Case: Khoday India Ltd Vs. Scotch Whisky Association

Appellant is a company incorporated under the Companies Act, 1956. It manufactures whisky under the mark ?Peter Scot?. Manufacture of the said product allegedly was started by the company in May, 1968. An application was filed by it for registration of its mark before the respondent No.3. Appellant was informed that its application was accepted and allowed to proceed with the advertisement, subject to the condition that the mark would be treated as associated with Reg. T.M.proceeding was initiated as regards registration of the trade mark. No opposition was filed by the respondent. Only one M/s. Mohan Meakins filed an opposition. The said trade mark was registered. Respondent Nos. 1 and 2 came to know of the appellant?s mark on or about 20th September, 1974. They filed an application for rectification of the said trade mark on 21st April, 1986. We may also notice that a suit for passing off has also been filed by the 1st respondent and others in the Bombay High Court being C.S. No. 1729 of 1987, which is stated to be still pending.Appellant having been called upon showing its cause, by way of an affidavit affirmed by one Mr. Petern Warren explaining the manner in which the word ?Peter Scot? was coined,I was employed in Khoday, the whisky we produced was sold under at least two marks, namely RED KNIGHT and PETER SCOT. The brand name ?Peter Scot? was coined primarily with my father in mind i.e. using his forename, ?Peter?, and his nationality, ?Scot?. Another factor behind the coining of this brand name was the internationally known British explorer, Captain Scott, and his son Peter Scott, who is widely known as an artist, naturalist and Chairman of the World Wildlife Fund. Although the name ?Scott? is spelt with two ?t?s, it is phonetically the same as ?Scot?. Before the 3rd respondent, respondents 1 and 2 filed affidavits affirmed by 20 different persons in support of their application for modification. One of the affidavits to which, we would advert to a little later was affirmed by Ian Barclay, who is anSolicitor of the said respondents. Several issues were framed by the 3rd respondent in the said proceedings which were asWhether the applicants are ?persons aggrieved? under Section 56;(2) Whether the Application for rectification is not maintainable due to anyof Applicants;(3) Whether the impugned mark was not distinctive of the goods of the registered proprietors at the commencement of the rectification proceedings;(4) Whether the impugned registration contravenes Section 11 at the commencement of rectification proceedings; and(5) Whether the mark is liable to be rectified and if so, in what manner.?While opining that the 1st respondent has no locus standi to maintain the said application for rectification, it upheld the locus standi of the 2nd respondent. As regards Issue No.2 is concerned, it held that theof the applicants is not fatal. Issue No.3 which was to the effect that whether the impugned mark was not distinctive of the goods of the registered proprietors at the commencement of the rectification proceedings, it was answered in favour of the appellant. Issue No.4 which primarily concern us was discussed by the 3rd respondent at some details. It was held that the mark has been used deceptively for long time and, although there is also unexplainable and inexcusable delay on the part of the respondents in filing the rectification application, the registered proprietors failed to file any evidence nor did they raise their little finger to rebut the evidence filed by the applicants/respondents. The plea of acquiescence/delay raised by the appellant 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.On the affidavit evidence filed on behalf of the respondents, respondent No.3, although opined, that the same was not satisfactory but held the respondents? plea that the impugned registration contravenes Section 11 of the Act,the evidence gives an impression that some customers are being persuaded into thinking that PETER SCOT brand Whisky is also a Scotch Whisky. This is on account of the presence of two factors, namely(1) the presence of the word Scot in the PETER SCOT mark and (2) the presence of some slogan on the Whisky bottles under PETER SCOT brand. Unfortunately, there is absolutely no evidence whatever from the registered proprietors to assail or counteract or rebut the Applicants? evidence. In the absence of any material or evidence in rebuttal or reply from the registered proprietors, the evidence of Applicants stands unquestioned, unrebutted, unassailed and even unmitigated and I have no other go except to receive the voluminous affidavit and documentary evidence filed by Applicants on its face value.?On the aforementioned premise, the application for rectification was allowed. An appeal was preferred there against by the appellant before the High Court in terms of Section 109 of the Act. A learned Single Judge of the High Court dismissed the said appeal. As regards the plea of acquiescence it wasacquiescence if it is to be made a ground for declining to rectify, must be of such a character as to establishon the part of the applicant or deliberate inaction which had regulated in the appellant incurring substantial expenditure or being misled into the belief that the respondents though entitled to, had deliberately refrained from taking any action and were unmindful of the use of the mark by the person in whose name it was registered. The facts of this case are not such as to warrant the conclusion that there has been acquiescence.?Noticing that the appellant had neither adduced any evidence northe deponents of the affidavits, it wasis unfortunate that the appellant had chosen to refrain from placing any material before the authority to refuse the claim for rectification. Apparently, appellant did not have great faith in the validity of the registration and did not consider it worthwhile even tothe witnesses who had filed the affidavits in support of the application for rectification. It is evident that adoption of the mark ?Peter scot? by the appellant was for the reasons mentioned in the affidavit of Peter Jeffery Warren. The mark was adopted apparently with a view to take advantage of the good will associated with Scotch whisky by using the word ?Scot? as part of the trade mark for the whisky manufactured by the appellant.?As regards the quality of the affidavits it wascriticism leveled against the deponents of some of the affidavits filed by the respondents as evidence though justified to some extent does not help the appellant to avoid rectification. The statutory standard is not the actual confusion and deception but likelihood thereof. The term ?Scot? when used in association with whisky oforigin is inherently capable of and is likely to cause confusion and deception.?Feeling aggrieved, an intra court appeal was preferred there against by the appellant. A Division Bench of the High Court, as noticed hereinbefore, dismissed the said appeal. The Division Bench noticed at some length the submissions made by the parties to inter alia holdhave carefully considered the above said submissions made by the counsel on either side. In our considered view, the use of the device ?Lion Rampant? and the above said description especially the description ?Distilled from the Finest Malt and Blended with the Choicest Whiskeys by Scotch Experts under Government Supervision? is definitely intended to lead the consumers to believe that the whiskey manufactured by the appellant is scotch whiskey. Though specific averments as above said have been made in the affidavit on Ian Barclay, the same have not been rebutted by the appellant by adducing rebuttal evidence. The appellant has also not chosen toIan Barclay on the averments contained in the affidavit. Therefore, we are of the considered view that both the third respondent and the learned single Judge have considered all the relevant materials available on record and have exercised their discretion properly and as such we do not find any reason to interfere with the judgment of the learned single Judge.?

Reasoning: However, tests laid down in Australia and United States in respect ofgoods are noticed hereinbefore are somewhat different. But then we are concerned with the class of buyer who 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. Respondent No.3, the learned Single Judge as also the Division Bench of the High Court, therefore, failed to notice the distinction, which is real and otherwise borne out from the precedents operating in the field. [SeeKerly?s Law of Trade Marks and Trade Names, Thirteenth Edition pg. 600].Had these tests been applied the matter might have been different. In a given case probably we would not have interfered but we intend to do so only because wrong tests applied led to a wrong result.So far as the applicability of the 1999 Act is concerned, having regard to the provisions of Sections 20(2) and 26(2), we are of the opinion that the 1999 Act will have nodoctrine of continuing wrong has nothing to do with the refusal on the part of a statutory authority or a court of law to exercise its discretionary jurisdiction on the ground of latches, acquiescence or waiver.