Certification Trade Marks and GI versus ‘Regular’ Trade Marks: The Calcutta High Court Ruling in Tea Board v. ITC

We’re pleased to bring to you a guest post by Eashan Ghosh on the recent decision of the Calcutta High Court in the GI and Certification TM infringement case filed by the Tea Board of India against ITC for use of ‘Darjeeling’ as part of the name of a refreshment lounge (‘Darjeeling Lounge’) in one of its hotels. Eashan has been in practice as an intellectual property advocate and consultant in New Delhi since 2011, and teaches a seminar on intellectual property law at National Law University, Delhi. Eashan writes about Indian intellectual property law, including a monthly review of Delhi High Court judgments, on his Medium page. He has written guest posts for us in the past as well (see hereherehereherehere and here).

Certification Trade Marks and GI versus ‘Regular’ Trade Marks: The Calcutta High Court Ruling in Tea Board v. ITC

Eashan Ghosh

Earlier this month, a decision by the Calcutta High Court ruled against the Tea Board India in a certification trade mark and geographical indication (GI) infringement claim against ITC Limited. It dismisses in full, with a ₹100,000 (~$1400) costs award, the Tea Board’s claim over the use of ‘Darjeeling’ by ITC as part of its ‘Darjeeling Lounge’ at one of its Kolkata hotels. The decision closes proceedings before the court of first instance, over eight years after the Claimant filed suit in October 2010.

Upon institution, the Claimant’s motion for interim injunction was refused twice in less than a year, the latter in appeal by the Calcutta High Court in August 2011 (a post on the appeals decision was carried on this blog here). The Claimant moved the Supreme Court in December 2011.

The Supreme Court did not interfere with the August 2011 decision and eventually directed a return to the Calcutta High Court in January 2016, with an instruction to decide the case expeditiously on pleadings and admitted material alone. (The direction comes from an undertaking by the Claimant before the Supreme Court in March 2013 not to lead oral or documentary evidence, and to contest the case before the Calcutta High Court on material already presented.)

The Calcutta High Court framed issues in November 2016, before full judgment on February 4, 2019.

Three Findings

The decision returns three findings of interest.

First, it finds that the claim is barred by a limitation prohibition contained in Section 26(4) of The Geographical Indications of Goods (Registration and Protection) Act, 1999 (‘the GI Act’).

Second, the Claimant’s registration, as a certification trade mark registration under The Trade and Merchandise Marks Act, 1958, is limited to ‘goods’, and is ineffective against the Defendant here, whose business is in services.

Third, even failing the first two findings, the certification and GI registrations only protect the Claimant against a narrow class of infringements, and the Defendant’s actions do not infringe these rights.

I now discuss these findings in turn.

The Claim

The Claimant’s remit here requires it to take up representation over ‘Darjeeling Tea’. Against this Defendant, it asserts its registrations for a certification trade mark and GI, which seek to limit the identification of goods under ‘Darjeeling Tea’ to the tea estates in the Darjeeling district of West Bengal.

The claim makes three assertions.

First, it states that the association with ‘Darjeeling’ is proprietary and exclusionary (i.e. the Defendant is not allowed to use ‘Darjeeling’).

Second, it states that the Defendant’s use is misleading (i.e. the Defendant’s use associates itself with Darjeeling but does not originate from it).

Third, it states that the Defendant’s use is actionable as unfair competition and at passing off (i.e. the Defendant’s use is likely to be confused with the Claimant’s goods which do originate from Darjeeling).

The Section 26(4) Limitation

However, the Court finds that the substance behind these claims is secondary, since the Claimant’s case runs into limitation trouble.

Section 26(4) of the GI Act, to the extent it applies here, states that a Claimant loses to limitation:

  • the right to file a claim
  • against the use or registration of a trade mark (the Defendant’s ‘Darjeeling Lounge’)
  • which infringes a registered GI (the Claimant’s ‘Darjeeling Tea’),
  • if more than five years elapse between:
    • the date from which the alleged infringement has become known to the GI Claimant and
    • the institution of the claim for infringement.

Faced with this objection, the Claimant’s facts appear slightly frayed on the point. The Defendant asserts, uncontroverted, that its business under ‘Darjeeling Lounge’ commenced on January 1, 2003. The Claimant’s evidence discloses a notice of January 9, 2005 addressed to the Defendant on the subject. The Defendant’s own trade mark application was put to public notice on February 7, 2005. The Claimant’s own case elsewhere states that it became aware of the Defendant’s business in April 2005.

However, faced with a claim instituted on October 1, 2010, all these dates are handily beyond the five-year limitation under Section 26(4).

Certification Trade Marks under the 1958 Act

The second limb of the Claimant’s case asserts its certification trade mark rights under Sections Sections 69(c) and 75, and 78 of The Trade Marks Act.

The Court addresses this claim by first pressing a distinction between a “certification trade mark” and a “registered trade mark”.

