Don’t Offend My Oats: Generic Disparagement, Market Leadership, and Marico Limited vs. Alpino Health Foods

[lokesh vyas]

Trademark law has an interesting concept—generic disparagement that goes a bit further than general disparagement. In this post, I discuss one such case from the Delhi High Court: Marico Limited vs. Alpino Health Foods Pvt Ltd, where the plaintiff (“Marico”) seemed to take the whole “disparagement” thing a bit too personally (or perhaps, generally).

Facts: The story has it that Marico has been in the oats business since 2010 and sells it under the name “Saffola Oats,” but it has many flavors. It arguably has a market share of around 45%. Enter the defendant (“Alpino”), who is in the ready-to-eat product business and has a peculiar problem with the current oats product—it calls oats “bland,” a “flavorless punishment disguised,” “impossible to be eaten,” and “a scam since 2006.” It even called the oats “choona” (lime powder), which can be used for construction. All this was to create a market for its newly launched chocolate, “Alphine Super Oats.” 

But here’s the kick: despite all this anti-oat talk,  Marico isn’t the target. Instead, the entire concept of oats is under attack to create space for “Alphine Super Oats.” Yet, the oat leader, Marico, got offended and called it a case of generic disparagement. It claimed that “any campaign being run against oats as a food product will directly impact the trade of the Plaintiff and will cause irreparable harm and injury to” it. Alleging it is a generic disparagement, Marico took Alpino’s hyperbole of oats being choona too seriously, calling it a “dangerous and misleading association.” A few fun memes created by Alpino questioning oats also peeved the plaintiff, Marico. (Don’t miss them on pages 8-10) Though, as per the order, Marico also sought a remedy for unfair trade practices, the order does not discuss that. Nor will I do it here.

While I fail to fathom how offending “oats” as a product sans any mention of Marico’s product peeves it (my reasons are below), the Court favored this unfounded demand, holding it to be a prima facie disparagement case.

Comments: First off, as trite as it may seem, given the courts’ frequent skimming of these factors, it is worth reminding that three factors must be satisfied to grant an interim injunction: prima facie case, irreparable loss, and balance of inconvenience. These factors become more critical when a case concerns granting an ex-parte injunction (See, e.g., Tejaswini’s post). Yet, the present Court summarized them in one paragraph with a “goes-without-saying” style, without recording its reasons (see para 55). Nor did the Marico categorically demonstrate how each factor (both for proving temporary injunction and disparagement) was satisfied, aside from tossing around a few arguments here and there (see paras 42-50 for a hunt for “key” words related to the temporary injunction and disparagement, pun intended).

Anyway, let’s cut to the meat of the matter: generic disparagement—a curious creature of trademark law that, if misunderstood, can easily curb the creative freedoms of advertising. This point is well noted in DHC’s recent Zydus Wellness Products Ltd. V. Dabur India Ltd. case, which Praharsh and Ananya analyzed here. I use this case to analyze the present case.

While the Court in the Oats case found it to be a prima facie case of generic disparagement, to determine that, we have three key factors to assess: (i) the intent of the commercial, (ii) the manner of the commercial, and (iii) the overall effect of the advertisement. Of these, the “manner of the commercial” often carries the most weight, as the Pepsi vs. Coca Cola case notes in paragraph 13. However, as the Zydus case clarifies, these factors are not meant to be taken with hypersensitivity; instead, the overall appearance from an average consumer’s viewpoint needs anchoring. 

But let me confess here: while logic does help make the inferential relations explicit, enabling us to see the internal tensions and factors behind our conscious choices, it’s not some golden key to unlocking legal truths. Therefore, I don’t think there’s a right/one/objective/correct legal logic that rights legal wrongs, especially when it comes to this kind of factorial analysis. It all hinges on how persuasively one argues a case and cleverly curates these (overlapping?) factors to support either side. Here, I go with the most straightforward and obvious interpretation that was also accepted by the Marico and backed by precedents.

