This article has been written by Niharika Tiwari, pursuing the Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho.

Introduction

Before purchasing a product be it clothing, beauty products, food, multivitamins, etc., have you ever searched for its review online on different platforms? I am sure each one of us has done this at least once in our lifetimes. With the advent of social media and its various platforms, we have also seen the rise of “social media influencers”. They review a different range of products from different brands and sometimes even collaborate with them. Small businesses also use these tools to promote their products and develop a consumer base. In the current scenario, there have been a boom in the influencer’s viewers and followers as online purchases rose tremendously in the pandemic. According to a survey conducted by the United Nations Conference on Trade and Development and Netcomm Suisse E-Commerce Association, in collaboration with the Brazilian Network Information Center (NIC.br) and Inveon, online purchases across all product categories have increased by 6 to 10 percentage points. The whole influencer marketing is a huge 5-10 billion dollars industry.

So, who is a social media influencer? A social media influencer creates brand awareness and reviews a different range of products through various platforms like blogs, vlogs, tweets, reels which may be sponsored or unsponsored and their popularity depends upon the number of likes, views, shares, and subscriptions across various social media platforms. They use the goodwill that they develop amongst their audience to promote a brand, support a cause and recommend products depending upon what they think of their quality. This power of the influencers cannot be underestimated because they shape the mindset of the consumer’s attitude while purchasing a product. Not everyone dives deep into the intricacies to determine whether a product is of good quality and thus depends upon the opinion of these influencers. But do these influencers carry any responsibility to provide their audience a well-researched opinion on a product and not pass any comment recklessly? Is there any limitation that puts a check on them making them responsible for their credibility? This article will answer these questions in detail. 

What is trademark disparagement?

Comparative advertisement is a strategy used by companies where they compare their products to that of their competitors to show that their products are superior in quality from that of their competitors. However, when this comparison crosses the line and represents other brands in a misleading light through derogatory comments, it becomes product disparagement. This becomes a major concern for the trademark proprietors as such misleading information about their brands made in a malafide manner by the competitors affects the consumer behavior which may put them at a disadvantage. There is a very limited check put by the law on the advertising industry however, the trademark law does refer as to when comparative advertisement causes infringement. 

You must have seen the detergent ads where the product is compared with the quality of the other product but the competitor’s product name is hidden. That is done to avoid any legal issues arising out of the advertisement regarding any disparagement claims. However, even an indirect indication that may lead to the recognition of the product may lead to disparagement. The Advertising Standard Council of India in its code of self-regulation of advertising contents in India has listed certain conditions that have to be taken care of while employing comparative advertisement method such as the comparison should be in the interest of vigorous competition and public enlightenment, same aspects, and purposes of the products should be compared, the comparison should be factual and accurate substantiated by appropriate evidence and above all, the comparison should not mislead the consumers, be libelous, defamatory or be confusing either about the product which is being advertised or with which its comparison is drawn with. However, these conditions of the code are not legally binding and are optional. 

Legal provisions

• Section 29(8) of the Trademarks Act, 1999:  A registered trademark is said to be infringed if the advertisement of such trademark takes unfair advantage, employs unfair trade practices, damages the distinctive character or the reputation of the trademark.
• Section 30(1) of the Trademarks Act, 1999: permits comparative advertisement on the condition that it should be related to an “honest practice” and not harmful to the competitor’s trademark or business.
• Article 19(1)(a) of the Constitution of India: Article 19(1)(a) protects the right of commercial speech in the form of advertisements limited by reasonable restrictions under Article 19 (2) of the Constitution of India. 

Judicial pronouncements

The courts have also intervened to explain what is permitted comparative advertisement as per the law and what will constitute disparagement:

Colgate Palmolive Company & Anr. v. Hindustan Unilever Ltd.

In this case, the Court distinguished positive comparison and negative comparison of two products. A comparative advertisement where one company shows its product to be of superior quality than that of its competitors is a positive comparison that is permitted under the law. However, if one company belittles or denigrates their competitor’s product to show its superiority, it is a negative comparison prohibited under the law as it amounts to disparagement and attacks the goodwill of the competitor’s business. This is against the general rules of the Trademark law. In this case, there was an indirect comparison between Pepsodent and Colgate toothpaste. The court passed an interim injunction to restrain any direct or indirect use of Colgate toothpaste in such a comparison which is detrimental to the reputation of the popular toothpaste brand. 

PepsiCo. Inc. and Ors. v. Hindustan Coca Cola Ltd.

To decide a case of disparagement, the court laid down the following factors in this case:

• The intent of the commercial,

• The manner of the commercial,
• The storyline of the commercial and the message sought to be conveyed by the commercial.

Reckitt Benckiser (India) Limited v. Naga Limited and Ors.

