Copyright and Trademark Dispute: Supreme Court Ruling on Liquor Label Infringement

The Supreme Court of India recently adjudicated a significant case involving copyright and trademark infringement in the liquor industry. The case, Brihan Karan Sugar Syndicate Private Limited v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana, revolved around the alleged unauthorized use of a label by the respondent that was deceptively similar to the appellant’s registered artistic work. The Court’s judgment sheds light on the principles of copyright law, passing-off action, and the scope of interim relief in intellectual property disputes.

Background of the Case

The appellant, Brihan Karan Sugar Syndicate Private Limited, filed a suit against the respondent, Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana, claiming infringement of its artistic label used for selling country liquor under the brand name “Tango Punch.” The appellant alleged that the respondent’s label, “Two Punch Premium,” was deceptively similar, causing confusion among consumers and amounting to copyright infringement and passing-off.

The appellant sought a permanent injunction to restrain the respondent from using the disputed label and also claimed damages for the unauthorized use of its intellectual property. The District Judge-1, Osmanabad, ruled in favor of the appellant and granted the following reliefs:

A perpetual injunction against the respondent from reproducing or using the label in any form.
A directive to the respondent to cease selling liquor with the disputed label.
An order for the respondent to pay damages amounting to Rs. 1,00,000.
A requirement for the respondent to surrender all infringing materials for destruction.

The respondent challenged this ruling before the Bombay High Court (Aurangabad Bench), which stayed the execution of the decree until the final disposal of the appeal. Dissatisfied with the stay order, the appellant approached the Supreme Court.

Arguments by the Appellant

The appellant contended that:

The trial court had conducted a full-fledged hearing and arrived at a well-reasoned decision favoring the appellant.
The High Court had wrongly attached importance to the rejection of interim relief during the suit proceedings, which was irrelevant after the final decree was passed.
The appellant’s withdrawal of objections before the Excise Commissioner against the respondent’s label should not negate its copyright and trademark claims.
The similarities between the labels were so striking that consumer confusion was inevitable.
The High Court erred in granting a blanket stay of execution, effectively nullifying the trial court’s findings.

Arguments by the Respondent

The respondent countered these arguments by stating that:

The appellant had failed to prove that its label was well-established in the market or had acquired goodwill.
There was no substantial similarity between the two labels.
The appellant had not produced concrete evidence of its sales, advertising expenditures, or consumer recognition.
The withdrawal of objections before the Excise Commissioner indicated acquiescence.
The trial court had overlooked key legal principles governing intellectual property disputes.

Supreme Court’s Analysis

The Supreme Court analyzed the arguments in light of established legal precedents and the evidence presented. The key issues examined were:

1. Prima Facie Case for Copyright Infringement

The Court noted that the appellant had a registered copyright in the artistic work used on its label. However, to establish infringement, it was necessary to prove that the respondent had substantially copied the label. The trial court had found a high degree of similarity between the two labels, justifying the grant of relief.

2. Passing-Off Claim

For a successful passing-off action, the appellant needed to establish:

Prior use of the mark.
Consumer goodwill and reputation associated with the mark.
Likelihood of deception or confusion.

The Court observed that the appellant had not provided strong evidence of sales figures, promotional efforts, or consumer surveys to prove the brand’s goodwill.

3. Impact of Appellant’s Conduct

The Court took note of the appellant’s withdrawal of objections before the Excise Commissioner regarding the respondent’s label. While the appellant argued that the withdrawal was conditional, the Supreme Court found no mention of any conditions in the official records. The Court reasoned that such conduct suggested acquiescence, which could weaken the appellant’s claims.

4. Justification for the High Court’s Stay Order

The Supreme Court upheld the High Court’s decision to stay the execution of the decree pending appeal. It emphasized that an appealable decree should not be enforced when serious questions remain to be decided. The Court noted:

“The High Court was justified in granting the order of stay pending the final disposal of the appeal. The findings of the trial court were not conclusive, and the balance of convenience favored the respondent.”

Conclusion and Judgment

The Supreme Court dismissed the appellant’s appeal and upheld the High Court’s stay order, stating that the trial court’s decree should not be enforced until the respondent’s appeal is decided. The judgment reaffirmed key principles in intellectual property law:

Copyright protection requires substantial proof of originality and unauthorized reproduction.
Passing-off claims must be backed by clear evidence of goodwill and consumer recognition.
Acquiescence can weaken a plaintiff’s case, particularly if objections to an alleged infringer’s conduct were previously withdrawn.
Courts must balance the rights of both parties in granting interim relief during pending appeals.

The judgment serves as an important precedent for businesses involved in intellectual property disputes, emphasizing the necessity of concrete evidence in proving copyright and passing-off claims.

Petitioner Name: Brihan Karan Sugar Syndicate Private Limited.
Respondent Name: Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana.
Judgment By: Justice Abhay S. Oka, Justice Rajesh Bindal.
Place Of Incident: Maharashtra.
Judgment Date: 14-09-2023.

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