MANAGING THE CHALLENGES OF WTO PARTICIPATION: CASE STUDY 16

Protecting the Geographical Indication for Darjeeling Tea

> Introduction

This case study relates to the geographical indication (GI) protection of Darjeeling tea. It
tells the story of the unauthorized use and registration of ‘Darjeeling and Darjeeling logo’
by Japanese companies already registered in Japan by the Tea Board of India. The study
also refers to the unauthorized use and attempted registration of the words ‘Darjeeling
and Darjeeling logo’ by some other developed countries.

I. The problem in context

India is the world’s largest producer of tea, with a total production of 846 million kg in
the year 2002, supplying about 31 per cent of the world’s favourite hot drink. Among the
teas grown in India, Darjeeling tea offers distinctive characteristics of quality and flavour,
and also a global reputation for more than a century. Broadly speaking there are two
factors which have contributed to such an exceptional and distinctive taste, namely
geographical origin and processing. Thus Darjeeling tea has been cultivated, grown and
produced in tea gardens in a well-known geographical area — the Darjeeling district in
the Indian state of West Bengal — for over one and a half centuries. The tea gardens are
located at elevations of over 2000 metres above sea level.

Even though the tea industry in India lies in the private sector, it has been statutorily
regulated and controlled by the Ministry of Commerce since 1933 under various
enactments culminating in the Tea Act, 1953. The Tea Board was set up under this Act.
A major portion of the annual production of Darjeeling tea is exported, the key buyers
being Japan, Russia, the United States, and the United Kingdom and other European
Union (EU) countries such as France, Germany and the Netherlands.

Efforts made by the Tea Board to ensure the supply of genuine Darjeeling tea back to
top

In order to ensure the supply of genuine Darjeeling tea, a compulsory system of

certifying the authenticity of exported Darjeeling tea was incorporated into the 1953 Tea
Act in February 2000. The system makes it compulsory for all the dealers in Darjeeling
tea to enter into a licence agreement with the Tea Board of India on payment of an annual
licence fee. The terms and conditions of the agreement provide, inter alia, that the
licensees must furnish information relating to the production and manufacture of
Darjeeling tea and its sale, through auction or otherwise. The Tea Board is thus able to
compute and compile the total volume of Darjeeling tea produced and sold in the given

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period. No blending with teas of other origin is permitted. Certificates of origin are then
issued for export consignments under the Tea (Marketing and Distribution Control)
Order, 2000, read with the Tea Act, 1953. Data is entered from the garden invoices (the
first point of movement outside the factory) into a database, and the issue of the
certificate of origin authenticates the export of each consignment of Darjeeling tea by
cross-checking the details. The customs authorities in India have instructed, by circular,
all customs checkpoints to check for the certificates of origin accompanying the
Darjeeling tea consignments and not to allow the export of any tea as ‘Darjeeling’
without this certificate. This ensures the sale-chain integrity of Darjeeling tea until
consignments leave the country.

Legal protection at domestic level

CTM Registration

In order to provide legal protection in India the Tea Board of India registered the
‘Darjeeling logo’ and also the word ‘Darjeeling’ as certification trade marks (CTMs)
under the (Indian) Trade and Merchandise Marks Act, 1958 (now the Trade Marks Act,
1999).

GI registration

The Tea Board of India has also applied for the registration of the words ‘Darjeeling’ and
‘Darjeeling logo’ under the Geographical Indications of Goods (Registration and
Protection) Act, 1999 (the Act) which came into force with effect from 15 September
2003, in addition to the CTMs mentioned above.

Under the Act:

No person shall be entitled to institute any proceeding to prevent or recover damages for
the infringement of unregistered geographical indications.

A registration of geographical indications shall give to the registered proprietor and all
authorized users whose names have been entered in the register the right to obtain relief
in respect of infringement of the geographical indications. However, authorized users
alone shall have the exclusive right to the use of the geographical indications in relation
to the goods in respect of which the geographical indications are registered.

A registered geographical indication is infringed by a person who, not being an

authorized user thereof,
uses such geographical indications by any means in the designation or presentation of
goods that indicates or suggests that such goods originate in some other geographical area
other than the true place of origin of the goods in a manner which misleads the public; or

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uses any geographical indications in such a manner which constitutes an act of unfair
competition including passing off in respect of registered geographical indications; or

uses another geographical indication to the goods which, although literally true as to the
territory, region or locality in which the goods originate, falsely represents to the public
that the goods originate in the region, territory or locality in respect of which such
registered geographical indications relate.
The purpose of the GI Act is to create a public register, and

The GI Act confers public rights.

Status of registration of GI

The registration of the marks applied for by the Tea Board of India has not yet been
granted. The Registrar has, however, after examining the application for registration filed
by the Tea Board of India advertised for any expression of opposition. It is only after
considering opposition, if any, that the Registrar may decide to register the GI of the Tea
Board.

