Zydus Wellness Products Limited vs Dabur India Limited: Case Brief

Zydus Wellness Products Limited vs Dabur India Limited: Case Brief IPR Club

• Title: Zydus Wellness Products Limited vs Dabur India Limited
• Citation: CS (COMM) 304/2022
• Name of the Court: Delhi High Court
• Judge: Justice Pratibha M. Singh
• Parties: Plaintiff – Zydus Wellness Products Limited
• Defendant – Dabur India Limited

Brief Facts:

• The present suit has been filed before the Hon’ble High Court of Delhi (“Hon’ble Court”) by Zydus Wellness Products Limited (“Plaintiff”) against Dabur India Limited (“Defendant”) seeking a permanent injunction and restraint against two commercials released by the Defendant for the promotion of its product Dabur Glucoplus-C Orange (“Glucoplus-C”). Plaintiff merged with Heinz India Pvt. Ltd. in 2019 and, as a result of the merger, acquired all trade names and intellectual property rights to products like Nycil, Glucon-D, Complan, etc. Regarding the mark “GLUCON-D,” the Plaintiff through a predecessor has registered several trademarks that are still valid and in use today. According to the plaint, GLUCON-D is the market leader in India’s glucose powder segment and is offered in four flavours: regular, tangy orange, nimbu pani, and mango punch. 
• GLUCON-D Tangy Orange (“Glucon-D”) is one of the most well-known variations of the “GLUCON-D” line of products. It is claimed to be the market leader in the orange glucose powder drink category, with market shares of 72% from April 2021 to March 2022 and 74% from January 2022 to March 2022.
• On April 27, 2022, Plaintiff came across a Bengali-language television commercial of the defendant that was promoting Glucoplus-C on a Bengali news channel (“Impugned TVC”). Further, on the same Bengali news channel on April 29, 2022, Plaintiff saw an extended version of the impugned TVC with two extra frames. Plaintiff contends that the impugned TVC conveys the false impression that all orange glucose powder drinks are completely ineffective in providing energy and that only Glucoplus-C can do so. The impugned TVC specifically criticises Glucon-D, the market leader in beverages with orange glucose powder.
• The commercial shows two school girls competing in a 100-meter race. Both girls’ mothers provide them with orange drinks to consume before the race considering that it will help their child to win the race. The girl who consumes Glucoplus-C is depicted as having more energy, whereas the other girl, who consumes an orange colour drink, is depicted as having less energy and finally losing the race. Expressing disappointment, the mother of the losing girl questions the mother of the winning girl, who had consumed Glucoplus-C, if both of them drank the identical orange glucose, how did your daughter win so easily? The mother of the winning girl responds, “It’s not the same,” while holding up a packet of Glucoplus-C. “My daughter consumes Glucoplus-C”. The final frame of the video reads: “25% more glucose in every drink,” and features of Glucoplus-C are then displayed on the screen.
• Thus, the Plaintiff filed this suit before the Hon’ble Court to seek a permanent injunction.

Issue before the Hon’ble Court:

Whether the impugned TVC is identifiable with Glucon-D and if so, whether it is disparaging?

Arguments by the Plaintiff Zydus Wellness:

• The counsel appearing on behalf of the Plaintiff submits that Glucon-D holds 74% of market share in orange glucose powder category. Thus, though Glucon-D is not depicted in the impugned TVC, it will directly impact the Plaintiff as any viewer would immediately connect the comparison, as being made, with Glucon-D. The commercial depicts the losing girl consuming Glucon-D and the expression of the mother showing disappointment undervalues Glucon-D and shows that Glucon-D is not effective in comparison with Glucoplus-C.
• It is stated that 100 g of Glucon-D has 365 kcal of energy and 100 g of Glucoplus-C has 368 kcal of energy. Glucon-D has 40% glucose and the Glucoplus-C has 50.4% glucose.  The Plaintiff’s counsel claims that the 25% more glucose claimed in the commercial is misleading because the additional glucose in Glucoplus-C does not translate into more energy. The aforementioned assertion lacks any supporting evidence, and the lab report supporting it is incomplete and full of errors.
• The counsel claims that the requirement of truthful and honest representation in advertising as stated in clauses 1.1, 1.2, and 1.5 of the Code for Self-Regulation of Advertising Content in India published by the Advertisement Standard Council of India (“ASCI“) shows that serious misrepresentation of nutritional value under the garb of puffery cannot be done and the advertisement, therefore, is an effort to show Glucon-D in a bad light.

