Property Law Case: Mount Everest Brewery Pvt. Ltd. & United Brewery Nepal Pvt. Ltd. vs. Nepal Government & Others (NKP 2067, Decision No. 8356)
Case: Illegal Use of Empty Bottles Bearing Registered Trademarks
Plaintiff: Mount Everest Brewery Pvt. Ltd., United Brewery Nepal Pvt. Ltd.
Defendant: Government of Nepal, Department of Industry, Tripureshwor, Kathmandu and others
Decision Number: 8356
This case is related to trademark rights and intellectual property rights
Facts of the Case:
Gorkha Brewery Pvt. Ltd. produced and sold beers such as “Tuborg” and “Carlsberg” in bottles bearing its registered trademark and logo. Later, other beer companies, including Mount Everest Brewery Pvt. Ltd. and United Brewery Nepal Pvt. Ltd., collected empty Tuborg bottles from the market and filled them with their own beer products for sale. Gorkha Brewery argued that this practice could confuse consumers and harm the company’s identity and reputation. Therefore, it filed a complaint before the Department of Industry. After discussion, the Department of Industry ordered all beer companies to use only their own bottles.
However, Mount Everest Brewery and United Brewery challenged this decision. They argued that once the bottles were sold in the market, ownership of the bottles passed to the consumers, who could use them in any manner they wished. They also argued that a bottle itself is not a trademark but only a container.
The Patan Appellate Court upheld the decision of the Department of Industry. Later, the matter reached the Supreme Court, which also decided that one company could not use bottles bearing another company’s trademark.
Legal Issue
- Whether a beer bottle itself can be considered a trademark.
- Whether a company has rights over bottles bearing its trademark even if it did not manufacture the bottles itself.
- Whether another competing company can legally use empty bottles bearing someone else’s trademark.
- Whether such use creates confusion among consumers and violates Section 16(2) of the Patent, Design and Trademark Act, 2022.
Different Levels of Court Decision:
Department of Industry:
The Department of Industry, after receiving the complaint from Gorkha Brewery, directed all beer companies to use only their own trademarked bottles. The Department held that using bottles bearing another company’s trademark could confuse consumers and damage the reputation and goodwill of the trademark owner. Therefore, such use had to be stopped.
Patan Appellate Court:
The Patan Appellate Court upheld the decision of the Department of Industry. The Court held that when one company sells beer in bottles bearing another company’s trademark, it creates confusion among the public. The Court stated that the main purpose of a trademark is to distinguish one company’s products from another’s, and therefore such use was unlawful.
Supreme Court:
The Supreme Court also upheld the previous decisions. The Court held that although the bottle itself is not a trademark, the words, logo, and symbols embossed on the bottle are trademarks. The Court further explained that after a product is sold, the physical ownership of the bottle passes to the buyer, but the intellectual property rights related to the trademark remain with the original trademark owner. Therefore, using bottles bearing another company’s trademark to sell competing products amounts to infringement of trademark rights.
The Court concluded that such use could mislead consumers and therefore violated Section 16(2) of the Patent, Design and Trademark Act, 2022.
Principle Established:
- Physical ownership and trademark rights are separate legal rights.
- Selling a product transfers ownership of the bottle, but not the trademark rights.
- Trademark rights remain with the original trademark owner even after the product is sold.
- A competitor cannot use bottles bearing another company’s trademark for selling similar products.
- Unauthorized use of trademarked bottles may confuse consumers and amounts to trademark infringement.
