Whereas a company that uses the unauthorised name of an Indian product which is well known in a particular region does much more than using the name of that product. Names such as Darjeeling tea, Basmati rice, Kanchipuram silk, Alphonso mango, and Tirupati Laddu, are not merely trademarks of one company but belong to the entire community which has the common characteristic of being produced in a particular soil, climate, or tradition. The gist of the dispute arising from the Geographical Indication Act, 1999 (GI Law). When such a misuse takes place, the damage done is two-fold: 1) The consumers are misled as regards its origin. 2) Local producers lose their goodwill and profits. This article explores the way the GI Law deals with such a misappropriation, the rights conferred upon the registered proprietors and authorised users, and how these laws have been interpreted by the Indian courts.

LEGAL ISSUES AT HAND:

1. What legal rights are accorded to a registered geographical indication in the Geographical Indications Act of 1999? Who may exercise them?
2. May a private company that neither belongs to the region nor is a registered authorised user of a GI-specified good trade in products under the name of such a GI?
3. Are there any remedies to the authorised users of that GI in case this happens, either civil or criminal or both?
4. Does the registration of the GI play a role or no?
5. How does the Indian judiciary decide between the two sides, that is, the interest of the GI owners versus genericness, prior use, and/or honest concurrent use by the alleged infringer?

APPLICABLE STATUTORY PROVISIONS

The GI law in India is sui generis in nature, as it is specifically enacted for geographical indications and is not derived from any of the already existing trademark or copyright legislations.

Section 2(1)(e): Definition of “Geographical Indication”

Geographical indication means an indication which identifies goods as agricultural, natural or manufactured goods as originating or produced, processed or prepared in the territory, region or locality in which a given quality, reputation or characteristic of the goods is essentially attributable to its geographical origin.” The muscatel character of Darjeeling tea, resulting due to the interplay of the altitude, fog and soil of Darjeeling hills, is the classic example of geographical indication.1

Section 11: Application for Registration

An application for registration cannot be filed by a single producer, instead it has to be filed by an association of persons or producers. The geographical indication registration application can only be filed by an organization or authority by law representing the interest of producers of that particular good. It is this aspect that sets the geographical indication apart from trademark.2

Section 17- Application for Registration as Authorised User

After the registration of a GI, individual producers from the designated geographical area are required to apply separately to the registered proprietor (the association) in order to get registered as “authorised users.” It is only an authorised user who can exclusively make use of the GI for commercial purposes.3 Section 20- Infringement of Registered Geographical Indication; No Action for Unregistered GIs Under section 20, no one can bring any proceedings for the prevention of infringement or to claim any compensation for infringement of an unregistered geographical indication. This clearly explains how registration is commercially necessary even though it is not mandatory; otherwise, producers will have to rely on passing off at common law.4

Section 21- Rights Conferred by Registration

The Section 21(1)(a) confers the right to seek an infringement remedy on both the registered proprietor and the authorized user or users. Under Section 21(1)(b), the authorized user shall have the exclusive right to make use of the geographical indication with respect to the goods in respect of which the geographical indication is registered. The courts have interpreted this not to be an “either/or” situation; the registered proprietor (normally an association or statutory body) can sue on its own without dragging all the authorized users as co-plaintiffs.5

Section 22- Infringement of Registered Geographical Indications

Infringement of registered geographical indication occurs in the following situations:

1. if a person who is not authorized to use the mark uses the mark in such a way that it gives an impression that the goods are made in a place which is not actually their place of origin, thereby misleading the public; and
2. if such use amounts to an act of unfair competition. Section 22(2) provides for an additional category of protection to the notified products, such as wines and spirits, wherein even a correct indication of place of origin accompanied by expressions such as “type,” “manner” or “imitation,” amounts to infringement.6

Sections 24 and 25- Exceptions and Savings

Some of the exceptions that the Act allows include the case of a name belonging to the person himself used in his trade (when used in good faith) and continuous prior use of the same indication for goods before the GI’s registration or before 1 January 1995 or before the GI was protected in its country of origin.7

Section 26(4)- Limitation

A suit concerning the use or registration of the mark or indication cannot generally be filed more than five years from the date of knowing such use by the claimant. This has been a vital factor in several cases, as explained later.8

