Introduction: In the annals of trademark law, few cases weave a narrative as intricate and compelling as Khoday Distilleries Limited vs. The Scotch Whisky Association. This legal battle, culminating in a Supreme Court judgment on May 27, 2008, pits an Indian whisky manufacturer against a formidable guardian of Scotch heritage. At its heart, the case grapples with the delicate balance between trademark protection, consumer perception, and the equitable doctrines of delay and acquiescence. It’s a story of a brand name—Peter Scot—that stirred a transcontinental dispute, raising profound questions about deception, goodwill, and the passage of time in the realm of intellectual property.
Detailed Factual Background: Khoday Distilleries Limited, now known as Khoday India Limited, embarked on its whisky-making journey in May 1968, introducing a malt whisky under the brand "Peter Scot." The company, incorporated under the Companies Act, 1956, sought to register this trademark in 1971. The application sailed through initial scrutiny, with the Registrar of Trade Marks accepting it for advertisement, subject to association with an existing registration (T.M. No. 249226-B). Despite an opposition from Mohan Meakins, the mark was successfully registered, marking the beginning of Peter Scot’s market presence in India.
The Scotch Whisky Association (SWA), a trade body dedicated to protecting the integrity of Scotch whisky, along with another respondent, entered the fray years later. They became aware of Peter Scot as early as September 20, 1974, through a routine report in the Trade Mark Journal. However, no immediate action followed. It wasn’t until April 21, 1986—nearly 12 years later—that the SWA and its co-respondent filed an application for rectification of the Peter Scot trademark, alleging it deceived consumers into believing it was Scotch whisky. Concurrently, a passing-off suit filed by the SWA in the Bombay High Court in 1987 (C.S. No. 1729 of 1987) remained pending, adding another layer to the dispute.
Khoday defended its mark, explaining its origin through an affidavit by Peter Warren, a former employee. Warren claimed "Peter Scot" was coined from his father’s forename, "Peter," and his nationality, "Scot," inspired also by the famed British explorer Captain Scott and his son Peter Scott, a noted naturalist. The phonetic similarity between "Scott" and "Scot" was acknowledged, but Khoday emphasized its Indian identity, labeling Peter Scot as the "Pride of India," distilled and blended in Bangalore.
The SWA countered with affidavits from 20 individuals, including Ian Barclay, their in-house solicitor, asserting that Peter Scot’s branding—featuring a "Rampant Lion" emblem and slogans like "Distilled from the Finest Malt and Blended with the Choicest Whiskies by Scotch Experts under Government Supervision"—misled consumers into associating it with Scotch whisky, a product exclusively from Scotland.
Detailed Procedural Background: The procedural journey began with Khoday’s trademark registration application, accepted and advertised in the early 1970s. Following its registration, the SWA’s 1986 rectification application landed before the Deputy Registrar of Trade Marks (Respondent No. 3). The Registrar framed five issues: the applicants’ status as "persons aggrieved" under Section 56 of the Trade and Merchandise Marks Act, 1958; the maintainability of the application due to misjoinder; the mark’s distinctiveness; its compliance with Section 11 (prohibiting deceptive marks); and the rectification remedy.
The Registrar ruled that the SWA lacked locus standi, but the second respondent had standing. On distinctiveness, Khoday prevailed, but the Registrar found the mark contravened Section 11, citing unrebutted evidence of consumer confusion and dismissing Khoday’s delay and acquiescence pleas. The rectification was granted on May 12, 1979.
Khoday appealed to the Madras High Court under Section 109 of the Act (T.M.A. No. 3 of 1989). On September 25, 1998, a Single Judge upheld the Registrar’s decision, noting Khoday’s failure to rebut evidence or cross-examine witnesses and rejecting acquiescence due to insufficient evidence of deliberate inaction by the SWA. An intra-court appeal (TMSA No. 2 of 1998) followed, but the Division Bench, on October 12, 2007, affirmed the Single Judge’s ruling, emphasizing the deceptive intent behind Peter Scot’s branding.Undeterred, Khoday sought special leave from the Supreme Court, which was granted, leading to the final adjudication in Appeal (Civil) 4179 of 2008.
Issues Involved in the Case: The Supreme Court distilled two principal issues: (1) Whether the SWA’s delay in filing the rectification application amounted to acquiescence or waiver, barring their claim? and (2) Whether the Registrar and High Court applied the correct legal tests in assessing deception and confusion under Section 11 of the Act?
Detailed Submission of Parties: Khoday mounted a robust defense. They argued that the SWA, aware of Peter Scot since 1974, waited 12 years until 1986 to act, a delay that prejudiced Khoday as its sales soared. This inaction, they contended, constituted acquiescence or waiver, rendering rectification inequitable. They asserted that "Peter Scot" was not deceptively similar to Scotch whisky trademarks, as discerning buyers—typically educated and affluent—would not confuse an Indian product labeled "Pride of India" with Scotch whisky. It criticized the High Court for ignoring the label’s entirety and invoked Section 26 of the Geographical Indications of Goods Act, 1999, to protect their good-faith use.
