CASE BRIEF: DIAGEO BRANDS B.V. AND ORS. VS. ALCOBREW DISTILLERIES INDIA PVT. LTD.

 

CASE NAME	Diageo Brands B.V. and Ors. Vs. Alcobrew Distilleries India Pvt. Ltd.
CITATION	MANU/DE/5262/2022
COURT	Delhi High Court
Bench	C. Hari Shankar, J.
Date of Decision	19 December, 2022

INTRODUCTION

Diageo Brands B.V. & Anr. v. Alcobrew Distilleries India Pvt. is a significant case concerning design infringement in the liquor industry. The dispute centers around allegations by Diageo that Alcobrew's "Golfer's Shot" bottle design infringed upon Diageo's registered design for its "Scotch Hipster" range (Design No. 306577). The case raises important questions about the appropriate test for determining design infringement, the distinction between trademark and design law, and the assessment of novelty and originality in designs versus prior art. The case is particularly notable for the court's digression from an earlier non-binding judgment in Diageo Brands B.V. & Anr. v. Great Galleon Ventures Limited, where the court had granted a temporary injunction in favor of Diageo on similar claims. Justice C. Hari Shankar's judgment clarifies the distinction between tests applicable in trademark infringement cases versus design piracy cases, emphasizing the role of the "instructed eye" test in the latter.

FACTS

• Diageo Brands B.V., a Netherlands-based alcoholic beverage company, launched its 'Scotch Hipster' 180ml range in India in May 2019.
• The packaging for this range was inspired by 1920s hip flasks and was registered under the Designs Act, 2000 (Design No. 306577).
• Diageo had acquired proprietary rights to use "hipster" in India and "Pocket Scotch" globally in its trade market.
• Alcobrew Distilleries India Pvt., a homegrown liquor company, manufactured and sold "Golfer's Shot" bottles, marketing them as "Pocket Shots."
• In December 2022, Diageo approached the Delhi High Court seeking an injunction against Alcobrew, alleging design piracy under Section 22(1) of the Designs Act, 2000.
• Alcobrew claimed defense under Section 22(3) read with Section 19(1)(b) and (c), arguing that Diageo's registered design was identical to an existing international design (Design No. D562138) and lacked novelty and originality.

ISSUES

1. Whether the plaintiff's registered design is novel and original vis-à-vis prior art?
2. Whether the defendant's design infringes upon the plaintiff's registered design?
3. What is the appropriate test to determine infringement - the average customer test or the instructed eye test?
4. Is the scope of analysis different when considering novelty/originality of a design versus piracy of a design?

ARGUMENTS FROM BOTH SIDES 

Plaintiff's (Diageo) Arguments:

1. Claimed that Alcobrew's bottle design was an infringement of Diageo's registered design.
2. Argued that while an instructed eye or expert should test the novelty of a design, infringement should be examined from an average purchaser's perspective.
3. Contended that Alcobrew's promotion of its product as "Pocket Shot" was an attempt to mislead Diageo's "Pocket Scotch" consumers.
4. Asserted that Alcobrew had dishonestly adopted their design, showing mala fide intention.

Defendant's (Alcobrew) Arguments:

1. Submitted that their bottle design differed from Diageo's in terms of height, thickness, roundness of shoulders, and caps.
2. Contended that Diageo's design lacked originality and resembled previously published bottle designs common to the industry.
3. Argued that Diageo's product violated Section 22(3) of the Designs Act, which allows grounds for cancellation of a registered design to be used as a defense in infringement proceedings.
4. Claimed protection under Section 22(3) read with Section 19(1)(b) and (c), alleging that Diageo's design was identical to an existing international design.

