GI Act, 1999 | Registered Proprietor Can Sue For Infringement Of GI Independently From Authorised User: Madhya Pradesh High Court

The Madhya Pradesh High Court in a recent decision clarified that to file a suit for infringement under Section 21(1) of the GI Act, the Registered Proprietor (RP) need not implead the Authorised User (AU) as a necessary party.

The bench comprising Justices Sushrut Arvind Dharmadhikari and Hirdesh, on December 18 held that the existence of AU does not exclude the RP of its independent rights to register and protect the Geographical Indication. Further, it was observed that non impleadment of AU in a suit filed by RP for infringement cannot be grounds to reject the plaint under Order 7 Rule 11 of CPC.

It was held, that “Petitioner is the 'Bhagirathi' of the GI tag in India as is luminescent from the notification of January 2009. Therefore, the legislature could not have been presumed to have conferred exclusive rights on the AU to the exclusion of RP itself, the originator of the very existence of a right. On the principles of ubi jus ibi remedium, viz., if there is a right, there is a remedy, therefore, RP would also have a right to file a restraint suit for grant of injunction against any unauthorised user of GI tag”

The petitioner, who is a company incorporated in the United Kingdom with its registered office in Scotland is an association of 56 distillers, producers, dealers, blenders, owners of proprietary brand or brands, brokers or exporters of Scotch Whisky, which is manufactured in the United Kingdom, especially Scotland.

The petitioner was issued the status of Geographical Indication (GI) for Scotch Whisky on September 23, 2010, thus making the petitioner the Registered Proprietor (RP). The petitioner had filed in the Trial Court seeking a restraint order against the defendants or any of their agents from producing, bottling, selling, or marketing any Whisky that wasn't Scotch Whisky under the label 'London Pride' or any other similar names.

Additionally, the prayer sought to restrain the defendants from engaging in any form of manufacturing, importing, exporting, stocking, or dealing with non-Scotch Whisky using the Union Jack or similar images. The suit had been filed through the authorized signatory with its registered office in India.

The Defendants, on the other hand, are partners and are claimed to have been marketing and selling 'London Pride' whisky which essentially leads to the cause of action in the plaint.

The Commercial Court Order dated 28.10.21, which was impugned before the present bench dealt with an application under Order 7 Rule 11, wherein the suit filed by the petitioner was held maintainable only after the impleadment of “Authorised User” (AU) in terms of S.21 of the GI of Goods (Registration and Protection) Act, 1999 (GI Act).

Challenging the said order under Article 227, the petitioner argued firstly, that being the original applicant as RP, upon whose application the GI tag was granted to Scotch Whisky, the suit for infringement of GI only at their instance is clearly maintainable under Section 21 of the GI Act. Reliance was also placed on S.2(b)and (n), 6, 12,17 of GI Rules, 2002 to establish that the RP and AU were envisaged to be two different entities and the legislature intended to treat them separately and independently in their status.

Secondly, before the trial court, no pleadings on non-maintainability due to non-impleadment of the AU were made by the defendants and thirdly, Order 7, Rule 11 does not specify the requirement for impleading any necessary/ proper party.

The defendants, on the other hand, stressed that If an RP intends to file a lawsuit for infringement under Section 21, it can only do so if it piggybacks on AU. Without AU, the RP lacks its separate entitlement or basis to sue for the infringement of a GI tag.

Further, it was argued that the word 'and' occurring under Section 21(1)(a) of the GI Act has to be read conjunctively and not disjunctively, requiring both AU and RP to be necessarily impleaded as parties in a suit for infringement of GI. lastly, it was argued that the trial court committed no errors in its order as such a direction of impleadment is inherent in the powers available to the Civil Court under Order 7 Rule 11 of the Code of Civil Procedure (CPC)

The High Court was essentially tasked with three questions to consider: (1) Whether under Order 7 Rule 11 Civil Court hold the power to direct impleadment of a party as necessary/proper to the suit; (2) Whether the RP under S.21(1) of GI Act bring a suit for infringement independently, in its capacity and interpretation of the word “and” used; (3) Whether a cause of action has been disclosed under Order 7 Rule 11 for the complaint to be maintainable.

