Britannia Industries Ltd. v. ITC Ltd.

“Comparison is allowed, deception is not.”

SHORT DESCRIPTION

The judgment in Britannia Industries Ltd. v. ITC Ltd. is a landmark ruling on the law governing comparative advertising in India. The Delhi High Court clarified the legal boundaries between fair competition and unfair trade practices, holding that while businesses may promote their products by comparison, such advertising must not mislead consumers or disparage a competitor’s goods, either directly or indirectly.

FACTS OF THE CASE

Britannia Industries Ltd., a reputed manufacturer of biscuits, filed a suit against ITC Ltd. alleging that ITC had issued advertisements comparing its biscuits with those of Britannia in a misleading manner. The advertisements highlighted the nutritional superiority of ITC’s biscuits, particularly with reference to fibre and health benefits, while visually and contextually portraying Britannia’s biscuits as inferior. Britannia contended that the comparison was selective, incomplete, and unsupported by comprehensive scientific data, thereby creating a false and damaging impression in the minds of consumers. It was alleged that such advertising amounted to disparagement and caused injury to Britannia’s goodwill and brand reputation.

ISSUES INVOLVED

The Court was required to decide whether comparative advertising of this nature is permissible under Indian law, whether ITC’s advertisement crossed the permissible limits by disparaging Britannia’s product, and whether misleading or partially true health claims could be justified as part of commercial speech. The scope and limits of freedom of commercial expression were also examined.

ARGUMENTS OF THE PARTIES

Britannia argued that ITC’s advertisement was designed to indirectly portray Britannia’s biscuits as unhealthy and inferior. It was submitted that the comparison was not made on equal parameters and that selective disclosure of nutritional information misled consumers. Britannia maintained that even without expressly naming its product as bad, the overall message of the advertisement caused reputational harm.

ITC, in its defence, contended that comparative advertising is a lawful and accepted practice. It argued that it merely highlighted the advantages of its own product and did not make any false or defamatory statement against Britannia. ITC further relied on the principle that commercial speech is protected so long as it remains truthful.

FINDINGS AND OBSERVATIONS OF THE COURT

The Delhi High Court observed that comparative advertising is legally permissible and that a trader may claim that his product is superior to that of a competitor. However, the Court emphasized that such claims must be truthful, accurate, and capable of substantiation. The Court held that a manufacturer cannot, under the garb of comparison, convey that a competitor’s product is inferior, unsafe, or undesirable. It was further observed that even indirect or implied disparagement can be actionable if the overall impact of the advertisement misleads an average consumer. On examining the impugned advertisement, the Court concluded that ITC’s claims and presentation had the effect of disparaging Britannia’s product.

SUGGESTION / PRACTICAL TAKEAWAY

This judgment highlights the importance of exercising caution while engaging in comparative advertising. Businesses should ensure that all comparative and health-related claims are supported by reliable evidence and presented in a fair and balanced manner. Advertisements should focus on promoting one’s own product rather than undermining a competitor’s reputation. Prior legal review of advertising material can prevent litigation and protect brand credibility.

JUDGEMENT

Year: 2013

The Delhi High Court restrained ITC Ltd. from continuing the impugned advertisements and held that misleading and disparaging comparative advertising is not protected under law.