“Law Relating to Trademark and Geographical Indication in Protection Formatted: Line spacing: 1.

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of Consumer Rights: Issues & Challenges”

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Thesis

SUBMITTED IN FULFILMENT OF THE REQUIREMENT FOR THE

AWARD OF THE DEGREE

DOCTOR OF PHILOSOPHY

IN

LAW

By

MEENAKSHI DHAIYA

Formatted: Left
 CERTIFICATE
This is to certify that the work titled, “Law Relating to Trademark and Geographical Indication
in Protection of Consumer Rights: Issues & Challenges” submitted in the Maharshi Dayanand
University, Rhotak by Ms. Meenakshi Dhaiya in partial fulfillment of the requirement for the
award of Degree of Doctor of Philosophy in Laws.

Date:
Place: Prof. Ved Pal Singh
Supervisor
Professor of Law
Maharshi Dayanand University
Rohtak
 DECLARATION
I hereby declare that the work titled, “Law Relating to Trademark and Geographical Indication in
Protection of Consumer Rights: Issues & Challenges” prepared and submitted by me to Maharshi
Dayanand University, Rohtak in partial fulfillment for the requirement for the award of Doctor of
Philosophy in Laws Degree, under the supervision of Professor Ved Pal Singh is an original, bona-
fide work completed for an academic interest. This work or any part of this has not been submitted
by me to anyone else for award of degree by this University or any other University. The analysis
drawn by me is exclusive views of my own as it does not represents any views of other person,
organization or community.

Date:
Place: Meenakshi Dhaiya

Maharshi Dayanand University

Rohtak
 ACKNOWLEDGEMENT

Upon successful completion of this dissertation, I would like to place on record my sincere
gratitude towards the people who have been instrumental in its making. I would like to extend my
heartiest thanks to Professor Ved Pal Singh for his valuable inputs, honest remarks and earnest
effort to guide me throughout the drafting of this dissertation. I am highly indebted to the staff of
library to help me find the journals and books. I am also thankful to other officials and office staffs,
who have also extended their help whenever needed. I would like to extend my sincere thanks to
my friends for their review and honest remarks.
 TABLE OF CONTENTS

CHAPTER -1 - INTRODUCTION

[1.1] Introduction

[1.2]. Trademark

[1.3]. Geographical Indication

[1.4]. Consumer Protection & Intellectual Property Rights

[1.4.1]. Consumer Protection through Trademarks

[1.4.2]. Consumer Protection through Geographical Indication

[1.5] Rationale of Study

[1.5.1]. Rationale of Study in respect to Trademark.

[1.5.2]. Rationale of Study in Respect to Geographical Indication

[1.6]. Research Objectives

[1.7]. Scope of Study

[1.8]. Hypothesis

[1.9]. Research Methodology

[1.10]. Limitations of Study

 CHAPTER 2

ANALYSIS OF CONCEPT OF TRADEMARK PROTECTION

[2.1] Introduction

[2.2]. Meaning

[2.3].Overview of Trademark Law in Some Different Jurisdictions

[2.3.1]United States of America

[2.3.2]United Kingdom

[2.4] Brief Overview of Trademark

[2.5]. Value of Trademark and Brand

[2.6]Trademarks in the global economy

[2.7] Global Trademark applications

[2.8]. Trademark applications by Goods and Services

[2.9]Trademark shares by income group

[2.10]. Brands Reputation and Image in the Global Marketplace

[2.11]. Benefits of Trademarks to society (Consumer Perspective)

[2.12]Trademark implication in Nepalese context

[2.13] Conclusion and recommendation

CHAPTER 3

A TRADITIONAL APPROACH OF CONSUMER PROTECTION

[3.1]. Introduction

[3.2]. The Conventional Wisdom About Trademark Law Formatted

Formatted
[3.3]. A Second Look At Early Trademark Protection
Formatted
[A]. Medieval Marks as Liabilities Formatted

[B]. English Trademark Cases

CHAPTER 4

GEOGRAPHICAL INDICATION

4.1. Introduction

4.2. Development of the protection for IGOs

4.3]. Different systems for protection of GIs
[4.4]. Conflicts between GIs and trademarks
[4.5]Trademark system supplementing GI protection
[4.6]. Do current rules efficiently protect and ensure the enforcement of GIs?
[4.7]. GIs and Trademarks – synergies, conflicts and future development
CHAPTER 5

INTERNATIONAL LAW

[5.1]. INTRODUCTION
[5.2]GENERAL PRINCIPLES Formatted: No underline

[5.3]. TRADEMARK PROTECTION IN THE PARIS UNION

[5.4]. TRADEMARK PROTECTION IN THE TRIPS AGREEMENT
[5.5] CONCLUSION
CHAPTER 6

CONFLICT BETWEEN TRADEMARK & GEOGRAPHICAL INDIACATION

[6.1]. Introduction
[6.2] The Classic Case of Budweiser
[6.3]. The Legal Framework
(i) Characteristic 1: Consistent, Unique Quality
(ii) Characteristic 2: Product Origin
(iii) Characteristic 3: Qualities, Reputation, or Other Characteristics Linked to the
Geographical Origin of Goods
[6.4]. Additional Protection for Wines and Spirits

CHAPTER-VII

LEGAL PROTECTION OF
GEOGRAPHICAL INDICATION IN INDIA
7.1 Introduction
7.2 An overview of GI protection in India
7.3 Geographical Indications of Goods (Registration and Protection) Act, 1999 – An analysis
7.3.1 Historical background of the GI Act
7.3.1.1 Socio-Economic Perspective
7.3.1.2 Judicial perspectives
7.3.1.2.1 Basmati Rice case
7.3.1.2.2 Darjeeling Tea case
7.3.1.3 TRIPs and Protection for Darjeeling Tea
7.3.1.4 TRIPs compliance
7.3.2 Analysis of the GI Act

7.3.2.1 Some Salient and Important Features of the Act

7.4 Challenges and Problems in the Post GI Act Regime

7.4.1 Registration status of GIs in India
7.5 Conclusion

CHAPTER-VIII

CONCLUSIONS AND SUGGESTIONS

8.1 Conclusion
8.2 Suggestions
 CHAPTER – 1

INTRODUCTION

[1.1]. INTRODUCTION

This research work on “Law Relating to Trademark and Geographical Indication in

Protection of Consumer Rights: Issues & Challenges” is of immense importance as it deals with
various infirmities and ambiguity in implementation of existing laws. Out of all Intellectual
Property Rights Trademark is the only one which can be retained permanently till its renewal.1
Due to globalization2 the world is at ever-expanding stage and thus some phenomenon changes is
attributed to the inventions for development of trade and commerce.3 It must be examined how a
person feel if someone use your idea or creation and take all credit of it. Intellectual property right
is the key answer to the same. Over the corridors of time the value of Intellectual Property Right
has grown tremendously.

To curtain the inadequacies and unfair trade practices4 present in the present market, the
necessity to amend the current legislation5 regarding trademark has become a need of hour.6

1
AMANDA MICHAELS & ANDREW NORRIS, A PRACTICAL GUIDE TO TRADEMARK LAW, 75 (2002).
2
PITMAN B. POTTER, GLOBALIZATION AND ADAPTATION IN INTERNATIONAL LAW, 117 (2011).
3
M. LAKSHMI NARASAIAH, INDUSTRIAL DEVELOPMENT & WORLD TRADE ORGANIZATION, 5 (2005).
4
WORLD INTELLECTUAL PROPERTY ORGANIZATION, WIPO INTELLECTUAL PROPERTY HANDBOOK: POLICY, LAW AND
USE (2004).
5
Trademark Act, 1999.
6
DEZAN SHIRA & ASSOCIATES, CHRIS DEVONSHIRE-ELLIS SPRINGER SCIENCE & BUSINESS MEDIA, DOING BUSINESS
IN INDIA, 67 (2012).
Companies are spending a lot of money to build the goodwill regarding their product and once the
reputation has been establish they want to get benefit of the same. Similarly Geographical
Indication are some signs, impressions or designations which targets at the indication a product
have relating it to its country, region or area of origin.7 It can be used for almost every kind of
product. But generally Geographical Indications are related to agricultural goods or food stuff.8
Geographical Indications are considered as an instrument for securing the link between product
and its area of origin.9

Thus, the brand name become famous and the trademark is used as a synonym to the
product itself.10 Like for instance “Xerox” have become a synonym for photocopying.11 Similarly
in India many names are used to denote a particular product.12 India being a signatory of TRIPS
agreement13 is under an obligation to incorporate the international law and principles as specified
in the covenants related to intellectual property into its domestic laws.14 By this the older

7
BERNARD O’CONNOR, THE LAW OF GEOGRAPHICAL INDICATIONS, 23 (2004).
8
ALESSANDRO BONANNO, KAE SEKINE & HART N. FEUER, GEOGRAPHICAL INDICATION AND GLOBAL AGRI-FOOD:
DEVELOPMENT AND DEMOCRATIZATION (2019).
9
SREENIVASULU N.S., LAW RELATED TO INTELLECTUAL PROPERTY, 423 (2013).
10
MARY LAFRANCE, UNDERSTANDING TRADEMARK LAW (2009).
11
ROGER PERMAN & JOHN SCOULLER, BUSINESS ECONOMICS, 143 (1999).
12
DALDA has became as a synonym for Vanaspati gee.
13
TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) [hereinafter TRIPS
Agreement].
14
WILLIAM VAN CAENEGEM & JEN CLEARY, THE IMPORTANCE OF PLACE: GEOGRAPHICAL INDICATION AS A TOOL FOR
LOCAL AND REGIONAL DEVELOPMENT, 92 (2017).
legislation15 has been repealed and replaced with the new one.16 Intellectual Property related to
business i.e. Trademark and Geographical Indication not only protects the rights of businessman17
but also ensures safeguard for consumers.18 The question of infringement and passing off arises
when one imitate the reputation of business of true owner to take benefit by themselves.19

By tracing the history the Trademark Registration Act, 187520 of United Kingdom have
created a legal register of trademarks and Trademark registry for the first time around the globe.21
In UK the trademark laws has been consolidated in 188322 and the Trademark Act, 190523 have
first time gave the definition of trademark.24 Further changes have been made in the year 193825
leading to legal changes in trademark registration. With regards to India, proper law has been

15
Trademark & Merchandise Act, 1958
16
Trademark Act, 1999.
17
ANURAG K. AGARWAL, IIMA - BUSINESS & INTELLECTUAL PROPERTY: PROTECT YOUR IDEAS (2016).
18
3 PETER K. YU, INTELLECTUAL PROPERTY AND INFORMATION WEALTH: ISSUES & PRACTICES IN DIGITAL AGE, 94
(2007).
19
Thiruvalluvar Modern Rice Mill, represented by its Managing Partnership D. Balasubramani, Kangayam v. R. B.
Chidambarasamy, 2018 73 PTC 149.
20
Trademark Registration Act, 1875.
21
First Amongst Equals: Review Of the Historical Perspectives of the Trademark Legislation and Registration,
available at https://www.altacit.com/publication/first-amongst-equals-review-of-the-historical-perspectives-of-the-
trademark-legislation-and-registration/#sub_1.
22
John Mercer, A mark of distinction: Branding and trade mark law in the UK from the 1860s, 52 BUS. HIS. 17-42
(2010).
23
Trademark Act, 1905 (older UK trademark statute).
24
ROCHELLE COOPER DREYFUSS & JUSTINE PILA, THE OXFORD HANDBOOK OF INTELLECTUAL PROPERTY, 280 (2018).
25
UK, Trademark Act, 1938 (Changes were Made in this enactment).
enacted in 1999,26 which replaced the existing legislature, the Trademark and Merchandise Act,
1958.27 Government of India have also framed Trademark Rules, 200228 which came into force in
the year 2003.29 This rules has been made to ensure adequate protection of domestic and
international brand owner which is in compliance with the Trips agreement.30 For proper analysis
a brief of trademark, Geographical Indication and consumer protection has been drawn below.

[1.2]. TRADEMARK

With India being a signatory of TRIPs Agreement, protection of trademark and

incorporating the same in domestic laws have become a mandatory task for India. Protection of
trademark in India includes, protection of distinguishing marks, registration, registration and
protection for service marks, abolishment of licensing of trademark and periodical renewal of
trademark.

With rapid growth in globalization, the value of marks, brand names, trademark have
gained immense value which need efficient protection and minimum standards for enforcement of
trademark rights as recognized and enshrined under TRIPs Agreement. In consonance of the same
extensive review and overall analysis was conducted to amend the Trademark and Merchandise
Act, 1958 and replaced it with Trademark Act, 1999. With some more subsequent amendments in

26
Vijay Pal Dalima, “Trademark Law in India – Everything You Must Know,” MONDAQ, available at
http://www.mondaq.com/india/x/127680/Trademark/Trademarks+Law+In+India+Everything+You+Must+Know
27
Id.
28
Trademark Rules, 2002 (India).
29
New Elements in Trademark Act, 1999, available at
http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_107_1_new-elements-in-the-trademarks-act-1999act.pdf
30
TRIPS Agreement, Supra note 13.
the present Trademark Act, 1999 it sets in accordance with the TRIPs and other International legal
obligation of India. Present Trademark Act, 1999 provides for registration for trademarks as well
as service marks, increment in term of registration and also the recognition of well-known
trademarks. Indian Judiciary’s view is also proactive for protection of trademark and extended this
protection even for domain names as illustrated in landmark judgment of Tata Sons Ltd. v. Manu
Kosuri & Ors.31

India Being a country to follow common law country, is also following common law
principles and not just codified law, thus the present Trademark Act, 1999 recognize both claim
of infringement and passing off.32

Thus a trademark is a sign or symbol that denotes a particular product and distinguish it from its
competitors. Some of the types of trademark which are known in the international market is given
below –

31
Tata Sons Ltd. v. Manu Kosuri & Ors, 90 (2001) DLT 659; Yahoo Inc. v. Akash Arora, 1999 PTC 201.
32
Section 135, Trademark Act, 1999.
 The abovementioned is an example of evolution of trademark of PEPSI which evolved
with time. Similarly some other examples of passenger car trademark which are known to the
international market is Mercedes and Audi

[1.3]. GEOGRAPHICAL INDICATION

 It is a sign which was used with a product to denote its specific geographical origin.
Geographical Indication is basically granted to agriculture goods, handicraft items or naturally
manufactured goods from a definite region or locality.

“Indications which identify a good as originating in the territory of a Member, or a region or locality in
that territory, where a given quality, reputation or other characteristic of the good is essentially
attributable to its geographical origin.”33

The Abovementioned definition was given by virtue of Article 22 of TRIPs Agreement.

Subsequently after becoming a signatory to TRIPs Agreement, India comprehensively conducted
research and consolidate some principles related to Geographical Indication and enacted in 1999
to abide by the obligations under TRIPs Agreement. The Geographical Indication of Goods
(Registration and Protection) Act, 1999 is the present legislation dealing with the same. The aims
and objective of the enactment is as follows –

 By forming special law for geographical Indication for goods it aim at providing adequate
protection for the manufacturers of such goods.
 For consumers protection from getting deceit from the unauthorized users and excluding
them from using Geographical Indication.
 It aims at promoting the goods of Indian geographical Indication in international market.

A registered geographical indication eliminates uses by third party to use such GI by any
type of presentations of goods that indicate a particular origin.

33
Article 22, Agreement on Trade Related Aspects of Intellectual Property Rights.
 For Protection of consumers as well as manufacturers Trademark and Geographical
Indication both were Industrial Properties which restricts the unauthorized use of these two
Industrial Property by others.

Some of the Geographical Indications which are registered and present in India are shown by a
single image below –
 These above mentioned are some of the Geographical Indications registered in India. This
single image is embodied with most valuable Products of Indian origin. The detailed analysis of
all these products which have geographical Indication in India is done latter in specific chapter
related to legal protection for geographical indication in India. International Law related to this
also recognizes the products mentioned above in the picture.

[1.4]. CONSUMER PROTECTION & INTELLECTUAL PROPERTY RIGHTS

For enhancement of economic growth in any country a necessary condition is presence of

strong Intellectual Property Legal Regime.34 It helps in providing protection for consumers from
unfair trade practices.35 Presence of such rights in a market is an essential precondition for overall
development of any nation.36 The main work of legislation is to curb the unfair trade practices and
protect innocent consumers from unscrupulous manufacturers.37

[1.4.1]. CONSUMER PROTECTION THROUGH TRADEMARKS

34
WORLD INTELLECTUAL PROPERTY ORGANIZATION, DEPARTMENT FOR TRANSITION AND DEVELOPED COUNTRIES,
ECONOMIC ASPECTS OF INTELLECTUAL PROPERTY IN COUNTRIES WITH TRANSITION, available at
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_transition_8.pdf
35
DEBORAH E. BOUCHOUX, INTELLECTUAL PROPERTY: THE LAW OF TRADEMARK, COPYRIGHT, PATENTS, AND TRADE
SECRETS, 20 (2012).
36
KAMIL IDRIS, HISAMITSU ARAI & WORLD INTELLECTUAL PROPERTY ORGANIZATION, THE INTELLECTUAL
PROPERTY-CONSCIOUS NATION: MAPPING THE PATH FROM DEVELOPING TO DEVELOPED (2006).
37
Haines, Charles Grove. “Efforts to Define Unfair Competition.” 29 YALE L. J., 1–28 (1919).
 Trademark act as a link between consumers and manufacturer of a product.38 In the present
era consumers demand safety and quality of product,39 thus trademark is a system of assuring such
demands.40 In furtherance of the same trademark helps manufacturer to distinguish its product
from its competitors,41 and with this it makes consumers fully aware of the quality and attributes
of the product.42 It protects consumers and ensures them to identify and locate the product while
conducting a little research. Protection of trademark ensures that consumers would not get deceit
from similar marks which provide low quality product. The quality of the product is associated
with its brand name which is a virtue of trademark. Good quality product tends consumer to again
use the same product for experiencing same quality product.43

Similarly, the trademark protection tends to protect goodwill of the business associated
with its consumers.44 The legislation seeks to provide clarity over the goodwill and brand image
of the business for the consumers when they are evaluating the product with its competitors.

[1.4.2]. CONSUMER PROTECTION THROUGH GEOGRAPHICAL INDICATION

38
Martand Nemana, Joint Ownership of Trademarks, MONDAQ (2017), available at
http://www.mondaq.com/india/x/600602/Trademark/Joint+Ownership+Of+Trademarks
39
WILLIAM M. WADMAN, VARIABLE QUALITY IN CONSUMER THEORY: TOWARDS A DYNAMIC MICROECONOMICS
THEORY OF THE CONSUMER (2000).
40
IRENE CALBOLI & EDWARD LEE, TRADEMARK PROTECTION AND TERRITORIALITY CHALLENGES IN A GLOBAL
ECONOMY (2014).
41
GRAEME B. DINWOODIE & MARK D. JANIS, TRADEMARK AND UNFAIR COMPETITION: LAW & POLICY (2013).
42
Amit Singh, Tulip Suman & Thripura V., Interface and Synergies between Intellectual Property Rights and
Consumer Protection Law in India: An Analysis, 20 J. INTELL. PROP. 201-209 (2015).
43
Section 28 (2) of the Trademark Act, 1999.
44
THOMAS G. FIELD, TRADEMARK AND BUSINESS GOODWILL, 7 (1990).
 Geographical Indication helps consumers to identify the source of origin of a particular
product. This indication leads to determination of quality, reputation and other essential
characteristics of a good that are due to the place of origin. Imitation or duplication of any product
is harmful for both consumers as well as producers of that particular product. The consumers got
deceive by the duplication of such Geographical Indication as they buy it considering an original
one. Similarly producers brand image got harmed and it leads to loss in business for them.

There were certain benefits which were conferred by enactment of Geographical Indication
(Registration and Protection) Act, 1999 in India –

 It provides for registration of Geographical Indication in India, which provides legal

protection of particular product. This essentially led to increase in exports and would lead
to economic boost.
 Prohibits unauthorized use of such Indication by others.
 Leads to welfare of consumers by protecting the reputation and quality of a product.

Thus, both trademark and geographical indication are essential industrial property, not just
from the perspective of manufacturers but also for consumers. The consumer protection dimension
of Intellectual Property is needed to be properly formulated around the globe. In India also the
willingness of consumers for a better protection was demonstrated by Indian Judiciary as it have
opinioned many times in favor of consumer rights. Indian Judiciary has viewed Intellectual
Property especially trademark and Geographical Indication as a means for consumer protection.45

45
Reckitt & Colman of India Ltd. v. Kiwi T.T.K. Ltd., 63 (1996) DLT 29; N.R. Dongree & Ors. v. Whirlpoorl
Corporation and Anr., 1996 PTC (16) 583 (SC).
Intellectual Property is considered to be most vital role for protecting consumers’ rights around
the International Market.

[1.5]. RATIONALE OF STUDY

This research study is conducted to bring forth the issues and challenges which were
associated in law of Trademark and Geographical Indication. This research work gives a detailed
analysis of concepts related to these two most valuable Intellectual Property Rights and their
working for protection of consumers and manufacturers rights. The research work is focused upon
trademark and Geographical Indication thus the author would like to separately give the rationale
of both.

[1.5.1]. RATIONALE OF STUDY IN RESPECT TO TRADEMARK.

Trademark Act, 1999 is the present law dealing with Trademark Protection in India.
Trademark is an intangible asset and of most significance importance for any business. Brand
image of any business is associated with its trademark and it helps in establishing strong social
status of any product in the market. Once such brand image is construed in the market it starts to
give profitable margins to the manufacturer. Therefore not only financial benefits of trademark
were present but it also helps in establishing social status of any business.

But now due to expanding technologies and new emerging concepts these trademarks are
being subject to infringement and passing off. Thus with help of this research work I would like
to critically analyze the working of trademark law. Similarly the traditional protection of trademark
which is also providing protection for consumer rights have now been changed and manufacturers
are totally concerned about profit maximization with help of their trademarks. Many Trademarks
in the present era have become a symbol of Social Status and Luxury.
[1.5.2]. RATIONALE OF STUDY IN RESPECT TO GEOGRAPHICAL INDICATION

Large number of local community persons from backward classes in India are indulge in
generating and manufacturing of some products which have some specific characteristics of their
geographical origin. Likewise the protection accorded to Darjeeling Tea have helped in social
development of such area. Therefore with growing globalization many new products can be
introduced to the International Markets and those products need to be protected to protect the
interest of socially and economically backward classes who are involved in production of such
products.

Geographical Indication is a kind of extension for protection to products and interest of the
owners and producers of such products. Thus this research work will analyze the case studies of
some selected product which have some special characteristics of geographical origin of Indian
region. This helps in economic development of such regions.

[1.6]. RESEARCH OBJECTIVES

The objectives of research are based on the issues and challenges which were faced by the
Law of Trademark and Geographical Indication to achieve protection for Manufacturers and
Consumers. Thus the Objectives are –

 To conduct an analysis for evaluating the current level of protection for trademark and
Geographical Indication and it’s practical in the market.
 Consumer protection analysis through these two branches of Industrial Property that is
Trademark and Geographical Indication.
 This research is conducted with an aim of providing historical evaluation of trademark law
with special reference to India.
  To compare the Indian Legislation with that of other Jurisdiction specifically for
Trademark and Geographical Indication.
 To analyze the International Law related to these two branches of Intellectual Property
Law.
 Judicial perspective is also evaluated for the purpose of this research thesis, hence the IPR
Litigation was thoroughly examined.
 This research work will analyze the effects of International law and its practical implication
on Indian region.
 Further this research study will also examine the judicial trends towards consumer
protection through trademark and geographical indication in India.
 The consumers Interest protection is also examined along with protection for trademark
and geographical indication.
 Similarly the drawbacks and backdrops of Indian Legislation is also discussed in latter half
of this research work.
 Some recommendations and suggestions were also drawn at the end of this research work.

Lastly, with the help of this research work, I have analyzed and examined all the relevant
literature and laws present on the topic to prepare a well-explained research note.

[1.7]. SCOPE OF STUDY

Intellectual Property have all the attributes which normal tangible property have and need
protection. In India Intellectual Property is still at its developing stage. With the technological
advancement many new practical aspects have emerged thus each aspect need to be studied. Only
formulating laws in not enough for protection of Trademark and Geographical Indication. It need
to be assessed from the dimension of consumer protection.
 The question arises about the adjudicatory mechanism in India, for this the author have
bring forth some case analysis and case studies. All the literature present from national and
international perspective have been examined for this research work.

TRIPs Agreement have already laid down protection for Trademark and Geographical
Indication. But the same was not enough for protection of the same in India. Further, this protection
for trademark and geographical indication have seen to be only in papers, and no practical
implementation is possible due to lack of administrative authorities.

Therefore, the scope of this study revolves around all the possible relevant legislature
present and also the case analysis and case studies were examined to support the laws. Further the
theoretical framework and views and opinions of some highly publicist jurist were also taken into
account for reaching to a conclusion so that issues and challenges present in trademark and
geographical indication legal regime could be assessed. These issues and challenges were bring
forward and all the possible recommendation present is given in this thesis.

Thus, in furtherance of such scope a proper research question was formulated below.

[1.8]. HYPOTHESIS

The main question arises that whether the national and international legal framework for
trademark and geographical indication is effective and sufficient enough to exhaustively deal with
consumer and manufacturers protection?
 Similarly the shift from traditional approach of consumer protection aspect of trademark is
also dealt in the present research analysis. Thus the research work revolves around consumer and
manufacturers’ interest and investments.

[1.9]. RESEARCH METHODOLOGY

The research methodology adopted by the author is doctrinal and both primary as well as
secondary sources were assessed for examining and analysis of trademark and geographical
indication for protection of interest of consumers and producers. For the purpose of this research
provisions of TRIPs Agreement, Paris Convention & Madrid Protocol was done along with the
provisions of domestic laws. Further views of some jurist were taken into consideration and thus
Books and Articles of many peer reviewed Journals were taken into consideration to reach out the
conclusions of this research work. For the fulfilment of this research study, the author used 20th
edition of bluebook system of citation and footnoting.

[1.10]. LIMITATIONS OF STUDY

This research study is restricted to multilateral treaties for the protection of Geographical
Indication and Trademark. Especially TRIPs Agreement was taken into account for such analysis.
Similarly the provisions of Indian Laws were also assessed along with taken consideration of some
foreign laws.

[1.11]. REVIEW OF LITERATURE

For the purpose of this research study, the researcher have extensively reviewed and used
as many books which are available on Intellectual Property and specifically on trademark and
geographical indications. To analyze the current trends and jurisprudence of trademark and
geographical indications, international conventions and treatise were used. Agreement on Trade
Related Aspects of Intellectual Property is the primary International Instrument referred by the
author for proper understanding of the concept.

For understanding the concept of legal protection and meaning of trademark some books
like - The Trade And Merchandise Marks Act 1958 by K S Shavaksha, WIPO, Intellectual Property
Handbook: Policy, Law and Use, (2008) & Richard Stim, Intellectual Property: Patents,
Trademarks, and Copyrights, (1994) were extensively used by the author.

Similarly other aspects related to the Trademark were also discussed in this research work
which are analyzed with the help of some research work like - WIPO, Introduction to Trademark
Law & Practice – Basic Concepts: WIPO Training Manual (1993), Philip Sandner, The Valuation
of Intangible Asset: An Exploration of Patent and Trademark Portfolio, (2010), T.R. Iyengar &
H.S. Saharay, Commentary on Trade Marks Act (5th ed. 2016).

The researcher have also taken into consideration the peer review journals and many
publications of the World Intellectual Property Organization which have views of many jurists.
The Articles used and referred for better understanding of the concepts are the most helpful one
which results in fulfillment of this thesis work. Views of Irene Calboli, is the most valuable one as
it is seen in research work like Trademark Assignment "with Goodwill": A Concept whose time
has gone. 57 FLORIDA L. REV, 771-842 (2005), and also books of the same author like, Trademark
Protection and Territoriality Challenges in a Global Economy (2014) & The Protection of Non-
Traditional Trademark: Critical Perspectives, 213 (2018) plays a major role in concluding this
research study.

In contrast to this in terms of Geographical Indication there is not as much literature

available as it is for Trademarks. Thus the TRIPS Agreements stands as the first one to give
definition of Geographical Indication and also have given some sought of first norms for protection
of Geographical Indication set at international level. Geographical Indication provide socio-
economic development of products as well as they also sought extension of the concept of
traditional knowledge in Intellectual Property Rights.

For completion of this research thesis many laws and perspective of different jurisdictions
were also taken into consideration. The researcher provided many examples of law and other legal
aspects for the concept of trademark and geographical indications through many books like – The
Economics of Geographical Indication by Daniela Benavente published in 2013 and also through
World Trade Organization’s published work named as Geographical Indication: An Introduction
in 2013.

Consumers are also directly as well as indirectly related to these two branches of
Intellectual Property Rights. Thus examination of the same is also needed. For this books like
Consumer Protection in the Age of Information Economy by Jane K. Winn is also referred along
with The Average Consumer in Confusion based Dispute in European Trademark and similar
fictions by Rasmus Dalgaard Laustsen. This book by Rasmus Dalgaard Laustsen is the new work
describing the consumer protection importance through trademarks.

Similarly the Consumers interest in the intellectual property rights is also a concept need
to be explained. Liability for Anti-Trust and Protection of IP a joint work by Pranvera
Këllezi, Bruce Kilpatrick, Pierre Kobe is the one which can easily explain the consumer’s interest
in Intellectual Property and especially trademarks and geographical Indications. Similarly the work
concluded by National Research Council, Policy and Global Affairs, Office of International
Affairs in the name of Global Dimensions of Intellectual Property Rights in Science and
Technology describes this concept properly.
 Careful examination of each concept is necessary to be done for which secondary sources
are extensively used by the author and so thus the research study is a work giving brief about all
legal aspects of trademark and geographical indication present for consumer protection in India
and reference of other jurisdictions were also taken. Some case analysis and case studies were also
put forward by the author so the complete understanding of the concept can be done and the
targeted legal practitioner could be helped with such thesis.

Judiciary also have a major hand in developing the law of trademark and geographical
indication in India. Thus analyses of the cases of Supreme Court and various High Courts have
become necessary. In this research thesis many cases were also referred for providing complete
analysis of the concept targeted by the author. These cases were of immense importance and highly
valuable for concluding and developing the law related to these two branches of Intellectual
property
 CHAPTER 2

ANALYSIS OF CONCEPT OF TRADEMARK PROTECTION

[2.1] INTRODUCTION

Trademark law is introduced to prevent the confusion in consumers and protecting the interest of
producers and there investment in the business by protecting the brand name. Business entities
were spending millions to protect their brand identity and this is also preventing the confusion in
consumers for closely substitute products. Therefore consumer do not want to be confused while
purchasing any product and rely on the mark for its basic characteristics and qualities.46

[2.2]. MEANING

In simple language Trademark can be defined as a visual symbol which distinguishes one good or
service from that of their competitors. This term “visual symbol” denotes a vast variety of things
or even their combinations like word, letters, pictures, devices, arbitrary and fanciful designations,
symbols, slogans, numbers and their combinations etc. Thus, a trademark is any kind of symbol
which individualizes good/service of one manufacturer.47 In India section 2 (1) (zb) read with

46
Nard Barnes Madison , The Law Of Intellectual Property, 19 (3rdEdn, 2011 Aspen Publishers)

47
WIPO, INTELLECTUAL PROPERTY HANDBOOK: POLICY, LAW AND USE, 68 (2008).
section 2 (1) (m) of Trade Marks Act, 1999 provides an exhaustive definition of Trademark. To
gain legal protection a trademark must have some characteristics and features.

 It can be a sign, symbol, picture, heading, word or combination of every visual thing.48
 It must be capable of separating the identity of one legal entity’s product/service from those
of its competitors.
 A trade mark must be used in connection with some product or service and the right to use
it by some of the persons.
 Right to use a trademark can be acquired by registration under the Trade Marks Act, 1999
or by use in relation to the product or services. Thus this right is present in both Common
Law as well as Statutory Law.

A trademark is sometimes used by other terms also, we would look into some terms which were
used to denote trademark or it can be also termed as types of trademark.

1. Service Mark – “Service Mark” is also have similar characteristics to Trademark, the only
difference is that a trademark is used in relation to good and the other one is used in relation
to service. Similar to the trademark a service mark is used to indicate the service of one
legal entity and helps in distinguishing it from services of other legal entities. The main
role of service mark is in marketing and publicity of a person’s service and also in referring
to the standard or quality of the service. Section 2 (1) (z) of the Trade Marks Act, 1999
describes service as of any description and includes services of any industrial or
commercial matters.

48
Section 2(1 )(m), The Trade Marks Act, 1999.
 2. Collective Trademark – a collective trademark as the name suggest is acquired collectively
means by an association, union or any other type of collective group. This can be a trade
mark as well as service mark, and the same can only be used by the members of the group
only. Collective Trade is defined under section 2 (1)(g) of the Act, as a trademark which
can be used by the members of the owner group and distinguishes other good or service,
along with restricting non-members from using the “mark”.
3. Certification trademark – it is a criteria to indicate consumer that a particular mark fulfils
the standards in terms of quality, geographical origin or suitability. Section 2 (1) (e) of the
Act defines the same about certification trademark. Product meeting standards were
certified by the Bureau of Indian Standards. It is a evidence that some act has been initiated
for registration of trademark.
4. Well – known Trademark – cross – border protection of trade mark is also important, and
a well-known trademark must be understood in that sense. A well-known trademark
constitutes a mark which can be even substituted with the product or service as consumers
start recognizing the product from the name of well-known trademark. This concept of
well-known trademark was first introduced in Article 6 of Paris Convention for the
Protection of Industrial Property, 1883. This creates a prohibition on member countries to
allow any use of trademark constituting a reproduction, imitation or translation that can
create confusion in mind of consumers related to a mark which was registered in a different
jurisdiction or was a well-known trademark in a particular country. In Indian legislation
definition of a well-known trademark is envisaged under section 2 (1) (zg) of the Trade
Marks Act, 1999.

Types of Trademark can be easily explained by visual representation below -

[2.3].OVERVIEW OF TRADEMARK LAW IN SOME DIFFERENT JURISDICTIONS

Under this section I would analyze laws of some selected countries where trademark law have
more strengthened and evolved one as compared to other nations.

[2.3.1]United States of America

As a country of Common Law Jurisdiction, trademark protection in United States is based on use
instead of prior registration as it was seen in civil law countries. In United States the concept of
Trademark is different from patent and copyright. In contrast United States Constitution provides
protection of both patent and copyright but the same was not present in any form for trademark.
State and federal laws are here to govern trademark in United States. Federal trademark authority
is the first initiative by the congress to act in protecting trademark. Lanham Act, which is the
current legislation was dealing with trademark in United States also codified the common law of
trademark. Since this federal trademark law have evolved and expanded consistently, as the
Lanham Act was enacted in 1946 and most recently amended in 1996. Thus, in the present time
federal trademark law act as the main source of law whereas state common law actions for
trademark infringement were still present.

Lanham Act

Title 15 and chapter 22 of the United States Code is envisaged with the Lanham Act along with
the federal statutes dealing with trademark. It provides a system of registration for trademark
owners and protects the right of trademark owner by restricting the use of similar mark that can
lead to confusion in the consumers. This Act creates restricting and considered various activities
as illegal including trademark infringement, dilution and false advertisement. Lanham Act is
divided into four parts. First part dealing with registration process on the principle register along
with restriction on registration of some types of mark which are immoral, create disparage,
scandalous or deceptive and fall in other prohibited category.

The mark which cannot be registered under subchapter I of Lanham Act can be registered under
supplement register on the basis of registerable in future. Subchapter II of Lanham Act provides
such type of registration in the supplement register. Subchapter III is the heart of the Lanham Act
as it provides the main provision. Subchapter III contains section 42 and 43 which provides for the
remedies for trademark infringement. Lastly, subchapter VI sets forth the principles of Madrid
Protocol and was inserted in the principle legislation later on. This Act was named after
Representative Fritz G. Lanham of Texas. The scope of the same is exclusive and concurrent with
the state Common Law.

[2.3.2]United Kingdom

In United Kingdom laws related to Trademark is in existence over 100 years and the current law
governing trademark is Trademark Act, 1994. The introduction of this act was through the EC
Council Directive of 21st December, 1988, to properly establish as legal regime of trademark laws
of Member States. This repealed the earlier legislation of 1938 also. This new legislation have
repealed the earlier one in its entirety but still some of the provisions are similar till now. In
England after the introduction of this new legislation made trademark as personal property, and in
Scotland it is considered as incorporeal moveable property.49 Generally the difference between
both the Acts is from registration point of view. The 1994 Act creates a presumption that if there
is no objection to the mark registration cannot be cancelled. In contrast to this, the 1938 Act place
a burden on applicant to show why his or her trademark should be registered. The two parts of the
1938 act have been abolished and replaced with only registration process. Similarly, the provisions
related to assignation and licensing have also changed and the provision related to assignation was
replaced without any restriction and now it can be done without goodwill. And for the licensing
the restriction related to quality control and all was also abolished.

The 1994 Act also deals with other issues along with the rules associated with it including
the Community Trademark also. The new thing is provisions related to providing a mechanism for

49
Section 11 (2)(b), Trademarks Act 1999.
rectification of provisions in Madrid Agreement and its protocol,50 signed by UK on 28th June
1989. The specific thing which was included in the 1994 Act is to meet the obligation of UK under
the Paris Convention for Protection of Industrial Property of 20th march 1883.51

Some Lacunas in the 1994 Act

The provision related to store names was not even mentioned in the new Act of 1994. The
Government have refused the claim of protection must be granted for the goodwill associated with
it, but it is separable from the service provided by it. 52 Similarly there no grounds set for
registration of trademark can be done in special circumstances. And the registrar is also authorized
to refuse the use of variants if applicants were not able to show that variants are used by the owner.
Despite this provision nowhere in the legislation discretion was given to the registrar. And in
contrast the previous legislation have given the power to the registrar to decide whether to register
the mark or not. Likewise, a registrar can refuse to register a trademark if in his view he thinks a
trademark is a “danger to public health.” And now the registrar is no longer allowed to use his
discretionary power in trademark registration.

Common Law

In UK an unregistered can also be protected under the common law doctrine of passing off, till the
mark is in use by the service provider or manufacturer. In UK it is not mandatory to register a

50
Sections 53 and 54 of the 1994 Act provides for incorporation of Madrid Agreement for the International
Registration of Marks 1981 together with the amending Madrid protocol 1989 into UK Law.

51
Sections 51- 60 of the 1994 Act.

52
Harrods Ltd v. Harrodian School Ltd., [1996] EWCA Civ 1315.
trademark. In ErvenWarnick BV v. J.Townend & Sons (Hull) Ltd,53 the criteria for action of passing
off was introduced and properly laid down. For successful action of passing off, the representation
made by the trader to the customers or potential customers, which is affecting or can affect the
goodwill of another trader or causes damage to its business. In instances of successful claims
mostly plaintiff’s company name was used by the other competitor to create confusion in the mind
of customers.54 Use of such name by unregister manufacturer or service provider and this could
damage the brand image55 of the registered owner as well the product’s image in mindset of
consumers.56

Due to the extent of protection available in the new Act of 1994 the importance of passing off in
common law has been declined. This action of passing off is available in common law only in such
circumstances where the 1194 Act is unable to do so.57 Like if the mark was registered under 1994
Act.

[2.4] BRIEF OVERVIEW OF TRADEMARK

There was no Trade Marks Act in India until 1940, when the present Act (The Trade Marks Act
(No. V) of 1940) was passed, to provide for the registration and more effective protection of
trademarks in India. Soon after the passing of the United Kingdom Trade Marks Act in 1875, there

53
[1979] AC 731.

54
Harrods Ltd v. R Harrod Ltd [1924] 41 RPC 74.

55
Interlego AG v. Tyco Industries Inc. [1989] AC 217.

56
Reckitt and Coleman Products Ltd. V. Borden Inc. [1990] 1 All ER 873 HL.

57
ANNAND AND NORMANN, BLACKSTONE’ GUIDE TO THE TRADEMARKS ACT 1994, 13 (1994).
was a request from the Millowners' Association of Bombay and the Bombay Chamber of
Commerce to the Government of Bombay in 1877 to introduce in the local Legislative Council a
Trade Marks Bill along the lines of the United Kingdom Statute. Owing to the advisability of
having central legislation on such an important matter, the Government of Bombay referred the
matter to the Government of India and the latter circulated in 1879 a Trade Marks Bill and another
modified Bill in 1880 for public opinion, both of which received considerable opposition from the
commercial communities. It was not until the post war period of the First World War that the
commercial public in India began to realize the utter inadequacy of the protection afforded to
trademarks in India. Ineffectual attempts were made in 1927 and 1933 to bring to the notice of the
Government by resolutions of influential commercial associations and interpellations in the Indian
Legislative Assembly the extreme difficulties of the Indian merchant community to carry on their
trade, in the absence of proper trademark legislation in the country.

The Government of India ultimately responded in 1937, by circularizing the provincial

governments and commercial bodies a memorandum, dated February 25, 1937, setting out the
broad outlines of the proposed legislation on trademarks. Subsequently a Trade Marks Bill was
drafted in the light of the opinions received on the above memorandum, which after requisite
circulation for public opinion, was formally introduced in the Central Legislative Assembly, on
September 19, 1939 and passed by it on February 15, 1940. The legislation received the assent of
the Governor General on March 11, 1940, as the Trade Marks Act, 1940. Before the enactment of
the above legislation, the principles of infringement action in respect of trademarks had already
been included in Section 54, illustration (a) of the Specific Relief Act of 1876, but the commercial
public did not avail itself of this provision, perhaps owing to their erroneous belief that there could
be no cause of action without proper registration of a trademark under a Trade Marks Act. This
mistaken view has, however, now been removed by the decision of the Supreme Court in India in
1952, to the effect that under Section 54 of the Specific Relief Act, the Court had the discretion to
grant a perpetual injunction for infringement of a trademark, since a trademark was as much
property for the purpose of Section 54 as any other kind of property. The original Act consisted of
85 Sections, of which Sections 1 and 85 came into force immediately after enactment and the
remaining provisions of the Act were enforced by the Central Government on June 1, 1942.

