First case on infringement of a GI

May 31 2011

Tea Board, India v ITC Limited may be the first case on infringement of a registered geographical indication (GI) to be decided by an Indian Court. The Calcutta High Court denied an interim injunction to the Tea Board of India, the registered proprietor of the GI, Darjeeling. The Tea Board sued ITC, inter alia, under the Geographical Indication of Goods (Registration & Protection) Act 1999, for infringement of its registered GI against the use of the name "Darjeeling Lounge, alleging such use amounted to an act of unfair competition including passing off.

The Tea Board sought relief on the basis that use of the name Darjeeling Lounge by ITC to refer to a section of its hotel, amounts to an act of passing-off and therefore, an act of unfair competition. In response, the Court noted that every kind of passing-off would not necessarily amount to an act of unfair competition without further elucidating the dividing line between the two concepts. The Court explained that the registered proprietor can complain against the use of the GI under a passing-off action, if the GI has any "nexus" with the product with which it is exclusively associated with under its registration. ITC's Darjeeling Lounge being an exclusive area within the confines of its hotel, it is accessible only to its high-end customers, who may merely frequent the area and be served with any beverage. Accordingly, the Court concluded that there was scarcely any likelihood of deception or confusion.

Further, in holding that the use of Darjeeling was not the sole prerogative of the Tea Board, the Court highlighted that the word has been used so extensively in trading and commercial business for decades prior to the GI Act that the subsequent registration of the GI would not, prima facie, entitle the Tea Board to any interim relief in this case.

Effectively, the court has limited the scope of passing-off under the GI Act to only those cases where there is identity in the goods, and has also pointed that the descriptiveness or generic nature of a GI may be a factor in denying an interim injunction. While it is a ruling only at the interlocutory stage, the decision is likely to have significant ramifications in future cases in India, especially when obtaining interim injunctions forms a critical aspect of any IP litigation strategy.