Khadi v Khadi – Khadi’s Plight in the EUIPO

Sneha Tripathi 

4th year, B.A.LL.B (Honors)

Hidayatullah National Law University, Raipur 

Abstract

Khadi is a cultural symbol and provides identity to Indian goods in the international market. The brand’s zeal to continue being engraved as an identity has lead to a fight of infringement against a trademark application of a German Company Best Natural Products GmbH (BNP) in the European Union Intellectual Property Office (EUIPO). The Khadi and Village Industries Commission Act, 1956 provided for the establishment of the Khadi and Village Industries Commission which is an autonomous body under the Ministry of Micro, Small, and Medium Enterprises.To continue asserting legal right over the registered trademark in Khadi, Khadi and Village Industries Commission (KVIC) filed an application in 2014 for the cancelation of the Khadi Trademark registered by a German company called Best Natural Products Gmbh (BNP) situated in Munich.For proving its contention, the KVIC and Government of India had to prove that the product had been selling in the European market under the trademark Khadi.

Keywords: Khadi, Khadi and Village Industries Commission, trademark, fabric.

Introduction

Khadi is a cultural symbol and provides identity to Indian goods in the international market. The brand’s zeal to continue being engraved as an identity has lead to a fight of infringement against a trademark application of a German Company Best Natural Products GmbH (BNP) in the European Union Intellectual Property Office (EUIPO).

Khadi is hand-woven into a natural fiber made with cotton. The fabric made from this fiber is sturdy in texture and can be worn comfortably in both summers and winter. The origin of Khadi can be traced back to the Swadeshi movement led by Mahatma Gandhi during the Independence struggle. With the beginning of the Swadeshi movement, the foreign goods were shunned and Khadi provided an alternative to the British textiles besides providing a livelihood to the people. People were also encouraged to wear it as a heritage symbol. In the year 1925, the commercial launch of Khadi was done by the All India Spinners Association. To establish Khadi as a brand, the Khadi Village Industries Commission Act, 1956 was legislated which gave the authority to a Commission to control and regulate the use of the term Khadi by holding a trademark registration under most classes.  

The Khadi and Village Industries Commission Act, 1956

The Khadi and Village Industries Commission Act, 1956 provided for the establishment of the Khadi and Village Industries Commission which is an autonomous body under the Ministry of Micro, Small, and Medium Enterprises. This commission would help in the development of Khadi and village industries. According to Section 2(d) of this act, Khadi means any cloth woven on handlooms in India from cotton, Silk, or woolen yarns in India or a mixture of any two or all such yarn. In the year 2014, Khadi mark Regulations, 2013 were issued in exercise of the powers conferred by Section 27 of the Khadi and Village Industries Commission Act, 1956.This was for authentication of genuine Khadi as defined in the Act by attaching the Khadi mark tag and labels issued by the Commission to the certified Khadi Institutions and persons producing selling or trading in Khadi and Khadi products. The eligibility of the product is defined by the tag on the fabric purchased from a Government cleared institution.

Khadi and Geographical Indication

Khadi has gained a secondary meaning as a handspun fabric from India and an application for GI was made by the Intellectual Property Rights Attorney Association on behalf of the Indian producers. If this was to be granted, the Khadi Trademark for the fabric would be cancelled but the applicant withdrew the application filed unexpectedly.

Khadi and Fabindia Case

The Khadi and Village Industries Commission have always been sharp-eyed against the unauthorized use of the Khadi mark to safeguard the rights of Khadi artisans and prevent the sale of any fake product under the name of Khadi. In 2017, the Commission issued a legal notice to more than a thousand private companies including Fabindia. A case was filed against Fabindia in the Bombay High Court claiming damages of Rs. 525 crores for the use of Khadi mark as under section 29 of the Trademarks Act, 1999. The unauthorized use of a registered trademark amounts to infringement. A legal notice was also served to Khadi Essentials and Khadi global for using the term Khadi on their products and social media handles. An instance of the sale of Khadi PPE kits also had lead to the filing of an FIR in Chandigarh.

Khadi vs. Khadi before the Cancelation Division

To continue asserting legal right over the registered trademark in Khadi, KVIC filed an application in 2014 for the cancelation of the Khadi Trademark registered by a German company called Best Natural Products Gmbh (BNP) situated in Munich. This German company’s brand, Khadi Naturprodukte is in the business of selling various Indian origin products such as shampoos, soaps, perfumeries, etc. in Europe. Khadi Cosmetics in Germany and Europe sells products through its online shop. These products are also sold by KVIC in addition to its fabric. 

The trademark has been registered with the Office for Harmonization of Internal Markets in Belgium. The KVIC has sought for cancelation of the trademark given to the German company under the classes 3, 21 and 31 in the United States and European Union. As informed by the Minister of Micro, Small and Medium enterprises, Mr. Nitin Gadkari, the Commission is also proposing to negotiate the assignment of the trademark registered by BNP in favor of KVIC.