Under Section 85 of the Act, a deposit scheme was introduced by the Government of India to
enable intending applicants to deposit trademarks, before the coming into force of the remaining
provisions of the Act. About 158,000 trademarks were deposited, of which 120,000 were in respect
of textile goods and about 38,000 were in respect of nontextile goods. The Trade Marks Rules,
1942, came into force on June 1, 1942. Important alterations were subsequently made in the Act
by the Trade Marks (Amendment) Act of 1943. The main office for the registration of trademarks
was transferred from the Patent Office at Calcutta to the Trade Marks Registry at Bombay, where
arrangements were made for the maintenance of a single Register. A Branch Registry Office was
established at Calcutta for facilitating registration of local trademarks, with a copy of the Bombay
Register and the Refused Textile Marks List kept there for inspection by the public. A new Section
86 was also incorporated in the Act, validating all proceedings previous to the aforesaid
Amendment of the Act. Certain definitions have been given in the beginning of the Act, in respect
of particular terms used therein. In Section 2(1) of the Act, a "trademark" has been defined as a
mark used or proposed to be used in relation to goods, for the purpose of indicating or so as to
indicate a connection in the course of trade between the goods and some person having the right,
either as proprietor or as registered user, to use the mark, whether with or without any indication
of the identity of that person. Notwithstanding this exhaustive definition, a trademark, consisting
of a well-known invented word, may also be registered under Section 38 of the Act as a defensive
trademark, in respect of goods in relation to which the proprietor of the mark does not use or
propose to use the mark. A "mark" under the Act includes a device, brand, heading, label, ticket,
name, signature, word, letter or numeral or any combination thereof.
A mark may also consist of any combination of the elements enumerated in the definition.
"Associated trademarks" means trademarks deemed to be, or required to be registered as associated
trademarks under the Act. A "certification trademark," as defined in the Act, signifies a mark
adapted in relation to any goods to distinguish in the course of trade, goods certified by any person
in respect of origin, material, mode of manufacture, quality, accuracy or other characteristic, from
goods not so certified and registrable as such, under relevant provisions of the Act, in respect of
those goods in the name, as proprietor of the certification trademark of that person. It is clear from
the above definitions that since a "certification trademark" has been separately defined in the Act,
it is not included in the expression "trademark." "Registered trademark" means a trademark which
is actually on the Register, kept for the purpose under the Act. Before the enforcement of the Trade
Marks Act, 1940, the only way of acquiring title to a trademark in India was through public use of
the mark. After the passing of the Registration Act of 1908, it was the general practice to have
registration of declaration of ownership of a trademark under the above Act, which resulted in a
mistaken belief held by the commercial public, that such a registration would constitute a legal
proof of the declarer's title to the mark. These registered declarations and many foreign trademarks
were also wrongly described in India as "registered trademarks." In this connection it may be noted
that under Section 68 of the Act, any representation with respect to a mark, not being a properly
registered trademark, is deemed to be a penal offence.

As stated in the preamble, the object of the Act is to provide for the registration and more effective
protection of trademarks in India. It has therefore been provided in Section 3, that the provisions
of this Act are in addition to and not in derogation of any provisions of the common law or any
other statute laws for the time being in force, which relate to trademarks, e.g. the Specific Relief
Act, the Registration Act, the Indian Merchandise Marks Act and the Sea Customs Act. Further
the wrongful use of the word "registered" in relation to a trademark applied to goods, may
constitute a false trade description within the meaning of the Merchandise Marks Act. For the
purpose of registration under the Act, goods have been classified into 34 classes in the Fourth
Schedule of the Trade Marks Rules, 1942, mainly on the lines recommended for adoption by the
International Union for the Protection of Industrial Property at their conference held in London in
1934. The Registrar's decision about the determination of the specific class within which any goods
fall is final and there can be no appeal to the High Court from such a decision.

Registrable trademarks under the Act constitute two broad groups, viz. (1) marks which are
inherently "adapted to distinguish," and (2) marks which are prima facie not inherently "adapted
to distinguish," but are not incapable of being so "adapted to distinguish." In the first group are
included trademarks, consisting of at least one of the following essential particulars, namely (a)
the name of a Company, individual or firm, represented in a special or particular manner; (b) the
signature of the applicant for registration or some predecessor in his business; (c) one or more
invented words; (d) one or more words having no direct reference to the character or quality of the
goods, and not being according to its ordinary significance, a geographical name or surname or
the name of a sect, caste or tribe in India. Marks falling in the aforesaid group are registrable
without any evidence. Whereas trademarks enumerated in the second group, consisting of a name,
signature or any words other than those detailed in the above clauses, are not registrabie except
upon evidence of their distinctiveness. It may so happen that the mark does in fact distinguish the
goods of the applicant, in which case the tribunal may be guided by evidence as to the extent to
which actual use has made the mark really distinctive. The question whether a trademark, although
not inherently distinctive, is in fact distinctive because of the use of the mark or of any other
circumstances, is in each case a question of fact. Marks which are incapable of being so "adapted
to distinguish," are liable to be refused notwithstanding evidence of use. But an exception has -
been made in the Act, in the case of a trademark which has been continuously used in respect of
the same goods as those in relation to which registration is applied for, during a period from a date
prior to the 25th day of February 1937, to the date of application for registration, in which case the
Registrar shall not refuse registration by reason only of the fact, that the trademark is not so adapted
to distinguish, and may accept evidence of acquired distinctiveness, as entitling the trademark to
registration. An application to register a trademark should contain a statement of the period during
which and the person by whom it has been used in respect of the goods mentioned in the
application. The Registrar may require the applicant to file an affidavit testifying to such use, with
exhibits showing the mark as used.

The forms prescribed for ordinary trademarks may also be used for application in respect of "old
marks." In this connection it should be noted that a foreign trademark, in spite of its being duly
registered in the country of origin, must satisfy the requirements of the domestic law as detailed
above, in order to entitle it to protection in India, since there is likelihood of such a mark causing
confusion or deception in the latter country.

The Trade Marks Act prohibits the registration of trademarks which consist of or contain, any
scandalous design, or any matter the use of which would (a) by reason of its being likely to deceive
or to cause confusion or otheiwise, be disentitled to protection in a Court of Justice or (b) likely to
hurt the religious susceptibilities of any class of citizens of the Indian Republic or (c) be contrary
to any law for the time being in force or to morality. Trademarks which are likely to deceive by
reason of similarity to trademarks belonging to other owners, form the largest group of marks
against which aforesaid prohibition has been enforced in India. In coming to a decision about the
enforcement of such prohibition, the tribunal is empowered to take into consideration the following
classes of marks: (1) Trademarks already on the Register in respect of the same goods or
description of goods, (2) unregistered trademarks used by other persons in advertisements, trade
circulars, etc., although not so used as trademarks and consequently unprotected under the
common law, and (3) refused trademarks of other earlier applicants for registration. The onus of
proving that a proposed trademark is not likely to deceive lies upon the applicant for registration
of the mark. Furthermore, a word which is the commonly used and accepted name of any single
chemical element or single chemical compound is not registrable as a trademark in respect of a
chemical substance or preparation. There is an exception in the case of brand names however,
where if a word is used to denote only a brand or make of the element as made by the proprietor
in association with a suitable name or description open to the public, it can be so registered. The
decisions of the English Courts have generally been followed by the Courts in India regarding the
class of purchasers, who should be taken in considering the question of deceptive resemblance.

The probable purchaser should be a person of average memory and intelligence with their usual
imperfections. It is the ultimate purchaser who has to be considered and not the middlemen or
vendors of the goods, in deciding cases of deceptive resemblance of the mark concerned. Further,
the probability of deception is to be considered primarily with reference to India. In case of honest
concurrent use of the mark or of other special circumstances, the Registrar may permit the
registration by more than one proprietor of trademarks which are identical or nearly resemble each
other in respect of the same goods or description of goods, subject to such conditions and
limitations, as he may think fit to impose. The honest concurrent use claimed by the applicant
however, must be continuous and for a sufficiently long time. The onus of proving honest
concurrent use is always on the applicant and the honesty, in question, is commercial honesty in
all cases. A temporary discontinuance of the use of the mark will not necessarily be a bar to its
registration by the first user, notwithstanding that the same mark had been registered by another
person in the meantime.
Trademark Registration System is also shown for better understanding

SELECTION OF The mark should be distinctive enough and must not fall under any prohibited
THE MARK category
SEARCH BEFORE A causal search on the Trademark Registry should be done to see whether
similar trademark has been registered or not. Although it is not mandatory
APPLICATION but advised to do so.

FILING OF An application for multiple classes can be filed under the provisions of
APPLICATION Trademark Act, 1999

NUMBERING OF The application filed is dated and numbered and a copy of the same is
THE APPLICATION returned back to the applicant’s attorney.

MEETING THE The registry sends an official examination report comprising of all the
OFFICIAL objection like deceptive mark or similar mark pending for registration and
OBJECTION ask for clarification for the same.

ADVERTISEMENT The application thereafter is published in Trademark Journal which is official

OF THE Government of India publication by Trademark Registry.
APPLICATION

ACCEPTANCE OF Afterwards, if no opposition was bring forwards in a period of four months

THE then trademark is granted. If oppositions have come then it should be decided
APPLICATION on merits.

OPPOSITION After the objection were lawfully submitted than the Trademark Registry
PROCEEDINGS issue an official letter for accepting their application.
 ISSUE OF Registration would generally take four to five days. However when the
CERTIFICATE OF certificate is issued it is effective from the date of application.
REGISTRATION

A trademark registered as an associated trademark, has all the incidents of a registered trademark,
except in respect of two matters, viz. (1) that associated trademarks are assignable and
transmissible only as a whole and not separately and (2) where use of a registered trademark is
required to be proved for any purpose, the tribunal may accept use of a registered associated
trademark, as an equivalent for the use required to be so proved. It is well recognized that the
registered owner of a composite mark cannot claim any exclusive right to any element which is
common to the trade or otherwise indistinctive, such as, descriptive or laudatory words appearing
in the mark. In such cases it is the practice in India that disclaimers are imposed by the Registrar
in respect of specific parts of the mark, in order to safeguard the interests of the public and give
necessary guidance to the applicant for registration of the composite mark.

[2.5]. VALUE OF TRADEMARK AND BRAND Formatted: Small caps

Trademarks integrate the names, terms, signs, symbols, logos and designs for creating typical
images of product and services of the companies to generate economic values and benefits.
Trademarks are the intangible assets with the capability of generating future revenues, enhancing
customers’ value propositions, protecting competitive positions, and increasing the attractiveness
of business in global business environment. At the present time, brands are created and protected
by trademarks. Superior position of companies is strongly supported by trademarks and brands.
The value of brand is the monetary compensation which is expected to be received from licensing,
franchising or from the sale of that brand.58

Branding is an essential and crucial element of this globalized market economy. Business
enterprises are investing large amounts of their capital in promoting the product and services for
building a brand name in the marketplace. Ultimately, these activities influence consumer buying
decision for choosing a branded product or services. Branding is based on the advertisement of the
product and services. Investment in branding determines the profitability and brand value of the
companies. The competitiveness of the business enterprises in the market is shaped by the
trademarks and brands with the implications of economic accomplishment.59

Brand Finance report (2017) reveals that technology based US Company Google (Google Inc.) is
in first position with brand value of USD 109,470 Million in Global Brand 2017. The table shows
that its brand value has been increased by 24 percent in 2017. The table depicts that the Apple
Company has decreased 27 percent value from 2016 and degraded from first position to second
position with USD 107,141Million from 145, 918 Million brand value.60 This indicates that the
brands and trademarks are the source of competitive advantages and valuable Intellectual Property.
According to Brand Finance report 2017, brand is a marketing-related intangible asset which

58
V. SOLPE, MANAGING INTELLECTUAL PROPERTY Delhi: PHI Learning (2014).

59
WORLD INTELLECTUAL PROPERTY ORGANIZATION, WORLD INTELLECTUAL PROPERTY REPORT: BRANDS –
REPUTATION AND IMAGE IN THE GLOBAL MARKETPLACE (2013).

60
BRAND FINANCE. THE ANNUAL REPORT ON THE WORLD’S MOST VALUABLE BRANDS 2017. BRAND FINANCE GLOBAL
500 2017. (2017, February).
incorporates the names, terms, signs, symbols, logos and designs for creating distinctive images
of product and services associated with stakeholders of the companies to generate economic values
and benefits.

Table 1- The most valuable brands, 2017

Brand Brand
Value Value
%
Brand Name Industry Group Domicile 2017 2016
Change
(USD $ (USD $ Rank Rank
Million) Million) 2017 2016

Google Technology US 109,470 88,173 24% 1 2

Apple Technology US 107,141 145,918 -27% 2 1

Amazon.com Technology US 106,396 69,642 53% 3 4

Retail

AT&T Telecoms US 87,016 59,904 45% 4 6

Microsoft Technology US 76,265 67,258 13% 5 4

Samsung Conglomerate SOUTH 66,219 58,619 13% 6 7

KOREA

Verizon Telecoms US 65875 63,116 4% 7 5

Walmart Retail US 62,211 53,657 16% 8 8

Facebook Technology US 61,998 34,002 82% 9 17

 ICBC Banks China 47,832 36,334 32% 10 13
Source: The annual report on the world’s most valuable brands, (Brand Finance, February 2017)

Trademarks and brands are becoming key components in corporate strategy and marketing
management with the increasing recognition of its economic value. In recent times, the
accumulation of substantial corporate IP assets and IP asset management is one of the corporate
strategies of the knowledge and technology based industries. Trademark and brand valuation is
very common for the purposes of commercialization, sale and purchase of trademarks. Trademarks
and brands valuation commonly apply for the buying or selling a company, licensing, joint
ventures, mergers and acquisitions, franchising, and strategic partnership decisions. Some firms
are giving the importance of brand valuation for the investment planning, building partnership
through cross-licensing with each other to enhance the value of their trademarks, brands and IP
assets.61 In the long run, the competitiveness of the business organizations and their economic
prosperity is enhanced by their trademarks and brand image.

[2.6]TRADEMARKS IN THE GLOBAL ECONOMY Formatted: Small caps

Economists believe and explain that knowledge and innovation play a crucial role for the economic
growth of the countries. It is generally agreed that the knowledge, innovation, technology transfer,
and protection of the IP rights are the key contributing factors for the fast economic growth of
some countries. Trademarks play a valuable macroeconomic function to identify the origin of the
products, services and technologies. Trademarks look after the accountability to the consumers.

61
K. IDRIS, INTELLECTUAL PROPERTY – A POWER TOOL FOR ECONOMIC GROWTH (2ND ED.). GENEVA: WIPO (2003).
Trademarks play an important strategic role in business enterprises for the promotion of the sales
of product and service in market. Trademarks help to strengthen the consumer loyalty towards
products and services.

Consumer loyalty helps to enhance retention of customer which is effective as the attraction of
new customers for the companies’ revenue generation. Trademarks enable firms to increase
profitability, respond to unfair competition, grow and retain market share, differentiate products
and services, introduce new product and service lines, earn income through royalties of licensing
and franchising, support partnerships and strategic alliances, and rationalize the financial value of
the firms. Most of the global companies such as KFC, McDonald’s, Coca-Cola, and General
Motors are using franchising business model to use their trademark strategically all over the
World. Franchising business model is very popular for the strategic use of a trademark.

[2.7] GLOBAL TRADEMARK APPLICATIONS Formatted: Small caps

According to WIPO Statistics Database (2015) a total of 33.1 million trademarks were active in
124 IP offices worldwide. WIPO statistics depict that the trade mark application and registration
is higher than the patent and other IP assets. By using the application class count, trademark filing
activity grew by 6.9% in 2014. It is recorded after the harmonizing the filing systems of trademark
application and registration across national and regional offices. In 2014, total number of classes
specified in applications reached 7.45 million which is more than 66 percent increment from the
year 2004. From the year 2004 the complete class counts system has been started.62

In 2014, about 5.19 million trademark applications were filed all over the World which is 6.9
percent more than in 2013. This growth was achieved by the radical increment in trademark filings

62
WORLD INTELLECTUAL PROPERTY ORGANIZATION, WORLD INTELLECTUAL PROPERTY INDICATORS (2015).
in China. Since 2000, trademark applications have been increased doubled. The double digit
growth of trademark application was seen in the year 2010 and 2011. However, around 6- 7 percent
application growth rate has been achieved from the year 2012 to 2014. Figures indicate that the
economic growth of the individual country and the World economy can be the contributing factor
for the trademark application and registration.

WIPO facts and figures (2015) suggest that until the mid-1980s, the trademark filings in the world
were low and stable. However, most of the countries adopted the economic liberalization and
privatization policy since 1990. The adaptation of the market economy resulted that the trademark
filings at China, USA, India, Brazil, and South Korea has been increased. China has received the
largest trademark applications after the transformations of Chinese economy (World Intellectual
Property Organization, 2015).

[2.8]. TRADEMARK APPLICATIONS BY GOODS AND SERVICES Formatted: Small caps

For the registration of product and service marks, the international 45 Nice Classification system
of Goods and Services was established by an agreement concluded at the Nice Diplomatic
Conference (June 15, 1957, revised at Stockholm, in 1967, and at Geneva, in 1977) (World
Intellectual Property Organization, 2015). In this classification system, the first 34 classes are
allocated for goods class and the remaining 11 for the service classes. According to WIPO (2015),
nearly 65 percent trademarks were covered by the goods classes where 35 percent has been applied
from the service classes in 2014 applications all over the World (World Intellectual Property
Organization, 2015). Facts indicate the leading nature of goods classes in application and
registration of trademarks worldwide.
[2.9]TRADEMARK SHARES BY INCOME GROUP Formatted: Small caps

Countries under the high-income group covers the 45.2% of the world trademark registration
where upper middle-income countries group shares 44.4%. The lower-middle income countries
share 9.6% where only 0.8% is shared by the low-income countries. The World Intellectual
Property Indicators (2015) show that the Asia and Europe share the high percent of trademark
registration in 2014. However, the Africa and Oceania share the low trademark registration in
2014. Because of the emerging economy of China and India the average growth rate of trademarks
application in Asia is 9.5% which is the highest in 2014 (World Intellectual Property Organization,
2015) . This shows that the economic activities and revenues of countries influences the trademark
application and registration.

From the observation of WIPO statistics database (2015), it is agreed that China accounts the
highest trademark application class count in 2014. China covers the 30% of worldwide trademark
filing movement. China has 2.22 million class count with highest 18.2% annual growth in
trademark application. The USA reports 471,000 class count with 6.7% annual growth rate. Japan
with16.9%, and India with 15.4% annual growth also conveyed the top in trade mark application
class count. WIPO statistics illustrate that the top ten IP offices of the world occupied the 63% of
the worldwide trademark filing activity in 2014. (World Intellectual Property Organization, 2015).
These statistics also clarify that the economic activities and market economy of the country
facilitates the growth of trademark application.

Regarding the trademark application class count per 100 billion USD Gross Domestic Product
(GDP) for selected origins, China has the highest USD 12071 contribution per 100 billion USD
GDP in 2014. Most of the countries have improved their trademark contribution for economic
growth and the GDP from the year 2004 to 2014. Excluding Jordan other origins have enhanced
the trademark contribution in the economy (World Intellectual Property Organization, 2015).

WIPO statistics figure shows that the countries of middle and low- income economy such as Viet
Nam, Philippines, Colombia, Malaysia, and Pakistan receive substantially higher numbers of
trademarks applications than other forms of IP in 2014. It shows that trademark protection system
has been emphasized by the middle and low- income countries with their economic growth.

WIPO statistics of top five IP offices (2015) depict that China has the highest trademark filings
activity in agriculture industry followed by the clothing, and research & technology industries in
2014. However, USA has the highest trademark filings in research & technology industry followed
by the leisure & education, and business industries. Japan and European Union’s Office for
Harmonization in the Internal Market (OHIM) also have the highest trademark filings activity in
research & technology in 2014. Figures show that leisure & education, research & technology,
agriculture, clothing, and business sectors are the leading industries in trademark application
worldwide. Research and technology industry can be seen as the popular trademark applications
sector at every top five IP offices. Leisure and education is the top industry sectors at USA, OHIM
and in Japan. China and the Russian have the strong focus of trademark application in the
agriculture and clothing industries. The trademark applications activity in goods classes have been
dominated by the scientific equipment, fashion and pharmaceuticals industries products. However,
trademark registrations for services classes are leading by the business services and education
sectors. These are the fundamental facets of trademarks in the global economy.

[2.10]. BRANDS REPUTATION AND IMAGE IN THE GLOBAL MARKETPLACE Formatted: Small caps

Enterprises based in emerging economies have improved their investment in branding and creating
brand value faster than the companies in high income economies. The total value of the top 500
brands of emerging economies is increased by 3 percent from 2009 and 2013. This proves the
increasing trends of investment in trademark protection and branding by emerging economy.
Globally, companies have invested about USD 466 billion for branding in 2011. WIPO research
findings emphasized that the countries’ level of economic development and their investment in
branding of products and services are closely related. More economic growth means more
trademarks application and investment in branding. Emerging economies like China and India are
financing immense capital for trademarks and brand building than high-income economies
countries. For the protection of reputation and brand image, the importance of trademark
protection of goods and services is gradually increasing in today’s more dispersed and virtual
markets.

As an intangible asset, trademark accelerates the Brand Equity development mechanism with a
brand value of a company in the marketplace. The quality of product or service associated with
the brand and the name and recognition of the product and services are the contributing factors for
the valuation of brands. A company may have patent and trademark as IP assets in a single product.
However, Patent can be expired after limited time period where trademark can go for long period
with brand value. In the global marketplace, some companies are still generating revenues as a
result of strong brand image protected by trademarks after the expired of the patent of their
products. Therefore, trademark protection gives access to companies to stop others from free riding
of their investment on trademark, brand and image.

[2.11]. Benefits of Trademarks to society (Consumer Perspective)

Trademarks help consumer to purchase a product and service of their like with distinct name. If
all similar products and services are sold under the same name, consumers may fail to recognize
the products and services they liked and which can mislead them to get a product with the
quantities and qualities they needs. Trademark protection promotes brand competition, which
leads to higher quality products in the marketplace (Hennessey, -----). Generally, it is agreed that
consumers spend time and money for researching different offerings before deciding which good
or service to purchase. Trademark protection helps consumers to reduce their search costs to get
the desired products and services. Trademark protection system and brand empowers consumers
to draw on their past experience and to correct information asymmetry about specific goods and
services. The trademark protection system and brand provides the legal framework to support
consumers’ confidence to purchase the product and service as they intended. However, this
mechanism only works if consumers are confident. Beside this, trademark system also drives
producers and sellers towards creating brief identifiers for specific product or services for the
effective communication about products and services.

[2.12]TRADEMARK IMPLICATION IN NEPALESE CONTEXT Formatted: Small caps

Trademark is an important intellectual property which creates brand and value in the global
marketplace. The competition on the marketplace can be upraised due to the high investment in
branding activities of companies which creates barriers for new entry. Sometimes People
condemned the trademarks as creator of monopolies because of restricting the new entry in the
marketplace. However,ccompanies build reputation and image by branding and trademarks.
Brands and trademark are essential guide for consumers to differentiate the products and services
of their choice. Consuming high value brands products and services are perceived as quality, image
and status. Brands protected by trademarks enables market economy to operate effectively and
efficiently. Consumers have the perceived value of a trademark and brand. For the creation of
brands and their values, the trademarks play important role in global business environment. The
trademark has positive impact on brand reputation and image which facilitates for developing
consumers’ brand loyalty. Trademarks and brands come with a certain image which is concerned
by consumers for the purchase and consumption of product and services. Brands created by
trademarks are the source of competitive advantages and valuable intangible assets which
ultimately affect the sales, profits, and brand value of the companies. The level of economic
development and investments in branding are closely related. Today China and India as rapidly
growing emerging economies countries are investing more in trademarks and branding than
countries of high-income economies. Importance of trademarks is gradually increasing for the
protection of reputation and brand image in today’s more dispersed and virtual markets.

There is a relationship between trademark and economic development of countries. The concept
of trademark registration and creating brand value is applicable to many segments of Nepalese
business organizations; ranging from manufacturing to service business enterprises. Trademark
can help to develop the corporate image, product and service image and brand value of Nepalese
business organizations in national and international marketplace. Trademark and brand value has
direct applicable to business enterprises to develop the brand image and reputation by formulating
trademark strategies to protect the trademarks in domestic and global business competition. For
creating the brand image, Nepalese enterprises need to register trademark for avoiding offence
from the competitors. It also helps to correct the information asymmetry about specific products
and services in the marketplace.

[2.13] CONCLUSION AND RECOMMENDATION Formatted: Small caps

From the above discussion based on secondary source of statistics and existing literature, it can be
concluded that trademark is a common marketing tool and strategy for the promotion of brands of
product and services. A registered trademark became a key approach of guaranteeing quality and
building brands. Trademark can be a vehicle for economic advancement of the countries.
Trademarks give economic potential and could be used by market economy to generate more
income, value and surplus in the economy. Trademark protection system can play a dynamic role
for the smooth economic development of a country. The legal protection of trademarks and brands
encourage and support the innovation and creativity in manufacturing and service industries.
Trademark protection mechanism is influential in the context of global, regional, national, and
enterprise level economic development. Trademark as a significant IP asset creates brand and
value in the global marketplace. Reputation and image of the products and services are developed
by the trademark protection mechanism. Trademark protection system is the means of the
economic growth which enables the product and service trade in the marketplace. It can be the
source of competitive advantages and valuable intangible assets of the business enterprises for the
future sales, profits, brand value and economic wellbeing of the companies. Trademark protection
and brand reputation also benefits the consumer society of the world.
Finally, it is recommended for the further research to examine the impact of trademark protection
system for the countries’ economic growth and GDP with the support of primary data and
empirical research study.
 CHAPTER 3

A TRADITIONAL APPROACH OF CONSUMER PROTECTION

[3.1]. INTRODUCTION

Trademark law has come unhinged from its traditional consumer protection moorings.
That is the clear message of modern scholarship. Doctrinal innovations like dilution and initial
interest confusion are illegitimate, many commentators suggest, because they reflect a property-
based conception of trademarks that is inconsistent with trademark law’s core policies of
protecting consumers and improving the quality of information in the marketplace.

These critics are only half right. Trademark law now covers much more ground than it did
at the beginning of the twentieth century, and it has expanded in ways fundamentally inconsistent
with the traditional goals of trademark protection. But the critics have mischaracterized traditional
trademark law and therefore misunderstand the nature of this shift in trademark law’s normative
foundation. As this paper demonstrates, trademark law traditionally was not intended primarily to
protect consumers. Instead, trademark law, like all unfair competition law, sought to protect
producers from illegitimate diversions of their trade by competitors. Courts did focus on consumer
deception in these cases, but only because deception was what distinguished unfair competition,
which was actionable, from mere competition, which was not. In fact, courts denied relief in many
early trademark cases despite evidence consumers were likely to be confused by the defendant’s
use. Invariably they did so because the circumstances did not permit the inference that the
defendant was using confusion to divert the plaintiff’s customers.

Moreover, American courts based trademark protection from the very beginning on
property rights. This property-based system of trademark protection was largely consistent with
the natural rights theory of property that predominated in the nineteenth century, when American
trademark law developed. Significantly, this approach did not generate broad and absolute rights
in a trademark. Instead, traditional trademark rights protected the exclusive right to use a
trademark only within a particular field of trade, and courts imposed a variety of reasonable limits
on the scope of those rights.

Reexamination of traditional trademark principles teaches several important lessons. First,

it reveals as inaccurate the popular contention that trademark law recently departed from its
traditional focus on consumers to embrace a property-based form of protection. Consequently, it
steals the normative force of many of the modern criticisms of trademark law, which focus on
trademark law’s deviation from its supposed sole purpose - improving the quality of information
in the marketplace. Consequently, while modern trademark law deserves sustained scrutiny, any
criticisms must stand on their own merits and fairly confront the policy goals of modern trademark
law. The criticisms cannot draw their normative force by pointing to “traditional” principles that
did not exist.

This lesson hints at a broader methodological flaw in some applications of the law and
economics approach. Law and economics scholars gained prominence in trademark discourse, as
they did in many other contexts, in part by making purportedly descriptive claims about various
legal doctrines. Underneath the formal doctrinal means through which courts reached their results,
they argued, many legal doctrines could be explained as attempts to promote economic
efficiency.63 Courts simply lacked sufficient background in economics to explicate the true bases
of their decisions.64 These types of descriptive claims then are used to lend legitimacy to a
normative agenda.65

63
See RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 6 (1973) (“As we shall see, many areas of the law,
especially the great common law fields of property, torts, and contracts, bear the stamp of economic reasoning. Few
legal opinions, to be sure, contain explicit references to economic concepts and few judges have a substantial
background in economics. But the true grounds of decision are often concealed rather than illuminated by the
characteristic rhetoric of judicial opinions.”) (emphasis added).

64
Id. at 25 (“It would not be surprising to find that many legal doctrines rest on inarticulate gropings toward efficiency.
Many legal doctrines date back to the nineteenth century, when a laissez-faire ideology based on classical economics
was the dominant ideology of the educated classes.”). Without assessing the accuracy of Posner’s general statement
about the ideology of the nineteenth century educated classes, I believe his claim is demonstrably inaccurate with
respect to nineteenth century property law and theory.

65
See Mario J. Rizzo, The Mirage of Efficiency, 8 Hofstra L. Rev. 641, 641-43 (1980) (discussing the folly of
conflating normative and positive economic accounts of the law).
 This form of intellectual bootstrapping cannot be sustained, however, when the descriptive
claims prove erroneous. And even if the efficiency hypothesis has some purchase in other areas,
courts were not motivated by economic efficiency when they developed trademark doctrine.
Courts deciding trademark cases did sometimes reach outcomes that improved the quality of
information in the marketplace.66 But they also tolerated substantial confusion in many cases.
Rather than criticizing or explaining away results that do not fit the efficiency hypothesis, it makes
much more sense to consider the possibility that courts in all these cases acted according to a
different normative framework.

The second lesson that this reexamination of traditional trademark law teaches is that the
doctrinal expansions critics widely decry are more a consequence of the consumer protection
approach than a deviation from it. Traditional trademark rights were intended only to prevent
competitors from dishonestly diverting customers who otherwise would have gone to the mark
owner. Thus, courts created a number of important restrictions on the scope of those rights. In
the twentieth century courts rejected trademark law’s traditional theoretical construct in favor of
the information transmission model and, in the process, greatly expanded its reach. This expansion
cannot be described as a “propertization,” however, or as a shift from a consumer-centered system
to one that is producer-centered. Trademark law has always protected producer interests, and it
has done so by recognizing property rights. Instead, the expansion of modern trademark law

66
Posner, then, might view those results as “efficient.” The significance of that conclusion is questionable, however,
because modern law and economics scholars tend to operate under an artificially narrow definition of efficiency. See,
id. at 641-48 (criticizing Posner, among others, for restricting the notion of efficiency in their positive analysis). Rizzo
also criticizes law and economics scholars for making normative arguments that focus on partial-efficiencies when we
cannot determine “with any reasonable degree of accuracy when an overall efficiency improvement has occurred.”
Id. at 642.
resulted from courts rejection of a particular property theory and their countenance of a much
broader range of producer interests.

Trademark law traditionally saw a trademark as little more than a window to the mark
owner’s underlying business. Marks were necessary so that customers who were satisfied with a
producer’s product could continue to patronize that producer. But, on this view, value lay in the
business, and the business of the producer was the ultimate object of protection. By contrast,
modern law sees a mark in much more Shechterian terms: it treats the mark itself as a repository
for value and meaning, which may be deployed across a wide range of products and services.67
Modern trademark law, in other words, amounts to little more than industrial policy intended to
increase brand value.

This article proceeds in four parts. First, it sets out the common objection in modern
trademark scholarship that trademark law has lost its consumer focus and reveals as historically
inaccurate the premise on which the objection is based. Second, the article revisits “traditional”
trademark principles and identifies trade diversion as the ultimate evil pursued by trademark law.
Third, the article situates traditional trademark protection within the natural property rights
tradition that nineteenth century judges generally operated. Fourth, and finally, it describes the
modern doctrinal developments and identifies more accurately trademark law’s fundamental shift
from customer-centered to mark-centered protection. It argues that these modern doctrinal

67
Because Schechter articulated this conception of a trademark in The Rational Basis of Trademark Protection, that
article probably was the most influential contribution to twentieth century trademark law even though the dilution
claim he proposed has developed in fits and starts. See, Frank I. Schechter, The Rational Basis of Trademark
Protection, 40 HARV. L. REV. 813 (1927).
expansions deserve sustained analysis, but that the analysis must accurately assess trademark law’s
modern goals and evaluate modern law on its own terms.

I. [3.2]. THE CONVENTIONAL WISDOM ABOUT TRADEMARK LAW Formatted: Small caps
Formatted: Small caps
Formatted: Indent: Left: 0", Hanging: 0.01", No bullets or
numbering
It would be difficult to overstate the consensus in the literature that the goal of trademark Formatted: Small caps
law is to improve the quality of information in the marketplace and reduce consumer search costs. Formatted: Small caps
Formatted: Small caps
Trademarks, the conventional wisdom holds, are means by which consumers can organize
information about products or services. Trademark law works protects consumers in both a narrow
sense (by protecting them from being deceived into buying products they do not want) and a broad
sense (by allowing consumers to rely on source indicators and thereby reduce search costs in the
market generally).68

According to Glynn Lunney, trademark “[o]wnership was assigned to the person who
adopted the mark for her trade, not because she had created it or its favorable associations, but
because such person was conveniently placed and strongly motivated to vindicate the broader
public interest in a mark’s ability to identify accurately the source of the goods to which it was
attached.”69 Trademark protection enhances marketplace efficiency, Lunney argues, because

by enabling consumers to connect information to precise product[s] more

accurately, trademarks help consumers express more accurately their preferences
and tastes for the varying mix of product features, quality, and prices each finds

68
See WILLIAM M. LANDES & RICHARD A. POSNER, THE ECONOMIC STRUCTURE OF INTELLECTUAL PROPERTY LAW
166-68 (Harvard Univ. Press 2003).

69
Glynn S. Lunney, Jr., Trademark Monopolies, 48 EMORY L.J. 367, 417 (1999).
 desirable. Trademarks can, therefore, help ensure that the pricing signals received
by producers from the market (or “expressed demand”) more accurately reflect
consumers’ actual tastes and preferences (or “actual demand”).70

Stacey Dogan and Mark Lemley similarly argue that trademark law evolved to prevent
higher search costs for consumers and to give incentives to firms to invest in quality products and
services. “Trademark law … aims to promote more competitive markets by improving the quality
of information in those markets.”71 Dogan and Lemley even go so far as to argue that “since
consumers are the ultimate intended beneficiaries of trademark protection, one could argue that it
made more sense to vest [the right to control use of trademarks in the merchandising context] in
consumers, not producers.”72 This view of trademark law’s normative goals, often associated with
the Chicago School of law and economics, is rampant in the literature,73 and widely embraced by

70
Id. at 432.

71
Stacey L. Dogan & Mark A Lemley, The Merchandising Right: Fragile Theory or Fait Accompli?, 54 EMORY L.J.
461, 467 (2005) (hereinafter “The Merchandising Right”). The authors see also describe concerns about the effect of
particular rights on consumers or competitors, and on the competitiveness of the marketplace as a whole, as the “core
values of trademark law.” Id. at 475.

72
Id. at 479 n.74.

73
See 2 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 2.1 (4th ed. 1996) (citing
Landes and Posner for the proposition that trademark law is best understood as trying to promote economic efficiency);
Stacey L. Dogan and Mark A. Lemley, Trademarks and Consumer Search Costs on the Internet, 41 HOUS. L. REV.
777, 778 (2004) (arguing that the historical normative goal of trademark law is to foster the flow of information in
markets, thereby reducing search costs for consumers); Mark A. Lemley, The Modern Lanham Act and the Death of
courts.74 Indeed, the information transmission model so dominates discussion of trademark law
that that Barton Beebe recently argued that “[t]he Chicago School of law and economics has long
offered a totalizing and, for many, quite definitive theory of American trademark law … The

Common Sense, 108 YALE L.J. 1687, 1690-93 (1999) [hereinafter Lemley, Death of Common Sense] (stating that the
single purpose of trademark law is to “enable the public to identify easily a particular product from a particular
source”); John F. Coverdale, Trademarks and Generic Words: An Effect-on-Competition Test, 51 UNIV. CHI. L. REV.
868, 869-70 (1984); Nicholas Economides, Trademarks, in the NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE
LAW 601 (1998); Nicholas Economides, The Economics of Trademarks, 78 TRADEMARK REP. 523, 525-27 (1988);
I.P.L Png. & David Reitman, Why are Some Products Branded and Others Not?, 38 J.L. & ECON. 207, 208-11 (1995)
(presenting empirical evidence in support of search cost rationale); Diego Puig, To God What is God’s and to Caesar
What is Caesar’s: Aesthetic Functionality as a Value Between Trademark Rights and Religious Freedoms, 9 J. TECH
L. & POL’Y 81, 91 (2004) (describing the first policy reason behind trademark protection as consumer protection by
“ensuring purchasers are not confused about the source” of the product and thereby reducing transaction costs); Clarisa
Long, Dilution, 106 Colum. L. Rev. 1029, 1033-34 (2006) (contrasting dilution protection with traditional trademark
protection and arguing that the former is producer-centered while the latter is consumer-centered). Some
commentators have credited as a second purpose of trademark protection protecting producers’ goodwill, though even
then they describe that goal in market efficiency terms, arguing that trademark law seeks to protect producer goodwill
in order to encourage investment in product quality. See Eric Goldman, Deregulating Relevancy in Internet
Trademark Law, 54 Emory L.J. 507, 554-55 (2005); LANDES & POSNER, supra note __ at 166-68.

74
Courts do mention more frequently than do commentators the goal of protecting producers’ goodwill as an additional
concern, though they also often describe that goal in market efficiency terms. See Qualitex Co. v. Jacobsen Products
Co., 514 U.S. 159, 163-64 (1995) (stating that trademark law “reduce[s] the customer’s cost of shopping and making
purchasing decisions,” and “helps assure a producer that it (and not an imitating competitor) will reap the financial
reputation-related rewards associated with a desirable product”); Union National Bank of Texas, Laredo, Tex. v. Union
National Bank of Texas, Austin, Tex., 909 F.2d 839, 844 (5th Cir. 1990) (“The idea is that trademarks are
‘distinguishing’ features which lower consumer search costs and encourage higher quality production by discouraging
free-riders.”).
influence of this analysis is now nearly total … No alternative account of trademark doctrine
currently exists.”75

Working from this unquestioned premise, commentators have sharply criticized modern
doctrinal growth. Courts in recent times have greatly expanded trademark protection to cover more
attenuated forms of confusion on the part of more people, and many of these expansions, the critics
contend, are difficult to explain as attempts to promote the flow of information in the
marketplace.76 Dilution is the most popular target for criticism, 77 but expansions of trade dress
protection and recognition of new forms of actionable confusion have also raised the ire of
trademark scholars.78 Trademark critics widely characterize the expansion of modern law as a

75
Barton Beebe, The Semiotic Analysis of Trademark Law, 51 U.C.L.A. L. REV. 621, 623-24 (2004). Beebe’s
alternative account describes trademark protection in terms of semiotic theory. Trademark law, according to Beebe,
developed largely, though unintentionally, in accordance with semiotic theory and has worked to protect sign value
and the integrity of a sign’s meaning. It should be noted, however, that Beebe’s account is entirely descriptive. It
makes no judgment as to whether trademark law should protect sign value at the expense of other values.

76
Lunney, supra note __ at 435-36 (arguing in the trade dress context particularly, that consumers often do not rely
on the features claimed as trademarks when making purchasing decisions).

77
See, e.g., Wendy J. Gordon, Introduction, 108 YALE L.J. 1611, 1614 n.19, 1615 (1999) (calling dilution a
“disaster”); Lemley, Death of Common Sense at 1698 (arging that “dilution laws represent a fundamental shift in the
nature of trademark protection”).

78
See, e.g., Lunney, supra note __ at 391-410; Jennifer E. Rothman, Initial Interest Confusion: Standing at the
Crossroads of Trademark Law, 27 CARDOZO L. REV. 105 (2005) (criticizing the initial interest confusion doctrine);
Goldman, supra note __ at __ (same). Interestingly, there are some doctrines within trademark law that are also
inconsistent with the consumer-based market efficiency justification of trademark law but have escaped the attention
of scholars. For example, the idea of inherent distinctiveness – that some marks receive protection based solely on
move away from confusion-based trademark law and towards a property-based regime that is
focused only superficially on consumers.79

This characterization is important to critics for two reasons. First, it situates the debate
about trademark expansion within the raging debate regarding whether the objects of intellectual

their categorization and without any evidence that consumers actually associate the mark with a particular source –
seems incompatible with trademark law based on matching consumer expectations. Indeed, most justifications of the
concept of inherent distinctiveness reflect a sort of incentive/reward structure typical of patent and copyright. See
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 770-71 (1992) (accepting the Court of Appeals’ reasoning that
“[w]hile the necessarily imperfect (and often prohibitively difficult) methods for assessing secondary meaning address
the empirical question of current consumer association, the legal recognition of an inherently distinctive trademark or
trade dress acknowledges the owner's legitimate proprietary interest in its unique and valuable informational device,
regardless of whether substantial consumer association yet bestows the additional empirical protection of secondary
meaning.").

79
See, e.g., Margaret Jane Radin and R. Polk Wagner, Thee Myth of Private Ordering: Rediscovering Legal Realism
in Cyberspace, 73 CHIC.-KENT L.REV. 1295, 1305 n.29 (1998) (“Modern trademark law is moving … towards a …
property rights regime.”); Mark A. Lemley, Romantic Authorship and the Rhetoric of Property, 75 TEX. L. REV. 873,
900 (1997) (arguing that trademark owners “are well on their way to owning the exclusive right to pun”); Lunney,
supra note __ at 371-72 (describing “radical and ongoing expansion of trademark protection” as a shift from
“deception-based trademark,” which focused on a trademark’s value merely as a device for conveying otherwise
indiscernible information about a product, to “property-based trademark,” which regards a trademark as a valuable
product in itself). Lemley says, on this basis, that trademark law reflects “the death of common sense.” Lemley,
Death of Common Sense.
property law should be regarded as “property.”80 Second, and more importantly for this paper, the
characterization of modern trademark law having moved towards a property-based regime pits
modern doctrinal innovations against the normative premises of trademark law and suggests that,
not only do expanded trademark rights impose costs on competitors and the public, they cannot be
justified on their own terms. In other words, criticisms of trademark law tend not to engage in a
balancing of legitimate concerns but rather claim there is only one legitimate concern (for
consumers and the quality of information in the marketplace) and that the law is illegitimate to the
extent it deviates from that goal.81

80
For some discussion of this debate, see Richard A. Epstein, Liberty Versus Property? Cracks in the Foundation of
Copyright Law, 42 SAN DIEGO L. REV. 1 (2005); Adam Mossoff, Is Copyright Property?, 42 SAN DIEGO L. REV. 29
(2005); Mark A. Lemley, Property, Intellectual Property, and Free Riding, 83 TEX. L. REV. 1031, 1037-39 (2005).

