Tea Board, India vs. I.T.C. Limited, 24 August, 2011 (Darjeeling Case)

CASE ANALYSIS Name of the Case: - Tea Board, India vs. I.T.C. Limited Decided on: - 24 August, 2011 Citation No: - MANU/WB/0271/2011 Judges: - Justice Bhaskar Bhattacharya and Justice Sambuddha Chakrabarti. Statutes Referred:  Trademarks Act, 1999 Geographical Indications of Goods (Registration and Protection) Act, 1999 Brief Facts – The dispute is on "DARJEELING" between Tea Board of India and ITC Limited. The Tea Board asserts exclusivity over "Darjeeling" and ITC maintains that there is more to "Darjeeling" than the tea that is grown there. Tea Board is the registered owner of two sets of marks in connection with tea. One is the word "Darjeeling" and the other is a round device featuring profile of a lady holding two-leaves-and-a-bud and the word "Darjeeling" spelt out on the edge running from 9 o'clock to 12 o'clock. The word and device marks are independently registered as a Geographical Indication (GI) and as a Certification trademark. The Tea Board's grievance is in naming of a section of ITC's luxurious hotel (ITC Sonar) as the "Darjeeling Lounge". It claims that the use of "Darjeeling" in the name of the exclusive lounge is an infringement and passing off of the claimant's registration of "Darjeeling" Geographical Indication and the certification mark and also a dilution of the "Darjeeling" brand. Tea Board filed a suit to restrain ITC from using or conducting or marketing in any manner or in any way carrying on its business at its hotel - ITC Sonar, by using in any manner whatsoever the name "Darjeeling Lounge" or any other name or mark or word which is phonetically or structurally similar or identical or deceptively similar to BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 1 CASE ANALYSIS the registered Geographical Indication "DARJEELING", the name and logo in the name of the Tea Board in any manner whatsoever and/or passing off or attempting to pass off its business or services so as to discredit the fame of DARJEELING Tea as a Geographical Indication and/or to mislead persons as to the nature of the beverages sold at ITC Sonar so as to allude a nexus with the registered Geographical Indication for the name DARJEELING or logo and to confuse person in any manner. Under the application for interlocutory injunction, concerned with the existence of a prima facie case of the Tea Board against ITC based on the Trade Marks Act, 1999 (TM Act) and The Geographical Indications of Goods (Registration & Protection Act, 1999) (GI Act), ITC sought to cut the claim contending that grievances with respect to rights breached under the GI Act is only restricted to goods and not against any services. ITC wanted the GI Act to be understood as providing protection only to goods against goods and not having room enough to allow a complaint by a registered proprietor of a GI against any service. The argument put forth was that the Geographical Indication Act seeks to protect indications with respect to goods only, identified on account of quality or reputation or other characteristics attributable to their geographical origin and cannot be extended to any services. The Court looked through the provisions of the Geographical Indication Act and also the Trade Marks Act with respect to certification marks as the complaint of the Tea Board also encompassed the violation of its rights under registered certification mark. The Court, while observing that there would be a cause of action in an unauthorized use of a good's certification mark by any service provider, felt that in case of Geographical Indication there could not be a complete exclusion of a cross category complaint in the face of the deeming provisions on use of a Geographical Indication constituting unfair competition and an action for passing off. The use of "Darjeeling" by ITC is not in connection with any designation or presentation of good therefore the infringement as given in section 22(1) of the Geographical Indication Act is not available to Tea Board, thus held the Court. Reading from section 22(2) on use of a registered Geographical Indication in a manner constituting unfair competition including passing off, the Court also drew parallel with what passing off implies in trade mark law. The Court, while reiterating the factors on which an action of passing BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 2 CASE ANALYSIS off would lie, did not find any exclusive nexus of "Darjeeling" with the product of Tea Board, and thereby concluded that the word "Darjeeling" could not be under Tea Board's exclusive use by virtue of its registration as a GI or as a certification mark. Thus, the Tea Board's application for interlocutory relief was dismissed with the learned Single Judge's (S.J.) finding that it failed to prove a strong prima facie case and also on the balance of convenience. An appeal was preferred against the above order. Issues – 1. Whether by virtue of certification trade mark, the plaintiff can restrain the defendant for infringement and passing off, who is carrying a business of hospitality from naming one of its lounges in the hotel as “DARJEELING LOUNGE”, where among the beverages and foods served to its customers, tea is also one of the items which is not necessarily restricted to the one grown only in the district of Darjeeling? 