Guest Post: An insider’s account of the Basmati row

[*Long Post]

I am glad to introduce you all to a post written by Rajendra Kumar, Latha Nair, Ashish Kanta Singh and R. Rajalakshmi of KNS Partners, a leading IP boutique firm in India. While Rajendra Kumar, Latha Nair and Ashish Kanta Singh are partners, R. Rajalakshmi is a senior associate at the firm. KNS Partners appeared for APEDA.

Latha R. Nair had written various guest posts for us in the past. Some of them can be found here, here, here and here.

As to understand the background of the dispute, we had earlier covered the developments here, here and here.

                              Guest post: An insider’s account of the basmati row

This blog post is jointly written by Rajendra Kumar, Latha Nair, Ashish Kanta Singh and R. Rajalakshmi, all of K&S Partners (ably guided by Mr. Jyoti Sagar), who have been working on the protection for Basmati. We would also like to thank Mr. P S Raman, Senior Advocate for leading us in this appeal before the IPAB. Much has been written in the press on this case, and we thought it is better that you hear it from the horse’s mouth. Considering the historical aspects of the case, the details of the protection going back to 1995, the sheer size of the pleadings (nearly a truck load!!) and the need to be crisp for the sake of  SpicyIP readers, we have made a narrative in the form of questions and answers.

What are Geographical Indications (GIs)?

GIs constitute a very important form of intellectual property mandated to be protected by the WTO Agreement on the Trade Related Aspects of Intellectual Property Rights (“the TRIPs Agreement”) to which India is a signatory. GIs identify a good as originating in the territory of a country, 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. Apart from quality and characteristics that are essentially attributable to the relevant geographical origin of the goods in question, ‘reputation’ is also recognized as a standalone factor defining a GI.  In other words, historical and traditional recognition of association of a product with a region is the heart and soul of a GI.

Unlike trademarks which are private monopoly rights, GIs are collective, community rights owned by diverse stakeholders involved in the supply chain of a given product.  GIs are protected and enforced by bodies that act as custodians of the rights of such stakeholders.

The dual objectives of protection of a GI are first, to protect the stakeholders consisting of the producers and traders, all those in the trade supply chain of the product; and secondly, to protect the consumer who purchases the product based on certain expectations of quality, characteristics or reputation of the product which is essentially attributable to its geographical origin.

Why protect Basmati rice?

Basmati rice is an iconic heritage of India which needs to be preserved and protected globally in the national interest. The reputation of Basmati rice as a long grain aromatic rice originating from a defined region in the Indo-Gangetic Plains (IGP) below the foothills of the Himalayas, is founded in tradition, folklore, scientific literature, culinary literature, political and historical records and most importantly trade descriptions that have been used by the Basmati rice trade.

The cultural and economic importance of Basmati rice makes it imperative to protect it as a GI in a responsible manner which sustains such protection globally for decades to come. An important component of that is to resist efforts made by detractors to dilute the cachet of Basmati, diluting its reputation and eventually exposing Basmati to “genericide” – a fate which was met by several products which started their lives as GIs and ended up as generic names of products – some of these examples are – Epsom Salt, Cologne, Dijon Mustard, Cheddar Cheese.

Who is APEDA and its role in the protectionof Basmati rice and name?

APEDA is a non-trading, statutory body created under the Agricultural and Processed Food Products Export Development Authority Act, 1985 (“the APEDA Act”), which provides for the development and promotion of export of certain agricultural and processed food products from India, including Basmati rice. The APEDA Act was amended in 2008 to confer it powers to protect intellectual property in special products such as Basmati rice. As such, APEDA is qualified to be an applicant under Section 11 of the Geographical Indications of Goods (Registration& Protection) Act, 1999 (“GI Act”).

Since 1995, APEDA has been protecting the goodwill and property in the name “Basmati” on a global basis for the benefit of all stakeholders in Basmati rice. Such efforts include both commercial and legal steps, such as monitoring the world trademark registers and markets for instances of usurpation, initiating legal actions (over 800 so far), issuing and enforcing labeling guidelines etc. Notable instances of success so far include a successful challenge of a US Patent in 2000 that forced a partial voluntary surrender of several claims thereof.

In November 2008, APEDA filed its application in India to register Basmati as a GI under the GI Act. Needless to say, prior to 2008, it had already been engaged in the protection of Basmati as a GI through the multifarious efforts listed above.

What was the opposition all about?

In August 2010, APEDA’s application was opposed by 6 opponents from the State Madhya Pradesh (MP), namely, Daawat Foods, SSA International Limited, Narmada Cereals Private Limited, Madhya Kshetra Basmati Rice Exporters Association, Madhya Kshetra Basmati Rice Growers Associationand the State of Madha Pradesh (“the MP Opponents”). The oppositions were identically worded except for a few minor differences.  The pleadings were completed and all the oppositionsexcept the one filed by the State of MP were finally heard in June 2013. The State of MP’s opposition (TOP-19) was to have been heard later that year.

What were the main grounds of opposition by the MP Opponents and APEDA’s defense thereto?

Considering the volume of arguments in these proceedings, we have tabulated the respective contentions for the ease of the readers.

As such, the MP Opponents argued that 13 districts in the State of MP should have been included in APEDA’s application. The areas claimed by APEDA and the MP Opponents are depicted respectively in yellow and red colors for the benefit of the readers in the diagram below.

What were the main findings in the Order of December 31, 2013?