Provisions Of Order 7 Rule 11 Do Not Require Joinder/Non-Joinder As A Ground For Rejection Of The Plaint:

The bench held that Order 7 Rule 11 nowhere required the non-joinder/ joinder in its grounds for rejection of the plaint. The plaint could not be immediately rejected if the plaintiff failed to implead necessary parties, it was held.

It was observed, “The provisions of O7/R11 clearly don't envisage joinder/non-joinder as grounds for rejection of the plaint. The said exercise may be done during the course or further stages of the trial. It can be examined by the Trial Court at the stage of framing of issues later during the trial about the necessity of joinder of any necessary party or implication of non-joinder of any such party on the maintainability of the suit. However, in an application under O7/R11, such an inquiry is clearly not permissible to be undertaken by the Trial Court”.

Order 7 Rule 11 of CPC allows for the rejection of a plaint if it doesn't comply with certain specified conditions, such as being frivolous, vague, or not disclosing a cause of action, the Court found. 

RP A Separate Entity From AU, Can Independently File For Infringement Under Section 21(1) :

In dealing with the second issue, the Court stressed viewing S.21 in the larger scheme of the GI Act under the title ' Rights conferred by registration'. S. 21(1), as analysed by the Court, gives the RP of the GI and the AU the right to obtain relief in respect of infringement of the GI in the manner provided by the Act.

To examine whether the RP has a separate existence from the AU in the context of filing for infringement, the Court dwelled on the understanding of S.20, 17 and 68 of the GI Act.

The Court observed that the registration of GI conferred equal recognition and rights to the RP as well as to AU in terms of obtaining relief against infringement. The Court in examining the provisions dealing specifically with AU such as under sections 17 and 68 held that the RP exists separately from the AU and that the mere existence of AU cannot be seen to operate as a complete exclusion of rights to RP.

It held, “Thus the RP can very well be treated as an entity independent of AU, under the provisions of the GI Act for the purposes of obtaining or continuing with the GI tag of any good concerned”.

'And' Is To Be Interpreted As 'or' To Give Equal Rights To RP And Au For GI Protection:

The bench, while placing reliance upon the Supreme Court's decision in Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd., (2008) 4 SCC 755 held that the word 'and' in S.21(1)(a) has been inferred as 'or'. In holding to the contrary, the status of RP would then be reduced below that of the AU, which could not be done as both hold equal rights of registering and protecting the GI.

In the present case, considering that the Petitioner was the first entity to have the scotch whiskey protected as a GI, the Court held the RP to be the “Bhagirathi” of the GI tag. Being a Bhagirathi, it could be presumed to exclude the RP from independently suing for infringement of the GI.

The Court, therefore, rejected the argument of the defendants to hold the AU as necessary for impleadment in the infringement suit.

The Plaintiff Does Not Fail To Disclose The Cause Of Action:

The Court held that as per the arguments in the plaint, it cannot be doubted that Scotch whiskey has been well known to be a special GI across the world and that “The possibility of loss of business and damage to goodwill arising out of the use or misuse of brand of Scotch Whiskey can't be ruled out if during the trial later, it is established by the plaintiffs that JKE (Respondent) is infringing upon the registered GI of petitioner”.

In deciding so, the Court placed reliance on the test laid down in Dahiben vs. Arvind Bhai Kalyaniji Dhanusali., (2020) 7 SCC 366 wherein the Supreme Court observed that the Court in an inquiry under Order 7 Rule11(a) should see that if the averments made would result in a decree being passed.

The High Court thus directed the trial court to proceed in accordance with the law. The Petition was allowed with no order as to costs.

Case Details: SCOTCH WHISKY ASSOCIATION THR. ITS AUTHORISED REPRESENTATIVE SUNIL MEHDIRATTA v. J.K. ENTERPRISES THR. ITS PARTNER MR. KARANBEER SINGH CHHABRA & OTHERS MISC. PETITION No. 4543 of 2021

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