Darjeeling Lounge survives: Tea Board loses appeal

The Tea Board of India has lost its appeal before the Calcutta High Court to injunct the Indian conglomerate ITC Limited, and its hospitality/hotel chain, from using the word “Darjeeling” in connection with its tea lounge. In its order dated 24 August 2011, a Division Bench of the Calcutta High Court emphatically upheld the earlier decision of the Single Judge (which we reported on here and here), saying that the injunction had been refused on “well-established principles”, and that the Board had failed to make out a prima facie case even. The order is available here.


For those of who arrive a little after the tea has been brewed, a brief history of the facts: “Darjeeling” and the logo of a woman holding tea leaves are registered by The Tea Board as geographical indications GIs as well as certification trademarks, under the respective Acts, in connection with “tea”. The Tea Board sued the ITC Sonar, a leading Kolkata hotel, for naming its executive lounge, “Darjeeling Lounge”.

The suit hinged mainly on issues of infringement of the GI and the certification TMs, as well as for passing off and dilution. In April this year, a Single Judge of the Calcutta High Court had refused to grant an injunction to the Tea Board. The Tea Board then came in appeal to the Division Bench (DB), which refused to reverse the order of the trial court. Mr S Majumdar of S Majumdar & Co, a Kolkata-based IP law firm, brought the DB decision to our attention.

On a side note, the word “Darjeeling” and the corresponding logo are the first two GIs registered in India, numbered 1 and 2, in class 30. One would think it is entirely appropriate that the first decision involving GIs in India should be in connection with these two registrations!

The appellate (DB) order:

The DB said that the Tea Board had failed to make out a prima facie case of passing off. The court noted that the Tea Board was admittedly neither a trader of tea nor was it in the hospitality industry. The Tea Board was in fact a statutory authority which had obtained certification marks in order to protect its “authority to certify” that a particular type of tea was connected with the Darjeeling region. The Tea Board did not contend that ITC Sonar’s Darjeeling Lounge was trying to hijack this authority to certify in any way, and therefore had no case for passing off.

The Tea Board had alleged that the beverages sold and served in the Darjeeling Lounge had no connection whatsoever with the Darjeeling GI or the Darjeeling region itself (the tea-producing hill region in the eastern Indian state of West Bengal, soon to be [*groan*] renamed Paschim Banga). As a result, according to the Tea Board, the intention of the hotel to convey a nexus to that effect was ‘false and fraudulent’. The Board also alleged that the serving of a wide range of beverages (other than Darjeeling teas) at the Darjeeling Lounge was “an act of unfair competition inasmuch as it discredits the famous Darjeeling tea and misleads the [hotel’s] patrons as to the nature of the beverages served there”.

The DB also drew attention to the rights of owners of registered certification marks (section 78 and 75, Trade Marks Act) as being different from the owners of registered trademarks (section 28 and 29). “Darjeeling” is registered as a certification mark.

I thought that the Division Bench offered a very sound judgement (some of you may well disagree with me on this). But I believe this is a good precedent to have set in terms of establishing what may not be claimed as an infringement of a certification mark or a geographical indication. This is also a great opportunity for registered owners, such as the Tea Board, to better understand the boundaries of their rights, and enforce and strategise accordingly.


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2 thoughts on “Darjeeling Lounge survives: Tea Board loses appeal”

  1. Sumathi,
    I entirely agree with you that the Division Bench has offered a very sound judgment and that the registered owners to better understand boundaries of their rights and enforce and strategize accordingly.
    In fact Section 29(4) of Trade Marks Act, 1999 has created havoc.
    I give three varied situations and request the readers to please give a thought to it.
    1. A defendant is holding the registration of the mark in about 20 classes but not in the class in which he is actually dealing on account of oppositions filed by some persons. The plaintiff sues the defendant on the basis of registration in three classes in which the plaintiff is dealing but seeking the relief of injunction from using the mark for any goods whatsoever on the basis of Section 29(4).
    2. The plaintiff is holding registration of the trade mark in 20 classes but not in the class in which he is dealing on account of oppositions filed by some persons. Somehow the defendant gets the registration of the mark in the class in which he and plaintiff are dealing, even though the plaintiff had earlier filed oppositions against the registration of the mark of the defendant which were not contested by the defendant and the applications were rather withdrawn. The plaintiff somehow missed the advertisement of the mark in the Journal as such could not oppose. Even though the plaintiff is holding registration in 20 classes, wouldn’t be of any assistance to plaintiff on account of defense under Section 28(3) and 30(2)(e). Does Section 28(3) and 30(2)(e) over ride Section 29(4)?
    3. Plaintiff is holding the registration of a mark in say Class: 1 on the basis of Proposed to be used. He is also holding registration of the said mark on the basis of proposed to be used in Class: 2 on the basis of user. The defendant takes the defense that the defendant is protected under Section 34 of the Act on account of his prior user of the mark which is prior to the date of registration (the registration is on the basis of proposed to be used) and the judgments with respect to the provisions of Section 34 are that the user mentioned in Section 34 refers to the use in respect of “the” goods. Now the plaintiff wants to take the benefit of Section 29(4) whereby the plaintiff is the defendant is not able to show the prior user of the mark prior to the date of registration (keep in mind that the plaintiff is holding the registration of the mark in some other class) and pleading that the provisions of Section 29(4) will have its role to play. The situation in nut shell is that the goods in which the defendant is dealing, he is able to show the prior user even prior to the registration of the plaintiff fin respect of the class of goods and sis saved by Section 34, but finds trapped in Section 29(4).

  2. I too found the judgment well-argued and persuasive. Unfortunately there is a lot of confusion about the extent of protection accorded by both certification marks and GIs but the court clearly recognised the importance of not acceding to unsubstantiated allegations of infringement at the interim stage. As to passing off it’s difficult to tell without seeing the evidence but it looks like a ‘throw it all in and perhaps one will succeed’ type of action. Incidentally, is it correct that in India the plaintiff must show a ‘strong prima facie case’ at the interim stage? That’s a higher hurdle to get over than in England.

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