Disparagement | Intellectual Property Rights | Uncategorized

Permissible Limits of Conducting Product Reviews by Social Media Influencers (Decoding Marico v. Abhijeet Bhansali): Part I

The Bombay High Court in earlier part of the year 2020, has dealt with the case of permissible limits of action of viewers who review products or services. The decision is in the case of Marico Limited v. Abhijeet Bhansali[1] wherein the Learned Single Judge of Hon’ble High Court of Delhi restrained by an order of temporary injunction a social media influencer in regard to a video in which he reviews a branded Coconut Oil and compares it with Virgin Coconut Oil. The Learned Single Judge found the Video to be false and disparaging. The Influencer in question filed an appeal which reversed the findings of the Learned Single Judge subject to certain modification in the video. In the present literature, being Part I we provide you a summary of Learned Single Judge’s decision and key take aways. In subsequent part being Part II we will cover the Division Bench Judgment and the resultant ratio.

Permissible Limits of Conducting Product Reviews by Social Media Influencers (Decoding Marico v. Abhijeet Bhansali): Part I

Marico Limited v. Abhijeet Bhansali

Notice of Motion No. 1094 of 2019 in COMIP No. 596 of 2019

2020 (81) PTC 244 (Bom)

Brief Facts:

One of the Plaintiff’s product, Parachute edible coconut oil, was claimed to be amongst the most reputed brands owned by the Plaintiff. Defendant, a youtuber had his own channel titled ‘Bearded Chokra’. On or about 1st September, 2018, Defendant published a video titled ‘Is Parachute Coconut Oil 100% Pure?’. In this video, Defendant reviewed the  Plaintiff’s product. Plaintiff field the present suit claiming that the Defendant made false claims and statements with regard to the Plaintiff’s product.

BeardedChokra

Plaintiff’s Contentions:

  • Defendant published the video with malicious intent to get more viewers.
  • Impugned Video as a whole is disparaging and false in nature.
  • Defendant promotes a competing product in the video in substitution for the product of the Plaintiff and urges the viewers to stop using the Plaintiff’s oil.
  • The acts of the Defendant fall under the category of commercial activities as well as attempts for seeking monetary donations/sponsors for his channel and not a general review.
  • Defendant was fully aware that the contents of the video constituted the tort of malicious falsehood and slander of goods and that for this reason the Defendant offered to delete certain portions of the video (after issuance of legal notice) where he sought to make a comparison and also offered to make a completely fresh video after a re-evaluation of a fresh product of the Plaintiff.
  • Defendant made reckless, false and disparaging statements in the video without conducting the proper tests and research apart from just the freezing test[2].
  • Defendant’s actions satisfy all ingredients to constitute disparagement, slander of goods, and malicious falsehood.
  • Special damage does not mean special in terms of quantum but special in the sense that the loss cannot be evaluated in money and that it is impossible to ascertain the nature of the damage.

Defendant’s Contentions:

  • There was no malicious intent and the purpose of the video was only to educate viewers. Plaintiff has used a trick of showing a wet coconut alongside its product in order to fool consumers into thinking that its product was derived from wet coconut instead of copra.
  • Defendant’s offer to delete certain parts of the video was made as a concession to settle the dispute and was not an admission.
  • Upon buying products from clicking on the link mentioned by Defendant, Defendant receives a commission from the online site not the competitors of Plaintiff. However, Defendant’s recommendations and review videos in the past have been made without receiving any commission
  • Plaintiff uses the term ‘coconut oil’ when they are actually selling copra oil[3]  which is of inferior quality.
  • Statements made by the Defendant in the Impugned Video are true and constitute bona fide opinion
  • Defendant’s statement that the Plaintiff’s oil’ is of an inferior quality to other organic cold pressed coconut oils’ is absolutely correct and in accordance with the scientific literature.
  • Defendant has fundamental right to freedom of speech.
  • Some of the words of the Defendant such as that the smell of the Plaintiff’s product is akin to ‘a dried or rotten coconut’ were used for exaggeration and were not to be taken literally.
  • Plaintiff has shown no proof that its revenues have gone down since the video was uploaded.
  • An action for disparagement/malicious falsehood/slander of goods can only be against a trader or a competitor.

Plaintiff’s Rejoinder:

If the Defendant intended to create an educative video with the consumer’s interest in mind, Defendant should have approached any independent laboratory to conduct tests. Food Safety Standards Act, 2006 in Section 40 provides for a remedy whereby a Purchaser can have a food analysed by a Food Analyst on payment of a fee.

Court’s Observations:

On Social Media Influencer’s Role

Defendant is a ‘social media influencer’. Such person bear a higher burden to ensure there is a degree of truthfulness in their statements. Social media influencer cannot deliver statements with the same impunity available to an ordinary person.

On Test of Disparagement

In case of slander of goods/disparagement, Plaintiff must show (i) that the Defendant’s statements are false; (ii) that the statements were made maliciously or recklessly; and (iii) that the said statements caused special damages to the Plaintiff.