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Arguments by the Defendant:

• The counsel for the Defendant states that Glucon-D is not even passingly mentioned in the TVC, nor is there any mention of any other competing product. A competitor should therefore be able to accept a certain level of puffery or exaggeration in television commercials. 
• According to the Defendant’s counsel, the Plaintiff itself admits on the product label that glucose provides instant energy. If this truth is acknowledged, then portraying the same in a puffed manner cannot be considered disparaging. An injunction requested against the Defendant would conflict with the Plaintiff’s stand on its packaging if the Plaintiff asserts that glucose provides instant energy compared to a regular drink.
• With respect to the increased energy value of Glucoplus-C on the new packaging while the ingredients have remained the same since 2019, the Defendant’s counsel submits that certain ingredients that were previously not taken into account for the calculation of energy value have now been approved by the Food Safety and Standards Authority of India (“FSSAI“) to be taken into account, leading to an increase in the energy value of Glucoplus-C.
• The counsel also states that the Defendant has a right to highlight the special qualities of its products. The Defendant is only emphasising its superiority and the benefits of its product in the impugned TVC. As a result, it is argued that the comparative advertisement must be permitted as long as it does not denigrate the competition. Although the Defendant acknowledges that it only holds less than 10% of the market share, compared to the Plaintiff’s 74%, it is not permitted to pursue a monopoly under the terms of this lawsuit.

Laws considered in the case:

• According to section 29(8) of the Trademark Act, 1999 (the “Act”), an advertisement is considered to be a trademark infringement if it unfairly exploits the trademark, engages in dishonest business practises, impairs the distinctiveness of the trademark, and is detrimental to the trademark’s reputation.
• Comparative advertising is an exception under Section 30(1) of the Act, provided that the person using the registered trademark does so honestly and does not gain an unfair advantage when identifying the goods and services. It indicates that using one’s trademark for comparison in India is acceptable and would not constitute trademark infringement if the aforementioned conditions are followed. The test for determining whether or not the advertisement falls under honest practise will be to look at what a reasonable reader or consumer thinks.
• In addition to trademark laws, India has the ASCI, which permits competitive advertising as long as it is truthful, fact-based, and does not mislead potential customers. The advertisement cannot give the producer an undue advantage over the products, services, or brand of the competitor.

Judgment by the Hon’ble Court:

With respect to the abovementioned issue, the Hon’ble Court has analyzed the following notable features of the impugned TVC –

• No other orange glucose powder drink is specified in the impugned TVC, either directly or indirectly. The basic orange-colored drink shown in a glass in the second frame of the commercial has no packaging, mark, logo, or container other than Glucoplus-C’s is displayed in the whole commercial.
• The impugned TVC identifies “orange glucose” as the product category against which the commercial is targeted. As a result, the impugned TVC qualifies as “comparative advertising” for the broad orange glucose product category. The intention and primary emphasis of the impugned TVC is the promotion of Glucoplus-C. The depiction of the mother stirring the generic orange drink is too short to be a view of the impugned TVC.    Although the comparison in the impugned TVC may not be in the Plaintiff’s favour, it cannot be deemed to be disparaging. Therefore, the Hon’ble Court is of the view that a viewer cannot detect at that point in the commercial that it is a comparative advertisement.
• In accordance with this Hon’ble Court’s previous judgments, there cannot be a presumption that the Plaintiff’s product is being targeted when a commercial makes no explicit or direct mention of a competitor’s product. Exaggerating the benefits and features of one’s products is acceptable while disparaging and undervaluing the products of others is not. Therefore, the Hon’ble Court held that Glucoplus-C did not disparage any orange glucose powder drink.  
• The Hon’ble Court further declared that there is no falsity present in the impugned TVC and that it is largely truthful. Defendant did not materially mislead any facts. The general message that Defendant was trying to get across vide the impugned TVC was that its product has 25% more glucose which provides instant energy. Thus, the Hon’ble Court is unable to conclude that Glucon-D is being disparaged or that there is any general disparagement because there is no disparaging speech, still, or image in the impugned TVC.
• Hence, the Hon’ble Court held that the prayer for interim injunction cannot be granted.

Written by Suhani Heda

Zydus Wellness Products Ltd vs Dabur India Limited on 29 July, 2022