81
Even Bob Bone, who has looked closely at trademark law’s historical development, suffers from this law and
economics myopia. Bone recognizes that a focus on producer goodwill fits uneasily with the information transmission
model. Nevertheless, he criticizes courts for departing from the information transmission model even in old cases and
even though producer goodwill has a much longer pedigree in trademark law than does the economic view of
trademarks. See, Robert G. Bone, Hunting Goodwill: A History of the Concept of Goodwill in Trademark Law, __
BOSTON UNIV. L. REV. __ (forthcoming 2006). As I demonstrate below, the growth of trademark law was not a result
of courts’ focus on goodwill, but rather by the expansion of that concept that resulted took place when trademark law
was uncoupled from its traditional natural rights moorings.
 This criticism, however, is premised on a “falsely imagined past.”82 In reality, “traditional”
American trademark law was unapologetically producer-centered.83 Trademark law, indeed all of
unfair competition law, developed to promote commercial morality and to prevent competitors
from diverting a producer’s customers through “illegitimate” means. Consumer confusion was
relevant to the traditional determination of infringement only for instrumental reasons; confusing
consumers was a particularly effective way of stealing a producer’s trade. To put it another way,
if Bork was right that antitrust laws have only one legitimate goal – to promote consumer welfare,
and not to protect competitors, though competitors might also benefit84 – then traditional trademark
law was its conceptual mirror image. Trademark law traditionally sought to regulate the
relationship among competitors, though consumers might also have benefited.

Moreover, American courts from the very beginning protected producers’ interests against
illegitimate diversions of trade by recognizing property rights. Because those property rights were
grounded in the natural rights theory of property that most judges and commentators relied on in
the nineteenth century, however, the property rights courts traditionally recognized were

82
ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF 15 (The Free Press 1993) (1978)
(“One of the uses of history is to free us of a falsely imagined past. The less we know of how ideas actually took root
and grew, the more apt we are to accept them unquestioningly, as inevitable features of the world in which we move.”).

83
In fact, while courts and commentators sometimes did mention a side benefit to consumers, I am unaware of any
nineteenth century court or commentator ever discussing trademark protection in terms of information transmission
policies. And in fact it would be quite odd for courts to have discussed trademark law in those terms, since that
understanding of trademark law is mostly a product of the law and economics movement that would not take root until
at least the middle of the twentieth century.

84
BORK, supra note __ at 51.
considerably narrower than the rights recognized today. Specifically, trademark owners were
entitled to relief only against others that illegitimately interfered with their ability to profit from
their labors by dishonestly marking their products and passing them off as those of the trademark
owner.

This characterization of traditional trademark law poses serious problems for modern
criticisms of trademark law. If “traditional” trademark law was not intended primarily to protect
consumers, then the fact that modern trademark law seems producer-centered is not particularly
damning. More importantly, it suggests that the critics worship a false idol when they claim that
trademark law can be limited by tying protection to consumer expectations. In fact, virtually all
of trademark law’s modern doctrines are more difficult to square with the natural property rights
approach nineteenth century judges applied than with the economic efficiency theory currently in
vogue. To take just one example: there is a reasonable argument that information clarity would be
promoted, not hindered, if trademark law prevented all conflicting uses of a mark. After all, a
market with only one party using APPLE or FORD is the easiest for consumers to navigate.

The following section revisits traditional American trademark law in greater detail and
describes the theoretical construct in which the law developed.

II. [3.3]. A SECOND LOOK AT EARLY TRADEMARK PROTECTION Formatted: Small caps
Formatted: Indent: Left: 0", Hanging: 0.01", No bullets or
numbering
Formatted: Small caps
The use of marks to identify and distinguish one’s property dates to antiquity, and Formatted: Small caps
regulations regarding use of those marks is almost as old. Much of the history has been Formatted: Small caps

85 Formatted: Small caps

investigated thoroughly, and I do not intend to offer a complete historical account here. This

85
For more thorough historical accounts, see FRANK I. SCHECHTER, THE HISTORICAL FOUNDATIONS OF THE LAW
RELATING TO TRADE-MARKS (Columbia Univ. Press 1925); Edward S. Rogers, Some Historical Matter Concerning
article focuses in particular on the traditional normative premises of American trademark.
Understanding the origins of American trademark law, however, necessarily requires historical
context, including some understanding of the English trademark law on which American law
explicitly was based.

A Medieval Marks as Liabilities

Scholars have identified a number of ways in which individuals and producers historically
have used distinguishing marks. Most basically, merchants used marks to demonstrate ownership
of physical goods, much in the way that ranchers use cattle brands to identify their cattle.86 Use
of marks to indicate ownership of goods was particularly important for owners whose goods
moved in transit, as those marks often allowed owners to claim goods that were lost. Producers
often relied on identifying marks, for example, to demonstrate ownership of goods recovered at
sea.87

Marks also were quite important to the operation of the guild system in medieval England.
Local guilds often developed reputations for the quality of their products, and when they did, the

Trade-Marks, 9 MICH. L. REV. 29 (1911); Sidney A. Diamond, The Historical Development of Trademarks, 65
TRADEMARK REP. 265 (1975); Benjamin G. Paster, Trademarks – Their Early History, 59 TRADEMARK REP. 551
(1960); Daniel M. McClure, Trademarks and Unfair Competition: A Critical History of Legal Thought, 69
TRADEMARK REP. 305 (1979).

86
Diamond, supra note 23 at 273; SCHECHTER, HISTORICAL FOUNDATIONS at 20-21.

87
SCHECHTER, HISTORICAL FOUNDATIONS at 26-31. Owners also carved identifying marks into the beaks of swans
they were allowed to own by royal privilege. Id. at 35-37.
names of the towns or regions in which those guilds operated became repositories of goodwill. To
maintain that goodwill, guilds needed to be able to restrict membership and identify and punish
members who produced defective products. Guilds therefore required their members to affix
distinguishing marks to their products so the guilds could police their ranks effectively.88

Importantly, guilds required members to display their marks for the purpose of developing
and maintaining collective goodwill for the guild; marks were not used for the purpose of
establishing individual producer goodwill. Indeed, intraguild competition was strictly forbidden.89
Moreover, these regulations were not motivated primarily by a concern for consumers. Even in
the cutlers’ trade, where marks seem to have been the most analogous to modern trademarks,90
regulation was intended for “guidance and control of those working in rivalry, rather than to protect
purchasers.”91 In fact, though it is not clear how often mark owners sought enforcement of their
marks during this period, there is evidence that enforcement attempts generally were motivated by
a guild member’s concern about being held responsible for products it did not make.92

88
SCHECHTER, HISTORICAL FOUNDATIONS at 38-63. Not coincidentally, these mandatory marks also made it possible
for the Crown to regulate conduct, particularly in the printing industry, where the Crown policed heresy and piracy.
Id. at 63-77 See also, Paul Goldstein, Copyright’s Highway 42 (2994) discussing Crown’s censorship mechanism).

89
SCHECHTER, HISTORICAL FOUNDATIONS at 42-47 (describing guild efforts to prevent members from establishing
individual goodwill).

90
There are some examples in the cutlers’ trade of the government treating marks as property that could be passed by
will and of owners advertising to suppress piracy. SCHECHTER, HISTORICAL FOUNDATIONS at 119-20.

91
Id. at 120.

92
Id. at 55.
 B English Trademark Cases

Commentators often cite Southern v. How93 for the proposition that English cases based on a
party’s replication of an identifying mark have been identified as early as the seventeenth
century.94 Popham’s report of that case stated that

An action upon the case was brought into the common pleas by a clothier that
whereas he had gained great reputation for his making of his cloth by reason of
which he had great utterance to his great benefit and profit, and that he used to set
his mark to his cloth whereby it should be known to be his cloth and another clothier
perceiving it used the same mark to his ill made cloth on purpose to deceive him,
and it was resolved that the action did well lie.

In his seminal work The Historical Foundations of Trademark Law, however, Frank Schechter
raised significant questions about the accuracy of Popham’s report on Southern v. How. Popham’s
was only one of five known reports of the case,95 and other reports are inconsistent with Popham’s

93
2 Popham 144 (16__).

94
See FRANCIS H. UPTON, A TREATISE ON THE LAW OF TRADE MARKS WITH A DIGEST AND REVIEW OF THE ENGLISH
AND AMERICAN AUTHORITIES 11-12 (1860); James Love Hopkins, The Law of Trademarks, Tradenames and Unfair
Competition at § 6 at 15-16 (1905).

95
The other reports were in J. Bridgeman’s Reports 125 (1659); Croke’s Reports, Cro. Jac. 469 (1659); and two reports
in Rolle’s Reports, 2 Rolle 5 (1676) and 2 Rolle 28. The report attributed to Popham, moreover, was not even reported
description. Some of the reports contain no reference at all to the clothier’s case,96 and at least one
of the reports suggests that it was the deceived customer who brought the action.97 This
disagreement about the nature and basis of the clothier’s case foreshadowed years of imprecision
regarding the basis of trademark claims, and Popham’s characterization of Southern v. How played
a prominent role in the development of the law. In fact, several English judges deciding trademark
cases in the eighteenth century relied solely on Popham’s report for the proposition that cases
based on use of another’s mark could be brought as actions on the case, sounding in deceit.98

(1) Trademarks in Courts of Law and Equity

by Popham himself but was included in the volume in the section titled “Some Remarkable Cases Reporte d by other
learned Pens since his death.”

96
See J. Bridgeman’s Report and the report at 2 Rolle 5 (1676).

97
Croke’s Report stated: “Dodderidge cited a case to be adjudged 33 Eliz. in the Common Pleas: a clothier of
Gloucestershire sold very good cloth so that in London if they saw any cloth of his mark they would buy it without
searching thereof; and another who made ill cloths put his mark upon it without his privity; and an action on the case
was brought by him who bought the cloth, for this deceit; and adjudged maintainable.” Cro. Jac. 469 (emphasis added).
The second of Rolle’s Reports, 2 Rolle 28, is somewhat ambiguous, but that report also suggests it may have been the
purchaser who brought the case.

98
See, e.g., Blanchard v. Hill, 2 Atkyns 484 (1742); Crawshay v. Thompson, 4 Man. & G. 357, 385-86 (1842) (citing
Popham’s and Croke’s reports); Burgess v. Burgess, 3 De. G. M. & G. 896, 902 (1853); Hirst v. Denham, L.R. 14 Eq.
542, 549 (1872).
 The first reported decision clearly based on a competitor’s use of a trademark was issued
by a court of equity in Blanchard v. Hill in 1742.99 In that case, Lord Hardwicke rejected the
request for injunctive relief by the plaintiff, a maker of playing cards who sought an injunction
restraining the defendant from “making use of the Great Mogul as a stamp upon his cards, to the
prejudice of the plaintiff, upon a suggestion, that the plaintiff had the sole right to this stamp,
having appropriated it to himself, conformable to the charter granted to the cardmakers’ company
by King Charles the First.”100 The factual context of Blanchard is particularly noteworthy; the
plaintiff was seeking protection of a mark for playing cards pursuant to a royal charter, and charters
granting exclusive rights to cardmakers had been at the center of a long political struggle between
Parliament and the Crown.101 Thus the decision was clearly colored by the important role marks
played in the contested charter scheme.102 Lord Hardwicke noted that he believed that “the
intention of the charter [under which the plaintiff claimed rights] [was] illegal,”103 and said the

99
2 Atkyns 484 (1742).

100
Id. at 484.

101
For a discussion of the struggle between Parliament and the Crown over who would be able to grant exclusive
privileges, see Thomas Nachbar, Monopoly, Mercantilism, and the Politics of Regulation, 91 VA. L. REV. 1313 (2005).

102
See The Case of Monopolies, 11 Co. Rep. 84 b, 77 Eng. Rep. 1260, 1266 (K.B. 1603) (calling the playing card
monopoly granted by Queen Elizabeth under her royal prerogative an “odious monopoly”). Marks were an important
part of that privilege scheme because cardmakers were required to use their seals so that the exclusive privilege could
be enforced.

103
Blanchard, 2 Atkyns at 485.
court would “never establish a right of this kind, claimed under a charter only from the crown,
unless there ha[d] been an action to try the right at law.”104

Lord Hardwicke’s concerns about granting an injunction, however, seem to have been
focused on situations in which the plaintiff’s claim was based on an exclusive right attendant to a
monopoly granted by charter. Though he denied relief in Blanchard, Lord Hardwicke
distinguished the case from the clothier’s claim referenced in Popham’s report of Southern v. How.
The plaintiff in Blanchard based its claim simply on the defendant’s use of the plaintiff’s mark,
whereas the clothier in Southern v. How based its case on the defendant’s “fraudulent design, to
put off bad cloths by this means, or to draw customers from the other clothier.”105 When the
defendant intended to pass off its goods as those of the plaintiff, Lord Hardwicke implied, an
injunction might be appropriate.

Despite the initial reluctance of courts of equity to recognize exclusive rights in trademarks
and Lord Hardwicke’s obvious suggestion to pursue trademark claims in courts of law, the first
reported decision by an English common law court was the 1824 decision in Sykes v. Sykes.106 In
that case, the court upheld a verdict for the plaintiff against defendants who marked their shot-
belts and powder-flasks with the words “Sykes Patent” in imitation of the plaintiff’s use of the

104
Id.

105
Blanchard, 2 Atkyns at 485.

106
3 B. & C. 541 (K.B. 1824). There are some accounts of an earlier decision in a case called Cabrier v. Anderson,
apparently tried before Lord Mansfield in 1777, in which the court awarded the plaintiff damages of £ 100 under a
statute of William III when the defendant put plaintiff’s name on defendant’s watches. There are no published reports
of the case, though contemporary press accounts claimed that the case was “remarkable … and the first of its kind.”
See SCHECHTER, HISTORICAL FOUNDATIONS at 137-38 (quoting St. James Chronicle, Dec. 4, 1777).
same mark for its shot-belts and powder-flasks.107 After specifically noting that the plaintiff’s
sales had decreased after the defendants began selling their identically labeled products, the court
concluded that the defendants were liable for having marked their goods so as “to denote that they
were of the genuine manufacture of the plaintiff” and “[selling] them to retail dealers for the
express purpose of being resold as goods of the plaintiff’s manufacture.”108

Several common law cases following the Sykes decision recognized similar claims and
imposed liability when the defendant sought to pass off his goods as those of the plaintiff.109 Those
cases generally were brought as actions on the case, in the nature of deceit.110 Yet one must be
careful not to read those cases through modern lenses – despite the form of action, courts in these
early cases invariably described the harm as resulting from fraud on the plaintiff.111

107
Sykes, 3 B. & C. at 543.

108
Id.

109
See, e.g., Blofeld v. Payne, 4 B. & Ad. 410 (K.B. 1833)

110
See, e.g., Edelsten v. Edelsten, 1 De. G. J. & S. 185, 199 (1863) (stating that in actions for trademark infringement
“at law the proper remedy is by an action on the case for deceit; and proof of fraud on the part of the defendant is the
essence of the action”).

111
See Blofeld, 4 B. & Ad. at ___ (upholding the verdict for the plaintiff and holding that the defendant’s use of
envelopes resembling those of plaintiff’s, and containing the same words, was a “fraud against the plaintiff”). See
also, Jamieson & Co. v. Jamieson, 15 Rep. Pat. Cas. 169, 191 (1898) (holding that the case was not based on “a breach
of any right of property in the Plaintiffs. It is merely an exercise by the Plaintiff of a right that he has that he should
not be injured by the fraud of the Defendant in pretending that the goods manufactured by him, the Defendant, are of
the Plaintiff’s manufacture.”).
 Courts of equity became more solicitous of trademark claims in the first part of the
nineteenth century, around the same time common law courts began deciding trademark cases. Of
particular significance, courts very early on came to agreement that, where a claimant could
demonstrate and exclusive right to use a particular mark, equity intervened to protect a property
interest and evidence of fraudulent intent was not necessary. Despite limited reported decisions
following Blanchard v. Hill,112 for example, Lord Cottenham confidently held in Millington v.
Fox113 that equity could be invoked to protect the plaintiff’s title to his marks, even absent evidence
that the defendant knew of the plaintiff’s marks or intended to defraud her.114 Likewise in Hall v.
Barrows,115 the court noted that the “jurisdiction of the Court of Chancery in the protection of
trade marks rests upon property, and fraud in the defendant is not necessary for the exercise of that
jurisdiction.”116

112
A prior instance of an injunction restraining trademark infringement was noted, with no elaboration, in ROBERT
HENLEY EDEN, A TREATISE ON THE LAW OF INJUNCTIONS 314 (1821) (citing Day v. Day (1816)).

113
3 Myl. & Cr. 338 (1838). In that case, the court said that it would interfere to protect the plaintiff if ordinary or
unwary purchasers are likely to be misled to mistake the defendant’s goods for the plaintiff’s. Id. See also Singer
Machine Manufacturers v. Wilson, L.R. 3 App. Cas. 376 (1877)

114
Millington, 3 Myl. & Cr. at 352. See also, SCHECHTER, HISTORICAL FOUNDATIONS at 138-39.

115
4 D.J. & S. 150 (1863).

116
Id. at 156.
 As Lord Westbury said in Leather Cloth Co. v. American Leather Cloth Co.,117 rejecting
any contention that courts of equity based jurisdiction on fraud:

[t]he true principal, therefore, would seem to be that the jurisdiction of the Court in the
protection of trademarks rests upon property, and that the Court interferes by injunction,
because that is the only mode by which property of this description can be effectually
protected.118

Significantly, Lord Westbury reached this conclusion after noting that holding out one’s goods as
those of another gave no right to the latter to complain unless the act caused him some pecuniary
loss or damage.119 “Imposition on the public, occasioned by one man selling his goods as the
goods of another, cannot be the ground of private right of action.”120 The court in Levy v. Walker121
was even more explicit that the protection of trademarks was not intended for the benefit of
consumers: “The Court interferes solely for the purpose of protecting the owner of a trade or

117
4 De G.J. & S. 137, 141 (1863).

118
Id. at 141; see also SCHECHTER, HISTORICAL FOUNDATIONS at 143.

119
Leather Cloth Co., 4 De G.J. & S. at 140.

120
Id.

121
L.R. 10 Ch. Div. 436 (1879).
business from a fraudulent invasion of that business by somebody else. It does not interfere to
prevent the world outside from being misled into anything.”122

(2) Reconciling Law and Equity Approaches

Some readers of the English trademark cases have viewed courts of law and equity as
having developed incompatible theories of trademark protection, one based on fraud (law) and the
other on property (equity).123 That reading is understandable, since many early courts were not
particularly clear about the relationship between actions at law and in equity. For example, in The
Leather Cloth case, Lord Westbury thought it evident that, at law,

the remedy for the piracy of a trade mark is an action on the case in the nature of a writ of
deceit. This remedy focused on fraud, and originally it seems that an action was given not
only to the trader whose mark had been pirated, but also to the buyer in the market, if he had
been induced by the fraud to buy goods of an inferior quality.124

Notwithstanding this characterization of claims at law as fraud claims, he believed that equity
intervened to protect a property interest that courts of law could not adequately protect. “In equity,
the right to give relief to the trader whose trade has been injured by the piracy appears to have been

122
Id. at 448.

123
See Bone, Hunting Goodwill at __.

124
Leather Cloth, 4 De G.J. & S. at 139. Here it is clear that the various reports of Southern v. How created some
confusion as to whether the action on the case was brought by the clothier, the purchaser, or both.
originally assumed by reason of the inadequacy of the remedy at law, and the necessity of
protecting property of this description by injunction.”125

Despite this apparent dichotomy, courts often discussed the same precedents and spoke in
the same terms regardless of the form of action. As a result, in many cases it is difficult to tell
whether the action was brought in equity or at law based solely on the way the court is discussing
the nature of the wrong. In Croft v. Day,126 for example, an equity action, the court enjoined the
defendant’s use after describing the harm in types of fraud:

The principal in these cases is, that no man has a right to dress himself in colors, or
adopt and bear symbols, to which he has no peculiar or exclusive right, and thereby
impersonate another person, for the purpose of inducing the public to suppose either
that he is that other person, or that he is connected with and selling the manufacture
of such other person, while he is really selling his own. It is perfectly manifest, that
to do these things is to commit a fraud, and a very gross fraud.127

125
Id. at 139-140 (emphasis added).

126
7 Beavan 84 (Rolls Court 1843).

127
Id. at 88.
Likewise in Hogg v. Kirby,128 the chancery court intervened because it considered the publication
by the defendant of what appeared to be a continuation of plaintiff’s magazine “a fraud upon the
goodwill of [the plaintiff’s] periodical.”129

But this apparent ambiguity regarding the real basis of trademark law was more semantic
than substantive. Common law actions were denominated actions on the case sounding in deceit
because of the peculiarities of pre-merger forms of action. At law, parties could bring two different
claims to recover for injuries to their interests: trespass and case. To oversimplify, a party brought
a trespass action when its injury was direct and brought an action on the case to remedy indirect
injuries.130 Because the trademark cases litigated in courts of law were cases where the defendant’s
use was not considered categorically illegitimate but only illegitimate to the extent it was intended
to deceive,131 the mark owner’s injury was indirect.

128
2 Ves. 226

129
Id. at __. See also See Hall v. Barrows, 4 D. J. & S. 150, 159 (1863) (“Imposition on the public is indeed necessary
for the plaintiff’s title, but in this way only, that it is the test of the invasion by the defendant of the plaintiff’s right of
property; for there is no injury if the mark used by the defendant is not such as is mistaken, or is likely to be mistaken,
by the public for the mark of the plaintiff; but the true ground of this Court’s jurisdiction is property, and the necessity
of interfering to protect it by reason of the inadequacy of the legal remedy.”).

130
See Reynolds v. Clarke, 92 Eng. Rep. 410 (K.B. 1726) (“[I]f a man throws a log into the highway, and in the act it
hits me, I may maintain trespass, because it is an immediate wrong; but if as it lies there I tumble over it, and receive
an injury, I must bring an action upon the case; because it is only prejudicial in consequence, for which originally I
could have no action at all.”). For a very brief general discussion of the difficulty of distinguishing trespass and case,
see RICHARD A. EPSTEIN, CASES AND MATERIALS ON TORTS, 90-99 (8th ed. 2004).

131
See Section __ below.
 The important point is that plaintiffs in these actions at law were not vindicating the rights
of consumers – they were making claims based on injury to their own interests that resulted
indirectly from deception of consumers. Courts intermingled talk of fraud and property, not
because of any confusion as to the basis of protection, but because in all these cases their real
concern was that the defendant improperly diverted the plaintiff’s trade.132

Nor was trademark protection was classified as protection or property solely to gain the
jurisdiction of courts of equity: injuries to property interests were remediable at law through
trespass actions and actions on the case (depending on whether the injury was direct or indirect),
and courts of equity would enter injunctions even in the absence of a right in a particular name or
mark if there was evidence that the defendant sought to sell his own goods as those of another.133
Rather, what determined whether a party could invoke equity jurisdiction was whether a plaintiff
could establish exclusive rights in its mark or whether the defendant might have a legitimate reason
for using the designation at issue.

132
See Perry v. Truefitt, 6 Beavan 66. Thus, the mark owner’s stake, both at law and in equity, was its returning
customers. Compare Bone, Hunting Goodwill at 19 (“Because trademark law was based on preventing fraud and the
fraud at question was perpetrated on the public at large, it was not clear what individual stake the trademark owner
had that could justify injunctive relief.”).

133
See, e.g., Croft v. Day, 7 Beav. 84, 89-90 (1843) (noting that the decision to enjoin the defendant was not dependant
on “any peculiar or exclusive right of the Plaintiffs” but on the fact that the Defendant was using the mark “in a manner
calculated to mislead the public, and to enable the Defendant to obtain, at the expense of [the Plaintiff], a benefit for
himself, to which he [was] not, in fair and honest dealing, entitled.”). As the court said in Farina v. Silverlock, 6 De.
G. M. & G. 214, 217 (1856), a plaintiff’s right to “equity is founded on the jurisdiction of [courts of equity] to give
relief in the shape of preventive justice in order to make more effectual a legal right, the legal right [in trademark
cases] being a right to have a particular trade-mark to designate a commodity.”
 An action warranted interference by equity, in the first instance, when a plaintiff could
demonstrate title to a mark by showing substantially exclusive use of the mark. In those cases, the
defendant had no legitimate reason to use the same mark. If the mark owner could not demonstrate
exclusive rights, perhaps because the mark had descriptive significance, the defendant’s use could
not automatically be deemed illegitimate, and the plaintiff was forced to prove its right to relief at
law before it could earn the right to an injunction.134

C Early American Trademark Jurisprudence

(1) Trademark Law Targets Dishonest Trade Diversion

As noted above, I read the decisions of the common law courts and courts of equity in
England as reflecting the same fundamental concern. In both types of cases, courts were singularly
focused on the harm to a producer from improper diversion of trade, and the courts worked with

134
See Farina, 6 De G. M. & G. 214 (in case where plaintiff’s mark consisted of a label in a certain form and there
was evidence that labels the same or similar to it might be sold for a legitimate purpose, and where there was no proof
of actual fraud, the court would refrain from entering an injunction until plaintiff established his case at law). See
also, Edmund Robert Daniell, The Practice of the High Court of Chancery 1516 (2nd ed. 1845) (“if the legal right is
disputed, the Court does not, except in a strong case, interfere in the first instance by injunction, but it puts the party
upon establishing his right at Law before it confers the equitable remedy.”); Croft v. Day, 7 Beav. at 87 (noting cases
in which the injunction is granted at once and those in which the injunction is refused until the plaintiff has established
his right at law).
existing forms of action to remedy with that harm.135 American courts continued that focus,
repeatedly making clear that the purpose of trademark law was to protect a party from illegitimate
attempts to divert its trade.136

In Coats v. Holbrook,137 for example, the court said that “a person is not allowed to imitate
the product of another and ‘thereby attract to himself the patronage that without such use deceptive
use of such names would have enured to the benefit of that other person.”138 Likewise, in Partridge
v. Mench,139 the court

135
Rodgers v. Nowill, 5 C.B. 109 (1847) for example reflects the court’s recognition that it was forced to deal with
the case as one of the recognized forms. In that case, counsel responded to the judge’s question “Is this an action on
the case for a deceit?” by noting that “there is no other title under which such an action can be classed.” Id. at 116.

136
Like its English predecessor, American trademark law was predominantly a product of judicial decision. Prior to
the first federal Trademark Act in 1870, statutory protection, to the extent it existed, was highly trade-specific.
Massachusetts, for example, passed a law specifically regulating the use of marks on sail-cloth and the sail-makers
pressed Congress for federal protection. See SCHECHTER, HISTORICAL FOUNDATIONS at 130-32. The first federal
trademark legislation in 1870 was followed by additional legislation in 1876 that imposed criminal sanctions against
one who fraudulently used, sold or counterfeited trademarks. 19 Stat. 141. Both statutes ultimately were declared
unconstitutional in The Trademark Cases, 100 U.S. 82, 99 (1879). Even after the Trademark Act of 1870, trademark
law remained a creature of common law. The Lanham Act, passed in 1946, is widely noted to have predominantly
codified existing common law. See 15 U.S.C. § 1051 et seq.

137
2 Sand. Ch. 586, 7 N.Y. Ch. Ann. 713 (C.C.N.Y. 1845).

138
Id. at __.

139
5 N.Y.Leg.Obs. 94, 2 Barb.Ch. 101, 5 N.Y. Ch. Ann. 572, 47 Am.Dec. 281 (CCNY 1847).
 proceed[ed] upon the ground that the complainant ha[d] a valuable interest in the
good will of his trade or business, and that having appropriated to himself a
particular label, or sign, or trademark, … he [was] entitled to protection against any
other person who attempt[ed] to pirate upon the goodwill of the complainant’s
friends or customers, or of the patrons of his trade or business, by sailing under his
flag without his authority or consent.140

Francis Upton recognized this premise when he wrote at the beginning of his 1860 treatise that,
the whole purpose of adopting a trademark was to “enable [the merchant] to secure such profits as
result form a reputation for superior skill, industry or enterprise.”141

In Delaware & Hudson Canal Co. v. Clark,142 Justice Strong stated the premises of
trademark law with certainty:

[i]n all cases where rights to the exclusive use of a trade-mark are invaded, it is
invariably held that the essence of the wrong consists in the sale of the goods of
one manufacturer or vendor as those of another, and thus it is only when this false

140
2 Barb. Ch. at 103

141
UPTON, supra note __ at 2.

142
80 U.S. 311 (1871)
 representation is directly or indirectly made that the party who appeals to the court
of equity can have relief. This is the doctrine of all the authorities.143

Thus, traditional American trademark law sought to protect a producer’s interest against
illegitimate trade diversion. Moreover, American courts concluded very early on that this
protection in many cases was based on a property right,144 following essentially the approach of
English courts of equity.145

(2) Trademarks and Unfair Competition

Because the purpose of trademark protection traditionally was to prevent trade diversion
by competitors, it has long been regarded as a species of the broader law of unfair competition,146
and even more broadly, as part of the law governing other fraudulent (and unfair) business

143
Id at 322-23.

144
See, e.g., Derringer v. Plate, 29 Cal. 292, 294-95 (1865); Blackwell v. Armistead, 3 F.Cas. 546, 548 (W.D. Va.
1872); Trade-Mark Cases, 100 U.S 82, 92 (1879); Avery & Sons v. Meikle & Co., 4 Ky.L.Rptr. 759 (1883). See also,
SCHECHTER, HISTORICAL FOUNDATIONS at 141-44, 150-53, 154 n.1. (and cases cited therein).

145
Thus, even if English law and equity decisions did reflect a deeper disagreement about the basis of trademark
protection, decisions of American courts reveal no similar disagreement.

146
See Oliver R. Mitchell, Unfair Competition, 10 Harv. L. Rev. 275, 275 (1896) (“Logically speaking, the fact is that
Unfair Competition is properly a generic title, of which trade mark is a specific division.”).
practices.147 This view of trademark protection as a species of unfair competition was not, as some
have suggested, a post-hoc conflation of two branches of the law. From the very beginning,
trademark cases and those only “analogous” to trademark cases have stated clearly the fundamental
principle that no person has the right to pass off his goods as those of another. In his 1859 essay
“The Morals of Trade”, Herbert Spencer wrote that:

It is not true, as many suppose that only the lower classes of the commercial world
are guilty of fraudulent dealing. Those above them are to a great extent
blameworthy. On the average, men who deal in bales and tons differ but little in
morality from men who deal in yards and pounds. Illicit practices of every form
and shade, from venial deception up to all but direct theft, may be brought home to
the higher grades of our commercial world. Tricks innumerable, lies acted or
uttered, elaborately-devised frauds, are prevalent; many of them established as
‘customs of the trade’’ nay, not only established, but defended … We cannot here

147
“The entire substantive law of trademarks … is a branch of the broader law of unfair competition. The ultimate
offense always is that defendant has passed off his goods as and for those of the complainant.” G. & C. Merriam Co.
v. Saalfield, 198 F. 369, 373 (6th Cir. 1912); see also, Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 412-13
(1916) (“The essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another.
This essential element is the same in trademark cases as in cases of unfair competition unaccompanied with trademark
infringement. In fact, the common law of trademarks is but a part of the broader law of unfair competition.”) (internal
citations omitted); Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 428 (2003) (“Traditional trademark
infringement law is part of the broader law of unfair competition, that has its sources in English common law …)
(internal citations omitted).
 enlarge on the not uncommon trick of using false trademarks, or of imitation
another maker’s wrappers.148

Similarly, James Love Hopkins wrote that “[u]nfair competition consists in passing off
one’s goods as the goods of another, or in otherwise securing patronage that should go to another,
by false representations that lead the patron to believe that he is patronizing another person.”149
Trademark infringement was a form of unfair competition, as was apparent to Hopkins, because
copying a producer’s marks was the simplest means of depriving another of the trade he had built
up. “This is the easiest method of stealing his trade, and most universal because of the general use
of marks or brands upon personal property.”150 This language regarding improper diversion of
trade runs throughout unfair competition cases as the “true principle” upon which the cases depend.
Thus, courts perceived no conceptual distinction between trademark infringement and other forms
of unfair competition.

At some point in the late nineteenth or early twentieth century, American courts began to
use the term “unfair competition” slightly differently. Those courts divided the universe of
distinguishing marks into “technical trademarks,” which were protected in actions for trademark

148
HERBERT SPENCER, THE MORALS OF TRADE (1859), quoted in HOPKINS, supra note __ at author’s note p. vi
(emphasis added).

149
HOPKINS, supra note __ at § 2 at 2-3 (emphasis added). According to Hopkins, commentators had argued that the
right of those engaged in commerce to be subjected to none but fair competition, upon which unfair competition law
is based, is “closely allied” to recognized property rights in patents and copyrights. Id.

150
Id. at § 2, at 3.
infringement, and “trade names,” which were protected in actions for unfair competition. 151 In
general courts denied technical trademark status to surnames and to descriptive terms.152 This
distinction was a more formal version of a distinction some English courts made between cases
where the plaintiff could prove exclusive title to a mark (in which case equity would act to enjoin
others’ use of the mark immediately) and those cases in which the plaintiff could not demonstrate
title (in which case equity would not act until the plaintiff had establish at law that the defendant
nevertheless acted to divert his trade).153 The analogy is not perfect, however, because those older
cases did not speak in terms of technical trademarks and trade names, even when the marks in
question consisted of surnames, which later cases would have considered trade names.

In practice, cases of trademark infringement and those of unfair competition differed only
in terms of what the plaintiff had to prove. Whereas unfair competition claimants had to prove
that the defendant intended to pass off its products as those of the plaintiff, trademark infringement
plaintiffs did not have to prove intent.154 Use of another’s technical trademark was unlikely to
have a legitimate explanation, whereas use of another’s trade name may have had a purpose other
than deception. Here the analogy to English cases is close. In the English cases, parties who could

151
Technical trademarks were arbitrary terms applied particularly to articles that were sold. RESTATEMENT (THIRD)
OF UNFAIR COMPETITION § 9 (1993). See also MCCARTHY § 4:4 (defining technical trademarks as marks that were
“fanciful, arbitrary, distinctive, non-descriptive in any sense and not a personal name”).

152
Tradenames then cumulatively can be thought to comprise what we now think of as indicators which lack inherent
distinctiveness and are protectable only with evidence of secondary meaning.

153
See Note 70, supra.

154
See SCHECHTER, HISTORICAL FOUNDATIONS at 161
establish exclusive rights did not need to produce evidence of fraud, whereas those parties forced
to establish their legal right prior to equity taking jurisdiction had to show that the defendants
intended to divert their trade.

Whether the American cases were based on trademark infringement or unfair competition,
however, the underlying concern, just as it was in English cases, was trade diversion. 155 Indeed,
many of the doctrinal limitations applied to both types of cases,156 and courts often even made
explicit reference to the close conceptual relationship between trademark infringement cases and
other cases of unfair competition.157 As a result, commentators were comfortable arguing that
trademark infringement and unfair competition claims were based on the same principles.158

155
See Hanover Star Milling, 240 U.S. at 413 (Th[e] essential element is the same in trade-mark cases as in cases of
unfair competition unaccompanied with trade-mark infringement.”); HOPKINS, supra note __ at § 4 at 12 (“The
principles involved in trademark cases and tradename cases have been substantially identical.”).

156
“The qualified right in the tradename [or a trademark], a right to prevent a defendant from passing off his goods as
those of the plaintiff by the use of it – exists only with regard to goods of the kind for which the plaintiff uses it, and
to which the connection with his business suggested by the use of the name extends.” Hopkins at § 5 at 15 quoting
KERLY ON TRADEMARKS 475 ( 2d. ed. London 1901).

157
See, e.g., Marsh v. Billings, 61 Mass. 322, 330 (1851).

158
HOPKINS, supra note __ at § 2 at 3 (“It is true, as well, that the development of the law of the technical trademark
tended to encourage the buccaneers of commerce to invent new and subtler means of stealing another’s trade without
trespassing upon his trademark rights. But the law, steadily though slowly, extended its bulwark of protection about
the legitimate trader, until at length he was afforded legal redress in some form, not always adequate or complete,
against the fraudulent diversion of his trade, in whatever form it might appear.”). See also, Oliver R. Mitchell, Unfair
 (3) Benefits to Consumers an Added Bonus

Though trademark law as it developed in England and in America focused on protecting

producers, the benefits to consumers were not entirely lost on courts. In fact, some courts even
said that prevention of fraud on the public was one of the bases for protection. In Amoskeag Mfg.
Co. v. Spear,159 for example, Justice Duer wrote, “consider[ing] the nature of the wrong that is
committed when the right of an owner of a trade-mark is invaded”160 that

He who affixes to his own goods an imitation of an original trade-mark, by which

those of another are distinguished and owned, seeks, by deceiving the public, to
divert and appropriate to his own use, the profits to which the superior skill and
enterprise of the other had given him a prior and exclusive title. He endeavors, by
a false representation, to effect a dishonest purpose; he commits a fraud upon the
public and upon the true owner of the trade-mark. The purchaser has imposed upon
him an article that he never meant to buy, and the owner is robbed of the fruits of
the reputation that he had successfully labored to earn.161

Competition, 10 HARV. L. REV. 277, 284 (1896) (“In every unfair competition case the defendant’s attempt is to
appropriate to himself some part of the good will, or the entire good will, of the plaintiff’s business.”).

159
2 Sandf. 599 (N.Y. Super. 1849)

160
Id. At 605. Note that, although he would elaborate on the harm, Justice Duer framed the issue in terms of the rights
of the trademark owner.

161
Id. at 605-06. See also Alff & Co. v. Radam, 14 S.W. 164 (1890) (plaintiff entitled to protection against deception
not because of his trademark, but because of fraud and deception practiced by the defendant upon the plaintiff and the
Upton similarly claimed that the right of property in trademarks was of “immense and incalculable
value to the manufacturer – the merchant – and the public.”162 Indeed, even in 1860 it was

the well established doctrine, that the exclusive property of the manufacturer, or merchant,
in his trade marks, is of that nature and character, that its adequate security and protection,
by the exercise of the highest power of the courts, is an imperative duty, as well as for the
safety of the interests of the public, as for the promotion of individual justice.163

public); Goldwyn Pictures Corp. v. Goldwyn, 296 F. 391 (2d Cir. 1924) (noting that, in unfair competition cases, fraud
is the basis of the complaint and the court acts to promote honesty and fair dealing, and because no one has a right to
sell his own goods as the goods of another; the court seeks to protect the purchasing public from deception and also
the property rights of the complainant).

162
UPTON, supra note __ at 15-16. Foreshadowing contemporary economic justifications of trademark protection,
Upton noted that a trademark is “the means, and in many instances, the only means, by which [the manufacturers] are
enabled to inspire and retain public confidence in the quality and integrity of the things made and sold – and thereby
secure for them a permanent and reliable demand – which is the life of manufacturing and mercantile operations. And
it is also… the only means, by which the public is protected against the frauds and impositions of the crafty and
designing …” Id.

163
UPTON, supra note __ at 13.
 When courts or commentators mentioned the benefit to the public, however, Upton’s
formulation was typical - they generally made clear that the benefit to the public was a secondary
benefit. As the court explained in Boardman v. Meriden Britania Co.164

The object or purpose of the law in protecting trademarks is twofold: First, to

secure to him who has been instrumental in bringing into market a superior article
of merchandise, the fruit of his industry and skill; second to protect the community
from imposition, and furnish some guaranty that an article purchased as the
manufacture of one who has appropriated to his own use a certain name, symbol or
device as a trademark is genuine. Consequently, the violation of property in
trademarks works a twofold injury; the appropriator suffers, in failing to receive
that remuneration to which he is justly entitled, and the public in being deceived
and induced to purchase articles made by one man, under the belief that they are
the production of another.165

Importantly, this formulation did not depend on whether the claim formally was considered a
trademark claim or one for unfair competition. In both types of cases, courts primarily focused on

164
35 Conn. 402 (1868)

165
Id. at __. See also, Taylor v. Carpenter, 2 Sand. Ch. 603, 604 (1846) (“It is a fraud upon both the trademark owner
and the public to allow another to deceive purchasers and … to deprive the owners thereof of the profits of their skill
and enterprise.”); WILLIAM D. SHOEMAKER, TRADE-MARKS, Vol. I, 4 (1931) (“This protection is afforded, not only
as a matter of justice to him, but to prevent imposition upon the public.”):
a producer’ diverted trade, sometimes mentioning the public’s interest as well.166 It was not until
the middle of the twentieth century that courts inverted these policy goals in their discussions.167

166
One commentator did claim that “the interference of courts of equity, instead of being founded upon the theory of
protection to the owner of trademarks, is now supported mainly to prevent fraud upon the public.” CHARLES E.
CODDINGTON, A DIGEST ON THE LAW OF TRADEMARKS § 36 (1878). The authorities Coddington cites, however, do
not support his conclusion. In fact, each of the cases he cites fairly clearly seeks to protect the mark owner from trade
diversion. In Lee v. Haley, for example, the court held that, while the plaintiff had no exclusive right in the name
Guinea Coal Company, “the principle upon which the cases on this subject proceed is, not that there is a property in
the word, but that it is a fraud on a person who has established a trade, and carries in on under a given name, that
some other person should assume the same name, or the same name with a slight alteration, in such a way as to induce
persons to deal with him in the belief that they are dealing with the person who has given a reputation to the name.”
Lee v. Haley 5 Chy. App. Cas. (Law R.) 155, 161 (1869) (emphasis added). In Wotherspoon v. Currie, the court noted
that “the employment of [a name that has become a trade denomination and as such the property of a particular person
who first gives it to a particular article of manufacture] by another person for the purp ose of describing an imitation
of that article, is an invasion of the right of the original manufacturer, who is entitled to protection by injunction.” 5
Eng. & I. App. (Law R.) 508, (1872). See also, Id. At 521-22 (Lord Westbury referring to the Glenfield mark as
plaintiff’s property).Newman v. Alvord is the only one of Coddington’s cases that even mentions a benefit to
consumers, and it makes the consumer benefit a secondary one. Newman v. Alvord, 51 N.Y. 189, 193, 195 (NY Sup.
Ct. 1877) (stating, in the summary preceding the decision that “the principle upon which relief is granted is that
defendant shall not be permitted by the adoption of a trade-mark which is untrue and deceptive, to sell his own goods
as those of plaintiff, thus injuring the latter and defrauding the public” and noting several times that the defendant
“injured the plaintiff and defrauded the public”). Thus, it is probably no surprise that Coddington’s was a rather
isolated opinion. See HOPKINS, supra note __ at § 19 at 40a n. 21 (arguing that Coddington “erred in ascribing [fraud
on the public] as the only reason for trademark protection. The prevention of fraud upon the person whose goods are
pirated is equally important and cogent.”).

