ISSUE III : Protection of geographical indications: Achievements and Roadblocks

INTRODUCTION

Geographical Indication (“GI”) is a class of intellectual property that protects the quality, reputation and other character of goods essentially attributable to their geographical origin. This bulletin seeks to analyze the meaning, importance and need for protection of GI as well as the provisions relating to the registration thereof in India. It further highlights the proactive role played by the judiciary in the protection of GI. Finally, it touches upon the very vital issue of imbalance within the Trade Related Aspects of Intellectual Property Rights Agreement (“TRIPS”) as regards protection afforded to GI that is detrimental to the interests of India and other developing countries.

1. Need for Protection of Geographical Indication

Over the years, products originating from a particular region gain reputation for their unique quality and characteristics owing to the specific geographical conditions of the place of their origin.1 Examples of such products/goods are Darjeeling tea, Champagne, Scotch whisky, Chanderi saree, Kancheepuram silk, Mysore sandalwood oil.2 Such geographical names if used by any person in relation to goods originating from different places is likely to cause confusion and deception in the mind of the consumer, who, more often than not pays a premium price for the usage of goods associated with a particular geographical area. Thus, exclusion of unauthorized persons from misusing GI protects the consumers and adds to the economic gains of the authorized producers of the goods. It further promotes goods bearing Indian GI in the export market.

India is a signatory to the World Trade Organization (“WTO”) TRIPS Agreement, in terms of which member countries are under an obligation to provide legal means to interested parties so that they can prevent the use of marks that mislead the public about GI of the goods.3 Further, unless a GI is protected in the country of origin, there is no obligation under TRIPS on member countries to extend protection to such goods.4 Till 1999, GIs were protected in India by general principles of common law which permit the aggrieved person to file an action for ‘passing off’ for protection of their rights. In view of the absence of statutory protection in India, Indian GIs were being misused by persons outside India.5 It was, therefore, necessary to provide protection to GIs through suitable legislation. Accordingly, in compliance with its obligation under the TRIPS India enacted ‘Geographical Indications of Goods (Registration and Protection) Act, 1999’ (the “Act”) to govern the law relating to GIs.

2. Geographical Indications of Goods (Registration and Protection) Act, 1999

The Act seeks to provide for the registration and better protection of GI relating to goods in India.6 The Act is administered by the Controller General of Patents, Designs and Trade Marks who is the Registrar of Geographical Indications.7 The GI registry is located at Chennai.

Section 2 (e) of the Act provides that GI in relation to goods means an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or other characteristics of such goods is essentially attributable to its geographical origin and, in case of manufactured goods, one of the activities of either the production/processing/preparation takes place in such territory, region or locality, as the case may be.

Both GI and trademark are source identifiers. However, a trademark identifies the products with the manufacturer and GI identifies products with the place of production or origin. Another important difference is that the GIs are the community rights8 whereas the trademark is an individual right. Further, a trademark can be assigned as well as licensed, but a GI cannot be assigned, transmitted or licensed.

3. Registration of GI

Any association of persons or producers9 or any organizations, or authority established by or under the law can apply for registration of GI.10 The applicant must represent the interest of the producer. Apart from registration of GI, the Act provides for registration of authorized users of the GI.11 Section 21 of the Act grants exclusive rights to use the GI in relation to the goods in respect of which the GI is registered to the authorized user thereof. Further, the section also confers upon the registered proprietor as well as the authorized user the right to obtain relief12 in case of infringement of the GI.

The registered proprietor of the geographical indication has the right to file a suit for infringement or passing off and can claim damages. A registered GI is infringed if an unauthorized user uses it to indicate or suggest that the goods in respect of which the GI is used originate from a geographical area other than the true place of origin of such goods in a manner which misleads the public as to the geographical origin of the goods, or when use of GI results in unfair competition including passing off in respect of a registered

4. The Scotch Whisky Case

Recently, the Delhi High Court held that Indian whisky manufacturers cannot use the word “Scot” or “Scotch” as it is a GI that identifies whisky produced in Scotland.16 In this case, the plaintiff filed a suit for a permanent injunction to restrain the defendant from manufacturing or otherwise dealing with whisky under the name ‘Red Scot’. The plaintiff placed on record (a) the Scotch Whisky Act, 1988 and Scotch Whisky Order, 1990 to show that even in Scotland every whisky produced do not necessarily fall within the definition of Scotch whisky; (b) sales figures of Scotch whisky and some sample advertisements. The plaintiff’s position was that the word ‘Scot’ or ‘Scotch’ is a GI within the meaning of Article 22(1) of the TRIPS in as much as it identifies whisky produced in Scotland.17

