India: Scotch Whisky "Order" Prevails In India

Last Updated: 6 July 2006

Competition in the national and global markets has intensified bringing issues of identification and positioning to the forefront. Every product in the market tries carving a niche based on the strong customer base it builds-up on the brand value, name or identification that it holds. When it comes to internationally marketed products named for the region, area, or nation where they are produced, protecting the integrity of the products from manufacturers who would misuse the name associated becomes a major battle.

In this regard, considering the most famous export of Scotland, the Scotch whisky the battle for protection of the tag "Scotch" from manufacturers of spurious ‘scotch whisky makers’ has been a tough process. In an effort to prevent other countries, cultures, or regions from cheaply reproducing Scotch-type whisky and marketing it for trade purposes, Scotland has had legal battles with many international bodies. This protection to their product is also in a way extending protection to something that is an expression of Scottish culture, taste, and cleverness.

Since ages, Scotch whisky has remained one of Scotland's most favorite cultural products as well as one of its most profitable trade items. Scottish distillers have been rightfully the sole owners of the label "Scotch" for centuries. As it is in the case of Scotch whisky, there is an inherent specialty that is associated with such products. The distillation and maturation processes of making Scotch have been specific to Scotland for at least 5 centuries. This makes it impossible to conceive that this process could be replicated in another country with the same success. Moreover, if one would analyze the production process from a Scot's point of view, nowhere else in the world can one find the Scottish peat used to smoke the barley, or the Scottish oak to make the maturation casks, or the Scottish air to seep through the casks and give the spirit its character.

Thus goods having a specific geographical origin and possessing qualities or a reputation that are due to that place of origin demands to be protected and herein the law protecting geographical indications becomes relevant. The objective of the law in this regard has been threefold: to prevent unauthorized persons from misusing geographical indications, to protect consumers from deception and adding to the economic prosperity of the producers of such goods.

Protection of geographical indications at the international level can be traced to a number of treaties administered by the World Intellectual Property Organization (WIPO), most notably the Paris Convention for the Protection of Industrial Property of 1883, and the Lisbon Agreement for the Protection of Appellations of Origin and Their International Registration. In addition, Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) also deal with the international protection of geographical indications within the framework of the World Trade Organization (WTO).

At the national level, Geographical indications are protected under a wide range of concepts, such as laws against unfair competition, consumer protection laws, laws for the protection of certification marks or special laws for the protection of geographical indications or appellations of origin.

Courts actively contribute to prevention of the misuse and misrepresentation by dishonest commercial operators and protection of the interests of the consumers and legitimate producers. In India, recently, in Scotch Whisky Association & Ors. V. Golden Bottling Ltd., 2006 (32) PTC 656 (Del.) the issue was with regard to manufacture and sale of whisky under the name "Red Scot" by the defendants, against which injunction was sought by the plaintiffs.

In the instant case, the Plaintiffs, Scotch Whisky Association, is an association, registered as a company in the United Kingdom incorporated with the object of protecting and promoting the interests of Scotch whisky trade both in the U.K and abroad. The injunction was sought so as to restrain the defendants, Golden Bottling, from using the name "Red Scot" or any other name containing "Scot" or any word similar thereto so that defendant cannot passoff its whisky as Scotch whisky. The Scotch Whisky Act of 1988 and the Scotch Whisky Order was also placed on record by Scotch Association to prove that even in Scotland all whiskys that are produced there need not necessarily fall within the definition of "Scotch Whisky".

It was also contended by the Association and its members that the words "Scot" or "Scotch" were geographical indications in the purview of Article 22.1 of the TRIPS Agreement thus, identifying it as whisky produced in Scotland. To substantiate their stand, they brought forth sample advertisements apart from sales figures worldwide.

Article 22.1 of TRIPS Agreement defines geographical indications as indications, which identify a good as originating in the territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin. Further, Article 22 mandates protection to be extended by member countries for specific geographical indications.

Further, Section 2(e) of The Geographical Indications of Goods Act, 1999 reads:

"geographical indication", in relation to goods, means an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin and in case where such goods are manufactured goods one of the activities of either the production or of processing or preparation of the goods concerned takes place in such territory, region or locality, as the case may be.

Explanation:- For the purposes of this clause, any name which is not the name of a country, region or locality of that country shall also be considered as the geographical indication if it relates to a specific geographical area and is used upon or in relation to particular goods originating from that country, region or locality, as the case may be;"

Placing reliance on the aforementioned provisions, the Court upheld the contentions of the Scotch Whisky Association and granted injunction and also awarded damages for the offence of passing off committed by the defendants. The court also emphasized the necessity of preventing violations of the intellectual property rights of the parties before it.

The judgment of the Court upholding the legal protection guaranteed to the specific GI, herein Scotch Whisky, construing along the lines of the Indian GI Act of 1999 reveals a trend of protection and concern for extending legal protection to GIs by Indian courts and hence acquires the status of a landmark decision. This aspect is further highlighted by the recent move by the Union Government to identify the products that needs to be registered as GI’s so as to protect the country’s trade interest.

© Lex Orbis 2006

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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