For more intellectual property updates follow our WHATSAPP CHANNEL and SUNS LEGAL | LinkedIn

Written by Keerthana M, Legal Intern, and Verified by Sunil Jose, Managing Attorney, Suns Legal.

CEAT LIMITED V. APOLLO TYRES LTD. COM IPR SUIT (L) NO.28069 OF 2024

Persuasive messaging and enhanced visual stimuli are key traits of Video Commercial (VC) advertisements. The immersive storylines and creative representations captivate viewers and impart fair market value to brands. They not only fuel consumers’ desire to purchase specific products but also create preconceived notions about them.

The Bombay High Court recently issued an ex-parte order in Ceat Limited v. Apollo Tyres Ltd., restraining Apollo Tyres, a leading Indian tyre manufacturer, from broadcasting a VC advertisement that ridicules and disparages its competitor, CEAT. In an era where viewers can skip ads on platforms like YouTube, does it matter if one brand sabotages the reputation of another as a competitive strategy? This recent order answers that question.

CEAT Ltd. (“plaintiff”) filed the present suit against Apollo tyres (“defendant”) for the acts of disparagement, slander and infringement of CEAT’s registered trademark. 

Both disparagement and slander involve spreading false statements, but they target different subjects. Disparagement harms the reputation of a business or product, while slander involves spoken statements that damage the reputation of an individual or entity.

The plaintiff, who owns the well-known and distinctive trademark ‘CEAT’, is involved in manufacturing and marketing automotive tyres and related products. Both the Courts and the Registrar of Trademarks have recognized ‘CEAT’ as a well-known trademark. Around 2020, the plaintiff developed a unique tyre tread design for its ‘All-Terrain’ (AT) tyres, intended for motor vehicles, and named it ‘CROSSDRIVE AT’.

Justice R.I. Chagla included the entire storyline of the video commercial in the judgment. The commercial creatively depicts a conversation between the front tyres of two MAHINDRA THAR SUVs: a black one with worn-out tyres, claimed to be the plaintiff’s CROSSDRIVE AT, and a maroon one with brand-new APOLLO APTERRA AT2 tyres. Throughout the commercial, the plaintiff’s tyre is portrayed as inferior to the defendant’s tyre.

The Court also cited the case of USV (P) Ltd. vs. Hindustan Unilever Ltd., 2022 SCC OnLine Bom 1471. It emphasized that advertisers must be careful when using exaggerations to attract consumers’ attention, ensuring they do not discredit other products in the same category.

The Judge quoted some well-established principles of disparagement of goods from one of his recent decisions, Hindustan Unilever Limited vs. Abbott Laboratories & Ors., Interim Application (L) No. 27529 of 2024 in Commercial IPR Suit (L) No. 27527 of 2024, wherein it was mentioned that a tradesman can declare his goods to be the best or even better than his competitors’ goods but he cannot directly or indirectly say his competitors’ goods are inferior. If he does so, he then slanders the goods and defames his competitors which is unacceptable.

He also specified the three crucial factors to decide the question of disparagement, (i) Intent of the commercial; (ii) Manner of the commercial; and (iii) storyline and the message sought to be conveyed by the commercial. Out of these three, the “manner of commercial” is very important and if it ridicules the competitor’s product, it amounts to disparagement.

The court found sufficient evidence of disparagement and slander in the VC advertisement, supporting the plaintiff’s claims. The use of spoken words “SEE-IT, SEE-IT” and “SETH”, phonetically similar to ‘CEAT’, which was intended to create a bias in the viewers’ minds. The plaintiff pleaded that such use infringes the trademark ‘CEAT’ under Section 29(9) of The Trademarks Act, 1999 which protects registered trademark owners from unauthorized use of similar marks that could mislead consumers. If a trademark is used in a way that causes confusion, it can be deemed an infringement, allowing the trademark owner to take legal action. The conversation between rival tyres, which includes mockery by the defendant’s tyre, visual representation denoting the worn-out condition of the plaintiff’s tyre and the comments posted by the general public who have identified the plaintiff’s tyre in the impugned advertisement corroborate the same. The VC ad was circulated across different online platforms, including YouTube, Instagram, X, LinkedIn, and Facebook. It was also mentioned that the disclaimer shown is hardly visible and hence is of no significance. The word “entities” used in it signals that the defendant knew it referred to a juristic company, namely the plaintiff.

The Hon’ble court, prima facie, found that the impugned advertisement denigrates and disparages the plaintiff’s product by applying the well-settled principles of disparagement. The balance of convenience was also seen to be in favor of the plaintiff. (The balance of convenience is a legal principle used to determine which party would suffer greater harm from the granting or denial of an injunction, weighing the potential consequences of each outcome.)

The Court was also of the opinion that if the ex-parte order is not granted, the plaintiff shall suffer irreparable loss which cannot be compensated in monetary terms. Thus, the order was passed against the defendants and connected parties, temporarily restraining them from circulating the impugned advertisement. They were also asked to take down the advertisement from all platforms to prevent further loss to the plaintiff. The matter was disposed of on the final day of hearing wherein the parties had agreed to settle.

COMMENTS

Comparative advertising is a widely used marketing strategy by brands worldwide. However, the issue often lies in its execution. The Trademarks Act, 1999 permits its use as long as it does not mislead, discredit other trademarks, and fairly compares products. This case serves as a reminder to advertisers to adhere to honest practices and avoid confusion among consumers, thereby promoting an ethical trading environment.