Case Study of Rice Tech (India – US Dispute) and Transformation of India From Trademark Act to Sui Generis System

  • Kishan Bansal
  • Show Author Details
  • Kishan Bansal

    Student at Jindal Global Law School

Abstract

In the paper, the author would overlook both the Trade related Property Rights (TRIPs) agreement and the Geographical Indications of Goods (Registration and Protection) Act, 1999 followed by analysing Basmati rice as a valid Indian geographical indication. The paper will also discuss the case of RiceTec (India – US Dispute) and how the sudden increase in the cases of biopiracy lead India to a stricter law to protect its geographical indications from exploitation by the developed nations. Thereafter, the country embarked on a shift from the Trademark system to the Sui generis system to prevent any such future incidents of biopiracy. However, the paper will equally try to understand the pertinent issues in TRIPS which was one of the reasons for old-world countries like India to still get exploited at the hands of developed nations and thus, enact stricter domestic laws. The author would also dwell upon the role of the European Union in furtherance of the protection of Geographical indication laws.

Type

Research Paper

Information

International Journal of Law Managment and Humanities,
Volume 4, Issue 2, Page 2453 - 2461

DOI: http://doi.one/10.1732/IJLMH.26536

Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Copyright

Copyright © IJLMH 2021

I. Introduction

In India, prior to 2003, there was no specific law for Geographical indication protection. Misuse of Geographical indication was prevented through consumer protection law or passing off action in court or certification trademark. The TRIPS agreement only posed a minimum standard system requirement before the member countries. Even after the protection, the RiceTec Basmati case dispute wherein an attempt was to usurp the traditional rice variety from India, the country soon realized the need to shift from the trademark system to the sui generis system through enacting the Geographical Indications of Goods Act, 1999.

II. Trade-related property rights (trips)

The Trade-Related Property Rights (TRIPS) agreement came into effect in 1995 to harmonize and strengthen intellectual property rights worldwide. All the member countries of the World Trade Organization (WTO) are mandatorily required to follow the guidelines of TRIPS for the protection of intellectual property. Under Article 1(1) of TRIPS, the member countries are required to adopt a minimum standard system under which they are given the freedom to consider the relevant system of implementation in their domestic legal system for the overall protection of intellectual property. Under Article 22(1) the definition of geographical indication includes any good in a territory, region, or locality whose reputation, quality, or any other characteristic is attached with its geographical origin. Article 24 lists down the exceptions under which geographical indication is not granted to a good. Clause 9 of Article 24 also puts an obligation on the country of origin to recognize and protect their geographical indication with the help of their domestic legislation as only the domestically protected geographical indications can get the protection under the TRIPS from other countries. However, there are several issues raised by the old world countries that the objective of protecting the intellectual property has not been achieved by the TRIPS as it is misused by the new world countries as a leeway to exploit them. One of the main issues with TRIPS is that it does not provide enough protection to the traditional knowledge which is the most integral part of the geographical indications. Even though apart from geographical indication none other intellectual property law recognizes the need for the protection of traditional knowledge but old world countries are still hesitant to take any such advantage provided by the geographical indication due to the persisting biopiracy cases by the new world countries. Patents are often used to seek such protection, but it is not the most desirable option for the protection of traditional knowledge as patent provides protection to individuals whereas traditional knowledge is generally possessed by the whole community. The Rice tech case became an example for India to realize and recognize the need for better domestic law in order to prevent the gross exploitation by the new world countries.

III. Geographical Indications of Goods (Registration and Protection) act, 1999

Before the year 1999, India being an old-world country lacked any specific domestic legislation to protect the geographical indications. In order to comply with the requirement posed by the TRIPS agreement, geographical indications were given protection through the trademark system which is generally preferred by the new world countries. However, soon after the Geographical Indications of Goods (Registration and Protection) Act, 1999 and Geographical Indications of Goods (Registration and Protection) Rules, 2002 were enacted which came into effect from the year 2003. The objective of this sui generis parliamentary Act was to provide for the registration and better protection of geographical indications of the goods. It helps to protect the interest of all stakeholders i.e. the producers or manufacturers and the consumers. It also restricts unauthorized people to use geographical indication for an economic gain or any other purposes which gives an advantage to the authorized producers and it saves consumers from the likelihood of fraud which might arise due to the false claims of a geographical origin of a good.

