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Fairness Wars
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FAIR (NESS) WARS contd...
In 1999, HLL and CavinKare hiked the price of F&L and
Fairever by Re. 1 from Rs.25 and Rs.26 respectively. In 2000, Fairever was back
to its original price to maintain price parity. Many stockists said that this
was done to push the product against F&L. A stockist commented, “The company was
trying out this price to compete with F&L and other new brands that have come
in. But we did not see higher sales due to this and the company reverted to its
original price.” F&L too followed suit. During 2000-01, while the fairness cream
market was growing at an average of 15% Fairever's growth had slowed down.
Analysts felt that this was mainly because Fairever was priced higher than
competing products.
Meanwhile, in January 2000, HLL filed a patent infringement suit for Rs.100
million in the Kolkata High Court against CavinKare Ltd. HLL alleged that
CavinKare was using its patented F&L formula without its knowledge or
permission. HLL obtained an ex-parte stay on CavinKare, but CavinKare got the
stay vacated in a week's time. It also filed a patent revocation application in
the Chennai High Court and defended the suit on the grounds that HLL's patent
was not valid. CavinKare further claimed that the ingredients contained in the
composition were ‘prior art'and that the new patent was not an improvement of
the earlier patent, which had expired in 1988.
In September 2000, the companies suddenly opted for an out-of-court settlement.
CavinKare gave an undertaking to the court that the company would not
“manufacture and/or market either by themselves or by their agents any fairness
cream by using silicone compound in combination with other ingredients covered
in patent no. 169917 of the plaintiff (HLL), namely Niacinamide, Parsol MCX,
Parsol 1789, with effect from September 15, 2000.” HLL also gave an undertaking
that it would not interfere with the sale of the cream manufactured on or before
September 15, 2000, lying with the wholesalers, re-distribution stockists, and
retailers.
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Continued....
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