While the parties were awaiting a hearing to be fixed in the State of MP’s opposition, the Assistant Registrar (AR) issued a common order in all the six oppositions on December 31, 2013 (common order). The main findings in the common order are as follows:

• “Popular perception” has no statutory sanction as a basis for GI protection.
• The AR had looked into documents which are 50 years old and the same create a factum of Basmati cultivation in the State of MP and APEDA gave no reasons for excluding other states which have been producing Basmati since 1900s.
• It is vital to demarcate actual producing area even up to the level of village panchayat and not even a micron point space of actual cultivation area should be left uncovered.
• From the data published by the Directorate of Rice Development (DRD), Patna, it is clear that some of the States like MP, Rajasthan, Bihar have been cultivating Basmati rice and the said areas are left uncovered in APEDA’s application.[This finding was based on a document(“the disputed document”) published by the Directorate of Rice Development, Patna which was suomoto introduced by the AR].

Accordingly, the AR held that not even a “micron point space” of actual cultivation area should be left uncovered and directed APEDA to file an amended application by including “the uncovered area” within 60 days of the order.

The consequences of the order, why APEDA appealed and the contentions in the appeal and the counter?

If left unchallenged, the common order could potentially have attracted claimants for purported “Basmati” from other parts of India and other parts of the world on the basis that in the home country India, specifications alone constitute the basis for GI protection.  In other words, Texan, Californian, Filipino rice varieties could potentially claim the Basmati tag merely on the basis of equivalent specification.If that were to happen, it would have seriously damaged and diluted the claim of Basmati as a GI and as an iconic heritage of India.

Before we discuss the grounds of appeal, it is relevant to state here that apart from the six appeals filed by APEDA against the common order of December 31, 2013, curiously, two other appeals were also filed by:

1. Daawat Foods Limited, challenging the locus standi of APEDA (being OA/9/2014/GI/CH). The order of February 5, 2016 has since dismissed this appeal upholding APEDA’s locus.
2. Basmati Growers Association Pakistan (BGA) challenging the inclusion of areas in MP (OA/8/2014/GI/CH). The order of February 5, 2016 has dismissed this appeal as well on the ground that BGA, not being a party to the opposition proceedings in respect of which the order of December 31, 2013 was passed, had no locus standi to file the said appeal. [Interestingly, BGA had filed another appeal against an order of the AR that dismissed its opposition as its evidence was time-barred. On February 5, 2016 the IPAB had dismissed this appeal vide a separate order].

The thrust of APEDA’s appeal was that the common order had been issued in violation of principles of natural justice in that: (a) the common order decided TOP 19 without any hearing; (b) it did not at all analyse APEDA’s voluminous evidence, yet relied on the MP Opponents’ evidence as gospel truth in a mechanical and cavalier fashion; (c) the decision was hinged on the disputed document that was not filed by either of the parties and by misinterpreting and misquoting the said document; and (d) it is a non-speaking order in that neither the facts nor the law including judicial precedents cited by APEDA were considered.  Apart from these main grounds, APEDA also relied on the same arguments in the opposition proceedings.

In defense, the MP Opponents relied on the same arguments and documents raised in the opposition proceedings. Additionally, they argued that the disputed document was already filed by them in the opposition proceedings.  APEDA, however, clarified that: (a) they filed only a part of the said document in the opposition proceedings, that too, a part that was convenient to them ; and (b) that the said document when read as a whole was in support of APEDA’s case and against the MP opponents.

What are the salient findings in the IPAB’s order of February 5, 2016?

IPAB heard the appeal during extensive hearings held in Chennai on November 3-5, 2015.

The main findings of the IPAB are as follows:

• APEDA is an authority established under law for the purposes of Section 11 of the GI Act and as such has the locus standi to file the GI application.
• Reputation is a standalone factor for recognition of a GI under the GI Act.
• In view of the cogent documents filed by APEDA in support of its application and taking note of the efforts undertaken by APEDA for protecting the cause of Basmati, there is no justification in prolonging and protracting the grant of “GI Tag” for Basmati rice for the traditional Basmati rice grown areas in its application.
• That several vital pieces of evidence filed by APEDA such as the affidavits of Dr. K V Prabhu, the counter submissions of APEDA to each of the documents relied on by the MP Opponents, affidavits of two food critics, details of the National Basmati Trials etc., have not been considered by the AR in arriving at his conclusions.
• The AR has placed reliance only on the MP Opponents’ evidence and failed to test or analyze the same properly and has brushed aside and overlooked APEDA’s evidence.

As such, the IPAB held that APEDA “is entitled to get GI Tag for Basmati rice” in respect of the areas stated in its application. Accordingly, it has directed the AR to issue a certificate of registration within four weeks of receipt of a copy of its order. As for the inclusion of the areas claimed by the MP Opponents, the IPAB directed the AR to reconsider the matter afresh by affording a reasonable opportunity to both sides within 6 months from the date of receipt of the IPAB’s order.

What does the IPAB order mean for Basmati protection now?

Under Article 24.9 of the TRIPs Agreement, a member country is not obliged to protect a GI of another member country, if such a GI is not protected in its home country.  This has been a challenge for APEDA in several jurisdictions of the world, particularly in the civil law countries where registration is mandatory and evidence regarding reputation is not always persuasive as opposed to home registration. This order comes as a big relief to APEDA and all the stakeholders involved in Basmati trade (including some of the MP Opponents) as it eases out some such legal troubles.