The Scotch Whisky Association & Another v. Golden Bottling Ltd.

Citation: 129 (2006) DLT 423, 2006 (32) PTC 656 Del

Bench: Justice Madan B. Lokur

Court: Delhi High Court

Facts of the Case:

The Plaintiffs in this case were Plaintiff No. 1, who was an association registered as a company in the UK, dealing with the protection and promotion of Scotch whisky trade in the UK and abroad, whereas Plaintiffs No. 2 to 4 were members of the Scotch Whisky Association ("SWA"). They filed a suit for permanent injunction preventing the Defendant, Golden Bottling Ltd., from selling whisky under the name ‘Red Scot’ or any other name containing the word ‘Scot’, or any similar word. This was done to prevent the Defendant from passing off its whisky as Scotch whisky.

However, in June 2003, the Plaintiffs found out that ‘Red Scot’ whisky was still being sold in the market by the Defendant and thus filed a suit.

In April 2004, a summons was issued in the suit along with the injunction restraining the Defendant from selling whisky containing the word ‘Red Scot' or ‘Scot’. Despite the summons, the Defendant did not respond. In December 2004, the proceeding took place ex parte against the Defendant.

Issues:

• Whether it is permissible for the Plaintiffs to approach the Court to restrain the Defendant from passing-off its goods as those originating from Scotland or that it is Scotch whisky.

Laws:

Geographical Indications of Goods (Registration and Protection) Act, 1999 - Sections 20(1), 20(2) and 67, Article 10bis of the TRIPS Agreement.

Analysis:

The SWA on earlier occasions, appealed to the Indian courts to restrain whisky manufacturers from using the word ‘Scot’ or ‘Scotch’ in their whisky productions and dealings. The usage of the Scotch Whisky Act, 1988 of the UK was also placed on record by the Plaintiffs.

Section 3(1) of this legislation defines Scotch whisky as “whisky distilled and manufactured in Scotland”, according to the definition under Rule 3 of the Scotch Whisky Order, 1990. These legislations were referred to in order to show that even in Scotland, not all whiskeys produced fall under the definition of Scotch whisky. It is an established fact that Scotch whiskey is available and known all over the world as a kind of whiskey produced in Scotland and is usually advertised as such.

Under the WTO TRIPS Agreement, geographical indications (GIs) are defined as ‘indications that identify a good attributing to its origin in the territory of a member, or a locality or region in that particular territory, given that the quality, reputation or other traits of the good arise due to its geographical origin.’

As per the TRIPS Agreement, members have to provide the legal aid to interested parties to prevent any use that would render it an act of unfair competition under Article 10bis of the Paris Convention. This applies to the use of GIs for wines and spirits not originating in the area indicated.

In this case, the word ‘Scot’ or ‘Scotch’ is a geographical indication (as defined in the TRIPS Agreement) identifying whisky produced in Scotland.

In addition to the above, India also has its own Geographical Indications of Goods (Registration and Protection) Act, 1999 under which a geographical indication has been defined. Section 20(1) of this Act prevents the filing of any suits to recover damages for the infringement of an unregistered GI.

It was held that it was permissible for the Plaintiffs to approach the Court to restrain the Defendant from passing-off its goods as those originating from Scotland or that it is Scotch whisky.

Under Section 67 of the Act, the Plaintiffs prayed for damages amounting up to Rupees five Lakh caused by the action of passing-off by the Defendant. It was argued that the reputation of Scotch whisky was irreparably damaged by the use of the word ‘Scot’ in the Defendant’s products.

After hearing both sides, the bench held that the Defendant ought to be prevented from further passing-off its ‘Red Scot’ whisky as whisky originated from Scotland. It was held that the only way to do so was to injunct the Defendant from using the word ‘Scot’ or any other similar words while dealing and manufacturing whisky.

Since the Defendant did not appear in Court, it was assumed that they agreed to drop the word ‘Scot’ from their products. While the Defendant stopped the sale and manufacture of ‘Red Scot’ for a period of two years between 2001 and 2003, they soon resumed the use of the word ‘Scot’ in the whisky manufactured and sold.

The final verdict reiterated the need to protect intellectual property and came to the conclusion that the Plaintiffs were entitled to the permanent injunction prayed for and also to damages to the extent of Rupees five Lakh and the cost of Rupees three Lakh ten thousand which was incurred in litigation.

Conclusion:

Goods having a certain geographical origin due to which it has a specific reputation or quality should not be denied protection. India’s stand on the geographical indication protection by way of the common law remedy of passing-off has been well-established through the numerous judicial opinions on par with international judgements. However, the concept of geographical indications as a branch of intellectual property by itself is still in a developmental stage.

The purpose of the law concerning the same can be stated in three main points: to restrain unauthorised entities from falsely labelling products as if they were of geographic significance, to protect consumers from being cheated, and to promote economic prosperity sellers holding geographical indications.

This particular judgement of the court which upholds legal protection of Geographical Indications, including Scotch whisky, follows the principles set by the Indian GI Act of 1999. It was the beginning of a trend of awareness and legal protection for GIs in the Indian judiciary, leading to its significance as a landmark decision.