Hindustan Lever Ltd. vs COLGATE PALMOLIVE (INDIA) LTD.

THE claim of 2 times superiority on the part of Colgate Dental Cream-Double Protection over any ordinary toothpaste has brought about another legal battle between two multinational corporate giants making this Commission as a battlefield for the purpose. Weapons of the battle have obviously been arguments and submissions by learned Counsels from both sides, materials containing studies of tests carried out by both the sides together with opinions of experts on conclusions, results of some survey got done by and on behalf of the applicants/complainants in order to find out the concept of "ordinary toothpaste" and the like. It may be indicated that this is the third legal battle between the same parties before this Commission.

THE facts giving rise to the present proceeding may be summarised in a nut-shell. THE respondent claims to be a market leader in toothpaste. It has recently introduced sometime in or around June, 1998 its toothpaste styling it as "Colgate Dental Cream-Double Protection" [CDC-DP for convenience]. With a view to promoting its sales, the respondent has given through both the print and the visual media wide publicity to its 2 times superiority over any ordinary toothpaste qua fighting germs and qua protection from germs that cause bad breath and tooth decay. This advertising gimmicks appears to have irked its competitor (applicant/ complainant No. 1) in this proceeding. It has therefore, in the company of one consumer, approached this Commission under Sections 36B(a) and (d) and Sections 10(a)(i) and (iv) read with Sections 36-A and 2(o) of the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act for brief) charging the respondent with adoption of and /or indulgence in restrictive and/or unfair trade practices within the meaning of those terms as contained therein. According to the applicants/complainants, the claim of 2 times superiority of CDC-DP over any ordinary toothpaste is both false and misleading. THEy have, therefore, prayed for an enquiry proceeding into the matter and to pass a cease and desist order qua the advertisement both in the print and the visual media regarding the alleged claim of 2 times superiority of CDC-DP over any ordinary toothpaste. THEy have also taken out an application under Section 12-A of the MRTP Act for an interim relief in the nature of the relief of permanent injunction restraining the respondent from making or continuing to make such claim in any manner and in any form of representation or advertisement. By an order passed by this Commission on 3rd July, 1998, a Notice of Enquiry (NOE) has been ordered to be issued making it returnable on 12th October, 1998. A notice as to the interim relief application was also ordered to be issued making it returnable on 29th July, 1998. In response thereto, the respondent has filed its reply and has resisted for the time being the interim relief application on various grounds. It has inter alia denied the charge of adoption of and/or indulgence in any kind of restrictive and/or unfair trade practices on its part qua its claim of 2 times superiority of CDC-DP over any ordinary toothpaste with respect to fight against germs and protection from germs that cause bad breath and tooth decay. It is the case of the respondent in its reply that it has made this claim only after carrying out intensive test studies and opinions of experts. According to the respondent, the claim of such superiority is based on extensive research and study conducted by it in various ways. THE respondent has contended that no case, much less a prima facie case, has been made out for claiming any interim relief as prayed for by and on behalf of the applicants/ complainants in their interim relief application. THE applicants/complainants have filed their rejoinder thereto and have controverted the claim made by and on behalf of the respondent in its reply. THE respondent has filed its sur-rejoinder thereto again controverting some further claims made by and on behalf of the applicants/ complainants in their rejoinder. It is difficult prima facie to agree with the submission urged before us by learned Counsel Mr. Andhyarujina for the applicants/ complainants to the effect that the advertisements in question claiming 2 times superiority of CDC-DP over any ordinary toothpaste would disparage toothpaste products manufactured by applicant/complainant No. 1 under various brand names. The reason there for is quite simple. 2 times superiorty of CDC-DP is claimed over any ordinary toothpaste without identifying such ordinary toothpaste in any manner. The word "ordinary" has to be understood in contra-distinction with the word special, uncommon, unusual, extraordinary and the like synonyms. The word "ordinary" is defined to mean customary, usual or normal; of the usual kind; not distinguished in any important way from others in New Webster''s Dictionary of the English language at P. 667. In Black''s Law Dictionary (6th Edition) at P. 1097 its meaning is given as "not characterised by peculiar or unusual circumstances". The word "ordinary" as an adjective would not refer to any particular or special item, product or thing.

The word "disparaging" occurring in Section 36-A(1)(x) has not been defined in the MRTP Act. According to well-settled principles of interpretation, its meaning will have to be ascertained from dictionaries. The word "disparage" as a verb is defined in the Chambers English Dictionary published by Allied Publishers Ltd. in its 1992 reprint at P. 409 to mean to dishonour by comparison with what is inferior. It thus means that for the purpose of disparaging something or some product some comparison with what is inferior is necessary. That inferior thing or product should be identifiable. In the New Shorter Oxford English Dictionary published by Clarindon Press Oxford (1998) at P. 696 the meaning of the word "disparage" as a verb transitive is given inter alia as bring discrediting or reproach upon; dishonour; lower in esteem; speak on or treat slightly or vilify; undervalue; and deprecate. It needs no telling that, according to grammatical usage, a transitive verb is incomplete unless it is followed by some noun or pronoun as an object. In that view of the matter, we are prima facie of the view that disparagement or an act of disparaging would occur only by comparison with some identifiable product.

