PETER SCOT can remain on register, says Supreme Court
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In Khoday Distilleries Limited v Scotch Whisky Association (Case 4179/2008, May 27 2008), the Supreme Court has reversed decisions by the registrar of trademarks and the Madras High Court, holding that the mark PETER SCOT for whisky was not evocative of scotch whisky.
Khoday Distilleries Limited registered the mark PETER SCOT for goods in Class 33 of the Nice Classification with effect from July 3 1971. In 1986 the Scotch Whisky Association and John Walker and Sons Limited initiated rectification proceedings on the grounds that use of a mark containing the term 'scot' was likely to deceive or cause confusion as to the origin of the goods. The registrar of trademarks and the Madras High Court agreed and ordered that the registration for PETER SCOT be expunged from the register.
On appeal, the Supreme Court disagreed, holding that the registration for PETER SCOT was valid based on two grounds.
First, the court ruled that, having regard to the nature of the goods and the relevant public, whisky bearing the mark PETER SCOT was unlikely to be confused with scotch whisky. Interestingly, the court coined a new term, stating that the ‘heightened scrutiny test’ need not be applied in determining actual confusion or a likelihood of confusion. It went on to hold that "where the class of buyers… is quite educated and rich, the test will [be different from that used where] the products are purchased by villagers, [the] illiterate and [the] poor". In the present case, the court found that the relevant public knew "the value of money, and the quality and content of scotch whisky" and was "aware of the differences in the process of manufacture, the place of manufacture and the origin [of the goods]".
Second, the court ruled that although the statute of limitations does not apply to rectification proceedings under the trademark legislation, the Scotch Whisky Association and John Walker were prevented from initiating rectification proceedings on the grounds of acquiescence and waiver. The court noted that Khoday started using the PETER SCOT mark in 1968 and obtained registration with effect from 1971. The rectification action was filed only in 1986, even though the Scotch Whisky Association and John Walker had been aware of the application for the registration of PETER SCOT since 1974 at the latest. According to the court, the explanation offered for the delay in initiating the rectification proceedings was untenable, particularly in light of the fact that the association and John Walker had objected to Khoday's use of the marks HOGMANAY and OLD ANGUS in 1974. In these circumstances, the court ruled that the association and John Walker were deemed to have acquiesced to Khoday's use of the PETER SCOT mark. Further, the court held that the action had "caused immense prejudice" to Khoday; therefore, the registrar should have exercised his discretion and refused to remove the mark from the register.
The decision is significant in that it is the first time that the Supreme Court has held that an action for rectification may be dismissed on the grounds of acquiescence and waiver, even though there is no limitation period for bringing such an action. However, in doing so, the court seems to have overturned findings of fact made by the registrar and the trial court, which departs from established practice.
Mustafa Safiyuddin, DSK Legal, Mumbai
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