Advantages of GI protection at domestic level and export markets

The reasons for the need for additional protection for GI over and above the CTM has
been set out by the chair of the Tea Board of India as follows.

When CTM registration is not accepted in a jurisdiction where protection is sought, for
example, France for Darjeeling;

because GI registration is necessary to obtain reciprocal protection of a mark mandate

under EU Regulation 2081/92; and

registration gives clear status to a GI, indicating a direct link with geographical origin.(1)
Quite apart from the aforesaid reasons the GI Act in India has also been enacted in order
to comply with its obligation under the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS), which requires WTO members to enact appropriate
implementation legislation for GI.

Steps taken at international level back to top

Registration of Darjeeling tea and logo

In order to protect ‘Darjeeling’ and ‘Darjeeling logo’ as GI, the Tea Board of India
registered the marks in various countries, including the United States, Canada, Japan,
Egypt, and the United Kingdom and some other European countries, as a trade
mark/CTM. In this context it is relevant to note that on 3 August 2001 the UK Trade
Registry granted registration of the word ‘Darjeeling’ as of 30 March 1998 under the UK

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Trade Marks Act 1994. The United States has also accepted the application of the Tea
Board for the registration of ‘Darjeeling’ as a CTM in October 2002.

The appointment of the International Watch Agency

In order to prevent the misuse of ‘Darjeeling’ and the logo, the Tea Board has since 1998
hired the services of Compumark, a World Wide Watch agency. Compumark is required
to monitor and report to the Tea Board all cases of unauthorized use and attempted
registration. Pursuant to Compumark’s appointment, several cases of attempted
registrations and unauthorized use of ‘Darjeeling’ and Darjeeling Logo have been
reported.

The assistance of overseas buyers

In order to ensure the supply of genuine Darjeeling tea, the Tea Board has sought the help
of all overseas buyers, sellers and Tea Council and Associations in so far as they should
insist on certificates of origin to accompany all export consignments of Darjeeling tea.

II. Local and external players and their roles back to top

The Tea Board of India, the sole representative of tea producers in India, is responsible
for the implementation of the government’s regulations and policies. It is vested with the
authority to administer all stages of tea cultivation, processing and sale (including the
Darjeeling segment) through various orders issued by the government. It works in close
co-operation with the Darjeeling Planter’s Association, which is the sole producers’
forum for Darjeeling tea. Both the Tea Board and the Darjeeling Planter’s Association
(DPA) have been involved at various levels in protecting and defending the ‘Darjeeling
tea’ and ‘Darjeeling logo’. The primary objects are (i) to prevent misuse of the word
‘Darjeeling’ for tea sold worldwide; (ii) to deliver the correct product to the consumer;
(iii) to enable the commercial benefit of the equity of the brand to reach the Indian tea
industry and ultimately the plantation worker; (iv) to achieve international status similar
to champagne or Scotch whisky in terms of both brand and equity and
governance/administration.

The Tea Board of India assumed the role of complainant in making and filing opposition
or other legal measures whenever cases of unauthorized use or attempted or actual
registration of Darjeeling and Darjeeling logo were brought to its notice. Such legal
measures are generally taken where negotiation failed. For instance, in February 2000 in
Japan the Tea Board of India filed an opposition against Yutaka Sang yo Kabushiki Kaisa
of Japan for registration of the trade mark ‘Darjeeling Tea’ with the map of India, the
International Tea KK of Japan for registration of Darjeeling Women device in Japan
under class 30/42 (tea, coffee and cocoa) and against Mitsui Norin KK for the use in

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advertising of the ‘Divine Darjeeling’ logo. These opposing parties defended the
invalidation action filed against them.

Some disputes relating to Darjeeling tea have been settled through negotiation undertaken
by the Tea Board of India with the foreign companies concerned with the help of their
respective governments. Thus, the Tea Board with the help of the Indian government
continues to negotiate with France at various levels over the activities of the French
trademark authorities. Moreover BULGARI, Switzerland agreed to withdraw the legend
‘Darjeeling Tea fragrance for men’ pursuant to legal notice and negotiations.(2)

In one of the cases in France, the Tea Board of India put the applicant Comptoir des
Parfums (which advertised in March 1999) on notice, and drew its attention to the prior
rights and goodwill in the name of Darjeeling as the GI for tea, requiring it to withdraw
its application voluntarily. Based on the correspondence the applicant consented to the
amendment of all specifications of goods by the addition of ‘all those goods being made
of Darjeeling tea or recalling the scent of Darjeeling tea’. The amendment proposed by
the applicant was found by the examiner to be descriptive of the goods in question.

