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CHAPTER-VII
LEGAL PROTECTION OF
GEOGRAPHICAL INDICATION IN INDIA
7.1 Introduction Over the recent past, Geographical Indications (GI) have emerged as a significant form of Intellectual Property Rights (IPR) issue in the Indian context. GI helps a community of producers to differentiate their products from competing products in the market and build goodwill around their products, often fetching a premium price. From consumer’s point of view, GIs act as a signalling device, which helps them identify genuine quality-products and also protect them against counterfeits. In view of their commercial potential, adequate legal protection of GIs becomes necessary to prevent their misappropriation. Although India has had in its possession a considerable number of products that could qualify for legal protection as geographical designators, the initiatives to exploit this potential begun only recently when the country established as sui generis system of GI protection with the enactment of ‘the Geographical Indications of Goods (Registration and Protection) Act, 1999, coupled with the ‘Geographical Indications of Goods (Registration and Protection) Rules, 2002. The Act, which became operational with effect from 15 September 2003, was drafted as part of the exercise in the country to set in place national IPR laws as much in compliance with India’s obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade Organisation (WTO) so as to take advantage of the ‘minimum’ standards of GI protection that the TRIPs sets out for the WTO members to comply with in their respective national legislations.
7.2 An overview of GI protection in India In India, the legal system for GI protection has very recently been developed. The Geographical Indications of Goods (Registration and Protection) Act was enacted in 1999 and has come into force in September 2003 (hereafter called GI Act). Before this act, there was no separate legislation for GIs specifically. However, there were three alternative ways in which the then existing legal systems of the country could be utilised for preventing the misuse of GIs. (i) under the consumer protection laws; (ii) through passing off action in courts; and (iii) through certification trademarks.^1 Among these laws, certification trademarks (CTM) were more focused on recognised and protecting indication of sources. In the Indian context, the most common geographical name protected under the CTM system, prior to the GI Act, was “Darjeeling Tea”.^2 A certification trademark is understood as a mark administered by a proprietor who certifies the goods as to their origin, material, mode of manufacture, or performance of services, quality accuracy or other characteristics, and thereupon allows use of the mark. Under the CTM system, a proprietor of the mark who proposes to merely administer the mark but not use it him or herself, applies for the registration of the same together with a set of elaborate regulations detailing the process of certification for the use of the mark in relation to the goods in question. It is absolutely imperative in the
(^1) Kasturi Das, Socio-Economic Implications of Protecting Geographical Indications in India , August 2009, Centre for WTO Studies (^2) The Tea Board of India has registered the name Darjeeling as a Certification Mark in India, USA and, p.6. UK.
quality or reputation that the product has already earned in the market either by publicity or by its presence in the market. A survey of decided cases reveals that Indian courts have maintained the action of passing off to protect GIs. 4 Scotch Whisky Association v. Pravara Sahakar Karkhana Ltd.,^5 is a leading case on this subject. In this case, the plaintiff Scotch Whisky Association, a company incorporated under the Companies Act of United Kingdom instituted the passing off action against the defendants- a manufacturer of various brands of Indian Whisky like ‘blended scotch whisky’ or Blended with Scotch’ under various brand names, ‘Drum Beater’ and ‘God Tycoon’. On these facts, the Bombay High Court held: The Plaintiff had sufficient interest to prevent passing off of Indian Whisky manufactured by the defendant and to prevent damage to reputation and goodwill of Scotch whisky. The defendants were passing off their goods as blended Scotch whisky which in fact they were not. The case therefore merited interim injunction. The defendants resorted to unfair means by using the words ‘Blended with Scotch’ and indulged in colourable imitation and unfair trading in an attempt to harvest unjust benefits by appropriation of plaintiff’s goodwill. The defendant was restrained from advertising or offering for sale or distributing in any country Whisky, which is not Scotch whisky. It is evident from the aforesaid decision that the judiciary in India has consistently extended the umbrella of legal protection to GIs even in the absence of any legislation in force at that point of time.
(^4) Tushar Kanti Saha and Nalin Bharti, “Beyond Wines and Spirits: Developing Countries ‘GI Products and their Potential in WTO Regime with Special Reference to India”, Vol.11, March 2006, p.892. Journal of Intellectual Properly Rights, (^5) AIR 1992 Bom 294.
