Intellectual Properties of a Company
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This article is written by Anukrati Gupta, a student from Symbiosis Law School, Noida. In this article, the author has critically analysed the case of William Grant & Sons Ltd. v. McDowell & Company Ltd.

Introduction

A ‘copyright’ refers to the one of the legal right’s that the owner of the Intellectual Property possesses. In a simple language, a right to copy is known as copyright. The copyright law states that a person who is a creator of a work is the only person who imbibes the exclusive rights to reproduce that work. It gives creators of original material the exclusive right to further use and duplicate that material for a given amount of time, at which point the copyrighted item becomes public domain.

The case further discussed in this assignment is that of a copyright infringement. The present case deals with a copyright infringement issue, the case has discussed about how the Defendant has copied the Plaintiff’s very popular Scotch whisky’s label and how a copyright infringement harms the business and reputation of a seller/businessman. 

Name of the Case: William Grant & Sons Ltd. Vs. McDowell & Company Ltd. [1994 (30) DRJ 105]

Court: Delhi High Court

Name of the Judge: Justice Mahinder Narayan

Background

Facts Summary

The Plaintiff, in this case, is William Grant & Sons Ltd., the company is seeking injunction on the basis of the infringement of copyright. The Defendant, in this case, is McDowell & Company Ltd. The facts giving rise to this particular case as per the Plaintiff in the plaint filed states that his company was incorporated under the laws of Scotland and its registered office is at the Glenfiddich Distillery, Dufftown, Banff shire Scotland. On the other hand the Defendant, in this case, is one of the major manufacturers and marketers of whisky in India.  The plaint filed further specifies that the Defendant company announced the launch of a whisky which he claims to be Single Malt Whisky under its own name ‘McDowell’s Single Malt Whisky’ to be launched by the defendants by the month of December, 1992.

The Plaintiff in the plaint filed claims that they have been exporting various Whiskies to India since 1946 and Glenfiddich Single Malt Whisky since 1978. There were major specifications mentioned by the Plaintiff which made their product unique from every other products present. The Plaintiff went on to mention the history of the Scotch whisky that they produce and further talks about the method of making of the two very popular whiskies that they sell, one is known as the Malt Whisky and the other one is known as the Grain Whisky. The case here is related to the Malt Whisky also known as Single Malt Whisky. While discussing the making of this whisky, the Plaintiff stated that the Malt Whisky is produced from malted barley only and on the other hand the Grain Whisky was the combination of malted barley, un-malted barley and other cereals. It was further stated by them that they have a trademark “Glenfiddich” for the pure Malt Scotch Whisky that they produce.

The plaintiffs, in this case, talks about the various stages of packaging which they follow to make their whisky marketable. They specify that it is packed under a black cylindrical container called a tube after it is labeled and bottled. The tube of the company is unique because of its shape and design and is also memorable and further owes its origin to the owner who is the owner of the copyright. The tube is covered with grainy black textured paper which forms a base for all the necessary details that is required to be mentioned on the Glenfiddich label. The bottle of the Glenfiddich Pure Malt Whisky is a triangular bottle deep green in color which is combined with the effect of tube. For the Plaintiff’s product Glenfiddich label is truly a hallmark. Although there is no exclusive right attached to the green colored triangular Glenfiddich bottle but it is inseparably associated with the brand.

Further, the Plaintiff talks about their unique label and explains that the device of stag and thistles with heraldic insignia, are typically the essence which reminds instantly of Scotland. And particularly thistles are officially recognized to be an indicative of Scotland and one of the reasons for the same is that it is the national emblem of Scotland, and it is held objectionable if they are used on the products not originating from Scotland. The Plaintiff’s Glenfiddich label constitutes original artistic work within the meaning of Section 2(c) of the Indian Copyright Act, 1957. The Glenfiddich Single Malt Whisky was sold in a green bottle and black cylindrical cartons bearing a label with a distinctive trade dress and unique features, which included a stag device that Grant contended had become exclusively associated with them and a thistle device which Grant alleged was a Scottish symbol indicating origin of the product. 

Defendant, on the other hand was about to introduce Single Malt Whisky under the name of McDowell Single Malt Whisky. The Plaintiff claims that there is a copyright infringement by the defendants as the label on the bottle and the shape of the bottle manufactured by them were very similar and it could harm their goodwill and profit. 

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Relevant Laws

Copyright Act, 1957 – Section 15, Copyright Act, 1957 – Section 19, Copyright Act, 1957 – Section 2(c), Copyright Act, 1957

Cases majorly referred to: R.J. Reynods Tobacco Company vs. Indian Tabacco Company Ltd. and Apple Computer lnc. vs. Apple Leasing & industries

Arguments by the Parties

Plaintiff’s side

The Plaintiff in this said case flies a claim against the Defendant where they have stated various causes through which it is easy to prove that the defendants are involved in a case of copyright infringement with regards to the Plaintiff’s product. The Plaintiff starts with the history of their product and the various specification that their product posses. They state that how they have various stages of packaging and how do they do the same with various specifications. They further state that the Glenfiddich label of their Single Malt Whisky posses some typical evocation of the Scotland like device of stag, device of thistle and heraldic insignia. And they also mention that their Glenfiddich label constitutes artistic work within the meaning of Section 2(c) of the Indian Copyright Act, 1957 which means that “it is entitled to protection as such under the Indian law by virtue of the membership of both India and the United Kingdom to the Berne Convention and the Universal Copyright Convention (UCC)”. The Glenfiddich Malt Whisky Label was first designed in the late 1960s by the Plaintiff and over the years changes were brought forth in the said label to make it come out as unique in the world market. 