2. Whether the use of word “DARGILING” by the defendant for naming one of its lounges in the hotel as “DARJEELING LOUNGE” is violative of the rights conferred by the Geographical Indication Act? Arguments:1. Whether by virtue of certification trade mark, the plaintiff can restrain the defendant for infringement and passing off, who is carrying a business of hospitality from naming one of its lounges in the hotel as “DARJEELING LOUNGE”, where among the beverages and foods served to its customers, tea is also one of the items which is not necessarily restricted to the one grown only in the district of Darjeeling? The division bench held that Section 68 of Trade Marks Act which deals with certification trademarks specifically exclude application of Section 29 i.e. infringement of registered trademarks. Therefore, protection conferred under Section 29 of the Act is not available to the plaintiff being holder of a Certification Trade Mark. But by virtue of registered certifications, the holder thereof is entitled to protect its right conferred BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 3 CASE ANALYSIS under Section 78 of the Act as provided in Section 75 of the said Act. Court went on to discuss Sections 28 and 29 for the purpose of comparing of nature of rights accrued and the infringement mentioned therein with those provided in Sections 75 and 78 of the Act. Section 78 states that, the registration of a person as a proprietor of certification trade mark in respect of any goods or services shall if valid, give to that person the exclusive right to the use of the mark in relation to those goods or services. Section 75 states that the right conferred by section 78 is infringed by any person who, not being the registered proprietor of the certification trade mark or a person authorized by him, uses in the course of trade, a mark, which is identical with or deceptively similar to the certification trade mark in relation to any goods or services in respect of which it is registered, and in such manner as to render the use of the mark likely to be taken as being a use as a trade mark. Whereas 28 states that subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of trade mark in the manner provided by this Act. Here the expression “to obtain relief in respect of infringement of trade mark in the manner provided by this Act.” which is conspicuously absent in Section 78 of the Act. Moreover, in Section 29, the list of infringements of the rights conferred under Section 28 is far more extensive as detailed in nine different sub-sections including the act of use without permission by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered as provided in sub-section (5) thereof, which is the allegation against the defendant by the plaintiff in substance. The above phrase indicated in Section 29 is noticeably absent in Section 75 of the Act. Therefore, there is no infringement of certification trademark in this case. Appellant also relied on some foreign decisions showing that in foreign courts Tea Board has succeeded to prevent some foreign traders who are using the word BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 4 CASE ANALYSIS “Darjeeling” in their trade name from so doing. Court rejected those decisions by saying that those decisions, those foreign courts had no occasion to deal with the provisions contained in the Trademarks Act or the Geographical Indication Act of this country. Since we are not finally deciding the matter but are dealing with an appeal preferred against an order of interlocutory injunction where the main matter is yet to be decided on merit, we are concerned with the existence of a prima facie case of the plaintiff based on the abovementioned two Indian Statutes and as such, we do not intend to deal with those foreign decisions based on the law prevailing in those countries at this stage. Court also rejected the contention of plaintiff regarding passing off by saying the plaintiff is neither a trader of tea nor is it in the service of rendering hospitality to the public. The Tea Board is created by a statute who has obtained registration of its Certification Trademarks for protecting its authority to certify that a particular type of tea is connected with the Darjeeling region to protect its interest. It is not the case of the plaintiff that the defendant is trying to pose before the public that it has also the authority of such certification or that it has proclaimed by naming one of its lounges in a hotel as that of DARJEELING LOUNGE that it is the authority to give such certificate or that it is an agent or authorized representative of the plaintiff. Thus, the averments made in the plaint do not make out any prima facie case of passing off. 2. Whether the use of word “DARGILING” by the defendant for naming one of its lounges in the hotel as “DARJEELING LOUNGE” is violative of the rights conferred by the Geographical Indication Act? To answer this issue court went on to specify the statements of the object and reason of enacting the Geographical Indication Act and said that based on the object and the preamble of the said Act, it has described as an Act to provide for the registration and better protection of Geographical Indications relating to goods. Court opined that in the context of the G. I. Act, the learned Single Judge was right in prima facie holding that the right conferred on registration under the Geographical Indication Act in respect of the goods “tea”, does not confer any right over the word “Darjeeling”, a geographical name, so as to prevent the defendant from rendering its services of hospitality to the public by naming one of the lounges of its hotel as BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 5 CASE ANALYSIS “Darjeeling Lounge” as the object of the G. I. Act is to give better protection of Geographical Indications relating to goods. Decision of the Court:The Court concluded the Tea Board's prima facie failure in proving violation of its registered certification trademark in terms of sec 75 of the TM Act as it had not registered its name as holder of the mark DARJEELING in respect of hotel business but for the purpose of certification of tea as one grown in Darjeeling where benefit of Sections 28 and 29 of the TM Act is not available. In