Calcutta High Court Sets Aside Temporary Injunction Against Sun Pharma Over Emami's 'Zandu Balm' Disparagement Suit

The Calcutta High Court has recently set aside a temporary injunction restraining Sun Pharmaceutical Industries from airing an advertisement that Emami alleged disparaged its “Zandu Balm”, “Mentho Plus Balm” and “Zandu Ultra Power Balm”.

A Division Bench of Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya held that the advertisement did not specifically target Emami's products and that the company had failed to make out a prima facie case for an injunction.

The court observed, “There is precious nothing to connect the product of the plaintiff with the advertisement.”

The court noted that the advertisement did not carry Emami's brand name or any distinctive shape, design, or colour that could connect the product shown to Emami.

Emami had approached the trial court alleging that the advertisement disparaged its Ayurvedic health and pain-relief products. It sought injunctions against the advertisement and similar material, along with removal of the video, an apology and corrigendum, destruction of the master tape and damages.

The High Court considered whether the dispute had to be heard by a Commercial Court under the Commercial Courts Act, 2015, and whether Emami had made out a prima facie case for interim protection.

Sun Pharma argued that the case was a “commercial dispute” under Section 2(1)(c)(xvii) of the Act because Emami had relied on its trademark, copyright, and design registrations. The company also pointed to the Rs. 50 crore valuation of the suit.

The court rejected the argument, distinguishing product disparagement from intellectual property infringement.

The court observed, “There is a fundamental distinction between disparagement of a product and infringement/passing off of trademark and/or copyright.”

The court noted that Emami's references to its registrations were incidental and that infringement of those rights had not been alleged as the basis of the suit.

The court also noted that Emami had sought to reserve separate claims concerning trademark, copyright, and design infringement and passing off. The principal reliefs in the present suit, it held, concerned disparagement and defamation of Emami's products.

“The denigration and disparagement of the plaintiff's products, as alleged in the plaint and injunction application, is agnostic of and unrelated to the registrations of trademark, copyright or design in the name of the plaintiff," it ruled.

The court therefore held that the core dispute was not a commercial dispute under Section 2(1)(c)(xvii) and that the suit could proceed before the ordinary civil court.

On the advertisement itself, Emami relied on its 57% market share in the balm segment. It argued that a reference to “Balm” would naturally be understood as a reference to its products because of its position in the market.

The court found that Emami's own pleadings did not allege generic disparagement of all balms. Instead, its case was that the word “Balm” specifically referred to Emami's products. The court therefore held that cases dealing with generic disparagement did not assist Emami.

The advertisement did not name Emami or display packaging specifically identifiable with its products. The container shown was generic, with no special feature linking it to Emami's registered designs.

The court also rejected the trial court's conclusion that Emami's 57% market share was enough to presume that “Balm” was exclusively associated with its products.

It noted, “We are unable to agree with the conclusion arrived at by the learned Trial Judge that, merely due to the plaintiff/respondent no.1 holding 57% of share in the segment, it is to be presumed that the term 'Balm' is inextricably and exclusively linked with the products of the plaintiff and none else.”

The court consequently found that Emami had not established a prima facie case of disparagement of any of its products in particular.

The appeal was allowed, and the injunction was set aside. The court clarified that its observations were tentative and would not bind the trial court when it decides the injunction application or the suit.