The judgment stems from a lawsuit filed by Beiersdorf AG, the company behind Nivea products. They argued that HUL’s marketing tactics in shopping malls were deceptive and unfairly targeted Nivea. In the present case, Beiersdorf asserted that they first became aware in 2021 of Hindustan Unilever Limited’s marketing endeavors, featuring their sales representatives in various malls. These efforts involved comparing a cream in a blue tub that was indistinguishable from Nivea’s blue tub with Hindustan Unilever Limited’s Ponds Superlight Gel.
Story is of a misleading Comparison
Beiersdorf AG vs. Hindustan Unilever Limited
[DHC I.A. 7636/2021 in CS(COMM) 300/2021]
The core issue revolved around the highly distinctive trade dress claimed by Beiersdorf for its ‘NIVEA’ brand products, featuring a distinctive blue background (‘Pantone 280C’) and developed for ‘NIVEA Crème’ in 1925. In 2021, Beiersdorf discovered that the HUL was conducting marketing activities in various malls in Delhi and Gurgaon, where sales representatives were comparing a cream in a blue tub identical to Beiersdorf’s ‘NIVEA Crème blue tub’ (without the sticker) to the HUL’s product’ Ponds Superlight Gel’ (“impugned activity”). According to Beiersdorf, the HUL’s sales representatives would apply cream from the “blue tub” on one hand of walk-in customers and the HUL’s product on the other hand. They then used a magnifying glass to assure customers that the blue tub product left an oily residue compared to the HUL’s Ponds Super Light Gel’. Beiersdorf claimed this activity was disparaging their product and issued a cease-and-desist notice on June 19, 2021. Subsequently, the current suit was filed, and a summons was issued on July 5, 2021. The application notice was issued, and the matter has since remained on the Board. Beiersdorf applied and obtained registrations for ‘NIVEA’ trademark and variants in more than 175 countries in various classes. ‘NIVEA’ was first registered in 1943 in India in class 3 and subsequently was registered in various other classes.
The court indicated that the analysis of this case hinges on the following key aspects:
Association with Nivea Crème
The court observed that the distinctive blue colour of the Nivea crème tub, identified as “Pantone 2 “0C,” was not “sed decoratively by Beiersdorf but as a “source id” notifier.” The cons “stent use of this colour suggests that any product in such a blue tub would be associated with Nivea. Additionally, the court noted that Hindustan Unilever Limited (HUL), part of the global “Unilever “group,” could no” claim ignorance of this association. HUL’s attempts at aggressive comparative advertising, unsuccessful in other parts of the world, further indicated a deliberate effort to leverage the blue colour associated with Nivea.
HUL’s Knowledge of the Blue Color
The court found that HUL was aware of the association between Nivea and the blue colour based on the examples provided by Beiersdorf. Despite ongoing legal battles over this issue in various countries, HUL’s choice of a similar blue container lacked valid justification.
Intent Behind Using the Blue Crème Tub
The court emphasized that comparisons inherently require a specific reference. Using an unmarked blue container, the court suggested that HUL intended to draw a misleading comparison. Without proper labelling, this tactic could be seen as deceptive, misrepresentative, and disparaging. The court rejected HUL’s argument, comparing that a “generic c “theory” does not “constitute disparagement, referencing previous legal precedents to support this.
Comparison to Consumers
HUL’s comparison of their lightest product with Beiersdorf’s was deemed inherently deceptive. The misleading impression created about Nivea would likely make consumers cautious about purchasing Beiersdorf’s product. The court referred to the ASCI Code for self-regulation of advertising content in India, which permits comparative advertising only if it is clear which aspects of the advertiser’s are being compared with those of the competitor.
Puffery or Disparagement
Puffery refers to exaggerated, subjective claims about a product that are not meant to be taken literally or legally binding. These statements are often seen as promotional and not intended to mislead consumers.
Disparagement: Disparagement involves making false, misleading, or derogatory statements about a competitor, which can harm the competitor’s reputation and sales. Disparaging claims go beyond mere puffery and are considered legally actionable.
The court stated that while advertisements might not constantly be disparaging, any misleading elements must be removed. Comparisons should be made between similar products, not dissimilar ones. The court dismissed HUL’s argument that mentioning oily residue wasn’t emphasizing that the overall impact of the advertisement must be evaluated to determine disparagement. The court referenced the Tata Press Ltd. v. MTNL case, noting that commercial speech does not protect false, misleading, unfair, or deceptive advertising. The court asserted that even a slight disparagement could be significant in a campaign, and thus, the threshold for determining misleading or disparaging activity should be lower.
No judgments on In-Mall Marketing were not taken as defense.
Although counsels have stated that there were no judgments specifically addressing in-mall marketing campaigns, this Court believes that the laws governing advertisements, whether in print, digital, or television, should also apply to such campaigns. These campaigns are essentially methods of promoting and marketing a company’s product to consumers, but in a more personalized and interactive setting. The nature of the communication in these interactions is open to interpretation. In traditional advertisements, the assessment is limited to what is seen or heard. However, in an in-mall marketing campaign, the potential for imputation, aspersion, implication, and overstatement—leading to even slight disparagement—is limitless. The marketing executives’ body language, gestures, conversations, or suggestive indications also animate the promotional interaction. Therefore, there is intrinsically less material available for the court to consider, and the threshold for determining the possibility of the impugned activity being misleading or disparaging must be lower.
The court stated that while advertisements might not constantly be disparaging, any misleading elements must be removed. Comparisons should be made between similar products, not dissimilar ones. The court dismissed HUL’s argument that mentioning oily residue wasn’t disparaging, emphasizing that the overall impact of the advertisement must be evaluated to determine disparagement. The court referenced the Tata Press Ltd. v. MTNL case, noting that commercial speech does not protect false, misleading, unfair, or deceptive advertising. The court asserted that even a slight disparagement could be significant in a campaign, and thus, the threshold for determining misleading or disparaging activity should be lower.
Therefore, the Hon’ble High Court concluded that Hindustan Unilever Limited’s actions comparing Nivea products with those of Ponds were prima facie misleading and disparaging. This conduct was deemed to have caused irreparable harm to Beiersdorf. Consequently, the court issued an injunction restraining HUL from engaging in such activities or any similar ones that could lead to disparagement or denigration of Beiersdorf’s products or business.
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