WE are supported in our view by the Division Bench ruling of this Commission in the case of M. Balasundram v. Jyothi Laboratories and Another, reported in (1995) 82 Company Cases at P. 830. In that case the advertisements issued by the respondent therein with respect to its product by the brand name of "Ujala" was in the nature of disparagement of the product of the complainant by the brand name of "Regol". It was found that in the advertisement shown over the TV the respondent therein admitted to highlight that only 3-4 drops of "Ujala" were sufficient to achieve the desired whitening effect on the clothes washed with that product as against the quantity which is required to be added in the case of other products in circulation in the market. In that context, this Com mission took the view that the advertisement in question was in no way by way of disparagement of the complainant''s products. In that context it has been Held : "WE do not think that the words "goods of another person" have a definite connotation. It implies disparagement of the product of an identifiable manufacturer". We are in respectful agreement with the view taken by the Division Bench of this Commission in its aforesaid ruling in the case of Balasundaram (supra). On the principle of comity we think that we are bound by the aforesaid Division Bench ruling of this Commission. It is on all fours applicable in the present case. The claim of 2-times superiority of CDC-DP over any ordinary toothpaste does not refer to any identifiable product or any identifiable manufacturer much less applicant/complainant No. 1. It would not be necessary for applicant/ complainant No. 1 to have the cap fit on its head.

AT this stage we should like to refer to the Division Bench ruling of this Commission in the case of Colgate Palmolive India Ltd. v. Hindustan Lever Limited, reported in (1997) 5 CTJ (MRTPC) at P. 421. In that case disparagement was found to be with respect to an identifiable product on the basis of the material on record. The aforesaid Division Bench ruling of this Commission between the same parties, though with respect to the different subject-matter and the different cause of action, does lend support to our aforesaid view. In that view of the matter, we are prima facie of the view that no toothpaste product of applicant/complainant No. 1 is sought to be disparaged or is disparaged in any manner by the advertisements in question issued by and on behalf of the respondent claiming 2 times superiority of CDC-DP over any ordinary toothpaste. That brings us to the question whether or not the respondent is justified in claiming 2 times superiority of its CDC-DP over any ordinary toothpaste. In this connection, a reference deserves to be made to the Division Bench ruling of this Commission in UTPE 236/ 87 (in the case of Shri Sunder Singh Khosla v. Hindustan Proteins Ltd.) decided on 13th September, 1991. In that case the respondent marketed some potato chips known as Uncle Chipps with the representation that the said chips contained 15% less fat than the standard wafers. In that context it has been Held : "A comparison with what has been described by the respondent as standard wafers is itself misleading because admittedly there are no standard wafers. This would definitely mislead a potential consumer of wafers into believing that he is consuming lesser fat by eating the respondent''s wafers as compared with standard wafers. The quality of the goods sold by the respondent is thus falsely stated. This also gives an impression that the respondent''s wafers have got benefit of lesser fat than wafers which are described as standard wafers. In these two senses it can be said that the respondent has falsely represented that the goods are of a particular quality and has also falsely represented that the goods have benefits which they do not have. It may be that there was no dishonest intention on the part of the respondent but the absence of dishonest intention does not make the false representation any the less false, if the representation holds out that goods contain particular quality or benefits which they do not possess.

If a consumer is misled into believing that the goods marketed by the respondent contain lesser fat than the wafers which are called standard wafers then such an unfair trade practice must be held to be prejudicial to the public interest. In such a case the consumer is lulled in believing that he is consuming a product which is less harmful and has more benefits than the standard product of this type. A representation which tells the recipient of that representation that there are certain standard wafers while there are no such wafers is itself an act which causes loss or injury to the consumers.