167
See, e.g., Zippo Mfg. v. Rogers Imports, Inc., 216 F. Supp. 670, 694-95 (S.D.N.Y. 1963) (“the law of unfair
competition has traditionally been a battleground for competing policies. The interest of the public in not being
 In most cases, the question of whether trademarks were protected for the benefit of
producers or the public was not particularly important since both interests generally suggested the
same outcome. The real animating force in these cases is most apparent in cases where interests
of the public and those of the producer did not necessarily coincide. And in those cases, courts
sided with producer interests and made clear that trademark protection was not, in fact, intended
primarily for public benefit.

(a) Evidence of Confusion was Not Sufficient

If protection of the public were trademark law’s primary concern, then we could expect to
find cases where courts enjoined uses that caused confusion even if there was not particularly
compelling evidence that the confusion would lead to lost sales by the particular plaintiff. In fact
we find just the opposite: courts sometimes denied relief even in the face of potential confusion
where the plaintiff could not prove that the confusion would result in diversion of its customers.
The deception of the public, standing alone, was not a sufficient condition for relief.

These results are based on principles that go all the way back to English trademark
decisions like The Leather Cloth Co. v. American Leather Cloth Co.168 In that case, Lord Westbury

deceived has been called the basic policy. Moreover, a plaintiff’s interest in not having the fruit of his labor
misappropriated should not be disregarded. But there is also the policy of encouraging comepetition from which the
public benefits.”); Norwich Pharmacal Co. v. Sterling Drug, Inc., 271 F.2d 569, 570-71 (2d Cir. 1959), cert. denied,
362 U.S. 919 (1960) (“Distaste for sharp or unethical business practices has often caused the courts to lose sight of
the fundamental consideration in the law of unfair competition – protection of the public.”).

168
4 De G.J. & S. 137 (1863).
explained that it was a prerequisite to relief, even in cases where the defendant held out his goods
as those of the plaintiff, that the plaintiff “sustains, or is likely to sustain, from the wrongful act
some pecuniary loss or damage.”169 The right to a trademark, according to Lord Westbury, was a
right in property, and

the mistake of buyers in the market under which they in fact take the Defendant’s goods as
the goods of the Plaintiff, that is to say, imposition n the public, becomes the test of the
property in the trade mark having been invaded and injured, and not the ground on which
the Court rests its injunction.170

The same view is evident in a number of American cases. In New York & Rosendale
Cement Co. v. Coplay Cement Co.,171 for example, the court denied injunctive relief against the
defendant’s use of the “Rosendale” designation for its cement, even though it was not, as plaintiff
was, one of the fifteen to twenty cement manufacturers located in Rosendale, New York. The
court denied relief despite its belief that consumers were likely to be confused and that confusion
was regrettable: “no doubt the sale of spurious goods, or holding them out to be different from
what they are, is a great evil, and an immoral, if not illegal, act.”172 Nevertheless, the plaintiff was
not entitled to a remedy. Because it was not the only manufacturer of Rosendale cement, the

169
Id. at 141.

170
Id.

171
44 F. 277 (C.C.E.D. Pa. 1890)

172
Id. at 278-79
plaintiff could not say that the defendant was intending to palm its products off as those of the
plaintiff, as opposed to one of the other many manufacturers who made their cement in
Rosendale.173 “[I]f a person seeks to restrain others from using a particular trade-mark, trade-
name, or style of goods, he must show that he has an exclusive ownership or property therein. To
show that he has a mere right, in common with others, to use it, is insufficient.”174

173
Pillsbury-Washburn Flour Mills Co. v. Eagle, 86 F. 608 (7 th Cir. 1898), cert denied 173 U.S. 703 (1899), provides
an interesting comparison. In that case, the plaintiffs consisted of all the companies milling flour in Minneapolis, and
the court granted them injunctive relief against the defendant, which was located in Chicago and sold flour milled in
Milwaukee under the “Minnesota Patent” label. Joseph Bauer suggests that the case reflects a broader understanding
of unfair competition law since the court rejected the “property right” prerequisite suggested by the Rosendale Cement
and American Washboard cases when it said that “in cases where the question is simply one of unfair competition in
trade it is not essential [that] there should be any exclusive or proprietary right in the words or labels used, in order to
maintain the action.” Joseph P. Bauer, A Federal Law of Unfair Competition: What Should Be The Reach of Section
43(a) of the Lanham Act?, 31 U.C.L.A. L. Rev. 671, 676 (1984). But, as we have seen, a proprietary right was never
a prerequisite to unfair competition relief – the lack of such a proprietary right only meant that the plaintiff had to
prove intent to pass off. In the Pillsbury case, the plaintiffs could quite plausibly allege that the defendants were
diverting trade that otherwise would have gone to them since they collectively comprised all of the companies milling
flour in Minneapolis.

174
Rosendale, 44 F. at 279. Where a plaintiff used a geographic designation to which it did not have exclusive rights,
it was forced to demonstrate that the defendant intended to sell its products as those of the plaintiff in order to prevail.
See Newman v. Alvord, 51 N.Y. 189 (1872) (finding for plaintiff, which had no exclusive right to designate its cement
as originating from “Akron,” on the ground that the plaintiff was the sole manufacturer of cement from stone near
Akron at the time of the suit and the defendant sought to sell its goods as those of the plaintiff); Lea v. Wolf, 13
Abb.Pr.(N.S.) 389 (N.Y. Sup. 1872) (holding that plaintiff had no exclusive right to designate its product
“Worcestershire sauce,” since that mark consisted of the name of the place the sauce was manufactured and the
descriptive name of the article, but granting an injunction against defendant’s use of labels and wrappers that so
resembled plaintiff’s that defendant’s intent to divert plaintiff’s customers was clear); Anheuser-Busch Brewing Ass’n
 Similarly the Supreme Court held in Canal Co. v. Clark175 that the plaintiff had no
exclusive right in the geographically descriptive term “Lackawanna” and therefore could not
prevent the defendant from truthfully describing his coal as having originated from that place.176
The plaintiff lacked a remedy even though the court recognized that it may be true “that the use by
a second producer, in describing truthfully his product, of a name or a combination of words
already in use by another, may have the effect of causing the public to mistake as to the origin or
ownership of the product.”177 It rejected the plaintiff’s claim despite this risk of consumer
confusion because

if it is just as true in its application to his goods as it is to those of another who first applied
it, and who therefore claims an exclusive right to use it, there is no legal or moral wrong.

v. Piza, 24 F. 149 (S.D.N.Y. 1885) (holding that Anheuser-Busch had no exclusive right to “St. Louis Lager Beer,”
but granting injunction since AB was the only party exporting beer under that name, and the defendant, who was not
from St. Louis, sought to divert AB’s trade by misleading customers); Southern White Lead Co. v. Cary, 25 F.125
(N.D. Ill. 1885) (holding plaintiff entitled to injunction where defendants stamped their kegs “Southwestern, St. Louis”
in the same form as plaintiff stamped its kegs “Southern Company, St. Louis,” and where there was evidence
defendants’ kegs could be and were sold as the plaintiff’s).

175
80 U.S. 311 (1871).

176
Canal Co. v. Clark, 80 U.S. 311, 323 (1871) (“No one can claim protection for the exclusive use of a trade-mark
or trade-name which would practically give him a monopoly in the sale of any goods other than those produced or
made by himself. If he could, the public would be injured rather than protected, for competition would be destroyed.”).

177
Id. at 327.
 Purchasers may be mistaken, but they are not deceived by false representations and equity
will not enjoin against telling the truth.178

American Washboard Co. v. Saginaw Mfg. Co.,179 reaches a similar result. There, the
plaintiff manufactured washboards with aluminum-coated facings and sold the washboards under
the “aluminum” trade name. The defendant also designated its products as “aluminum,” even
though its products actually were made of zinc. While there was little dispute that the defendant
had in fact misrepresented the nature of its goods, the court denied injunctive relief.

Since “aluminum” was merely the descriptive title of a kind of washboard, no single
producer could claim the term as its own. Without something more than defendant’s use of the
“aluminum” trade name, the plaintiff could not claim that the defendant was “passing off” its goods
as those of the plaintiff; but only that the defendant was misrepresenting the nature of its goods.180
The court noted that the plaintiff had “los[t] sight of the thoroughly established principle that the

178
Id. at 327. Commentators often refer to the bar on claiming descriptive terms as trademarks as evidence of concern
for consumers. Canal Co. does provide some support for that view, given its statement that “[n]o one can claim
protection for the exclusive use of a trade-mark or trade-name which would practically give him a monopoly in the
sale of any goods other than those produced or made by himself. If he could, the public would be injured rather than
protected, for competition would be destroyed.” Id. at 323. But to read Canal Co. v. Clark that way would be to take
one statement out of context and ignore the rest of that decision, which recognized the potential for confusion but still
determined that the defendant’s actions were legitimate.

179
103 F. 281 (6th Cir. 1900).

180
Today, such a false description of the nature of one’s product would be a clear violation of § 43(a) of the Lanham
Act. See 15 U.S.C. § 1125(a).
private right of action in [these] cases is not based on fraud or imposition upon the public, but is
maintained solely for the protection of the property rights of a complainant.”181

These cases underscore the traditional producer-centered view of trademark law: trademark
law was not intended to protect consumers, but rather to protect the producer against competitors
fraudulently stealing their consumers by passing off their goods. As the American Washboard
court said, “[a producer] has a right to complaint when another adopts this symbol or manner of
marking his goods so as to mislead the public into purchasing the same as and for the goods of
complainant.”182 The mark owner “comes into a court of equity in such cases for the protection of
his property rights. The private action is given, not for the benefit of the public, although that may
be its incidental effect, but because of the invasion by defendant of that which is the exclusive
property of complainant.”183

181
American Washboard, 103 F. at 285. Importantly, the court was only concerned about the defendant fraudulently
stealing consumers by passing off its goods as those of the plaintiff. Id. at 284-85. One could easily describe the
defendant as having fraudulently stolen American Washboard’s customers. There is no doubt that the defendant
misrepresented to consumers that its product was made of aluminum. Id. at 285; see also Bauer, supra note __ at 673
n.17. And since plaintiff in that case was the only domestic manufacturer of aluminum washboards, and as a result,
defendant’s sales clearly came at the plaintiff’s expense. But the plaintiff could not show that any such trade diversion
resulted from the defendant’s passing off its goods as the plaintiff’s.

182
American Washboard, 103 F. at 284.

183
Id. (emphasis added); see also Bates Mfg. Co. v. Bates Numbering Mach. Co. 172 F. 895 (C.C.N.J. 1909) (quoting
American Washboard); Avery & Sons v. Meikle & Co., 4 Ky.L.Rptr. 759, __ (1883) (fraud upon the public is not
sufficient to invoke jurisdiction unless probable or possible injury to plaintiff is shown).
 Perhaps the clearest expression of this understanding that trademark law protected a
producer’s property interest came from the court in Borden Ice Cream Co. v. Borden’s Condensed
Milk Co.184 In that case, the court denied relief to the plaintiff, which sold milk under the Borden
name, against a defendant which used the Borden name for ice cream. The court recognized the
potential for consumer confusion but said, echoing Lord Westbury in The Leather Cloth case:

It has been said that the universal test question in cases of this class is whether the
public is likely to be deceived as to the maker or seller of the goods. This, in our
opinion, is not the fundamental question. The deception of the public naturally
tends to injure the proprietor of a business by diverting his customers and depriving
him of sales which otherwise he might have made. This, rather than the protection
of the public against imposition, is the sound and true basis for the private remedy.
That the public is deceived may be evidence of the fact that the original proprietor's
rights are being invaded. If, however, the rights of the original proprietor are in
no wise interfered with, the deception of the public is no concern of a court of
chancery.185

184
201 F. 510 (7th Cir. 1912).

185
Id. at 513. Very similar language appears in Taylor v. Carpenter, 23 F.Cas. 742 (C.C.D. Mass. 1844); The
Trademark Cases, 100 U.S. 82, 93-94 (1879);; Chadwick v. Covell, 23 N.E. 1068 (1890) (Holmes, J.); Crescent Tool
Co v. Kilborn & Bishop, 247 F. 299 (2d Cir. 1917); Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413-15 (1916);
Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 206-07 (1942).
 Notably, in these cases where the interests of producers and consumers diverged, including
New York & Rosendale Cement Co. and American Washboard, the courts understood that their
decisions would not protect consumers and anticipated that any relief for them would have to come
from a lawsuit filed by a deceived member of the public or from a lawsuit filed by the state. 186
The notion that consumers might have their own claims was not a new development – courts had
for many years suggested that consumers might have their claims for deception.187 But that
dichotomy reflects courts’ traditional understanding of the relevant interests in these cases.

(b) The Cases Involving Expired Patents Are Consistent With the Trade
Diversion Conception

Commentators also have pointed to the cases involving trademark rights in the post-patent
period as evidence of trademark law’s consumer focus. I do not dispute that concerns for
consumers gave additional weight to the conclusions courts drew in those cases, but those

186
Rosendale, 44 F. at 279; American Washboard, 103 F. at 285 (“It is doubtless morally wrong and improper to
impose upon the public by the sale of spurious goods, but this does not give rise to a private right of action unless
property rights of the plaintiff are thereby invaded. There are many wrongs which can only be righted through public
prosecution, and for which the legislature, and not the courts, must provide a remedy.”)

187
See, e.g., Levy v. Walker, L.R. 10 Ch. Div. at 448 (“If there is any misleading, that may be for the Criminal Courts
of the country to take notice of, or for the Attorney-General to interfere with, but an individual Plaintiff can only
proceed on the ground that, having established a business reputation under a particular name, he has a right to restrain
any one else from injuring his business by using that name.”). See also, SCHECHTER, HISTORICAL FOUNDATIONS at
143. Depending on the accuracy of the various reports of Southern v. How, a claim on behalf of the defrauded
purchaser might well have been what the court was contemplating there.
decisions too can be seen careful applications of the historical underlying goal of trademark law –
preventing competitors from stealing customers under false pretenses.

In Singer Mfg. Co. v. June Mfg. Co.,188 the court refused to prevent competitors in the
sewing machine trade, which had entered the market after Singer’s patent on the machine expired,
from manufacturing and selling competing sewing machines of the same shape as the Singer
machines or from using the term “Singer” to refer to those machines. The court said “[i]t follows,
as a matter of course, that on the termination of the patent there passes to the public the right to
make the machine in the form in which it was constructed during the patent.”189 Having acquired
the right to make the machine, the public must also acquire the “designated name which was
essentially necessary to vest the public with the full enjoyment of that which had become theirs by
the disappearance of the monopoly.”190 Consequently, the court would not prevent the defendant
from using the “Singer” mark altogether or from making machines in the same shape as Singer’s.

Despite rejecting the plaintiff’s claim of exclusive rights, however, the court believed that
the defendant had attempted to divert the plaintiff’s trade illegitimately and ordered an accounting
of the defendant’s wrongfully obtained profits. It found the defendant’s conduct punishable
because “the defendant had not marked its machines with a sufficiently prominent disclosure of

188
163 U.S. 169 (1896).

189
Id. at 185.

190
Id.
the actual source of manufacture, and … some of [the] defendant’s advertisements did not
adequately disclose the true source of the goods.”191

By distinguishing the use of the Singer name and the shape of the product from additional
marking requirements, the court simply applied trademark law’s traditional principles to allow
competition and yet prevent illegitimate trade diversion. If consumers had become accustomed to
a calling the machines “Singer” machines and expected those machines to be made in a particular
shape, then they did not likely attach any particular source significance to those elements. In that
case, the defendant’s use of the Singer name to sell its similarly shaped machines did not
illegitimately divert consumers from Singer. Certainly the defendant sought to capture some
consumers who otherwise would have bought from Singer, which was the only manufacturer of
these machines during the patent period. But that diversion was legitimate because it was precisely
what the patent system anticipated after patent expiration.192 The marking requirement was
intended to prevent competitors from stealing Singer’s customers by making them think they were
buying a machine made by Singer.

The court’s order that the defendant pay to the plaintiff his wrongfully obtained profits
further reinforces this interpretation. David Welkowitz suggests that the order was based on a
desire to protect the public from deception,193 but the compensatory nature of the monetary relief

191
David S. Welkowitz, The Supreme Court and Trademark Law in the New Millennium, 30 WM. MITCHELL L. REV.
1659, 1664 (2004); Singer, 163 U.S. at 200-04.

192
As discussed below, courts and commentators of the nineteenth century were quite careful to make this distinction
between legitimate and illegitimate attempts to steal competitors’ customers. See Section __, below

193
See Welkowitz, supra note __ at 1664.
is hard to square with that interpretation. Instead, the award of compensation reflects a belief that,
but for the defendant’s trickery, those profits would have been Singer’s. If the court only was
concerned about consumers, it could have just entered the injunctive relief.

Kellogg Co. v. National Biscuit Co.194 also fits squarely within this understanding. In that
case the Supreme Court, as it did in Singer, refused to allow the owner of an expired patent to
prevent competitors from making a product in the shape to which consumers had grown
accustomed or from calling that product by the name by which customers knew that product.
Unlike the defendant in Singer, however, Kellogg took care to delineate clearly the source of its
cereal by making its biscuits in a different size and prominently displaying the Kellogg name on
the product’s packaging.195 By clearly marking the source of its product, Kellogg showed that it
was not trying to divert National Biscuit Company’s consumers by making them believe they were
getting a National Biscuit product. They were trying to take some of National Biscuit’s market to
be sure, but not through deception.

194
305 U.S. 111 (1938).

195
Id. at 120-22.
 CHAPTER 4

GEOGRAPHICAL INDICATION

4.1. INTRODUCTION Formatted: Font: 14 pt

Formatted: Font: 14 pt, Small caps
1.1 Background and definitions
In today’s increasingly competitive and transnational trading environment, products from all over
the world are sold in domestic and foreign markets. These products need to be distinguished from
one another in order to provide consumers with information about their (commercial) origin,
quality etc. Various ways and methods with legal implications have been developed, for the
purpose of distinguishing products from each other. This has also provided producers with tools
to guard themselves from infringement, unfair competition, free-riding etc. Most likely, today, the
product carries a trademark, distinguishing its commercial origin from that of other products. It
may also be protected under patent regulations, if it contains a sophisticated enough invention. In
addition, its design and trade name may be protected. These are examples of intellectual property
measures intended to reassure consumers of the specific characteristics of the product in question,
and to provide protection for individual producers.

Historically, trademarks became the chief way for producers to individualize themselves,
distinguish their products from those of others, and secure economic revenue from exclusivity.
However, as competition grew increasingly fierce and international, protection for trademarks
turned out not to be enough; goods needed to be further distinguishable.2
This was where indications of geographical origin, such as geographical indications (GIs),
demonstrated their importance. GIs are place names used to identify the origin and quality,
reputation or other characteristics of products, for example “Champagne”, “Tequila” or
“Roquefort”.196 Thus, a GI has historically been, and still is today, a way to create value through
exclusivity. In order to fully understand the discussion going on today about GIs it is important to
recognize that, in addition to communicate geographical origin, a GI is also a legally protected
instrument for creating value through the exclusivity for the producers of the good in question.

This essay uses the definition of GIs as given by the Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS), Art 22(1).197 By being able to label goods in yet another
unique way, producers communicate to consumers that the good in question has certain valuable
features. “GIs – like trademarks – are intrinsically associated with the buying and selling of
goods”.198 The system of protection through distinguishing marks laid the foundation for what
today is a system for the protection of indications of geographical origin.

196
http://www.wto.org/english/tratop_e/trips_e/gi_e.htm, last visited 2009-03-06.

197
TRIPS Art 22(1) states that “[g]eographical indications are, for the purposes of this Agreement, indications which
identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given
quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.” TRIPS
constitutes Annex 1C of the WTO Agreement, signed at the Marrakesh ministerial meeting, in 1994.

198
Rangnekar, 2004, p 8. 6

”Terroir” is a French word, attributing the features and characteristics of the wine to the “[…] soil, weather conditions
and farming techniques” in which the grapes were cultivated. These elements collectively contribute to the specific
The term indications of geographical origin (IGOs) is here used as an umbrella term for several
different relevant denotations, namely indications of source, appellations of origin and
geographical indications. IGOs are commonly afforded rights, and can as such be used
simultaneously by many producers. Conversely, no producer fulfilling the requirements related to
the IGO can be denied using it. This separates IGOs from other intellectual property rights (IPRs),
which generally convey individual (monopoly) rights to a single rightholder. However, IGOs and
trademarks resemble in that, that they convey rights to prevent unauthorized producers from
labeling their goods with identical, or confusingly similar, IGOs or trademarks.
Some of the geographical Indication in India are given below –

features of the final product, in terms of its taste etc. See http://en.wikipedia.org/wiki/Terroir, last visited on 2009-02-
12. It has also been proposed that the notion of terroir is the very base for all “appellation laws” as such, see Hughes,
2006, p 301.
Purpose
This research work analyzes the relationship between GIs and trademarks, focusing on the
synergies and conflicts that arise in the international market due to their similarities and
differences. In addition, the purpose is to contribute to the current discussion regarding the need
for an efficient GI protection scheme.
4.2. DEVELOPMENT OF THE PROTECTION FOR IGOS Formatted: Small caps

2.1 Introduction Formatted: Indent: Left: 0"

People have since early times appreciated that not all goods of the same type are equivalent in
terms of quality. In ancient Greece, a particular wine from a certain region was more in demand
than other wine, because people appreciated its superior quality. This wine had unique
characteristics based on its origin, something that is referred to today as terroir.199 Consequently,
it sold at a higher price.200 People distinguished this wine from other types by its markings,
indicating its particular geographical origin. It has since been recognized that other goods than
wine can possess certain features due to origin and several international instruments provide
means to distinguish such goods from other goods, lacking this origin and these features.

2.2 The Paris Convention and the Madrid Agreement Formatted: Font: Italic, Underline
Formatted: Indent: Left: 0"
The first international legal framework to grant protection for indicators of geographical origin on
goods was the Paris Convention.201 It affords protection for indications of source as well as for
appellations of origin, when such indicators are used on goods. However, the Paris Convention
does not stipulate any particular requirements as to “quality, characteristic or reputation of the

199
Terroir” is a French word, attributing the features and characteristics of the wine to the “[…] soil, weather
conditions and farming techniques” in which the grapes were cultivated. These elements collectively contribute to the
specific features of the final product, in terms of its taste etc. See http://en.wikipedia.org/wiki/Terroir, last visited on
2009-02-12. It has also been proposed that the notion of terroir is the very base for all “appellation laws” as such, see
Hughes, 2006, p 301.

200
EU, 2003, p 3.

201
Paris Convention for the Protection of Industrial Property of March 20, 1883 (revised at later occasions).
identified product”, in which aspect it differs from some more recently adopted legal
frameworks.202 Rather, the requirements for protection under the Paris Convention are fulfilled
already when the goods are labeled “made in…”, or in some other way convey to consumers “the
notion that the goods bearing the indication originate in that country or place”.203 Hence, the Paris
Convention is mainly focused on the actual geographical source or origin of the product, rather
than certain features of it. If “false” indications are used on goods, the Paris Convention stipulates
applicable remedies.

The concept of indications of source is also used in the Madrid Agreement for the Repression of
False or Deceptive Indications of Source of Goods, of 1891 (the Madrid Agreement). It was the
first multilateral legal instrument to address the issue of “deceptive indications of source”, thus
expanding the scope of protection already provided for by the Paris Convention.204 Deceptive
indications are “literally true but nevertheless misleading”,205 insofar that they refer correctly to a
certain origin, but it is not the origin consumers think. This situation occurs when, for example, a
certain name is used on two different places in two different countries – but functions as indication
of source for goods from only one of these countries. If producers in the other country use the
name as indication of source, the Madrid Agreement applies.

202
Addor & Grazioli, 2002, p 868.

203
WIPO, 2000, p 6. See also http://origin.technomind.be/246.0.html, last visited 2009-02-16.

204
EC, 2007, p 3-4.

205
WIPO, 2003b, p 11.
2.3 The Lisbon Agreement Formatted: Font: Italic, Underline

206
In 1958, the Lisbon Agreement was established. This multilateral agreement deals with
appellations of origin. It raises the requirements for protection from those in previously mentioned
instruments, by stipulating that a product should be of certain “quality and characteristics […] due
exclusively or essentially to the geographical environment” from which it originates. In addition,
it is only “the geographical name of a country, region, or locality” that can serve as an appellation
of origin.207 Thus, the notion of appellations of origin applies to a smaller number of indicators
than does indications of source. A result of the higher requirements in the Madrid Agreement is
that all appellations of origin are indications of source, whereas not all indications of source are
appellations of origin.
2.4 TRIPS

The most recent international agreement on IGOs is the Agreement on Trade-Related Aspects of
Intellectual Property Rights, of 1994 (TRIPS). TRIPS, as part of the WTO Agreement, is binding
on all WTO Member States. It is, in addition, the first international legal instrument in which the
term geographical indications (GIs) appears.

206
Lisbon Agreement for the Protection of Appellations of Origin and their International Registration of October 31,
1958 (revised at later occasions).

207
Lisbon Agreement Art 2(1). Examples of appellations of origin include “Bordeaux”, “Tequila” and “Jaffa”. See
WIPO, 2000, p 6.
TRIPS Art 22 frames the definition of GIs.208 GIs indicate that a good carries a certain quality,
reputation or other characteristics, which are essentially due to its origin. This means that “quality,
reputation and other characteristics are each in their own right a sufficient but indispensable
condition for the existence of a GI”.209 Being of significant value, WTO Member States shall
arrange protection for GIs and save them from unfair competition and misleading practices.18
However, such protective measures only come into effect if it is proved that illegitimate use of the
GI has caused consumers to be misled. But by “corrective labels”, consumers are informed of the
true origin of the good, and are prevented from being misled.210

TRIPS Art 23 refers exclusively to wine and spirits. Such goods are afforded a higher level of
protection, in that all illegitimate use of the GI is prohibited. There is no requirement of consumers
having to be misled.

GIs resemble appellations of origin, although the requirements of a GI are less strict. The good
merely has to have a quality, reputation or other characteristics which essentially are due to its
origin. This is an alleviation of the stricter requirement contained in the Lisbon Agreement, stating
that a product’s “quality and characteristics” must be “exclusively or essentially” due to the

208
See supra, footnote 4.

209
Addor & Grazioli, 2002, p 869 18

TRIPS Art 22 protects “indications which identify a good as originating in the territory of a Member, or a region or
locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable
to its geographical origin.”

210
For further discussion on corrective labels, see sections 3.2, 3.4 and 4.2.
geographical environment from where it originates.211 Furthermore, any sign can constitute a GI
according to TRIPS, not only geographical names as in the Lisbon Agreement.212 It is further
noted that TRIPS refers specifically to goods, which entails agricultural products such as food and
wine, as well as other manufactured goods.213 However, it is unanimously acknowledged that the
definition of GIs in TRIPS does not include services.214

The less strict requirements in TRIPS result in GI being a broader term than appellations of
origin.215 Since no particular quality or characteristics have to be presented (reputation is enough),
and since any indication – not only place names – is enough, all GIs can be said to be appellations
of origin, but not all appellations of origin are GIs.

211
Lisbon Agreement Art 2. Emphasis added.

212
EC, 2007, p 6. Within the EU, “Feta” is, allegedly, the most famous GI that does not refer to a specific geographical
place. See http://ec.europa.eu/trade/issues/sectoral/intell_property/argu_en.htm, last visited 2009-03-05.

213
Correa, 2002, p 10. 23

214
Rangnekar, 2002, p 16-17. This is the reason why TRIPS uses the term “good” and not “product”.

215
This is true even though Art 22 TRIPS is based on the language in Art 2 of the Lisbon Agreement. See WIPO,
2000, p 6.
2.5 Bilateral Agreements Formatted: Font: Italic, Underline

Various countries from all over the world have entered into bilateral agreements, for the protection
of GIs.216 Such agreements add to the existing set of rules on the handling of GIs, stipulated in
other legislative instruments.

2.6 Trademarks Formatted: Font: Italic, Underline

The purpose of a trademark is to indicate a commercial origin. Thus, they are in nature individual,
and refer only to one producer. Trademarks are usually made up of words, numbers or names, or
combinations thereof. The bottom-line is that they shall have a certain level of distinctiveness,
meaning that they are “capable of distinguishing the goods or services of one undertaking from
those of other undertakings”.217 A mark will not be deemed distinctive if the term itself is generic.
Without the required level of distinctiveness, the mark is not considered eligible for protection as
such. However, TRIPS acknowledges that marks can acquire distinctiveness through “use”,
should they not be inherently distinctive.

216
Such bilateral agreements include the EC – Australia Wine Agreement, the EC – Canada Agreement in which GIs
for European wines and spirits are afforded protection in Canada, in return for protection for Canadian GIs, such as
“Canadian Rye Whisky”. Other bilateral agreements are those between the EC and Mexico, EC and Chile and EC and
South Africa. Furthermore, the EC – US Wine Agreement stipulates rules for how certain European wine GIs are to
be used in the US. See EC, 2007, p 8 – 12. See also WTO, 2001, p 25, for an extensive enumeration of bilateral
agreements in force 2001, not only involving countries from the EU.

217
TRIPS Art 15 (1).
The protection TRIPS assigns trademarks is found in Art 16. Trademark owners have an
“exclusive right to prevent all third parties … from using … identical or similar signs” on identical
or similar goods, if such use might lead to confusion in the marketplace. This “likelihood of
confusion” is a well established measurement in the world of trademarks. If the use of a trademark
causes no risk of consumers being confused, it is sufficiently distinct from existing trademarks,
and can obtain protection under applicable legal instruments.

2.7 National regulations Formatted: Font: Italic, Underline

In addition to international regulations on IGOs, many countries provide protection through

domestic legal instruments, many of which existed prior to TRIPS. It is held that protection of
IGOs has its oldest roots in European countries such as France, Italy, Spain and England.

It was recognized that there were inherent discrepancies in how IGOs were protected on the
national level, and WTO Member States hence have discretion to implement the provisions of
TRIPS as they think appropriate.218 As a result, the modes of protection differ.31 In the EU, India
and China and others, protection springs from a sui generis system, whereas the U.S, Canada and
Japan protect IGOs by means of trademark law. Within the EU, protection for agricultural
products is provided

Such bilateral agreements include the EC – Australia Wine Agreement, the EC – Canada
Agreement in which GIs for European wines and spirits are afforded protection in Canada, in return
for protection for Canadian GIs, such as “Canadian Rye Whisky”. Other bilateral agreements are

218
TRIPS Art 1.1.
those between the EC and Mexico, EC and Chile and EC and South Africa. Furthermore, the EC
– US Wine Agreement stipulates rules for how certain European wine GIs are to be used in the US.
through Regulation 510/2006, which is specifically dedicated to GIs.219 Products that are
“nonagricultural or industrial” fall outside of the scope of protection.220

In the U.S., the regular trademark doctrine provides protection for GIs through the notions
“certification marks” and “collective marks”.221 Unlike regular trademarks, certification marks
and collective marks are not individual rights; any producer can, by adhering to certain rules and
standards, use them. Such rules and standards, however, are imposed by the holder of the mark.
There are few requirements as to what such standards for use actually have to entail, i.e., there is
no need to prescribe a certain geographical origin of the good for it to legitimately carry the mark.
Hence, the rules governing the standards for legitimate use of the marks are much less strict than
corresponding requirements under sui generis systems. As long as the goods are produced in
conformity with certain specific methods of production and/or the producer is a member of a
specific association, the marks in question can be used.

219
This Regulation, however, does not provide protection for wines and spirits. See Regulation 510/2006, Art 1(1).

220
Reg 510/2006 Art 1(1) mentions only “agricultural products”. See also OriGIn, on Reg 510/2006, p 1, (available
at: http://origin.technomind.be/fileadmin/origin/PDFs/English/OriGIn_publications/News/Note_on_GIs_under_th
e_modified_EC_Regulation.EN.pdf, last visited on 2009-03-05).

221
Moschini et al., p 797.
[4.3]. DIFFERENT SYSTEMS FOR PROTECTION OF GIS Formatted: Small caps

3.1 Sui generis or trademark system? Formatted: Indent: Left: 0"

Whether one or the other system provides a better protection for GIs is debatable. Arguments are
raised in both directions, and there seems to be no world-wide consensus on this issue.

On the one hand, it might arguably be “smoother” to protect GIs using existing legislation, e.g.
trademark law. By simply expanding the scope of protection afforded under its trademark law, a
country can protect GIs instantly, since no legislative process is necessary. And if disputes arise
between GIs (protected as certification or collective marks) and trademarks, they will be settled
using principles of trademark law. Thus, a dispute settling system giving foreseeable outcomes is
ensured.

On the other hand, protection afforded GIs by a sui generis system is tailored specifically. EC
Regulation 510/2006, which replaced Regulation 2081/92, is such a system. It protects GIs by
using the notions of Protected Designation of Origin (PDO), Protected Geographical Indication
(PGI). PDOs and PGIs need to be registered in order to be protected as GIs, but they cannot refer
to wine or spirits. Although defined slightly differently, both notions include specific requirements
as to the geographical origin of the products. The link between the product and its origin is crucial,
and it has been shown that 40% of the consumers in the EU “would pay a 10 percent premium for
origin guaranteed products”. The economic importance is clear, and becomes even clearer when
assessed.

[4.4]. CONFLICTS BETWEEN GIS AND TRADEMARKS Formatted: Small caps

GIs and trademarks represent different spheres of distinguishing marks, and the efforts to protect
them sometimes create conflicts. Such conflicts arise, i.a., between trademarks and protected GIs
for identical/similar products, which contain the same sign. Determining who should have the
right to use that sign as trademark or GI is difficult, but nevertheless important. The question
whether exclusivity of a registered trademark trumps a later-in-time protected GI is also of great
significance.222 The conflicts that arise can be settled from either a trademark perspective or a GI
perspective48 and, depending on which perspective is used, conflicts will be dealt with differently.
It is, in essence, a matter of either granting exclusive rights to either the trademark or the GI
according to a “first-in-time, first-in-right” scheme, or granting the GI exclusive rights, without
taking possible prior trademarks into account, or prescribing a co-existence of the trademark and
the GI.223

222
Such conflicts between two trademarks in the same relevant market are usually solved by virtue of the priority
principle, which offers a “first-in-time, first-in-right” type of solution. The principles of territoriality and specialty
can also result in that the trademarks are to coexist, instead of granting superior rights to either of them. See WIPO,
2000, p 4 (which refers to the Paris Convention Art 6septies), as well as p 14. 48

WIPO, 2000, p 15.

223
For an introductory note to this debate, see Montén, 2006, p 328 – 331.
TRIPS deals with these conflicts by prescribing that previously registered trademarks containing
a protected GI can, under certain circumstances, be invalidated. Such circumstances include the
situation when the use of a trademark “is of such a nature as to mislead the public” about the origin
of the goods carrying it.224 The burden of proof lay on the producer claiming that an illegitimate
use of the GI is taking place. But if the GI relates to wine or spirits, no proof regarding risk of

224
TRIPS Art 22(3). Invalidation follows either an “ex officio” procedure, or a request of an “interested party”.
misleading is needed; the trademark shall be invalidated anyway.225 226Nonetheless, a trademark
will prevail, even though it is “identical” or “similar” to the GI if it is registered or applied for in
good faith, before a certain time, or if rights to it have been acquired through use.53

Moreover, Art 22 TRIPS allows for the use of a GI by producers from outside the designated
geographical area, provided that such a use is accompanied by a corrective label. Such a label
discloses the true origin of the good, thus disclosing that it is another than what is actually
indicated by the GI that the good carries. The position of TRIPS is that corrective labels prevent
consumers from being misled about the actual origin of the good. By identifying the true origin,
the GI can be legitimately used on the good, even though it originates from elsewhere. However,
corrective labels cannot be used on wines or spirits, according to Art 23 TRIPS.227 It is further
noted that Reg 510/2006 proscribes the use of corrective labels – a prohibition which thus applies
to corrective labels on agricultural products.228

225
TRIPS Art 23(2). Invalidation follows either an “ex officio” procedure, or a request of an “interested party”.

226
It shall also be noted that invalidation claims under Arts 22-23 must be made within a period of 5 years from that
the use of the contested trademark became known in the country where the protected GI comes from, or from the date
of the registration of the trademark in question, whichever is the earliest in time. See TRIPS Art 24(7). 53

TRIPS Art 24(5), which is also known as a grandfather clause. Blakeney describes this feature in TRIPS as a result
of protection for GIs being an “innovation” in many countries, why, under certain circumstances, trademarks receive
a further stretching protection. See Blakeney, 2001, p 641.

227
See also Rangnekar, 2004, p 13.

228
Reg 510/2006 Art 13(b).
Conflicts will at times also be settled in direct favor of the trademark. In practice, Parma Ham is
a protected GI within the EU, but cannot be used as GI in Canada or Mexico. A prior Canadian
trademark registration of the very same connotation renders such use impossible.229 Typically,
countries in support of more limited GI protection measures use trademark law as the vehicle for
protection230, which involves a “first-in-time, first-in-right” resolution of conflicts. In such
situations, producers of GI labeled goods will be denied the right to use that GI, as a direct result
of the principle of priority.231

Furthermore, trademark law itself sometimes hinders producers of GI labeled goods to use the GI
relating to the goods. Since GIs commonly entail geographical references, such as names of
regions or cities, they cannot be registered under trademark law since such names are in nature
descriptive.232

229
EU, 2003, p 1. See also Babcock & Clemens, 2004, p 10 – 11.

230
See above, section 2.5 for examples of where protection is granted through the use of trademark law.

231
EC, 2007, p 14.

232
EC, 2007, p 14. 60

Trademarks are distinguishing as to commercial origin of the goods, whereas GIs connote certain qualities,
characteristics or reputation of the good.
[4.5]TRADEMARK SYSTEM SUPPLEMENTING GI PROTECTION Formatted: Small caps

Conflicts between trademarks and GIs usually result in either concept being prohibited to use the
geographical denomination at issue. Nevertheless, there are situations where the two systems
create synergies, rather than being adversarial.

Trademarks and GIs have important similarities, as well as differences. Both concepts enable
producers to distinguish their products in the market, although GIs are used on a collective level
rather than individual.60 Producers may utilize both a trademark and a GI, as long as both are used
legitimately. Hereby producers obtain a two-layer protection; one in their capacity of producers
as such, and one for producing a certain good within a certain demarcated geographical area. In
addition to the two-tiered protection, such combined use will provide consumers better
information regarding both commercial and geographical origin of the good.

Being indicators of source, neither trademarks nor GIs may lack distinctiveness or be deceptive.233
Generally, trademark law prevents marks containing a geographical reference from obtaining
protection. Only if such a geographical source reference does not confuse the public as to the
origin of the goods will it be allowed.234 Thus, this restrictive feature of trademark law will help
keeping the sphere of trademarks “clean” from GIs.

233
WIPO, 2003a, p 12.

234
WIPO, 2000, p 15. One example of a trademark that does not confuse the public as to the origin of the goods is
“Antarctica” on bananas.
Lastly, it is once again emphasized that when GIs are protected by means of trademark law (and
more specifically, through the concepts of certification marks and collective marks), there are
synergies between them, and potential conflicts will be easily settled. The applicable legal
principles provided to resolve the dispute will be pointed out in the legislative document already,
and a solution to the dispute will thus be swiftly obtained.235

3.4 Generalization of GIs and trademarks

The protection of IPRs is based, i.a., on the principles of territoriality and specialty. Hence, TRIPS
clarifies that a GI may be protected in one country, and a generic term in another.236

In the EU, terms that have once become generic may not be registered as GIs.237 But at the same
time, registered GIs cannot become generic.238 This has important implications for producers
outside the designated geographical area, since a registration renders it impossible for them to use
the GI or even attack it on the grounds of being generic. Thus, when a GI disappears from the
public domain due to registration under the EU rules, it will not return. To further increase the

235
Op. cit, p 16.

236
TRIPS Art 24(6). See also WIPO, 2000, p 8

237
Reg 510/2006 Art 3(1).

238
Reg 510/2006 Art 13(2). 67

Reg 510/2006 Art 13(1)(b). See case C-87/97, Consorzio per la Tutela del Formaggio Gorgonzola and Käserei
Champignon Hofmeister GmbH & Co. KG, Eduard Bracharz GmbH, for further elaboration on corrective labels
within the framework of community law.
protection for GIs, the EU rules prohibit all use of corrective labels, irrespective of what type of
goods they would be used on.67

The rules on generalization of GIs in Reg 510/2006 differ from those of TRIPS. According to
TRIPS a GI can become generic. Art 24(9) gives that WTO Member States are not obligated to
protect GIs which are not protected in their country of origin. International protection requires
domestic protection, which itself requires that the sign is not generic.239 One way, in which GIs
risk becoming generic is through the use of corrective labels on GI labeled goods. By being used
on goods originating elsewhere than the originally GI labeled goods, the GI itself becomes less
and less powerful. When a GI has become generic, the exclusivity it once represented has
vanished; it will no longer distinguish a certain origin of goods.240 However, it shall be noted that
every country assesses individually whether a GI is generic under its domestic standards.241

Unlike GIs protected in the EU, registered trademarks can become generic if the owner is
incautious. In other words, a mere registration does not render trademarks indefinitely exclusive
and protected. Rather, trademark owners must maintain the trademark’s distinctiveness by
consistently ascertaining consumers of its existence and uniqueness. Classic examples of

239
It is plausible that countries are unwilling to declare their own GIs generic, especially since GIs often represent
great economic values.

