MOUNT EVEREST BREWERIES v. MP BEER PRODUCTS LTD: Madhya Pradesh High Court Bars Reuse of Branded Beer Bottles

Case Name	Mount Everest Breweries Ltd. v. MP Beer Products Ltd.
Citation	2024: MPHC-IND:321382024 SCC OnLine MP 7367.
Court	High Court of Madhya Pradesh
Decided On.	12th November 2024
Petitioners	Mount Everest Breweries
Respondents	MP Beer Products

INTRODUCTION 

This present instance is concerned with trademark infringement and reuse of embossed beer bottles, Mount Everest Breweries Ltd, manufacturer of beer under the trademark “STOK” with an embossed logo and panda devices on its bottles, it was later discovered that rival manufacturers were reusing its embossed bottles for marketing their own brands, this according to the petitioner violated IP rights and contravened the Madhya Pradesh Beer and Wine Rules, 2000 and the MP Foreign Liquor Rules, 1996. 

After the complaints in 2019 and 2020, the excise commissioner in Nov 2020 prohibited all bottling units from reusing embossed bottles, however a single judge of the HC quashed this order in March 2024, terming it non-reasoned and remitted the matter to the commissioner, the division bench in this appeal was tasked with deciding whether such prohibition was legal and withing the commissioner’s power. 

IMPORTANT PROVISIONS 

• Section 2(zb), Trademark Act, 1999: this provision defines the trademark and what constitutes infringement through unauthorized use of a registered mark. 
• Madhya Pradesh Excise Act, 1915. 
• Madhya Pradesh Beer and Wine Rules, 2000
• Madhya Pradesh Foreign Liquor Rules, 1996: Rule 9, Rule 10.
• Article 19(1)(g), Constitution of India: Freedom to practice any 
• Article 301, Constitution of India: talks about freedom of trade, commerce, and intercourse throughout India. 

BRIEF FACTS – 

Mount Everest Breweries Ltd., the appellant is a prominent manufacturer and marketer of beer under the trademark “STOK”, the company bottles its beer in glass bottles that not only carry affixed statutory labels but are also embossed with the “STOK” trademark and a distinctive panda device, and in the course of its business, Mount Everest Breweries discovered that rival beer manufacturers were reusing its branded embossed bottles to package and sell their own beer, sometimes these respondents affixed their own approved labels over the existing embossed marking and at other times, they attempted to scratch or remove the original embossment physically. 

After discovering this practice, Mount Everest Breweries contacted the Commissioner of Excise in Madhya Pradesh in December 2019 and March 2020, complaining that the reuse of their bottles infringed on their trademark and intellectual property rights and violated the statutory rules for beer packaging. Initially, there was no response, however, the High Court intervened in July 2020, directing the Commissioner to address these complaints and subsequently, on 7 November 2020, the Excise Commissioner ordered that all liquor and beer bottling units refrain from reusing glass bottles embossed with another manufacturer’s trademark or logo, including those of Mount Everest Breweries, whether or not the labels were removed or scratched.

The private respondents (other manufacturers and bottling units) challenged this order, further hey argued that using emptied bottles is common in the industry, that they legally buy these bottles from scrap dealers, and that placing their own approved labels prevents consumer confusion, they also claimed that the Excise Commissioner’s action was beyond his powers, not supported by specific law, and caused unnecessary financial and logistical difficulties, as well as environmental issues by blocking recycling efforts.

A Single Judge of the High Court reviewed the situation and found that the Commissioner’s order lacked sufficient reasoning and did not adequately address the respondents’ concerns, and on 13 March 2024, the Judge sent the matter back to the Commissioner for fresh consideration.

Mount Everest Breweries then appealed, arguing that competitors’ reuse of its embossed bottles constituted trademark infringement and passing off, violated the MP Foreign Liquor Rules, which require unique label and brand identification for each bottle, and that scratching out embossed trademarks created safety and regulatory risks, the respondents continued to uphold their position regarding industry practices, the lack of explicit prohibition in the Excise Act, and the importance of environmental sustainability.

The Division Bench, faced with these conflicting issues and interpretations of the law, was tasked with determining the legality of prohibiting the reuse of branded embossed beer bottles by rival bottlers under the statutory framework of Excise and IPR law in Madhya Pradesh.

ISSUES INVOLVED – 

1. Whether the reuse of beer bottles embossed with another manufacturer’s trademark constitutes trademark infringement, passing off, or dilution of brand identity under the Trademarks Act, 1999? 
2. Whether the Excise commissioner has the statutory authority under the MP excise act, the MP beer and wine rules, 2000, and the MP foreign liquor rules, 1996, to prohibit bottling units from reusing bottles embossed with another company’s brand or logo? 
3. Whether industry practices, environmental sustainability, and financial logistical hardship can justify the reuse of branded bottles, and if such practices are prohibited by the statutory liquor packaging regulations? 

