Who can sell Champagne? | Case Summary: Comite Interprofessionnel Du Vin De Champagne v Chinar Agro Fruit Products

Name of the case: 

Comite Interprofessionnel Du Vin De Champagne v Chinar Agro Fruit Products

Citation: 2017 SCC Del 10704

Judges: Justice Sanjeev Sachdeva

In this case, the dispute surrounded the use of the Geographical Indication tag ‘Champagne’. Geographical Indications (GI) is a kind of intellectual property meant for products originating from a specific area. However, the product must have some special quality due to its origin. For example, ‘Darjeeling Tea’, ‘Mysore Silk’, etc. All such GIs are registered under the Geographical Indications of Goods (Registration and Protection) Act, 1999.

 The facts

The plaintiff is Comite Interprofessionnel, which is a public service body in France. It holds the registered GI tag for champagne, both in France and overseas. Champagne is a naturally sparkling wine produced only in the Champagne region of France. The defendants are Chinar Agro Fruit Products, a food and drinks manufacturing company based in India. The plaintiff claimed that the defendant had infringed its registered GI by selling non-alcoholic sparkling drinks under the name Champagne. The defendants were restrained from manufacturing, selling or advertising any product by the name Champagne by an interim order. This was made absolute by another order. An Inspector was appointed to search the premises of the defendant. A number of products with the restrained name were found. Despite these allegations, the defendants did not appear in the court.

 The arguments

The plaintiffs made the following arguments:

1. The plaintiff is the registered proprietor of the GI Champagne in many countries. In India, it is registered under the GI Act. It has also been given additional protection by a notification of 2012. This gives the plaintiff the right to protect their GI against any use that causes or is likely to cause confusion.
2. The ‘confusion’ referred to above is the one caused to the consumers. The defendant’s use of the name Champagne misleads the consumers. They think it refers to the real alcoholic drink from the Champagne region. This violates section 22 of the GI Act.
3. The plaintiff claimed that the defendant’s acts are deliberate and calculated. They are trying to take advantage of the reputation and goodwill associated with the product Champagne. This will and has helped them further their trade.
4. The defendants are not just using the name, but even the packaging. Their drink is sold in bottles which are identical in shape, colour and configuration to the original Champagne wines. This gives further proof that they are deliberately misusing the GI.
5. Due to the damage caused by the defendant’s acts, the plaintiff seeks an injunction in accordance with section 67 of the GI Act.

The law

Section 22 of the GI Act:

22. Infringement or Registered Geographical Indications: (1) A registered geographical indication is infringed by a person who, not being an authorised user thereof,-

(a) uses such geographical indication by any means in the designations or presentation of goods that indicates or suggests that such goods originate in a geographical area other than the true place of origin of such goods in a manner which misleads the persons as to the geographical origin of such goods; or

(b) uses any geographical indication in such manner which constitutes an act of unfair competition including passing off in respect of registered geographical indication.

Explanation 1 :- For the purposes of this clause, “act of unfair competition” means any act of competition contrary to honest practices in industrial or commercial matters.

Explanation 2:- For the removal of doubts, it is hereby clarified that the following acts shall be deemed to be acts of unfair competition, namely:-

(i) all acts of such a nature as to create confusion by any means whatsoever with the establishment, the goods or the industrial or commercial activities, of a competitor;

(ii) false allegations in the course of trade of such a nature as to discredit the establishment, the goods or the industrial or commercial activities, of a competitor;

(iii) geographical indications, the use of which in the course of trade is liable to mislead the persons as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods;

(c) uses another geographical indication to the goods which, although literally true as to the territory, region or locality in which the goods originate, falsely represents to the persons that the goods originate in the territory, region or locality in respect of which such registered geographical indication relates.

(2) The Central Government may, if it thinks necessary so to do for providing additional protection to certain goods or classes of goods under sub-section (3), by notification in the Official Gazette, specify such goods or class or classes of goods, for the purposes of such protection.

(3) Any person who is not an authorised user of a geographical indication registered under this Act in respect of the goods or any class or classes of goods notified under sub-section (2), uses any other geographical indication to such goods or class or classes of goods not originating in the place indicated by such other geographical indication or uses such other geographical indication to such goods or class or classes of goods even indicating the true origin of such goods or uses such other geographical indication to such goods or class or classes of goods in translation of the true place of origin or accompanied by expression such as “kind”, “style”, “imitation”, or the like expression, shall infringe such registered geographical indication.

(4) Notwithstanding anything contained in this section, where the goods in respect of which a geographical indication has been registered are lawfully acquired by a person other than the authorised user of such geographical indication, further dealings in those goods by such person including processing or packaging, shall not constitute an infringement of such geographical indication, except where the condition of goods is impaired after they have been put in the market.

Section 67 of the GI Act:

67. Relief in Suit for Infringement or for Passing Off: (1) The relief which a court may grant in any suit for infringement or for passing off referred to in section 66 includes injunction (subject to such terms, if any, as the court thinks fit) and at the option of the plaintiff, either damages or account of profits, together with or without any order for the delivery-up of the infringing labels and indications for destruction or erasure.

(2) The order of injunction under sub-section (1) may include an ex parte injunction or any interlocutory order for any of the following matters, namely:-

(a) for discovery of documents;

(b) preserving of infringing goods, documents or other evidence which are related to the subject-matter of the suit;

(c) restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect plaintiff’s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

The court’s decision

The court noted that the defendants had failed to represent themselves. The allegations were found to be genuine. The defendant’s acts have damaged the wine growers, co-operatives and brokers of the Champagne region by using their GI without authorisation. It can also dilute the distinctive character of the original product, as people are getting something else in the name of Champagne. This would eventually lead to the GI Champagne becoming generic in India. Additionally, the unauthorised use of the plaintiff’s GI violates section 22(3) of the GI Act. The court also stated that the protection under section 67 was absolute because infringement would cause damage to the goodwill and reputation of the plaintiff.

Considering these observations, the court issued a permanent injunction decree against the defendants. They were restrained from manufacturing, selling or advertising any product with the name Champagne. They were also restrained from making products that, in any way, suggest an association with the Champagne region of France, or with the registered GI. the court also restrained the defendants from acts of unfair competition. This is because they tried to dilute the goodwill and reputation of the plaintiff. Further, the court asked the defendants to submit all the goods, labels or packaging that are infringing the plaintiff’s GI.