240
Addor & Grazioli, 2002, p 881.

241
Das, 2008, p 480. 71

http://en.wikipedia.org/wiki/List_of_generic_and_genericized_trademarks, last visited on 2009-03-03.

trademarks that can freely be used today, and thus where the exclusiveness is gone, include
cellophane, escalator and linoleum.71 And in countries where GIs are protected by trademark law,
it is plausible that GIs can become generic in a similar way that ordinary trademarks can.

[4.6]. 4. DO CURRENT RULES EFFICIENTLY PROTECT AND ENSURE THE ENFORCEMENT OF GIS? Formatted: Small caps

4.1 INTRODUCTION Formatted: Heading 1

Opinions vary regarding which regulatory system should govern GIs, and countries disagree on
whether the current protection is efficient. This issue is hotly debated within the Doha
Development Round.242 On the one hand, the EU and WTO Member States in Africa and Asia
advocate a strong, far reaching protection for GIs, and claim it should be even stronger than
today.243 On the other side of the debate, the US, Australia and countries in Latin America oppose
this desire for strong(er) protection. The division is thus not of a North-South type, rather between
emigrant-immigrant countries.244

242
The Doha Development Round shall specifically address the issue of establishing a multilateral system for the
notification and registration of GIs for wines and spirits, see paragraph 18 of the Ministerial Declaration of November
2001. The establishment of this system, and the expansion of the protection on TRIPS Art 23 to all GIs are two
controversial topics of debate under the Doha Mandate. See
http://www.wto.org/english/tratop_e/trips_e/gi_background_e.htm, last visited 2009-03-06.

243
It is held that the protection of GIs in TRIPS is mainly an accomplishment by European negotiators. See Blakeney,
2001, p 630.

244
Addor, 2005, p 2. See, for a more detailed enumeration, in particular footnotes 10 and 14. Some scholars refer to
this division of countries as a split between “Old and New World countries”. See Addor & Grazioli, 2002, p 883, and
Evans & Blakeney, 2006, p 577 and p 611.
4.2 Arguments of the different sides to the debate
As a strong proponent for GI protection, the EU consistently strives to make the afforded
protection even stronger than today. Therefore, it has proposed additional changes through which
such improved protection for GIs would be achieved.

In short, the EU’s proposal in the Doha Development Round entails requirements for the
establishment of an international register for GIs relating to wines and spirits, as well as
requirements of a broadened applicability of TRIPS Art 23, thus making it apply to all GI labeled
goods.245 In addition, the EU compiled a list of 41 GIs246 which are deemed generic in countries
outside the EU, and demanded that these be afforded the protection they should rightfully have.247
The EU claims that these GIs are not generic.248

245
See proposal TN/IP/W/11, available at
http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/tn/ip/W11.doc, last visited 2009-03-03. For detailed
information on submissions from individual Member States, see
http://www.wto.org/english/tratop_e/trips_e/gi1_docs_e.htm, last visited 2009-03-03.

246
Well-known GIs as Champagne, Feta, Gorgonzola and Prosciutto di Parma are all found on this list, as they are
deemed generic terms in several countries outside the EU.

247
Babcock & Clemens, 2004, p 7 – 8. For the detailed proposal, see
http://www.wto.org/english/tratop_e/trips_e/gi_background_e.htm, last visited 2009-03-06.

248
Hughes, 2006, p 323.
These changes would ensure that all GIs benefit from the more sophisticated and adequate
protection which presently is only afforded wine and spirits. Thus all risk of consumer confusion
would be eliminated, and producers would not be subject to unfair competition from producers
using corrective labels. Eliminated possibilities to use corrective labels will, in addition, prevent
unjustified free-riding of GI labeled goods. This is regarded as a goal in itself, and also makes it
more unlikely that a GI becomes generic due to undue use.

The presently warranted freedom to use corrective labels (and thus an opportunity to free-ride)
causes producers, whose goods are protected by TRIPS Art 22 only, to be discriminated.249 Since
“Geneva watch made in the United States” is an acceptable corrective label – whereas “Napa
Valleytype Red Wine, produced in Argentina” is not – goods protected under TRIPS Art 22, and
thus their producers are being discriminated.

In addition to preventing free-riding and generalization, an enhanced protection would benefit

developing countries. Through stronger protection, goods from such countries would be granted
the protection they need, in order to wrestle their way into consumer patterns in developed
countries. Thus, for goods from developing countries, a widened applicability of TRIPS Art 23
and an international register for GIs is of vital importance.250

249
Addor, 2005, p 1 – 2.

250
Fink & Smarzynska, 2002, p 410.
Other WTO Member States are reluctant to a stronger and extended protection. Viewing matters
from another perspective, the US and other countries251 oppose the changes aiming at extending
the protection. Instead, these countries have put forward a “joint proposal”252, in which they
propose a voluntary database for the registration of GIs.

The U.S. opposes an extended protection, as it is claimed that the success of its companies is
jeopardized.253 Furthermore, the U.S. argues that the desire to retrieve the 41 GIs is merely a way
for the EU to convey a monopoly on groups of European producers. Monopolies should be
avoided, being undesirable per se, and they would also, in this case, convey unjustified (higher)
income on the to-be monopolists in the EU.254

Furthermore, a successful “claw back” itself would mean that currently generic words have to be
protected as GIs. This would force innumerable producers outside the EU to undertake costly
255
rebranding measures. Since the hitherto used GI no longer would be available to them,

251
Among these countries are Canada, Japan, Korea, Mexico etc., see
http://www.wto.org/english/tratop_e/trips_e/gi_background_e.htm, last visited 2009-03-06.

252
See proposal TN/IP/W/10/Rev.2, available at
http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/tn/ip/W10R2.doc, last visited 2009-03-03.

253
Babcock & Clemens, 2004, p 9. (Although only referring to US companies, the authors might be willing to apply
this reasoning to “non-EU” companies in general.)

254
Hughes, 2006, p 305.

255
Kerr, 2006, p 6.
producers would have to come up with new ways of communicating their goods to consumers.
Such rebranding, in addition to being costly, would plausibly cause much consumer confusion,
leading to lower sales levels and reduced profit.256 The impacts on the market would be even
worse if TRIPS Art 23 is extended to cover all GIs, since this would prevent the (presently fair)
use of corrective labels.257

4.3 Is the protection afforded efficient? Formatted: Indent: Left: 0"

The debate regarding GI protection is clearly divided between countries desiring an enhanced
protection, and countries wishing to maintain status quo. Interestingly, proponents of enhanced
protection often protect GIs via a sui generis system (e.g. the EU), while countries taking the more
reluctant approach often provide protection through trademark law (e.g. the U.S.).

Thus, the question whether the current level of protection is efficient will, most certainly, be
answered differently by the two sides. Countries that support an extension of the protection
evidently believe that maintaining status quo is unsatisfactory. This is the underlying reason for
the proposal presented by the EU.258 By extending the applicability of TRIPS Art 23, and
ascertaining protection for the 41 GIs mentioned in the list, GI protection will be made more
efficient. Conversely, negative externalities such as free-riding, generalization and lost profits are
unopposed under the present system. Furthermore, an enhanced protection will facilitate for

256
Babcock & Clemens, 2004, p 11.

257
Hughes, 2006, p 351.

258
Supra, footnote 75.
producers in developing countries to market their goods internationally, and this is true also for
niche market producers in developed countries.259 And by excluding free-riding possibilities,
consumers will always be informed of the good’s geographical and commercial origin. Hereby
they will also know which qualities, characteristics or reputation it represents.260

On the other hand, arguments are raised against an extended protection. Clearly, countries
representing this view consider the protection afforded by TRIPS and other existing international
agreements to be sufficient. Therefore, producers of GI labeled goods are adequately enabled to
benefit from the protection as it is, why an enhancement of it is undesirable. Furthermore, it is
invoked that the GIs that the EU wants to retrieve are generic, and should therefore not be
protected. If the “claw back” initiative is successful a vast array of producers will suffer huge
costs for re-branding expenses, and re-branding itself creates consumer confusion.261 Finally, such
an enhanced protection would benefit producers in the EU more than producers in other countries,
and would in itself entail a barrier to trade.262

The question whether the present protection for GIs is efficient is not easily answered; persuasive
arguments can be found for either standpoint. However, developing countries show increased
support for an enhanced protection, realizing that, for them, economic benefits are likely to follow

259
Blakeney, 2001, p 652.

260
See Addor & Grazioli, 2002, p 882 – 883.

261
Montén, 2006, p 332 and p 336 – 339.

262
Addor & Grazioli, 2002, p 885.
from a stronger protection.263 Furthermore, GIs are to a significant extent protected also by
bilateral trade agreements. The support developing countries show for the EU’s position, and the
fragmented legal situation on GI protection indicate that the protection as such could probably be
made more efficient.

[4.7]5. GIS AND TRADEMARKS – SYNERGIES, CONFLICTS AND FUTURE DEVELOPMENT Formatted: Small caps

GIs and trademarks are different IPRs, and cause both synergies and conflicts in international
trade. The former is based on the collective, whereas the latter is individual. But in important
respects, they also serve the same purposes – identifying to consumers the origin of the goods,
and providing exclusivity for producers. This will be of great value also in the future. By
constituting exclusivity rights, they prevent non-privileged producers from unfairly using the GI
or trademark to the detriment of the rightholders.

Consumers today want to know the commercial and geographical origin of goods, in order to
make informed purchasing decisions. A desire to buy goods of certain features has lead to a clear
tendency among consumers to buy food and other good of particular origin.94 GIs function as

263
Calboli, 2006, p 195. 94

A contemporary example of these tendencies from Sweden is the advertisement for “Norsk torsk”, which means
“Norwegian Salmon”. Hence, consumers are concisely informed of the salmon’s origin, and thus able to make an
informed purchasing decision.
guarantees for such desired features. In a future where consumers demand greater certainty of the
origin of foodstuff and other goods, GIs will be indispensable.

However, in order for GIs to play this role in the international marketplace, the protection for them
must, de jure condendo, be transparent, reliable, efficient and clear-cut. Therefore, an international
system for their registration is desirable.264 An extended applicability of TRIPS Art 23 would
enable producers to invest time, effort and money in actions for the monitoring of their rights.
Thus, consumers’ desires for high-quality goods could be even better ensured.

Many countries seem to believe that the protection for GIs can be made more efficient, and the
arguments on how to realize such desires have been presented above. In order to obtain a solution
regarding GI protection that is acceptable for all parties, and thus sustainable, negotiations must
take place on the multilateral level. Therefore it is important that the Doha Round is successfully
concluded. The advantages of GIs will not be obtained unless a globally agreed, efficient and
accepted scheme of protection is ensured.

264
Such a register would be even more beneficial, if it applied to all GIs, not only wines and spirits.
 CHAPTER 5

INTERNATIONAL LAW

[5.1]. INTRODUCTION
Trademarks are signs that identify goods or services offered on a market.265 Trademarks are
nothing new. For example, ancient Greeks and Romans stamped or inscripted on various goods
an identifying symbol or name.266 Today the trademark is a way to attract the public. Consumers
look at trademarks to choose goods and services, which increases the role of trademarks in global
marketing. The economic value of trademarks in attracting customers requires that firms manage

265
The Lanham Act of 1946 § 45, 15 U.S.C § 1127 (1994) [hereinafter Lanham Act]. “The term ‘trademark’ includes
any word, name, symbol, or device, or any combination thereof . . . to identify and distinguish his or her goods,
including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even
if that source is unknown.”

266
STEPHEN P. LADAS, PATENTS, TRADEMARKS AND RELATED RIGHTS: NATIONAL AND
INTERNATIONAL PROTECTION 3-4 (1975). See generally, FRANK I. SCHECHTER, THE HISTORICAL
FOUNDATIONS OF THE LAW RELATING TO TRADE-MARK (1925).
and protect them comparably to other assets.267 The industrial property system offers a legal means
for such protection.
Industrial property rights are comparable to ownership rights. Ownership rights are exclusive
rights that preclude third parties from using an object without permission;268 industrial property
rights are viewed in the same way.5 However, the object of industrial property rights is not a
material good.269 Instead, the object can be an industrial model or design, a technical invention
covered by a patent, a distinctive sign such as a trademark, or an indication of geographic
origin.270The ownership of immaterial goods, such as those listed above, does not stem from the
nature of the objects.271 Ownership is not acquired automatically, but may be granted by state

267
William M. Landes & Richard A. Posner, Trademark Law: An Economic Perspective, 30 J.L. & ECON. 265, 274-
75 (1987). See generally, ERIC GOLAZ, L’IMITATION SERVILE DES PRODUITS ET DE LEUR
PRÉSENTATION: ETUDE COMPARÉE DES DROITS FRANÇAIS, ALLEMAND, BELGE ET SUISSE (1992).

268
Louis Kaplow & Steven Shavell, Property Rules Versus Liability Rules: An Economic Analysis, 109 HARV. L.
REV. 713, 716 (1996).

269
6.See id. at 540.

270
7.See id.

271
.See id. at 531-32. See generally, W.R. CORNISH, INTELLECTUAL PROPERTY: PATENTS, COPYRIGHT,
TRADE MARKS AND ALLIED RIGHTS 22 (1996).
authorities on request.272The resulting right is governed by the principle of territoriality, which is
effective only in the country that created the right.273

The principle of territoriality complicates the protection of an industrial property right in

international commerce. One who seeks protection will have to follow several filing procedures
and pay several fees in each country where protection is sought.274 Furthermore, the chances of
success will vary in each country.275

Some regional industrial property systems cover the territory of several independent states.276 For
example, the European Community (EC) trademark, which can be applied for at the EC office in
Alicante, Spain, provides an exclusive right that uniformly covers the territory of all fifteen

272
9.See LADAS, supra note 2, at 33; see also, CORNISH, supra note 8, at 23.

273
0.See CORNISH, supra note 8, at 22-23.

274
1.See LADAS, supra note 2, at 33-34.

275
2. See id.

276
. See, e.g., Daniel R. Bereskin, A Comparison of the Trademark Provisions of NAFTA and TRIPs, 83
TRADEMARK. REP. 1, 2 (1993) (discussing introduction of intellectual property into the North American Free
Trade Agreement); see also Horacio Rangel-Ortiz, Well-Known Trademarks Under International Treaties: Regional
Trade Agreements—Part 2, 95 TRADEMARK WORLD 28, 30 (1997) (discussing Commerce treaties between South
American States, which includes provisions relating to intellectual property).
European Union member states.277 However, this system merely extends the principle of
territoriality in a national context to a regional territory.278

Several international agreements have been signed to facilitate the international protection of
industrial property rights. The oldest is the Paris Convention, signed in 1883.279 The most recent
is the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), included in
the 1994 Marrakesh Convention that created the World Trade Organization and entered into force

277
. See Council Regulation 40/94 of 20 December 1993 on the Community trade mark, art. 1, 1994 O.J. (L11) 1,
3, amended by Council Regulation 3288/94 of 22 December 1994 amending Regulation (EC) No 40/94 on the
Community trade mark for the implementation of the agreements concluded in the framework of the Uruguay Round,
1994 O.J. (L 349) 83-84.

278
. See Council Regulation 3288/94 of 22 December 1994, art. 5b, 1994 O.J. (L 349) 83 (stating that the EC
trademark may be applied for by persons who are citizens or residents of all member states of the World Trade
Organization). In this Article, I will not specifically address the EC trademark because it is treated as a national mark
in the international protection system. See Council Regulation 40/94, supra note 14, at 3.

279
. See Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, as last revised at Stockholm
July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention].
in 1995.280281 TRIPS is the most complete international treaty in intellectual property.282 It
provides the minimal rules of protection for all intellectual property rights including patents,
unpatented know-how, trademarks, industrial designs and models, semi-conductor chips,
geographical names, copyrights, and other related rights.283 TRIPS is the first international treaty
to introduce a system of sanctions against members who do not enforce the minimum protection
of intellectual property rights.284 Several other global and regional agreements, signed between the
Paris Convention and TRIPS, remain in force today. All of these conventions are interrelated such
that an entire international system of trademark protection exists today. Agreements that pre-date

280
7.See Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15,

281
, Marrakesh Agreement Establishing the World Trade Organization [hereinafter WTO

Agreement], Annex 1C, LEGAL INSTRUMENTS—RESULTS OF THE URUGUAY ROUND vol. 31; 33 I.L.M. 81
(1994) [hereinafter TRIPS].

282
. See J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection under the TRIPS
Component of the WTO Agreement, 29 INT’L LAW. 345, 347 (1995).

283
9.See TRIPS, supra note 17, art. 1(2) & pt. II.

284
. See Reichman, supra note 18, at 385. These sanctions are administered by the Dispute Resolution Organ, a
body within the World Trade Organization. See Paul Edward Geller, Intellectual Property in the Global Marketplace:
Impact of TRIPS Dispute Settlements?, 29 INT’L LAW. 99, 107-14 (1995); Thomas Cottier, The Prospects for
Intellectual Property in GATT, COMMON MKT. L. REV. 383, 392-93 (1991). The proceedings are ruled by Articles
XXII and XXIII of the General Agreement on Tariffs and Trade of 1994, together with the Memorandum on Rules
and Procedures Relating to the Dispute Resolution. See TRIPS, supra note 17, art. 64; Cottier, supra.
TRIPS, based on the 1883 Paris Convention, coexist with the requirements of TRIPS.285 A few of
these older agreements include: the 1891 Madrid Agreement on the International Registration of
Trademarks;286 the 1957 Nice Agreement Concerning the International Classification of Goods
and Services For the Purposes of the Registration .

[5.2]GENERAL PRINCIPLES
The Paris Convention and TRIPS both include general principles for the protection of intellectual
property rights and provide specific trademark rules. The general principles deal with the
substance and procedure of protection and apply to all industrial property rights.287

A. Principles Relating to the Substance of Protection

1. The Paris Convention of 1883. The Paris Convention on the Protection of Industrial Property
is the oldest and most important treaty with respect to industrial property rights.288 It contains two
basic principles of international law that members must enforce in their reciprocal relations. The
first is the national treatment principle, discussed generally in Article 2 and specifically as it relates

285
. See TRIPS, supra note 17, art. 2(2). Article 2(2) states that “[n]othing in Parts I to IV of this Agreement shall
derogate from existing obligations that Members may have to each other under the Paris Convention, the Berne
Convention, the Rome Convention, and the Treaty on Intellectual Property in Respect of Integrated Circuits.” Id.

286
. Madrid Agreement Concerning the International Registration of Marks, Apr. 14, 1891, as revised July 14,
1967, 828 U.N.T.S. 389 [hereinafter Madrid Agreement].

287
2.See generally TRIPS, supra note 17.

288
3. See Kur, supra note 27, at 93.
to trademarks in Article 6, sections 1 and 2.289 The second is the principle of independence of
rights, as embodied in Article 6, section
3.290

a. National Treatment Principle. The principle of national treatment is applicable to all

industrial property rights.291 The principle generally states that a member state may not subject
foreigners benefiting from the Paris Convention to higher industrial property protection standards
than those applicable to its own citizens.292 In addition, it is not necessary to justify that a
trademark has been registered in the country of origin prior to registering it in another member
state.293 For example, if a citizen or corporation of Singapore wishes to obtain an industrial
property right in France, where both countries are Paris Convention member states, the Singapore

289
4.See Paris Convention, supra note 16, arts. 2, 6(1)-(2).

290
5. See id. art. 6(3).

291
6.See LADAS, supra note 2, at 269.

292
. See Paris Convention, supra note 16, art. 2. Article 2(1) of the Paris Convention provides the nationals of
any member state with the same advantages that domestic laws grant to nationals of the states where the protection is
sought; reciprocity is denied. See id. art. 6(2). The member states may not discriminate against the nationals of the
other member states without violating the cardinal principle of the national treatment, a principle which is innately
“opposed to the principle of reciprocity.” LADAS, supra note 2, at 269.

293
. See Paris Convention, supra note 16, art. 6(2). Article 6(2) of the Paris Convention states: “However, an
application for the registration of a mark filed by a national of a country of the Union in any other country of the
Union may not be refused, nor may a registration be invalidated, on the ground that filing, registration, or renewal,
has not been effected in the country of origin.” Id.
national will obtain the right under the same conditions as a French citizen or corporation. The
same outcome results at a multilateral level.
To understand fully the practical impact of the national treatment principle, it is necessary to
understand that a member state may refuse industrial property rights protection to citizens or
corporations of states that are not members of the Paris Convention.294 A member state may also
subject non-member protections to stricter conditions than those applicable to its own nationals.295
For instance, because Thailand has not ratified the Paris Convention, a member state of the
Convention could refuse to protect industrial property rights claimed by Thai citizens or
corporations. A member state could also subject protection for these non-members to a condition
of reciprocity, residence, the payment of a supplementary fee, or anything else.
The national treatment principle was the first elementary and efficient rule aimed at facilitating
the international protection of industrial property rights.296 This principle, asserted in 1883, has
now been introduced into TRIPS and applies between all TRIPS member states.297
b. The Principle of Independence of Rights. Under the principle of independence of rights,
a trademark granted in a member state is independent from those that already exist in other member

294
9.See LADAS, supra note 2, at 269.

295
0. See id.

296
. See J.H. Reichman, Intellectual Property in International Trade: Opportunities and Risks of a GATT
Connection, 22 VAND. J. TRANSNAT’L L. 747, 844 (1989).

297
2. See TRIPS, supra note 17, art. 3.
states for the same object, including in the country where it was first protected.298 Consequently,
trademarks consisting of the same sign designating the same goods and belonging to the same
owner in several Paris Convention member states are independent from one another.299 This rule
extends the national treatment principle to an extreme because the trademark owner is subject
exclusively to the national law of each country.300 The nullification, refusal, or transfer, for
example, of the trademark in one member state has no influence on the rights protected in another
member state.
The exceptions to the principle of independence include the priority right and the protection of the
trademark “as such.” The priority right in Article 4 is designed to facilitate the international
protection of industrial property rights.46 Within six months from the first application in a member
state, the applicant may file for registration of the same trademark in other member states using
the date of the first application.47 As a result, disclosures or uses of the trademark within the
priority period are not grounds for nullification of the mark.48 This priority right exception does
not apply to service marks under the Paris Convention.49

The second exception is the protection of the trademark “as such” in Article 6 quinquies.50 This
exception aims to solve the difficulties that arise from the existence of different prerequisites for

298
. See Paris Convention, supra note 16, art. 6(3). Article 6(3) of the Paris Convention states: “A mark duly
registered in a country of the Union shall be regarded as independent of marks registered in the other countries of the
Union, including the country of origin.” Id.

299
4. See id.

300
. See G.H.C. BODENHAUSEN, GUIDE D’APPLICATION DE LA CONVENTION DE PARIS POUR LA
PROTECTION DE LA PROPRIÉTÉ INDUSTRIELLE 89 (1969). The same rule applies to patents under Article
4bis(1). See id. at 63; see also Paris Convention, supra note 16, art.
trademark protection in different countries.51 For instance, some national laws prohibit
registration of numbers or letters, whereas others allow such trademarks.52 Under such a system
it would be impossible for a trademark holder to use a mark in the same form in several countries.
The Paris Convention resolves this problem by providing that a trademark that has been registered
in its country of origin in compliance with local law is to be registered in other contracting states
“as it is,” or in French, “telle quelle.”53

2. TRIPS. TRIPS incorporates more precisely the principle of national treatment already in force
for the Paris Convention member states. As with the Paris Convention, 54 Article 3 of TRIPS
provides of Marks;301 the 1973 Vienna Agreement Establishing an International Classification of
the Figurative Elements of Marks;302 the 1989 Madrid Protocol on the International Registration
of Trademarks;303 and the 1994 Trademark Law Treaty.304 Each of these conventions offers a
different link to TRIPS.

301
. Nice Convention Concerning the International Classification of Goods and Services For the Purposes of the
Registration of Marks, June 14, 1957, as last revised at Geneva Oct. 2, 1979, 23 U.S.T. 1336, 550 U.N.T.S. 45.

302
. Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks, June 12,
1973, as last revised Oct. 1, 1985, in 3 MANUAL OF INDUSTRIAL

PROPERTY CONVENTIONS (1965).

303
. Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, adopted June
28, 1989, 9 INDUSTRIAL PROPERTY LAWS AND TREATIES text 3-007, 001 (July-August, 1989) [hereinafter
Madrid Protocol].

304
. Trademark Law Treaty, adopted Oct. 27, 1994, 9 INDUSTRIAL PROPERTY LAWS AND TREATIES text
3-010, 001 (Jan. 1995) [hereinafter Trademark Law Treaty].
Article 2(1) of TRIPS covers the relationship between TRIPS and the Paris Convention. 305 It
obliges all member states to comply with Articles 1-12 and Article 19 of the Paris Convention’s
1967 Stockholm version.306 These articles include all of the substantive rules of the Paris
Convention, with the exception of budget and administrative provisions.307 Therefore, TRIPS
signatories are bound by the Paris Convention’s substantive provisions even if they have not
ratified the Paris Convention itself.308 This binding effect is described as the “Paris-plus
approach.” 309

This Article examines the new rules of trademark protection under TRIPS and compares them with
existing Paris Convention rules as well as the rules of international agreements based on the Paris

305
. See TRIPS, supra note 17, art. 2(1); see also, Annette Kur, TRIPs and Trademark Law, in GATT TO TRIPS,
THE AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL

PROPERTY RIGHTS 93, 96 (Fredrich-Karl Beier and Gerhard Schricker eds., 1996).

306
8.See TRIPS, supra note 17, art. 2(1).

307
. See Arpad Bogsch, The First Hundred Years of the Paris Convention for the Protection of Industrial Property,
22 INDUS. PROP. 187, 195-212 (1983). See generally, Jean Foyer, Problèmes Internationaux Contemporains Des
Brevets D’Invention, 171 RECUEIL DES COURS, 340 (1981). The International Bureau of the Union for the
Protection of Industrial Property was created by the Convention and today is managed by the World Intellectual
Property Organization (WIPO) in Geneva. See Bogsch, supra, at 212-13.

308
0. See Kur, supra note 27.

309
1. Id.
Convention. for reciprocity between member states: each member state must grant the citizens310
of fellow member states intellectual property rights protection at least as favorable as that granted
to its own citizens.311 Article 3 also includes the exceptions contained in the

Paris Convention.312

While TRIPS reasserts the Paris Convention’s principles, it goes beyond the Paris Convention by
introducing the most favored nation clause (MFNC) for the first time in the realm of intellectual
property.313 According to Article 4, “[a]ll advantages, favors, privileges or immunities granted by
a [m]ember to citizens of any other country will be, immediately and without further conditions
extended to all other members.”314 However, this provision does not apply to advantages granted

310
. The word “citizen” within the meaning of the WTO Agreement designates “physical or legal persons who
fulfill the criterias required to benefit from a protection according to the Paris Convention.” WTO Agreement, supra
note 17, art. 1.3. Under the Paris Convention, even the citizens of countries that are not members may be “assimilated”
as citizens of the Union, if the citizens are domiciled or have an effective and serious industrial or commercial
establishment on the territory of one of the member states of the Union. See Paris Convention, supra note 16, art. 3.

311
. See TRIPS, supra note 17, art. 3(1). “Each Member shall accord to the nationals of other Members treatment
no less favorable than that it accords to its own nationals with regard to the protection of intellectual property, subject
to exceptions already provided in, respectively, the Paris Convention (1967) . . . .” Id.

312
. See id. The Paris Convention provides for these exceptions, expressly reserving laws of the member states
that relate to administrative and judicial procedure. See Paris Convention, supra note 16, art. 2(3). Some nations,
such as France, give their own citizens a privilege of jurisdiction. See, e.g., CODE CIVIL [C. CIV.] arts. 14, 15 (Fr.).

313
8.See Cottier, supra note 20, at 398.

314
. TRIPS, supra note 17, art. 4.
under international agreements entered into force prior to TRIPS, if the TRIPS Council is notified
about the agreements and the advantages do not constitute an arbitrary or unjustified
discrimination against other member states.315

National treatment and MFNC apply from the date TRIPS entered into force 316 and extend to
members benefiting from a delayed application of the agreement.317 However, these two
principles “do not apply to procedures provided for in multilateral agreements con-

315
. See id. “Exempted from this obligation are any advantage, favour, privilege or immunity accorded by a
Member: . . . (d) deriving from international agreements related to the protection of intellectual property which entered
into force prior to the entry into force of the Agreement Establishing the WTO, provided that such agreements are
notified to the Council for Trade-Related Aspects of Intellectual Property Rights and do not constitute an arbitrary or
unjustifiable discrimination against nationals of other Members.” Id.

316
1.See TRIPS, supra note 17, arts. 3 & 4.

317
2. See id. art. 65(2).
cluded under the auspices of the World Intellectual Property Organization (WIPO) relating to the
acquisition or maintenance of intellectual property rights.”318 The agreements referred to are those
that organize various systems of international or regional registration of industrial property rights,
such as the Madrid Agreement319 and Madrid Protocol for trademarks,320 and agreements that
might be concluded on this basis in the future.321

B. Principles Relating to the Procedure of Protection

1. The Paris Convention. Article 12 of the Paris Convention provides the relevant procedural
provisions, stating that each member state must “establish a special industrial property service,
and a central office for the communication to the public of patents, utility models, industrial
designs, and trademarks.”322 Furthermore, under Article 12, each member state’s service must
publish an official periodical sheet.323

318
3. Id. art. 5.

319
4.See Madrid Agreement, supra note 22.

320
5.See Madrid Protocol, supra note 25.

321
6. See Kur, supra note 27, at 97.

322
. TRIPS, supra note 17, art. 12(1).

323
8. See id. art. 12(2).
 2. TRIPS (part III and part IV). TRIPS states general principles of procedure for the
acquisition and sanction of industrial property rights that must be enforced by its members.324
Under parts III and IV of TRIPS, member states must introduce procedures into their national
legislation that will allow an efficient action against any infringement of intellectual property
rights.325 Member states also must introduce means designed to prevent any further infringement
of the rights326 and are obligated to enforce both of the above measures “so as to avoid the creation
of barriers to legitimate trade and to provide for safeguards against their abuse.”327 Furthermore,
procedures and formalities required for the acquisition of rights must be reasonable328 and
equitable and may not be “unnecessarily complicated and costly,” nor include unreasonable or
unjustified delays.329

TRIPS requires decisions about any infringement of intellectual property rights to be written,
reasoned, and communicated to the parties without undue delay.330 A member state’s decision

324
9. See id. arts. 41, 62.

325
0. See id. art. 41(1).

326
1. See id.

327
2. Id.

328
3. See id. art. 62(1).

329
4. Id. art. 41(2).

330
5. See id., art. 41(3).
should be grounded on evidence only where the parties have had the opportunity to be heard.331
While member states are not required to organize a separate judicial system,332 they must provide
a procedure for judicial review of all final administrative decisions.78

Part III, sections 2-5 of TRIPS provide a more detailed list of procedures and criminal, civil, and
administrative corrective measures.333 In cases of infringement, rightsholders may seek
enforcement from judicial, administrative, and customs authorities, through measures such as
injunctions334 and penal sanctions,335 or through the confiscation or destruction of counterfeit
goods.336 If infringement is threatening, the owner may demand provisional measures such as
suspension of the goods from circulation.337

Each member state or group of states must organize protection of trademarks to be in compliance
not only with these general principles but also with the rules specific to trademarks.338

331
6. See id. art. 41(3).

332
. See id. art. 41(5). 78. See id. art. 41(4). Formatted: Indent: Left: 0"

333
9. See id. arts. 42-61.

334
0. See id. art. 44.

335
1. See id. art. 61.

336
2. See id.

337
3. See id. art. 50.

338
4. See discussion infra Parts III, IV.
[5.3]. III. TRADEMARK PROTECTION IN THE PARIS UNION

The “Paris Union” consists of the 1883 Paris Convention and a series of agreements subsequently
signed within the Paris Convention’s framework.339

A. The Paris Convention of 1883

While the Paris Convention provides some rules specific to certain categories of industrial property
rights, such as patents, trademarks, and industrial designs,340 in general, the Convention leaves
further implementation of its directives to be applied through the member states’ national laws.341
To this extent, it achieves a limited harmonization of international trademark law. The few
trademark rules provided by the Paris Convention relate to the acquisition and content of a
trademark right.342

339
. See Friedrich-Karl Beier, One Hundred Years of International Cooperation—The Role of the Paris Convention Formatted: Indent: First line: 0"
in the Past, Present and Future, 15 INT’L REV. OF INDUS. PROP. & COPYRIGHT L. 1, 1 (1984).

340
. See Paris Convention, supra note 16, art. 1(2). “The protection of industrial property has as its object patents,
utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of
origin, and the repression of unfair competition.” Id. The Paris Convention does address copyright, subject to the
Berne Convention for the Protection of Literary and Artistic Works, September 9, 1886, 828 U.N.T.S. 221.

341
7.See LADAS, supra note 2422, at 265.

342
8.See discussion infra Part III.A.1-2.
 1. Rules on the Acquisition of Rights

a. Prohibited Signs. According to the Paris Convention, member states must prohibit
trademark protection of certain official signs such as emblems of states, signs of control and
guaranty, and emblems of international intergovernmental organizations.343

b. Protection of Well-known Marks. Even if they have not been registered, well-known
marks benefit from an extended protection based on notoriety.344 Such marks are protected against
all unauthorized use, even if they appear on goods different from those for which the mark was
originally registered or used.345 Evidence of a well-known mark’s notoriety must be found in the
country where the protection of the mark is sought.346

c. Service Marks. While they do not have to provide for the

343
9.See Paris Convention, supra note 16, art. 6ter.

344
0. See id. art. 6bis(1).

345
See LADAS, supra note 2, at 1257.

346
See id. at 1253.
registration of such marks,347 member states have an obligation to protect service marks under
Article 6sexies.348 However, the marks may be protected by other rules such as unfair
349
competition.

Collective Marks. Member states have an obligation to protect collective marks under Article
7bis.350 These marks belong the a so-called association.351 However, such an association’s
existence cannot be contrary to the law of the country of origin.98

e. Nature of the Goods to which the Mark is Applied. The nature of the product to which a
trademark is applied may not impede the registration of the mark.352 For example, even if the
marketing of certain goods is prohibited, the trademark applied to the goods may still be registered.

f. Temporary Protection. Member states have an obligation to grant temporary protection

for trademarks during official international exhibitions.353

347
See id. art. 6sexies.

348
See id.

349
See BODENHAUSEN, supra note 45 at 127.

350
See Paris Convention, supra note 16, art. 7bis.

351
.See id. .

352
See id. art. 7.

353
See id. art. 11.
 g. Specific Mention. Member states may not require as a condition of protection that the
product bear a specific mention of the trademark registration.354

2. Rules on the Content of Rights

a. Use. Member states may require that the rightsholder effectively uses the trademark.355
When an owner fails to use the trademark within a reasonable period of time, and does not have a
valid reason for the disuse, the owner may be deprived of the trademark right.103

b. Co-Owners. Simultaneous use of the trademark by coowners to designate identical or

similar products will not limit the trademark’s protection, so long as the use does not deceive the
public and is not contrary to public interest.356

c. Grace Periods. A grace period of at least six months must be granted for payment of fees
due for maintenance or renewal of the trademark right.357

d. Agents or Representatives. If a firm’s agent or representative fraudulently registers a

trademark belonging to the firm that he represents, the rightsholder may, according to national
law, request either the nullification of the mark or transfer of the mark’s ownership.358

354
See id. art. 5-D.

355
. See id. art. 5-C(1). 103. See id.

356
See id. art. 5-C(3).

357
art. 5bis (1).

358
See id. art. 6septies(1).
 e. Illegal Marks. A product bearing an illegal trade or service mark will be seized upon
import into the member state where the mark is entitled to legal protection.359
Today, the rules of the Paris Convention must be applied under TRIPS, as discussed below.360

B. Conventions Based on Paris

Article 19 of the Paris Convention permits the conclusion of special agreements between member
states.361 Presently, four such special agreements exist relating to trademarks: the Madrid
Agreement,362 the Trademark Registration Treaty,363 the Madrid Protocol,364and the Trademark
Law Treaty.365

The Madrid Agreement, Trademark Registration Treaty, and the Madrid Protocol are completely
independent and distinct in aim and content from TRIPS. Whereas these three agreements

359
See id. art. 9(1).

360
See discussion infra Part IV.

361
See Paris Convention, supra note 16.

362
0.See Madrid Agreement, supra note 22.

363
. Trademark Registration Treaty, June 12, 1973, Hein’s No. KAV 2310, 63 TRADEMARK REP. 640 (1973)
[hereinafter Trademark Registration Treaty].

364
2.See Madrid Protocol, supra note 25.

365
. See Trademark Law Treaty, supra note 26. For further elaboration, see I.J. Kaufman, A View from the Outside:
A Non-European Look at the Madrid Protocol, the Trademark Law Treaty and the Community Trademark,
TRADEMARK WORLD, Nov. 1995, at 17.
organize an international registration of trademarks, TRIPS does not deal with procedural aspects
of industrial property rights.366 An example of the independence of these agreements is evident
through an examination of Article 5 of TRIPS. Article 5 provides that national treatment and
MFNC do not apply to procedures for the acquisition and maintenance of rights outlined in treaties
concluded under auspices of the WIPO.367

1. The Madrid Agreement. The Madrid Agreement

Concerning the International Registration of Marks was concluded in 1891.368 It is part of the
Paris Convention, but only for ratifying countries.369 Most of the industrialized countries have
ratified the Madrid Agreement, with the exception of the United States, Japan, the United
Kingdom, Ireland, and the Scandinavian countries.370

The Madrid Agreement simplifies international registration procedures for the acquisition of
trademark protection by providing for a single international application upon payment of a single

366
4.TRIPS only addresses this issue with the broad principles provided in Articles 42 to 49.

See TRIPS, supra note 17, arts. 42-49.

367
5. art. 5.

368
6.See Madrid Agreement, supra note 22.

369
. See id. art. 2; see also M.A. LAEFFER, INTERNATIONAL TREATIES ON INTELLECTUAL PROPERTY
257 (2d ed. 1997).

370
. See id. at 258 n.95 (listing signatories as of January 1996); see also WIPO, The Madrid System (visited Aug.
26, 1998) <http://www.wipo.org/eng/ratific/g-madrd-m.htm> (listing signatories as of June, 1997).
fee.371 The system of the Madrid Agreement may be summarized as follows: • a citizen or an
organization of a member state owns a registered trademark in the country of origin; 372• on the
basis of this initial registration, the national trademark owner applies for international trademark
registration with the International Bureau of the WIPO in Geneva;373

• in the international application, the applicant lists the Madrid Agreement member
states in which protection is sought;374

• the WIPO distributes the international application to each of the listed states;375

in each of these states, the international application is treated as a national application376 unless a
national authority notifies the WIPO within one year that it seeks to refuse protection.

371
9.See id.; Kur, supra note 27, at 94; see also Bogsch, supra note 29, at 187.

372
0.See Madrid Agreement, supra note 22, art. 1(2).

373
1. See id.

374
. Article 4(1) of the Madrid Agreement states that “[f]rom the date of the registration so effected at the
International Bureau in accordance with the provisions of Art. 3 and 3ter, the protection of the mark in each of the
contracting countries concerned shall be the same as if the mark had been filed therein direct.” Id. art. 4(1). However,
Article 3bis allows the contracting parties to “notify the Director General of WIPO in writing that the protection
resulting from the international registration shall extend to the country only at the express request of the proprietor of
the mark.” Id. art. 3bis. Since the countries made such notification, the applicant must, in practice, designate the
countries of interest. See id.

375
3. See id. art. 3(4).

376
4. See id. art. 4(1).
Therefore, the Madrid Agreement unifies the application procedure. However, it does not deal
with the rules applicable to trademark protection that remain under the national law of each country
of protection; the principle of territoriality applies.377 During the first five years, trademarks
registered through the international procedure are dependent upon initial registration in the country
of origin.378This is the “central attack system.”379 All trademarks issued from the international
registration are void within five years from the date of international registration if the basic
trademark, the trademark in the country of origin on which the international registration is based,
is nullified.380 This system has been criticized and has motivated some countries to refuse to join
the Madrid Agreement.381

377
6. See id. art. 4(1).

378
7. See id. art. 6(2).

379
. Marshall A. Laeffer, The New World of International Trademark Law, 2 MARQ. INTELL. PROP. L. REV. 1,
13-14 (1998).

380
. See Madrid Agreement, supra note 22, art. 6(3). “This opened the possibility for a third person to destroy the
international registration in all members through a successful attack on the basic home registration.” Gabriel M.
Frayne, History and Analysis of TRT: Background, 63 TRADEMARK REP. 422, 424 (1973).

381
. The United States never signed the Madrid Agreement, while Brazil, Cuba, and Mexico withdrew their
signatures. See Frayne, supra note 129, at 425.
 2. The Trademark Registration Treaty. The WIPO guided the conclusion of the Trademark
Registration Treaty in 1973.382 One of the goals of this agreement was to offer solutions to
commonly cited concerns with the Madrid Agreement. The Trademark Registration Treaty creates
a new system of international trademark registration designed to gain the approval of those states
that had refused to sign the Madrid Agreement, including the United States.383 This attempt was
unsuccessful with regard to the United States, which has not ratified it, diminishing much of the
treaty’s force.384 The treaty, which entered into force in 1980, is now signed only by the Soviet
Union (now CIS) and four African countries.385

3. The Madrid Protocol. The Madrid Protocol (Protocol) was signed on June 27, 1989, and
entered into force on April 1, 1996.386Contrary to initial hopes, the United States has not acceded
to it.387

382
1.See Trademark Registration Treaty, supra note 111.

383
2.See William E. Schuyler, Jr., TRT, A Chance to Modernize our Trademark Statute, 63

TRADEMARK REP. 478 (1973).

384
3. See id.

385
. See Laeffer, supra note 128, at 14 (listing Burkina Faso, Congo, the Gabon, and Togo as the four African
countries that had signed the treaty).

386
5.See LAEFFER, supra note 117, at 259.

