Bangalore: India can have its whisky, and drink it too, but it risks losing out in the global rice and tea market.
A ruling by the Supreme Court on Tuesday ended the almost two-decades-long challenge by an association of Scotch whisky makers to Khoday India Ltd’s right to have a non-Scotch whisky brand called Peter Scot because of the similarity between the words “Scot” and “Scotch”.
But the ruling could result in global retaliation and affect Indian products such as basmati rice and Assam tea, say analysts. That’s because the Supreme Court ruled in favour of Khoday despite the geographical indication (GI) status enjoyed by Scotch. Unlike a trademark—a unique and distinctive sign to identify a product or service—a GI is a sign used on goods that have a specific place of origin and possess qualities or reputation that are due to that origin.
In many cases, a GI is merely the name of the place where the goods originate. “Champagne” and “Tuscany” are some examples of GIs. Indian examples include “Assam tea”, “Darjeeling tea” and “Kanchipuram silk saree”. Basmati rice is also a GI.
Speaking generally of the relevance of cases on questions of trademark and GIs, and not on this specific case, Rahul Singh, professor at the National Law School of India and an expert in laws related to intellectual property, says that in such instances judges must not interpret facts in a manner that would result in display of “nationalistic protection or economic jingoism”.
Unbottled genie? Peter Scot whisky and other brands in a shop in New Delhi. Khoday India registered the brand as a trademark in 1974. (Madhu Kapparath / Mint)
“Tomorrow our Assam tea and Basmati rice could get into trouble in another country” if this happens, he cautions.
A corporate law practitioner involved in the case who did not wish to be named says that the judgement “is a landmark judgement in trademark cases in India”.
“There was such heavy international lobbying against the trademark. Scotch whisky has been granted protection of geographical indication also. It is significant that an Indian company won the case,” this person adds.
In this case, Khoday, which began producing Peter Scot 40 years ago, registered the trademark in 1974. Twelve years later, the Scotch Whisky Association or SWA, a group of manufacturers and exporters of Scotch whisky, raised an objection before the registrar of trademarks, arguing that the word “Scot” was deceptively similar to “Scotch” and would mislead the consumers into believing that the product was of Scottish origin. The registrar ruled in SWA’s favour.
Khoday appealed to the Madras high court which too ruled against it. The high court order delivered in October was challenged by Khoday in the Supreme Court.
A two-judge bench on Tuesday allowed the appeal and validated the use of the trademark “Peter Scot”.
The judgement swung in favour of Khoday on two points. The first was the delay of 12 years on part of SWA in filing an objection.
The second was that consumers of Scotch whisky in India are discerning enough to distinguish between Scotch whisky and whisky made in India.
Referring to precedents from countries such as Australia and the US, the judges said the legal test applied to check deception of consumers by the high court were incorrect.
The judgement states: “However, tests laid down in Australia and United States in respect of self-same goods are noticed herein before are somewhat different. But then we are concerned with the class of buyer who is supposed to know the value of money, the quality and content of scotch whisky. They are supposed to be aware of the difference of the process of manufacture, the place of manufacture and their origin.”
The apex court’s judgement, interestingly, overturns numerous verdicts of high courts in the country that granted SWA relief by passing restraining orders against liquor manufacturers in India for using words such as “Scot”, “Highland” and “Chief”, words that SWA contended were associated with Scotch whisky brewed in Scotland.
Neel Mason, managing partner, Mason and Associates, a firm that specializes in intellectual property rights law, points to a 2006 Delhi high court judgement, where SWA succeeded in stopping Golden Bottling Ltd from manufacturing and selling a whisky called “Red Scot”. “But we can’t say that the Supreme Court ruling...overrules the high court verdicts since every case is decided on specific facts. Issues of pricing, delay and nature of the labels or products are different and need to be seen on a case-to-case basis,” explained Mason.
Anand Prasad, partner at Trilegal, said that this judgement opens up doors to mislead consumers. “Not all consumers in India are sophisticated in terms of global knowledge,” he added.
According to National Law School’s Singh, issues such as the Scotch whisky one are essentially about customer confusion.
“What raises confusion in customers is a question of interpretation. Judges in this case feel that ‘Peter Scot’ would not cause confusion and they are within the paradigm and spirit of the philosophy of trademark law,” he said.