The Calcutta High Court has allowed Sun Pharma’s appeal and set aside the ad interim injunction that had restrained it from airing the impugned video and making any statements regarding Emami’s “Zandu Balm”, “Mentho Plus Balm” and “Zandu Ultra Power Balm” products. The Court held that a suit for disparagement simpliciter is not a “commercial dispute” under the Commercial Courts Act and that mere market leadership cannot convert a generic term like “Balm” into a brand-specific reference.
The Court clarified that a suit for disparagement simpliciter does not constitute a “commercial dispute” within the meaning of Section 2(1)(c)(xvii) of the Commercial Courts Act, 2015, even if stray references are made in the plaint to trademarks, copyrights, or design registrations. The items enumerated under Section 2(1)(c) of the CC Act are exhaustive, and a narrow interpretation is to be lent to the provisions of the Act in light of its object of providing speedy remedy. Disparagement and infringement or passing off stand on diametrically opposite poles, since the former denigrates a product while the latter acknowledges its worth through emulation.
For Section 29(8) of the Trade Marks Act to apply, the registered trademark itself must feature in the offending advertisement, which was absent in the present case. A generic term like “Balm” cannot be presumed to be exclusively linked to a particular manufacturer merely on the basis of market leadership, and in the absence of any direct correlation between the container depicted in the advertisement and the plaintiff’s product, no recall value can be deduced. The plaintiff must plead and prove generic disparagement as a distinct cause of action to succeed on that ground, and mere market share does not substitute for such pleading, added the Court.
The Division Bench comprising Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya observed that the items enumerated under Section 2(1)(c) of the CC Act are exhaustive in defining a commercial dispute, drawing support from Bharat Coop. Bank, Everstrong Sales, and Ambalal Sarabhai Enterprises. The Court noted that while the phrases “arising out of” and “relating to” in Clause (xvii) lend a wider perspective, the cause of action and reliefs in the plaint must still be relatable to intellectual property rights.
The Court drew a fundamental distinction between disparagement, which is the denigration of a product or brand, and infringement or passing off, which acknowledges the worth of the trademark by seeking to emulate it, holding that the two stand on diametrically opposite poles. The Court observed that the plaint did not allege infringement of trademark or copyright as the immediate trigger of the suit, and that Paragraph 56 of the plaint itself sought leave under Order II Rule 2 of the CPC to sue separately for infringement, passing off, and design violations, drawing a clear line of distinction.
The Court further observed that Section 29(8) of the Trade Marks Act was not attracted because the offending commercial did not refer to, show, or allude to any trademark or copyright of Emami, but merely referred to balms in general. On the second issue, the Court observed that the plaint did not plead generic disparagement but only direct disparagement of Emami’s products, and that the offending advertisement did not carry Emami’s brand name or any unique shape, design, or colour relatable to Emami’s design registrations.
The Court held that the expression “Balm” is a generic term referring to the consistency and texture of a product rather than a particular species of products, and that mere market share of 57% did not make the term “Balm” inextricably and exclusively linked with Emami’s products.
Briefly, the underlying suit was filed by Emami Limited seeking reliefs including perpetual injunction against disparagement of its ayurvedic balm products, mandatory injunction directing Sun Pharma to issue a corrigendum and tender an unconditional apology, delivery up and destruction of the master tape of the impugned video, damages for loss of business and reputation, and other ancillary reliefs. Sun Pharma contested the maintainability of the suit before an ordinary civil court, contending that the dispute was a “commercial dispute” within the meaning of Section 2(1)(c)(xvii) of the Commercial Courts Act, 2015, since the plaint relied upon registrations under the Trade Marks Act, 1999, the Copyright Act, 1957 and the Designs Act, 2000, and the suit was valued at Rs.50 crores, well above the specified value under the Act.
Emami countered that the suit was essentially one for disparagement of its goods, a tortious action akin to defamation, and that the references to its IP registrations were merely incidental to establish its business and goodwill, with the plaintiff holding 57% market share in the Balm segment. Emami also pointed out that Sun Pharma’s YouTube channel had over 8.58 thousand subscribers at the time of dissemination, and that after a cease-and-desist meeting, Sun Pharma escalated the dissemination of the impugned video by over 1968.97% between November and December 2025.