‘The Tea Board of India feels that a partnership with the buyers in the major consuming
countries such as Germany, Japan and the United Kingdom would be the only long term
solution to the problem of possible passing off.’ However, it strongly opposes any
attempt at individual registration in the case of private labels or its misuse in specific
overseas jurisdictions.(3)

III. Challenges faced and the outcome back to top

The Tea Board of India has faced a series of hurdles, challenges and difficulties in the
protection and enforcement of the word ‘Darjeeling’ and of the Darjeeling logo. Some of
the major challenges faced by the Tea Board’s effort to protect ‘Darjeeling’ and the
Darjeeling logo in Japan, France, Russia, the United States and other countries are given
below.

Unauthorized use and registration of Darjeeling Tea and logo in Japan back to top

In the first case the Tea Board filed an invalidation action against International Tea KK, a
Japanese Company, over the registration of the Darjeeling logo mark, namely, Darjeeling
women ‘serving tea/coffee/coca/soft drinks/fruit juice’ in the Japanese Patent Office
(JPO) on 29 November 1996 with the trademark registration number 3221237. The
impugned registration was made notwithstanding the registration in Japan of the identical
Darjeeling logo mark by the Tea Board of India, with the trademark registration number
2153713, dated 31 July 1987. The Tea Board also filed a non-use cancellation action. On

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28 August 2002 the JPO Board of Appeal held that the pirate registration was invalid
because it was contrary to public order and morality. With regard to the Tea Board’s non-
use cancellation action, the JPO decided that International Tea KK had not furnished
sufficient evidence to substantiate its use of registration and thereby allowed the appeal
of the Tea Board.

In the second case, the Tea Board of India opposed the application for ‘Divine
Darjeeling’ in class 30 (Darjeeling tea, coffee and cocoa produced in Darjeeling, India)
filed by Mitsui Norin KK of Japan advertised on 29 February 2000. The opposition was
mainly on three grounds, namely (i) ‘divine’ is a laudatory term and accordingly the mark
for which protection is sought is merely ‘Darjeeling’, which is clearly non-distinctive; (ii)
‘Divine Darjeeling’ is misleading in so far as ‘coffee and cocoa produced in Darjeeling’
are concerned, all the more so because the district of Darjeeling does not produce coffee
or cocoa; (iii) Darjeeling tea qualifies as a geographical indication under international
conventions including TRIPS and ought to be protected as such in Japan, a member of
TRIPS.

The JPO Opposition Board dismissed the invalidation action filed by the Tea Board of
India primarily on the ground that the mark ‘Divine Darjeeling’ as a whole was not
misleading or descriptive of the quality of goods. However, the non-use cancellation
action succeeded, because the registered proprietor was not able to place on record
adequate evidence to prove the use of the mark in Japan.

In yet another case the Tea Board of India brought an invalidation action against Japanese
trade mark registration of ‘Darjeeling tea’ with a map of India in class 30 by Yutaka
Sangyo Kabushiki Kaisa, on the ground that the registration was contrary to public order
and morality. This action was rejected on the ground that ‘the written English characters
“Darjeeling tea” and the map of India for the goods of Darjeeling tea are used as an
indication of the origin and quality of Darjeeling tea and will not harm the feelings of the
Indian people’. However, the non-use cancellation action filed by the Tea Board
succeeded, because the registered proprietor was not able to place on record sufficient
evidence to prove the use of the mark in Japan.

A perusal of these decisions reveals that the JPO did not decide the contention of the Tea
Board of India relating to the TRIPS Agreement, which requires WTO members to
provide the legal means to prevent the use of a GI for goods originating in a geographical
area other than the true place of origin in a manner which misleads the public to
constitute an act of unfair competition. Indeed, non-disposal of the argument that the
procedural guidelines of WTO be followed dilutes the effect of the TRIPS Agreement.

Other instances of defending GI against developed countries back to top

France. While the Indian system protects French GIs, France on the other hand does not
extend similar or reciprocal protection to Indian GIs. Thus French law does not permit

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any opposition to an application for a trademark similar or identical to a GI if the goods
covered are different from those represented by the GI. The owner of the GI can take
appropriate judicial proceedings only after the impugned application has proceeded to
registration. The net effect of such a provision has been that despite India’s protests,
Darjeeling has been misappropriated as a trade mark in respect of several goods in class
25, namely, clothing, shoes and headgear. The French Examiner — even though he found
evidence in favour of the Tea Board of India (i) on sufficient proof of use of ‘Darjeeling’
tea in France, and (ii) that the applicant had slavishly copied the name Darjeeling in its
application — held that the respective goods ‘clothing, shoes, headgear’ and ‘tea’ are not
of the same nature, function and intended use, produced in different places and sold
through different networks. The Examiner also held that even if the applicant has
slavishly copied the Tea Board’s Darjeeling logo (being the prior mark), the difference in
the nature of the respective goods is sufficient to hold that the applicant’s mark may be
adopted without prejudicing the Tea Board’s rights in the name ‘Darjeeling’.

