NIVEA V. PONDS: DECEPTIVE ADVERTISING & TRADEMARK INFRINGEMENT

Introduction

Recently, a Single Judge Bench of the Delhi High Court comprising of Hon’ble Mr. Justice Anish Dayal gave the judgement in the case of Beiersdorf Ag (Plaintiff) versus Hindustan Unilever Limited (Defendant). The court looked closely at the rules and restrictions surrounding competitive advertising. The main claims in the case were that Beiersdorf’s “NIVEA Crème” and HUL’s “Ponds Superlight Gel” were unjustly compared in HUL’s promotional campaigns.

The case explores the use of a recognizable blue colour and product comparisons in marketing campaigns, posing issues with deceptive advertising and brand identification. The ruling carefully considers consumer perception, trademark rights, and comparative advertising law before deciding whether or not the promotional efforts were derogatory or deceptive to the “NIVEA” brand. A review of other cases involving comparable conflicts, market research, and the overall effect of the defendant’s advertising effort on the plaintiff’s product reputation are all included in the court’s consideration.

The trademark in question is depicted below and the colour blue which is in question.

     

Facts of the Case:

The facts of the case include the key information about both the companies.

Nivea: With the earliest registration in India dating back to 1943, NIVEA has acquired trademark registrations in more than 175 countries. The German Patent and Trademark Office have safeguarded the brand’s unique blue colour, known as Pantone 280C, which is used as a source identity.

NIVEA has won multiple honours on a national and international level and is regarded as one of the top 500 mega brands in the world. With large promotional spending, the brand’s global sales turnover for 2016 was estimated to be Euro 4.2 billion. In India, Nivea is classified under Class 3, which includes products like hair lotions and cosmetics. The date of the trademark filing was March 18, 1913.

 

Ponds: In order to show that it’s “Ponds Superlight Gel” left less greasy residue, the defendant, Hindustan Unilever Limited, compared it to a cream in a blue bottle that looked like the plaintiff’s “NIVEA Crème.” The comparison made by the defendant’s representatives between their gel product, Ponds Superlight Gel, and their heavy cream product, NIVEA Crème, was deemed deceptive because of the disparity in product categories.

By using a blue tub in promotional activities, the plaintiff claimed the defendant was demeaning their “NIVEA” product, implying an inferiority complex based on oiliness and creating a link with the plaintiff’s product. Because the blue tub is connected to the plaintiff’s “NIVEA” products and the plaintiff has a history of defending its trade dress and colour “Pantone 280C,” the defendant’s use of it was noteworthy.

Arguments:

Plaintiff: According to the plaintiff, the defendant violated their trademark by deceptively and negatively promoting their product in marketing campaigns using a blue tub that resembles the “NIVEA Crème blue tub.” The plaintiff alleges that the defendant copied the extremely distinctive trade dress of their “NIVEA” brand items, which has a particular blue backdrop (designated as Pantone 280C) that acts as a source identifier.

The plaintiff contends that the defendant’s comparison of a gel category product (Ponds Superlight Gel) with a heavy cream category product (NIVEA Crème) is unfair and fundamentally deceptive. The plaintiff cites a history of legal conflicts in which the defendant or its parent firm, Unilever, was implicated in comparable cases of defamation and deceptive advertising in different jurisdictions using the “NIVEA” brand.

Defendant: The defendants contended that comparative advertising is acceptable and implied that there was no disparagement because the contested conduct did not feature any specific brand. They argued that even if the “NIVEA” trademark was displayed, it would only be a comparison of the features of the products in relation to oily residue and not be considered disparaging.

The plaintiff’s allegation regarding the colour blue was contested by the defence, who pointed out that other moisturizers also have blue packaging, therefore the colour blue was not only connected to the plaintiff’s product. It was stated that the plaintiff is a natural target of comparative advertising, a popular marketing tactic, due to its position as the market leader or dominating competitor.

The company behind the “NIVEA” brand, Beiersdorf AG, charged HUL for employing dishonest comparison advertising techniques. Beiersdorf learned that sales agents from HUL were running in-mall advertisements that contrasted “Ponds Superlight Gel” with a product that looked like “NIVEA Crème” and was packaged in a blue tub. Using a magnifying glass, they demonstrated how the “Ponds Superlight Gel” did not leave an oily residue, but the product from the blue container did. This contrast was said to emphasize an alleged drawback (oily residue) of the product in the blue tub, misleading consumers and disparaging the ‘NIVEA’ brand.