Further, as informed by the Plaintiff, the label of Glenfiddich Whisky was made subject to an amendment in the year 1983 through a design agency and the current form is the result of that redesigning. The design agency (Claessens International Ltd.), which helped in the redesigning the label of Glenfiddich, duly assigned them the copyright of the same under the head ‘artistic work’ for that new redesigned label. And the same is the reason that the plaintiffs consider themselves to be the owner of the copyright of this said artistic work and the ownership of the same further states that they have the right to reproduce the same in any form or material.

The Plaintiff contends in this case that the Single Malt Whisky which is introduced by the defendants in India included a lot of features that the Plaintiff’s product posses like that of label containing various features and symbols. Plaintiff here contends that the label put forth by the Defendant is a “colorable imitation” and a slight reproduction of their label and the said action is done without the Plaintiff’s consent. And the container it is packed in is also a lot identical, which the Plaintiff thinks of as done for the means of taking away of the customers from them by the way of misguidance and misinterpretation. And as there is a huge population in India who consumes this product, it will be harmful to their business and will be a clear infringement of intellectual property.

The Plaintiff here, in this case, prays for a temporary injunction before the court which can restrain the defendants from advertising and selling their alcoholic beverage which come under the brand named “McDowell’s Single Malt Whisky”. The reason is that it posses the identical packaging, bottle, label and container which amounts as an infringement of the copyright of plaintiffs product.

Defendant’s side

The Defendant, in this case, seeks the dismissal of suit stating it to be without any cause of action. The Defendant clearly states that a wide range of Single Malt Whisky is present and also different parts of the world produce different types of whisky and the one produced in Scotland is specifically known as ‘Scotch Whisky’, so there is no way in which the Defendant is taking the name of the Plaintiff’s whisky. Further, the Defendant denies to the contention that the packaging is infringing any trade description and states that it is not conducting any improper usage and says that the packaging by then is totally different from that of the Plaintiff’s Scotch whisky. 

Defendant shows his denial on the Plaintiff’s claim that their Glenfiddich single malt whisky posses a uniquely designed label with the artistic features of his own including color arrangements and etc., and says that they are not entitled to the protection they are asking for. 

It is further claimed by the Defendant that the brand Glenfiddich is not a well known Scotch Whisky brand in India. And that the products sold by the Plaintiff are highly expensive and people usually don’t buy it. Also, states that the Plaintiff’s product is 4 times the cost of the Defendant’s product.  

According to the Defendant, the features in question as per claimed by the Plaintiff were very common to trade and can’t be put forth for copyright infringement.

The Defendant through its arguments states that the ‘Single Malt’ Whisky he is the seller of is being sold in India since, 1991. And that the cylindrical container is in no way identical with that of the Plaintiff’s container. Also, the contents that appear on the label are not similar to the plaintiffs product that allege distinctive or essential features of the brand. The Defendant further states that the device of thistle, device of scrolls, shield like device are common to the trade and cannot be contended as infringement of anybody’s rights. 

The Defendant clearly denies the allegations of the colorable imitation of the Plaintiff’s label, and also denies that the two brands had a very similar trade dress in which the product was packed. The Defendant clarifies to the court that they posses no intention or desire to confuse the customers and mentions that they already have a good image in the Indian markets as they are a very well known manufacturers of alcohol products in that country and there is no need for them to steal the goodwill of the plaintiffs brand. The Defendant states that their product can never be confused with that of the Plaintiff’s for the sole reason that the Plaintiff’s product is not available at retail outlets in India and the Defendant’s was. The Defendant denies all the allegations in absolute totality by stating that they have not deliberately or otherwise adopted the symbols or trademark of the Plaintiff. 

Ratio Decidendi

“If there is recognized reputation in India, the party under the plaint is entitled to protect that reputation, and has all the rights to ensure that the reputation is in no way eroded by use of their label by making the exact replica or something which is very similar to the same.”

Obiter Dicta

A question discussed by the court, in this case, to answer the question of law was that “what is a label?”. The court with the help of the “Sunlight Soap case” states that “a label is a device which is affixed by a manufacturer on a product/article and contains material placed upon it by the manufacturer of the goods so as to distinguish his own goods from the goods of the other manufactures, and contains information regarding the nature and quality of the product, or goods to which the label is appended or affixed.” Also according to the Trade &: Merchandise Marks Act “label” is included as mark.