RELYING on the aforesaid Division Bench ruling of this Commission in the case of Sunder Singh Khosla (supra), learned Counsel Mr. Andhyarujina for the applicants/complainants has submitted that the representation about the claim of 2 times superiority of CDC-DP over any ordinary toothpaste is per se misleading inasmuch as no ordinary toothpaste exists in the market. He has invited our attention to the concept of an ordinary toothpaste given by and on behalf of the respondent in its reply to the interim relief application. In para 3 of its reply, the respondent has stated : "What is meant by ordinary toothpaste in the present context is a toothpaste which conforms to the BIS (Bureau of Indian Standards) standard but does not contain Xylitol and Triclosan or ingredients proven to fight germs in the mouth. It is the case of the applicants/ complainants that a toothpaste according to the BIS standard should contain at least SLS (Sodium Lauryl Sulphate). According to the applicants/ complainants, the respondent has itself ascertained in its affidavit in UTPE 415/97 to the effect that SLS is a proven anti-bacterial agent. If that be so, according to learned Counsel Mr. Andhyarujina for the applicants/complainants, "the ordinary toothpaste" exists only in imagination and not in reality. As against this, learned Counsel Mr. Chinoy for the respondent has invited our attention to the clarification made by there spondent in its sur-rejoinder with respect to its concept of ordinary toothpaste qua its claim of 2 times superiority of CDC-DP over such ordinary toothpaste. In para 4 of its sur-rejoinder the respondent has stated : "An ordinary toothpaste contains ingredients such as abrasive agent, foaming agent, humectant, flavour oils etc. Some of the ingredients such as flavour oils, SLS have anti-microbial properties". As rightly submitted by learned Counsel Mr. Andhyarujina for the applicants/complainants, the respondent has made a departure from its earlier concept of "ordinary toothpaste" in its sur-rejoinder. In its reply, the respondent has made it absolutely clear that an ordinary toothpaste would be the one which conforms to the BIS standard but does not contain Xylitol and Triclosan or the ingredients proven to fight germs in the mouth. In the sur-rejoinder affidavit, the respondent has clearly stated that an ordinary toothpaste could contain an anti-microbial agents like flavour oils or SLS. If that be so, the respondent''s own product of Colgate Dental Cream (CDC) would also bean ordinary toothpaste. It is not in dispute that in UTPE 415/97 the respondent itself claimed that its CDC contains SLS as an anti-microbial agent. Nowhere in its reply in the present proceeding, the respondent has claimed that its CDC-DP is 2 times superior to its CDC. It is not the ca se of the respondent that it has tested its CDC-DP qua its CDC for the purpose of finding out which of its two products is superior to the other and to what extent. If the respondent does not claim its CDC to be an ordinary toothpaste, the concept of "ordinary toothpaste" becomes absolutely vague because we a re not sure which concept or ordinary toothpaste we should accept. We have its two concepts before us : one contained in the repay of the respondent and the other in its sur-rejoinder. If the concept of "ordinary toothpaste" is quite vague, we have prima facie to come to the conclusion that no ordinary toothpaste in its true sense is available in the market. In that case, the aforesaid ruling of this Commission in the case of Sunder Singh Khosla (supra) would be applicable.

LEARNED Counsel Mr. Chinoy for the respondent has urged that the claim of 2 times superiority of its CDC-DP over any ordinary toothpaste is not without any basis and there is ample material on record for the purpose of a prima facie conclusion by this Commission on that question. It has been urged by learned Counsel Mr. Chinoy for the respondent that the respondent has carried out some test studies for the purpose of ascertaining 2 times superiority of CDC-DP over any ordinary toothpaste. LEARNED Counsel Mr. Andhyarujina for the applicants/complainants has on the other hand submitted that so-called test studies conducted by and on behalf of the respondent are not reliable for the simple reason that it does not become clear therefrom which ordinary toothpaste was used for the purpose of such test studies and also because the first three test studies were conducted when both the toothpastes contained flouride and in the fourth test study only an interim report is presented. It is not in dispute that the first three test studies contained flouride in both the control product and the test product. Flouride is admitiedly an anti-bacterial agent. We are again not sure what amount of flouride was found in the control product and the test product while undertaking such test studies. The test reports of the first three test studies would only indicate flouride "in matching proportion" in both the test and the control products. That is indeed a vague term and would lead us to practically nowhere. We are not impressed by the submission urged before us by learned Counsel Mr. Chinoy for the respondent to the effect that the experts found the contents of flouride to the extent of 0.6% in such test studies. The reason there for is quite simple. It does not become clear from the material on record on what basis experts of in as to the aforesaid percentage contents of flouride in each of the test and the control products, more particularly when the test reports only indicated "matching proportion" of flouride contents in both the products as aforesaid. We are again not impressed by the submission urged before us by learned Counsel Mr. Chinoy for the respondent to the effect that such study reports were accepted by the International Association for Dental Researchers (the IADR) for presentation at its premier meeting of Dental Researchers held in June, 1998 at Nice, France. The reason is not far to seek. The IADR has only taken note of such test reports in its said meeting held in June, 1998 in France and has not approved it. It needs no telling that taking on record something is different from its approval. We are, therefore, unable to persuade ourselves to accept the test reports of the first three studies undertaken by and on behalf of the respondent for ascertaining its claim of 2 times superiority of its CDC-DP over any ordinary toothpaste. So far as the test report regarding the fourth study is concerned, it is admittedly an interim report. That study was admittedly conducted by comparing the effects of CDC-DP and an ordinary toothpaste. Both the toothpaste products have been stated to be without any flouride content. However, again we are not sure what meaning of the ordinary toothpaste we are to accept, whether the one given in the reply or the other in the sur-rejoinder. The test report also does not show at least ingredients of the ordinary toothpaste used for comparison with that of CDC-DP. If it did not contain any anti-microbial agent, it would not answer the meaning of ordinary toothpaste found in the reply in accordance with the BIS standard. If any anti-bacterial or anti-microbial agent is found in the ordinary toothpaste, the test report is silent as to the percentage of its contents and the name of such ingredient. Apart from the fact that it is an interim report, it would be difficult to rely on such report in absence of any expert opinion on scientific analysis of the two products, namely, CDC-DP and the said ordinary toothpaste. An attempt was made to bring on record the final test report of the said study carried out for six months, but we have not permitted it to be taken on record. Even assuming that the final test report could have been taken on record, again it might have to face same impediments against its prima facie acceptance on the aforesaid reasoning.

