Case Name: Tea Board vs ITC Limited

Citation: Tea Board of India v. ITC Ltd., 47 PTC 194 (Calcutta H.C. 2011).

Court: Calcutta High Court

Corum: Justice Sanjib Banerjee (2011 interlocutory order); Justice Sahidullah Munshi(2019 final judgment) 

Abstract

Tea Board v. ITC Limited is a Calcutta High Court judgment that examines the enforcement of a geographical indication that is registered under the Geographical Indications Act,1999 on a service provider. The Tea Board having the geographical indication and the registered trademark of “Darjeeling” sought to restrain ITC Limited from naming a section of their hotel as “Darjeeling Lounge”. The court dismissed the interlocutory application and held that the GI Act is applicable to only goods and not to services. The court further found out that the suit was time barred under section 26(4) of the GI Act. This judgment exposes the significant structural gap that is present in India’s GI protection framework, leaving unresolved the cross-category enforcement and it being dependent on future legislative or judicial intervention,

Introduction

The case of Tea Board v. ITC Limited is one of the first cases wherein the Indian Judiciary engaged with a simple but tricky question of whether a registered geographical indication be exercised against a service provider who has used the same name as that of the registered Geographical Indication. Tea Board (the plaintiff in this case) is a statutory body which is the registered proprietor of the “Darjeeling” geographical indicator sought to restrain ITC Limited (the defendant in this case) from using the name “Darjeeling” as the name of their lounge within its luxury Kolkata Hotel. The plaintiff sought an injunction and not a final determination, so this was an interlocutory proceeding that had happened before the Calcutta High Court. The Calcutta High Court dismissed the plaintiff’s application. This surprised numerous practitioners who believed that a registered GI status carries stronger protective force across commercial contexts. It is important to note that the judgment passed by Justice Sanjib Banerjee in 2011 was an interlocutory order which disposed of the temporary injunction application only. The final judgment was delivered by Justice Sahidullah Munshi on 4 February 2019 dismissing the suit on merits. 

Facts

Tea Board was established under the Teas Act,1953 and it holds registered rights of “Darjeeling” as geographical indication under the GI Act,1999 and as a certified trademark under the Trade Marks Act,1999. ITC Limited named one of its sections in the ITC Sonar Hotel as “Darjeeling Lounge” which was accessible to exclusive guests through their issued room cards. Tea Board issued a letter to ITC Limited in June 2005 and further opposed ITC applying for the registration of “Darjeeling Lounge” trademark. The lounge functioned as a private hospitality enclosure serving all kinds of beverages and not Darjeeling Tea exclusively.

Issues

1.     Whether a GI be enforced against a service provider, which is registered for goods under the GI Act,1999?

2.     Whether this suit is time barred as per section 26(4) of the GI Act,1999?

Reasoning

On issue 1:
The court observed that the GI Act,1999 is a good-centric Act and it focuses on the goods only and not on persons connected with the goods. Section 22(1)(a), which talks about prohibition of misleading designation of geographical origin, was declared to be inapplicable as ITC did not use it for a product but for hospitality service. The court left the question of permissibility of cross-category cases tentatively open but held that there is no prima facie case that can be made out on the facts before it.

On issue 2:
The court observed that the Tea Board did not file this suit until 2010 even though they were aware about the use of “Darjeeling” by April 2005. This was way beyond the five-year window as per the 26(4) of the GI Act,1999. The Tea Board argued that the use by ITC was in bad faith and that a continuing cause of action kept the claim alive. The court, at the interlocutory stage, found that no argument of Tea Board was sufficiently persuasive and noted that bad faith must be proved through evidence and not through assertion, and continuing-wrong doctrine cannot suspend a statutory bar indefinitely.

Critique

The court was right by not stretching the GI Act beyond what was written in the law as the GI Act mentions only about goods and not services. So, applying the GI Act to services related disputes without any legislative backing would have created interpretative chaos. The weakest part of the judgment has to be the dilution reasoning. It is because section 21 of the GI Act provides for crystallization of exclusive rights upon registration, so allowing the pre-registration commercial use of the rights for years to dilute those rights post-registration effectively makes the protective purpose of the statute provisional. The court left a significant gap in its reasoning by declining to engage with Articles 22-23 of TRIPS that obligate protection against misleading evocation which is outside the registered category. The court remained silent on the question of whether a “Darjeeling Tea Stall’ infringes the provisions of the GI Act, which remains a loose end that will be pulled by the future litigants inevitably.

Impact

The businessmen must realize that registration under the GI Act confers them rights only against goods and not against service providers. Legislatively, India is far behind the EU that has extended GI protection to services, a reform that the Indian government must urgently consider. For agricultural GI holders, it is essential to proactively measure the commercial use particularly in the context of hospitality as there is currently a significant statutory gap that leaves significant brand value vulnerable. Until there is an action taken by the Parliament, the only reliable enforcement mechanism is the certification trademark route under the Trade Marks Act,1999, which makes dual registration not merely advisable but strategically compulsory for all the serious GI proprietors. 

Conclusion

This case establishes the boundary of GI rights between the goods and services divide and signals that a GI that is asserted after prolonged generic use faces a lot of difficulty while establishing broad exclusivity. This case leaves the issue of cross-category enforcement unresolved whereas resolves the interlocutory dispute. The most interesting aspect of this case is that the name of a hotel lounge exposes a significant structural gap in India’s GI protection framework with far-reaching consequences for each and every registered GI holder.

References

Tea Board of India v. ITC Ltd. (2011) 47 PTC 194 (Calcutta High Court)

Tea Board India v. ITC Ltd. (2019) CS 250 of 2010 (Calcutta High Court) 

The Tea Act, 1953

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

The Trade Marks Act, 1999

Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 22 (1994)

Agreement on Trade-Related Aspects of Intellectual Property Rights, Art. 23 (1994)