Bombay High Court Issues Restraining Order Against Apollo Tyres: What Are the Implications of the Ad Criticizing CEAT Tyres?

In a significant legal development, the Bombay High Court has issued an ex-parte injunction prohibiting Apollo Tyres from airing an advertisement that CEAT Tyres alleges disparages its products. The order, delivered by Single-judge Justice Riyaz Chagla on September 12, 2024, addresses allegations that Apollo Tyres' commercial unfairly criticizes CEAT's CROSSDRIVE AT tyres.

Case Background and Court Ruling

The court's intervention came after CEAT Tyres, a prominent player in the tyre manufacturing industry, filed a petition claiming that Apollo Tyres' Visual Commercial (VC) engaged in unfair competition. CEAT asserted that the advertisement depicted its CROSSDRIVE AT tyres as worn-out and substandard while showcasing Apollo's Apterra AT2 tyres as new and superior. This portrayal, according to CEAT, was a deliberate attempt to undermine its brand’s reputation and mislead consumers.

Justice Chagla’s order reflects a careful examination of CEAT’s claims. The judge noted that CEAT's CROSSDRIVE AT tyres feature a unique and distinctive tread pattern that the company has developed and used since May 2022. This tread design, CEAT argued, has established significant goodwill and market reputation. The advertisement in question, according to CEAT, unfairly compared a used CEAT tyre with a brand-new Apollo tyre, creating a misleading impression about the quality of CEAT’s product.

Legal Grounds and Considerations

The court determined that CEAT had made a compelling prima facie case for the grant of interim relief. Justice Chagla observed that the advertisement's portrayal of CEAT's product was not only unfair but also detrimental to the plaintiff’s brand. The judge emphasized that the balance of convenience was in favor of CEAT, as the company would suffer irreparable harm if the advertisement continued to be broadcast. The harm, the court noted, could not be adequately compensated by monetary damages alone.

Moreover, Justice Chagla highlighted the absence of any equitable grounds favoring Apollo Tyres, as the defendant was not present despite being notified of the proceedings. The court’s decision reflects a concern for protecting brand integrity and ensuring fair competition in the marketplace.

Implications for Competitive Advertising

The court’s restraining order underscores the ongoing legal challenges in competitive advertising, particularly concerning claims of disparagement and unfair comparison. CEAT’s legal team, led by Senior Counsel Virag Tulzapurkar and supported by Advocates Hiren Kamod, Vinod Bhagat, Prachi Shah, and VA Bhagat, argued that the advertisement sought to portray CEAT’s tyres as inferior, potentially misleading consumers and damaging CEAT's market position.

Next Steps and Legal Proceedings

The Bombay High Court has scheduled a detailed hearing of the case for October 11, 2024. This hearing will provide an opportunity for both parties to present their arguments comprehensively. The outcome of this case could set a precedent for how competitive advertising claims are adjudicated, particularly in terms of brand reputation and fair play.

Case Title and Related Matters

The case, titled CEAT Limited vs Apollo Tyres (COM IPR SUIT (L) NO.28069 OF 2024), continues to attract attention due to its implications for the tyre industry and competitive advertising practices.