DECISION 

The Delhi High Court examined the scope of protection for registered designs and the appropriate test for determining design piracy in the case of Diageo Brands B.V. & Anr. v. Alcobrew Distilleries India Pvt. The dispute centered on Diageo's claim that Alcobrew's "Golfer's Shot" bottle infringed upon Diageo's registered design for its "Scotch Hipster" range, with Diageo seeking injunctive relief under Section 22(1) of the Designs Act, 2000. Alcobrew contested the claims, arguing that Diageo's design lacked novelty and originality, citing existing international designs and common industry features. After examining both products, the Court found significant differences between them that precluded a finding of fraudulent imitation. The Court emphasized that the distinguishing features Diageo used to claim novelty for its own design equally served to differentiate Alcobrew's design from Diageo's. The Court rejected Diageo's argument that while an instructed eye should test novelty, infringement should be examined from an average purchaser's perspective. Instead, Justice C. Hari Shankar made a clear distinction between trademark infringement and design piracy, ruling that the "instructed eye" test was the appropriate standard for design cases. The Court noted that design piracy under Section 22 requires a transparent or dishonest copy, which was not established in this case. In its analysis, the Court carefully distinguished between the Trademarks Act 1999 and the Design Act 2000, explaining that trademark law aims to prevent consumer confusion through source identification, while design law promotes innovation through limited market exclusivity. The Court observed that while intention is irrelevant in trademark infringement, piracy involves an element of conscious theft. The Court found that the essential features of Diageo's registered design were not sufficient alone to become a source identifier for their products. Moreover, apart from the black and gold color scheme, the two products differed in their labels and trade dress. Relying on principles laid down in B. Chawla v. Bright Auto Industries, Carlsberg Breweries, and Procter & Gamble, the Court criticized the judgment in Diageo v. Great Galleon for applying the uninstructed ordinary purchaser test in a design piracy case. Ultimately, the Court dismissed Diageo's application for temporary injunction, holding that Diageo had failed to establish a prima facie case of design piracy against Alcobrew. The Court concluded that the balance of convenience did not favor granting the injunction, as Diageo had not demonstrated that Alcobrew's product constituted a fraudulent or obvious imitation of their registered design.

ANALYSIS

The Diageo v. Alcobrew decision makes significant contributions to India's design law jurisprudence, particularly in clarifying the appropriate standard for evaluating design infringement claims. By explicitly rejecting the application of trademark law principles to design cases, the Court has established a clearer boundary between these two distinct intellectual property regimes. This distinction is crucial for maintaining the integrity of each system and ensuring that inappropriate tests do not undermine the specific policy objectives of design protection. The Court's emphasis on the "instructed eye" test, conducted by an informed person knowledgeable of prior art, provides important guidance for future design infringement cases. This approach recognizes that design protection is fundamentally different from trademark protection - while trademarks function as source identifiers for consumers, designs protect the novel and original aesthetic aspects of industrial products. The judgment correctly notes that only someone informed about prior art can properly assess whether a design truly represents a novel contribution deserving of protection. Furthermore, the decision highlights the often-overlooked requirement that plaintiffs in design infringement cases must establish the novelty and originality of their registered design vis-à-vis prior art, even if the design is already registered. This burden serves as an important check against overbroad claims and helps prevent the monopolization of common design elements within an industry. The Court's observation that the same features distinguishing a design from prior art may also distinguish it from an allegedly infringing design represents a logical and practical approach to assessing infringement claims. The judgment also clarifies the relationship between novelty and infringement in design cases, establishing that if certain aspects make a design novel compared to the prior art, those same aspects may serve to distinguish it from allegedly infringing designs. This principle helps maintain the balance between protecting genuine innovation and allowing legitimate competition and industry-standard design elements to flourish. By digressing from the earlier non-binding judgment in Diageo v. Great Galleon, this decision demonstrates the evolving understanding of design law principles within the Delhi High Court. The careful analysis of the distinct purposes behind trademark and design protection reflects a sophisticated appreciation of intellectual property law's various branches and their specific policy objectives. This more nuanced approach should lead to more consistent and principled decisions in future design cases. The practical impact of this decision extends beyond the immediate parties, potentially influencing how companies approach both design registration and enforcement strategies. By emphasizing that design registration is not a tool for source identification or preventing consumer confusion but rather a legal protection against imitation causing loss to producers, the Court has reinforced the proper scope and purpose of design law in India's intellectual property framework.