The first factor, the intent of Alpino’s advertisement, is apparently to promote its own product, or more accurately, to create a space for its “Alpino Super oats.” Marico also admits this part. However, it is to be noted that Alpino took it too far under the name of “a fun and quirky way.” Calling something a scam and claiming to reveal “truth” demands more facts than “fun.” In the light of DHC’s Dabur v. Advertising Standards Council of India (though not related to disparagement as such), which noted: “there is very thick line that divides a harmless hyperbole and misleading claims made in advertisements, especially, when the products relate to human consumption and claims are made about the superlative qualities of the products on human health.” However, I’d tilt this in Alphino’s favor, as it doesn’t allude/attack Marico’s product—“Saffola Oats”—a scam. This can also be deciphered from the fact that Alpino has been calling out the “scam” since 2006, while Marico only entered the market with its product in 2010. So, any connection to Marico is more of Marico’s own self-induced harm than Alpino advanced disparagement.

Secondly, regarding the manner of the commercial, one should ask: Is the comparison broadly truthful, or does it veer into false disparagement? While the former is permissible, the latter is not. And here’s where it gets tricky—Alpino’s statements are certainly hyperbolic, funny, and clearly false. Why? For one, an average intelligent consumer (not a moron in a hurry) would not seriously believe that oats are equivalent to “cement, adhesive, washing powder, insect killer, or even human ashes (‘asthiyaan’).” Forsooth, these wild analogies –like Oats being construction material, carrom board powder, or even “lifeless, boring and impossible to finish” good– are more comedic than convincing and aren’t meant to be taken seriously. The Zydus case rightly remarked, “[t]he consumers are cognizant of the fact that advertisements are one-sided commentary put out by the manufacturers and sellers for the promotion of their products and are inherently biased in nature.” So, the manner is not really harmfully disparaging Marico’s product. Instead, it shows Alpino’s creative efforts.

The third factor is the overall effect of the advertisement. Hither, we ask whether the advertisement promotes Alpino’s product or disparages a rival product. In this case, the Alpino isn’t directly attacking “Saffola oats” but is taking a creative jab at the “entire oat category.” Note that disparagement would only occur if Marico owns the “oats” as a mark and/or people associate it with Marico. And that’s not a logically sensible scenario to surmise, as it would create a de facto monopoly over “oats” by Marico—something it did not ask for. Though, by granting the interim injunction, the court has already laid a path for that.

Taking market leadership, apparently, the rub of the matter is also not a determining factor. As the Zydus case points out (para 41), “[w]here there is no overt or covert reference, merely on the basis of market share it cannot be presumed that the advertisement is directed towards the market leader.” Importantly, the Court tied this to “freedom of expression,” noting that “freedom for advertisers [in generic disparagement] would be greater than those cases falling into other categories.” It also stated that:

“It cannot be said that every generic comparison would be referencing to the market leader which would, in the opinion of the Court, be curtailing freedom of advertising to a considerable extent. Mere allusions, in the absence of a decipherable comparison would not be sufficient to make out a case of generic disparagement. An advertiser ought to have the freedom to make advertisements with generic comparison highlighting the features of its own product and if the same is done without an allusion to any market leader, objection cannot be raised unless representation being made is absolutely false or misleading.”

For these reasons, I believe the court’s decision is problematic.

That’s from my end.

Here’s a background story to this post: This draft evolved singingly since its first “final” draft, thanks to Praharsh and Swaraj’s feedback. Special shoutout to Swaraj for pushing me to rethink my analogy of generic disparagement to “someone yelling “Pagal/Crazy!” in a crowd and one person turned around, feeling targeted.” While I found that very convincing (I won’t lie), I realized it could dilute/over-amplify the very nature of the legal concept at hand. Guess what he made me watch? Gino D’Acampo: “If my Grandmother had wheels, she would have been a bike.” A fun watch it was.

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