INTERNATIONAL FRAMEWORK: TRIPS AND WIPO

India’s GI Act was made solely in order to fulfill its obligation as a member of the WTO with regard to the TRIPS agreement. Article 22 of TRIPS begins the chain reaction by laying down that the members should provide for legal means of preventing interested parties from using any indication that may mislead the public about the origin of a product or is an act of unfair competition.9 In Article 23, when it comes to wine and spirits, the bar is raised even higher, in that even the absence of confusion or misleading about the origin is taken into consideration and the mere indication of the true origin or use of the geographical name followed by words such as “kind” or “type” will also be banned.10 This is similar to Section 22(2) of the Indian Act. Article 24 11provides for certain exceptions to the rule. Apart from TRIPS, the Lisbon Agreement administered by WIPO (as well as the Geneva Act of 2015 to the Lisbon Agreement), an international registration system exists for appellations of origin and geographical indications; however, India is not a party to the Lisbon system at present. India’s interaction in this regard occurs through trade negotiations bilaterally and the filing of geographical indication applications in specific countries, which is the path set out by the Basmati and Darjeeling cases.

JUDICIAL ANALYSIS

Scotch Whisky Association v. Pravara Sahakar Shakar Karkhana Ltd. (Bombay High Court, 1991)12 This decision was made even before the GI Act was in existence, and this particular case is still the cornerstone of Indian GI jurisprudence through the common law tort of passing off. The Scotch Whisky Association took the Indian cooperative to court for selling their whisky with a label of “Blended with Scotch” and images such as tartan and Scottish drummer on it. The High Court of Bombay ruled that “Scotch Whisky” is a geographical indication which refers only to a whisky manufactured in Scotland and that the Association had enough stake in the matter to prevent the misappropriation of the geographical indication.

Tea Board, India v. ITC Limited (Calcutta High Court, 2011)13

Tea Board, the registered proprietor of the GI and certification trademark “Darjeeling,” had filed a case against ITC Limited for using the term “Darjeeling Lounge” as the name of a service provided by it at one of the hotel outlets run by it. In dismissing the appeal by Tea Board, the Division Bench held that the provisions relating to infringement contained in Section 22 of the GI Act were applicable to goods and not services, and the Board failed to prove that its registration of GI was applicable to tea only, and not other beverages, which the lounge was serving.

The Basmati Rice Dispute (RiceTec Inc., USPTO proceedings, 2000–2001)

Though this particular case has not been heard in an Indian court, it is a seminal one in the history of GI in India. RiceTec Inc., a US firm, was granted a patent on some hybrid rice lines and had promoted them under the name “Basmati.” The challenge to the patent came from APEDA on behalf of the Indian government, who argued that the term “Basmati” refers to a special aromatic rice that grows in the Indo-Gangetic plains and cannot be monopolized as a brand by an entity that does not have any link with the place. After some struggle, RiceTec was forced to withdraw its claims, and the more general claims about the naming of “Basmati” did not survive.

LEGAL POSITION OF THE UNAUTHORISED COMPANY

A Private company marketing goods as the trade mark of a renowned region-specific Indian commodity and not being a legally authorized manufacturer of that region: In case where the GI has been registered under the Act, both the registered proprietor (which usually is an association of producers, cooperative or statutory body) and the authorized users will be entitled for remedy under Section 21 in conjunction with Section 22. The actions taken by the company will undoubtedly come under Section 22(1), because the use of the name on products that do not originate from the particular region is definitely likely to mislead the customers as to their geographical origin and independently constitutes unfair competition in the form of passing off. Where the GI has not been registered, Section 20 prohibits a statutory action for infringement, but that does not leave any remedy for the local producers; the passing off action as Scotch Whisky Association case indicates is open at common law, if they succeed in proving distinctive reputation and goodwill associated with the region of their production. It may have a case for continuous prior use prior to the cut-off dates (Section 25), or it may try to mount a genericness defense in support of the proposition that the term is now a common descriptor of a certain product category and not its source of origin (a genuine argument for terms such as cheddar, but not for those such as Darjeeling, Basmati, or Tirupati Laddu).

