The Blurred Lines Between Excise and Trademark Law

31st October, 2024 - 5:45 am Categories: Legal Case 0 Comments

EXCISE LAWS VS TRADEMARK LAWS

The case of ‘Mount Everest Breweries Ltd. v. Excise Commissioner, MP has an interesting twist on the confluence of excise laws and trademark legislation. In the case at hand, the Madhya Pradesh High Court held that what powers to determine the similarity between beer labels can be exercised by the Excise Commissioner, a function generally reserved under the Trade Marks Act, 1999 to be executed by the Trade Marks Registry. Questions posed on August 27 create critically important questions in regards to the breadth of powers granted under state excise laws and, potentially, whether such powers can migrate into areas of intellectual property law domains generally governed exclusively.

The issue was two rival beers’ labels: VASCO 60000 EXTRA STRONG BEER approved by the Excise Commissioner and a commercially existing MOUNT 6000 SUPER STRONG BEAR whose registration had already been done. Aggrieved by the registering decision of the Commissioner of Excise, Mount Everest Breweries contended that he illegally registered the said VASCO label without deciding on its similarity with the appellant’s already existing label. Despite the MP Foreign Liquor Rules, 1996, and MP Beer and Wine Rules, 2002, which control label registration, no such permission is explicitly granted to the Excise Commissioner to decide whether or not there could be a likelihood of confusion or deceptive similarity between rival brands. Therefore, the judgment of the Court extends the rule of rule 9 to the extent that it mandates a search by the Commissioner only of a limited details amongst others like the content of the label, but not of its likeness to another mark.

JUDICIAL INTERPRETATION

Here, the test followed was that of deceptive similarity as found within the trademark law, with Section 2(h) of the Trade Marks Act and the leading judgment of Parle Products v. JP Mysore and Co being referred to. This approach tries to address whether ordinary consumers, with imperfect memory, may be misled by confusion between the two labels. In doing so, the Court seems to lay responsibility at the door of the Excise Commissioner to ensure beer labels do not work under a misleading similarity, despite the usual practice of such decisions being made by the Trade Marks Registry. This curious blending of excise and trademark responsibilities bodes ill for future adjudication of such matters.

The fact that there was a prior agreement between the parties before the Delhi High Court makes the decision all the more complicated. The respondent had agreed not to make use of the VASCO 60000 mark but had sought to get the registration of the label done before the Excise Commissioner. Yet while raising questions of good faith, the MP High Court had left the ground undetermined whether the order of the Delhi High Court was geographically limited or operative all over the country. And the matter is further complicated by murkiness over the agreement and unclear position as to whether label registration constitutes “use” of the mark.

This decision of the court is particularly significant because it attempts to tread on the ground which has traditionally been covered by specialist courts like IP courts of metropolitan cities like Delhi, Mumbai, and Chennai, which are better placed to deal with complexity in trademark disputes. The court blurred the distinction that had hitherto held between excise regulation and enforcement of trademark rights by allowing the Excise Commissioner holding authority under the excise law to determine whether labels resemble each other. The correct course would have been to refer the parties to carry an action of infringement or passing off under the Trade Marks Act, where further examination on similarities between the marks could be allowed, as well as providing expert opinion and evidence.

The division bench of the MP High Court simply ignored the recommendation made by the Single Judge at a previous stage, wherein it had ordered that the dispute be referred to a competent civil court for adjudication under trademark law. The division bench adopted a cursory approach which may well lead to setting mistaken precedents whereby bodies that are not specialized, such as the excise authorities, gain power over what are matters falling within IP law. This decision can have far-reaching implications; the interpretation of trademark law might be inconsistent in other jurisdictions where IP cases are relatively few.

CONCLUSION

It is in this sense that the case of the present judgment reflects the complexity at the junction of several areas of law. The decision of the High Court of Madhya Pradesh to call upon the Excise Commissioner to decide on similar labels or not, rather than referring the matter to the Trade Marks Registry or directing the parties to appropriate civil courts, creates uncertainties that upset the established process for dealing with trademark disputes. This shift underscores the requirement that hitherto vague demarcations regarding responsibilities between excise and IP authorities be made clear to prevent such legal ambiguities in the future.

Author: Khushboo Pachisia, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.