Once upon a time many years ago an evil prince tried to pirate our ‘queen of rices’ – ‘basmati rice’ – but luckily our ever vigilant government challenged the pirates in an adversarial duel (3 years late!) and won back our ‘basmati’ swearing to protect this ‘queen of rices’ from the bio-‘Pirates of America’.
‘Basmati’ – Patents and trademarks
I know the above introduction sounds much too over-dramatized, over-romanticized for an IP blog but those sentences are quite accurate of the over-hyped state of affairs in 1997-2001 when the RiceTec case occurred in the USA. RiceTec at that time was a small company held by the reigning Prince Hans Adam II of Liechtenstein, a small principality bordering Austria and Switzerland. RiceTec in 1994 had submitted 20 claims for utility patents for its hybridized basmati rice. RiceTec claimed to have spent $10 Million and 4 years in developing these strains from original South Asian strains of basmati which were donated by India and Pakistan to a U.S.-based international agricultural research center in Idaho (Bio-Diversity Act???). The patents were granted in 1997. The rice was sold under the brand ‘Kasmati’ and ‘Texmati’ something which RiceTec was doing even prior to filing for the patents.
As with all IP issues, involving the West in India, this issue too, soon assumed the shape of colonial struggle against the forces of imperialism. A NGO filed a Public Interest Litigation in the Supreme Court which in turn ordered the Indian Government to protect Basmati in the USA. RiceTec was caught completely off-guard by the adverse publicity. They kept claiming, and in my opinion quite rightly, that these patents would not affect Indian Exports of Basmati since it did not in anyway forbid Indian farmers from selling their produce in India. Anyway to keep things short the issue ended with the Indian Government successfully challenging the patents on the grounds that the claims were actually prior art. RiceTec consequently withdrew the most contentious claims. This was just Chapter 1 in Basmati’s tryst with IP law. (SpicyIP had commented on another Basmati Patent issue in July)
The most contentious issue, according to me, was not the patent issue because RiceTec could continue to grow and sell its strain of Basmati even without patents; the most contentious issue was the granting of trademarks such as ‘Kasmati’ – ‘Indian Type Basmati Rice’. Basmati rice had quite a reputation in the Western markets, as an aromatic rice, with an export market worth around Rs. 2000-2500 Crores and several American Companies were riding on this reputation to sell their own versions of American Basmati something which the Indians thought was an oxymoron on the lines of ‘American Champagne’. In 2001 some Indian and American NGOs filed a petition with the Federal Trade Commission (FTC), the regulatory watchdog, against unfair competitive practice, requesting it to curtail the use of the word ‘basmati’ to only traditional basmati imported from India, since the unregulated use of the name would mislead consumers. The FTC denied this petition on a number of grounds the most pertinent one, for us, being the fact that “there were no agricultural regulations mandating that the use of the term ‘basmati’ be controlled by a rice product’s country of origin” as also their finding that basmati rice is “included as an example of ‘aromatic rough rice,’ and is not limited to rice grown in any particular country.” The last finding was particularly damaging since it seems to have deemed Basmati as a generic term describing all forms of aromatic rice and under Article 24 of the TRIPS a country need not accord GI protection ‘with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services.’ However I’m not sure whether the FTC ruling is conclusive on this issue, the IPR Commission of UK has commented on this issue in its famous report on IP. The Commission wondered why the Govt. of India did not even launch a formal complaint with the FTC’s ruling on the issue.
Thus the obvious question now, was how India was going to protect the Basmati brand in the USA and more importantly in its existing world-wide markets against ‘American Basmati Rice’?
I know the above introduction sounds much too over-dramatized, over-romanticized for an IP blog but those sentences are quite accurate of the over-hyped state of affairs in 1997-2001 when the RiceTec case occurred in the USA. RiceTec at that time was a small company held by the reigning Prince Hans Adam II of Liechtenstein, a small principality bordering Austria and Switzerland. RiceTec in 1994 had submitted 20 claims for utility patents for its hybridized basmati rice. RiceTec claimed to have spent $10 Million and 4 years in developing these strains from original South Asian strains of basmati which were donated by India and Pakistan to a U.S.-based international agricultural research center in Idaho (Bio-Diversity Act???). The patents were granted in 1997. The rice was sold under the brand ‘Kasmati’ and ‘Texmati’ something which RiceTec was doing even prior to filing for the patents.