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On how Defendant’s Statements are False

  • A perusal of the video shows that except the colour of the Plaintiff’s oil in the liquid and frozen forms, the Defendant has not mentioned or analysed any other details of the Plaintiff’s product. Conversely, the Defendant has omitted details of the products used by him to compare with the Plaintiff’s product.
  • Nutritional value of Virgin Coconut oil and Plaintiff’s products are almost identical. Defendant has not conducted any independent tests to prove that there is a significant variance in the nutritional values of the products. Defendant did have the option of having the Plaintiff’s product analysed under Food Safety Standards Act, 2006. This would have definitely showed the bonafides of the Defendant in ginving the correct and true information about the product.
  • Falsehood on the part of the Defendant is also evident from the fact that the only test conducted by the Defendant to come to the conclusion that the Plaintiff’s product is of an inferior quality is ‘Freeze Test’.
  • Plaintiff’s product is an Unrefined Expeller pressed Coconut Oil and not Virgin Coconut Oil.
  • In the video, Defendant uses and shows the words ‘organic coconut oil’ for the other oil used by the Defendant. However, Defendant actually compares ‘virgin coconut oil’ with Plaintiff’s product. if the two oils used by the Defendant for conducting the ‘freeze test’ did not belong to the same category i.e. ‘organic coconut oil’, the parameters of colour and particulate matter used by the Defendant and the result based thereon would not only be inaccurate but also erroneous.
  • Defendant has purposely and knowingly misrepresented to the viewers that he was comparing the Plaintiff’s product with ‘organic coconut oil’ when in reality he was comparing it with ‘virgin coconut oil’.

On how Defendant’s Statements were Malicious or Reckless

  • In the Impugned Video, the Defendant has made use of forceful statements and thus has portrayed himself as an expert who has undertaken extensive research. The literature relied upon by Defendant pertains to gauging quality of ‘Virgin Coconut Oil’ and thus inapplicable to present case. The Article does not demonstrate as to how the discolouration in ‘Coconut Oil’ or a strong smell in ‘Coconut Oil’ is a sign of inferiority.
  • The article makes no reference to the colour of unrefined oils made from copra or that any inference is to be drawn in respect of colors of unrefined Coconut Oil. In the context of oils made from copra the article only mentions that the same may contain mold (fungus) but the same is not harmful in any nature or form. Thus, the article in no manner or form lends credence to the findings made by the Defendant.
  • Defendant had no reason to believe that the statements he made were true since there in material in respect of Plaintiff’s product to demonstrate that such belief was possible.  And thus the Defendant’s statements have been made with recklessness and without caring whether they were true or false.

On Special Damages Caused to Plaintiffs

Plaintiff has suffered special damages in the present matter as the Defendant’s video assumable has been liked by two thousand five hundred (2500) individuals and thus the impact of the video on Plaintiff’s reputation and damage caused to it cannot be underestimated.

On Defendant’s defences of exaggeration, disparagement applicalble only against competitors and Fundamental Right of Freedom of Speech of Defendant

  • Defendant has afforded no explanation for using the term ‘rotten coconuts’. Later in his video the Defendant has once again insinuated that the Plaintiff’s product might be made from poor quality coconuts.
  • In an action for disparagement/malicious falsehood/slander of goods it is irrelevant whether the Defendant is a trader or not so long as the necessary ingredients are satisfied.
  • Fundamental rights cannot be abused by any individual by maligning or disparaging the product of others.

Temporary Injunction was granted against the Defendant.

Author’s Comments

As the decision has been reversed in appeal, we will refrain from making any critical comment on the findings and approach on merits in the present decision. However, we agree as to the law of disparagement reiterated and applied by the Learned Single Judge in the present case. The key take away points from this decision are:

  1. Social media influencers have higher burden to check for facts before them make a statement on a product/service;
  2. The statements should not false, reckless, malicious and shoud not cause special damage to the Plaintiff. Conversely, truth based on substantiable date is a permissible defence;
  3. The products compared should be same. Apples should not compared to oranges;
  4. The positive evidence of individuals liking a video criticising a product can be taken as special damage to the Plaintiff; and
  5. It is not only a competitor who can be held liable for disparagement.

[1] 2020 (81) PTC 244 (Bom)

[2] Defendant conducted a test of freezing two oils in different transparent glasses. The Defendant then states in the video that ‘pure organic coconut oil’ should be ‘completely snow white’ in colour when frozen and that it should not have any kind of ‘impurities’ or ‘stains’ whatsoever. Thereafter, Defendant shows that organic coconut oil when frozen is ‘pure snow white’ in colour but the Plaintiff’s product has ‘darker greyer shade’ than the other organic coconut oil.

[3] Copra is the dried meat or kernel of the coconut, which is the fruit of the coconut palm. Coconut oil is extracted from copra, making it an important agricultural commodity for many coconut-producing countries.

Contribution by: Ms. Pragati Pachisia, JCCLC, Kolkata

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