Anchor Agrees Before Calcutta High Court To Drop 'First and Only' Toothpaste Claims In 18-Year Dispute With HUL

Hindustan Unilever Limited (HUL) and Anchor Health and Beauty Care Private Ltd. have settled their 18-year-old commercial disparagement dispute, with Anchor agreeing not to advertise its toothpaste as the "first and only (Sirf)" toothpaste containing Triclosan, Fluoride, and Calcium or as India's "First All-Round Protection Toothpaste."

The Calcutta High Court accepted the Terms of Settlement and decreed the suit accordingly.

Justice Ananya Bandyopadhyay accepted the Terms of Settlement filed jointly by the parties. The court was satisfied that the compromise had been entered into voluntarily, was lawful and did not offend any statutory prohibition or settled principle of public policy.

HUL instituted the suit in 2008, seeking a decree of perpetual injunction restraining Anchor from publishing or telecasting advertisements, hoardings and publicity material claiming that its toothpaste was the "first and only (Sirf)" product containing Triclosan, Fluoride and Calcium.

It also sought to restrain claims that Anchor's product was India's "First All-Round Protection Toothpaste."

According to HUL, the campaign amounted to comparative advertising that crossed the permissible limits and entered the realm of commercial disparagement. It alleged that the advertisements portrayed its well-known "Pepsodent" toothpaste in a manner capable of impairing its commercial reputation while projecting Anchor's competing product through claims of exclusivity and superiority.

During the pendency of the suit, HUL obtained interim protection. On May 15, 2008, the Court recorded Anchor's statement that it would refrain from using the expression "first and only (Sirf)" in the impugned television advertisement.

Anchor also undertook not to erect fresh hoardings of the kind complained of and to take necessary steps, wherever practicable, to remove the offending publicity material.

The interim arrangement was affirmed by the Court on August 26, 2010. The injunction was extended to advertisements disseminated through web-based platforms as well.

After prolonged litigation, the parties negotiated a settlement. Under the Terms of Settlement, Anchor undertook not to telecast or publish, in any form of media, the impugned advertisements or any advertisement carrying the "first and only (Sirf)" representation or any substantially similar representation.

Anchor further agreed not to publish the impugned hoarding or any substantially similar hoarding or publicity material. It also undertook not to release any advertisement employing the expression "first and only (Sirf)" or any comparable representation having the effect of disparaging HUL, its brands, or its products.

Examining the settlement, the Court observed that a lawful compromise voluntarily entered into by competent parties "deserves judicial recognition." It clarified that its role extends beyond merely recording the compromise:

"The Court is required to satisfy itself that the settlement has emerged from the free volition of the parties, that its terms do not offend any statutory prohibition or settled principle of public policy, and that enforcement of the compromise would advance the administration of justice rather than impede it."

The Court found these requirements satisfied. It observed:

"The settlement neither affects rights vested in third parties nor seeks to circumvent any statutory mandate. On the contrary, it preserves commercial discipline by defining the permissible limits of future advertising and secures lasting quietus to a controversy that has remained pending before this Court for a considerable period."

Accepting the settlement, the court directed that the Terms of Settlement would form an inseparable part of the decree. It accordingly decreed the suit in favour of HUL.

The court further held that Anchor, along with its directors, officers, servants, agents, distributors, dealers, franchisees, marketers, advertisers, representatives, stockists, successors-in-business and all persons acting under its authority, would remain bound by every covenant contained in the settlement.

The decree permanently restrains the company from using the representation "first and only (Sirf)", any substantially similar representation, or any analogous commercial claim having the tendency to disparage HUL, its brands or its products, whether through print, electronic, digital, outdoor or any other medium.