It finds that the Claimant’s certification trade mark was registered under the 1958 Act, at a time when certification trade mark protection extended to goods only. Under Section 2(1)(e) of The Trade Marks Act, 1999, a certification trade mark now covers “goods or services”.

Since the Defendant here deals in services, a strict reading of the scope of the Claimant’s certification trade mark registration would mean that this registration is ineffective against the Defendant. This invites the Court to consider the repeal and savings provisions under The Trade Marks Act which succeeded the 1958 Act.

It rules, on balance, that a certification trade mark would continue to be in force and have effect under the 1999 Act. However, the effect of the Claimant’s rights under the 1958 Act would not be extended to full occupy a broader right under the 1999 Act.

“The repealing Section,” says the Court, “does not say that [the certification trade mark] issued under [the 1958 Act] would stand extended by the provisions of the [1999 Act].”

The distinction, therefore, is one between continuing effect (over goods alone) and extension (from goods to ‘goods or services’, as the revised Act provides) of the protection offered by this category of trade marks. [Elsewhere – and unconnected – the Court emphasizes that, under Sections 2(1)(e) and (f) of the GI Act, a registered GI offers proprietary rights in relation to goods.]

Different From ‘Regular’ Trade Marks?

Continuing with its certification trade mark discussion, the Court distinguishes this category of trade marks from what it calls “regular” trade marks. The principal point of difference, it observes, lies in the consequence of the certification trade mark registration.

This category of registration offers the Claimant “the authority to certify that any tea marked by the [‘Darjeeling’] name or logo, is guaranteed to be 100% Darjeeling Tea originating from the 87 tea gardens in the Darjeeling district of West Bengal and possesses certain organoleptic qualities and characteristics”.

On top of this, Section 78 offers such Claimants “the exclusive right to the use of the mark” in relation to the category of goods (or services, under the 1999 Act).

However, seeking a prohibitory injunction against this Defendant, there is no certification / verification aspect to the Claimant’s trade mark rights at all. The Court admits as much, noting that the Claimant’s certification trade mark “would stand infringed only in the event the Defendant certifies that a particular tea is ‘Darjeeling Tea’”. This evidently imagines certification trade marks in an altogether different space as against ‘regular’ trade marks.

To be sure, Section 75, the infringement provision which attaches to certification trade mark registrations, does not follow this distinction quite so readily. It permits infringement actions to be brought by such Claimants if they encounter use which is “likely to be taken as being [use] as a trade mark” in respect of the goods (or services, under the 1999 Act) that the Claimant’s certification mark is registered.

The influence of a simple, deceptive similarity-style infringement inquiry that would attach to ‘regular’ trade mark registrations, therefore, is evident. Given the setup of the Claimant’s case, though, there is little onus on this Court to examine this issue more thoroughly.

Section 22 and the Dilution Claim

Despite sufficient reason to close the claim on the Section 26(4) limitation alone, the Court discusses numerous other offshoots of the Claimant’s certification trade mark / GI registration claim. While largely surplus to requirements on these facts, the discussion does offer some useful insight to how similarly placed Indian courts might be minded to rule on such claims going forward. Two observations suffice to illustrate this.

First, the Court explores the statutory framework supporting the Claimant’s claim of GI infringement and passing off. It identifies passing off as a specie of the unfair competition genus under Section 22(1)(b) of the GI Act and its Explanations. It finds also that this risk of passing off is submerged in the present case because the businesses of the Claimant and Defendant are far removed from each other.

Second, the Court takes up the Claimant’s assertions that the ‘Darjeeling’ portion of the Defendant’s trade mark was adopted in bad faith, and that the use of ‘Darjeeling’ by the Defendant was likely to dilute the Claimant’s use of its certification trade mark / GI. Both are dismissed as unsupported by evidence.

On the bad faith allegation, it finds that the Defendant’s hotel facility was conceptualized / themed around West Bengal generally. (The fact that several parts of the Defendant’s facility are “named after West Bengal’s well-known geographical sites and dynasties”, is consistent with this motif.)

On dilution more broadly, it characterizes the Defendant’s hotel guest clientele as “high-end…educated and knowledgeable”, finds that the ‘Darjeeling Lounge’ has sufficiently restricted access, and that the services offered are unlikely to be confused with ‘Darjeeling Tea’. (There is a running mention early in the judgment of the Defendant’s facility serving beverages including Darjeeling tea, but this objection does not re-appear in the substance of the Court’s discussion.)

The consumer characterization, in particular, is in line with the elevated consumer recall Indian trade mark law has consistently associated with consumers of premium products and services.

A decision, therefore, that takes a measured step into an area of Indian trade mark / GI law with far fewer miles on it than ‘regular’ trade mark law. A decision, also, that puts down some vital markers – on Sections 22 and 26 of the GI Act and Section 75 of the Trade Marks Act especially – that may be more meaningfully addressed in the future.

Disclaimer: The author’s colleagues represented the Defendant before the Calcutta High Court.

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