the GI domain, the Court held that GI Act which seeks to protect indications identified on account of quality or reputation or other characteristics attributable to their geographical origin with respect to goods only (tea), cannot be extended to any right over a geographical name (Darjeeling) as that may fall foul of the objects of the Geographical Indication Act. The appeal is thus dismissed being devoid of any merit. No order as to costs was granted by the Court. Analysis:The division bench (DB), with an observation on the scope of investigation in an appeal against a discretionary order like in an interim injunction, proceeded to determine whether the S.J. in the facts of the present case was justified in refusing the interim relief during the pendency of the suit. For this the Court tried to seek answer to the question that – whether by virtue of registrations under Geographical Indication Act and TM Act, Tea Board can restrain ITC from naming one of its lounges in hotel as "DARJEELING LOUNGE" where tea is also served among other items, which is not necessarily from Darjeeling. The Court took into consideration the cited case laws and also the provisions on 'rights conferred' and 'nature of infringement' of Trademarks and Certification marks to compare them and opined that infringement of the right conferred under Section 28 of the TM Act cannot have any application while alleging infringement of the rights conferred under Section 78 of the TM Act. Under the Trade Marks Act 1999, Sections 28 & 29 deals with Rights conferred by registration and Infringement of registered Trademarks respectively and Sections 75 and 78 deals with Infringement of Certification trademarks and Rights conferred by registration of Certification trademarks. The Court particularly deliberated upon BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 6 CASE ANALYSIS the infringement by use of a registered trademark by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered [sec 29 (5)] only to observe that a corresponding provision is absent in sec 75 and hence the application of sec 29 against rights conferred under sec 75 is unfounded. The Court, on the allegation of passing off, held that the plaint does not makes any prima facie case as Tea Board is neither a trader of tea nor it is in the service of rendering hospitality therefore it is not its case that ITC, by naming one of its lounge as Darjeeling Lounge, is trying to proclaim as an agent or authorized representative of Tea Board. In the GI domain, the Court upheld the observation of the S.J that GI Act which seeks to protect indications identified on account of quality or reputation or other characteristics attributable to their geographical origin with respect to goods only (tea), cannot be extended to any right over a geographical name (Darjeeling) as that may fall foul of the objects of the Geographical Indication Act. Also the Court found it apparent that ITC in using the word DARJEELING does not falsely assert that it has right to certify that the tea served in the lounge is grown in Darjeeling. On deeper analysis, one concurs with the reasoning given by the Hon’ble High Court. It is not the intention of grant of Certification Marks under the Trademarks Act to create monopoly rights in favour of the proprietor of a mark, so as to completely preclude a bona fide user to adopt the same or similar mark in relation to goods and/or services not covered by the scope of registration by the proprietor. The object of the GI Act is to prevent unauthorized persons from using the GI, so as to safeguard the interest of the consumers and protect them from deception about the origin of goods. Therefore, a registered proprietor of a trademark or Geographical Indication cannot be entitled to proceed against a third party using a similar trademark or Geographical Indication, when the use by such third party is in relation to goods or services not covered in the scope of the registration of the proprietor and also there exists little possibility of the public getting confused as regards the origin of goods. In the instant case, the mark “Darjeeling” was used by the Defendant in relation to a lounge area, where a variety of beverages were served. This lounge was accessible to a limited set of people. Thus, there was little scope that the members of the public will be confused BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 7 CASE ANALYSIS about the origin of the goods provided by or services rendered by the Defendant, if the word “Darjeeling” is used as the name of the lounge area by the Defendant. Conclusion – This decision treats GI’s very differently from statutorily protected “Well Known Marks”, as later being entitled to stronger protection when it comes to dilution. Also, there is important thing to note that the rights conferred on owners of registered certification marks under Section 75 and 78 of the Trademarks Act, 1999 are different and weaker from the rights conferred on owners of the registered trademarks under Section 28 and 29. I think this is a good judgment as the bench has not got carried away by foreign judgments and decided the matter on provisions prevailed in Indian Statutes. The Court did not take a conclusive view on the cross category claim in cases of GI infringement. A reading of the GI Act reveals that it is the clear intention of the legislature to restrict the applicability of the GI Act to goods only, thereby excluding services from the scope of the GI Act. Therefore, the applicability of the GI Act for infringement claim vis. a vis. services is yet to be tested conclusively. However, this judgment specified what should not be claimed against the rights conferred by certified marks and Geographical Indication’s. ************** BUSINESS, IPR AND GLOBALISATION ASSIGNMENT NO: 4 8