Beiersdorf AG also cited a number of other incidents in which HUL and its parent business Unilever had used such comparative marketing strategies against ‘NIVEA’ goods, mainly in India:

  • 2012 ASCI Complaint: A TV commercial for “Fair & Lovely Moisture Plus” cream that subtly disparaged “NIVEA” products by moving a blue container off the screen prompted a complaint to be filed with the Advertising Standards Council of India (ASCI). The complaint had been upheld by ASCI, which suggested that the advertisement be taken down or changed.
  • 2016 ASCI Complaint: HUL complained against Beiersdorf regarding an advertisement for ‘NIVEA Crème’, highlighting the on-going contention between the two companies regarding comparative advertising practices.
  • 2018 Digital Media advertising: The ‘Ponds Light Moisturiser’ advertising was withdrawn after Beiersdorf’s Indian affiliate lodged a complaint comparing it to an undisclosed product in a blue tub. Because the products being compared were not made apparent, the advertisement was perceived as an unfair comparison that deceived consumers.
  • 2019 Instagram Story: A ‘Lakme Peach Milk Soft Crème’ Instagram story was taken down because it was compared to a product with recognizable blue packaging. The ‘NIVEA’ brand was once more linked to the blue packaging, and this association was perceived as an attempt to denigrate the product.

Comparative Advertisement in India:

In the judgement of Wipro Enterprises (P) Limited v. Reckitt Benckiser (India) Pvt. Ltd. in the high court of Delhi laid down the principles of Comparative Advertisement in India:

Direct and Indirect Targeting: Comparative ads may be allowed as long as they do not specifically mention the plaintiff’s product by name or by any other means, unless the circumstances of the market demand it. The inference must to be evident and not exclusively predicated on market share.

Truthfulness and Honesty: Ads need to be sincere and truthful. Ads that are misleading, fraudulent, or deceptive are not allowed, regardless of whether they promote the advertiser’s goods or disparage a rival’s.

Puffery: While puffery is acceptable, it must be separated from false claims of reality. As long as puffery does not mislead customers about the competitor’s offering, it is not actionable.

Disparagement: It is not acceptable to disparage the product of a competitor. It is permissible to assert that one’s product is better than a competitor’s, but it is not appropriate to assert that one’s own product is worse. A message that disparages the competitor’s goods, whether directly or indirectly should not be included in the commercial.

Consumer Perspective: The ordinary consumer, who is not naive and is able to read between the lines, is used to evaluate the advertisement’s impact. When assessing whether an advertisement is deceptive or derogatory, it is important to consider its entire impact and the lasting impression it makes on the audience.

Section 30(1) of the Indian Trademark Act 1999 permits the use of a registered trademark to identify goods or services, including comparison advertising, provided that honest procedures are followed and the brand’s reputation is not harmed.

Decision

The court declared that HUL could not assert ignorance of the distinctiveness of the ‘NIVEA’ trade dress and recognized that Beiersdorf’s use of the distinctive blue color for its ‘NIVEA’ goods was a well-established source identifier. It was clear from the parties’ past legal battles and arguments regarding comparable advertising that HUL was aware of the connection between the blue tub and the “NIVEA” product.

The plaintiff and defendant, the court further observed, have distinct categories of creams, effectively three categories, with varying percentages of fatty substance in each category. HUL decided to contrast the plaintiff’s heaviest product, “NIVEA Crème,” with their lightest product, “Ponds Superlight Gel.” It was deemed deceptive to compare HUL’s lightest product to a certain, recognizable blue tub cream in order to demonstrate that their gel was lighter without fully disclosing this information to the customer. The court ruled that if a feature that sets a product apart pertains to a criterion that would vary for a different category, then similar products can be compared.

The Beiersdorf AG v. HUL ruling establishes the parameters of comparison advertising and provides advertisers with a thorough framework for developing their promotional tactics that adheres to ethical and legal standards.

Author: Shreyas Mehta, 2nd Year student of Dharmashastra National Law University, Jabalpur