As with all IP issues, involving the West in India, this issue too, soon assumed the shape of colonial struggle against the forces of imperialism. A NGO filed a Public Interest Litigation in the Supreme Court which in turn ordered the Indian Government to protect Basmati in the USA. RiceTec was caught completely off-guard by the adverse publicity. They kept claiming, and in my opinion quite rightly, that these patents would not affect Indian Exports of Basmati since it did not in anyway forbid Indian farmers from selling their produce in India. Anyway to keep things short the issue ended with the Indian Government successfully challenging the patents on the grounds that the claims were actually prior art. RiceTec consequently withdrew the most contentious claims. This was just Chapter 1 in Basmati’s tryst with IP law. (SpicyIP had commented on another Basmati Patent issue in July)
The most contentious issue, according to me, was not the patent issue because RiceTec could continue to grow and sell its strain of Basmati even without patents; the most contentious issue was the granting of trademarks such as ‘Kasmati’ – ‘Indian Type Basmati Rice’. Basmati rice had quite a reputation in the Western markets, as an aromatic rice, with an export market worth around Rs. 2000-2500 Crores and several American Companies were riding on this reputation to sell their own versions of American Basmati something which the Indians thought was an oxymoron on the lines of ‘American Champagne’. In 2001 some Indian and American NGOs filed a petition with the Federal Trade Commission (FTC), the regulatory watchdog, against unfair competitive practice, requesting it to curtail the use of the word ‘basmati’ to only traditional basmati imported from India, since the unregulated use of the name would mislead consumers. The FTC denied this petition on a number of grounds the most pertinent one, for us, being the fact that “there were no agricultural regulations mandating that the use of the term ‘basmati’ be controlled by a rice product’s country of origin” as also their finding that basmati rice is “included as an example of ‘aromatic rough rice,’ and is not limited to rice grown in any particular country.” The last finding was particularly damaging since it seems to have deemed Basmati as a generic term describing all forms of aromatic rice and under Article 24 of the TRIPS a country need not accord GI protection ‘with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services.’ However I’m not sure whether the FTC ruling is conclusive on this issue, the IPR Commission of UK has commented on this issue in its famous report on IP. The Commission wondered why the Govt. of India did not even launch a formal complaint with the FTC’s ruling on the issue.
Thus the obvious question now, was how India was going to protect the Basmati brand in the USA and more importantly in its existing world-wide markets against ‘American Basmati Rice’?
‘Basmati’ – Geographical Indications
The one possible remedy to this was to accord ‘Basmati’ the protection of a ‘Geographical Indication’ as defined under the TRIPS regime. As SpicyIP already mention in an earlier post TRIPS under Article 22 defines GI as “a 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.” Famous examples are Champagne & Scotch. Specific examples of GI like protection for rice are the “Arroz de Valencia rice” from the Albufera region of Valencia in Spain. GI protection assures that producers situated outside the designated geographical region cannot use the name of the protected GI i.e. nobody outside the Champagne district of France can use Champagne to describe their sparkling wine.
India passed a GI legislation in 1999 but 8 years later ‘basmati’ is still not protected as a GI despite the Government’s claims post-RiceTec to take all necessary steps to protect ‘basmati’ adequately. So what went wrong? Why don’t we have GI protection for ‘basmati’ as yet, despite there being an application pending with the GI Registry? Only when India grants GI protection will other countries view ‘basmati’ as a GI and prevent mis-use of its name. Currently the application is still being studied by the Expert Committee. One possible reason for the delay could be the bureaucratic apathy (as explained to me by an official of the GI Registry) but given the pace with which the GI Registry has been granting GIs, that cannot be the only reason. There are several other reasons for this delay.
Firstly ‘basmati’ is an extremely valuable product; its export market is between Rs.2000 to 2500 crores. Obviously politics follows money and politics has followed the ‘basmati’ dispute especially since ‘basmati’ is traditionally grown in Haryana and Punjab where the agriculture lobbies are rather strong. To be more precise, Indian farmers/millers/exporters and the government just cannot agree on an acceptable definition of ‘Basmati’. Everybody knows Basmati is an aromatic rice which is longer than other rice grains and has a special flavour to it but the need of the hour is for the Govt. of India and the private parties to agree to a fixed definition keeping in mind the requirements of the GI Act. The Ministry of Agriculture notified 6 traditional varieties of Basmati rice in 2003 under the Seeds Act, 1966 and these were the 6 varieties that were also notified by the Ministry of Commerce in a set of rules titled titled “Export of Basmati Rice (Quality Control & Inspection) Rules 2003”. These rules are enforced by the Export Inspection Council (EIC) of India which undertakes compulsory testing of ‘basmati’ exports. The Agricultural Processing and Export Development Authority (APEDA) (which is the central agency dedicated to promoting the export of agricultural products such as basmati) issued a press release in 2006 warning basmati exporters to stick to guidelines failing which there was a very serious threat of ‘basmati’ being considered a generic name and being denied protection. These guidelines however give de-facto GI like protection in Europe, U.K. & Saudi Arabia since those governments have drafted basmati import guidelines on the basis of the Govt. of India definitions and prohibit the usage of ‘basmati’ for any other brands. The EIC is recognized as the final certifying authority by the EU. Moreover the EU provides for a zero duty regime on traditional basmati rice thereby hiking the cost of the imported hybrid American Basmati varieties, much to the chagrin of the Americans who threatened to take the issue to the WTO.