387
6. See Kur, supra note 27, at 95.
Like the Trademark Registration Treaty, the Protocol tries to gain the approval of those countries
that had refused to sign the Madrid Agreement by incorporating new approaches to international
trademark registration.388

To begin, the Protocol expands the reach of international registration procedure by introducing
English as a secondary procedural language.389 Former agreements had designated that only
French be used.390

On a more substantive level, the Protocol permits international registration on the basis of a
national application instead of national registration.391 The applicant must be a citizen, a resident,
or be established in the state where the initial application was made.392 The national office
receiving the initial national application must submit the international application.393 The

388
. See LEAFFER, supra note 117, at 259; G.F. Kunze, The Madrid System for the International Registration of
Marks as Applied under the Protocol, 16 E.I.P.R. 223 (1994); G.F. Kunze, The Protocol Relating to the Madrid
Agreement Concerning the International Registration of Marks of June 27, 1989, 82 TRADEMARK REP. 58, 59
(1992).

389
8.See Madrid Protocol, supra note 25.

390
. See Kur, supra note 27, at 95; Common Regulation under the Madrid Agreement Concerning the International
Registration of Marks and the Protocol Relating to that Agreement, 9

INDUSTRIAL PROPERTY LAWS AND TREATIES text 3-005, 006, rule. 6(1) (1996).

391
0.See LEAFFER, supra note 117, at 259.

392
1.See Madrid Protocol, supra note 25, art. 2(1).

393
2. See id. art. 2(2).
consequences of an international registration, according to the Protocol, are the same as those
under the Madrid Agreement; in each of the countries selected by the applicant, the international
application is treated as a national one.394For example, if the applicant selects the European
Community Office, the office of harmonization in the internal market, the application is treated as
an EC trademark application.395

Furthermore, the Protocol extends the deadline to notify the applicant that protection has been
denied to eighteen months. If opposition to protection is raised by a third party, the deadline is
extended an additional seven months.145 The duration of protection following an international
registration is ten years, renewable under payment of a fee to the International Bureau of the
WIPO.396

The Protocol also operates to mitigate consequences of the “central attack.” If the basic trademark
is nullified, an application can be made to convert it into a national trademark with the same
priority as that to which the international registration was entitled.397This preserves national
trademarks.
Although the Protocol is a new treaty independent from the Madrid Agreement and introduces
new procedures for international registration, both are intended to be linked by means of a common
implementation regulation, which entered into force on April 1,

394
3. See id. art. 4(1)(b).

395
. See id. art. 9quarter(1)(i) (stating that contracting states may substitute a common office for their national
office). 145. See id. art. 5(2).

396
6. See id. arts. 6(1), 7.

397
7. See id. art. 9quinquies.
1996.398

4. The Trademark Law Treaty. The Trademark Law Treaty was adopted in Geneva on October
27, 1994, and entered into force August 1, 1996. It is the result of initiatives undertaken by the
WIPO for the preparation of a new international trademark agreement.399During the initial
negotiations, started in 1989, the ambitious intent of this instrument was to span all aspects of
trademark protection.400As no single acceptable solution could cover every difficulty regarding
trademark protection,401 the Trademark Law Treaty was finally limited to the goal of harmonizing
and simplifying administrative procedures of national registration by delineating registration
procedure.402 In addition, the Trademark Law Treaty eliminates the requirement that documents
be legalized before they are accepted by certain national trademark offices—which is one of the

398
8.See id.; Kur, supra note 27, at 95.

399
. For the history of the Trademark Law Treaty, see History of the Preparations for the Trademark Law Treaty:
Memorandum Prepared by the International Bureau, WIPO Doc. TLT/DC/Inf/2 (May 4, 1994).

400
0. See Kur, supra note 27, at 95.

401
. See id. Certain difficulties resulted from political conflicts between non-Europeans (mainly the United States)
and the European Union (EU). The EU demanded a separate vote in the Trademark Law Treaty Assembly, in addition
to the individual votes of its member states; the non-Europeans refused to agree. See id. at 95 n.13.

402
. See Trademark Law Treaty, supra note 26; LEAFFER, supra note 117, at 308. The Treaty includes the
maximum requirements for the accordance of a filing date, representation before the Trademark Office, duration and
renewal of registration and division of the application. See Kur, supra note 27.
greatest procedural difficulties.403 The Trademark Law Treaty also provides model forms that
contracting states are encouraged to adopt for their national trademark offices.404

The provisions of the Trademark Law Treaty are not incorporated into TRIPS, although there is
partial overlap between the two. Through application of the Trademark Law Treaty, the procedures
for national registration of trademarks are harmonized with those of other signatories, which not
only allows registration to take effect on an international level, but also to do so rapidly.405 The
effect of Article 62 of TRIPS realizes the same aim, though in general terms and in relation to all
types of intellectual property rights.406 TRIPS requires “compliance with reasonable procedures
and formalities”407 and provides for judicial review of any final administrative decision, thus
generally allowing a unified procedure for international trademark registration.408

403
3.See Trademark Law Treaty, supra note 26, arts. 8(4), 9.

404
. See LEAFFER, supra note 117, at 308. These model forms are attached to the Regulation Under the Trademark
Law Treaty. If these forms are used, they must be accepted and no other formalities may be required. See Trademark
Law Treaty, supra note 26, art. 3(2).

405
5.See LEAFFER, supra note 117, at 308; Kur, supra note 27, at 97.

406
6.See id.; TRIPS, supra note 17, art. 18.

407
7.Id. art. 62(1); Kur, supra note 27, at 97.

408
8.See TRIPS, supra note 17, art. 62(5); Kur, supra note 27, at 97.
[5.4]. IV. TRADEMARK PROTECTION IN THE TRIPS AGREEMENT
Articles 15-21 of TRIPS lay down the rules for protection of trademarks.409 These provisions deal
with the conditions and content of the protection, but only in a general way, stating some principles
that the member states must enforce.410

A. Rules Relating to the Acquisition of the Protection (Article 15)

1. Protectable Signs. Article 15(1) of TRIPS establishes a uniform definition of a

trademark that had been absent from the Paris Convention: all signs and combinations of
signs that are capable of distinguishing the products or services of one undertaking from
another are capable of acquiring trademark protection.411Distinctiveness is thus the sole
substantive condition of protection of a trademark.
In the case of signs that are not inherently capable of distinguishing the relevant goods or services,
registration may be made dependent on the condition that they have acquired distinctiveness

409
. See TRIPS, supra note 17, arts. 15-21. For further elaboration, see Paul J. Heald, Trademarks and Geographical
Indications: Exploring the Contours of the TRIPS Agreement, 29 VAND. J. TRANSNAT’L L. 635, 637-43 (1996);
B.W. Schwab, The New Era in Trademark Treaties and Multinational Agreements, in GLOBAL TRADEMARK AND
COPYRIGHT 169, 173-79 (1994).

410
. See J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection Under the TRIPS
Component of the WTO Agreement, 29 INT’L. LAW. 345, 362-63 (1995); Adrian Otten & Hannu Wager, Compliance
with TRIPS: The Emerging World View, 29 VAND. J. TRANSNAT’L L. 391, 394, 399-400 (1996).

411
1.See TRIPS, supra note 17, art. 15(1).
through use.412 Member states may exclude from protection signs that cannot be perceived
visually, such as sound marks.413

Because Article 15(1) does not specifically exclude threedimensional marks (such as bottles) from
protection, the only question is to determine whether such a form distinguishes the product or
service it is supposed to identify.414

2. Other reasons for refusal. Besides refusal on grounds of lack of distinctiveness

provided in Article 15(1), refusal of protection is permissible only to the extent that the
grounds do not conflict with the provisions of the Paris Convention.415 Under the latter,
denial of protection is permissible if registration in the country in question would infringe
on the prior rights of third parties,416 if the mark is devoid of any distinctive character or
consists exclusively of descriptive terms,417 or if the mark is contrary to accepted principles
of morality or public order—in particular if it were to deceive the public.168

412
2. See id.

413
3. See id.

414
4. See id.

415
5. See id. art. 15(2).

416
6.See Paris Convention, supra note 16, art. 6quinquies(B)(1).

417
. See id. art. 6quinquies(B)(2) 168. See id. art.
6quinquies(B)(3).
Article 15(3) states that registration may be made dependent on use, although actual use cannot
constitute a condition for the filing of the application.418 This wording is intended to cover the
declaration of an intent to use, as allowed under Article 1(b) of the Lanham
Act.419

Article 15(4) extends Article 7 of the Paris Convention to service marks so that the nature of a
product or a service may not be an obstacle to registration of the mark.420

1. Formal requirements. TRIPS members are free to arrange the details of the
application, registration, and cancellation proceedings, taking into account the general
principles stated in Article 62(1) to (5) and Article 41.421 Article 15(5) of TRIPS only
provides for the obligation to publish the trademark either before or immediately after
registration and to allow suitable opportunity for an opposing party to apply for

418
9.See TRIPS, supra note 17, art. 15(3).

419
0.See Lanham Act, supra note 1, art. 1(b); Kur, supra note 27, at 102.

420
1.See TRIPS, supra note 17, art. 15(4); Paris Convention, supra note 16, art. 7.

421
. See TRIPS, supra note 17, arts. 62(1)-(5) (covering acquisition, maintenance, and interpartes procedures), 41
(covering enforcement obligations). Cf. M. BLAKENEY, TRADE

RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS: A CONCISE GUIDE TO THE TRIPS

AGREEMENT 65-66 (1996).
 cancellation of the registration.422While an opposition procedure may be provided, it is not
required.423

B. Rules Relating to the Content of the Protection (Article 16)

TRIPS recognizes the classical nature of the right of the trademark holder. It is an exclusive right
to use the trademark for designation of the goods or services listed in the registration.424 As a
consequence of this exclusivity, the rightholder may forbid third parties from using his trademark,
but may also authorize them to do so.425 In both respects, TRIPS provides for more detailed rules
than those contained in the Paris Convention.426

1. The Right to Prohibit the Use of the Trademark. During the term of protection (a
minimum of seven years that may be renewed indefinitely),427 the owner of a trademark
enjoys the exclusive right to prevent third parties from using, in the course of trade, an
identical or similar sign for identical or similar goods or services where such a use would

422
3.See TRIPS, supra note 17, art. 15(5).

423
4. See id.

424
5. See id. art. 16(1).

425
6. See id.

426
7.See Heald, supra note 159, passim.

427
8.See TRIPS, supra note 17, art. 18.
 result in a likelihood of confusion.428 The likelihood of confusion is presumed if identical
signs are used for identical products or services.429 In all other situations, the trademark
owner must produce evidence to demonstrate the likelihood of confusion.430

Existing prior rights of any kind remain unaffected by the exercise of the trademark holder’s
rights.182 For instance, a shop sign already used prior to the registration may continue to be used
by its owner.
Two specific paragraphs deal with the protection of well-known marks.431 First, Article 16(2)
extends 6bis of the Paris Convention, which covers well-known marks, to service marks as well.432
Second, Article 16(3) specifies that “account [shall be taken] of the knowledge of the trademark
in the relevant sector of the public.”433 Thus, a mark may be protectable even if it is not recognized
by the general public.434 This may be important for products that are sold to specialists rather than
to the general public. Third, a well-known mark is protected beyond the limits of similarity of

428
9. See id. art. 16(1).

429
0. See id.

430
. See id. 182.

431
3. See id. art. 16(2)-(3).

432
4. See id. art. 16(2).

433
5. Id. art. 16(3).

434
6. See Kur, supra note 27, at 105.
goods and services.435 Its owner may prohibit the use of this mark by third parties even for goods
or services that are different from those designated by the well-known mark. The owner may do
so if such use would create in the mind of the public a connection between the well-known mark
and the third party’s goods or services, those diluting or damaging the reputation or value of the
well-known trademark.436 For instance, the Coca-Cola Beverage Company has the right to forbid
a shoe manufacturer from using the sign “Coca-Cola” to designate its shoes if consumers would
be likely to believe that the shoes were manufactured or endorsed by the Coca-Cola Beverage
Company, thereby diluting the “Coca-Cola” trademark.
Member states are permitted to make certain limited exceptions to the rights of a trademark holder.
For example, states may permit third parties to use the trademark in cases of fair use or for use as
a descriptive term, provided that they take into account the legitimate interests of the trademark
owner and of third parties.437 National or regional laws determine to what extent a trademark
owner’s rights have been exhausted after goods approved by the owner and bearing the trademark
are first marketed.438 Article 6 expressly states that “[f]or the purposes of dispute settlement . . .
nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual
property rights.”439

435
7.See TRIPS, supra note 17, art. 16(3).

436
. See id.; see also Federal Trademark Dilution Act of 1995, 15 U.S.C. § 1125(c) (Supp. II 1996).

437
9.See TRIPS, supra note 17, art. 17.

438
0. art. 6.

439
Id.
The maintenance of the registration and the enforcement of rights against third parties may be
subject to a requirement of use of the trademark that must be made within a specified period.440
Introduction of such a requirement is a matter of national law.441 Insofar as the latter contains an
obligation to use, it must comply with Article 19 of TRIPS, which stipulates that a period of at
least three years must be granted for the use of the trademark.442 Use of a trademark by another
person shall be recognized as a valid use on condition it is done under the control of the trademark
owner.443 Such would be the case when the trademark is used by a licensee or by several
undertakings within the same company.444 Non-use will not necessarily invalidate a trademark
registration. Article 19(2) excuses non-use when it is the result of special circumstances such as
import restrictions or other government requirements.445

Article 20 of TRIPS deals with the question of whether use of a trademark may be subject to
additional requirements under national law.446 As a matter of principle, such additional

440
See id. art. 19(1).

441
See id. (“If use is required to maintain a registration . . . .”).

442
See id. Article 5(C)(1) of the Paris Convention requires a more general “reasonable period.” See Paris Convention,
supra note 16, art. 5(C)(1).

443
.See TRIPS, supra note 17, art. 19(2).

444
See BLAKENEY, supra note 172, at 57.

445
. See TRIPS, supra note 17, art. 19(1) (citing the examples of import restrictions and other government
requirements).

446
See id. art. 20.
requirements are permissible on condition they do not unjustifiably encumber the use.447
Therefore, TRIPS members are free to require that use of the trademark comply with additional
conditions. Such conditions might include an indication that the product has been manufactured
by a licensee or a restriction of the use with certain products such as tobacco.

2. The Right to Authorize the Use of the Trademark. A third party may legally use a protected
mark if he receives authorization from the owner through either licensing or assignment. While
TRIPS addresses these two procedures, it does not provide a complete set of rules on licensing and
assignment of trademarks, thus leaving member states relatively unrestricted in determining the
scope of licensing and assignment rules.448

With regard to licensing, Article 21 states that trademarks may not be subject to compulsory
licenses.449 Thus, TRIPS members are free to regulate conditions and effects of trademark
licenses. In particular, members may specify in their national legislation appropriate measures to
prevent or control licensing practices that restrict competition, have adverse effects on trade, or
impede the transfer or dissemination of technology.450

Members must, nevertheless, comply with the basic principles set forth under TRIPS in Articles
1-8.451 For instance, under the principle of national treatment, a member cannot discriminate

447
(citing examples of what constitutes unjustifiable encumbrances).

448
0. See id. art. 21.

449
1. See id.

450
2. See id. art. 40(1).

451
3. See id. art. 1.
against foreign licensees by extracting stringent conditions that it does not require from domestic
licensees.452 Article 8(2) allows members to take measures to avoid an abusive exercise of rights
and practices that unreasonably restrain commerce or damage international technology transfer.453

With regard to assignment, Article 21 provides that an owner is free to assign his trademark, with
or without transferring the business to which the trademark belongs.454 As for the rest, the
members have a great deal of latitude in regulating the conditions and effects of an assignment,
while remaining in compliance with the basic principles of TRIPS.207

[5.5]V. CONCLUSION
What conclusions may be drawn from this brief overview of the international trademark protection
system? Clearly, the Paris Convention has stood the test of time. Its principles are now
incorporated into TRIPS, defining the basic rules of protection of industrial property rights in
international trade. One could ask whether this solution was even necessary, let alone adequate.
International trade means competition, which in turn, means conflict. In the past, wars were fought
to conquer new markets.

452
4. See id. art. 3.

453
5. See id. art. 8(2).

454
. See id. art. 21. 207.
 CHAPTER 6

CONFLICT BETWEEN TRADEMARK & GEOGRAPHICAL

INDIACATION

[6.1]. INTRODUCTIONCHAPTER 1
“The TRIPS Agreement455 is the first multilateral text dealing with geographical
indications as such, and may be rightly considered an important first step in this difficult field.”456
In addition to introducing geographical indications into an international agreement, the TRIPS
Agreement provides for co-existence of geographical indications and trademarks. ‘Trademarks’
and ‘geographical indications’ are legal devices which regulate communication to markets about
a product. Trademarks indicate the commercial origin of a good or service while geographical

455
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, 15 April 1994, 331197, online: WTO
<www.wto.org/english/tratop_e_trips_e/t_agmo_e.htm> [TRIPS Agreement]. Note that this citation is not part of the
original quote.

456
Daniel Gervais & Elizabeth Judge, Intellectual Property: The Law in Canada, (Toronto: Thomson Canada Limited,
2005) at 550.
indications signal the geographic origin of a good.457 Both tools also legally grant exclusive rights
to certain uses of a word or symbol.458 Tension arises when the tools overlap on the same subject
matter.459 While both devices act as a means of source identification to consumers, are they
equivalent devices in law? What is industry’s perspective? If trademarks and geographical
indications are equivalent, why is protection of geographical indications a source of contention as
the World Trade Organization seeks to expand the categories of

goods subject to geographical indication protection? Does the answer to rights

implementation lie in an either/or approach with a checkerboard of jurisdictions recognizing one
system or the other or is a mediated outcome of co-existing protection in negotiated goods
categories the solution? Is it possible that the devices can co-exist because they are different and
operate in separate spheres? As the thesis will discuss, the co-existence of trademarks and
geographical indications in the TRIPS Agreement is a

source of contention between Members of the World Trade Organization. The thesis asks
if the treatment of these “quibbling siblings”460 in the TRIPS Agreement is a mistake due to an

457
Dev Gangjee, “Quibbling Siblings: Conflicts Between Trademarks and Geographical Indications” 82 (2007) Chi.-
Kent L. Rev. at 1255.

458
Ibid at 1258.

459
Dev Gangjee, “Say Cheese! A Sharper Image of Generic Use Through the Lens of Feta” 5 (2007) Eur. I. P. Rev.
at 172.

460
See supra note 3 generally.
assumption that they are equivalent devices or is it possible for trademarks and geographical
indications to co-exist?

[6.2] THE CLASSIC CASE OF BUDWEISER

Tensions between the intellectual property tools of geographical indications and
trademarks have existed for the past hundred years between the American and Czech brewers of
Budweiser beer. The American brewer, Anheuser-Busch, and the Czech brewer, Budejovicky
Budvar461 [Budvar], each produce their own version of ‘Budweiser’ beer. Since the late 1800s,
the companies have fought over the right to use the ‘Budweiser’ name. The ‘Budweiser’ litigation
highlights tension between trademarks and geographical indications as well as the broader issues
at play. These tensions and issues have led to a dispute between World Trade Organization
Members and have stagnated negotiations at the World Trade Organization Doha talks.462

In 1876 Anheuser-Busch463 began to manufacture beer for an immigrant from Bohemia,

Carl Conrad under the name ‘CCC Budweiser Beer’. In 1883 Anheuser Busch acquired the right
to use ‘Budweiser’ from Conrad and in 1891 the parties signed an assignment agreement
transferring the right to the name and the trademarks from

461
Burgerliches Brauhaus, Cesky Akciovy Pivovar was the predecessor company of Budejovicky Budvar. Jitka
Smith, “Budweiser or Budweiser?” 32 (1999) J. Marshall L. Rev. 1251 at footnote 10.

462
Frances Zacher, “Pass the Parmesan: Geographical Indications in the United States and the European Union - Can
There be Compromise?” 19 (2005) Emory Int’l L. Rev. T 429.

463
At the time, Anheuser-Busch Inc. was E. Anheuser Company’s Brewing Association. See Anheuser-Busch

Inc, v. Du Bois Brewing Co., 73 F. Supp. 338, 348 (W.D. Pa. 1947) [Du Bois Brewing Co.]
Conrad to Anheuser-Busch. 464

464
Ibid at paras 4-8.
 From his travels to Europe, Conrad was aware that ‘Budweiser’ beer “was considered by
Europeans to be one of the finest beers made there [in Europe].”465 It was Conrad’s and
Anheuser’s intention that the American Budweiser be “similar in quality, color, flavor and taste
to the ‘Budweiser’ beer then being made in Bohemia.”466
Anheuser-Busch’s Budweiser beer in the 21st Century has come to hold 45% of the

American beer market and the brand is the largest selling beer internationally.467

In 1895, the Budvar brewery was founded in the town of Ceske Budejovice, in South
Bohemia468469. The town boasts a seven hundred year history of brewing beer which is entwined
with the town’s culture including the “local tradition, architecture and the arts.”470 The facades of
historic buildings in the town depict breweries and brewing elements such as beer barrels, hopps,
and beer cups.471 Local restaurants that sell beer on tap also display folk art portraying the region’s

465
Ibid at para 6.

466
Ibid at para 7.

467
Philippe Zylberg, “Geographical Indications v. Trademarks: The Lisbon Agreement: A Violation of TRIPS?”
(2002) 11 U. Balt. Intell. Prop. L. J. at 40.

468
Bohemia is a historic name for the area now known as the Czech Republic. See supra note 7 at footnote

469
.

470
Supra note 7 at 1255.

471
Robert M. Kunstadt & Gregor Buhler, “Bud” Battle Illustrates Peril of Geographic Marks, (1998) 20 Nat’l
beer brewing tradition.472 Budvar started using the names ‘Budvar’ and ‘Budweiser’ for the
company’s beer in 1895. Other breweries also existed in the town at the time. Over time, Budvar
acquired these other breweries and eventually became the sole producer. The word ‘Budweiser’
is an:473

adjective originating from the German language name of the Czech town
Ceske-Budejovice – Budweis – where the beer was born in the middle ages,
thus describing the origin of the brew. In German, it is common to ad[d]
the suffix “er” to a town in order to indicate that something or someone
originates from that specific town.

Between 1898 and 1911, American importers of the Czech beer labeled the product
‘Budweiser’.474 Anheuser-Busch argued that the use of the word ‘Budweiser’ infringed its
American trademark. On August 19, 1911 Anheuser-Busch entered into an agreement with
Budvar allowing Anheuser-Busch to use the term ‘Budweiser’ outside of Europe “so long as it did
not use the word ‘Original’ in connection therewith.”475 In return, Budvar agreed not to object to

L.J., C4.

472
Ibid at C4.

473
Supra note 13 at para 40. The City of Budweis was changed to Budejovice with the founding of the Czechoslovak
Republic after World War I. See supra note 9 Du Bois Brewing Co. at para 8.

474
Supra note 9 at paras 10-12.

475
Ibid at para 46.
Anheuser-Busch’s 1876 trademark application in the United States. Budvar reserved the “right to
use the word ‘Budweiser’ on its product in the United States and elsewhere throughout the
world.”476

In another agreement between Anheuser-Busch and Budvar executed on September 4,

1911, the Czech company conceded Anheuser-Busch’s trademark rights in the United States “in
the word ‘Budweiser’ and agreed to use the word ‘Budweiser’ only to describe the geographical
origin of this beer.”477 Anheuser-Busch paid Budvar 82,500
Austrian kronen in exchange for the Czech company to withdraw its objections at the

American Patent Office to Anheuser-Busch’s use of ‘Budweiser’:478

as a trade-name or trade-mark on its beer, except in Europe, it being

made clear that this license was not intended to permit the sale of the
American-made beer as ‘Budweiser’ in any European country, and
that the right already possessed and enjoyed by Burgerliches
Brauhaus [Budejovicky Budvar] to sell its ‘Budweiser’ beer in the
United States should continue.
On September 27, 1938 Anheuser-Busch adopted a resolution directing its officers to “take
such legal and other action as might be necessary to eliminate the further use of the word

476
Ibid at para 46.

477
Ibid at para 12.

478
Ibid at para 45.
‘Budweiser’ […] by the two brewers at Budweis.”479 The Anheuser-Busch representatives
negotiated agreements with the Czech brewer in the first quarter of 1939. Budvar agreed to
“discontinue their use of the name ‘Budweiser’ on their beer sold in the United States and its
territories, in exchange for which

[Anheuser-Busch] paid them a total of $127,000.”480

After the Second World War, Anheuser-Busch experienced increased competition and the
American beer market became saturated, leading the company to seek new opportunities
abroad.481 In an attempt to either shut down Budvar or take over the company, Anheuser-Busch
employed various tactics: aggressive marketing strategies, legal initiatives, attempts to buy stock
in Budvar, and stopping procurement of hops from the Czech Republic. Anheuser-Busch’s tactics
were unsuccessful.482

As set out above, Anheuser-Busch had agreed not to enter the European market in the
August 19, 1911 agreement. Yet none of the agreements signed by the parties referencing the

479
Ibid at para 49.

480
Ibid at para 49.

481
Supra note 7 at 1251.

482
Anheuser-Busch’s offer to buy Budvar included incentives such as investing in the town of Budweis’ downtown
and schools combined with a marketing campaign of the American Budweiser in Czech media. The offer sparked
public protests calling for the rejection of Anheuser-Busch’s offer. See supra note 16 at

C4.
geographic use of ‘Budweiser’ addressed the jurisdiction of the United Kingdom.28 Anheuser-
Busch therefore sought to export its beer to the United Kingdom in the early 1970’s as it was not
part of the European Community at the time.29 The decision to export led to a protracted dispute
between Anheuser-Busch and Budvar which has sprouted in various forms including litigation in
European jurisdictions within the United Kingdom (now a part of the European Union) as well as
a parallel dispute at the World Trade Organization.30

The litigation in the United Kingdom is of interest for the purpose of this thesis because
British legislation prior to 1994 allowed for competitors’ trademarks to coexist.31 This co-
existence of marks is relevant because, as will be discussed,32 the World
Trade Organization Panel eventually declared in 2005 that geographical indications and As
mentioned above, while the Budweiser litigation continued between the companies themselves,
another dispute began between their respective states at the international level. On June 1st, 1999,
the United States requested consultations with the European Community regarding EC Regulation
2081/92.34 The Australian government later lodged a complaint and eventually, once the World
Trade Organization Panel was established to address the complaint, the two cases were combined
into one dispute before the World Trade Organization Dispute Settlement Board: European
Communities – Protection of Trademarks and Geographical Indications for Agricultural Products
and Foodstuffs.35 The essence of the American and Australian complaint was “that the E.U.
regulation discriminates against foreign geographical Regulation applied only to agricultural
goods. Beer was one of the goods specifically contemplated by the Regulation.483

483
Supra note 34 Annex I
 As the Regulation protected translations of geographical indications,484 the European
Community argued that the American company Anheuser-Busch would be unable to use the name
‘Budweiser’ within the European Community.485 Budvar had registered ‘Budejovicky’ as a
geographical indication in the European Community. ‘Budejovicky’, as described above,
translates to ‘Budweiser’ and is the name of a Czech town. The United States took the position
that ‘Budweiser’ was registered as a trademark prior to the registration of ‘Budejovicky’ as a
geographical indication and therefore the trademark rights should take precedence over a
geographical indication subsequently registered.486 The European Community successfully argued
in the World

Trade Organization Dispute that geographical indications and trademarks may coexist.

The combination of the World Trade Organization Report and the fact that, as of

2009, the ‘Budweiser’ battle comprised approximately 100 court cases over the name in forty
jurisdictions487 has contributed to the continuing tension in this area of the law. The extensive
litigation has resulted in a patchwork of markets divided between the two companies: Anheuser-
Busch sells ‘Budweiser’ in sixteen countries and ‘Bud’ another fifteen; Anheuser-Busch dominates

484
Supra note 34 at Article 13.1(b).

485
Supra note 35 [World Trade Organization Report] at 6.30.

486
Supra note 35 [World Trade Organization Report] at 6.31.

487
Thitapha Wattanapruttipaisan, “Trademarks and Geographical Indications: Policy Issues and Options in Trade
Negotiations and Implementation” 26:1 (2009) Asian Development Review at 198.
the North American, South American and Asian markets. Budvar registered ‘Budweiser’ and
‘Bud’ as a trademark and appellation of origin or geographical indication in “28 European
countries and 37 non-European countries.”488

As mentioned, the litigation in the United Kingdom resulted in a decision by the European
Court of Justice allowing for co-existence of use by both companies. Despite the litigation, the
United Kingdom is Anheuser-Busch’s “second most important global market for beer”.489 The
World Trade Organization Panel issued its report on March 15, 2005 while the Doha talks began
in November of 2001. One might expect that the mutual claim of victory by the United States and
the European Union would set the stage for collaboration during the Doha round of talks; however,
this has not been the case. When the World Trade Organization Members first negotiated the
TRIPS Agreement, as mentioned earlier, discussions came to a deadlock over geographical
indications.490 The parties overcame the issue by agreeing to future negotiations.45 In this way,
the United States “did not have to concede too much ground to the EC [European Community]
and the EC was assured of built-in negotiations during which it could work towards expanding GI
[geographical indication] protection.”46 The World Trade Organization Members agreed to
discuss two topics with respect to geographical indications at the Doha talks:47

Considering the difficulty the parties had in reaching agreement during the

488
Ibid.

489
Ibid.

490
Justin Waggoner, “Acquiring a European Taste for Geographical Indications” (2008) 33 Brooklyn J. Int’l L.at 578
at 578.
Uruguay round of World Trade Organization talks, it is not surprising that the Doha Development
Agenda is contentious and negotiations on geographical indications have stagnated for eleven
years. The ‘Old World’48 is in favour of both topics outlined above while the ‘New World’
opposes both ideas. As noted, when the Doha talks began in 2001, the World Trade Organization
Dispute Settlement Board Panel had yet to issue its report with respect to the European Regulation.
The parties were two years into the Doha round before the World Trade Organization Dispute
ended. This meant that any potential advantage to either side by claiming victory was irrelevant
by the time the report was issued as, by that time, the parties’ positions were already entrenched
at the Doha talks and, indeed, talks were stalled.

[6.3]. THE LEGAL FRAMEWORK

The following section examines trademarks and geographical indications according to the
relevant international instrument, the TRIPS Agreement. The purpose is to provide a legal context
for analyzing the two devices in Chapter 3’s discussion of the World Trade Organization Dispute.
The section first examines trademarks and then geographical indications.

Article 15.1 of the TRIPS Agreement describes protectable trademark subject matter.491
Trademarks are not merely a company name or logo but rather the combination of text, font,

491
Supra note 1 at Article 15.2-5 are interpretation aids regarding publishing obligations and optional ‘use’
requirements. Note: if use is required, the TRIPS Agreement Article 19 applies. Article 19 states that “[…] the
registration may be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons
based on the existence of obstacles to such use are shown by the trademark owner. […]”
colour, and figurative elements. The unique combination of these elements creates a distinctive
sign linking a product to its producer.492

The TRIPS Agreement Article 16.1 outlines the rights member states must confer upon
trademark holders: exclusive use in the case of trade in goods or services of a registered
trademark.94 For Member States to be in compliance with TRIPS, mark holders must satisfy a
two-part test: trademark holders must demonstrate firstly that a third party acting without consent
is using the mark and secondly that the use results in confusion. The laws of Member States must
reflect the TRIPS Agreement requirement that confusion arises when a competitor uses an identical
or similar mark on counterfeit goods. If the mark holder meets both elements of the test, domestic
law in Member

States must provide that the mark holder be able to prevent competitors from using the same or a
similar mark. The term of protection in Member States must last at least seven years with the
opportunity to renew a mark indefinitely.493

According to the definition, a good’s quality, reputation or other characteristic satisfies the criteria
for a geographical indication as long as it is attributable to the good’s geographical origin.494 The
article broadly defines the term, creating the opportunity for widely differing thresholds to define

492
Supra note 1 at Article 15.1:

493
Supra note 1 at Article 18.

494
Matthijs Geuze, “The Provisions on Geographical Indications in the TRIPS Agreement” (2009) 10:1 The Estey
Centre Journal of International Law and Trade Policy 50 at 53.
geographical indications. Note that the definition relates only to goods and excludes services.495
The definition also fails to address the question of specifications or standards to determine the
quality, reputation, or other characteristic, which will make goods protectable.496

The definition refers to ‘indications’ which are not necessarily geographical

locations.497498499 The scope of geographical indications therefore includes direct and indirect

495
Irina Kireeva, Wang Xiaobing & Zhang Yumin, “Comprehensive Feasibility Study for Possible Negotiations on a
Geographical Indications Agreement between China and the EU”, EU-China Project on the Protection of Intellectual
Property Rights, 27 April 2009 at 11. Note that Liechtenstein, Peru and Switzerland recognize services as forms of
geographical indications. Among services recognized as geographical indications are health services and traditional
healing methods.

496
Supra note 41 at 173.

497
The concept of ‘geographical indications’ combines terms from two prior international agreements: the

498
Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods, Apr. 14,

499
, as last revised at Lisbon on Oct. 31, 1958, 828 U.N.T.S. 163 [Madrid Agreement] and the 1958 Lisbon Agreement
for the Protection of Appellations of Origin and Their International Registration, Oct. 31, 1958, as last revised Jan.
1, 1994, 923 U.N.T.S. 205 [Lisbon Agreement]. The Madrid Agreement recognized ‘indications of source’ that
indicate the place or country of origin such as ‘Made in America’ or ‘Product of Mexico’. Indications of source differ
from geographical indications in that they do not link a product’s quality to geography. The Lisbon Agreement defined
‘appellation of origin’ in Article 2.1 as a geographical name that “designates a product whose quality and
characteristics are exclusively or essentially related to the geographical environment, including natural or human
factors”. This definition links a product’s quality with its geographical location and is therefore a higher threshold
than indications of source.
geographical indications.500 Direct indications require the product name to be a geographic name.
Indirect indications are “non-geographical names or symbols, if perceived by the public as
identifying a certain geographical origin.”501 Recognition of indirect geographic indicators means
that the TRIPS Agreement protects “other signs of geographical significance whether composed
of words, phrases, symbols or emblematic images.”502 An example of such a geographical
indication is ‘feta’ which is neither a place nor region in Greece yet relates to the Greek culture.503
In order for an indication of a good to qualify for geographical indication status under the TRIPS
Agreement, it must meet the following three conditions:504

1. The good must have a consistent, unique quality;

2. The product must originate from a defined area; and

3. The goods must have qualities, reputation or other characteristics which are clearly
linked to the geographical origin of goods.

500
WIPO, Trademarks and Geographical Indications, WIPO – WASME/IPR/GE/03/2(Sep 29,2003) at 21.

501
Ibid.

502
WIPO’s Standing Committee on the Law of Trademarks, Industrial Designs & Geographical Indications, The
Definition of Geographical Indications, SCT/9/4, (October 1,2002) at 3.

503
Ibid. See supra notes 69-74.

504
Jingjing Zhou, A Review of GI Protection From a Chinese Perspective (LL.M. Thesis, University of Western
Ontario 2007) [unpublished] at 14-15.
(i)(iv) Characteristic 1: Consistent, Unique Quality
This characteristic justifies protecting an indication of a good. Consistent quality is
necessary for creating a reputation and often, monopoly, being able to justify a higher price. For
example, the average French cheese with a geographical indication sells for an additional 3.00€
per kilogram than a French cheese without a designation.505 Other examples include Toscano
olive oil, with its 10% price increase since obtaining geographical indication protection as well as
Jamao coffee from the Dominican Republic where the price rose from US $67/lb to US $107/lb.506
In addition to this anecdotal evidence of the value of geographical indications, a European
Commission survey found that “almost half of EU consumers (43%) were prepared to pay up to
10% more for products bearing a label of origin.”507 In this way, geographical indications can
assist in promoting a region’s goods thereby “serv[ing] important business interests.”508

(ii)(v) Characteristic 2: Product Origin

505
Paul Vandoren, The EU Geographical Indications Labeling System, Tokyo-Osaka, (March 10-12, 2004) online:
European Union Delegation of the European Commission to Japan
<http://jpn.cec.eu.int/home/showpage_en_event.eventobj53.1php>.

506
Ibid.

507
Ibid.

508
Steven A. Bowers, “Location, Location, Location: The Case against Extending Geographical Indication Protection
under the TRIPS Agreement” (2003) 31 AIPLA Q. J. 129 at 131.
 The information provided by registering a geographical indication points to the product’s
origin, protecting “consumers from the use of deceptive or misleading labels and provid[ing]
consumers with choices among products and with information on which to base their choices.”509

(iii)(vi) Characteristic 3: Qualities, Reputation, or Other Characteristics Linked to the

Geographical Origin of Goods
Goods protected by registered geographical indications derive reputation from natural
factors such as climate and human factors such as production methods connected to a geographical
region.510 The production of Roquefort cheese illustrates how climate affects the quality of a good
as producers age the cheese in the caves of the Roquefort district in France.511 Roquefort reflects
the caves’ unique atmosphere and therefore production of the cheese is inextricably linked to the
geographic location.

The TRIPS Agreement currently contains two levels of protection of geographical

indications for goods. The first level provides protection for all goods except wines and spirits,
the second provides a higher level of protection for wines and spirits. The purpose of Article 24.1
is to increase geographical indication protection while Article

24.2 creates a role for the World Trade Organization Council of TRIPS in negotiations.

509
Jose Manuel Cortes Martin, “TRIPS Agreement: Towards a Better Protection for Geographical Indications?”
(2004-2005) 30 Brook. J. Int’l L. 117 at 118.

510
Ibid.

511
Lawrence W. Pollack, “Roquefort – An Example of Multiple Protection for A Designation of Regional Origin
under the Lanham Act” (1962) 52 Trademark Rep. 755.
 Article 22 requires Members to provide a legal structure for holders of geographical
indications. The Article focuses on protecting the public from misleading geographical
indications and or trademarks.512 Article 24.3 cements protection for geographical indications at
the pre-existing level before the TRIPS Agreement came into force. The remainder of Article 24
emphasizes good faith,513 exempts common language as infringement of a geographical
indication,514 and allows the use of a person’s name or business partner predecessor to be a
geographical indication so long as the public is not misled.515 Article 24.9 is a list of situations
when Members are exempt from protecting geographical indications. Article 22.2 subparagraphs
516517
(a) and (b) prohibit false or misleading designations regarding the product origin. A
geographical indication offends the provision if it misleads the public with respect to the good’s
geographic origin.117 To engage the Article, countries must provide that holders of geographical

512
Supra note 104 at 70.

513
Supra note 1 at Articles 24.4, 24.5, and 24.7.

514
Supra note 1 at Article 24.6.

515
Supra note 1 at Article 24.8.

516
Supra note 1 at Article 22.2 states:

517
. In respect of geographical indications, Members shall provide the legal means for interested
parties to prevent:

(a) the use of any means in the designation or presentation of a good that indicates or suggests that
the good in question originates in
indications need to demonstrate that the competitor’s mark or geographical indication misleads
the public or that the situation constitutes an act of unfair competition.

Article 22.4 extends geographical indication protection to regions “which, although

literally true about the territory, […] falsely represents to the public that the goods originate in
another territory.” This subparagraph addresses situations where, for example, cities in different
countries share the same name a manufacturer of goods originating in a city not famous for the
product must not be allowed to use the city name such that consumers think the goods are from
the city of the same name that is famous for such goods.

Article 22.3 consists of rules to protect geographical indications through the trademark system.
The Article restricts trademark applications or invalidates a registered trademark “if the TM
[trademark] under consideration contains or consists of a false or misleading GI [geographical
indication].”118 In this way, the TRIPS Agreement is broader than previous international
agreements as it expands geographical indication protection into the sphere of trademarks.518

On the other hand, Article 24, mentioned above, reflects the tension in negotiations of the
TRIPS Agreement as the Article carves out exceptions to Articles 22 and 23.519 The conflict is
between two groups: the ‘Old World’ and the ‘New World’.520

518
L. Bauemer, “Protection of Geographical Indications under WIPO Treaties and Questions Concerning the
Relationship Between Those Treaties and the TRIPS Agreement” in Symposium on the International Protection of
Geographical Indications in the Worldwide Context (1997) at 21.

519
Daniel Gervais, The TRIPS Agreement: Drafting History and Analysis, (London: Sweet & Maxwell, 1998) at 197.

520
Supra note 48.
The ‘Old World’ consists of longstanding cultures such as European, Middle Eastern and

Asian countries. For the purpose of this thesis and the World Trade Organization Dispute
examined, the thesis focuses on the ‘Old World’ as represented by European countries. The ‘New
World’ comprises countries that are younger and have been relatively recently colonized by the
Europeans, such as North America, South America, Australia and New Zealand. These countries
are also home to older aboriginal cultures; however, the law on which this thesis focuses has been
shaped by immigrant European populations.

The ‘Old World’ wants to create a multilateral registry for wines and spirits and increase
protection for geographical indications generally while the ‘New World’ does not.521 During the
original World Trade Organization TRIPS Agreement negotiations in the Uruguay round of
talks,522 the parties were at loggerheads to such a point that “the only possible outcome not
blocking the negotiation was thus to agree to further talks”523 and thus are part of the current
‘compromised’ text of Article 24 of the TRIPS Agreement.

[6.4]. ADDITIONAL PROTECTION FOR WINES AND SPIRITS

Article 23 creates a different protection for geographical indications in connection with

wines and spirits.524 While the general protection in Article 22 prohibits geographical indications

521
Supra note 47 and corresponding text.

522
The Uruguay round of World Trade Organization negotiations led to the creation of the TRIPS Agreement.

523
Supra note 120 at 203.

524
Supra note 1 Article 23.1 states:
that mislead the public, Article 23 is broader in that it prevents misuse even where the public is
not misled. There is, therefore, “no need to show that the public might be misled or that the use
constitutes an act of unfair competition, and this is the main reason why Article 23 is considered
additional protection.”525 Article 23 thus requires Members to meet a higher threshold of
protection for wines and spirits.526 Article 23.2 addresses trademarks in wines and spirits.527 The
section differs from Article 22.3 for other goods as Article 23.2 “applies specifically to indications
identifying wines and spirits” and is different from Article 22.3 because “deception

Each Member shall provide the legal means for interested parties to prevent use of a geographical
indication identifying wines for wines not originating in the place indicated by the geographical indication
in question or identifying spirits for spirits not originating in the place indicated by the geographical
indication in question, even where the true origin of the goods is indicated or the geographical indication
is used in translation or accompanied by expressions such as “kind”, “type”, “style”, “imitation” or the
like.

