Darjeeling tea - A case of quality assurance leading to

global positioning

International Convention on IP and Competitiveness of MSMES

A Presentation by Rajendra KumarPartner, K&S Partners

Gurgaon, INDIADecember 11, 2009

DEFINITIONDEFINITION

GEOGRAPHICAL INDICATIONGEOGRAPHICAL INDICATION

is a collective right as opposed to a is a collective right as opposed to a trademark which is a private righttrademark which is a private right

identifies a product as originating in a identifies a product as originating in a country or a region thereof country or a region thereof

whose quality, reputation or other whose quality, reputation or other characteristics are attributable to its characteristics are attributable to its geographical origingeographical origin

TYPES OF GIsTYPES OF GIs

GEOGRAPHICAL INDICATIONGEOGRAPHICAL INDICATION

Product name indicates the originProduct name indicates the originSCOTCH whiskySCOTCH whiskyDARJEELING teaDARJEELING teaHAVANA cigars, HAVANA cigars,

Product is traditionally associated with a Product is traditionally associated with a particular regionparticular regionFETAFETACAVACAVA

ECONOMIC EXPOLITATION OF GIs

Like any other IPR, a GI can also be economically exploited

Provides benefit to all stake holders

Contributes to human and social development of community

ECONOMIC IMPLICATIONS OF GIs

PROTECTION OF GIs IMPORTANT:Promotes products having certain

characteristics of considerable benefit to the rural economy

Ensures the supply chain integrity of GI products

Facilitates distribution and sale of GI products – especially relevant to developing countries whose markets are in industrialized countries

ECONOMIC IMPLICATIONS OF GIs

PROTECTION OF GIs IMPORTANT:Improves the income of farmers and

retains the rural population in less favoured remote areas

Protects consumers against acts of unfair competition by ensuing correct labeling information

Acts as a vehicle for producers to compete on quality rather than quantity

How do we unlock the wealth?

Legal:Need for protection of GI at

domestic and international levelsNeed for integrity and sanctity of

supply chain through certification at source

Need for pro-active and defensive steps to prevent usurpation of GIs

How do we unlock the wealth?

Commercial:Need for building brand equity through

promotional campaigns in diverse markets

Need for documentation of:Traditional knowledge in the cultivation and

production methodsAll advertising and promotional expenditure

Focus on quality assurance; commitment of trade to maintain standards

SYSTEMS OF PROTECTION

Possible statutory means of protection of GI in different jurisdictionsCOLLECTIVE MARKCERTIFICATION MARKGEOGRAPHICAL INDICATIONS

SYSTEMS OF PROTECTION

Common Elements of Legal ProtectionCollective body with locus standiSpecification/characteristics of the productWhether geographical or traditional nameType of goodsProof of origin – historical recordsMethod of production Inspection bodyGeographical area of production and map

INDIAN SUCCESS STORY

DARJEELING DARJEELING TEA STORYTEA STORY

THE DARJEELING TEA STORY

Darjeeling tea goes back to 1835Statutorily controlled by the

Government as part of the Tea industry from 1933 under various enactments culminating in the Tea Act, 1953

The Tea Board is vested with the authority to administer all stages of tea cultivation, processing & sale through various orders

Cultivated currently in 87 designated gardens in the Darjeeling district

THE DARJEELING TEA STORY

The Darjeeling tea industryEmploys over 52000 people on permanent

basisAdditional 15000 persons engaged during

plucking season – March to November60% of the work force is women employed on

family basis Income of a garden worker half in the form of

cash and the other half by way of perquisites with access to free accommodation, subsidies cereal ration and free medical benefits

THE DARJEELING TEA STORY ECONOMIC IMPLICATIONS

Protection of Darjeeling tea:Beneficial for the plantation workerWould ensure better prices Better economic health of the

industrySustainable educational and health

systemsA better quality of life

THE DARJEELING TEA STORY

1997 - Benelux Countries (Belgium, Netherlands,

Luxembourg) – Collective mark protection for DARJEELING logo

1998 – World Wide Watch agency CompuMark appointed to monitor conflicting marks.

Pursuant to the watch agency being appointed:

Instances of attempted registrations foundSome challenged through oppositions &

cancellations and sometimes negotiations.

THE DARJEELING TEA STORY

1998 – UK - Certification mark protection for DARJEELING word

2002 - USA – Certification mark protection for DARJEELING word

2003 – Russia – Trade mark registration for DARJEELING word

2003 - India - GI application filed for DARJEELING word & logo marks, accepted and published in the first GI Journal in July 2004

THE DARJEELING TEA STORY

2004 - India – Copyright registration obtained for DARJEELING logo

2004 - Japan – Collective mark application filed for DARJEELING word

2004 - Australia – Certification mark applications for DARJEELING word and logo marks (logo accepted)

2004 - Germany – Collective mark application filed for DARJEELING word

THE DARJEELING TEA STORY

2007 – On November 12, 2007, DARJEELING applied for under ECR 510/2006 as a PGI

Legal Angle

• The following are some decisions The following are some decisions favoring Tea Board issued by favoring Tea Board issued by some national courts:some national courts:•FranceFrance

