GI Protection and Its Limits in India 

Case Name: Tea Board, India v. ITC Limited 

Citation: C.S. 250 of 2010 (Calcutta High Court, 2019) 

Court/Jurisdiction: High Court at Calcutta, Ordinary Original Civil Jurisdiction, Original Side 

Coram: Justice Sahidullah Munshi 

Abstract 

The name of the mountains, the river, the history of the area; a name that has been around for centuries and a single word. Walking into a five star hotel in India, you could find names that have come down from the mountains, the river, and the history that has passed down the ages. What caught the eye of the Tea Board of India in ITC’s selection of a lounge in its luxury hotel in Kolkata as ‘Darjeeling Lounge’, was an affront to one of the most famous geographical indications of the world. That led to a long litigation process which ultimately ended before the Calcutta High Court, where the case was dismissed in full in February 2019. The case poses some basic questions: does owning a geographical indication imply ownership of the name itself in all contexts? Can a certifying body police the use of a celebrated placename in trade? When does justice just close the door and when a rights holder waits too long? All three are answered in this case comment. 

Introduction 

The genesis of India’s geographical indication law was a simple belief, that the geographical origin of a product is not just geographical trivia but is, indeed, the soul of the product. This can be best explained by the clear example of the tea of Darjeeling. It is grown in 87 estates that are nestled in the hills in West Bengal and has a flavour and character and global reputation that cannot be matched with any other tea grown elsewhere. This is protected by the Tea Board of India as its registered GI and certification trademark holder. 

What about the word ‘Darjeeling’ used not for tea but for a hotel lounge, though? It is the very question that is at the core of Tea Board, India vs. ITC Limited. Similarly, in January 2003, ITC’s luxury hotel opened a lounge in Kolkata named ‘Darjeeling Lounge’, which was also part of a ‘heritage theme’ based on the popular hill station — much like ITC called other hotel rooms ‘Bay of Bengal’ and ‘Sunderbans’. This caused Tea Board to file a suit in 2010, requesting damages of Rs. and a permanent injunction. 50 crores. 

The suit was dismissed by the Calcutta High Court. It is important not only for the answers it provided to the questions it posed, but because it also revealed, in the process some of the uncomfortable truths about the GI protection framework in India. 

Facts 

The Tea Board of India is established in accordance with the provisions of the Tea Act, 1953, as a statutory organisation. The name ‘Darjeeling’ and its logo are registered as two types of intellectual property: a geographical indication under the GI of Goods (Registration and Protection) Act, 1999; and an original certification trademark registered under Chapter VIII of the Trade and Merchandise Marks Act, 1958. The sole purpose of the certification trademark is to ensure that all tea with the name or logo comes from 87 specific tea estates located in the Darjeeling district and is of organoleptic character as recognized as genuine Darjeeling tea. 

ITC Limited is one of the biggest conglomerates in India which has a luxury 5-star hotel in Kolkata. The hotel, which at one time was known as ‘The Sonar Bangla’ and subsequently as ‘ITC Sonar’, opened its doors on 1st January 2003. Dubbed ‘ITC’, the hotel’s different sections were named after popular landmarks in West Bengal, such as the banquet hall ‘Pala,’ the lawn ‘Sunderbans’ and the executive refreshment lounge on the ground floor ‘Darjeeling Lounge’. The lounge was only open to high-end guests by room card keys, and offered a wide range of food and drinks, not just Darjeeling tea. 

It is tea Board’s understanding that in April 2005, ITC had made an application for the trademark registration of ‘Darjeeling Lounge’ in Class 41, which was advertised in the Trademarks Journal. Tea Board’s lawyers sent a cease-and-desist notice and filed a formal trademark opposition. Although there was a number of objections and counter-objections, the issue was not amicably solved. The civil suit was filed by Tea Board with the Calcutta High Court on October 1, 2010, which was over five years after it had first learnt of the use. 

The Single Judge had refused to grant it a temporary injunction which was confirmed by the Division Bench in August 2011. Tea Board appealed against the order of the Division Bench before the Supreme Court. In a crucial concession, before the Apex Court, the counsel for the Tea Board said that the plaintiff would not present any oral and documentary evidence in the suit and would not deny any of the averments made by the defendant. Supreme Court had remanded the case before the High Court, stating that it could be disposed of on the existing record at the earliest. The suit was then duly heard and decided upon the pleadings and admitted documents alone. 

Legal Issues 

• Whether the suit could be barred by limitation under Sec. 26(4) of the GI Act, 1999? 

• Whether the use of ‘Darjeeling Lounge’ by ITC infringed on Tea Board’s certification trademark and/or registered Geographical Indication? 

• Whether the GI Act, 1999 is applicable to services or not? 

• Whether ITC’s calling the establishment ‘Darjeeling Lounge’ constituted passing off or unfair competition? 

• If Tea Board, as a certifying body rather than a trader, was entitled to have a passing off action? 

Court’s Decision and Impact 

After hearing the suit, the Justice Munshi dismissed the same and fixed the cost as Rs. A sum of Rs.1,00,000 was paid to the Tea Board and it was ordered to be remitted to the Legal Aid Services Committee of the High Court for mediation. The Court, on limitation, found the five year limitation period under Section 26(4) of the GI Act to be absolute. The plaint was time-barred on its own merits, as Tea Board was aware of the use since April 2005, and only filed the suit in October 2010. The Court further observed that the lounge was in use prior to the coming into force of the GI Act and therefore Section 26(1)(a), which favours good faith use of the lounge before the Act’s coming into force, also applied to the ITC’s favour. In its scope, the Court said the trademark certification was only for the purposes of certifying a tea to be a ‘genuine’ Darjeeling tea. It did not give Tea Board a general right of ownership to the word ‘Darjeeling’ in any trade contexts. The infringement of a certification trademark was permissible only on the basis of Section 75 of the Trade Marks Act, 1999, which requires the defendant to have falsely certified goods with the mark — an allegation which Tea Board never made. On the GI Act, the Court concluded that only goods, and not services are covered. ITC lounge is a service and it does not produce, manufacture or brand any of the items with the Darjeeling name. Thus the protections of the GI Act did not apply. On dismissal the Court concluded that Tea Board and ITC did not compete with tea, there was no evidence of any confusion on the part of the consumer, and that the fact that there was no complaint from the actual Darjeeling tea producers was significant. The Court deemed the suit to be ‘frivolous’ and determined that Tea Board had not succeeded with its claims on any of the matters it had raised. 

