On August 27, the Madhya Pradesh High Court passed a peculiar decision, in a writ appeal, setting aside the Excise Commissioner’s order for not considering the alleged similarities between the competing beer labels. The Court interpreted the responsibility to make such a determination under the MP Foreign Liquor Rules. In this tidbit, SpicyIP intern Mehnaz Khatoon breaks down the order, highlighting how such an interpretation by the Court cannot be made under the MP Rules and explaining the implications of this decision. Mehnaz is a recent law graduate from Aligarh Muslim University Centre Malappuram. She is passionate about Intellectual Property Laws and is interested in pursuing a career in the corporate sector.
SpicyIP Tidbit: MP High Court Sets Aside Excise Commissioner’s Order for Not Considering Similarities Between Competing Beer Labels
By Mehnaz Khatoon
In Mount Everest Breweries Ltd. v. Excise Commissioner, MP, a division bench of the Madhya Pradesh High Court passed an unexpected order dt. August 27, assigning the authority to determine the similarity of competing labels to the Excise Commissioner—something typically reserved for the Trade Marks Registry to do. This decision thus raises questions about the scope of powers granted under the state’s excise laws and their intersection with trademark law. But before we get to discussing this, a bit of a background. The case revolved around an appeal questioning whether the Excise Commissioner’s approval of a beer label—”VASCO 60000 EXTRA STRONG BEER”— warranted a determination on its similarity with the appellant’s label for”MOUNT 6000 SUPER STRONG BEAR.”
Allowing the appeal against the Commissioner’s order registering the VASCO 60000 label, the High Court attributed the power to make a determination on similarity between different competing labels to the Excise Commissioner even though the relevant provisions of the MP Foreign Liquor Rules, 1996, and MP Beer and Wine Rules, 2002, do not explicitly grant such an authority to the Commissioner. For clarity, it is important to know that Rule 9 of the MP Foreign Liquor Rules focuses on the registration of labels. These Rules are applicable to register labels of wine and beer as well, as per Rule 12 of the MP Beer and Wine Rules. Sub-rule 4 of the Foreign Liquor Rules requires the Commissioner to make an inquiry whether the label contains information about relevant disclaimers, place of sale, batch number, name and place of the distillery and the manufacturer, alcoholic strength, and the brand, but it does not offer any guidance on how similarity between competing labels could be/ should be assessed by the Commissioner. Interpreting the duty to make “relevant enquiry” under the above sub-rule, the Court held that the test for determining deceptive similarity, as outlined in the Trade Marks Act, 1999, should apply in such cases for registration of labels by the Excise Commissioner.
Under the Trade Marks Act, only the Trade Marks Registry is tasked with examining whether a mark is deceptively similar to another. The Act does not provide for external authorities, such as the Excise Commissioner, to make such determinations. Therefore, the Court’s interpretation in this case appears to stretch beyond the traditional understanding of the applicable laws for trademark prosecution by placing the onus on the Excise Commissioner to assess label similarity.
Setting aside the Commissioner’s order, the Court began by clarifying the concept of deceptive similarity under Section 2(h) of the Trade Marks Act, before moving into explaining trademark infringement. Relying on the Parle Products v. JP Mysore and Co, the Court laid out the test for assessing overall similarity, ultimately stating that the Excise Commissioner should have applied this test before approving the competing label. This unclear delineation of responsibility for determining similarity raises important questions about the consistency of such assessments under both excise and trademark laws. Moving on, the Court found significant similarities between the labels, including the numeral “6000,” color schemes, and design elements, which could lead to confusion in the market. The Court also observed that the respondent has previously agreed in a settlement with the appellant, before the Delhi High Court, that it shall not use the impugned VASCO 60000 mark, but still proceeded to seek registration for the same before the Excise Commissioner. But it is pertinent to note that the order doesn’t specify if the agreement is limited to use in the territory of Delhi or across India nor does it explain how the act of seeking a registration before the Excise Commission can be interpreted to mean “use” of the impugned trademark.
The decision is peculiar because rather than guiding the appellant to file an infringement or passing off suit as per the Trade Marks Act, the Court overstepped by allowing the Excise Commissioner to determine label similarity—an authority the Commissioner is not empowered with under IP laws. Moreover, the Court’s approach blurs the lines between trademark adjudication and adjudication under unrelated areas of law like Excise and could have significant ripple effects across both the fields. Instead of adhering to the separate adjudication process under the Trade Marks Act, the Court allowed an overlap of responsibilities. This signals a concerning shift where authorities not traditionally empowered to handle IP-related issues are being forced into this domain. While the Court may have aimed to avoid consumer confusion, the proper remedy would have been directing the appellant to pursue an infringement or passing off action through the designated mechanisms under the Trade Marks Act. The Single Judge in their order here, too clarified that the dispute alleging similarity between the labels concerns numerous questions of facts which can be determined by a competent civil court after recording of the evidence. The Single Judge thus nudged the parties to file an infringement suit before the competent court. Unfortunately, the division bench seemed to have overlooked this crucial observation and passed the present order on a seemingly prima facie understanding of the situation.
As readers would know, traditionally IP disputes have mostly been adjudicated in metropolitan cities such as Mumbai, Delhi, Chennai, and Kolkata, where Courts (and in some cases specialized IP Divisions) handle complex IP matters. This decision by the MP High Court is notable, as it signals a growing trend of intellectual property issues being addressed in courts outside these cities. However, the over-broad and somewhat forceful application of trademark laws in the present writ appeal clearly signifies the need for a more thorough understanding and awareness of IP laws in jurisdictions where IP disputes are uncommon to avoid unwarranted ripple effects that may eventually result in uneven interpretation of these laws.