Recently, Delhi High Court granted an interim injunction to Zydus against social media influencer Prashant Desai’s allegedly disparaging post on nutritional health drinks. SpicyIP Intern Manya Gupta analysis the Court’s rationale on disparagement and assesses the implication of this order on free speech. Manya is a fourth year student at the National Law University, Delhi.
Assessing the Free Speech v. Disparagement Debate in the DHC’s “Complan” Case Order
By Manya Gupta
On September 26 2024, the Delhi High Court granted an interim injunction to Zydus (“Plaintiff”) for protection of its trademark “Complan”, used in respect of a popular nutritional milk drink primarily targeted at kids. A single judge bench comprising Justice Saurabh Banerjee gave a prima facie finding that Prashant Desai (“Defendant”), a social media influence, disparaged the Complan trademark by uploading a video telling people not to give the drink to their kids as it is extremely unhealthy.
This marks another order in a series of orders (which are discussed here and here by Srujan Sangai and Prashant Reddy) where the court invokes the test of disparagement, which is used in comparative advertising cases, for setting the threshold for reviewing a product. This legal transplantation leads to muffling the concerns expressed by content creators and influencers. I shall analyse the Court’s ruling on two aspects: its observations on disparagement, and its application of the interim injunctions on this front.
Arguments
The Plaintiff (Zydus) prayed for an interim injunction contending that the Defendant’s actions amount to disparagement due to infringement under S. 29(8) of the Trade Marks Act, 1999. Curiously, they also argued that the post also flouted the Guidelines for Influencer Advertising in Digital Media in India 2022 (hereinafter “ASCI Guidelines“). It must be noted that the guidelines are not binding, however elegant. Also, S. 29(8) is meant for “infringement by advertising of the mark”, and the ASCI guidelines too, as the title indicates, are influencer “advertising”. Generally brought up in the context of comparative advertisements, it’s unclear how the same was attracted in the present case (more on this below).
Desai argued that they were a credentialed nutritionist with requisite degrees and that no case for infringement has been made out as the criticism is true. It was also argued that the plaintiff has not suffered any special damages as the impugned social media post included three brands of other drinks and not just Complan. Lastly, Desai also invoked free speech as a defence to their post under the trusty protections of Article 19(1)(a) of the Constitution.
I’m Hurt ![🙁]()
– The Essentials of Trademark Disparagement
– The Essentials of Trademark Disparagement Trademark disparagement is included under S. 29(8) of the Trademarks Act. It was taken to be a part of S. 29(8) after the DHC held that comparative advertisement is permitted under S. 30(1), but it cannot amount to disparagement under S. 29(8). To establish disparagement certain factors are required to be fulfilled and in this case both parties relied on the test laid in Pepsi Co. Inc. v. Hindustan Coca Cola Ltd; (i) the impugned statement must be false; (ii) the statement must have been made with malice; and (iii) the plaintiff should have suffered special damage. As clear from the above standards, the onus in disparagement to establish that the impugned statement is false falls on the trademark holder, which is different from the one applied in defamation. The Court held that there is a case made out for trademark disparagement as the Defendant’s statements were malicious, and were incorrect. Notably, it did not make any observations on the requirement of special damages.
On the falsity of the claim, Zydus contended that Desai’s assessment of Complan being unhealthy is false as they include natural sugar in the total calculation of sugar displayed in their product. They argued that since there are no mandated standards for natural sugar, they should not be used and added to show the total sugar in the product; and in any case, if it is added the total amount alleged by Desai is incorrect.
Desai, on the other hand, defends his claim of “Don’t Give Complan to Your Kids Ever” with evidence that Complan has over 40g-50g of sugar (200% in excess of the daily requirement for kids) and is not a “health drink”. It responded to the Plaintiff’s evidence of Complan containing less sugar by stating that they have only ‘added sugar’ which is not ‘natural sugar’ (Para 30). While their submission does not explicitly state why added sugar is unhealthy, longstanding research has proved that both varieties are damaging, something that is ignored by the food industry frequently. It would’ve been helpful if it was clear what claim was being checked – whether it was the total sugar content (which can be easily fact-checked by testing the product by a court appointed third party), or whether the amount of sugar in the product was ‘unhealthy’, which, arguably is a more complicated question.
Regardless, on the requirement of the claim being false, the Court seems to have shifted the burden of proof to establish whether a claim is false from the plaintiff to the defendant and has summed up its relevant reasons in this regard in merely two statements in the order: first, that “the impugned video [….] is in fact false on the face of it”, and second, that “The contents/ statements therein are not backed by any substantive basis […] therefore […] are nothing short of being false”; without any further reasoning.