Critical Analysis 

How long can a 20% quota be extended and what are the limits? 

The decision is an important reminder that a GI – regardless of its fame – does not guarantee an absolute monopoly over the geographical name in all commercial situations. Therefore, Tea Board’s registration of ‘Darjeeling’ does not prevent the use of any other commercial entity in India from using the word ‘Darjeeling’ in their brand name, apart from tea. Legally, this separation is sound because a hotel room with the name of a hill station doesn’t imply the origin of a food product. The two are just two different devices. 

However there is a real gap in the case. Geographical names are becoming more and more branded, and their evocative use in the hospitality, fashion and lifestyle industries can have the effect of erasing the specific identity of the GI, although it would not be technically infringing on the name. The current legislation does not provide a solution to this. 

Despite the fact that the LGI Act was passed, the services blind spot persists. 

The most significant systemic problem that comes up in the case is that the Indian GI Act does not address services. The Court’s interpretation is accurate as per text — throughout the Act it refers to goods. In practice, however, this means that there is a considerable loophole. European Union GI law, however, has been developed to afford protection to GI names even in the services sector in the case of evocative or parasitic uses. If a French court received a case, for instance, where a popular restaurant or lounge took a popular AOC name without permission, it would have had more options to respond. The lawmakers in India should seriously discuss whether it’s time to make necessary changes in the GI Act to include the services domain. 

The Limitation Trap 

Section 26(4) is a one-size-fits-all limitation that is not to be taken with a grain of salt. Tea Board was aware of the lounge since April 2005, but did nothing about it till October 2010. That’s an inexplicable delay on the facts. The legal effect was inescapable, whatever the internal institutional reasons may have been. Rights holders, be they domestic or foreign, should be aware that GI protection is not automatic. Under the GI Act, it is imperative to act promptly as soon as the infringing use is detected. 

The Evidentiary Concession 

Perhaps the most baffling aspect of this case is Tea Board’s failure to present evidence before the Supreme Court. The passing off, dilution, consumer confusion, and bad faith inquiries are all fact-intensive inquiries. These questions cannot be resolved without an “evidentiary vacuum” in court. Tea Board’s decision to waive its right to present evidence was a decision that virtually guaranteed that it would lose the case, regardless of the strength of its lawsuits. This blunder is worthy of discussion in IP Litigation circles as a case study in what not to do. 

Criticism 

The judgement, though it may be legally sound, leaves the impression of an uncomfortable outcome. Darjeeling tea is indeed a genuine global icon – one of the most valued and internationally recognised GI product of India. The fact that a luxury hotel can call a commercial space the same name, serve various beverages, and have no legal liability to anyone, even though it is technically legal under the law, isn’t what can be expected to make sense. This mismatch between the spirit and the letter of GI protection is a problem which cannot be solved by the courts. It takes the vision of the legislators. 

Also, the Court’s remark that no complaint was received from any of the 87 tea estates could have been a favour to ITC. It does not necessarily reflect on the reputation of the GI if there are no complaints from individual producers. But the power of a collective GI is that no one individual producer in that collective need to take steps to protect it. A less generous interpretation of Tea Board’s representative function as GI guardian may have resulted in a different analysis. 

Conclusion 

In the case of Tea Board, India v. ITC Limited, the case illustrates the extent to which law will fail to protect the parties involved in this dispute as well as the limits of law in general. The Court’s conclusions regarding limitation, the limited scope of certification trademarks, and the failure to find that the GI Act applied to services, as well as the failure to establish passing off, are all individually sound. But they do together create a picture of a GI protection regime which is not really following the development of a contemporary economy where the geographical name becomes a powerful asset for commercial use. 

One cannot legally make a whisky that is a clone of a Scottish whisky. Now a hotel lounge, it appears that it is legal to ‘borrow’ the name of an internationally renowned tea-growing hill station. Whether such result is good or bad will depend upon whether the law is interpreted as it is written or as it may reasonably be interpreted. For now, it is clear that the law does not mandate that the owner of a GI own the name of the mountain from where that tea is sourced. The legislature, however, may wish to revisit that boundary. 

References

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

Trade Marks Act, 1999 

Trade and Merchandise Marks Act, 1958 

Tea Act, 1953 

Code of Civil Procedure, 1908 

Marico Ltd. v. G.P.L. Oil Company & Anr., AIR 2018 Cal 66 

Tea Board India v. I.T.C. Ltd., 2011 (5) CHN 1 

Laxmikant v. Patel, AIR 2002 SC 275 

M/s. Bengal Waterproof Ltd. v. M/s. Bombay Waterproof Manufacturing Co. & Anr., (1997) 1 SCC 99 

Wander Ltd. v. Antox India Pvt. Ltd., 1990 (Supp) SCC 727 

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 1994 — Article 22 and 23 

SCC OnLine: Tea Board, India v. ITC Limited, C.S. 250 of 2010 (Cal. HC, 2019) 

Manupatra: MANU/WB/0277/2019