Khoday's once again raises the Black flag

After winning the battle against UB's Kalyani Black Label, it is now against Diageo's Johnnie Walker

The House of Khodays presents an interesting case. It has a topline of around Rs 300 crore and is best known for its range of spirits and beer brands including the popular Peter Scot whisky and Hercules Strong Beer. This publicly-held company, which is hoping to go private, has had pitched battles against the giants in the industry including Vijay Mallya-led United Breweries (UB), as well against the revered Scotch Whisky Association, which ring-fences its interests with intense ferocity. Khoday's has won  against both these institutions by prevailing that it has a right to use the brand 'Peter Scot' without trespassing on the heritage of scotch whisky, as well as the right to brew 'Hercules Black Label', without affecting UB's Kalyani Black Label beer.

And now, the global spirits major Diageo has woken up to the recent move by Khoday's to register a trademark - 'Black Label', for a planned launch of premium beer, Khoday's Black Label - which it feels is a direct assault on its flagship, Johnnie Walker Black Label scotch whisky. The stakes are high this time for Diageo, as it is expanding its presence in India through the network of United Spirits in which it has close to 29 per cent stake. The sale of Diageo products in the past six months have galloped at the rate of a good 35 per cent.

FAMOUS TIFFS IN THE INDIAN LIQUOR INDUSTRY

• Right over “Officer’s Choice” whisky between Vijay Mallya and Kishore Chhabria
• Kishore Chhabria’s ongoing tiff with John Distiller’s over “Officer’s Choice” and “Original Choice”
• Khoday’s “Peter Scot” whisky  against Scotch Whisky Association  
• Khoday’s “Hercules Black Label” beer against United Breweries’ “Kalyani Black Label” beer
• Khoday’s planned launch of a premium beer with an extension of “Black Label” against Diageo’s “Johnnie Walker Black Label” scotch whisky

According to information from the Intellectual Property Appellate Board  in Chennai, the dispute is on an order by the Deputy Registrar of Trademarks allowing the registration of application by Khoday Brewing and  Distilling Industries for the trademark, Khoday's Black Label, for its premium beer. Diageo, which holds the patent for Black Label, for its various products, has opposed the move when the matter came for consideration of the deputy registrar. Diageo's appeal to the board is to issue an order setting aside the order of the Trademark officer, that allowed the registration.

While Diageo maintained that it will not comment as the hearings are on, the senior management of Khoday's defended the move. "The usage of the generic word such as 'Black' cannot be stopped," says Satpal Chaudhry, COO, Khoday India, who declined to comment further on the status of the launch of the new beer.  

Diageo is in varied stages of trademark dispute with Khoday's on at least 60-70 trademark infringements, including the latter's 'VAT 999' which Diageo says is similar to its 'VAT 69' blended scotch whisky.

The latest face-off between Khoday's and Diageo is among a slew of cases that the liquor industry has seen over the past few years. Deepak Roy, the executive vice-chairman and CEO of Allied Blenders & Distillers, says that such instances are highly prevalent in India and the IP (intellectual property) holders will do whatever possible to protect their turf.

ABD, which is owned by another well-known liquor baron, Kishore Chabbria, has had a pitched battle with Vijay Mallya for nearly two decades, until Mallya relinquished the rights to 'Officer's Choice' whisky.  Even as ABD was tangled with Mallya, it was parallely engaged in another legal battle with Bangalore-based John Distillers over 'Original Choice' whisky. ABD has been maintaining that John's 'Original Choice' is deceptively similar to the 'Officer's Choice' and hence, should be called off the marketplace. The issue is still being pursued by ABD. The stakes are high, with 'Officer's Choice' selling annually around 20 million cases and growing at an aggressive pace.

Industry analysts indicate that there are many such instances in the lower end of the market for Indian Made Foreign Liquor (IMFL), where deceptively similar names are pushed aggressively by retailers. "There are instances where major Indian, as well as global, players have filed cases against regional Indian companies against even the shape of a bottle.  There are limited options and it is only to an extent that a regional player can innovate, but there are legal cases going on in India," a senior industry analyst says.

However, he adds, that "deceptively similar brand names" will not work in the premium segment, as clearly laid out in the landmark Peter Scot issue with Scotch Whisky Association.