ARGUMENTS ADVANCED BY PETITIONERS – 

• According to the counsels representing the petitioners asserted that the respondents actions amounted to clear trademark infringement under the Trademark Act, 1999, and by reusing the bottles that are embossed with “STOK” and the panda logo the respondents were not only using Mount Everest registered mark without authorization but also creating confusion among the consumers as to the origin of the product, even if the external label affixed to the reused bottle depicted the respondent’s own mark, the persistent visibility of the embossed “STOK” logo gave rise to a likelihood of association or origin in the public mind constituting both infringement and passing off, this MEBL argued diluted the exclusivity and value of its acclaimed brand and led to the unfair diversion of goodwill. 
• MEBL emphasized that the relevant packaging and labeling rules under the MP Foreign Liquor Rules, 1996, and the MP Beer and Wine Rules, 2000, required each beer bottle to display a unique, registered label along with clear manufacturer identification, the petitioner argued that having two brands its own embossed trademark and the respondent’s pasted label on one bottle was misleading and they claimed this situation did not follow the regulations and could confuse the public, as stated in Rule 9 and related provisions, they maintained that these rules are designed specifically to prevent such confusion, ensure proper traceability and accountability, and make sure each bottle clearly indicates its true source.
•  MEBL argued that apart from legal infringement, reusing branded bottles harmed the integrity of the marketplace and consumer rights, the presence of two brands on one bottle could mislead buyers into thinking there was a link between competitors or the source of the beer and the petitioner believed this led to unfair competition, reduced consumer trust, and jeopardized the market’s ability to tell competing products apart.
• The petitioner raised safety and design concerns and they noted that respondents sometimes tried to scratch off or remove the embossed logo before reusing the bottles, MEBL argued that these practices could weaken the structural integrity of glass bottles, putting consumers at risk and additionally, MEBL said that trying to erase the logo showed that the respondents recognized the illegality and risks of using bottles with someone else’s brand mark.
• MEBL defended the Excise Commissioner’s jurisdiction and power to prohibit the reuse of its branded bottles emphasizing that under the excise laws and rules, the commissioner is specifically tasked with the label registration, brand approval, and ensuring compliance with statutory packaging requirements, the petitioner rejected arguments that such interventions extended beyond the scope of excise regulation claiming instead that they fell squarely within the commissioner’s mandate to prevent deceptive packaging and protect public order in the industry.
• Responding to the claim that bottle reuse was a common practice in the industry, MEBL stated that long-standing customs do not excuse legal or intellectual property violations, they argued that while recycling is generally acceptable, reusing bottles with someone else’s registered trademark is different and cannot be allowed by law and generic bottles, or those without a registered mark, can be reused freely without violating rights or breaking regulatory rules.
• Finally, MEBL rejected the respondents’ claims that the prohibition would lead to financial difficulties, logistical issues, or damage to environmental sustainability, it argued that commercial and environmental interests should be balanced with legal rights and regulatory protections and moreover, the prohibition was a reasonable restriction under Articles 19(1)(g) and 301 of the Constitution and it aimed not to restrict trade, but to prevent deception and uphold rightful brand ownership.

ARGUMENTS ADVANCED BY RESPONDENTS – 

• The counsels for the respondents argued that the reused of the empty beer bottles in an established industry norm, practiced not only in MP but across India and globally, bottles used in the beer trade are frequently acquired in bulk from scrap dealers and are recirculated within the supply chain as a cost saving and sustainable measure, they asserted that prior use the original labels are removed and their own excise approved labels are affixed a practice accepted for years by excise authorities, the respondents emphasized that the practice posed no real likelihood of consumer confusion, given the visual prominence of their own brand labels and the lack of misleading intent. 
• Respondents argued that there is no clear clause in the Madhya Pradesh Excise Act, the Beer and Wine Rules, or the Foreign Liquor Rules that forbids reusing bottles with an embossed mark or logo from another manufacturer, they insisted that their adherence to legal requirements particularly the approval and registration of relevant labels was adequate to set their product apart from rivals, they maintained that the regulatory framework supported the practice of bottle reuse by remaining silent and that any consumer confusion was removed because their bottles had approved labels.
• It was further argued that the Excise Commissioner lacks the authority to enforce the Designs Act, the Copyright Act, or the Trademarks Act, the respondents asserted that their regulatory function is restricted to packaging laws and excise taxes, not intellectual property protection, further the respondents argued that executive orders under the Excise Act should not be used to decide trademark infringement cases and instead, they should be decided separately in the proper intellectual property forums, such as civil suits under the Trademarks Act.
• The environmental advantages of recycling and reusing bottles were persuasively stated by the respondents, who also highlighted the practice’s facilitation of sustainability, conservation, and waste reduction issues and prohibiting bottle reuse, they contended, would increase industry costs, encourage needless waste, and disrupt established logistical supply chains, further they asserted that forcing producers to use only brand-new bottles or to steer clear of available scrap would result in extreme financial hardship with no commensurate public or regulatory benefit.
• In order to further ensure that there was no deception of origin to the end-consumer, respondents cited technical measures (such as scratching out the logo or using larger labels to cover any embossed marks), they claimed that by taking these safety measures, their bottles were aesthetically unique and in compliance with excise laws, thereby removing any possibility of passing off or confusing customers.
• In conclusion, they challenged the commissioner’s order and subsequent proceedings on the grounds of procedural fairness and reasoning. The respondents maintained that their objections and defenses were not adequately considered by the Excise authorities, and that the impugned order was cryptic, lacked cogent reasoning, and failed to engage with the practicalities of the beverage industry and excise statutes. 