In this case, a comparison was drawn between the famous Dettol soap and the defendant’s Ayurvedic soap. In the advertisement, a pregnant lady was shown laboring while the doctor asked for hot water, instead, a soap was handed over to her. This soap was identified by the viewers as the Dettol soap. She rejects it and says that an antiseptic soap is needed. Then the defendant’s soap is provided to her and then the Ayurvedic properties of the soap are described in the advertisement. Plaintiff claimed that this amounted to disparagement and the intention behind the commercial is malicious. However, the court held that the defendant only stated the truth about the plaintiff’s product and the truth is a complete defense in these cases. There was a misunderstanding created in the minds of the general public that the Dettol soap had the same disinfecting qualities as Dettol liquid. This misunderstanding being clarified either by the defendant or a third party is not illegal under the law. 

Hamdard Dawakhana (Wakf) Lal v. UOI 

In this case, the Hon’ble Supreme Court for the first time considered whether commercial advertisement falls under the ambit of free speech. It was held that the advertisements of prohibited drugs under the specific statute do not fall under free speech under Article 19(1)(a) of the Constitution of India. It also held that as advertisements had the element of trade and commerce, therefore, they do not fall under Article 19(1)(a) however, this decision was then overruled in the case of Tata Press Ltd. v Mahanagar Telephone Nigam Ltd. reaffirming that commercial speech is a part of freedom of speech and expression. 

Reckitt & Colman of India Ltd v. MP Ramachandran & Anr.

This case discussed what are the permitted actions to be used by the competitors while employing comparative advertisements to promote their businesses. A tradesman can declare his products to be the best in the world, even if it’s not true, he can claim that his products are better than his competitors while also comparing the advantages and disadvantages but he cannot falsify claims about the competitor’s product being bad.

Social media influencers and trademark disparagement

The rise of social media influencers has become a trend these days. They have a viewer base of their own consisting of those who trust their judgment about a certain product they review. But is there any check on their freedom to say things about a product or they can say anything? From the concepts discussed above, we can say that false claims cannot be made by the competitors or the influencers about the product in question. So, the legal question here is that is the review given by an influencer restricted by Article 19(2) of the Constitution of India? This question was dealt with in the case of Marico Limited v. Abhijeet Bhansali by the Bombay High Court, where the defendant, Abhijeet Bansali who runs a YouTube channel called Bearded Chokra, put out a video about Parachute Coconut Oil allegedly claiming that it is not a “100 % pure and smells like a dry rotten coconut.” Plaintiff contended that the claims made by the defendant in the video were false and were made to attack the goodwill of Plaintiff. Also, Defendant had given purchase links of other competing coconut oils in the video description, and thus it was not a general review but a commercial activity. 

The Hon’ble Court set an example for the social media influencers about the responsibility they carry and to ensure that their statements do not mislead the general public in this case. The court said that their audience places a lot of trust in their opinions and follows them without much research of their own. They cannot make statements like an ordinary person without any consequences. The Court held that the statements made by the defendant were made with recklessness without any effort to check the truth and falsity of them. It is the burden of the influencers to take extra precautions to ensure that their statements do not deceive the public. In this case, the test or the articles Defendant relied upon to show that his statements in the video were made in good faith were baseless and could not prove his claims. Article 19(2) was also discussed in this case that a person cannot under the garb of free commercial speech put out false and malicious comment which denigrates, belittles, discredits or harms the reputation and goodwill of someone else’s products and only facts to make the public aware are permitted. Such practices detrimental to the distinctive character of the plaintiff’s trademark also amounts to unfair trade practices. The court ordered the video, in this case, to be taken down. This was the first case ever to discuss the liability of social media influencers and their responsibility towards the viewers.

Conclusion

Social media influencers when starting are just like any other person. There are lots of influencers on all platforms trying to make their name. Some swayed by shortcuts to fame may employ such methods to gain traffic to their profile while others may contribute to disparagement by sheer ignorance. So, there is a need for the influencers to be aware of the checks put up by the law on free commercial speech and also be aware of the influence they have and the trust of the people they wield to be responsible for their content. And for the people, it has rightly been said all along that all that is there on the internet may not be true and they need to be vigilant as to the credibility of the content they view. Additionally, there is still a need for a comprehensive decision around trademark disparagement, and with the increase in such practices, it might be dealt with by the courts in the future.

References

1. https://unctad.org/news/covid-19-has-changed-online-shopping-forever-survey-shows
2. https://www.bigcommerce.com/blog/influencer-marketing-statistics/#10-most-important-influencer-marketing-statistics-for-2020
3. http://updates.anandandanand.com/commercial-disparagement/
4. https://www.lexology.com/library/detail.aspx?g=c200e9b5-d6a9-4584-9e9d-01ede06d2f56
5. http://www.legalservicesindia.com/article/604/Comparative-Advertisement-&-Infringement-of-Trademark.html
6. https://www.mondaq.com/india/media-entertainment-law/885770/social-media-influencers-freedom-of-speech-and-trademark-disparagement

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