The roadblock to the GI protection, as reported by livemint, is the fact that Indian farmers and millers aren’t happy with this definition. They want a wider definition so as to increase the volume of the exports of even other rices which don’t strictly fall under the definition of ‘basmati’ and subsequently earn more money. It is these objections and procedural delays which are bogging down the registration process. Moreover the association (GIs can be granted only to a collective association) which had filed the first application for Basmati was found to be an association of exporters/mill owners. This is against the very basis of the GI which is the fact that the farmers should be the main stakeholders. The need of the hour is that the Government conduct an in-depth scientific study on the issue and give a conclusive definition of what constitutes ‘basmati’.
What needs to be noted here is the difference in strategy pursued by the various state governments. Whereas the Karnataka and A.P governments initiate GI registration on behalf of the community the Basmati GI applications are filed by private parties and associations and not by the State Governments.
The second possible reason for the delay is more complex. It’s the fact that Basmati is grown both in Pakistan and India thereby requiring them to initiate the process of joint registration. TRIPs does provide for such registration, the only problems are that firstly Pakistan doesn’t have a GI Act and secondly the Indo-Pak negotiations are a constant hostage to the vagaries of international politics.
The one possible remedy to this was to accord ‘Basmati’ the protection of a ‘Geographical Indication’ as defined under the TRIPS regime. As SpicyIP already mention in an earlier post TRIPS under Article 22 defines GI as “a 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.” Famous examples are Champagne & Scotch. Specific examples of GI like protection for rice are the “Arroz de Valencia rice” from the Albufera region of Valencia in Spain. GI protection assures that producers situated outside the designated geographical region cannot use the name of the protected GI i.e. nobody outside the Champagne district of France can use Champagne to describe their sparkling wine.
India passed a GI legislation in 1999 but 8 years later ‘basmati’ is still not protected as a GI despite the Government’s claims post-RiceTec to take all necessary steps to protect ‘basmati’ adequately. So what went wrong? Why don’t we have GI protection for ‘basmati’ as yet, despite there being an application pending with the GI Registry? Only when India grants GI protection will other countries view ‘basmati’ as a GI and prevent mis-use of its name. Currently the application is still being studied by the Expert Committee. One possible reason for the delay could be the bureaucratic apathy (as explained to me by an official of the GI Registry) but given the pace with which the GI Registry has been granting GIs, that cannot be the only reason. There are several other reasons for this delay.
Firstly ‘basmati’ is an extremely valuable product; its export market is between Rs.2000 to 2500 crores. Obviously politics follows money and politics has followed the ‘basmati’ dispute especially since ‘basmati’ is traditionally grown in Haryana and Punjab where the agriculture lobbies are rather strong. To be more precise, Indian farmers/millers/exporters and the government just cannot agree on an acceptable definition of ‘Basmati’. Everybody knows Basmati is an aromatic rice which is longer than other rice grains and has a special flavour to it but the need of the hour is for the Govt. of India and the private parties to agree to a fixed definition keeping in mind the requirements of the GI Act. The Ministry of Agriculture notified 6 traditional varieties of Basmati rice in 2003 under the Seeds Act, 1966 and these were the 6 varieties that were also notified by the Ministry of Commerce in a set of rules titled titled “Export of Basmati Rice (Quality Control & Inspection) Rules 2003”. These rules are enforced by the Export Inspection Council (EIC) of India which undertakes compulsory testing of ‘basmati’ exports. The Agricultural Processing and Export Development Authority (APEDA) (which is the central agency dedicated to promoting the export of agricultural products such as basmati) issued a press release in 2006 warning basmati exporters to stick to guidelines failing which there was a very serious threat of ‘basmati’ being considered a generic name and being denied protection. These guidelines however give de-facto GI like protection in Europe, U.K. & Saudi Arabia since those governments have drafted basmati import guidelines on the basis of the Govt. of India definitions and prohibit the usage of ‘basmati’ for any other brands. The EIC is recognized as the final certifying authority by the EU. Moreover the EU provides for a zero duty regime on traditional basmati rice thereby hiking the cost of the imported hybrid American Basmati varieties, much to the chagrin of the Americans who threatened to take the issue to the WTO.
