Delhi High court vide its order dated July 30, 2020 granted an ad-interim injunction in a suit filed by Budweiser for Trademark infringement, unfair competition, and commercial disparagement and dilution and tarnishment of its goodwill and reputation of the brand “Budweiser”.

Brief Facts

In an instant case Defendant No. 1,2 and 3 who run a website by the name of www.thefauxy.com , posted a video on their social media handles such as Twitter, Instagram and Youtube. The video depicted a comedic sketch that is modeled as a news report, testing the veracity of the claim that the plaintiff beer bottle contains urine.

In the video it was shown that Plaintiff’s beer contains Urine which Defendant No. 1 has tasted from the sample from the pathology lab. 

Ddenant No. 2 on the other hand has claimed that the video shown by Defendant No. 1 is fake and false, and claimed further that plaintiff’s beer brand “Corona ” contains coronavirus.

To which plaintiff had filed an infringement suit against Defendants.

Plaintiff’s Contention

The Plaintiff contended that the suit has been instituted against the Defendants to protect the intellectual property rights and reputation of the plaintiff which has been exploited by the defendant’s posts on social media which states the fake news which states that the employees of the plaintiff have been urinating the beer that is sold to its customers.

By posting such videos on social media, it ruined the plaintiff’s reputation. It was claimed that over 5900 views had garnered as on the date of filing of the suit and as a result became viral on the internet and caused the publication of several hundred defamatory posts and videos across social media.

 On July 2, 2020 the news made “Budweiser” to trend as the no.1 hashtag on twitter in India. Plaintiff also submitted that on social media there were no disclaimer of fake news/ fictitious report on the youtube page of the defendants. 

Contentions of Social media platforms- Youtube (Defendant No.4) and Twitter (Defendant No.5)

The counsel submits that youtube and twitter are just an intermediary to upload the content as the content are not uploaded by defenats themselves. The primary grievances was against defendant no. 1,2 and 3. 

Furthermore, both the defendant no. 4 and 5 were of the view that the impugned video does not amount to defamation and disparagement.

Laws relating to commercial disparagement

Basically disparagement is the publication of false and derogatory statements about a business or individual which will discourage or prevent the consumer base of the business or individual.

Disparagement is different from defamation as defamation hurts the personal reputation and goodwill of a person as compared to disparagement which hurts the economic interest.

According to section 29 of Trademarks act, 1999 any use of a trademark which is against the reputation of the trademarks amounts to infringement.

The Bombay High Court has delinitated the ingredients to be present to make a statement disparaging. It must –

  1. Be a false statement
  2. Be made with a malicious intent.
  3. Cause special damage to the plaintiff’s business.

Court’s Observation

The court observed that posting such videos hampers the reputation and goodwill of the plaintiff’s business and therefore restrains defendants from reproducing, broadcasting, communicating to the public, screening, publishing, and distributing the imputed video or any other video on any media or platform and promoting the impugned video on various social media amounting to infringement of plaintiff registered mark Budweiser” and also amounting to commercial disparagement of the plaintiff’s product.

Conclusion

Therefore, it was held by the court that defendants were commercially disparaging the plaintiff’s reputation and goodwill and business and therefore prohibited defendants from further promotion and distribution of impugned video and related social media posts.

However, the court did not give any direction for removal of the video from social media accounts which was also contended from plaintiff’s side. 

The matter is still pending before Delhi High court and is listed on september 1, 2020. Watch this space for updates.

Contact BIAT Legal LLP for any Trademark infringement cases. 

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