In view of our aforesaid discussion, we are of the prima facie view that the respondent is not justified in claiming 2 times superiority of its CDC-DP over any ordinary toothpaste. Such claim can prima facie be said to be quite misleading.

IN order to test the validity of the claim of 2 times superiority of its CDC-DP over any ordinary toothpaste, it would be desirable to have an overall scientific analysis of its said product by a panel of experts as has been done in UTPE 415/97. As pointed out hereinabove, in that case applicant/complainant No. 1 herein is found to have claimed 102% superiority of its New Pepsodent over CDC indirectly though not by direct reference thereto. IN the course of the interim order, this Court accepted the suggestion for appointment of a panel of experts for examination of such claim of 102% superiority of New Pepsodent over CDC. Thereafter a panel of experts comprising three renowned international experts on the subject, one each nominated by HLL, Colgate and this Commission, has come to be appointed for the purpose. The same formula can be adopted in this case also, if so desired. That brings us to the balance of convenience between the parties. No one has any right to mislead consumers by making unjustified tall claims with respect to any of its products. The respondent is prima facie found to have been indulging in making such unjustified tall claims qua 2 times superiority of its CDC-DP over any ordinary toothpaste. We have prima facie found this to be a case of misleading consumer and would therefore be unfair trade practice within the meaning of Section 36-A of the MRTP Act. The balance of convenience would, therefore, tilt more in favour of consumers than in favour of anyone else. It would however that more in favour of applicant/complainant No. 1 man in favour of the respondent if the balance of convenience has to be weighed between these two multinational corporate giants. The reason therefor is quite simple. Such unjustified tall claims as to 2 times superiority of CDC-DP over any ordinary toothpaste would certainly affect sales of any rival product. It cannot be gainsaid that applicant/ complainant No. 1 is also inter alia a manufacturer of toothpastes and marketing the same under different brand names. Its sale of toothpastes is likely to be affected by such advertisement campaign launched by and on behalf of the respondent claiming 216. times superiority of its CDC-DP over any ordinary toothpaste. It is true that there is no direct or indirect reference to any toothpaste product of HLL in such advertisement campaign. However keeping in mind the gullibility of people of our country, more particulary those not residing in urban areas, such sales promotion drive through print and visual media and/or hoardings would drive most people to think that there is no other toothpaste which can beat CDC-DP with respect to its anti-bacterial and anti-microbial effect on their teeth. That would certainly affect sales of toothpaste products manufactured by rival manufacturers. As pointed out hereinabove, HLL is one such competitor and rival in the toothpaste market. Under Section 12-A of the MRTP Act, a trader can also approach this Commission for the purpose of claiming some interim relief if such trader is prima facie affected by or on account of adoption of and indulgence in any kind of unfair trade practice by the opposite party. This right of the trader to approach this Commission under Section 12-A of the Act is subject to the rider that such trader can approach this Commission under Section 36-B(a) of the MRTP Act. Even if such trader''s complaint is not maintainable thereunder, such trader can approach this Commission under Section 36-B(d) thereof and this Commission can act on such information. It may however be clarified that, in any case, applicant/complainant No. 2 is prima facie found to be a consumer and this complaint at her instance would certainly be maintainable.

IN view of our aforesaid discussion, we are of the opinion that an ad interim relief as prayed for by and on behalf of the applicants/ complainants in this application under Section 12A of the MRTP Act deserves to be granted by injuncting the respondent from carrying on its advertisement campaign claiming 2 times superiority of its CDC-DP over any ordinary toothpaste. In the result, this application for interim relief under Section 12-A of the MRTP Act is accepted. The respondent is directed not to carry on its advertisement campaign in any form, whether by print or visual media or by means of hoardings or posters or any like display material, claiming 2 times superiority of CDC-DP over any other toothpaste, ordinary or otherwise. There shall be no order as to costs on the facts and in the circumstances of the case qua this interim relief application proceeding. Application allowed.