The roadblock to the GI protection, as reported by livemint, is the fact that Indian farmers and millers aren’t happy with this definition. They want a wider definition so as to increase the volume of the exports of even other rices which don’t strictly fall under the definition of ‘basmati’ and subsequently earn more money. It is these objections and procedural delays which are bogging down the registration process. Moreover the association (GIs can be granted only to a collective association) which had filed the first application for Basmati was found to be an association of exporters/mill owners. This is against the very basis of the GI which is the fact that the farmers should be the main stakeholders. The need of the hour is that the Government conduct an in-depth scientific study on the issue and give a conclusive definition of what constitutes ‘basmati’.
What needs to be noted here is the difference in strategy pursued by the various state governments. Whereas the Karnataka and A.P governments initiate GI registration on behalf of the community the Basmati GI applications are filed by private parties and associations and not by the State Governments.
The second possible reason for the delay is more complex. It’s the fact that Basmati is grown both in Pakistan and India thereby requiring them to initiate the process of joint registration. TRIPs does provide for such registration, the only problems are that firstly Pakistan doesn’t have a GI Act and secondly the Indo-Pak negotiations are a constant hostage to the vagaries of international politics.
Potential Challenges to Basmati as a GI under TRIPS
Some Governments namely the American Government have stated that some WTO countries “might not consider ‘basmati’ to be a term eligible for protection as a GI since it does not identify an actual place to which the particular quality and characteristics of the rice are attributable.” This argument makes no sense because for proving a GI all that is required to be proven is reputation’, ‘given quality’ and ‘other charateristics’; there is no requirement for the name to refer to a specific geographical region. For e.g. ‘reblochon cheese’ produced in the Savoy region of France does not bear any name of any geographical place. The American argument holds true for only the predecessor to the GI that is the ‘appellation of origin’ where the indicator had to make a direct reference to the geographical region.
The second challenge that Basmati faces, if it is ever registered as a GI, is the fact that current protection under the TRIPS does not preclude other producers from making allusions to the ‘basmati’ name during advertising their own non-basmati rices i.e. under Article 22 of TRIPs American producers are not precluded from using phrases like ‘Indian Style Basmati’ as long as they can prove that consumers will not be confused by such wording. Such protection is in sharp contrast to the protection given to wines and other spirits under Article 23 of the TRIPs which clearly prohibits the use of words such as ‘style’, ‘kind’ etc. The EU is in favour of expanding this protection. Once again the Americans are in total opposition to extending such protection to even food stuffs because they are a country of immigrants who have started businesses selling food stuffs of their home countries and to prohibit such usage would hurt their indsutries substantially. Please see this paper by Dwijen Rangnekar for more on the subject.
Some Governments namely the American Government have stated that some WTO countries “might not consider ‘basmati’ to be a term eligible for protection as a GI since it does not identify an actual place to which the particular quality and characteristics of the rice are attributable.” This argument makes no sense because for proving a GI all that is required to be proven is reputation’, ‘given quality’ and ‘other charateristics’; there is no requirement for the name to refer to a specific geographical region. For e.g. ‘reblochon cheese’ produced in the Savoy region of France does not bear any name of any geographical place. The American argument holds true for only the predecessor to the GI that is the ‘appellation of origin’ where the indicator had to make a direct reference to the geographical region.
The second challenge that Basmati faces, if it is ever registered as a GI, is the fact that current protection under the TRIPS does not preclude other producers from making allusions to the ‘basmati’ name during advertising their own non-basmati rices i.e. under Article 22 of TRIPs American producers are not precluded from using phrases like ‘Indian Style Basmati’ as long as they can prove that consumers will not be confused by such wording. Such protection is in sharp contrast to the protection given to wines and other spirits under Article 23 of the TRIPs which clearly prohibits the use of words such as ‘style’, ‘kind’ etc. The EU is in favour of expanding this protection. Once again the Americans are in total opposition to extending such protection to even food stuffs because they are a country of immigrants who have started businesses selling food stuffs of their home countries and to prohibit such usage would hurt their indsutries substantially. Please see this paper by Dwijen Rangnekar for more on the subject.
