Trademark

Guest Post- Khadi: Shouldn’t we first set our house in order?


khadi guest postSpicyIP is delighted to share with you a guest post on the ongoing ‘khadi’ trademark controversy, written by none other than Ms. Latha R. Nair, a distinguished IP practitioner from India. She has a number of distinctions to her credit, but we list a few of them below:

“She is a partner with the Delhi based law firm K&S Partners, one of the top IP firms in India. She received her Honors degree in Bachelor of Arts and Law from the National Law School of India University at Bangalore in 1994 and was admitted to the Bar in the same year. Apart from handling matters relating to protection and enforcement of trademarks and copyrights, she is actively involved in advising clients on TRIPS related issues, protection of geographical indications in India and abroad, domain name disputes and intellectual property aspects of the entertainment industry and the Internet. In particular, she has been advising the Government of India in the protection of various geographical indications including Basmati and Darjeeling.

In 2005, she received the India Traveling Fellowship Award offered by the ITechlaw Association (formerly, ‘Computer Law Association’) which enabled her to successfully complete an internship with four European law firms specializing in Intellectual Property and Information Technology law. She has co-authored a seminal work on geographical indications, titled “Geographical Indications – A Search for Identity” published by Lexis Nexis Butterworths India, which is a first work of its kind on the subject. She has also authored several articles on various aspects of intellectual property and information technology law and is a regular speaker at various fora, both national and international. She has been selected by the International Trademark Association (INTA) to serve on its Publications Committee for the years 2008 and 2009.”

In this post, Ms. Nair explores an interesting issue as to whether a trademark can be sought over ‘khadi’ at all, given that ‘khadi’ is originally a ‘trade description’ under Khaddar (Protection of Name) Act, 1950 and a trade description is expressly excluded from trademark protection under the Trade Marks Act, 1999.

[The opinions expressed in the post are the author’s own views and do not necessarily reflect those of K&S Partners]

KHADI: shouldn’t we first set our house in order….

Those sitting in glass houses should not throw stones at others…..

While the media has been crying foul for the last few days over the use of the name ‘Khadi’ by a German company on products like shampoo, soaps etc., what is little known to many is that there is a pre-independence legislation for the protection of the name ‘Khadi’ or ‘Khaddar’, which is being flouted in India itself.  According to this 1934 Act [the Khaddar (Name Protection) Act, 1934], “Khadi or Khaddar whether in English or in any Indian vernacular language, when applied to any woven material shall be deemed to be a trade description within the meaning of the Indian Merchandise Marks Act, 1889, indicating that such material is cloth woven on hand-looms in India from cotton yarn handspun in India”.

The 1934 Act was repealed when the Khaddar (Protection of Name) Act, 1950 was enacted. The 1950 Act made a slight modification (modified parts underlined) to the definition and read, “the words” Khaddar” and” Khadi” whether in Hindi or in any other Indian language or in English, when applied to any woven material, shall be deemed to be a trade description within the meaning of the Indian Merchandise Marks Act, 1889, (4 of 1889) indicating that such material is cloth woven on handlooms in India from cotton, silk or woolen yarn hand- spun in India or from a mixture of any two or all of such yarns.

‘Khadi’ is a trade description under the 1950 Act….

The Indian Merchandise Marks Act, 1889, was repealed and replaced by the Trade and Merchandise Marks Act, 1958 which in turn was repealed and replaced by the Trade Marks Act, 1999.  The relevant parts from the current definition of ‘trade description’ under Section 2(1) (za) of the 1999 Act are as follows:

2(1) (za) “trade description” means any description, statement or other indication, direct or indirect,-

……………………….

(vi) as to the mode of manufacture or producing any goods or providing services; or

(vii) as to the material of which any goods are composed; or

So the 1950 Act intended that ‘Khadi’ or ‘Khaddar’ is a trade description:

a)      for a mode of manufacture of cloth, namely, handspun as opposed to mechanized spinning; and

b)      where the material used is cotton, silk or woolen yarn hand- spun in India or from a mixture of any two or all of such yarns.

