[This post has been authored by SpicyIP Intern Tanvi Agarwal. Her previous post can be accessed here. Tanvi is a second-year student pursuing BA LLB at the National University of Juridical Sciences. She is intrigued by the field of Intellectual Property Law and wishes to explore the same.]
With the growth of competitive businesses around the world, industries are indulging in practices to promote their own goods to make it more attractive for consumers. In this process, they sometime tend to promote their product at the cost of dishonouring or discrediting their competitor’s product. This results in common claims of ‘disparagement’ in trademark law. However, in an interesting turn of events, Winzo, that operates a gaming app, sued Google for displaying a disclaimer on their website when their app is downloaded by any user. Winzo alleged that this disclaimer disparages its mark and thus denigrates its reputation. The court, however, had a differing view and has clarified that there is no disparagement on grounds of lack of comparative advertisement and permissibility of such disclaimers under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (‘IT Rules, 2021’).
Previously, trademark cases have been entertained in situations where disclaimers/ warnings have been given along with products. For instance, the tobacco plain-packaging dispute before the WTO concerning the trademark proprietors’ right vis-à-vis health disclaimers and warnings that accompany cigarette and tobacco packages. (See here for the extensive discussion on this issue). But this is an unique instance where a trademark suit has been filed for disclaimer/ warning that has been given alongside a mobile application.
The plaintiff, ‘WinZO’/ ‘WinZO Games’, a digital gaming and technology company offers over seventy games in different formats which is made available to the users through mobile application and the plaintiff’s website. The plaintiff in November 2021 was made aware of disclaimer/warning to users upon an attempted download of the plaintiff’s application by the defendant, Google. The text of the warning read as “This type of file may harm your device. Do you want to keep WinZO.apk anyway?” Pursuant to this, the plaintiff filed a suit seeking a decree of permanent injunction along with other ancillary reliefs, claiming (inter alia) that the warning of the defendant disparages the plaintiff’s digital gaming services under the ‘WinZO’/ ‘WinZO Games’ marks.
The order has firstly discussed the viability of the disclaimer. The court held that the warnings were not of an unique nature but was mandated under Rules 3(1)(i) and Rule (1)(k) of the IT Rules, 2021 as well as Rule 8 of the IT Rules, 2011 to protect the user against potential threats. Furthermore, it was held that there was no infringement of trademark under section 29 of the Trademarks Act (‘the Act’). Lastly, the ground for disparagement was dismissed due to lack of comparison between the products.
Claim for Disparagement
As a counter to the plaintiff’s claim of disparagement, the defendants claimed that “there is no comparison of the plaintiff’s application with any of the defendants’ products or services.” The court has also relied on the reasoning of the defendant to dismiss the claim for disparagement by stating: “As regards the ground of disparagement, indisputably, there is no comparison between the products/services of the defendants with that of the goods/services of the plaintiff. Nor is there any advertising for any goods or services. Therefore, there is no competing interest of the products/services of the defendants involved and in my prima facie view, no case of disparagement is made out.”
A collective reading of the defendant and the court’s reasoning indicates a presumption that a broader goal of competing interests of both the products must be made out to satisfy a claim for disparagement. One method of determining this competing interest is to check the presence of comparison between the products or existence of ‘comparative advertisement.’ The presumption can be broken down into two factors that need to be analysed to see if they are a mandatory condition for disparagement to occur: one, whether an advertisement is needed; second, whether the advertisement must entail a comparison between the products. Here, the court relying on the reasoning available in the existing jurisprudence paid heed to having comparative advertisement as a mandatory condition for disparagement. However, it can also be assessed as a hastened decision by the court where it had the possibility of analysing a claim for disparagement outside the lens of comparative advertisement.
Comparative advertisement: A mandatory claim for disparagement ?
The issue of comparative advertisement has previously been discussed here, here and here on the blog. It is the process through which the promoter of a product compares their product with another similar product. It is permitted as long as such a comparison shows their own product in a good light. However, comparative advertisement encroaches in the domain of disparagement when in light of the comparison between the two products, the competitor’s product is defamed or is shown in a bad light. The existing judicial precedents also indicate how these two areas run parallel to each other. In Reckitt & Colman of India v MP Ramachandran the court held that “comparative advertising is permissible, however, a promoter of a product is not entitled to defame the goods of its competitor”. Moreover, when the Delhi High court in Pepsico. V. Hindustan Coca Cola tried to establish a test for disparagement, it did so with respect to the advertisement in question. It held that factors like the intention, manner and storyline of the commercial had to be taken into account while determining whether an advertisement disparaged a product or not. Therefore, the existing jurisprudence implies that disparagement occurs in the context of an advertisement which involves comparison between two products.
However, in the present case there was no comparison between the services of the parties and thus, the claim for disparagement was dismissed. While comparative advertisement claims involve comparison between like products, there exists a substantial difference between the services offered by Google and that by Winzo. Furthermore, even if the services are presumed to be alike, the displaying of a warning by Google did not involve a comparison between the services. These warnings are also in the furtherance of public interest and prevent the public from getting misleaded. So, while they may have the potential to defame the brand’s trademark, the aspect concerning public interests outweighs any private interest that these brands may have associated with their mark, dismissing their claim for disparagement.
‘Use’ of a trademark
However, this case ignites the curiosity to explore the argument for disparagement from a different angle. To constitute disparagement there first must be a ‘use’ of the trademark.
The court has ruled out the claim for infringement by stating that there has been no ‘use’ of the trade mark under section 29 of the Act. First, the mark would not constitute a‘ mark
likely to be taken as being used as a trade mark’ in terms of Section 29(1) of the Act as the plaintiff’s name was only being used to identify the file being downloaded for the purpose of the warning. Second, the impugned mark did not satisfy the conditions laid down in either section 29(4) or section 29(6) of the Act.
Limiting the nature of ‘use’ of the trade mark to such an interpretation substantially excludes the scenario where a trademark although not ‘used’ in the above-mentioned manner is still detrimental to its distinctive character or repute. While section 29(8) of the Act could have emerged as a solution to this problem the fallacies present in the same debar it from doing so as analysed below. Section 29(8) of the Act lays down certain grounds where the ‘use’ of a trademark constitutes infringement. And section 30(1) of the Act lays down when such a ‘use’ of the trademark would not constitute infringement and emerges as a defence to a claim under section 29 of the Act. It makes way for a trademark whose use is “ not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark.” However, to claim infringement for any such trademark under section 29(8) is possible only when such trademark is used in the context of an advertisement as section 29(8) of the Act reads “ A registered trade mark is infringed by any advertising of that trade mark if such advertising…” This need for advertisement prevents the plaintiff from establishing a claim of disrepute to its trade mark. This exclusion could potentially harm the rights of a trademark owner and cause damage to their reputation. Therefore, in such a scenario, a possible feasible route for making a claim for the plaintiffs was to pursue a claim for libel.
There is a need to acknowledge unique circumstances of infringement of the trademark owner’s mark where there is a ‘use’ of the mark outside the ambit of comparative advertisement which nonetheless disreputes or defames the mark. The court’s analysis in the present case was in consonance with the statutory interpretation and existing jurisprudence on comparative advertisement and disparagement. However, it was also a missed opportunity of delving into a potential discourse for disparagement from outside the view of comparative advertisement and the statutory method of identifying ‘use’ of a mark.