• Applicant Dusong adopted the following Applicant Dusong adopted the following mark in respect of goods in classes 16, 35 mark in respect of goods in classes 16, 35 & 41& 41

Legal Angle

• While the Tribunal de Grand Instance While the Tribunal de Grand Instance rejected Tea Board’s claim, the Court of rejected Tea Board’s claim, the Court of Appeal Paris upheld the sameAppeal Paris upheld the same

• The court held that Darjeeling is a GI and The court held that Darjeeling is a GI and the acts of Mr. Dusong were parasitic and the acts of Mr. Dusong were parasitic and amounted to unfair competitionamounted to unfair competition

• Further, the bad faith adoption was writ Further, the bad faith adoption was writ large from the fact that he used a tea pot large from the fact that he used a tea pot device along with the markdevice along with the mark

• The court also imposed heavy costs on The court also imposed heavy costs on Mr. DusongMr. Dusong

Legal Angle

•USAUSA• DARJEELING v. DARJEELING NOUVEAUDARJEELING v. DARJEELING NOUVEAU• Opposition filed by Tea Board before the Opposition filed by Tea Board before the

Trademark Trial and Appellate Board (TTAB) Trademark Trial and Appellate Board (TTAB) USAUSA

• Based on its US CTM registrations, Tea Board Based on its US CTM registrations, Tea Board demanded that the mark ‘Darjeeling demanded that the mark ‘Darjeeling Nouveau’ by Republic of Tea (ROT) be refusedNouveau’ by Republic of Tea (ROT) be refused

• ROT filed a counterclaim that Tea Board’s ROT filed a counterclaim that Tea Board’s CTM registrations be cancelled on alleged CTM registrations be cancelled on alleged grounds of genericnessgrounds of genericness

Legal Angle

• While granting Tea Board’s claims, TTAB While granting Tea Board’s claims, TTAB held that:held that:• Darjeeling is an inherently distinctive Darjeeling is an inherently distinctive

certification trademark indicating certification trademark indicating geographic origingeographic origin

• ROT adduced no evidence to prove ROT adduced no evidence to prove claims of genericness and Tea Board claims of genericness and Tea Board had adequate control over the use of the had adequate control over the use of the CTMCTM

• The test for determining genericness of The test for determining genericness of a mark is its primary significance to the a mark is its primary significance to the relevant publicrelevant public

Commercial Angle

COMMERCIAL ANGLECOMMERCIAL ANGLE• Commercial angle is as important Commercial angle is as important

to GI protection as legal angleto GI protection as legal angle• What constitutes commercial What constitutes commercial

angle?angle?• Projection and promotion of the GI Projection and promotion of the GI

through advertisementsthrough advertisements• Need for building brand equity Need for building brand equity

through promotional campaigns in through promotional campaigns in diverse marketsdiverse markets

Commercial Angle

• Tea Board has been:Tea Board has been:•Conducting Tea Festivals in foreign Conducting Tea Festivals in foreign

jurisdictionsjurisdictions•Organizing seminars on IPRS and in Organizing seminars on IPRS and in

particular GIs particular GIs • Issuing advertisements in the Issuing advertisements in the

national and international media national and international media promoting Darjeelingpromoting Darjeeling

•Creating awarenessCreating awareness

Trade Supply Chain Integrity System

Introduced a trade chain management system for surveillance and monitoring of the supply chain and addressing traceability issues in the Darjeeling tea trade chain.

Two computerized data collection centers havebeen setup in Darjeelingand Kolkata, connectedthrough internet enabledservices.

Trade Supply Chain Integrity System

The system entails computerized collection and validation of all plantation and processing related data, namely; Daily green leaf plucking records Daily area plucked records Daily Manpower used records Daily green leaf transfer/purchase records Daily processing records Daily invoice entry records Daily dispatch records

All 87 registered Gardens have been provided with customized software for the data entry and submission

Trade Supply Chain Audit

Appointed an independent certification agency to conduct trade chain audit to check and validate the authenticity of the data collected through the Trade Supply Chain Integrity System.

The certification agency will conduct onsite checking and verification of all the data submitted by all entities in the trade chain.

Approximately 33 % of the all entities registered under each category will be audited each year, with every entity undergoing a complete verification once in 3 years.

Trade Supply Chain Audit

Annually 10% of all the registered entities will be subject to random and totally unannounced spot checks.

Full verification/spot-check will be conducted each year on the basis of a risk analysis.

All data/information/material obtained/generated during the audits will be kept strictly confidential.

Tea Estate Factory

Tea Estate Factory

Tea Estate Tea EstateTea Estate

Exporter/ Trader’s Warehouse and/Processing unit

Estate company’sWarehouse/Processing unit

Auction broker(no physical handling or custody of materials

Finaldomestic Handler

Second overseas Handler

FirstOverseasHandler

Final Exporter/Domestic buyer’s warehouse

SUPPLY

CHAIN

All Darjeeling Tea leaving

the shores of India today is guaranteed

100% Darjeeling Tea

THANK YOU!THANK YOU! © 2009 K&S Partners © 2009 K&S Partners

IndiaIndia