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Tea Board of India Loses Appeal to Ban Use of the Word ''Darjeeling'' for Hotel Lounge

Wednesday, August 31, 2011

Manyee Chow | Bloomberg Law Tea Board, India v. I.T.C. Limited, A.P.O.T. No. 245 of 2011, (High Court of Calcutta, Aug. 24, 2011) The Tea Board of India (the "Board") lost its appeal before the Calcutta High Court to prevent luxury hotel chain ITC Hotels from using the word "Darjeeling" in connection with a tea lounge at its ITC Sonar hotel in Kolkata. The Calcutta High Court found that the lower court correctly rejected the Board's previous application for an injunction and that the Board had failed to make out a prima facie case. For a discussion of earlier developments in this case, see Indian Court Holds Owner of DARJEELING Mark Does Not Hold Exclusive Rights to the Word "Darjeeling," Bloomberg Law Reports - Asia Pacific Law, Vol. 4 No. 6 (June 6, 2011).

The Board Failed to Prove Prima Facie Case Against ITC

The Board, a statutory body set up under the Tea Act, 1953, is the registered owner of the geographical indication and certification marks DARJEELING and the logo of the word "Darjeeling" featuring a side profile of a woman holding two leaves and a bud to symbolize tea. Defendant ITC Limited operates the luxurious ITC Sonar Kolkata Hotel, where one of its lounges catering to guests at its high-end rooms is named the "Darjeeling Lounge." In April 2005, ITC sought to have the mark DARJEELING LOUNGE registered under class 41. The application was subsequently abandoned by ITC following the Board's opposition but ITC continued to use the name "Darjeeling Lounge." The Board found out and sought an injunction to prevent ITC from using the name, alleging trademark infringement and that the food and beverages served at the lounge had no connection with the geographical location of Darjeeling, which resulted in "unfair competition inasmuch as it discredits the famous Darjeeling tea and misleads the defendant's patrons as to the nature of the beverages served there." Tea Board at 6. The lower court dismissed the Board's application after finding that the rights created under the Geographical Indications of Goods (Registration and Protection) Act 1999 (the "GI Act") and the Trade Marks Act 1999 (the "TM Act") related only to goods and not in respect of services, and therefore the Board had failed to prove a strong prima facie case. The Board appealed.

Lower Court Did Not Err in Its Decision

In its appeal, the Board claimed that the lower court failed to appreciate the scope of the rights granted to the Board under the GI Act and TM Act for the registration of DARJEELING as a geographical and certification mark, and that the injunction should be granted because ITC had committed the tort of passing off by using the word "Darjeeling," which would confuse consumers into believing the beverages sold in the lounge were associated with the Darjeeling region. ITC argued on the contrary, stating that neither of the Acts granted the Board the right to restrain ITC from naming one of its lounges "Darjeeling Lounge." Further, ITC contended that there was no passing off because ITC was not trading with any goods nor carrying on any business in the name of "Darjeeling." After reviewing the submissions from both parties, the court noted that the Board is not a trader dealing with tea, but an entity created by statute bestowed with the right to certify the use of the geographical indication "Darjeeling" in tea products around the world to guarantee that the product is produced in the defined Darjeeling district, and therefore its rights varied from the owners of registered trademarks which is governed by Sections 28 and 29 of the TM Act. Accordingly, the court found that ITC had not infringed the Board's mark under Sections 75 and 78 of the TM Act.

No Passing Off Committed

With regards to the allegation of passing off, the court found that because the Board did not contend that ITC was attempting to "pose before the public" that it had authority to certify products as originating from the defined Darjeeling district, there was no passing off. Tea Board at 18. In the court's opinion, the lower court ruled correctly when it held that the GI Act did not confer exclusive rights to the Board over the word "Darjeeling" so as to allow the Board to prevent ITC from naming its lounge "Darjeeling Lounge" because the purpose of the GI Act is to "provide for the registration and better protection of geographical indications relating to goods." Tea Board at 21. ITC did not falsely assert that it possessed the right to certify tea products as originating from the defined Darjeeling region, nor did ITC use the Board's logo. Accordingly, the court found that the Board had failed to prove a prima facie case of infringement and dismissed its appeal. Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy. ©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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