The Responsibility of Being a Responsible Influencer
In upholding the disparagement claims of the plaintiff, the Court uses a random notion of the need to be a “responsible” influencer vaguely throughout the Order. It also relies on it to prove multiple elements such as malice and to reject the defendant’s freedom of speech defence.
It proceeds to state that the “tone, tenor and language…speak volumes about the overall conduct of the Defendant” and by uploading the legal notice on their social media account rather than taking down the impugned video, the Defendant was not acting as a responsible ‘Social Media Influencer’. In this context, this is severely restrictive for free speech as the scope for criticism being made contingent on credentials would mean that general individuals would not be able to comment, or criticise any field which they do not have a degree in.
While Desai does not have formal degrees of health and medicine, and is a Chartered Accountant, they contended that they like studying about health and fitness. They also submitted to having obtained several certifications from different universities, including some on ‘Nutrition Science’ and ‘Exercise Physiology’ from Stanford University of Medicine; and ‘Health and Wellness: Designing a Sustainable Nutrition Plan’ from the Harvard Medical School (Para 26-27). The Court impliedly did not consider these adequate (Para 40) and it begs the question of what exactly are credentials. Does the Court mean hard credentials of being a doctor or something similar? And if that is the case, then this would be a severe limitation on free speech, restraining the freedom of ordinary people and influencers to make similar claims to talk about such products.
The Court also couples this newfound concept of a responsible creator with the fact that the defendant did not respond to the plaintiff’s legal notices, to assume malice. The judicial standard for malice is “using words with the knowledge that the words are false or inaccurate” and understandably, proving actual knowledge is difficult for want of evidence, however in the present case, the Court has chosen to use factors such as “tone” and credentials to prove malice (also previously discussed here and here). However, in my opinion, these could simply be an aspect of the creative freedom of content creators, and cannot be equated to ill intent, or an intent to harm. What’s more concerning is that the Court places the burden on Desai to prove that he has not acted maliciously, as done by the Bombay High Court previously.
Does Free Speech Not Extend to Criticizing “GOI Approved Products” ?
On the point of free speech, the Court in addition to the above states that there is a balance between free speech and reputation rights (Para 46, 47). However it discounts the right to free speech with the claim that the post has tarnished the reputation of an FSSAI endorsed product.
“The defendant cannot be allowed to openly belittle, malign or vilify the plaintiff’s product…which has been recognised/ authorised by the Government of India. Allowing the defendant to do so would be against the very tenets of the established law as it would be against those very requisite authorisations as applicable and in accordance with law…”
Para 53 from the High Court Order
Essentially, the Court states that it cannot allow the Defendant to make such statements against a product that has been approved by the Government (Para 53) (see above). This would be a significantly new standard in Article 19(1)(a) jurisprudence and goes starkly against the larger free speech jurisprudence. It is important to note that even the apex court has observed that criticism of the government is an essential aspect of democracy and while these products are “government approved”, retrospective rejections happen often and no authority is immune from mistakes and procedural lapses, something observed in the US’s Food and Drug Administration.
This poses significant implications on IPR and free speech jurisprudence, as it would mean that the scope for criticism of any approved product would be significantly limited without any basis. What would the Court say to approvals being later rejected (something that often happens), and popular products being questioned years after their approval?
Moreover, a balance between free speech and reputation is envisaged as an exception in the Act under S. 30(1) which allows use of a trademark as long as it follows (a) ‘honest practices’, and (b) doesn’t take ‘unfair advantage’, and is not ‘detrimental’ to the trademark.
Back to Square One: The Defendant’s Role in Interim Injunctions
Ignoring the Defendant’s submissions on veracity of claims, the Court thus holds that there has been a prima facie infringement and rules that the information in the defendant’s post is unverified, false and has anyway not been made by an accredited individual (Para 69). Further, it holds that the other requirements of disparagement i.e., malice is fulfilled and also, sans analysis holds that there have been special damages caused to the Plaintiff (despite the fact that the post had three brands).
Following from the above, the Court rules that due to the aforesaid conditions being fulfilled, the balance lies in favour of the plaintiffs as they have been selling the product for decades after the requisite approvals from the FSSAI. (Paras 69-74) and that the Plaintiffs would suffer irreparable harm given the influence of social media and their reputation in the market.
Now, the standard for a prima facie case cannot be stringent, however it can also not be without analysis of the claims of both sides. Especially for interim injunctions which are a “nightmare” to vacate. The injunction comes at a tricky time between creators and it throws a wrench in the works of the DHC in cases such as Dabur and Silvermaple.