Analysis and Critique

The judgment given by the judge, in this case, is totally in favor of the Plaintiff. As per the question of label the court states that the Single Malt Whiskey Label which includes the various features like that of color, shape and article that makes up the whole label namely thistles, stag and ribbons are not found in any other Malt Whisky Label. And as the same are yet found in the Defendant’s label and have taken some specific unique features like that of shapes, curved lines and articles present on it. And because of this, the court concludes that it was not done accidently or unknowingly and instead looks to be deliberate in nature. And further states that what can be called as deliberate copying is dishonest and posses a characteristic of intentionally bringing the said similarities between the Glenfiddich Single Malt Whisky and Single Malt Whisky of the Defendant.

It upholds the Plaintiff’s reference of the judgment by Justice Kekewich that “Where you see dishonesty, then even though the similarity were less than it is here, you ought, I think, to pay great attention to the items of similarity, and less to the items of dissimilarity” The judgment states that the Defendant appeared to have been conscious that the Glenfiddch is the largest seller of the Single Malt Whisky in the world, so to have some profits and gains in their finances they have deliberately and intentionally copied the label of the Plaintiff. 

The court, in this case, mentions that the “Plaintiff is entitled to say that Glenfiddich is a potable product as it is a liquid and it is very logical that no brand name can be put upon the liquid. All that the Plaintiff can do, is to label the bottle in which it markets its whisky, and to make sure that its label is distinctive of its product, that its label itself indicates source of the goods, and having done all that, having made the label a distinctive one by incorporating various features of its own kind. On coming to know of the adoption of the essential features of the Plaintiff’s label, as has been done by the Defendant, the Plaintiff is entitled to say that such adoption for a product which the Defendant itself admits, does not look like the plaintiffs product which clarifies that it is a copied label and is out of the boundaries of law.”

It was observed by the court in this case that the Plaintiff was right in stating that their company owns a worldwide reputation in the Glenfiddich Single Malt Whisky and the label that they own is unique and has an identity of its own. Also, that the Plaintiff has been in the market manufacturing, selling and marketing its own branded whisky as Glenfiddich Whisky since very long ago as compared to that of the Defendant’s. The Plaintiff is the largest producer of the Single Malt Whisky recognized in the whole wide world. The court in this case decided to pass a judgment in the Plaintiff’s favor by granting an injunction against the Defendant’s product. One of the reasons stated by the court for granting the infringement was that if the defendants were allowed to use the name ‘Single Malt’ then later if there is any infringement of Copyright from their end, they will plead that their reputation is now attached with that name.

The Plaintiff has come to the court without any delay and under the limitation period and this further adds a point in the favor of the plaintiffs. The court was also of the view that “the goods in the instant case are potable products, and it is not possible to mark a liquid,  and it is only the container in which the liquid is held that can be marked with the label, so as to show a connection in the course of trade, which the Plaintiff is doing, and has been doing, it would be difficult to quantify the loss which the Plaintiff would sustain if the Defendant is permitted to continue to manufacture, market and sell the whisky bearing the infringing label.” The court, in this case, referred to the case of R.J. Reynods Tobacco Company vs. Indian Tabacco Company Ltd.

In my opinion, this case was correctly decided by the court. If we see and analyze the facts of this case it is clear that the whisky they are manufacturing is a world famous one and that they have a goodwill and reputation because of them being in the market for so long. And because of the quality they provide the whisky is appreciated and collects a lot of revenue for the company. And as per the facts and evidences mentioned it is true that the label on the Glenfiddich Whisky bottle is a unique one and posses the rights of copyright. And if it is found by the court after an impartial test that the label on the defendants Whisky bottle does match with the one on the Plaintiff bottle then it is clear that this is the infringements of the copyrights possessed by the Plaintiff in this case.

And with the opening of the economy and expansion of the concept of globalisation the Indian law and Indian courts have recognised action by foreign Plaintiff on the basis of reputation of his goods or services on the foreign soil and have departed from the traditional concept of requirement of use of the trademark or registration in India for the success in the Passing Off action. Transborder reputation is embodied in Section 35 of the Indian Trade Mark Act, 1999 and it offers protection to foreign trademarks on the basis of their international reputation.

And if we refer to the Apple Computer Case, it can be noticed that there is “gradual impairment and debasement of reputation, dilution and erosion of what is distinctive, what has to be considered in the case of the Plaintiff is the trans-border reputation of the Plaintiff in its product. Trans-border reputation of the Plaintiff, has been, in my view, established sufficiently in our country by means of the fact that the sales of Glenfiddich takes place on duty-free shops in India and is widely liked and purchased by the customers. And advertisements of Glenfiddich Whisky are found in various magazines, foreign publications which are freely available in India.” And this act of the defendants will gradually lead to decrease in reputation and further problems. 

And hence, the decision given by the court is totally valid.

Conclusion

This judgment given by the Delhi High Court is considered to be an extremely significant decision, since it is the first time that an Indian court has dealt in depth with a trade dress case. And as the result of the same, the case is then later cited in a lot of judgments by various courts in the case of copyright or trademark infringement. This case specifies that if a product has a recognized reputation in India, the party under the plaint is entitled to protect the reputation which they have earned in the previous years by serving the customers with the quality product and as a result has gained goodwill for the same. They have all the rights to ensure that the reputation is in no way eroded by use of their label by making the exact replica or something which is very similar to the same.


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