Delhi High Court Restrains HUL From Comparing 'Ponds' With 'Nivea', Affirms In-Mall Marketing Campaigns As Advertisements

Delhi High Court Restrains HUL From Comparing 'Ponds' With 'Nivea', Affirms In-Mall Marketing Campaigns As Advertisements

In a recent ruling, the Delhi High Court issued an injunction against Hindustan Unilever Limited, prohibiting the company from conducting marketing or advertising campaigns that compare its 'Ponds' products with those of 'Nivea'. This restriction applies to all forms of promotion, whether explicit, implicit, or through association, particularly through sales representatives operating in malls across the national capital and Gurugram.

Justice Anish Dayal noted that such actions constitute disparagement or denigration of the products or business of the latter and said: “This Court is of the opinion that the impugned activity undertaken by defendant choosing to compare plaintiff's 'NIVEA' products (either expressly or by implication or association) and defendant's products, especially those under the trademark 'Ponds', are prima facie misleading and disparaging and cause irreversible prejudice to plaintiff.”

The Court issued the directive during an interim injunction plea brought forth by Beiersdorf AG, the manufacturer of Nivea products, as part of its legal action against HUL.

Beiersdorf AG asserted a uniquely identifiable trade dress for its 'NIVEA' product line, featuring the brand name prominently displayed against a distinctive blue backdrop. This visual identity was originally crafted and introduced for its flagship product, 'NIVEA Crème,' in 1925.

The plaintiff contended that in approximately 2021, it came to their attention that HUL had engaged in marketing activities. These activities involved their sales representatives stationed at various malls in Delhi and Gurgaon displaying a comparison between a cream housed in a blue tub identical to the NIVEA Crème blue tub (without the sticker) and 'Ponds Superlight Gel'.

According to the plaintiff's allegations, sales representatives of HUL would apply cream from the “blue tub” to the skin of walk-in customers while simultaneously applying the Ponds product. They would then use a magnifying glass to purportedly demonstrate to customers that the product from the blue tub left an oily residue on their skin compared to Ponds Super Light Gel.

Justice Dayal noted that on the face of it, the color blue has long been linked with the plaintiff's product, 'NIVEA,' which has garnered distinctiveness and widespread popularity over the years.

“Plaintiff claiming exclusivity in this color is not the issue; however, the use by defendant in the impugned activity of a blue color tub is too much of a coincidence to ignore. The allusion seems to be to the distinctive blue colorused by plaintiff,” the court said.

It further asserted that there was no rationale why HUL couldn't have utilized a dense cream in a tub of a different color for the purpose of comparison.

Regarding puffery and disparagement, the court noted that the legal principles governing advertisements, encompassing various mediums such as print, digital, and TV commercials, would also apply to in-mall marketing campaigns.

The court rationalized that in-mall marketing campaigns fundamentally serve as a method of promoting and marketing a company's product to consumers in a more personalized and interactive setting.

“At least in an advertisement in print, digital, medium, or TVC, the assessment is limited to what is seen or heard in the commercial. In an in-mall marketing campaign, the possibilities of imputation, aspersion, implication, and overstatement, leading to even a slight disparagement, will be limitless,” the court said.

Therefore, the court directed: "The defendant, including their directors, wholesalers, distributors, partners, proprietors, agents, or assignees, are prohibited from engaging in the challenged activity or any similar marketing or advertising endeavors that compare the plaintiff's 'NIVEA' products (explicitly or implicitly) with the defendant's products (particularly those under the 'Ponds' trademark), which could be construed as disparaging or denigrating the plaintiff's products or business."