Passing Off, and the Unregistered Geographical Indication

In one line

Passing off is preserved by section 20(2) and is the only route for an unregistered indication, the seller of indicated goods gives an implied warranty that the indication is genuine, and a person who threatens groundless proceedings may be sued for it.

Passing off, and why it still matters

Section 20(1) bars the statutory action for an unregistered indication. Section 20(2) preserves the common law one: "Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof."

Two situations make passing off indispensable.

One: the indication is foreign and is not on the Indian register. Scotch, Champagne, Parma. Their proprietors may not have applied here, and section 20(1) shuts them out of the statutory action.

Two: the indication is Indian and its producers never registered it. Most Indian regional products are not on the register, and until they are, passing off is all they have.

And even for a registered indication, passing off may reach further. Section 66(1)(c) expressly contemplates a passing off suit "whether registered or unregistered", and Tea Board v. ITC Ltd., worked in chapter 470, shows why: the statutory action works on goods only, while passing off is not so confined.

The case

Facts. The Scotch Whisky Association v. Golden Bottling Ltd., 2006 (32) PTC 656 (Delhi), was a suit for a permanent injunction restraining the defendant from dealing in whisky under the name Red Scot, or any name containing "Scot" or anything similar, so that it could not pass its whisky off as Scotch whisky. The first plaintiff is an association registered as a company in the United Kingdom, incorporated to protect and promote the interests of the Scotch whisky trade at home and abroad; the other plaintiffs are its members. It put in evidence the United Kingdom's Scotch Whisky Act 1988 and the Scotch Whisky Order 1990, whose rule 3 defines Scotch whisky by reference to production at a distillery in Scotland from water and malted barley, distillation below a stated strength, maturation in an excise warehouse in Scotland in oak casks for not less than three years, and the addition of nothing but water and spirit caramel. It also proved worldwide sales and advertising. It had sent notices in 2000 and 2001; the defendant never replied, and was proceeded against ex parte after failing to appear.

Held. The suit was decreed. Counsel's submission that "Scot" or "Scotch" is a geographical indication within Article 22.1 of TRIPS, because it identifies whisky produced in Scotland, was accepted, and the court set out the definition in section 2(1)(e) of the Indian Act. It then recorded the effect of section 20: sub-section (1) prohibits any proceeding to prevent or recover damages for infringement of an unregistered geographical indication, but "this does not affect the rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof" under sub-section (2), and section 67 empowers the court to grant either damages or an account of profits. On the unchallenged affidavit evidence the court was satisfied that the defendant should be restrained from passing off its Red Scot whisky as a produce of Scotland, and that this could only be done by injuncting it from using "Scot" or any similar word. It granted a permanent injunction, five lakh rupees in damages, and three lakh ten thousand rupees in costs.