7.3 Geographical Indications of Goods (Registration and Protection) Act, 1999 – An analysis 7.3.1 Historical background of the GI Act The need for separate legislation for GIs in form of the GI Act was felt in India due to some important reasons. 7.3.1.1 Socio-Economic Perspective Geographical Indications are intellectual property rights. Their function is to identify products on the market, similar to trademarks and trade names. Well protected and pro-actively used, GIs are a very interesting marketing tool because they can convey a lot of information from the producer to the consumer. GI give the producers of a region the exclusive right to use the indication for their products originating from that region. It also means that they have the right to prohibit any unauthorised use usurpation or imitation of the sign on a product that is not from the designated area or which does not have the qualities guaranteed by the GI. Rooted in the soil of the region for which they stand, geographical indications contribute to the socio-economic improvement of regions around the world. They create employment, contribute to the regulation of the market and encourage the diversification of production. In addition, they protect natural treasures and maintain the cultural heritage.^6 Much like trademarks, the economic rationale of GIs is based on the ‘information asymmetry’ between buyers and sellers in the market and role of reputation, conveyed through distinctive signs, in talking such asymmetry. Thus GI acts as a signalling device that helps the producers to differentiate their products from competing products in the market and enable them to build a reputation and goodwill around their (^6) Felix Addor and Alexandra Grazioli, 2006, Federal Institute of Intellectual Property available at http://www.ige.ch/e/jurinfo/j110110.shtm.
several decades and a over a period of time, it has acquired a unique position in the world market. The patenting of the world famous Basmati rice the crown jewel of the Asian sub-continent India and Pakistan by the US Company Rice Tec Inc. woke India and many other developing countries and made them aware of the unfair world market trend. The Basmati which has extra long grain, soft textured, aromatic rice has been cultivated since time immemorial in the foothills of the Himalayas. The rare agro- climatic conditions this region endow Basmati rice with certain characteristics, physical and sensory, not found elsewhere nor amenable to replication. This makes Basmati a premium product in the international market and the uniqueness needs to be preserved and protected.^9 Basmati commands a premium price both in domestic and international markets. Approximately one million hectares in India and 0.75 million hectares in Pakistan are planted in Basmati varieties, where it is cultivated by hundreds and thousands of small farmers.^10 In India alone basmati exports were valued at approximately US$ 475 million in 1998-99. The serenity of the surroundings was suddenly broken by bold new headlines which read “US Rice Company says India and Pakistan don’t own word “Basmati”. Ever since the company, Rice Tec, based in Texas, United States, patented Basmati rice, there has been a hue and cry in India and Pakistan. The fear of cultural piracy from the western multinationals is felt by the Indian farmers. 11
(^9) Chandar M. Lal and Gayathri Jambunathan, India and Pakistan Geographical Indications the Basmati issue. Submitted to the International Trademarks Association (INTA) Annual Meeting, Seattle May 1999,http://www.iprlawindia.org.doc. (^1011) Suman Sahai Looking beyond Basmati, Economic and Political Weekly , February 21, 1998, p.371. packages (in German) “Das Basmati Patent” September, 1999, http://www.evb.cal.Fafi Geno Type “The Basmati Rice Patent”, 1998, http://www.rafi.organd, Berne Declaration press
In February 1996, the APEDA^12 has found that Rice Tec had registered for a trademark for exporting what they called. ‘Texasmati’ in the UK and had lodged a case against Rice Tec in an UK economic court. Thus this was the authority strategy i.e., to file such cases in all the countries that Rice Tec approaches for trademarks. The first legal issue, which arose in the protection of Basmati as a geographical indication is as to whether it is a generic name? Rice Tec in its claim states that it is a generic name and therefore cannot be protected as a geographical indication.^13 Various reports have referred to the US Company’s use of such names as “Basmati”, “Kasmati”, “Jexamati and “Jasmati”.^14 In fact, the company has used the brand names Kasmati, Texmati, and Jasmati in the US and UK since before the patent was issued. It has been using the term “Basmati” as a generic term for considerably longer, “Rice Jec has produced and marketed Texas Basmati and American Basmati rice and labelling it as such for 20 years and exporting the products for 15 years with no objection ever previously raised”, the company stamen says.^15 Since the word “Basmati” is not a place name, its validity as a geographical indication would depend on whether “Basmati” can be shown to be closely and exclusively associated with a geographical area, although the world trade agreement calls it as geographic appellation.^16 The name and the patent are completely separate issues; and there is also a distinct difference between the use of Basmati as a generic term, and the use of brand (^1213) Agriculture Products Exports Development Authority. Research Institute being used by Rice Tec to state that Basmati is a generic term and therefore cannot beThis controversy was a result of the research prepared by an Indian scientist from the Indian Agricultural protected as a geographical indications. see Radhika Singa –1998. The Economic Times , New Delhi, August 11, (^1415) http://www.rediff.com/business/1998/mar/12rice.htm. 16 http://www.economictimes.com/today/12.http://www.itd.or/issues/india6.htmm.
