PETER SCOT stays on the register - for now

In Khoday Distilleries Limited v Scotch Whisky Association (November 26 2007), the Supreme Court has stayed a Madras High Court decision in which the High Court directed that the mark PETER SCOT be removed from the register on the grounds that it was evocative of scotch whisky.

Indian company 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 & Sons Limited initiated rectification proceedings against the trademark.

The Scotch Whisky Association adduced substantial evidence establishing the transborder reputation and goodwill of scotch whisky both in India and worldwide. The association contended that the mark PETER SCOT used in relation to whisky was deceptively similar to the word 'scotch'. Therefore, consumers were likely to be misled into thinking that whisky manufactured in India and sold under the mark PETER SCOT originated from Scotland.

Khoday argued that it had adopted the mark PETER SCOT because its distillery had been set up by a Scot called Peter Warren. Therefore, the mark PETER SCOT referred to Warren's first name and nationality.

The registrar held that the word 'Scot' is evocative of scotch whisky. Therefore, when used in relation to whisky produced outside of Scotland, the word 'Scot' would deceive the average consumer into thinking that such whisky was a variant of scotch whisky, whether the word was used by itself or in association with another word (eg, 'Peter'). Accordingly, the registrar held that the mark PETER SCOT should be removed from the Register of Trademarks.

The Madras High Court affirmed the registrar's decision. The court also held that the fact that a mark has been registered does not give indefeasible rights in the mark if the registration is contrary to Section 11 of the Trademarks Act. Therefore, the expungement of the PETER SCOT mark was permissible even though the mark had been registered with effect from July 3 1971 and the rectification proceedings were initiated only in 1986. Further, the fact that the Scotch Whisky Association had been inactive for a long period of time did not amount to acquiescence, particularly since the statute does not prescribe a limitation period for filing rectification proceedings.

Khoday also contended that the Scotch Whisky Association was not an aggrieved party and, consequently, was not entitled to file rectification proceedings against the PETER SCOT mark. The court held that the association itself was not an aggrieved party, since it was incorporated only to protect the interests of its members and carried out no manufacturing or trading activities. However, it was entitled to seek rectification in conjunction with whisky manufacturer John Walker, which is a member of the association.

Khoday appealed. The decision of the Madras High Court was upheld by the division bench of the same court. Khoday appealed to the Supreme Court by way of special leave petition. The Supreme Court admitted the petition and stayed the Madras High Court decision until further order. It also ordered that the petition be listed for hearing on January 16 2008.

The decision of the Supreme Court is awaited with considerable interest; in the meantime, the trademark PETER SCOT remains on the register.

Mustafa Safiyuddin, DSK Legal, Mumbai