India: The Scotch-Scot Scuttle

Last Updated: 1 September 2008
Article by Divya Subramanian

Khoday Distilleries Ltd. (known as Khoday India Pvt. Ltd.) incorporated under the Companies Act, 1956. Manufacturers of whisky under the mark "Peter Scot", a trademark was applied for in May 1968. In its row of litigations regarding its trademark, the Supreme Court admitted an appeal filed by them in Khoday Distilleries Limited (Now known as Khoday India Limited) v. Scotch Whisky & Ors. [2008 (37) PTC 413 (SC)]

Khoday's application was accepted and allowed to proceed with the advertisement, subject to the condition that the mark would be treated as associated with another registered trademark. As regards registration of the trade mark, a proceeding was initiated and no opposition was filed by Scotch Whisky Association (SWA). M/s. Mohan Meakins was the only one to oppose and the trademark was registered.

The etymology of the term "Peter Scot" was rendered. The plea of acquiescence/delay raised by Khoday was negatived on the ground that the plea of deceptive element in the impugned mark having neither been displaced nor rebutted by evidence on the part of the registered proprietors, the pleas of delay and acquiescence cannot be allowed in favour of the registered proprietors. They opined that SWA has no locus standi to maintain the said application for rectification. As regards the misjoinder filed by Khoday, the same was held to be not fatal. On the issue of distinctiveness, the Court rendered in favour of Khoday.

It was held that the mark had been used deceptively for long time and, that there was unexplainable and inexcusable delay on the part of SWA in filing the rectification application. The plea of acquiescence/delay raised by the Khoday was negatived on the ground that the plea of deceptive element in the impugned mark having neither been displaced nor rebutted by evidence on the part of the registered proprietors, the pleas of delay and acquiescence cannot be allowed in favour of the registered proprietors.

An appeal was preferred by Khoday before the High Court in terms of Section 109 of the Act. The arguments submitted therein governed the aspects of SWA having prior knowledge of the infringement, delay of 14 years and that acquiescence on part of SWA amounted to a waiver. The principles of passing off were also elucidated and they opined that their actions did not fall in that ambit.

The Supreme Court opined that the Division Bench had committed a serious error insofar it failed to take into consideration the arguments vouched by Khoday and the contents of its label. Taking into consideration the averments of SWA, the various provisions of the Act, the Supreme Court opined that the issues that were principle consideration revolved around the delay in filling a rectification application and whether the lower courts had been misdirected in law by SWA 's co-parties.

The Court opined that a consideration to the term "Scot" as a sufficient ground to render the mark "Peter Scot" is deceptive or confusing. They added that the onus of proof lay upon SWA and the discharge of the same needed to be accounted for. Further, on the issue of a reasonable period, The Court opined that the same would not merely depend upon the nature of action initiated before a statutory authority but also upon the purport and object of the statute.

In the course of arguments, a plethora of judgments were referred to, from various jurisdictions. The Court referred to this plethora of cases and concluded on evidence that a substantial portion of the public was likely to be misled. They turned attention to the different tests as rendered in different jurisdictions and stated that here in the present case the class of buyer was supposed to know the value of money, the quality and content of Scotch Whisky, while being aware of the difference of the process of manufacture, the place of manufacture and their origin. The Court examined the nature of some of the tests to be different, and stated that the application of a wrong set of tests had led to a wrong result. They also stated that Section 20 (2) and 26(2) of the 1999 Act had no application to the case at hand, and hence setting aside the impugned judgment, allowed the appeal.

© Lex Orbis 2008

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