West Bengal, India. Tea has been cultivated, grown and produced in tea gardens geographically located in this area for the last 150 years. The unique and complex combination of agro-climatic conditions prevailing in the region and the production regulations imposed, lends the tea a distinctive and naturally-occurring quality and flavour which has won the patronage and recognition of discerining consumers all over the world for well over a century. The tea produced in the region and having special characteristics is and has for long been known to the trade and the public all over the words as “Darjeeling” tea. 19 According to records, the commercial tea gardens were planted by British tea interests in 1852. Darjeeling was then only a sparsely populated hamlet which was being used as a hill resort by the army and affluent people. However, by 1866, Darjeeling had 39 gardens producing a total crop of 21,000 kilograms of tea harvested from 4,400 hectares. By 1874, tea cultivation in Darjeeling was found to be a profitable venture and there were 113 gardens with approximately 6000 hectares. Today, nearly 17, 400 hectares in 85 tea gardens produce around 11.5 million kilograms of tea.^20 The Easter and spring flushes have the unique Darjeeling flavour and command a high price. Most of the tea coming on to the world market, as ‘counterfeit’ Darjeeling seems to be coming from Kenya and Srilanka. The other source is said to be Nepal. Nepalese tea is produced in similar geographic conditioned to that of Darjeeling tea. About 60 percent of Nepalese tea is exported to India and most of the Nepalese tea estates gardens are owned by Indians. There are allegations that Nepalese tea is imported in to India is repackaged as Darjeeling tea and exported Nepal is small produces and exporter of tea in the world market. (^19) Rajendra Kumar and Vasundhara Naik, Darjeeling Tea- Challenges in the Protection and Enforcement of Intellectual Property Rights, http://www.wipolint/index.html.in (^20) Ibid.
What will happen if 40000 tons of ‘counterfeit’ Darjeeling disappears from the world market because of protection of the geographical indication for ‘Darjeeling Tea”? We could expect the price of Darjeeling tea to go up depending on the price elasticity of demand of Darjeeling tea, which will benefit the producers of Darjeeling tea.
- ‘counterfeit’ Darjeeling produced in India and consumed in India.
- ‘counterfeit’ Darjeeling produced in other countries consumed in India.
- ‘counterfeit’ Darjeeling produced in India and consumed outside India.
- ‘counterfeit’ Darjeeling produced in India and consumed out side India.^21 Since Darjeeling has a high reputation, both the Tea Board and the Darjeeling planters Association have been involved at various levels in protecting this common heritage. The protection is essentially geared to: (i) Prevent misuse of the word “Darjeeling” for other types of tea sold world- wide. (ii) Deliver the authentic product to the consumer. (iii) Enable the commercial benefit of the equity of the brand to reach the Indian industry and hence the plantation worker. (iv) Achieve international status similar to champagne or Scotch Whisky both in terms of brand equity and governance/administration. One of the first significant measures was taken by the Tea Board to protect Darjeeling as a geographical indication about 15 years ago by developing a “Darjeeling” Logo. The Darjeeling logo created in 1983 has since been registered in various
(^21) Niranja Rao, “ Geographical Indications in Indian Context: A Case Study of Darjeeling Tea , Sept.2003, working paper No.110, Indian Council for Research on International Economic Relations , p.13.
protected in Kenya or it could be stopped at the boarder of the importing country if the logo is protected in that country.