In another case the Tea Board opposed the application against the advertised marks for
Darjeeling in classes 5, 12 and 28 by Dor François Marie in France. The French
Examiner rejected the Tea Board’s opposition and held that the respective goods did not
(i) have the same nature, function and intended use; and (ii) share the same distribution
circuits. However, he held that although the applicant’s mark constituted a partial
reproduction of the Tea Board’s prior figurative registration for the Darjeeling logo, the
designated goods lacked similarity to that of the Tea Board’s prior marks and the logo,
therefore, may be used as a trade mark without prejudicing the prior rights of the Tea
Board.

Russia. The Tea Board filed an application for unauthorized use by a company of the
word ‘Darjeeling’. This application was objected to on the ground of conflict with an
earlier registration of the identical word by a company named ‘Akorus’. The Russian
Patent Office overruled the objection and accepted the application of Tea Board of India
for the word ‘Darjeeling’.

United States. The Tea Board is opposing an application filed by its licensee in United
States to register ‘Darjeeling nouveau’ (‘nouveau’ is the French for ‘new’) relating to
diverse goods and service such as clothing, lingerie, Internet services, coffee, cocoa and
so on in respect of first flush Darjeeling tea. The registration application is under
consideration even though ‘Darjeeling’ is already registered under US CTM law.

Other countries. Quite apart from the above, in several cases the Tea Board of India
opposed attempted registration and unauthorized use of the word ‘Darjeeling’ in
Germany, Israel, Norway and Sri Lanka before the Patent Office of the country
concerned.

Costs of protection and enforcement for the industry and the government back to top

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Another major challenge faced by the Tea Board of India relates to legal and registration
expenses, costs of hiring an international watch agency and fighting infringements in
overseas jurisdictions. Thus during the last four years the Tea Board of India has spent
approximately US$200, 000 for these purposes. This amount does not include
administrative expenses including the relevant personnel working for the Tea Board, the
cost of setting up monitoring mechanisms, software development costs and so forth. It is
not possible for every geographical indication right holder to incur such expenses for
protection. Further, like overseeing, monitoring and implementing GI protection, the high
cost of taking legal action can prevent a country from engaging a lawyer to contest the
case, however genuine and strong the case may be. Moreover, a lack of expertise in the
proper handling of highly complex legal language is another challenge to be met.

IV. Lessons for others back to top

The Tea Board of India appears to be not satisfied with the policy as well as the approach
of the patent authority in Japan and France. In order to deal with the situations described
above, India, along with several other member countries of the WTO, wants to extend the
proposed register for GI to include products or goods, other than wines and spirits, which
may be distinguished by the quality, reputation or other characteristics essentially
attributable to their geographical origin. The main advantage would be to develop a
multilateral system of notification and registration of all geographical indications. In this
connection, a joint paper has recently been submitted to the Two’s TRIPS Council. The
Doha Ministerial Declaration under paragraphs 12 and 18 also provides a mandate for the
issue of providing a higher level of protection to GIs to products other than ‘wines and
spirits’ to be addressed by the TRIPS Council. According to the Tea Board, (i) extension
of protection under Article 23 for products other than wines and spirits is required where
no legal platform exists to register a GI or a CTM which is a TRIPS obligation, for
example Japan; (ii) once the scope of protection is extended it would not be necessary to
establish the credentials/reputation of a GI before fighting the infringement of similar
‘types’, ‘styles’, or ‘look-alikes’; and (iii) additional protection would rectify the
imbalance created by the special protection of wines and spirits.(4)

The experience in defending GI in France, the United States and Japan further
strengthens the Tea Board’s perspective on the subject. Despite a registration of
‘Darjeeling’ as a GI in France, the Tea Board was unsuccessful in defending it because
French law does not permit any opposition to an application for a trade mark, similar or
identical to a GI. Likewise, India’s efforts to protect ‘Darjeeling’ in Japan did not succeed
because the prefix ‘Divine’ has not gained currency in the Japanese language.(5) From
the experiences described above it is felt that it is high time to evolve a rule that no
application for registration of a GI of the same or similar goods or products or even
similar type, style or look-alike already registered in that country be ordinarily
entertained by the competent authority of the country concerned. Further, the GI status
and apprehended or actual violation of GI should be published at both domestic and

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international levels. Moreover, adequate steps should be taken to evolve rules and
procedures for GI or CTM registration in all the member countries of the WTO. This
would prevent conflict to a great extent. Finally, a vigilance cell should be established to
check the violation and misuse of the GI of any product.

* Research Professor, Indian Law Institute, New Delhi. Formerly Professor, Chairman
and Dean, Faculty of Law, Kurukshetra University (India), and University of Calabar
(Nigeria). The author acknowledges with thanks the help received from the Tea Board of
India for providing requisite information.