The Delhi High Court’s Stand on Social Media Disparagement and Trademark Protection: Zydus Wellness Products case

Introduction

In Zydus Wellness Products Ltd. v. Mr. Prashant Desai[1], the Delhi High Court addressed allegations of disparagement and trademark infringement concerning the well-known product “COMPLAN.” The Plaintiff sought to restrain the Defendant , a social media influencer, from making false and misleading statements that could harm the brand’s reputation. The court emphasized the responsibility of influencers to communicate accurate information, especially regarding health-related claims, and ruled in favor of the Plaintiff. The analysis concluded that while freedom of speech is essential, it does not extend to harmful misinformation, reinforcing the need to protect established trademarks from disparagement.

Arguments of the Parties

Plaintiff’s Submissions

• The Defendant  has a significant online presence with 1 million Instagram followers and 60,000+ Facebook followers. The impugned video has reached millions of views, influencing a wide audience and misleading them with false claims, thereby damaging the Plaintiff’s reputation. The Plaintiff refers to the Gillette India case to support this.[2]
• As a social media influencer, the Defendant  should have exercised caution, especially when portraying himself as a nutritionist, which he is not. His reckless statements mislead the public into believing that the Plaintiff’s product is harmful to children’s health, causing defamation.
• The Defendant  violated the ASCI guidelines for influencer advertising[3] by not disclosing required medical qualifications while discussing health-related topics. The video also breaches the Guidelines for Preventing Misleading Advertisements and Endorsements (2022).[4]
• The statements in the video are false and malicious, damaging the Plaintiff’s goodwill. The Plaintiff argues that the statements meet the “trinity test” for defamation, relying on the Pepsi Co. case.[5]
• The Defendant  misrepresented the sugar content in COMPLAN, claiming 40g-50g of sugar, when in reality, 2 tablespoons contain only 8.8g of added sugar.
• The Defendant  distorted scientific facts by ignoring the WHO’s distinction between added and intrinsic sugar, misleading viewers with half-truths about the sugar content in COMPLAN.
• The Defendant  specifically targeted the Plaintiff’s COMPLAN product, along with Bournvita and Horlicks, implying malicious intent. The Plaintiff references the Unilever Industries case to support the claim of targeted disparagement.[6]
• While the Plaintiff acknowledges free speech, it is not absolute. The Defendant  cannot use this right to harm the Plaintiff’s reputation. The Plaintiff cites the Subramanian Swamy case to emphasize the limitations on free speech.[7]
• The Plaintiff seeks an ad-interim injunction to prevent further dissemination of the impugned content.

Defendant ’s Submissions

• The Defendant  is a Chartered Accountant and Certified Management Accountant with a degree from St. Xavier’s College, and certifications in health and nutrition from Stanford University, Harvard Medical School, and other courses.
• ASCI guidelines are non-binding and only serve as guidelines, not enforceable obligations. This has been upheld in cases like Century Plyboards[8] and Dish TV India Ltd.[9]
• To establish disparagement, the Plaintiff must show falsity, malice, and special damages, none of which are demonstrated here. The Defendant  cites Dabur India Ltd.[10] and Hindustan Unilever Ltd.[11]
• The impugned video provides factual information about COMPLAN, including sugar content. The Plaintiff’s analysis is misleading by focusing only on added sugar.
• The video addresses multiple products, not just COMPLAN. It aims to inform the public without malice, and no intent to harm the Plaintiff can be inferred. The Defendant  refers to the Kaleesuwari Refinery case.[12]
• The video promotes awareness of high sugar intake in children and is protected under Article 19(1)(a) of the Constitution, as it is informative and not defamatory. The Defendant  cites Shreya Singhal v. UOI.[13]