- Article 23.1 prohibits the use of geographical indication if “…the geographical indication is used in translation…”. Lack of this protection in the case of tea may not pose too much of a threat to Darjeeling tea because it is difficult to translate the geographical name of Darjeeling. This may be true of all Indian geographical indications.
- Article 23.1 prohibits the use of a geographical indication “… accompanied by expressions such as “kind”, “type”, “style”, “imitation” the like”. As this is not applicable to tea, it would be possible for example, for tea producers of Kenya to put the words “Imitation of Darjeeling Tea” on its tea products. But they cannot use the Darjeeling tea Logo if it is protected in that country as stopped at the border if it is protected in the country of importation; if they use the logo they are infringing the geographical indication.
- Article 23.2 provides that “the registration of a trademark for wines which contains or consists of a geographical indication identifying wines or for spirits which contain or consists of a geographical indication identifying spirits shall be refused as invalidated, ex-officio if a members legislation so permits or at the request of an interested party, with respect to such wines or spirits not having this origin”. This is not applicable to tea, but the protection afforded by Article 22.3 in respect of trademarks seems to be sufficient. Article 23.2 merely asserts that in case of tea for example, it is possible to grant a trademark, “Hyderabad Tea”, even when
Hyderabad is a geographical indication and it is known that Hyderabad does not produce any tea.
- Article 23.3 deals with homonymous geographical indications and provides that “in the case of homonymous geographical indications for wines, protection shall be awarded to each indication…”. Homonymous geographical indications may not be a problem for all most all geographical indications coming out of India not only for tea but for all products.
- Article 23.3 provides for “… the establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection in those members participating in the system”. In fact a legally enforceable multilateral system could be the only benefit from extension of Article 23 protection to other products. The TRIPs agreement leaves it to the members to decide on the mode of protection of geographical indications. The modes used by member countries to protect geographical indications are; (1) a sui generis law; (2) certification or collect marks under trademark law; (3) under unfair competition or consumer protection laws. In those countries, which protect geographical indications under a sui generis law or certification or collective marks under trademark law, it is possible to get protection for a logo indicating the geographical indication. If the producers and exporters of the ‘counterfeit’ goods use the logo it will be an infringement and can be challenged in courts. Here the producer of genuine product has just to prove that the producer of ‘counterfeit’ producer is not authorised to use the logo, as he does not produce it in the region, which the
Trade Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade Organisation (WTO) so as to take advantage of the ‘minimum’ standards of GI protection (alongside other IPRs) that the TRIPs set out for the WTO members to comply in their respective national legislations. 7.3.2 Analysis of the GI Act Prior to enactment of GI Act,^25 there was no law for the protection of geographical indication in India. The need and justification for this law has been aptly stated in the statement of object and reasons as under: “At present there is no specific law governing geographical indications of goods in the country which could adequately protect the interests of producers of such goods. Exclusion of unauthorised persons from misusing geographical indications would serve to protect consumers from deception, add to the economic prosperity of the producers of such goods and also promote goods bearing Indian geographical indications in the exports market. Unless a geographical indication is protected in the country of its origin there is no obligation under the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) for other countries to extend reciprocal protection. India would, on the other hand, be required to protection to goods imported from other countries which provide for such protection. In view of the above circumstances, it is considered necessary to have a comprehensive legislation for registration and for providing adequate protection for geographical indications”. Until recently and in past, protection from such misuse of geographical indications was granted through passing off action in courts^26 or through certification
(^2526) Geographical Indications of Goods (Registration and Protection ) Act, 1999 Remedy under tort.
