a competitor or call it bad or inferior.

If hyped-up advertising transgresses the grey areas of permissible assertion, the advertiser must have some reasonable factual basis for the assertion made. It is not possible, therefore, for X to make an off-the-cuff or unsubstantiated claim that its business / products / services are better that its rivals. While a distinction can be made and due latitude be given for an advertisement to promote one’s clientage, such latitude does not extend to license to misrepresent. Therefore, any and all facts stated by X in the advertisement must be substantiated and capable of being proven, and preferably, based upon the findings of a renowned market surveyor or record keeping agency.

Comparative advertising is permitted but only so long as it does not discredit or denigrate the intellectual property, or disparage the business / products / services of a competitor.

So long as the thumb rule of truthful portrayal of a rival's business / product / services is maintained, an action for alleged disparagement ordinarily does not lie.

Disparagement of a rival’s business / products / services may not be specific, and accordingly, generic disparagement of a rival’s business / products / services without specifically identifying or pin pointing the rival, is equally objectionable in a court of law.

While interpreting whether the intent behind X’s advertisement is one to denigrate its rivals, regard will be had not only to the content of, but also the manner (including pictographic representations) of presenting, the advertisement. Therefore, X must ensure that no designs applied to the advertisement result in a breach of the threshold of permissible competitive / comparative advertising.

Whilst it is always interesting to watch a smaller brand taking on a market leader, what will be the impact of such advertising? Will it really help Pepsodent garner more market share or will legal eagles continue to make moolah while teeth shine?

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