JUDEGEMENT – 

• The Hon’ble Court started by highlighting the legal framework outlined in the MP Beer and Wine Rules and the MP Foreign Liquor Rules, which mandate that every beer bottle have a label that clearly identifies the brand and manufacturer and the enforcement of these regulations, including the approval or rejection of labels and packaging that could confuse the public or consumers, was found to fall within the Excise Commissioner’s jurisdiction. 
• Therefore, the Court determined that the Commissioner’s prohibitory order was within the bounds of his legal authority and that such actions were in line with the objectives of the excise statutes, which include guaranteeing unambiguous product identification and avoiding deceit in a sector where labeling and packaging are essential to market regulation.
• The Court carefully considered the issues of passing off and trademark infringement, even after adding the respondents’ own authorized label, it was discovered that reusing bottles bearing the “STOK” mark and panda logo led to two brands appearing on a single bottle, the Court found that this was against the statutory regulatory framework and deceptive regarding the product’s origin and Mount Everest’s brand was weakened and unfair competition was made possible by the petitioner’s registered trademark’s continued visibility, even after the respondent’s own label was applied.
• The Court distinguished between the reuse of branded bottles and generic bottles while taking into account the respondents’ claims about logistical difficulty and environmental sustainability and it recognized that glass bottle recycling and reuse were generally acceptable and even preferred for sustainability, further it did clarify, though, that the ban only applied to the recycling of bottles bearing the embossed trademark or logo of another manufacturer, therefore, trademark infringement and noncompliance with excise and labeling regulations were not justified by economic or environmental considerations.
• Regarding the extent of the Commissioner’s authority, the Court determined that while the Excise Commissioner lacks the authority to decide cases involving violations of the Copyright or Trademarks Acts, he does have the authority to enforce adherence to state excise laws’ requirements for branding, labeling, and packaging and his regulatory authority includes making sure that bottles do not bear the marks of multiple manufacturers or create brand confusion also in a suitable forum, issues of infringement or design registration could be pursued independently.
• On claims pertaining to the right to trade under Article 19(1)(g) and 301 of the Constitution, the court reasoned that the prohibition imposed by the excise commissioners constituted a reasonable restriction, there was no absolute bar to trading in beer, and respondents retained the ability to use generic bottles for packaging, the restrictions applied only to packaging that would lead to consumer deception or undermine statutory compliance thus falling well within the scope of legitimate regulation in the public interest. 
• The Court left this matter open for resolution in the proper proceedings, provided that evidence was presented, and did not reach a definitive conclusion regarding the potential safety risks associated with scratching or removing marks from bottles and it upheld the main ban on using bottles with leftover embossed branding, but it overturned the general ban on such activities.
• In conclusion, the Court maintained the Excise Commissioner’s right to forbid reusing bottles bearing the embossed trademark or logo of another business, the respondents allegations of financial hardship, environmental necessity, industry practices, and constitutional violations were deemed without merit and the Court’s ruling achieved a balance between protecting intellectual property rights, making sure laws are followed, and allowing eco-friendly practices as long as they don’t confuse customers or violate the law.

CONCLUSION – 

The Madhya Pradesh High Court’s decision in Mount Everest Breweries Ltd. V. MP Beer Products Ltd., strongly reaffirmed the principle that protecting brand identity and preventing consumer confusion are legitimate regulatory aims withing the alcohol industry, by upholding the excise commissioner’s prohibition on the reuse of glass bottles embossed with another manufacturer’s trademark, the court recognized that the presence of dual brands on a single bottle directly undermines regulatory norms and diluted intellectual property rights. 

While accommodating the need for environmental sustainability and fair trade, the court distinguished generic bottle reuse from practices infringing statutory trademark and labelling protections. Ultimately, the judgment balanced industry interests, environmental concerns and market integrity, confirming that excise authorities can impose reasonable restrictions to safeguard consumer trust and preserve the distinctiveness of registered brands. 

This article has been written by Mayur Shrestha (Presidency University Bengaluru School of Law).