The Court’s Decision: Findings and Analysis

• Social media influencers have a responsibility to ensure that their statements about products are accurate and reliable. The court noted that the Defendant , who had no relevant qualifications or expertise, made claims about Complan without any scientific backing. The court emphasized that while influencers enjoy freedom of speech under Article 19 of the Constitution, their speech is subject to reasonable restrictions, particularly when making statements related to health and nutrition.
• The court observed that the video discouraging the use of Complan was uploaded without any professional or scientific expertise. The ASCI Guidelines require that health-related advice be given only by qualified professionals, such as doctors, nutritionists, or dieticians.
• The court recognized the Defendant ’s video as an act of product disparagement. Disparagement was established through the Defendant ’s statements, which discouraged parents from giving Complan to children, despite a lack of any supporting medical or scientific evidence.
• The Plaintiff claimed that the video, which garnered millions of views, comments, and shares, caused significant damage to the brand’s reputation and sales. The court noted that Complan had been a trusted brand in India since 1956, and the widespread dissemination of the defamatory video harmed the product’s market standing. The Defendant ’s refusal to remove the video, even after receiving a legal notice from the Plaintiff, was viewed by the court as an act of malice.
• The court ruled that the video, still available online, gave rise to a continuous cause of action. This meant that each time the video was viewed, the cause of action against the Defendant  was renewed. The court referenced the Bengal Waterproof Ltd.[14] case and the Midas Hygiene Industries[15] case, supporting the position that no delay in filing the suit was to be considered.
• In its interim decision, the court found that the Plaintiff had successfully established a prima facie case of product disparagement. Consequently, an interim injunction was granted under Order XXXIX, Rules 1 & 2 of the Code of Civil Procedure (CPC). The court restrained the Defendant  from continuing to distribute the video or making further disparaging remarks against Complan, pending the final outcome of the case.

Analysis and Conclusion

The court’s decision underscores the critical role of responsible communication in the digital age, particularly for social media influencers. By examining the Defendant ’s lack of expertise and the baseless nature of his claims about Complan, the court reinforced the necessity for accuracy and accountability in health-related discussions. The analysis highlighted the distinction between legitimate criticism and disparagement, emphasizing that unauthorized reproduction of branding elements could lead to significant reputational damage. Ultimately, the court’s ruling reflects a broader imperative to protect established trademarks while balancing freedom of speech, affirming that harmful misinformation cannot be shielded under the guise of personal opinion.

[1] Zydus Wellness Products Ltd. v. Mr. Prashant Desai, CS(COMM) 684/2024.

[2] Gillette India Ltd. v. Reckitt Benckiser, 2018 SCC OnLine Mad 1126.

[3] https://www.ascionline.in/wp-content/uploads/2023/08/GUIDELINES-FOR-INFLUENCER-ADVERTISING-IN-DIGITAL-MEDIA.pdf.

[4] https://consumeraffairs.nic.in/sites/default/files/CCPA_Notification.pdf.

[5] Pepsi Co. Inc. v. Hindustan Coca Cola Ltd., 2003 SCC Online Del 802.

[6] Unilever Industries Pvt. Ltd. v. Naresh Gehani, MANU/WB/0887/2023.

[7] Subramanian Swamy v. Union of India, (2016) 7 SCC 221.

[8] Century Plyboards v. ASCI, 1999 SCC OnLine Bom 444.

[9] Dish TV India Ltd. v. ASCI, 2016 SCC OnLine Del 6715.

[10] Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd., 2009 SCC OnLine Del 3940.

[11] Hindustan Unilever Ltd. v. Cavincare Pvt. Ltd., (2010) 44 PTC 270 (Del).

[12] M/s Kaleesuwari Refinery v. M/s M.K Agrotech Pvt. Ltd., 2016 SCC OnLine Mad 2966.

[13] Shreya Singhal v. Union of India, (2015) 5 SCC 1.

[14] Bengal Waterproof Ltd. v. Bombay Waterproof Mfg. Co., (1997) 1 SCC 99.

[15] Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia, (2004) 3 SCC 90.