marks.^27 However, in order to provide better protection to geographical indications, the Parliament enacted Geographical Indications of Goods (Registration and Protection) Act, 199928 which is quite similar and in lines with the New Zealand GI Act. This received the assent of the President of India on the 30th^ December 1999. This Act seeks to provide for registration and better protection of geographical indications relating to goods. It excludes unauthorised persons from misusing geographical indications. This would protect the interest of producers, manufacturers and thereby consumer from being deceived by the falsity of geographical origin to economic prosperity of the producer of such goods and promote goods bearing geographical indications in export market. Unless a geographical indication is protected in the country of its origin, there is no obligation under the agreement under Article 22 of the TRIPs agreement for other countries to extend reciprocal protection. It is in this context that the Act was enacted.^29 The Act has been divided into nine chapters. Chapter-I is preliminary which inter alia, defines various terms used in the Act. Chapter II deals with the appointment, powers and establishment of Registry. It also provides for registration in respect to particular goods and areas and prohibition of registration. Cheaper III deals with procedure and duration of registration. Chapter IV describes the effect of registration. Chapter V contains special provisions relating to trademark and prior user. Chapter VI provides for rectification and correction of the Register. Chapter VI relates to appeals and Appellate Board. Chapter VII prescribes penalties and procedure. The last i.e., Chapter IX is miscellaneous.
(^2728) Under the Trade and Merchandise Marks Act (1958). 29 WTO and TRIPs – An Indian perspective, http://www.indiainfoline.com/legal/feat/wttr.html.Statement of object and Reasons of the Bill.
The above definition is not exhaustive but merely illustrative. It would not be out of place to mention that while the TRIPs agreement refers to ‘goods’ the Indian Act classifies such goods. ‘Producer’ in relation to goods, means any person who – (i) if such goods are agricultural goods, produces the goods and includes the person who processes or packages such goods; (ii) if such goods are natural goods, exploits the goods; (iii) if such goods are handicraft or industrial goods, makes or manufactures the goods, and includes any person who trades or deals in such production, exploitation, making or manufacturing, as the case may be, of the goods^33 The TRIPs definition refers to goods in general, the Indian GI Act specifies the goods to be either agricultural goods or natural goods or manufactured goods that can qualify as a GI. Further, in the Indian Act, if a producer applies for a GI for a manufactured good, he or she must make sure that at least one of the activities of either the production or processing or preparation of the good must take place in the territory. In that sense, the GI Act is more restrictive than the TRIPs definition. 34 This can be explained by taking “Darjeeling tea” as an instance. Darjeeling tea involves manufacture because the green tea leaves plucked from the tea bushes have to go through a range of rigorous processing stages before turning into the final product (called “made-tea”), which is ultimately sold in the market. Now even if the tea leaves are plucked from Darjeeling region, the GI Act will not allow the final product to be designated as Darjeeling tea, unless the processing also takes place within the Darjeeling (^3334) Section 21 (k). Reference to India’ Kasturi Das, ‘ Protection of Geographical Indications: An Overview of Select Issues with Particular working paper 8, 2007, Centre for Trade and Development (centad), New Delhi, India.
region. The TRIPs definition will, however, allow the final product to be designated as Darjeeling tea, even if the processing takes place outside Darjeeling, because no matte where the processing takes place, the given quality or characteristics (such as flavour, etc.) of the final product will essentially be attributable to its geographical origin. 35 As for a given quality, reputation and other characteristic, TRIPs does not clarify any of these requirements further. Thus TRIPs is silent on whether these requirements imply only such qualities and characteristics, which may be attributed to ‘natural factors’ (e.g climate, topography, etc,), or whether those characteristics that result from ‘human factors’ e.g. specialised skills of artisans) may also be covered under the definition contained in Article 22.1. Unlike TRIPs, the GI Act explicitly mentions ‘human factors’. Section 11 (2) (a) of the GI Act, which stipulates what an application for GI registration should contain, refers to the geographical environment, with its inherent natural and ‘human factors’. Again as per section 32 (1) of the GI Rules, an application for a GI is required to be supported by ‘the detailed description of the human creativity involved’ and ‘the particulars of special human skill involved’. The significance of the explicit reference to ‘human factors’ in the GI Act may be appreciated when judged in the light of the fact that India has in its possession numerous handicrafts and handloom products that are apt to be protected as GIs and in the production of these items specialised human skills and craftsmanship play a significant role.
(^35) Ibid.