For proving its contention, the KVIC and Government of India had to prove that the product had been selling in the European market under the trademark Khadi for a significant time and there were consumers associated with it. This argument was opposed by the German brand stating that they have created their own brand in 2008 after thorough market research and concluded that there was no similar trademark present either domestically or internationally. They also said that the Khadi mark was only for a piece of cloth and the current Trademark application deals with different classes of products altogether. The Cancelation division concluded that KVIC was not able to substantiate its argument with relevant documents and the appeal for invalidity of the trademark was dismissed. Also, the documentary evidence showed that the KVIC was exporting only to 5 European countries. So, the claim for a well-known mark in the European market is invalid as it was not able to fulfill the requirement under Article 8(4) of the European Trademark Regulation Act. KVIC claimed that there are absolute grounds of invalidity present due to deceptiveness which is against the public interest. 

The Cancelation Division said that Khadi is not a part of the common knowledge of the people in the European Union and there were no expectations from the product that was labeled as Khadi. Also, the products concerned are not associated with textiles, so the argument against deception does not hold. Since there was no identical characteristic or similarity in the products, no bad faith can be proved. The dishonest intention cannot be proved on mere prior knowledge of the use of the word Khadi in the Indian market as the European Trademark holder did not know about the permission requirements that were imposed on the use of the word Khadi. KVIC failed to prove that Khadi had a reputation in the European Union and the German company has taken advantage of that acquired reputation. Thus, the Cancelation Division of the EUIPO dismissed the application for cancelation. 

This decision of the cancelation division was upheld by the Boards of Appeal in 2017. The German General Court also confirmed the order in 2018. After these orders, the KVIC had filed an application for registration in WIPO and EUIPO which are pending before the office. The motive behind these applications is to establish an Indian brand internationally and stop it from getting diluted. This solution can also be termed as preventive of bio-piracy and was earlier seen in the cases of turmeric and neem where the multinational corporations have tried to patent them.

Bio-piracy of Indian Traditional Knowledge

Indian traditional knowledge is more susceptible to bio-piracy as due to language constraints, patent offices have difficulty in tracing the prior art. Theses traditional practices are reliable because they have been used for centuries and the absence of prior art makes it easy for the corporations to get patents on these.  

The government under the Ministry of Micro, Small and Medium enterprises has taken various initiatives to make Khadi recognizable in the international market they have decided to ensure that Khadi product is genuine by attaching a Khadi mark to it. It has also given Khadi and Village Industries Commission status of deemed Export Promotion Council (EPC) and 1088 Khadi institutions have taken membership to enter the export business. The government plans to arrange a tie-up with foreign Institutions like Federation of Indian Export Organization, World Trade Centre, Indian Trade Promotion Organization, Trade Promotion Council of India, etc. This will help in establishing healthy business opportunities and gaining access to sellers and buyers in the international market by ways of organising exhibitions, workshops, trade fairs, etc. in foreign soil.

Traditional Knowledge Digital Library and Khadi

For the opposition of a patent and protection of traditional knowledge, the countries have to spend a lot of money. The patent on the traditional knowledge which was non-patentable is becoming a huge concern due to the economical effects of the earlier cases of turmeric, neem, kava, quinoa, etc. These patents are either based on the actual medicinal knowledge or a slight variation to it. A centralized database will help in transforming that onerous task into an organized and objective system.

To restrict biopiracy in the future, the Government of India has established a digital database known as Traditional Knowledge Digital Library, which will provide information on the Indian medicinal system like Ayurveda, Unani as well as Yoga. The hundreds of years old texts are a source of extensive details and allow comparisons between different data. Traditional knowledge is converted from existing literature in the local language to international languages like English, French, Japanese, Spanish, and German. This information has been classified under sections, classes, and groups for the convenience of the international examiners. The filed patent application would have to show a significant improvement and has to be a new invention compared to the prior art. The language is also no barrier in case of comparison with prior art if it has been disclosed in the public domain earlier.

The Traditional Knowledge Digital Library provides the details about the time, place and medium of publication for the prior art. This is known as Traditional Knowledge Resource Classification (TKRC) which ensures scrupulous documentation. Before the advent of TKRC, any prospective company could dig up ancient information and lay a claim over it without any consequence. The digital library needs to consider including the handicrafts such as Khadi and the database should be made more accessible.

Conclusion

The determination of the class of the products will be a key in the registration of the Khadi trademark. It would be easier to prove infringement if the application was also for fabric. Another way to prove infringement will be to establish that there was a dilution of the mark. The unfair practice of dilution not only leads to a reduction in the value of the product but also diminishes the commercial value of a registered trademark. 

The hallmark of the Khadi and Village Industries Commission is labor intensiveness and it provides livelihood to the artisans associated with the craft. The international registration of the Khadi trademark will also help in generating income in the form of the royalties which would be paid when the trademark is used by the foreign companies. This would neutralize the threat to the livelihood of the craftsmen and reputation associated with the specious good.

Source of image: https://economictimes.indiatimes.com/industry/cons-products/garments-/-textiles/kvic-seeks-international-trademark-for-khadi-items/articleshow/73507291.cms?from=mdr

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