Tuesday 18 November 2014

Brand Khadi and Trademark Disputes

Indian Government on Khadi Trademark:

In the first week of November this year, Economic Times reported about Indian Government’s plan to register the Trademark “Khadi”, and its inability to do so as the trademark was already registered by a German Company named Khadi Naturprodukte. The German Company is in the same business in Europe as Khadi and Village Industries Commission (KVIC), an arm of the Ministry of Micro, Small and Medium Enterprises (MSME): selling Indian Origin Products like Soaps, Shampoos etc.

But, is that the only problem the Government would face if it goes ahead with the idea of registration?
The answer is no. Here’s why:

When the Department of Industrial Policy and Promotion (DIPP) advised KVIC to register the trademark ‘khadi’ in US and EU, it was discovered that there are already other brands registered for the Trademark “Khadi” in various countries.

Whereas many websites are claiming this to be Bio-Piracy, the author does not believe that these companies are doing that in any way.

Bio-piracy means:

The practice of commercially exploiting naturally occurring biochemical or genetic material, especially by obtaining patents that restrict its future use, while failing to pay fair compensation to the community from which it originates.

As in the present situation, Khadi is being used only as a trademark and not as a patent, these companies cannot claim exclusive rights to ‘produce or manufacture or sell’ khadi products. The company can on their best foot, restrain other manufacturers of khadi products to use the term “Khadi Naturprodukte” for the class of goods and services for which the brand has been registered. It would have been much easier for Indian Government to prosecute these companies internationally if this were indeed a case of bio-piracy.

It was also reported in the same news report that KVIC has sought cancellation of the trademark given to the company by Belgium-headquartered Office for Harmonization in Internal Markets, an organization responsible for trademark and design registration in EU.

It is not only Germany where the trademark "Khadi" has been registered before the KVIC could approach the authorities: in India, Spain and Hungary also the term Khadi has been trademarked with various suffixes and prefixes.

Another set of reports are claiming that India is seeking Geographical Indication registration in favour of Khadi through Intellectual Property Rights (IPR) Attorneys Association. Geographic Indication means:

geographical indication is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin. Most commonly, ageographical indication includes the name of the place of origin of the goods.

A geographical Indication for Khadi, in favor of India alone and not the countries of Indian Subcontinent is again a very tough task but if granted, can definitely increase the chances of prosecution of foreign trademarks for the fabric khadi.

The international trademark system is governed by two treaties, namely, the Madrid Agreement Concerning the International Registration of Marks (1891) and the Madrid Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (1989) while the TRIPS Agreement [Trade-Related Aspects of Intellectual Property Rights] has provisions for Geographical Indications.

A year earlier, in October, 2013; President Pranab Mukherjee had with an aim to provide a unique identity to brand ‘Khadi’ in domestic as well as international markets, launched ‘Khadi Mark’ which indicates the quality and genuineness of a product. This mark in the lines of hallmark helps the purchaser to identify the quality and insure that the products are genuine.

For getting the already registered trademarks with the mark Khadi cancelled, the following criteria have to be fulfilled by the Government:

1. Convince the authority concerned that prima-facie ‘Khadi’ (stand-alone) is a word that can be used as a trademark.
2. Prove that in the jurisdiction of the trademark that is sought to be revoked, KVIC has been selling its goods in the same class as the other brand prior to it.
3. That the mark ‘Khadi’ has been in use continuously in the jurisdiction ever since.

KVIC, in India, has registrations for the mark Khadi and Khadi Gramodyog in classes 3 (soaps; perfumery, essential oils, cosmetics, hair lotions etc.) and 25 (clothing, footwear and headgear), however they have not been renewed or have been withdrawn (probably due to lack of prosecution). In the same classes, there are several other trademarks for the term Khadi that are registered as well as pending and no action seems to have been taken by the Government from its side to resolve this issue.

In my opinion, the idea of calling for de-registration of Non-Indian Khadi brands is based on the wrongful notion that the foreign companies are misusing Indian techniques whereas, anyone has a right to use such technology and mere registration of a trademark doesn’t mean that the goods of same nature cannot be produced. The Government should mull over its plan before taking any action on this issue.  

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