The SWA countered that delay was irrelevant in rectification proceedings aimed at maintaining register purity and public interest. They argued that Peter Scot’s branding deliberately mimicked Scotch whisky, exploiting its goodwill, as evidenced by unrebutted affidavits showing consumer confusion. Desai cited global precedents protecting "Scot," "Glen," and "Highland," urging a stern stance against fraudulent adoption. He dismissed the 1999 Act’s applicability and emphasized that statutory findings of likelihood of confusion warranted upholding the rectification.
Detailed Discussion on Judgments Cited by Parties and Their Context: Both parties drew on a rich tapestry of precedents, each contextualized to bolster their stance:
- Mohan Meakin Breweries Ltd. vs. The Scotch Whisky Association, PTC (Suppl) (1) 352 (Del) (DB): Cited by the SWA, this Delhi High Court decision protected "Scotch" against Indian misuse, emphasizing consumer protection over trader competition.
- Scotch Whisky Association & Ors. vs. Golden Bottling Ltd., 2006 (32) PTC 656 (Del.): Another SWA citation, it upheld rectification of "Red Scot," reinforcing the deceptive similarity test for whisky branding.
- Srilab Breweries Pvt. Ltd. vs. Scotch Whisky Association, 2006 (33) PTC 527 (Reg.): The SWA relied on this to show consistent success in barring Scottish-evoking marks on Indian whisky.
- William Grant & Sons Ltd. vs. McDowell & Co. Ltd., 1997 (17) PTC: Highlighted by the SWA, it protected "Glenfiddich," underscoring judicial intolerance for Scotch mimicry.
- Ciba Ltd. Basle Switzerland vs. M. Ramalingam, AIR 1958 Bom 56: Khoday cited this Bombay High Court ruling to argue that delay could bar rectification if it prejudiced the registrant, balancing public interest with equity.
- State of Madhya Pradesh vs. Bhailal Bhai, 1964 (6) SCR 261: Khoday referenced this Supreme Court case to suggest a three-year limitation analogously applied to equitable relief, though the court distinguished it as a money claim.
- Sakur vs. Tanaji, AIR 1985 SC 1279: Khoday used this to argue the Limitation Act’s inapplicability to the Registrar, a non-court entity.
- Power Control Appliances vs. Sumeet Research and Holdings, (1994) 2 SCC 448: Khoday leaned on this Supreme Court ruling to define acquiescence as active consent, not mere delay.
- Ramdev Food Products (P) Ltd. vs. Arvindbhai Rambhai Patel, (2006) 8 SCC 726: Khoday cited this to reinforce acquiescence as a defense where delay prejudiced the defendant.
- Bollinger vs. Costa Brava Wine Coy. Ld., 1960 (1) RPC 16: The SWA invoked this UK case on "Spanish Champagne" to argue that geographic misrepresentations deceive uneducated buyers, though Khoday distinguished it by buyer class.
- Warnick (Erven) Besloten Vennootschap vs. J. Townend & Sons (Hull) Ltd., 1980 RPC 31: The SWA used this to extend Bollinger’s deception test to whisky.
- Scotch Whisky Association vs. Marton De Witt, (2008) FCA 73 (Australia): Khoday cited this Federal Court of Australia decision to argue discerning buyers wouldn’t confuse "Glenn Oaks" with Scotch, contrasting Indian findings.
- Cooper Engineering Co. Pty. Ltd. vs. Sigmund Pumps Ltd., (1952) HCA 15 (Australia): Khoday referenced this to show dissimilar suffixes ("Master" vs. "King") negated confusion, akin to "Peter" vs. "Scot."
- Application of E.I. DuPont DeNemours & Co., 476 F.2d 1357 (US): Khoday drew on this US case’s multi-factor confusion test, emphasizing buyer sophistication and lack of actual confusion.
- Scotch Whisky Association vs. Majestic Distilling Company, 958 F.2d 594 (US): Khoday cited this to argue "Black Watch" wasn’t deceptive absent Scottish origin claims.
Detailed Reasoning and Analysis of Judge: On the delay issue, the court rejected the SWA’s claim that rectification proceedings were immune to equitable defenses. Noting their awareness of Peter Scot since 1974, The court found their 1986 action—12 years later—unjustifiable, especially given their proactive stance against other marks like "Hogmanay" and "Old Angus." Barclay’s explanation of awaiting a Supreme Court ruling was dismissed as hollow, as the SWA pursued other cases concurrently. Drawing on Ciba Ltd., Power Control Appliances, and Ramdev Food Products, Sinha held that the SWA’s inaction constituted acquiescence, causing Khoday substantial prejudice as Peter Scot gained popularity.
On deception, the court critiqued the Registrar and High Court for applying an overly stringent test, ignoring buyer sophistication and label context. The court contrasted the Bollinger test—apt for uneducated champagne buyers—with whisky consumers, whom he deemed discerning, educated, and brand-conscious. Referencing Australian (Marton De Witt) and US (DuPont) precedents, the court emphasized that "Scot" alone didn’t inherently deceive, especially with "Pride of India" and Bangalore origins clearly stated. The SWA’s unrebutted affidavits were insufficient without evidence of actual confusion, shifting the burden unmet due to Khoday’s non-participation—a tactical error, but not fatal given the delay defense. Court rejected the 1999 Act’s relevance, as Peter Scot’s use predated its enactment, and found the Registrar’s discretion misapplied by ignoring equitable principles. The judgment underscored that public interest and register purity, while vital, couldn’t override unconscionable delay.
