Madhya Pradesh High Court: In a petition challenging single judge order which quashed the Excise Commissioner’s order prohibiting all beer and liquor bottling units from reusing embossed bottles, and remitted back the matter to the Commissioner for reconsideration, a division bench of Sanjeev Sachdeva* and Pranay Verma, JJ., upheld the Excise Commissioner’s order prohibiting the reuse of bottles with embossed logos but set aside the prohibition on reusing bottles after removing/scratching the logos, leaving that issue for a different forum.
Factual Matrix
In the instant matter, M/s Mount Everest Breweries Limited (appellant) manufactures and sells beer under the trademark “STOK,” which is embossed on their glass beer bottles along with a “panda device.” The appellant discovered that private respondents, who also sell beer, were reusing their embossed beer bottles for marketing their own beer, allegedly infringing on the appellant’s trademark and intellectual property rights.
After filing complaints to the Commissioner of Excise in December 2019 and March 2020 without response, the appellant sought judicial intervention. In July 2020, this Court directed the Commissioner of Excise to address these complaints.
On 07-11-2020, the Commissioner prohibited all beer and liquor bottling units from reusing embossed bottles. However, the private respondents contested Commissioner’s order and argued that the impugned order is non-reasoned, violated their industrial practices and labelled it a restriction without legal basis. The single judge, vide order dated 13-03-2024, held that the Commissioner’s order lacked cogent reasoning and failed to address the objections raised by the Respondents. The Court quashed the Commissioner’s order and remitted the matter for reconsideration, directing the Commissioner to pass a detailed and reasoned order.
Moot Point
Whether reusing embossed bottles with another manufacturer’s trademark constitutes infringement of intellectual property rights under the Trademarks Act, and whether this falls under the purview of the Excise Act and the Commissioner’s jurisdiction.
Parties’ Contentions
The appellant contended that the reuse of embossed beer bottles by private respondents infringed on the appellant’s intellectual property rights. It was contended that this practice violated the Excise Act, the Madhya Pradesh Beer and Wine Rules, 2000, and posed risks to consumers by weakening bottle strength due to scratching.
However, the respondents contended that reusing empty beer bottles is an industry norm, with bottles being legally procured from scrap dealers. It was contended that the Commissioner of Excise lacked authority to enforce trademark protections, and the Excise Act did not prohibit the reuse of bottles bearing another company’s logo. It was further contended that the impugned order imposed undue financial hardship, thereby, impacted environmental sustainability, and violated constitutional rights under Articles 19(1)(g) and 301 of the Constitution of India.
Court’s Analysis
The Court noted that the MP Foreign Liquor Rules emphasised that labels and brands must uniquely identify the manufacturer, and the presence of two brands (one from the appellants and one from the respondents) is misleading and non-compliant. The Court held that using the appellants’ embossed bottles, even with scratched trademarks, infringed the appellants’ intellectual property rights and violated the MP Foreign Liquor Rules. However, the Court stated that private respondents are free to reuse generic beer bottles manufactured by third parties which do not violate the label, trademark/brand/logo of another entity.
The Court rejected the respondent’s argument that environmental concerns or logistical and financial hardships justified the reuse of bottles with the appellants’ embossed trademarks. The Court opined that while recycling is permissible, it cannot infringe on intellectual property rights or violate statutory provisions. Although there was an argument about scratching off trademarks potentially weakening bottles, the Court stated that no evidence was presented on this issue and deferred it to an appropriate forum if raised in the future.
The Court noted that the Excise Commissioner did not prohibited reuse of beer bottles, he has only directed that the bottles that have embossed logo or brand cannot be used. The Court stated that Article 19(1)(g) and Article 301 do not guarantee absolute freedom as they empower the State to impose reasonable restrictions on the said freedom. The Court opined that the impugned Excise Commissioner clearly falls within the ambit of reasonable restriction. The Court held that there is also no violation of Article 19(1)(g) and Article 301 of the Constitution of India as alleged by the respondent as there is no prohibition on the Private Respondents from conducting their business.
The Court upheld the Commissioner of Excise’s authority to enforce the rules under the MP Foreign Liquor Rules, which clearly empowers the Commissioner to prevent label misuse and avoid brand confusion. The Court further stated that any claim regarding design registration is beyond the scope of this matter and can be pursued in separate proceedings.
The Court allowed the appeals and reversed the single judge’s order remitting the case back to the Commissioner of Excise. The Court upheld the Commissioner’s prohibition on the use of old bottles carrying embossed trademarks, however, set aside the restriction on scratching off logos, leaving this matter open for determination in appropriate proceedings.
[Mount Everest Breweries Ltd. v. MP Beer Products Ltd., 2024 SCC OnLine MP 7367, Decided on 12-11-2024]
*Judgment by Justice Sanjeev Sachdeva
Advocates who appeared in this case:
Shri Piyush Mathur, Senior Advocate with Shri Amit Dubey, Counsel for the Petitioner
Shri Sumit Nema, Senior Advocate with Shri Piyush Parashar, Counsel for the Respondent No. 1/Caveator.
Shri Sudeep Bhargava, Counsel for the Respondent No. 2, 3 and 4
Buy Constitution of India HERE