525
Supra note 104 at 71.

526
Ibid.

527
Supra note 1 Article 23.2 states:

The registration of a trademark for wines which contains or consists of a geographical

indication identifying wines or for spirits which contains or consists of a geographical
indication identifying spirits shall be refused or invalidated, ex officio if a Member's
legislation so permits or at the request of an interested party, with respect to such wines or
spirits not having this origin.
(misleading the public about the true place of origin) does not have to be shown.”528 Article 23.3
considers wines and spirits indications with identical names and requires that “protection shall be
accorded to each indication, subject to the provisions of paragraph 4 of Article 22.”529 In Article
23.4 Member States agreed to negotiations regarding the creation of a “multilateral system of
notification and registration of geographical indications for wines eligible for protection in those
members participating in the system.”530

528
Supra note 120 at 197.

529
Supra note 1 at Article 23.3 states:

In the case of homonymous geographical indications for wines, protection shall be accorded
to each indication, subject to the provisions of paragraph 4 of Article 22. Each Member shall
determine the practical conditions under which the homonymous indications in question will
be differentiated from each other, taking into account the need to ensure equitable treatment
of the producers concerned and that consumers are not misled.

530
Supra note 1 at Article 23.4.
 CHAPTER-VII

LEGAL PROTECTION OF
GEOGRAPHICAL INDICATION IN INDIA

7.1 INTRODUCTION Formatted: Small caps

Over the recent past, Geographical Indications (GI) have emerged as a significant form of
Intellectual Property Rights (IPR) issue in the Indian context. GI helps a community of
producers to differentiate their products from competing products in the market and build
goodwill around their products, often fetching a premium price. From consumer’s point of view,
GIs act as a signalling device, which helps them identify genuine quality-products and also
protect them against counterfeits. In view of their commercial potential, adequate legal
protection of GIs becomes necessary to prevent their misappropriation. Although India has had
in its possession a considerable number of products that could qualify for legal protection as
geographical designators, the initiatives to exploit this potential begun only recently when the
country established as sui generis system of GI protection with the enactment of ‘the
Geographical Indications of Goods (Registration and Protection) Act, 1999, coupled with the
‘Geographical Indications of Goods (Registration and Protection) Rules, 2002. The Act, which
became operational with effect from 15 September 2003, was drafted as part of the exercise in
the country to set in place national IPR laws as much in compliance with India’s obligations
under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) of the
World Trade Organisation (WTO) so as to take advantage of the ‘minimum’ standards of GI
protection that the TRIPs sets out for the WTO members to comply with in their respective
national legislations.
7.2 AN OVERVIEW OF GI PROTECTION IN INDIA Formatted: Small caps

In India, the legal system for GI protection has very recently been developed. The Geographical
Indications of Goods (Registration and Protection) Act was enacted in 1999 and has come into
force in September 2003 (hereafter called GI Act). Before this act, there was no separate
legislation for GIs specifically. However, there were three alternative ways in which the then
existing legal systems of the country could be utilised for preventing the misuse of GIs.
(i) under the consumer protection laws;

(ii) through passing off action in courts; and

(iii)through certification trademarks.531

Among these laws, certification trademarks (CTM) were more focused on recognised and
protecting indication of sources. In the Indian context, the most common geographical name
protected under the CTM system, prior to the GI Act, was “Darjeeling Tea”.532 A certification
trademark is understood as a mark administered by a proprietor who certifies the goods as to
their origin, material, mode of manufacture, or performance of services, quality accuracy or
other characteristics, and thereupon allows use of the mark.

Under the CTM system, a proprietor of the mark who proposes to merely

531
Kasturi Das, Socio-Economic Implications of Protecting Geographical Indications in India, August 2009, Centre
for WTO Studies, p.6.

532
The Tea Board of India has registered the name Darjeeling as a Certification Mark in India, USA and UK.
administer the mark but not use it him or herself, applies for the registration of the same together
with a set of elaborate regulations detailing the process of certification for the use of the mark
in relation to the goods in question. It is absolutely imperative in the CTM system that the
person claiming proprietorship over the mark does not him or herself use the same in conjunction
with his or her goods or services. It is therefore usual to find that a central agency or association
usually administer the mark in question and acts as the certifying authority, which in turn
authorises the use of the mark by producers/manufacturers in relation to their own goods.
‘Certification trade marks’ can be registered under the Trade Marks Act of India.

It may be noted that India has recently established a “silk mark” to certify genuineness of
silk textiles in India and Darjeeling, a certification marks for a specific type of Tea produced in
Darjeeling and can be marketed, provided the product satisfies the set quality standards.
Similarly, WOOL MARK certifies that the goods on which it is used are made of 100% wool
and LABEL ROUGE use for high quality agricultural products in France.533
In its simplest form, the principle of passing-off states that ‘No-one is entitled to pass off
his goods as those of another’. The principal purpose of an action against passing off is therefore,
to protect the name, reputation and goodwill of traders or producers against any unfair attempt
to free ride on them. Though, India, like many other common law countries, does not have a
statute specifically dealing with unfair competition, most of such acts of unfair competition can
be prevented by ways of action against passing off.

In India, GIs have been governed by common law principles, which enable an aggrieved
person to file an action of ‘passing off’ for protection of his right. In other words, it is based on

533
Dr.Prabhuddha Ganguli, WTC Research study Report Geographical Indications its evolving controls, Jan. 2009,
p.4.
usage and common knowledge about the characteristic features and quality or reputation that the
product has already earned in the market either by publicity or by its presence in the market. A
survey of decided cases reveals that Indian courts have maintained the action of passing off to
protect GIs. 534 Scotch Whisky Association v. Pravara Sahakar Karkhana Ltd.,5 is a leading case
on this subject. In this case, the plaintiff Scotch Whisky Association, a company incorporated
under the Companies Act of United Kingdom instituted the passing off action against the
defendants- a manufacturer of various brands of Indian Whisky like ‘blended scotch whisky’ or
Blended with Scotch’ under various brand names, ‘Drum Beater’ and ‘God Tycoon’. On these
facts, the Bombay High Court held: The Plaintiff had sufficient interest to prevent passing off
of Indian Whisky manufactured by the defendant and to prevent damage to reputation and
goodwill of Scotch whisky. The defendants were passing off their goods as blended Scotch
whisky which in fact they were not. The case therefore merited interim injunction. The
defendants resorted to unfair means by using the words ‘Blended with Scotch’ and indulged in
colourable imitation and unfair trading in an attempt to harvest unjust benefits by appropriation
of plaintiff’s goodwill. The defendant was restrained from advertising or offering for sale or
distributing in any country Whisky, which is not Scotch whisky.

It is evident from the aforesaid decision that the judiciary in India has consistently
extended the umbrella of legal protection to GIs even in the absence of any legislation in force
at that point of time.

534
Tushar Kanti Saha and Nalin Bharti, “Beyond Wines and Spirits: Developing Countries ‘GI Products and their
Potential in WTO Regime with Special Reference to India”, Journal of Intellectual Properly Rights, Vol.11, March
5
2006, p.892. AIR 1992 Bom 294.
7.3 GEOGRAPHICAL INDICATIONS OF GOODS (REGISTRATION AND PROTECTION) ACT, 1999 – Formatted: Small caps

AN ANALYSIS

7.3.1 Historical background of the GI Act

The need for separate legislation for GIs in form of the GI Act was felt in India due to some
important reasons.

7.3.1.1 Socio-Economic Perspective

Geographical Indications are intellectual property rights. Their function is to identify products
on the market, similar to trademarks and trade names. Well protected and pro-actively used,
GIs are a very interesting marketing tool because they can convey a lot of information from the
producer to the consumer. GI give the producers of a region the exclusive right to use the
indication for their products originating from that region. It also means that they have the right
to prohibit any unauthorised use usurpation or imitation of the sign on a product that is not from
the designated area or which does not have the qualities guaranteed by the GI.

Rooted in the soil of the region for which they stand, geographical indications contribute to the
socio-economic improvement of regions around the world. They create employment, contribute
to the regulation of the market and encourage the diversification of production. In addition, they
protect natural treasures and maintain the cultural heritage.535 Much like trademarks, the
economic rationale of GIs is based on the ‘information asymmetry’ between buyers and sellers
in the market and role of reputation, conveyed through distinctive signs, in talking such
asymmetry. Thus GI acts as a signalling device that helps the producers to differentiate their

535
Felix Addor and Alexandra Grazioli, 2006, Federal Institute of Intellectual Property available at
http://www.ige.ch/e/jurinfo/j110110.shtm.
products from competing products in the market and enable them to build a reputation and
goodwill around their products which often fetch a premium price. Finally, geographical
indications contribute to sustainable development. This makes them valuable to producers in
both they wish to offer their diverse products, identified by the GIs, on the globalised market.
536

Given its commercial potential the legal protection of GI assumes enormous significance.
Without such protection, competitors not having legitimate right on a GI might ride free on its
reputation. Such unfair business practice result in loss of revenue for the genuine right holders
of the GI and also misleads the consumers. Moreover, such practices may eventually hamper
the goodwill and reputation associated with the GI. In order to rule out its misuse and to tap the
potential economic and socio-economic benefits emanating from this IP, it is essential to ensure
an appropriate legal protection for GIs at the national level.

7.3.1.2 Judicial perspectives

The issue of protection of GI gained particular interest and attention in India only when a patent
was obtained for Basmati Rice in the United States by the Rice Tec Inc. and the widespread
report of tea from other countries being passed off as Darjeeling Tea. India realised that if it
needed to protect its own geographical indications globally, it needed to protect them at the
national level to begin with.

536
Kasturi Das, supra n. 1, p.2.
7.3.1.2.1 Basmati Rice case
Basmati537 is a unique, long grain aromatic rice cultivated traditionally only in the Indo-
Gangetic plains of India and Pakistan. India has been exporting “Basmati” rice to several
countries of the world including the US, Europe and Middle East countries for several decades
and a over a period of time, it has acquired a unique position in the world market. The patenting
of the world famous Basmati rice the crown jewel of the Asian sub-continent India and Pakistan
by the US Company Rice Tec Inc. woke India and many other developing countries and made
them aware of the unfair world market trend. The Basmati which has extra long grain, soft
textured, aromatic rice has been cultivated since time immemorial in the foothills of the
Himalayas. The rare agroclimatic conditions this region endow Basmati rice with certain
characteristics, physical and sensory, not found elsewhere nor amenable to replication. This
makes Basmati a premium product in the international market and the uniqueness needs to be
preserved and protected.538
Basmati commands a premium price both in domestic and international markets.
Approximately one million hectares in India and 0.75 million hectares in Pakistan are planted
in Basmati varieties, where it is cultivated by hundreds and thousands of small farmers.539

537
Etymologically, the origin of the word “Basumati” can be traced to the Sanskrit word Vasumati which means
earth. Just as smell and fragrance are closely associated with earth, basmati rice is recognised by its unique aroma.

538
Chandar M. Lal and Gayathri Jambunathan, India and Pakistan Geographical Indications the Basmati issue.
Submitted to the International Trademarks Association (INTA) Annual Meeting, Seattle May 1999,
http://www.iprlawindia.org.doc.

539
Suman Sahai Looking beyond Basmati, Economic and Political Weekly, February 21, 1998, p.371.
 In India alone basmati exports were valued at approximately US$ 475 million in 1998-
99. The serenity of the surroundings was suddenly broken by bold new headlines which read
“US Rice Company says India and Pakistan don’t own word “Basmati”. Ever since the
company, Rice Tec, based in Texas, United States, patented Basmati rice, there has been a hue
and cry in India and Pakistan. The fear of cultural piracy from the western multinationals is felt
by the Indian farmers. 540

In February 1996, the APEDA541 has found that Rice Tec had registered for a trademark
for exporting what they called. ‘Texasmati’ in the UK and had lodged a case against Rice Tec
in an UK economic court. Thus this was the authority strategy i.e., to file such cases in all the
countries that Rice Tec approaches for trademarks.

The first legal issue, which arose in the protection of Basmati as a geographical
indication is as to whether it is a generic name? Rice Tec in its claim states that it is a generic
name and therefore cannot be protected as a geographical indication.542
Various reports have referred to the US Company’s use of such names as “Basmati”,
“Kasmati”, “Jexamati and “Jasmati”.14 In fact, the company has used the brand names Kasmati,

540
Fafi Geno Type “The Basmati Rice Patent”, 1998, http://www.rafi.organd, Berne Declaration press
packages (in German) “Das Basmati Patent” September, 1999, http://www.evb.cal.

541
Agriculture Products Exports Development Authority.

542
This controversy was a result of the research prepared by an Indian scientist from the Indian Agricultural
Research Institute being used by Rice Tec to state that Basmati is a generic term and therefore cannot be protected
as a geographical indications. see Radhika Singa – The Economic Times, New Delhi, August 11, 1998. 14

http://www.rediff.com/business/1998/mar/12rice.htm.
Texmati, and Jasmati in the US and UK since before the patent was issued. It has been using
the term “Basmati” as a generic term for considerably longer, “Rice Jec has produced and
marketed Texas Basmati and American Basmati rice and labelling it as such for 20 years and
exporting the products for 15 years with no objection ever previously raised”, the company
stamen says.543
Since the word “Basmati” is not a place name, its validity as a geographical indication
would depend on whether “Basmati” can be shown to be closely and exclusively associated with
a geographical area, although the world trade agreement calls it as geographic appellation.544
The name and the patent are completely separate issues; and there is also a distinct
difference between the use of Basmati as a generic term, and the use of brand names such as
Texmati and Jasmati. Two types of intellectual property are involved with names; Trademarks
and Geographical Indications. 545

The concern what Indian authorities had was the fear of Rice Tec getting a trademark on
Texmati, Texmati is deceptively similar to Basmati and therefore cannot be registered as a
trademark. An action of passing off was also expected to succeed.

However this was only an immediate solution available to the problem in hand since by
virtue of Article 24.9 of the TRIPs Agreement, at that time India had no law protecting GI. This
prevented Indian from approaching the WTO dispute settlement body and asking any other

543
http://www.economictimes.com/today/12.

544
http://www.itd.or/issues/india6.htmm.

545
The use of place names or worlds associated with a place to identify the origin, type and quality of a product for
e.g.; “champagne”.
members country to protect our GI. Therefore the only hope we Indians had was relying on tort
protection of passing off and unfair competition laws as usual.

It is extremely laborious to prove passing off repeatedly. Moreover, there was the danger
of the lack of the tort law (passing off) protection in the country where we seek to protect our GI
along with the fact that courts in US have been extremely unpredictable on this issue This was the
position of India which highlighted the need to legislate laws for protection of GI in our country.546

546
Ashwath U.Rao, “Basmati Issue”, http://www.iprlawindia.org.
7.3.1.2.2 Darjeeling Tea case
‘Darjeeling Tea’ could be considered as the most important geographical

indication along with ‘Basmati’ for India. Darjeeling tea is the tea produced in the hilly areas of
Darjeeling district of West Bengal.
Today, India is the Worlds largest grower of tea with a total production of 826.17 million
kilograms in the year 2002. The district of Darjeeling is situated in the State of West Bengal,
India. Tea has been cultivated, grown and produced in tea gardens geographically located in
this area for the last 150 years. The unique and complex combination of agro-climatic conditions
prevailing in the region and the production regulations imposed, lends the tea a distinctive and
naturally-occurring quality and flavour which has won the patronage and recognition of
discerining consumers all over the world for well over a century. The tea produced in the region
and having special characteristics is and has for long been known to the trade and the public all
over the words as “Darjeeling” tea. 547 According to records, the commercial tea gardens were
planted by British tea interests in 1852. Darjeeling was then only a sparsely populated hamlet
which was being used as a hill resort by the army and affluent people. However, by 1866,
Darjeeling had 39 gardens producing a total crop of 21,000 kilograms of tea harvested from
4,400 hectares. By 1874, tea cultivation in Darjeeling was found to be a profitable venture and
there were 113 gardens with approximately 6000 hectares. Today, nearly 17, 400 hectares in 85
tea gardens produce around 11.5 million kilograms of tea.20 The Easter and spring flushes have
the unique Darjeeling flavour and command a high price. Most of the tea coming on to the
world market, as ‘counterfeit’ Darjeeling seems to be coming from Kenya and Srilanka. The
other source is said to be Nepal. Nepalese tea is produced in similar geographic conditioned to
that of Darjeeling tea. About 60 percent of Nepalese tea is exported to India and most of the
Nepalese tea estates gardens are owned by Indians. There are allegations that Nepalese tea is

547
Rajendra Kumar and Vasundhara Naik, Darjeeling Tea- Challenges in the Protection and Enforcement of
20
Intellectual Property Rights, http://www.wipolint/index.html.in Ibid.
imported in to India is repackaged as Darjeeling tea and exported Nepal is small produces and
exporter of tea in the world market.

What will happen if 40000 tons of ‘counterfeit’ Darjeeling disappears from the world market
because of protection of the geographical indication for ‘Darjeeling Tea”? We could expect the
price of Darjeeling tea to go up depending on the price elasticity of demand of Darjeeling tea,
which will benefit the producers of Darjeeling tea.
1. ‘counterfeit’ Darjeeling produced in India and consumed in India.

2. ‘counterfeit’ Darjeeling produced in other countries consumed in India.

3. ‘counterfeit’ Darjeeling produced in India and consumed outside India.

4. ‘counterfeit’ Darjeeling produced in India and consumed out side India.548

Since Darjeeling has a high reputation, both the Tea Board and the Darjeeling planters
Association have been involved at various levels in protecting this common heritage. The
protection is essentially geared to:
(i) Prevent misuse of the word “Darjeeling” for other types of tea sold
worldwide.
(ii) Deliver the authentic product to the consumer.

(iii) Enable the commercial benefit of the equity of the brand to reach the

548
Niranja Rao, “Geographical Indications in Indian Context: A Case Study of Darjeeling Tea, Sept.2003, working
paper No.110, Indian Council for Research on International Economic Relations, p.13.
 Indian industry and hence the plantation worker.

(iv) Achieve international status similar to champagne or Scotch Whisky both

in terms of brand equity and governance/administration.
One of the first significant measures was taken by the Tea Board to protect

Darjeeling as a geographical indication about 15 years ago by developing a “Darjeeling”

Logo. The Darjeeling logo created in 1983 has since been registered in various jurisdictions
including UK, USA, Canada, Japan and Egypt and some European countries as a
Trademark/Certification Trademark/collective Mark.

The Tea Board has obtained “home protection” by registering the Darjeeling

Logo and also the word “Darjeeling” as a certification mark under the Indian Trade and

Merchandise Marks Act, 1958. Under the new Geographical Indication of Goods

(Registration and Protection) Act, 1999 (which has come in to force on September 15,

2003), the tea Board has also filed applications for the Darjeeling logo as well as “Darjeeling”
word to be registered as a geographical indication.549 Under the new Act
Darjeeling is registered as GI.

549
Supra n.19
 Formatted: Centered

7.3.1.3 TRIPs and Protection for Darjeeling Tea

The TRIPs agreement will help in protecting the geographical indication Darjeeling tea in the
member countries of WTO. 550
Is Article 23 protection necessary for Darjeeling Tea?- What does the geographical indication
for Darjeeling tea lose by not having Article 23 protection? Following are the various
components of enhanced protection afforded by article 23.

550
Article 22.
1) Article 23.1 mandates members to provide the legal means for interested parties
to prevent use of a geographical indication for products… “not originating in the place
indicated by the geographical indication in question, even where the true origin of the
goods is indicated…” In the absence of such protection for tea- it would be possible for
example, to use “Darjeeling Tea” with “produce of Kenya”. But the producers of Kenya
would not be able to use the Darjeeling tea logo if it is protected in Kenya or it could be
stopped at the boarder of the importing country if the logo is protected in that country.
2) Article 23.1 prohibits the use of geographical indication if “…the geographical
indication is used in translation…”. Lack of this protection in the case of tea may not pose
too much of a threat to Darjeeling tea because it is difficult to translate the geographical
name of Darjeeling. This may be true of all Indian geographical indications.
3) Article 23.1 prohibits the use of a geographical indication “… accompanied by
expressions such as “kind”, “type”, “style”, “imitation” the like”. As this is not applicable
to tea, it would be possible for example, for tea producers of Kenya to put the words
“Imitation of Darjeeling Tea” on its tea products. But they cannot use the Darjeeling tea
Logo if it is protected in that country as stopped at the border if it is protected in the country
of importation; if they use the logo they are infringing the geographical indication.
4) Article 23.2 provides that “the registration of a trademark for wines which
contains or consists of a geographical indication identifying wines or for spirits which
contain or consists of a geographical indication identifying spirits shall be refused as
invalidated, ex-officio if a members legislation so permits or at the request of an interested
party, with respect to such wines or spirits not having this origin”. This is not applicable
to tea, but the protection afforded by Article 22.3 in respect of trademarks seems to be
sufficient. Article 23.2 merely asserts that in case of tea for example, it is possible to grant
 a trademark, “Hyderabad Tea”, even when Hyderabad is a geographical indication and it
is known that Hyderabad does not produce any tea.
5) Article 23.3 deals with homonymous geographical indications and provides that
“in the case of homonymous geographical indications for wines, protection shall be
awarded to each indication…”. Homonymous geographical indications may not be a
problem for all most all geographical indications coming out of India not only for tea but
for all products.
6) Article 23.3 provides for “… the establishment of a multilateral system of
notification and registration of geographical indications for wines eligible for protection
in those members participating in the system”. In fact a legally enforceable multilateral
system could be the only benefit from extension of Article 23 protection to other products.
The TRIPs agreement leaves it to the members to decide on the mode of protection of
geographical indications. The modes used by member countries to protect geographical
indications are; (1) a sui generis law; (2) certification or collect marks under trademark law; (3)
under unfair competition or consumer protection laws. In those countries, which protect
geographical indications under a sui generis law or certification or collective marks under
trademark law, it is possible to get protection for a logo indicating the geographical indication.
If the producers and exporters of the ‘counterfeit’ goods use the logo it will be an infringement
and can be challenged in courts. Here the producer of genuine product has just to prove that the
producer of ‘counterfeit’ producer is not authorised to use the logo, as he does not produce it in
the region, which the geographical indication logo suggests. If the producer and exporter of the
‘counterfeit’ good do not use the logo, he is not infringing any geographical indication.551

551
Supra n.21.
 In countries, which provide relief to misuse of geographical indications only through
unfair competition law or consumer protection law, it is not possible to seek protection for a
logo depicting the geographical indication. In case the producer and exporter of ‘counterfeit’
goods uses geographical indication unauthorisedly, the producer of the genuine product can
claim that consumers are being misled because the consumers identify the logo with the
geographical indication even without explicit protection. In case the producer and exporter of
the ‘counterfeit’ product do not use the logo unauthorisedly it becomes difficult to prove that
consumers are being misled or there is unfair competition. But not many countries are protecting
geographical indications only through unfair competition or consumer protection laws.

7.3.1.4 TRIPs compliance

In view of their commercial potential, adequate legal protection of GIs becomes necessary to
prevent their misappropriation. Although India has had in its possession a considerable number
of products that could qualify for legal protection as geographical designators, the initiatives to
exploit this protection began only recently when the country established a sui generis system of
GI protection with the enactment of ‘The Geographical Indications of Goods (Registration and
Protection) Act, 1999’ (GI Act 1999), coupled with the ‘Geographical Indications of Goods
(Registration and Protection)

Rules, 2002 (GI Rules 2002). The Act, which became operational with effect from 15
September 2003, was drafted as a part of the exercise in the country to set in place

national IPR laws as much in compliance with India’s obligations under the agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade
Organisation (WTO) so as to take advantage of the ‘minimum’ standards of GI protection
(alongside other IPRs) that the TRIPs set out for the WTO members to comply in their respective
national legislations.

7.3.2 Analysis of the GI Act

Prior to enactment of GI Act,552 there was no law for the protection of

geographical indication in India. The need and justification for this law has been aptly stated in
the statement of object and reasons as under:

“At present there is no specific law governing geographical indications of goods in the country
which could adequately protect the interests of producers of such goods. Exclusion of
unauthorised persons from misusing geographical indications would serve to protect consumers
from deception, add to the economic prosperity of the producers of such goods and also promote
goods bearing Indian geographical indications in the exports market. Unless a geographical
indication is protected in the country of its origin there is no obligation under the agreement on
Trade Related Aspects of Intellectual Property Rights (TRIPs) for other countries to extend
reciprocal protection. India would, on the other hand, be required to protection to goods
imported from other countries which provide for such protection. In view of the above
circumstances, it is considered necessary to have a comprehensive legislation for registration
and for providing adequate protection for geographical indications”.

552 26
Geographical Indications of Goods (Registration and Protection ) Act, 1999
Remedy under tort.
Until recently and in past, protection from such misuse of geographical indications was granted
through passing off action in courts26 or through certification marks.553 However, in order to
provide better protection to geographical indications, the Parliament enacted Geographical
Indications of Goods (Registration and Protection) Act, 1999554 which is quite similar and in
lines with the New Zealand GI Act. This received the assent of the President of India on the
30th December 1999.

This Act seeks to provide for registration and better protection of geographical indications
relating to goods. It excludes unauthorised persons from misusing geographical indications.
This would protect the interest of producers, manufacturers and thereby consumer from being
deceived by the falsity of geographical origin to economic prosperity of the producer of such
goods and promote goods bearing geographical indications in export market. Unless a
geographical indication is protected in the country of its origin, there is no obligation under the
agreement under Article 22 of the TRIPs agreement for other countries to extend reciprocal
protection. It is in this context that the Act was enacted.555 The Act has been divided into nine
chapters.
Chapter-I is preliminary which inter alia, defines various terms used in the Act. Chapter II deals
with the appointment, powers and establishment of Registry. It also provides for registration in
respect to particular goods and areas and prohibition of registration. Cheaper III deals with
procedure and duration of registration. Chapter IV describes the effect of registration. Chapter

553
Under the Trade and Merchandise Marks Act (1958).

554
WTO and TRIPs – An Indian perspective, http://www.indiainfoline.com/legal/feat/wttr.html.

555
Statement of object and Reasons of the Bill.
V contains special provisions relating to trademark and prior user. Chapter VI provides for
rectification and correction of the Register. Chapter VI relates to appeals and Appellate Board.
Chapter VII prescribes penalties and procedure. The last i.e., Chapter IX is miscellaneous.

7.3.2.1 SOME SALIENT AND IMPORTANT FEATURES OF THE ACT

Definitions

Section 2(e) of the Act defines ‘geographical indications’ in relation to goods to mean:

“An indication which identifies such goods as agricultural goods, natural goods
or manufactured goods as originating, or manufactured in the territory of county,
or a region or locality in that territory, where a given quality, reputation or other
characteristic of such goods is essentially attributable to its geographical origin
and in case where such goods are manufactured goods one of the activities of
either the production or of processing or preparations of the goods concerned
takes place in such territory, region or locality, as the case may be.556

556
For the purposes of this clause, any name which is not the name of country, region or locality of that country
shall also be considered as the geographical indication if it relates to a specific geographical area and is used upon
or in relation to particular goods originating from that country, region or locality, as the case may be.
Meaning of indication557

The word indication has also been defined to include:

(i) any name (including abbreviation of a name)

(ii) geographical or figurative representations; or

(iii) any combination or suggest the geographical origin or goods to which it applies.
Concept of goods32

The Act also defines ‘goods’ to mean any:

(i) Agricultural goods.

(ii) Natural goods.

(iii) Manufacturing goods.

(iv) Goods of handicraft and foodstuff.

The above definition is not exhaustive but merely illustrative. It would not be out of place to
mention that while the TRIPs agreement refers to ‘goods’ the Indian Act classifies such goods.

557 32
Section 2 (g).
Section 2 (f).
 ‘Producer’ in relation to goods, means any person who –

(i) if such goods are agricultural goods, produces the goods and includes the person
who processes or packages such goods;
(ii) if such goods are natural goods, exploits the goods;

(iii) if such goods are handicraft or industrial goods, makes or manufactures the
goods, and includes any person who trades or deals in such production,
exploitation, making or manufacturing, as the case may be, of the goods558 The
TRIPs definition refers to goods in general, the Indian GI Act specifies the goods
to be either agricultural goods or natural goods or manufactured goods that can
qualify as a GI. Further, in the Indian Act, if a producer applies for a GI for a
manufactured good, he or she must make sure that at least one of the activities of
either the production or processing or preparation of the good must take place in
the territory.
In that sense, the GI Act is more restrictive than the TRIPs definition. 559

This can be explained by taking “Darjeeling tea” as an instance. Darjeeling tea involves
manufacture because the green tea leaves plucked from the tea bushes have to go through a range
of rigorous processing stages before turning into the final product (called “made-tea”), which is

558
Section 21 (k).

559
Kasturi Das, ‘Protection of Geographical Indications: An Overview of Select Issues with Particular

Reference to India’ working paper 8, 2007, Centre for Trade and Development (centad), New Delhi, India.
ultimately sold in the market. Now even if the tea leaves are plucked from Darjeeling region,
the GI Act will not allow the final product to be designated as Darjeeling tea, unless the
processing also takes place within the Darjeeling region. The TRIPs definition will, however,
allow the final product to be designated as Darjeeling tea, even if the processing takes place
outside Darjeeling, because no matte where the processing takes place, the given quality or
characteristics (such as flavour, etc.) of the final product will essentially be attributable to its
geographical origin. 560

As for a given quality, reputation and other characteristic, TRIPs does not clarify any of these
requirements further. Thus TRIPs is silent on whether these requirements imply only such
qualities and characteristics, which may be attributed to ‘natural factors’ (e.g climate,
topography, etc,), or whether those characteristics that result from ‘human factors’ e.g.
specialised skills of artisans) may also be covered under the definition contained in Article 22.1.
Unlike TRIPs, the GI Act explicitly mentions ‘human factors’. Section 11 (2) (a) of the GI Act,
which stipulates what an application for GI registration should contain, refers to the geographical
environment, with its inherent natural and ‘human factors’. Again as per section 32 (1) of the
GI Rules, an application for a GI is required to be supported by ‘the detailed description of the
human creativity involved’ and ‘the particulars of special human skill involved’. The
significance of the explicit reference to ‘human factors’ in the GI Act may be appreciated when
judged in the light of the fact that India has in its possession numerous handicrafts and handloom
products that are apt to be protected as GIs and in the production of these items specialised
human skills and craftsmanship play a significant role.

560
Ibid.
Various stages of filing and grant of GI are explained in figure 1
Figure-1: GI registration process in India
(2) Registration of Geographical Indication

The protection is granted to geographical indications through registration. The registering

authority is the Registrar of Geographical Indications.

Who can apply for registration?

(i) any associate of persons;

(ii) producers; or

(iii) any organisation or authority established by or under any law representing the
interest of the producers of the concerned goods.
Whom to apply?

The application must be made to the Registrar under the Act, the ControllerGeneral of Patents,
Designs and Trademarks appointed under sub-section (1) of section 3 of the Trademarks Act,
1999 shall necessary be the Registrar of Geographical Indications. He shall be assisted by such
number of officer, which the central government may think fit. 561

561
Section 11.
 A full fledged modern patent office and the country’s first geographical indication (GI)
registry was put up in Chennai which is really a good step forward in this field. This registry will
satisfy the requirements mentioned in the Act further supplementing it.562
Where to file the application?

Every application shall be filed in the office of the Geographical Indications Registry within
whose territorial limits, the territory of the country or the region or locality in the country to
which the geographical indications relates is situated.

Contents of the Application

The application for registration must contain the following:

(i) a statement as to how the geographical indication serves to designate the goods as
originating from the concerned territory in respect of specific quality, reputation or other
characteristics which are due exclusively or essentially to be geographical, environmental,
with its inherent natural and human factors, and the production, processing or preparation
of which takes place in such territory, region or locality;
(ii) the class of goods to which the geographical indication shall apply;
(iii) the geographical map of the territory of the country or region or locality in which the goods
originate or are being manufactured;

562
The office website (www.patent.office.nic.in) provides information on patents and the geographical indications
registry.
(iv) the particulars regarding the appearance of the geographical indication as to whether it is
comprised of the words or figurative elements or both;
(v) a statement containing such particulars of the producers of the concerned goods, if any
proposed to be initially registered with the registration of the geographical indication as
may be prescribed; and
(vi) such other particulars as may be prescribed.

On acceptance of this application the registrar of geographical indications563 shall

advertise it.564 Any person may oppose it within three months from the date of advertisement
or extended period of not more than one month.565 The registrar shall, after hearing the parties,
if so required, decide whether and subject to what conditions or limitations, if any, the
registration is to be permitted.566 Thus, where the application has not been opposed and the
time for notice of opposition has expired; or the application was opposed and it has been decided
in favour of the applicant, the registrar shall register the said geographical indication and the
authorised users if any, so mentioned in the application.42

563
Section 3(1) (The Controller-General of Patens, Designs and Trademarks is also the Registrar of Geographical
Indications).

564
Section 13.(1)

565
Section14 91)

566 42
Section 14 (5).
Section 6 (6).
 Once a geographical indication is registered, any producers of the concerned goods may
apply to the registrar for registering him as an authorised user for such geographical indication.

Effect of Registration – No person shall be entitled to institute any proceeding to prevent or

recover damages for the infringement of an unregistered geographical indication. This forbids
the institution of proceedings for injunctions or for damages. Nothing in the Act of Geographical
Indications of Goods shall be deemed to affect the right of actions against any person for passing
off goods as the goods of another person or the remedies in respect thereof.567
Prohibition of Registration of Certain Geographical Indications

Following geographical indications are not registrable under the Act: 568

(i) the use of which would be likely to deceive or cause confusion;

(ii) the use of which would be contrary to any law for the time being in force;

(iii) which comprises or contains scandalous or obscene matter;

(iv) which comprises or contains any matter likely to hurt the religious

susceptibilities of any class or section of the citizens of India;

(v) which would otherwise be disentitled to protection in a court;

567
Section 20.

568
Section 9
 (vi) which, although literally true as to the territory, region or locality in which the
goods originate, but falsely represent to the persons that the goods originate in
another territory, region or locality;
(vii) Which are determined to be generic names or indications of goods and are,
therefore, not or ceased to be protected in their country of origin, or which have
fallen into disuse in that country. Generic name or indication means the name of
goods which although relates to the place or the region where the goods was
originally produced or manufactured, has lost its original meaning and has
become the common name of such goods and serves as a designation for as
indication of the kind, nature, type or other property or characteristic of the
goods.
The registration of a GI shall be for a period of ten years but may be
renewed from time to time for an indefinite period.569
Rights conferred by Registration
It is mandatory to get a geographical indication registered in order to claim any rights in respect
of such indication under the Act.46 However, the rights of action against person for passing off
goods as the goods of another person or the remedies in respect thereof shall remain unaffected.
570

569 46
Section 18 (1).
Section 2 (1).

570 48
Section 20 (2).
Section 25.
 The registration of a geographical indication shall give:

(i) to the registered proprietor and the authorised user or users the right to obtain relief
in respect of infringement of such geographical indication;
(ii) to the authorised user the exclusive right to the use of the geographical indication
in relation to the goods in respect of which the geographical indication is registered.
(3) Special provisions relating to Trademarks and prior users.

The Registrar of Trade marks shall, suo motu or at the request of an interested party, refuse or
invalidate the registration of trade mark which contains or consists of a geographical indication
as it would lead to expropriation of a public property by an individual leading to confusion in
the market.48

The Geographical Indications Act protects a trade mark which contains or

consists of a geographical indication which has been applied for or registered in god faith under
the trade marks law or where such trade marks have been used in good faith before the
commencement of the Act or before the date of filing of an application for registration of a
geographical indication. This Act shall not apply to geographical indication with respect to
goods or class or classes of goods which have become the common name of such goods in India
on or before 1st January 1995. This Act protects the right of any person to use his name or the
name of his predecessor in business except where such name is liable to cause confusion or
misled the public. This Act provides that no action in connection with the use of registration of
a trade mark shall be taken after five years from the date from which such use or registration
which infringes any geographical indication registered under this Act has become known to the
registered proprietor or the authorised user.
(4) Infringement of the Registered Geographical Indication
A person, who is not an authorised user of a registered geographical indication, infringes it
when he:
(i) uses a such geographical indication by any means in the designations or
presentation of goods that indicates or suggests that such goods originate in a
geographical area other than the true place of origin of such goods in a manner
which misleads the persons as to the geographical origin of such goods; or
(ii) user any geographical indication in such manner which constitutes an ‘act of
unfair competition’571 including passing off in respect of registered geographical
indication; or
(iii) uses another geographical indication to the goods which, although literally true as
to the territory, region or locality in which the goods originate, falsely represents
to the persons that the goods originate in the territory, region or locality in respect
of which such registered geographical
indication relates.

It is also an infringement to use a geographical indication in respect of goods not

originating in the place indicated by such geographical indication, even if true origin of such
goods is also indicated, and the geographical indication is accompanied by expression such as
“kind”, “style”, “imitation” or the like expression. 50

571
‘Act of unfair competition’ means any act of competition contrary to honest practices in industrial or
50
commercial matters. Section 22 (3).
(5) Additional Protection of certain goods
The Central Government may by notification in the Official Gazette provide for additional
protection for certain goods which are notified. A GIs once law fully acquired their dealing in
such goods shall not constitute an infringement less the goods are impaired after they have been
put in the market.

(6) Rectification and correction of Register

The register or the Appellate Board may cancel or vary the registration of GIs or of an
authorised user for the contravention or failure to observe the conditions entered on the register.
It enable any person aggrieved by the absence or omission of any entry in the register without
sufficient cause or any entry wrongly on the register by the error or defect, to apply to the
Appellate Board or the register to pass appropriate orders. The Registrar and the Appellate
board can suo moto after giving notice the parties concerned and hearing them, pass appropriate
orders for cancelling, varying or rectifying the

register.572

(7) Appeals to the Appellate Board

Any person aggrieved by an order or decision of the Registrar under this Act, or the rules made
there under, may file an appeal to the Appellate Board. Such appeal must be filed within three
months from the date on which the order or decision is communicated to the aggrieved parties.52

572
B.L.Wadehra, Law Relating to Patents Trademarks Copyright Designs and Geographical Indications, 2nd
52
edn, Delhi: Universal Law Publishing Co.Pvt Ltd, 2000, p.513. Section 31.
(8) Remedies for infringement of a geographical indication
The remedies available for protection of geographical indications may broadly be classified into
two categories. (i) civil remedies; and
(ii) criminal remedies.

Civil Remedies
The Act provides for the following civil remedies for infringement of a registered geographical
indication;
(a) Injunction

(b) Damages or account of profits

(c) Delivery up of the infringing labels and indications.

These remedies are inclusive, not exhausting and the court may provide some other
remedies in addition to the aforesaid, such as Anton Piller order.573
(a) Injunction
Injunction includes- temporary injunction and permanent injunction. Further, the court may
also order an exparte injunction for-

573
In appropriate cases the court may on an application by the plaintiff pass an exparte order requiring the defendant
to permit the plaintiff accompanied by solicitor or attorney to enter his premises and take inspection of relevant
documents and articles and take copies thereof or remove them from the custody. The necessity for such an order
arises where there is a grave danger of relevant documents and infringing articles being removed or destroyed so
that the ends of justice will be defeated. (Anton Piller v. Manufacturing Processes (1976) Ch.55 (1976) R.P.C.
719). See also W.R. Cornish, Intellectual Property, 3rdedn., Delhi: Universal Law Publishing Co.Pvt. Ltd., 2001,
p.246.
 (i) discovery of documents;

(ii) preserving of infringing goods, documents or other evidence which are related to the
subject matter of the suit; and
(iii) restraining the defendant form disposing of, or dealing with his assets in a manner
which may adversely affect plaintiffs ability to recover damages, costs or other
pecuniary remedies which may be finally awarded to the plaintiff.
The aforesaid remedy of injunction is more effective and can prevent a greater harm to
the plaintiff.

(b) Damages or account of profits

The remedy of damages or account of profits is not cumulative but alternative. The plaintiff
has to elect one of the two remedies at an earlier stage of the suit. The remedy of damages (other
than nominal damages) or account of profits may be denied where defendant satisfies the court
that he was unaware and had no reasonable ground for believing that the geographical indication
of the plaintiff was registered when he connected to use it; and that when he became aware of
the existence and nature of the plaintiffs right in the geographical indication, he forthwith ceased
to use it.574

(c) Delivery-up of the infringing labels and indications

It is in the discretion of the court to order the defendant to deliver up infringing labels and
indications for destruction or erasure. The court by taking relevant circumstances into account
may or may not order for such remedy. All the aforesaid remedies are also available for passing

574
Section 67 (3).
off action.575 Passing off actions are initiated against the infringement of unregistered
geographical indications.

(ii) Criminal Remedies

Criminal remedies are more effective than civil remedies because the former can be disposed
off quickly. The pendency of a civil suit does not justify the stay of criminal proceeding in
which the same question is involved. Since criminal proceedings directly strikes at the honour
and social status of an infringer, in some cases he comes for a settlement out of court to save his
prestige. Chapter VIII of the Act deals with offences and penalties for such offences.

The Act contains penal provision for violation of various provisions relating to geographical
indications given below.
(i) Falsifying and falsely applying geographical indications to goods.576

(ii) Selling goods to which false geographical indications is applied.577

(iii) Falsely representing a geographical indication as registered.578

(iv) Improperly describing a place of business as connected with the geographical
indications registry.

575
Section 67 (1).

576
Section 38 and 39.

577
Section 40.

578
Section 42.
 (v) Falsification of entries in the register.

The punishment prescribed for the aforesaid offences varies form six months to three
years imprisonment and a fine of not less than rupees fifty thousand but may extend to rupees
two lakh. However the court for adequate and special reasons in writing may impose lesser
punishment.

The Act579 also prescribes for enhanced penalty for second or subsequent

conviction. The term of imprisonment in such cases shall not be less than one year but it may
extend up to three years and fine of not less than one lakh rupees which may extend up to two
lakh rupees. The discretion is vested with the courts to impose a lesser punishment after
recording in the judgment adequate and special reasons for awarding such lesser punishment.
No cognizance would be taken of any conviction made before the commencement of this Act.
The offence under the Act is cognizable.

