Horlicks Ltd.

& Anr vs Heinz Private Limited

 Plaintiff no. 2, i.e., Anr, under the license from plaintiff no. 1, i.e., Horlicks Ltd., has
extensively used the mark HORLICKS in India since many decades.
 The revenue generated by plaintiff no. 2 in the year 2017 (ten months) was Rs.2668
crores and the expenditure on advertising and promoting the product HORLICKS for
the same period was Rs.425 crore.
 Plaintiff no. 1 is the registered proprietor of the trade mark HORLICKS in India under
Classes 25, 28, 29, 30 and 32 of the Trade Marks Act, 1999 which are explained
further in the analysis.
 The defendant, i.e., Heinz Private Limited, had published an advertisement for its
COMPLAN branded product in the newspaper which intentionally and deliberately
disparaged the plaintiff’s product HORLICKS.
The fourth schedule of Trade Marks Rules, 2002 classifies goods and services under 45
classes. The classes significant to this case are explained below-

 Class 25: clothing, footwear. Headgear

 The impugned advertisement compared one cup of COMPLAN with two cups of
HORLICKS with a disclaimer on the page stating “One cup of Complan (33g) gives
5.94g of protein while two cups of Horlicks (27*2=54g) give 5.94g of protein basis
recommended pack dosage…”
 The disclaimer in the impugned advertisement was not an integral part of the
advertisement and the font size did not comply with the ASCI guidelines regarding
font size for a disclaimer.
 The impugned advertisement wrongly stated about the protein amount as the
serving size of COMPLAN had been manipulated to have double the protein of
HORLICKS.
 The comparison of both the products was not made per 100 grams, as per normal
market practice. The defendant had itself admitted in the written statement that
COMPLAN had 18g of protein per 100g, whereas HORLICKS had 11g of protein per
100g, and it clearly indicates that the defendant had made a false statement about
protein being double in its product.
  Even if the defendant wanted to compare the two products, then it should have
considered the preparation method of both the products.
 The visual of same sized cups was wrong and the visual of one cup of COMPLAN
being equal to two cups of HORLICKS was to attract the maximum consumer
interest.
 The impugned advertisement wrongly showed a direct correlation between the
protein amount consumed and child growth. It tried to misguide consumers into
believing that consumption of the defendant’s product directly leads to growth.
 The defendant’s tagline “From now on, only Complan” was not just a promotional
statement but a sort of rejection of HORLICKS over COMPLAN.
 The use of plaintiff’s mark by the defendant violated sections 29(8) and 30(1) of the
Trade Marks Act.
 The fundamental right to freedom of speech under Article 19(1)(a) of the
Constitution of India is only available to a citizen of India and not to a corporate
entity like the defendant.
Sections relevant in the above arguments pertain to The Trade Marks Act, 1999. They are
explained as follows:

 Sec 29(8): A registered trade mark is infringed by any advertising of that mark if such
advertising-
o (a) takes unfair advantage of and is contrary to honest practices in industrial
or commercial matters; or
o (b) is detrimental to its distinctive character; or
o (c) is against the reputation of the trade mark
 Sec 30(1): Nothing in Sec-29 (infringement of trade marks) shall be construed as
preventing the use of a registered trade mark by any person for the purposes of
identifying goods or services as those of the proprietor provided the use-
o (a) is in accordance with honest practices in industrial or commercial matters,
and
o (b) is not such as to take unfair advantage of or be detrimental to the
distinctive character or repute of the trade mark
 The Advertising Standard Council of India (ASCI) was established in 1985 as a self
regulatory organisation of the advertising industry in India. It is a non-Government
body. Its main objective is to promote responsible advertising, thus enhancing the
public’s confidence in advertisements.
Arguments on behalf of the defendant:

 The defendant, on its own initiative, had modified the impugned advertisement. The
defendant would publish the modified advertisement in future and the impugned
one in the present.
 The advertisement gave a visual comparison of protein content for both the
products based on ‘per serving’ size. The ‘per serving’ size is the most accurate, true
and verifiable method of comparison.
  The impugned advertisement showed the comparison along with the disclaimer
which stated the serving size of both the cups.
 In the modified advertisement, the disclaimer had made an integral part of the
advertisement and prominently displayed.
 A comparative advertisement was a comparison between two competing products
and the trade mark of each had to be displayed for consumers to identify the brands
and such use was allowed under Sec 30(1) of the Trade Marks Act.
 The primary objective of Sections 29(8) and 30(1) of the Trade Marks Act was to
allow comparative advertisement as long as the use of competitor’s mark was
honest.
 “From now on, only Complan” was just a promotional statement, i.e., to encourage
and urge consumers to purchase the product of the defendant.
Decision of the court:

 For any advertisement to be misleading, there must be two elements. First, the
advertisement must deceive the persons to whom it is addressed or at least must
have the potential to deceive them. Second, because of its deceptive nature, the
advertisement must be likely to affect the economic behaviour of public to whom it
is addressed or harm a competitor. The Court decided that the features were merely
being compared and were not misleading and the issue has not to be seen from a
hyper sensitive viewpoint, but from the eyes of an average consumer who is used to
certain rhetoric.
 The Court also stated that comparing 100g of both the products would be incorrect
as it would induce the consumers to consume three times the recommended ‘per
serving’ size of HORLICKS per cup risking their health. In any event, the ‘per serving’
is the only correct way to make comparison.
 The protein content is one of the essential components of a health drink. It is not
possible to lay down an exhaustive list of features in comparative advertising and
hence, the advertisement deals with one of the important characteristics.
Consequentially, the impugned advertisement only compares the protein content in
‘per serving’ sizes of both products which is factually true and not misleading in any
way.
 The Court mentioned that the primary objective of Sections 29(8) and 30(1) of the
Trade Marks Act, 1999, is to allow cooperative advertising as long as the use of a
competitor’s mark is honest. In this case, there is no detriment to the plaintiff’s
mark as there is a clear distinction between the plaintiff’s and defendant’s product.
 The statement “From now on, only Complan” is used to urge consumers to purchase
defendant’s product and the target customers expect a certain amount of
hyperbole. The said statement is not disparaging and does not amount to rejection
of plaintiff’s product.
To conclude, the impugned modified advertisement is not misleading and there is no
denigration to plaintiff’s mark. Further, the factor compared is material, verifiable and
representative feature.
Implications of the court decision for managers:
It can be said that the court’s decision allows honest and fair competitive advertising.
Companies use comparative advertising to promote, compare and highlight the superiority
of its product with respect to that of the competitor.
It encourages the managers to keep in mind the nuances of products being compared in the
advertisements to not attract any charges against them. The comparison between the
products must remain factual and should not distort facts or mislead customers through the
advertisements. However, the advertiser must act responsibly while highlighting the
features/characteristics of its product in comparison to the competitor’s product. The facts
must remain true and shouldn’t be exaggerated to support the advertiser’s product.
This decision allows for healthy, cooperative and competitive advertising while keeping
intact the need for verifiable and material facts of the compared goods or services.