The court accepted the contention of the plaintiff that the defendant should be prevented from passing off its goods as those of the plaintiffs as by using the word ‘Scot’ the defendant is giving an impression to unwary consumers that its product originates in Scotland or that it is Scotch whisky.18 The court held that defendant is liable to be restrained from passing off its ‘Red Scot’ whisky as a produce of Scotland by way of permanent injunction from using the word ‘Scot’ or any other word similar thereto in the whisky manufactured by it.

Further, the court also accepted the contention of the plaintiff that the reputation of Scotch whisky had been irreparably damaged by the use of the word ‘Scot’ in whisky manufactured by the defendant and ordered the defendant to pay to the plaintiff INR 500,000 as damages for passing off its goods as that of the plaintiff. This is seen to be in line with the recent trend followed by the courts to grant exemplary damages in cases of intellectual property right violation as a preventive measure.19

It is interesting to note that courts in India afforded protection to GIs even in the absence of any legislation in the country and even before TRIPS came into force. This was possible through an action for passing off. In Scotch Whisky Association v. Pravara Sakhar Shakar Karkhana Ltd20, the Scotch Whisky Association instituted an action for passing off against the defendants, a manufacturer of various brands of

Indian whisky known as ‘Blended Scotch Whisky’ or ‘Blended with Scotch’, under various brands. The Bombay High Court held that the plaintiffs had sufficient interest and locus standi to prevent passing off of Indian whisky manufactured by defendant as ‘Scotch whisky’ and to prevent damage to reputation and goodwill of Scotch whisky. It was held that the defendants were deliberately and intentionally passing off their product as ‘Blended Scotch’. It was further held that the defendants indulged in colorable imitation and unfair trading in an attempt to reap harvest by appropriation of plaintiff’s goodwill in Scotch whisky trade. The defendant were restrained from advertising or offering for sale or distributing in any country, whisky which is not Scotch whisky with the description ‘Blended with Scotch Whisky’ or ‘Blended Scotch Whisky’ or ‘Blended with six year Old Scotch’.

5. The TRIPS Imbalance

The TRIPS provides for two different levels of protection for GIs21. Article 22 of TRIPS covers GIs for products other than wines and spirits. Article 22 limits the protection of GIs to cases where the public is misled by the use of a GI as to the true geographical origin of the product, or where such use constitutes an act of unfair competition. For example, if the name ‘Darjeeling’ is used for a tea originating in Mexico in an attempt to pass it off as a tea from the Darjeeling area, then legitimate producers of Darjeeling tea have to not only prove that there has been an instance of unauthorized use but that such use has also misled the consumer and damaged their legitimate business. Article 23 of the TRIPS provides additional protection of geographical indications in the field of wines and spirits and states that governments of all member countries must provide the owners of GI the right to prevent the use of a geographical indication to identify wines not originating from the place suggested by the GI. However, under Article 23, there is no need on the part of the authorized users to prove that the public is misled or that there is unfair competition by using a certain GI. The use of accompanying expressions in a GI such as ‘style’, ‘type’, ‘kind’, ‘imitation’ or the like is prohibited.

Similar protection is given to geographical indications for spirits but not to any other category of goods. This offers an unfair advantage to the producers of wines and spirits. So, if farmers in USA manage to grow aromatic rice similar to Basmati, Indian and Pakistani growers of Basmati have no remedy, under TRIPS, to prevent USA from representing the rice grown there as ‘Basmati type’ rice. At the same time, if an Indian wine is represented as ‘Champagne type’ wine made in India, the claim can be prevented through the use of Article 23(1).

There is lot of resentment regarding Article 23 of the TRIPS, which grants higher status only to wines and spirits and excludes other goods and products out of its purview. There are demands for additional protection to other goods and products from a number of countries including India. The Doha Ministerial Declaration had suggested considering extra protection that WTO members already apply to wines and spirits to other traditional high quality products that are just as deserving for such recognition such as Indian saris, specialty teas such as Darjeeling (India), Jasmine rice (Thailand) etc.