Forfeiture of Goods - The element of mens rea is essential for conviction. If mens rea is
lacking, the accused may be acquitted. The court may, however, where a person is convicted or
acquitted because of lack of mens rea, direct the government to forfeit all goods and things by
means of, or in relation to which the offence has been committed. The court may either order
for the forfeited goods to be destroyed or otherwise disposed of.580

579
Section 41.

580
Section 46
Search and Seizure – the Act empowers the Deputy Superintendent of police to take cognizance
of geographical indications offences and may search and seize things and articles involved
therein without warrant if he is satisfied that any of the offences has been or likely to be
committed and all the articles so seized shall be produced before the Judicial Magistrate of the
first class or Metropolitan Magistrate, as the case may be as soon as practicable. However, a
police officer before making any such search or seizure shall obtain the opinion of the Registrar
on the facts involved in the offence and shall abide by such opinion. A person having an interest
in may article seized to file an application to the Judicial Magistrate of the first class or the
Metropolitan Magistrate, as the case may be, for restoration of such article seized,581
The interpretation of certain terms used in the Act is worth mentioning since it helps avoiding
confusions and lack of understanding both for judiciary and common man. The expression
“indication” has been defined inclusively to include any name geographical or figurative
representation or any combination of them conveying or suggesting the geographical origin of
goods to which it applies. Thus “indication” suggests or conveys the origin or source of the
goods. It may be in the form of name (in full or abbreviation) or representation (geographical)
or figurative) or combination of them; for e.g., the name “Scotch” indicates the origin of Whisky
as form Scotland.

“Darjeeling” is a geographical representation for indicating the origin of tea from Darjeeling
(India), the figure of Taj Mahal on a tea brand.

The definition of geographical indication in the Act is very comprehensive. The important
point is that a good should also have an identifiable quality, reputation or other

581
Section 50.
characteristics attributable to its geographical origin. In case of manufactured goods, method of
production or process would become an important parameter, what it would mean at the ground
level is that people interested in obtaining geographical indication must establish such features
in a distinctive manner which may not be an easy task in many situations and may require
technical inputs.

Miscellaneous Provisions
No suit or other legal proceedings shall lie against any person in respect of anything which is
in good faith done or intended to be done in pursuance of this Act.582 Every person appointed
under this Act shall be deemed to be a public servant.583 Stay of infringement proceedings can
be ordered. A stay of a suit for infringement of a geographical indication shall not preclude the
court from making an interlocutory order during the period of stay.584 In certain cases, specified
therein the application for rectification of register should be made to the Appellate Board.
Where a geographical indication has been applied to the goods on sale or in contract for sale of
goods, there is an implied warranty that the geographical indication is a genuine geographical
indication and not falsely applied.585 The Registrar is empowered with the powers of a civil
court, including award of reasonable costs. The Registrar shall have the power to review his

582
S.55 of the GI Act.

583
S.56 of the GI Act.

584
S.57 of the GI Act.

585
S.58 of the GI Act.
own decision.586 Where the Registrar exercises any discretionary power vested in him adverse
to an applicant, such person should be given an opportunity of being heard.587 The evidence
before the Registrar should be normally in the form of affidavit only and in addition to be may
take oral evidence.588

In case of death of a party to a proceeding during the course of the proceeding, the Registrar on
proof to his satisfaction may allow substitution of successor of the party or may allow the
proceeding to continue with the surviving parties. 589 The Registrar is empowered to extend the
time for doing of act subject to conditions.590 If the Registrar is of the opinion that the applicant
has defaulted in prosecution of his application, he may by notice require the applicant to remedy
the defect within a specified time after giving him an opportunity of being heard. He may treat
the application as abandoned unless the default is remedied within the time specified by him.

A suit for the infringement of geographical indication shall be instituted only before a district
court. The relief which a court could grant in an action for infringement or passing off includes
injunctions, damages, or at the option of the plaintiff account of profits. The court may also
order for the delivery up of the infringement labels and indications for destruction or erasure.
An injunction order may include an exparte injunction or any interlocutory order including

586
S.60 of the GI Act.

587
S.61 of the GI Act.

588
S.62 of the GI Act.

589
S.63 of the GI Act.

590
S.64 of the GI Act.
discovery of document, preserving of infringing goods, restraining the defendant from disposing
of or dealing with his assets adversely affecting the plaintiff’s ability to recover damages or
other pecuniary remedies which may be finally awarded by court. The court shall not grant
relief by, way of damages (other than nominal damages) on account of profits:
(a) If the defendant satisfies the court that he was unaware and had no reasonable
ground for believing that the geographical indication of the plaintiff was on the
register (in case of suit of passing off the geographical indication was in use); and
that
(b) When he became aware of the existence and the nature of the plaintiffs right, he
forthwith ceased to use the geographical indication.
In every proceeding under rectification and correction of the Register authorised user of
a geographical indication has to be impleaded.591
A certified copy of any entry in the register or any document of indexes mentioned in
sec.77 and sealed with the seal of Geographical Indications Registry shall be admitted in
evidence in all courts and in all proceedings without further proof or production of the original.
A certificate issued by the Registrar as to any entry, matter or thing, he is authorised to do shall
be prima facie evidence of the entry having been made and of the contents thereof.592 The
Registrar and other officers shall not be compelled to produce the Register or any other
document in his custody in any legal proceedings, the content of which can be proved by the

591
S.68 of the GI Act.

592
S.69 of the GI Act.
production of a certified copy issued under this Act, or appear as a witness to prove the matter
therein recorded unless ordered by the court for special reasons.593
The Central Government may, by notification, require that goods of any class specified
in the notification which are made or produced outside India and imported into India to apply
an indication of the country or place in which such goods are made or produced with the name
and address of the manufactures.594
The Appellate Board may grant a certificate of validity of a registered geographical
indication or the authorised user in any legal proceedings relating to rectification of the register,
and if, in any subsequent legal proceedings as to its validity comes up the said registered
proprietor or the authorised user, as the case may be, will be entitled to recover the full cost
charges and expenses as between a legal practitioner and his client.595
A person, who is a legal practitioner, or a person registered in the prescribed manner as
a geographical induction agent, or a person in the sole and regular employment of the principal
can appear before the Registrar duly authorised.

The Registrar should maintain:

(a) an index of registered geographical indications.

593
S.70 of the GI Act.

594
S.71 of the GI Act.

595
S.72 of the GI Act.
 (b) An index of geographical indications in respect of which applications for registration
are pending.
(c) An index of the names of the proprietors of registered geographical

indications, and

(d) An index of the names of authorised users. 596

The documents such as register, the indexes mentioned in sec. 77 and any other document
as the Central Government may specify be open to public inspection at the Geographical
Indications Registry. Any person may, on an application to the Registrar and on payment of
such fee as may be prescribed, obtain a certified copy of any entry in the register or any
document.597
The Central Government shall place before both the Houses of Parliament once a year a
report regarding the execution by or under the Registrar.598

7.4 CHALLENGES AND PROBLEMS IN THE POST GI ACT REGIME Formatted: Font: Bold, Small caps

The Government of India has established the Geographical Indications Registry’ with all-India
jurisdiction at Chennai, where the GIs can be registered. Authorities claim that this Act has two

596
S.77 of the GI Act.

597
S.78 of the GI Act.

598
S.80 of the GI Act.
key characteristics; (i) protection of producers against counterfeiting and misleading commerce,
and (ii) striking of balance between trademark and GI protection. According to this Act, once a
GI is registered, any person claiming to be the producer of the good designated by the registered
GI can file an application for registration as an authorised user. The GI Act is to be administered
by the Controller General of Patens, Designs, and Trademarks – who is the Registrar of GIs.
The registration of a geographical indication is for a period of ten years. Renewal is possible
for further period of ten years. If a registered GI is not renewed, it is liable to be removed from
the register.

7.4.1 Registration status of GIs in India

Around 1500 products from India have reportedly been identified as having the potential to get
registered as GIs.599 Till July 2012, 178 GI got registered with the GIs Registry600 including
few foreign GIs.81

599
Natarajan, V. (2008) ‘Indian perspective of GI Registration’, presentation delivered in the ‘Regional Conference
on IPR protection through Geographical Indication’, organised by the UNCTAD India programme and the Textiles
Committee, Hyderabad, India, 3-4, June.

600
See Annexure. 81

‘Champagne’ from France, ‘Pisco’ from Peru, Napa valley from USA, Scotch Whisky from UK Prosciutto di Parma
from Italy.
Table -1: category wise registered GIs.

Sl.No. Category No.of

Registered GIs.
1 Agriculture 44
2 Handicrafts 116
3 Manufactured 14
4 Foodstuffs 4
Total GIs registered 178

Source: GI Registry Office, Chennai, as on July 2012

 A striking feature of Indian GIs is the variety of product categories to which they belong.
These include textiles, handicrafts, paintings, agricultural products, horticultural products,
beverage, among others. This is in sharp contrast with the European Scenario, where GIs
predominantly relate to Wine and Spirits, or other food and agricultural products.601 Table 1
depicts the distribution of registered GIs in India as per certain broad product categories. As
may be noted from this table 1 out of the total of 178 (i.e.,

65.16%) registered GI’s are in the category of handicrafts (including handlooms, paintings, etc.).
Notably often these are also the products that are based on the traditional knowledge (TK) being
passed on from one generation of the artisans community to the next, clearly reflecting India’s

601
The EU has in its possession some 4800 registered GIs, 4200 for Wines and Spirits and another 600 for other
categories, mainly food products (European Commission, 2003), p.2.
rich heritage of TK in arts and crafts of diverse genres; and the significant roles that GIs can
potentially play in the context of these products. It may also be noted from table 1 that out of
178 registered GIs, 44 (i.e., around 25.58%) belong to agriculture. The predominance of
artisanal and agriculture- related products among he registered GIs, which taken together
comprise 154 out of the total of 178 (i.e., 89.53%) clearly indicates that GIs have a significant
potential to facilitate rural development in India. It is interesting to note in table 1 that out of
178 registered GIs only 74 (i.e.,

Around 43.02%) belong to manufactured and foodstuffs 4 (i.e. 2.3%)

Table-2: State/Region wise distribution of GIs in India

State/Region Number of Registered Products
West Bengal 9
Kerala 20
Tamil Nadu 18
Madhya Pradesh 5
Maharashtra 7
Orissa 14
Karnataka 31
Rajasthan 9
Andhra Pradesh 20
Himachal Pradesh 4
Bihar 4
Assam 4
 Goa 2
Uttar Pradesh 5
Gujarat 8
Chattisgarh 4
Nagaland 1
Jammu & Kashmir 5
Peru 1
France 2
USA 2
UK 1
Italy 1
Portugal 2
Pondicherry 2
Punjab 1

Source: GI Registry Office, Chennai as on July 2012

 Table-2 depicts that out of the total 28 states and 7 union territories of India products form
only 18 states and 2 union territories have been registered under the GI Act. Not even a single
product has been registered from 10 states and other union territories of India. While Karnataka
has the maximum products registered (32) interestingly few products from outside India has
been registered seeking protection with the Indian GI Registry Office.

The trends and patterns in the year wise distribution of GIs in India show that (see table
-3), while there has been an overall increase in the number of registered GI products, the increase
has not been consistent over the last 8 years. Only three 3 products were registered in the first
year 2004-05. The number of products registered under GI recorded a significant increase in
the year 2005-06. Twenty four (24) new products were registered in the following year 2005-
06 but in the next year 2006-07, only 3 new products were registered. The year 2007-08, 31
new products were registered. The year 2008-09 witnessed the maximum number of new
products registered 45. However, in the following year there was a significant drop in the
numbers of new GI product registration. Only 14 products were registered in the year 2009-10.
In the year 2010-11, 29 new products were registered. Lastly in the year 2011-12, 29 new
products were

registered.

Table-3: Year wise Distribution of Registered GIs in India

Year Agriculture Handicrafts Manufacture Foods

2004-05 1 2 - -

2005-06 2 18 4 -
2006-07 2 1 - -

2007-08 11 19 1 -

2008-09 10 33 1 1

2009-10 5 7 1 1

2010-11 8 15 4 2

2011 -12 5 21 3 -

Total 44 116 14 4
Grand Total: 178

GRAPH 3: Year wise Distribution of Registered GIs in India

7.4.2 Issues and concerns

There are a number of issues and concerns in the context of harnessing the potential
commercial benefits out of GI registration in India. Perhaps the biggest concern is near complete
absence of an effective post GI mechanism in the country. Which domestic registration of a GI
is a relatively easy task and there has been some progress on this account over the last 9 years,
it is important to understand that only registration of goods perse does not fulfil the objectives
of the Act, unless it is backed by sound enforcement mechanism both, in domestic and export
markets. In fact, the enforcement of the Act in other countries is a much more complicated
venture as this may pose a variety of constraints including technicalities involved in the
registration process in various foreign countries, exorbitant expenses involved in appointing a
watch-dog agency to get information on misappropriation; and huge financial resources needed
for fighting legal battles in foreign lands.602 The Governments role is vital in the post GI
mechanism because without government support, most producer groups do not have the
wherewithal to effectively defend and promote their GI brand in India, perhaps only in the case
of one good i.e. Darjeeling Tea, the Tea Board has had some success in defending against
misappropriation in a few countries because they have the financial capacity to do so.

Though the Act defines the cases when a registered GI is said to be infringed, it is silent
on the mechanism and provisions to fight against the infringement and this is an area where the
government needs to play larger role. In the opinion of Rajnikant Dwivedi, Director of Human
Welfare Association, an association based in Varnasi working with handloom weavers, benefits
of GI protection under the GI Act will actually depend on how effective is the post GI
mechanism. “Banarasee Saree Weavers Continue to be a distressed lot idle looms have not
begun functioning and unscrupulous practices of selling imitation products in the name of
Banarsee Saree have not been curbed. Mr.Anil Singh, Director Need, a Lucknow based
organisation and also an applicant in GI registration for Lucknow Chikan craft says that GI may

602
Kasturi Das (2006), Protection of Geographical Indications: An Overview of Select Issues with Special Reference
to India, Working Paper: 8; Centad, Delhi.
leave the artisans community completely high and dry as the awareness level on GI, the mot
basic recipe for success of any policy, is alarmingly dismal. The post GI mechanism must have
adequate provision for promotion and continuous awareness building. Chikan Craft, being an
eco-friendly, gender sensitive craft, has huge potential to increase the bargaining power of the
producers; however, this potential has not been tapped. Attempts have been made by the State
Government to tap this potential by merging GI promotion with the department of tourism,
promoting producer companies and other promotional measures. However, these efforts remain
restricted to a few areas where civil society is alive. One of the key concerns that Mr.Singh
points out is that a majority of producers do not have the capacity to report and fight an
infringement case.603

At present, the action related to GI appears concentrated on registration of GI goods and

in many cases the state governments are acting in haste. The identification and registration is
happening without adequate due diligence. Applicants often do not assess the commercial status
/prospects of a GI product in the domestic and export markets; the potential of its GI status in
contributing to its future growth; and the socio-economic implications of its GI protection for
the communities involved in its supply chain. As a result, the larger and the real objectives of
the Act are by passed, often leading to frivolous and consequential registration. Moreover, as
GIs are a collective rights and not an individual right, the registration process offers an
opportunity for community level sensitization and awareness. However, in the haste to register
GIs, this opportunity is lost. The awareness and involvement in the registration process of even
GI goods remain reduced to the level of a few selected stakeholders. This has in some cases led

603
Geographical Indications of India, Policy brief October 2010, aiaca. (All India Artisans and Craftworks Welfare
Association), p.8.
to seriously erroneous omissions and commission, defeating the large purpose of the GI Act.604
In case of Madhubani painting error has been pointed out. Madhubani painting on paper is
registered as GI under class 16 which implies that Madhubani painting on cloth is not protected.

Another lacuna is that the definition of ‘producer’ in the Act does not distinguish between
a real producer, retailer or dealer. As a result of this discrepancy, the benefits of the Act may
not percolate down to the real producer. Various economically powerful intermediaries may
still continue their control over markets and the real producers may still be dependent on these
intermediaries for market access. Even if GI protection would yield financial benefits, in such
a scenario, firms with superior bargaining positions (located on the upper stream of the supply
chain) may end up appropriating a disproportionate share of the economic value generated from
securing protection.605

7.5 CONCLUSION Formatted: Font: Bold, Small caps

The GI Act, which came into force, along with the GI Rules, with effect from 15
September 2003, has been instrumental in the extension of GI status to many goods so far. The
central government has established the Geographical Indications Registry with all-India
jurisdiction, at Chennai, where right-holders can register their GI. Unlike TRIPS, the GI Act

604
For instance, the map submitted while applying for GI registration of Bah Print (Already a registered GI) excluded
some areas where Bagh printing has existed for decades. (Pointed by Mr.Chinmaya Mishra in a Planning Commission
Meeting).

605
Rangnekar, D., ‘The International Protection of Geographical Indications: The Asian Experience’,
UNCTAD/ICTSD, Regional Dialogue on Intellectual Property Rights, Innovation and Sustainable Development,
Hong Kong, SAR, Republic of China, November 8-10, 2004.
does not restrict its special protection to wines and spirits alone. The central government has
discretion to decide which products should be accorded higher levels of protection. This
approach has deliberately been taken by the drafters of the Indian Act with the aim of providing
stringent protection as guaranteed under the TRIPS Agreement to GI of Indian origin. However,
other WTO members are not obligated to ensure Article 23-type protection to all Indian GI,
thereby leaving room for their misappropriation in the international arena. Registration of GI is
not compulsory in India.

If registered, it will afford better legal protection to facilitate an action for infringement. Once a
GI is registered in India, it becomes relatively easier to seek protection in other countries,
particularly the member countries of WTO.
 CHAPTER-VIII

CONCLUSIONS AND SUGGESTIONS

8.1 CONCLUSION Formatted: Font: Bold, Small caps

Intellectual Property Rights have never been more economically and politically important or
controversial than they are today. Patents, copyrights, trademarks industrial designs, integrated
circuits and geographical indications are frequently mentioned in discussions and debates on such
diverse topics as public health, food security, education, trade, industrial policy, traditional
knowledge, biodiversity, biotechnology, the internet and media industries. In a knowledge based
economy, there is no doubt that an understanding of IPRs is indispensable to informed policy
making in all areas of human development. Geographical indications of goods is emerging field of
intellectual property, which needs to be protected.

Marks indicating the geographical origins of goods were the earliest type of trademark. With the
industrial revolution international trade began to develop, and competition was largely dependent
on the quality of a good, which was associated with its source of origin. To take advantage of the
commercial attractiveness of local reputations merchants branded their goods with the place of
origin. It resulted in a variety of depictions such as local animals (panda beer), land marks (Mt
Keji Sake), buildings (Pisa Silk) or even well known personalities (Napoleon Brandy Mozart
Chocolates). These brands were tantamount to a warranty of the quality of these goods.

The legislation which sought to protect the commercial reputation of traders on discrete
geographical localities evolved principally in Europe into systems for the protection of
geographical indications. Geographical Indications are understood by consumer to denote the
origin and the quality of products. Many of them have acquired valuable reputations which, if not
adequately protected, may be misrepresented by dishonest commercial operators.

As there is not one single definition or terminology accepted worldwide for the concept of
geographical indications, it is important to distinguish the terms “geographical indications” from
“indications of source” or “appellations of origin”. “Indications of source” are a broad concept
covering any indication pointing directly or indirectly to a country or place of origin, without need
to show that a particular quality reputation or characteristic follows from the “source”,
“appellations of origin”, which are probably narrowest concept, are defined in Article 2(1) of the
Lisbon Agreement, as referring to the geographical name of a country, region, or locality, which
serves to designate a product originating therein, the quality and characteristics of which are due
exclusively or essentially to the geographical environment, including natural and human factors.
Finally, “geographical indications”, as defined in Article 22(1) of the TRIPs Agreement, it
communicates important pieces of information on : (i) the name of the product; (ii) the area of
geographical origin of the product; and (iii) its given quality, reputation or other characteristics,
which are essentially attributable to that geographical origin.

Geographical indications perform a variety of economic and other functions, which may depend
on how producers use geographical indications and consumer view them. Designations operate as
indicators of origin from which the products come. Designations symbolise qualities which certain
products have or which consumer associate them with and guarantee that they measure up to
expectation. Geographical indication protects culture by preserving traditional productions
methods, habits of consumption and cultural identity.

Like trademark geographical indications are valuable to producers and consumers of goods. They
help to promote goods of particular region by identifying their quality. Producers can also be
benefited by preventing unscrupulous competitors from applying the mark to the low quality
goods. Geographical indications protection is a matter of having exclusive right in trade to the use
of a name. Protection of geographical indications on the national and regional level is characterised
by the existence of a variety of different legal concepts. Those concepts were developed in
accordance with different national legal traditions and within a framework of specific historical
and economic conditions. Some countries provide geographical indication protection under laws
that are targeted at preventing unlawful commercial acts from business competitors such as unfair
competition and passing off. Both unfair competition and passing off are common law torts.

It was in France where the first statute was enacted which provides for the protection of
Geographical indications through a special title of industrial property, namely appellations of
origin. Registered Geographical indications are titles of protection that are very similar to
protected appellations of origin. Collective marks or certification marks provide a means for the
protection of geographical indications independent from statutory or judicial measures.

Traditionally, the courts in the UK and USA understood and applied the common law remedy of
passing off to restrain dishonest and wrongful conduct of defendants accused of suing proprietary
names, symbols or other indications of plaintiffs. On the basis of common law remedy certain
geographical indication for instance champagne, sherry and Scotch whisky received legal
protection by the courts.

Countries differ considerably in the way their laws handle geographical indications. Some have
specific geographical indications laws others use trademark law, consumer protection law,
marketing law or common law or combination of these.

In India Geographical indications were governed by common law principles before the enactment
of the Geographical indications of Goods (Registration and Protection) Act, 1999. Prior to this,
Indian Judiciary, in the absence of any legislation, applied the principle of passing off to protect
Geographical indications.

The phenomena of globalisation and increasing sophistication of consumers has led to a heightened
desire for high quality wines, spirits and food products that derive their unique characteristics from
the geographical region from which they originate. Geographical indications can increase the
marketability and value of any number of consumer goods which include everything from textiles
to food products. Due to its economic importance, there has been growing concern about the
protection of geographical indication which ultimately resulted in the TRIPs Agreement. Because
of the very large number of signatories, the adoption of TRIPs represented a fundamental step
forward for the protection of Geographical indication worldwide, thereby making TRIPs a true
milestone in this respect.

Three international multilateral agreements addressed the protection of geographical indications

prior to the TRIPs agreement. The Paris Convention which prohibits false indications through
broader measurers. The Madrid Agreement which provides for broader measures and prevents
dilution of certain geographical indications into generic terms. Finally the Lisbon Agreement
provides for an international registration system of geographical indications. Nevertheless, given
the restricted scope of protection afforded by these multilateral treaties and the limited number of
signatory states, none of these treaties could have any significant impact on the global protection
of geographical appellations.

In this background, the advent of the TRIPs Agreement undoubtedly constituted an important step
forward for the universal recognition of Geographical indications. The TRIPs Agreement is today
the standard subscribed by all members of the world Trade
Organisation (WTO) and therefore the one with widest international recognition. The TRIPs
Agreement contains some minimum standard for the protection of geographical indications,
including definition, scope, legal means, exceptions and international negotiations. It is also
important to mention that the TRIPs agreement is subject, as any other WTO agreement, to the
dispute settlement understanding of the WTO, making its standards ‘enforceable’ among
members.

However, as far as the scope of protection of Geographical indications under TRIPs is concerned,
there is a problem of hierarchy. This is because, although TRIPs contains a single, identical
definition for all Geographical indications irrespective of product categories, it mandates a two
level system of protection: (i) the basic protection applicable to all Geographical indications in
general (under Article 22), and (ii) additional protection applicable only to the Geographical
indications denominating wines and spirits (under Article 23).

At the general level, member countries are obliged to protect all geographical indications only
against deceptive or misleading use and other acts of unfair competition. For geographical
indications denomination wines and spirits, however there is an additional protection, which
requires member countries to prevent the use of such geographical indications. Irrespective of
whether the consumer are misled or whether the use of such indications constitute are acts of unfair
competition. As a result of this discriminatory approach adopted by TRIPs, excepting the
geographical indications denominating wines and spirits, all other geographical indications still
run the risk of being wrongfully exploited in the international arena.

The TRIPs Agreement provides a higher level of protection of geographical indications for wines
and spirits and to provide for the extended the higher level of protection to products propositions
are made under Doha Declaration. In other words Doha proposes to extend to higher level of
protection to all the products under geographical indication other than wines and spirits.
Geographical indications should be protected even if there is no risks of misleading consumers or
unfair competition. In simple terms the debated issues in the TRIPs Council under the Doha
mandate are: creating a multilateral register for wines and spirits and extending the higher (Art.23)
level of protection beyond wines and spirits.

Doha Round is gaining momentum as the negotiations are still going on these issues and the impact
of the Doha Round on Developing countries particularly India, does not require more emphasis as
the said round presents a new path breaking model of the global trade as a tool to analyse the
potential underlying economic interest each of its members.

Human communities have always generated, refined and passed on knowledge from generation to
generation. Traditional knowledge is a concept of cultural ecology, which, for matters of equity
and sustainability, increasingly calls for legal protection as an emerging concept in international
law. The traditional knowledge can be defined as the knowledge, innovations and practices of
indigenous peoples and local communities.

As for protection of traditional knowledge geographical indication is often regarded as a suitable

instrument for this purpose. Indeed, geographical indication has certain peculiar features which in
contrast to other IPRs, are considered to be relatively more amenable to the customary practices of
the indigenous communities:

(i) Geographical indication is a collective right.

(ii) Knowledge remains in the public domain.

(iii)Rights are (potentially) held in perpetuity (though registration might be necessary

in some countries, like in India);
 (iv) The scope of protection is relatively circumscribed in the sense that the right holders
do not have the right to assign; and they are required to remain within the
demarcated geographical territory in order to be able to enjoy their geographical
indications rights.

However, the aptness of geographical indication for protection of traditional knowledge is not free
from limitations. The foremost problem emanates from the fact that while geographical indication
can protect products from misappropriation of their reputation based on their geographical origin,
they cannot protect the knowledge embedded in their production processes, which often form part
of traditional knowledge of the communities involved therein. Notwithstanding such limitations,
it may still be asserted that to the extent that products draw on distinctive traditional methods of
production that have been preserved and nurtured over time by communities specific to a region,
geographical indications can be used as legal tool to develop market and protect a brand.

Geographical indications are often lumped with trademarks among forms of industrial property.
The relationship is close, for both are marks or expressions that guarantee the ultimate origin of a
product. Geographical indications and trademarks represent legal mechanisms that producers can
use to differentiate their products, according to criteria such as the sustainability or traditional
nature of production, and thus appeal to consumers. The economic function of geographical
indication is much the same as that of trademarks. First there exists related goodwill. Second,
they establish and protect market identity, by distinguishing the goods bearing a geographical
indication from same or similar goods or a different geographical origin.

There is some potential overlap between protection of geographical indications and the protection
of trademark, although as a general rule most trademark laws would consider a geographic
designation as insufficiently inherently distinctive or a defensible infringement if used by a person
whose place of production is located in a particular geographic area.

From time immemorial, like most peoples of the ancient world, Indians have referred to products
by the names of their places of origin. They have always known that goods from certain regions
have distinct qualities and characteristics, but formal protection for such products is relatively
recent.

Unless a geographical indication is protected in the country of its origin, there is no obligation
under the TRIPs agreement for the other countries to extend reciprocal protection. In India, The
Geographical Indications of Goods (Registration and Protection) Act, 1999 (GI Act) was enacted
in compliance with India’s obligations under TRIPs at the WTO. This Act seeks to provide for the
registration and better protection of geographical indications relating to goods in India and to fulfil
three key objectives:

(1) Adequately protect the interest of producers of geographical indication goods and add
to the prosperity of the producers of such goods;

(2) Protect consumers from deception; and

(3) Promote goods bearing geographical indication in the export market.

It excludes unauthorised persons from misusing geographical indications. This would protect the
interest of producers, manufacturers and thereby consumers from being deceived by the falsity of
geographical origin to economic prosperity of the producers of such goods and promote goods
bearing geographical indications in export market with product of India’s export interest.
Under the 1999 Act, any association of persons, producers, organisation or authority established
by or under the law can apply for protection of geographical indication. The only criterion is that
the applicant must represent the interest of the producers. While registration of geographical
indication is not mandatory in India section 20(1) of the Act states that no person “shall” be entitled
to institute any proceeding to prevent, or to recover damages for, the infringement of an
“unregistered” geographical indication. The registration of a geographical indication gives its
registered owner and its authorised users the right to obtain relief for infringement. A geographical
indication may be registered in respect of any or all of the goods, comprised in such class of goods
as may be classified by the registrar. The registration of a geographical indication is valid for a
period of 10 years and can be renewed successively for further period of Ten years each. A
registered geographical indication cannot be assigned, transmitted, mortgaged pledged or licensed.

The right to use the geographical indication vests with all the legitimate producers in the
geographical area. Legitimate producers are those producers who have been producing these
products possessing certain unique qualities, characteristics or reputation over a period of time.
The uniqueness of the product, which makes it a premium product, therefore, requires to be
protected, because if the uniqueness is diminished or deteriorated or destroyed, the consuming
public will no longer perceive the product to be associated with that specific geographical region
and having these unique features. In due course it will degenerate into a generic name for the
product concerned. Consequently, the product will no longer fetch a premium in the market.

It is interesting to notice that though Article 23 of TRIPs affords a higher level of protection to
geographical indications denominating wines and spirits only, the corresponding provisions in the
Indian Act do not restrict themselves to wines and spirits alone. Rather it has been left to the
discretion of the Central Government to decide which goods or classes of goods should be granted
such a higher level of protection. This discrepancy has deliberately been maintained by India,
lawmakers with the aim of ensuring the ‘absolute’ protection of Article 23 for the geographical
indications associated with products of India’s export interest.

The government has not come out with proper strategies for consumer protection and for the
promotion of international market for the Indian products protected under GI. As it is already
analyzed in this work without government support, most producer groups cannot effectively defend
or promote their GI brands as they do not possess the necessary resources. The Indian Government
has been active in getting GIs registered but it has not made any headway in adoption of strategies
for branding and promotion of GI products as well as their marketing and distribution in both
domestic and export markets.
The identification and registration is happening without adequate due diligence. There is a dearth
of research from the Indian perspective on potential benefits from GI protection. No systematic
assessment has been undertaken by the relevant agencies in India while identifying the products to
be accorded GI status. Although the GI Act seeks to provide a proper regulatory mechanism , the
GI Registry has time and again failed to comply with the minimum requirements laid down under
the Act. Given the fact that the legal regime for GI protection in India is still in the nascent stages,
it is understandable that the GI Registry would not wish to set too high a standard for eligibility
since it may discourage many from even attempting to secure a GI. However, granting GI
registrations to anything and everything which has a geographical name fails to achieve the broader
objectives of instituting a system of GIs. The lack of vigilance on the part of GI Registry is
encouraging individual applicants like Tirupati Laddu whose primary objective is to procure
monopoly rights over a product by using a GI. If the GI Registry does not apply more stringent
yardsticks for granting GI, it would become less potent as an instrument of IPR. Greater vigilance
on the part of the authorities is needed to ensure that GI continues to remain an effective tool for
furthering community rights. Domestic registration of GIs is a relatively easy task but it is
important to understand that only registration of goods per se does not fulfill the objectives of the
Act, unless it is backed by sound enforcement mechanism both in domestic and export markets.
The enforcement of the Act in other countries is a complicated venture as this may pose a variety
of constraints including technicalities involved in the registration process in various foreign
countries.

Another lacuna in the Act is that the Act defines the cases when a registered GI is said to be
infringed, but it is silent on the mechanism and provisions to fight against the infringement and
this is an area where the government needs to play a larger role. The knowledge underlying a GI
remains in the public domain; hence misappropriation of the embedded knowledge is not protected
against. This will cause serious financial and emotional damage to the producers of some local and
peculiar goods. In appropriate cases the government must encourage registration under Patents
law than under GI Act as the individual contribution may be significant and the same may be
fulfilling the requirements of patentability.
What all the Government is doing at present is nothing but the documentation of local resources
and the knowledge pertaining to them. This will definitely help in overcoming piracy of the
geographical resources and knowledge about them especially by the transnational companies, but
the government is not supposed to stop at this point. Something like the protection against reverse
engineering which is prevalent in patent philosophy must be made available to the well being of
the Geographical Indications owners also.

The researcher has given a comprehensive account on the trademark laws in India. The law of
trademarks has undergone colossal change in the past seven decades with the enactment of
Trademarks 1940 and Trade and merchandise marks act 1958 and Trademarks act 1999.
Trademarks act 1940 provided for the first time statutory rights to the trademark owners. It
envisaged for recognition, protection and enforcement of the rights vested upon the owners of
trademarks.
The Trade and Merchandise Act 1958 consolidated provisions of Trademarks Act 1940, Indian
Merchandise Marks Act 1889 and Indian Penal Code. The prudence behind such consolidation is
to have trademark law codified, so that only one enactment governs multiple aspects of protection
of trademarks. This law has served its purpose for more than four decades and then arose the need
for new enactment in the light of developments in trading and commercial practices, increasing
globalization of trade and industry, the need to encourage investment flows and transfer of
technology and the need to simplify and harmonize trademark managing systems. Thus the
trademarks act 1999 was enacted. The present act incorporates interalia registration of trademarks
for services, collective marks, etc;

At the international level the growth of Trademark Protection is evident from the numerous treaties
entered into by the nation states. Today there is ample legal knowledge and easily available
resources to the newly developing countries if they wish to domestically legislate upon trademark
protection. Basic principles of protection of trademarks more or less remain the same in all the
treaties. Another inference drawn by the researcher is that, there are constant endeavours by the
nation states to bring about harmony in all the domestic legislations pertaining to intellectual
property rights especially trademarks. These endeavours are necessitated by 331lobalization of
trade and commerce. Noteworthy amongst the Treaties entered into by the nation states in recent
times are the TRIPS Agreement and the Madrid Protocol. The Indian Trademarks Act 1999 is
based upon the United Kingdom Trademarks Act 1994 and the former was enacted primarily to
meet the country’s obligations under The TRIPS Agreement. India has also adopted the Nice
Classification for Registration of Trademarks. Recently

India has ratified the Madrid Protocol and passed the Trademarks Amendment Act 2010 which
incorporates the provisions of the protocol under Chapter IV(a). It simplifies the procedure for
international registration of trademarks. Therefore the researcher concludes that Indian legislature
is proactive and eager in domesticating the International Treaties and Agreements.

Protection of trademarks is an ever expanding concept. The definition of trademark is not

exhaustive and will never be in spite of scrupulous efforts made by the legislature to clearly define
the marks which can constitute a trademark. The dynamics of trade and commerce, innovative
ideas of the entrepreneurs to make an exclusive brand name which disclose the origin of their
goods, make it impossible to define a trademark in a watertight compartment. Sound marks and
smell marks are the results of such efforts by the entrepreneurs. To offer protection to these marks
affirmative measures are taken by both legislature and judiciary from time to time. Non-
conventional trademarks are gradually attaining the sanction of the judiciary in various
jurisdictions. In India, judiciary has recognized the sound marks but yet to recognize the validity
of smell marks. The researcher staunchly argues for the protection of smell marks and believes that
the impediment of graphical representation of smell marks can be bypassed by affirmative action
of the judiciary resorting to legal fiction.

8.2 SUGGESTIONS Formatted: Font: Bold, Small caps

In the light of the above findings the following suggestions have been made, for bringing a change
in the existing system.

1) Economic gains should not be the only motivation for geographical indications protection.
Otherwise, there is a risk of overusing the natural resources which in the long run results in
poor product quality and environmental damage.

2) There is need to set the price for geographical indications products to minimise the price
differentials between what the consumer pays and the producer earns.
3) There is need to regulate the collective use at local, national and international level in a fair
and equitable manner.

4) There is also need to facilitate or support the producers to improve the product.

5) There is need to develop empirical studies to help determine whether the benefits of high
protection of geographical indication outweigh the cost or vice versa.

6) There is need for governments to help producers get the relevant information on markets
for geographical indication products. Arrangement such as government support in providing
the relevant information on marketing of geographical indication products could help
producers.

7) There is a need to adopt a real strategy for geographical indications to yield gains. No
single ministry is best placed to devise and run a success geographical indication strategy. It
is important to adopt mechanism or organ through which the activities or the different
government ministers and policy makers relating to geographical indications are coordinated.

8) At the national level, there is an imperative need to put in place a legislative framework for
providing additional protection for geographical indications to products other than Wines and
Spirits.

9) A geographical indication is a strategy to differentiate the product on the market and aims
at promoting the interest of the producer on market. It is therefore necessary to market the
product and make it known. Otherwise there is a risk that consumers will not know the product
and its name will be misused.
 10) There is need to raise awareness of public authority (IP Office, Ministry of agriculture,
Commerce and Industry, Ministry of Culture/handicrafts) as well as producers on the need for
geographical indication.

11) Products with a potential for geographical indication protection exist in India. But there is
need to build capacity to make these products competitive in the international markets.

12) There is need to identify, for example, the specific qualities and reputation of the product,
the people willing to engage in collective process for the development of the geographical
indication product and the quality mark.

A serious consideration of the above suggestions and devising of appropriate steps for translating
them to actual reality, it is hoped, it would go a long way in strengthening the existing legal regime
which in turn provide adequate protection to Geographical Indications.

Registration of trademarks confers upon the owner the exclusive right to the use of the registered
trade mark. The registered owner of the trademark is bestowed with several rights interalia the
right to sue for infringement of trademark and to initiate criminal action against the infringer. The
law under the Trademarks Act 1999 provides for grounds upon which the registration may be
refused. An elaborate study on those grounds and also on the role of IPAB, has been made by the
researcher in the corresponding chapter. Process of registration laid down in the Trademark Rules
2002 is schematically described by the researcher.

Infringement action is brought up in a Court of Law when there is unauthorized use of registered
trademark by any other person. Passing off is a common law tort which can be used to enforce
unregistered trademark rights. The law of passing off prevents one person from misrepresenting
his or her goods or services as being the goods and services of the claimant, and also prevents one
person from holding out his or her goods or services as having some association or connection
with the plaintiff when this is not true. Section 29 of the Trademarks Act 1999 deals with the aspect
of infringement and Section 27 indirectly asserts the rights of unregistered trademark user to
institute a suit for passing off. Indian judiciary is still developing its knowledge over these
concepts. Nevertheless the higher judiciary is sufficiently advanced to deal with the complexities
that arise from these kinds of suits. Plethora of cases dealt by the higher judiciary guide the lower
courts when adjudicating upon the nascent aspects of infringement and passing off suits. For
instance the Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd judgment by the Apex
court is the guiding precedent when dealing with passing off of medicinal products. But, the
researcher being a practicing advocate, witnessed lack of understanding of the subject by the lower
judiciary. So there is a need to improvise the knowledge base of the judges.

Intellectual property disputes often involve complex issues and large financial interests. In a fast
growing industrial world, trademarks become as equal an asset or sometimes more as the final
product itself. Any impact on the mark is liable to have an effect on the entire gamut of operations
of the industry. Thus it becomes important to protect it meticulously. If a dispute arises with regard
to the trademark it is in the best interests of the parties to resolve them at the earliest. Admittedly
efficiency of the conventional Indian judiciary is not at appreciable standards. Delays are a
common phenomenon in the adjudication of disputes. Therefore alternate dispute resolution
mechanisms are, more often than not, best suited for speedy adjudication of disputes. WIPO is
actively persuading everyone to resolve their intellectual property disputes through ADR. Domain
disputes which may have cross border implications are best resolved through Uniform
Domain Name Dispute Resolution Policy(UDRP) and .IN Domain Name Dispute Resolution
Policy(.IN DRP). Proliferation of computers and easy connectivity through internet facilitates
online dispute resolution.

The researcher has pointed out certain imperfections in the trademark law and practice in India
which need legislative scrutiny and amendments. Firstly, Section 134 of the trademarks act confers
jurisdiction in cases of infringement upon the District Court. Under this section the plaintiff is
privileged to institute a suit for infringement where the plaintiff resides. This section has been
inserted in addition to that of general provision under Section 20 of CPC. This provision is grossly
abused by multinational companies having branch offices in several parts of the country. Therefore
it needs to be amended and a provision to the effect that “a plaintiff can institute a suit for
infringement in the court where there is his subordinate office only if the he can show that the
cause of action arisen at such place” shall be inserted.

Secondly, the researcher has proved that Rule 54 of the Trademark rules 2002 is by necessary
implication violative of the principles of natural justice. This provision should be removed because
it limits the right of the party to have access to the documents of other party.

Thirdly, Indian judiciary being acclaimed for its progressive steps in evolving various doctrines to
meet the ends of justice is expected to evolve a new mechanism to recognize and protect smell
marks. The criteria of graphical representation of the marks can be appropriately changed either
by judicial interference or by legislative amendment keeping in view the larger interest of
protecting the newly evolving marks.

Fourthly, there is an urgent need to relook into the menace of exparte orders being passed, without
sufficient cause or reason. It may appear trivial but preliminary injunctions in the nature of exparte
orders in trademark cases, more often than not, essentially devastate the business interests of the
adversely affected party. Small business holders find it almost impossible to revive their business
once it is shut down by an order of the court. Reasons behind this scenario interalia include delay
in adjudication of the disputes, lack of finances to fight costly litigation etc., Therefore, it is the
responsibility of the Supreme Court to become innovative and stop this practice followed in the
lower and High Courts.

Fifthly it is time to identify the loopholes in the ‘proposed to be used’ registration of

trademarks. The entire rationale behind law of trademarks is to protect those owners of the
trademarks who actually use the trademark with which goods or services are identified by the end
users. Fraudulent practice of registering trademarks with ulterior motives but not for actually using
them is becoming rampant. If this practice continues, larger problems such as registering of
trademarks only for the sake of selling them etc; will arise. Therefore, a fool proof mechanism for
registration of trademarks which prevents such malpractise should be developed. The procedures
followed in foreign jurisdictions like in United

States of America and Canada will facilitate development of such mechanism.

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