Khoday Distilleries v. Scotch Whisky Association: PETER SCOT

Citation & Court

Khoday Distilleries Ltd. (now Khoday India Ltd.) v. Scotch Whisky Association and others, Supreme Court of India (S.B. Sinha and Lokeshwar Singh Panta JJ.), Civil Appeal No. 4179 of 2008, decided 27 May 2008; AIR 2008 SC 2737; (2008) 10 SCC 723; (2008) 37 PTC 413

The Dispute

Khoday made whisky under PETER SCOT from 1968 and applied to register it in 1971; the Scotch Whisky Association did not oppose, and the mark was registered. The Association knew of the mark from a September 1974 watch report, but it and a second applicant sought rectification only in April 1986, alleging among other grounds that SCOT made buyers think the whisky was Scotch. The Registrar found standing only in the second applicant but allowed rectification under section 56 of the 1958 Act on the section 11 deception ground, and the Madras High Court dismissed Khoday's appeals. The issues were delay and the right test for deception.

What the Court Held

• The Limitation Act does not apply to rectification before the Registrar, who is not a court, but the power to rectify is discretionary, so delay, acquiescence and waiver can still be weighed alongside public interest and purity of the register.
• The Association knew of the mark from 1974 and acted against many Scottish-sounding marks, including Khoday's own HOGMANAY application and OLD ANGUS, yet took no proceedings on PETER SCOT until 1986; its explanation was rejected and rectification was held barred by acquiescence and/or waiver on these facts.
• The class of buyers matters: the test for educated, well-off buyers of such whisky differs from that for illiterate or poor buyers, and the authorities below erred by not applying that distinction.
• No fraud was alleged, the burden of proving deception lay on the rectification applicants, and the Geographical Indications of Goods Act, 1999 was held not to apply.

How to Use This in a Rectification

Registered proprietors facing a rectification petition can cite it where the petitioner knew of the mark for years, acted against others, and stayed silent. Proof matters: show the petitioner's knowledge (watch reports, notices, correspondence) and selective enforcement, and put sales and growth evidence on record before the Registrar, because the Court refused to consider a sales chart first produced on appeal. The second holding helps in hearings and oppositions involving premium or specialist goods, to argue that careful, informed buyers are less likely to be confused.

Important Limit

Decided under sections 11 and 56 of the 1958 Act; rectification is now under section 57 of the 1999 Act, and section 33 adds a five-year statutory acquiescence bar for earlier-mark owners, except where the later mark was not applied for in good faith. The Limitation Act point rested on the Registrar not being a court. The ruling was fact-specific and involved no fraud.

Judgment Source

Read the judgment. For other cases on the same issue, see trademark case laws in India, by issue.