Anheuser-Busch LLC v. Surjeet Lal, 2022 SCC OnLine Del 772 Bench:- Justice Prathiba M. Singh
FACTS OF THE CASE
Anheuser-Busch LLC is the owner of the popular beer brand ‘Budweiser’. They filed for an injunction against M/s. SOM Distilleries and Breweries Ltd. They alleged that their ‘BUDWEISER’ marked bottles were being reused by the defendants for their ‘BLACK FORT’ and ‘POWER COOL’ beer brands. The plaintiff presented evidence, including images and physical bottles, illustrating the unauthorized repurposing of ‘BUDWEISER’ bottles. The defendants, acknowledging the inadvertent entry of these bottles into their manufacturing process through informal channels (scrap dealers), offered an undertaking to the court. They assured that ‘BUDWEISER’ bottles would not be used for manufacturing or selling their own beer. The court issued a restraining order on December 20, 2018.
It prohibited the defendants from using any bottles embossed with the ‘BUDWEISER’ mark for their beer products until further notice. Furthermore, the court mandated the defendants to submit an affidavit detailing the implementation of this injunction to prevent future violations. Responding to the court’s directive, the defendant, through an affidavit filed on January 30, 2019, outlined a comprehensive plan of action promising that they would inform and direct kabadiwalas (scrap dealers) not to supply or deliver any bottles with the ‘BUDWEISER’ mark.
ANALYSIS BY THE COURT
The court clearly held that the use of recycled ‘BUDWEISER’ beer bottles for the products being sold under the mark ‘BLACK FORT’ and ‘POWER COOL’ by the Defendant-Company would clearly constitute ‘use in the course of trade’. The fact that the same are recycled bottles would not make a difference insofar as the question of infringement or passing off is concerned. In a similar case (Allied Blenders and Distillers Pvt. Ltd. v. Rangar Breweries Ltd.), the Delhi High Court issued a permanent injunction against the Defendant, prohibiting the use of the Plaintiff’s trademark ‘Of icer’s Choice.’ The Plaintiff contended that the Defendant’s products, marketed under their own label, featured embossed ‘Officer’s Choice’ trademarks on certain bottles, potentially recycled from the Plaintiff. The bench also relied on the judgment of the Bombay High Court in the case of Som Distilleries and Breweries Ltd. v. SABMiller India. The plaintiff challenged the defendant’s use of bottles embossed with the plaintiff’s trademark. The court noted the process of recycling used beer bottles, where previous labels are removed, and new ones are affixed before being sold back to brewers. While the appellant claimed utmost care to ensure only their labeled bottles are recycled, the court acknowledged the possibility of bottles from other companies entering the process due to human error. The appellant sought an honest use defense under Section 30(1), arguing that the use was in accordance with honest practices. However, the court found this defense contradictory given the acknowledged possibility of foreign bottles in the recycling process. Additionally, the court dismissed the argument that the use was not infringing under Section 29(1), stating that all required elements for infringement were met. The court emphasized the importance of preventing the use of identical or deceptively similar trademarks likely to cause confusion in the course of trade, and the appellant’s failure to establish an honest practice in this matter. The court also drew on the precedent set by Cobra Beer Partnership Ltd. v. Superior Industries Ltd. The judge found a prima facie case in favor of the plaintiff, asserting that their registered trademarks “COBRA” and “KING COBRA” were being infringed by the defendant. The judge emphasized that the plaintiff would suffer irreparable loss and injury if an ad-interim injunction was not granted, as the regular sale of beer by the defendant in bottles embossed with the plaintiff’s registered trademark could diminish the plaintiff’s reputation and tarnish the goodwill built over the years. The balance of convenience was deemed to be in favor of the plaintiff, leading to the grant of an ad-interim injunction in the case.
JUDGMENT BY THE COURT
Hence, the court held that the use of recycled bottles from another manufacturer for any product would constitute infringement and passing off, causing confusion about the source of the product. The Defendant’s utilization of recycled bottles with the Plaintiff’s trademark embossed on them during the recycling cycle is deemed problematic. However, the court acknowledged the undertaking given by the defendants. The Defendants were ordered by the court to ensure that recycled ‘BUDWEISER’ bottles are not employed for the beer manufactured and sold under their marks ‘BLACK FORT’ and ‘POWER COOL’, or any other mark. Enhanced supervision at the Defendant Company’s manufacturing plant, along with random checks and inspections, was ordered to ensure the absence of ‘BUDWEISER’ marks on bottles. The court also directed a permanent restraint on the Defendants from using, manufacturing, or selling the mark ‘BUDWEISER’, even in recycled bottles, concerning beer manufactured and sold by them.
DUCTUS EDGE 