Although the language of the 1950 Act does not expressly bar the use of Khadi on material other than hand-woven cloth, it could well have been the intention of the legislators of the Indian Republic at that time that Khadi be used as a trade description only on hand-woven or handspun cloth because at that time a rampant commercialization of the cachet in the name ‘Khadi’ was perhaps not foreseen.  This intention is reflected even in Section 2 (d) of the Khadi Village Industries Commission Act, 1956 [an Act that established the Khadi Village Industries Commission (KVIC) for the development of Khadi and village industries and for matters connected therewith] which defines ‘Khadi’ to mean “any cloth woven on handlooms in India from cotton, silk or woolen yarn handspun in India or from a mixture of any two or all of such yarns“.  Besides, the KVIC refers to Khadi products and products of village industries separately and even has separate funds allocated for these two products.

KVIC also has trade mark registrations for Khadi in practically all classes.

As explained above, there is a clear distinction between ‘Khadi’ products and products of ‘Village Industries’ under the Khadi Village Industries Commission Act, 1956 (“KVIC Act”).  In the light of all this, it is not clear as to how and when the use of Khadi started to transcend from handspun cloth to any kind of product.  In fact, KVIC today has registrations in respect of ‘KHADI’ and ‘KHADI’ formative marks in practically every class.  The goods include safety matches, footwear, stationery, toys, processed food, coffee, tea, sugar, pharma products, soaps, perfumes, plaster of Paris, lime stone, leather, firearms and even methane gas! In most of these registrations, user is claimed since 1978. And today, Indian markets are flooded with all kinds of products branded as Khadi!

From a reading of the KVIC Act, it appears that it is a non-trading body.  The functions of the Commission set up under the KVIC Act are primarily in the nature of planning, promoting, facilitating, organizing and assisting in the establishment and development of Khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary. Of particular note are its specific powers to ensure genuineness and to set up standards of quality and to ensure that products of Khadi and village industries do conform to the said standards, including issue of certificates or letters of recognition to the concerned persons.  None of the functions of the KVIC involves any trading or manufacturing activity on its own. Yet, it describes itself as ‘manufacturer and merchant’ in all of the trade mark applications filed before the Indian registry and registrations already obtained.

It is significant to note here that “Khadi” or “Khaddar” has been defined in several prominent dictionaries as a cotton, handspun fabric from India. Interestingly and to add more spice to the story, there is a company in Pakistan that is selling handspun fabric items and calls itself ‘Khaadi’.  http://www.khaadionline.com/in/about-us

So, is it a good idea to register Khadi as a trademark?

Although a tad late in the day to raise this question (considering the numerous registrations already owned by KVIC for Khadi), it must be noted that registering Khadi as a trademark may not be appropriate at all primarily because it is a term used to describe handspun cloth – so every merchant who deals in Khadi cloth has a right to describe his wares as Khadi.  Secondly, the 1950 Act itself calls it a trade description, thereby statutorily preempting any claims of private rights in the name.

Any alternate options available for KVIC to protect KHADI?

As noted above, all registrations for KHADI and KHADI formative marks owned by the KVIC, apparently a non-trading body, are ironically for trademarks. In contrast to a trademark that indicates a connection in the course of trade between the proprietor of the mark and goods sold under the mark, a certification mark does not indicate a connection in the course of trade. A certification mark distinguishes goods certified in respect of origin, material, mode of manufacture, quality, accuracy, or other characteristic, from goods not so certified. Its essential characteristic is that anyone whose goods meet certain specified standards is entitled to use the mark. Instead of registering KHADI cloth as a trade mark, KVIC could have well considered registering it as a certification mark for better protection.

The name Khadi has been in use in India to refer to hand-woven fabric for three-quarters of a century, so much so that the word has found a place in English dictionaries to mean a hand-woven cloth from India. In short, the word Khadi evokes India. A hand-woven fabric produced in the United States, France or Switzerland or any other country in the world cannot, therefore be described as Khadi even if identical methods and specification are followed because the premium of the hand-woven cloth from India is attributable to the name Khadi. In other words, Khadi as a name for hand-woven cloth has acquired a secondary meaning sufficient to earn a legally protectible interest in favour of all the producers of Khadi.

Such secondary meaning or reputation as a hand-woven cloth from India is sufficient for the protection of Khadi as a geographical indication. However, in the light of the rampant use of Khadi on all kinds products and that of KVIC’s own registrations in various classes, it is debatable whether such reputation is already diluted. Besides it will be a classic case of a conflict between a geographical indication and a trademark. The only unusual aspect of this conflict is that the misuse of the geographical indication was started and perpetrated (perhaps inadvertently or under wrong or no legal advice) by the controlling body itself!

(Ms. Nair may be contacted at [email protected] You can read some of her earlier posts here, here and here)

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