The demands of the WTO members of giving higher protection to such traditional high quality products are based on continued infringement of GIs by some countries. For example, an American company by the name Rice Tech succeeded in growing aromatic rice similar to Basmati and was allowed to

market the same as US grown basmati with clear description such as “American Basmati rice”.22 It is clear that US did not consider Basmati as a distinctive product only from India or Pakistan. The matter could possibly have been different had India and Pakistan proactively protected Basmati as a GI well ahead of time. Nonetheless, it is time that demands to extend the scope of the special protection offered with respect to certain categories of GI are accepted. The extension of scope of special protection presently offered only in respect of wines and spirits would prevent further geographical indication from becoming generic and would go a long way to protect the interest of WTO members especially the developing countries with a rich base of traditional knowledge.

CONCLUSION

Protection of GI has a two-way benefit. On one hand, it protects the consumers against spurious products and on the other hand, it facilitates the growth and prosperity of the regional authorized users of the GI. The aforesaid reasoning coupled with India’s obligations under the TRIPS paved way for enactment of the Act that provides registration and better production of the GI. The Indian judiciary played a significant role in protecting GI even before India became a signatory to TRIPS and the Act was passed. However, there is an imbalance within TRIPS in protecting GI for various products that places India and other developing countries at a disadvantageous position. TRIPS grants special protection to GIs relating to wines and spirits and not to any other traditional high quality products. It is upon India and other countries sharing the concern to push for extension of products or goods to which the special protection is afforded. Extending the scope of protection would go a long way in achieving one of the most important objectives of WTO, i.e., establishment of a level playing field in international trade.

1 These special attributes may be because of their geographical situation, climatic situation, soil etc. (as in case of Darjeeling Tea) and/or human factors like method of preparation/manufacture followed in a particular region (as in case of Basmati rice).

2  Twenty Eight products have been registered as GI in India as on November 6, 2006, http://www.girindia.in.

3 Article 22(2) of TRIPS. TRIPS consists of seven parts ranging from copyright, patents, undisclosed information, trademarks, industrial design, integrated circuits and GI. The Agreement sets out for each area minimum standards of protection as well as procedures and remedies to enforce the said intellectual property rights.

4 Article 24 (9) of TRIPS.

5 US allowed marketing of ‘American type Basmati’ by an American firm Ricetech.

6 The primary purpose of this Act is to provide legal protection to Indian GIs which, in turn, would enhance the exports of the country.

7 Section 3 of the Act.

8 Community right means a right that vest with a community or a group of persons. Registration of GI grants rights to the authorized users as a group to produce/manufacture/process goods or products in respect of which the particular GI is registered.

9 Section 2(k) provides that “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.

10 Section 11 of the Act.

11 Section 17 provides that any person claiming to be the producer of the goods in respect of which a GI has been registered may apply in writing to the Registrar for registering him as an authorized user of such GI.

12 Section 67 of the Act provides the relief which a court may grant in any suit for infringement or passing off. The same includes injunction, damages or accounts for profit and order for delivery of infringing labels and indications for destruction.

13 The term of protection of GI is initially for ten years and can be renewed for an additional period of ten years.14 If a registered GI is not renewed, it is liable to be removed from the register. Further, no rights in the GI shall be subject matter of assignment, transmission, licensing, pledge, mortgage or such other agreement. However, when an authorized user dies, his right devolves on his successor in title.15

13 Section 22 of the Act.

15 Section 24 of the Act.

16 The Scotch Whisky Association V. Golden Bottling Limited, 129(2006) DLT423.

17 Article 22(1) of TRIPS defines GI as indications, which identify a good as originating in the territory of a member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

18 Section 20(1) of the Act prohibits any person from instituting any proceedings to prevent, or to recover damages for, the infringement of an unregistered GI. However, section 20(2) of the Act provides that this does not affect the rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof.

19 Some of the recent decisions in which the court ordered the defendant to pay exemplary damages in case of intellectual property rights violation are Time Incorporated v. Lokesh Srivastava and Others 2005(30)PTC 3 (Del), Microsoft Corporation v. Yogesh Popat and others 2005 (30) PTC 245 (Del) and Cartier International B.V. v. Cartier Enterprises CS (OS) No. 1208/2003 decided on 22nd July, 2005.

20 AIR 1992 Bom 294.

21 For definition of GI under TRIPS, see footnote 14.

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