CRITICAL LEGAL ANALYSIS

In the structure of the GI Act, there has been a deliberate policy decision, with GIs being community rights which are collective and non-transferable, unlike trademarks, which are individual properties and are transferable. This is the very reason for which registration needs to be done by the association or authority on behalf of the producers, while the individual producers need to register themselves as authorised users as per section 17. While this dual structure ensures that no individual trader can take monopoly over the name of the entire region for commercial benefit, it also poses certain conflicts, as seen from the Tea Board cases and Scotch Whisky Association authorised user cases. Courts have often had to stress that the status of the proprietor to sue under Section 21(1)(a) of the GI Act does not depend on him/her having to become a member of all authorised users. The second area of conflict revolves around the ambit of protection. Tea Board v. ITC makes clear that protection of GIs through Section 22 is available only in relation to goods, creating a conceptual loophole when the place name is used in conjunction with services (like hotels, restaurants, and retail branding), although still capitalizing on the same reputation. It is indeed a true limitation to compare the wider provision of “unfair competition” in Article 22 of TRIPS and requires legislation to think afresh on the issue or for producers to avail themselves of an additional remedy of certification trademark protection under the Trade Marks Act, 1999, which is not similarly restricted to goods. Third, the five-year limitation period of Section 26(4) puts a true pressure on producer organizations to be vigilant about misuse in the market instead of passively waiting for it to happen despite registration. As the case of Darjeeling Lounge made amply clear, passivity may mean the death of a good claim.

PRACTICAL REMEDIES AVAILABLE TO THE PARTIES

The remedies open to the aggrieved producers in this case are as follows:

1. A civil suit for infringement under Section 22 before the District Court, seeking injunction, damages or an account of profits and delivery-up or destruction of the labels/packaging.
2. Interim injunctions to prevent further sales till the final hearing, especially in view of the nature of reputation and market damage.

1. Criminal remedies under the Act (Sections 39 and 40), for applying a geographical indication falsely and selling goods to which it has been falsely applied; these provisions carry imprisonment and a fine.14
2. Passing off action in common law when the GI is not registered, or as a concurrent claim along with statutory infringement.
3. Border enforcement actions, such as registration of the GI with the custom authorities for stopping imported or exported products.
4. Rectification of the register of Geographical Indications if the company registers a confusing mark/GI. In the case of the private firm, if it truly has a valid basis for using the name (previous honest use, or genuine assertion of the term being generic), there are solutions available, such as defense against the lawsuit based on these grounds; this includes filing for rectification of the GI registry under the Act in the event that the registration itself is erroneous, or negotiation of a license/authorized user agreement with the registered proprietor.

RECENT LEGAL DEVELOPMENTS AND EMERGING ISSUES

The Indian GI jurisprudence is still evolving regarding the issue of the right of standing and the enforcement mechanism. As noted in Scotch Whisky Association’s more recent case in the Madhya Pradesh High Court, the proprietor of the GI has a separate right to file a lawsuit without having to include all the users in the lawsuit, thus ensuring effective enforcement mechanism for producer collectives that are large in number and geographically dispersed. The GI registry in Chennai continues registering a number of different products beyond the initial agricultural and food stuffs to now cover handicrafts, textiles and even regional sweets and delicacies due to producer community’s understanding of their commercial importance in terms of registration. On the other hand, India continues to face the problem of enforcing its GI products abroad since the registration of the products under the Act does not have any effect outside of India.

CONCLUSION AND SUGGESTIONS

The Private, unauthorized use of the name of a regional product from India that enjoys great repute is not a figment of imagination. This involves genuine conflicts and legal problems that helped shape the GI regime in India. These range from the Scotch Whisky Association case in 1991 through the Basmati patent controversy to the Darjeeling Lounge controversy. In light of the GI Act, 1999, coupled with the common law of passing off and the TRIPS Agreement, the authorized producers enjoy a considerable, although limited, arsenal of weapons: Registration grants a solid right to sue under Section 21 and 22, while passing off remains an alternative in case there is no registration. Protection, however, does not come automatically. The common denominator in all these cases is that producer organizations must register themselves without delay, list individual producers as authorized users, be vigilant about the market and move fast within the five-year limitation period. Protection, for traditional products having very distinct regional characteristics, is clearly on the side of the community that created its fame.

1 GI Act, s 2(1)(e).

2 GI Act, s 11.

3 GI Act, s 17.

4 GI Act, s 20.

5 GI Act, s 21.

6 GI Act, s 22.

7 GI Act, ss 24 and 25.

8 GI Act, s 26(4).

9 TRIPS Agreement art 22.

10 TRIPS Agreement art 23.

11 TRIPS Agreement art 24.

12 Scotch Whisky Association v Pravara Sahakar Shakar Karkhana Ltd, 1991 SCC OnLine Bom 271.

13 Tea Board, India v ITC Ltd, 2019 SCC OnLine Cal 9122.

14 GI Act, ss 39 and 40.