April 11, 2016     

 India: Delhi High Court Orders only the Brews from Scotland to be called Scotch

 

India has a total of 261 registered geographical indications (hereinafter referred to as the ‘GIs’). However, there are not many landmark cases involving the GIs. In a recent case involving GIs, the Scotch Whisky Association (hereinafter referred to as the ‘SWA’) filed a case with the Delhi High Court seeking redressal.

 

Earlier, in 2004, the SWA had filed a case in the Delhi High Court against Golden Bottling Limited for the manufacture of ‘Red Scot’ Whisky, alleging that the name of the whisky would confuse consumers to believe that the said Whisky was from Scotland. The Court, in 2006, observed that Scotch Whisky was indeed a GI but since it was not a registered GI in India at that time, the Court could not uphold the GI. Thus, the Court relied on Section 20(1) of the Indian Geographical Indications of Goods (Registration and Protection Act), 1999, prohibiting all persons from instituting any proceedings to prevent or to recover damages for the infringement of an unregistered GI, and held the defendant guilty of passing off only. The Court also restrained the defendant from using the words ‘Scot’ or ‘Scotch’ in the marketing of its products.

 

The SWA applied for the registration of Scotch Whisky as a GI for Scotland on January 05, 2009, for goods in class 33 and was granted the said registration. The SWA controls 90% of the Scotch market. It has 58 members and engages in producing and selling world renowned brands such as Johnnie Walker, J&B, Ballantine's, Chivas Regal, Dewar's, Glenfiddich, Grant's, Black and White, Vat 69, Haig, White Horse, 100 Pipers, The Famous Grouse and Cutty Sark.

 

In the present case, the SWA filed an original suit against Oasis Distilleries, Adie Broswon Distilleries & Bottlers and Malbros International Private Limited on December 8, 2015, in the Delhi High Court for using the term ‘Scotch Whisky’ on their labels. It sought to restrain the Indian companies from selling their brews, other than those which are sourced from the registered association of Scotch producers in the United Kingdom, as ‘Scotch’, ‘Scotch Whisky’ or ‘Whisky from Scotland’, thus, protecting Scotland's national drink.

 

The three abovementioned companies were allegedly selling three local products, that is, Royal Arms, Blue Patrol and Malbros, without sourcing them from the SWA. The SWA alleged the infringement of the registration of Scotch Whisky in India as a GI as they were based outside of Scotland and had not been verified by the Spirit Drinks Verification Scheme (hereinafter referred to as the ‘Scheme’) introduced in January, 2014, to give Scotch whisky consumers around the world assurance of authenticity. They stated that Scotch can only be sourced from the members of the SWA under its verification Scheme. They also cited the GI registration in India in 2010 and Article 23 of the TRIPS Agreement which allows for additional protection to be granted in case of wines and spirits. According to the SWA, it meant that no reference to ‘Scotch Whisky’ could be made on the labels of whisky that is produced in India, even if it contains some amount of Scotch.

 

The SWA argued that the lack of verification suggested that there was no Scotch present in any product and so the companies were in breach of Scotch Whisky's GI in India. The SWA also claimed that such labelling, packaging and advertising was misleading the public and infringing the registered Scotch Whisky GI. Scotch Whisky has an additional protection under the GI Act, meaning that even products that do contain some Scotch cannot reference it on labels or in adverts for a Whisky made in India since Scotch is a specific term for Whisky made from malted barley by a legally defined process, originating in Scotland only and any bottlers outside Scotland who want to use Scotch Whisky as a constituent in a local spirit must first apply for the verification process. An interim relief was granted to SWA vide an order dated December 9, 2015.

 

However, the present case was not decided on merits as the parties settled the matter by consent. The defendants filed an undertaking to not use the said term to sell their products and to withdraw their trademark application. This means that an opportunity to have a ruling based on merits in the present case was lost. Had the case been decided on merit, it could have been the first case of an injunction being granted in a case regarding the infringement of GIs. The abovementioned order can be accessed here. The Delhi High Court also noted that the United Kingdom Regulations had been duly incorporated in the registration certificate and was acknowledged in the European Union Regulation No. 110/2008.

 

The present suit was one of the very first disputes under the newly-enacted Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015. This was the first action raised by the SWA using the Scheme and also the first action taken by the SWA under the new commercial court rules in India. It is also interesting to note that the suit was disposed off in a record time of only two weeks from the date of its institution.

 

The SWA was successful in proving that Scotch Whisky was just another name for Whisky made in Scotland. It was made approximately 500 years ago in Scotland and has been exported for over 200 years. It has acquired a significant reputation worldwide and is produced as per tried and tested traditional methods. Products brewed locally in India cannot allude to the word Scotch or Scotch Whisky, especially since Scotch Whisky was registered as a GI in India in 2009. As per the law, local distillers cannot use the term Scotch Whisky in their labelling, packaging or advertising. The law recognizes traditionally produced goods of a particular area like Benarasi Silk Sarees and Tirupati Laddoos.

 

Hence, the Indian companies filed an undertaking to not sell the products which made any reference to Scotch, Scotch Whisky, Scotland or use any words, names or images evocative of Scotland or Scotch Whisky. They also undertook to withdraw their trademark application no. 1691168 for Royal Arms (label mark).

 

 

 

 

 

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