According to Section 2(1)(e) of the Geographical Indications of Goods (Registration and Protection) Act, 1999, geographical indication in relation to goods is defined as an indication which recognizes natural goods, agricultural goods, or manufactured goods possessing some reputation, quality or other characteristics related to its geographical origin and in case of manufactured goods an additional threshold of either the production or the processing or the preparation should take place in geographical origin is required. The Controller-General of Patents, Designs, and Trademarks is appointed as Registrar of geographical indications[2] and Section 11(1) of the Act provides that association of persons or producers or any other organization or authority representing the interest of the producers are competent enough to file for registration of a geographical indication. Section 9 of the Act list downs the guideline to prevent registration of certain geographical indication the use of which is likely to deceive or cause confusion, contrary to the law, which comprises or contains any scandalous or obscene matter, which comprises or contains any matter that is likely to hurt the religious sentiments, ineligible for the protection of the law, which contains generic names or indication of goods and thus, are not protected in the country of origin, which falsely represents to the people that the goods originate in another territory, region or locality. As per Section 18(1) of the Act, a period of ten years is given for the expiry of registration of the geographical indication. Section 21 of the Act states the registration of the geographical indications provides a right to obtain relief in case of infringement and an exclusive right to the authorized user to use the registered geographical indication. However, the exclusive right is subject to certain conditions and restrictions. Section 20 of the Act mentions that the non-registration of geographical indication bars any individual to institute any sort of proceeding under the Act, but it does not deter with the common law right of passing off present with the people. Lastly, Section 66 of the Act provides that all the suits for infringement under the Act are supposed to be filed before any court below the district court having appropriate jurisdiction.

IV. Basmati Rice as a Geographical Indication in India

Rice has played an important part in the lives of people residing especially in the Southeast countries and in other different parts of the Asian continent. It has become a foundation of their history, culture, and food for years long. Throughout the centuries, farmers have been evolving, conserving, prospering, and growing several varieties of rice as per the taste and preferences of the consumer in their region[3]. Basmati is a variety of long, aromatic rice grown in the exclusive areas of the Indian subcontinent for centuries[4]. It has been looked upon as one of the most premium varieties of rice in the world because of its distinct characteristics in eating and cooking such as fluffy texture upon cooking, flavorsome taste, and distinct aroma[5]. The aroma in Basmati rice is because of the presence of compound 2-acetyl-1-pyrroline which is 12 times more than any other non-basmati variety of rice highlighting its uniqueness from other varieties of rice[6]. The distinct characteristics of basmati rice are heavily dependent on the climatic conditions, the procedure of cultivation and processing in the geographical area[7]. In India, the Agricultural and Processed Food Products Export Development Authority (APEDA), a governmental agency, has set the standards for eligibility of a rice variety to be notified as Basmati. The criterion provided includes that a minimum average precooked milled rice length has to be of 6.61 mm, Average precooked milled rice breadth has to be equal or more than 2 mm, Minimum length/breadth ratio of precooked milled rice has to be 3.50, etc[8]. India has always been the largest producer and exporter of basmati rice in the world. During the year 2019-2020, it has exported 44,54,656.70 MT of Basmati rice worth INR 31,025.91 crores to the global market with Iran being the largest importer followed by Saudi Arabia[9]. Due to the above-mentioned reasons, in the year 2016, APEDA was granted a certificate of registration of Basmati Rice as a geographical indication and rendered protection under the Geographical Indication of Goods (Registration and Protection) Act, 1999. An application has been launched by APEDA along with Basmati Export Development Foundation (BEDF) to avail better traceability and monitoring of the authenticity in production and supply of basmati rice in the both domestic and foreign market[10]. Also, the Centre for DNA Fingerprinting and Diagnostics (CDFD) created a DNA fingerprinting mechanism to keep track of the variety of Basmati rice in India.

Facts

In 1985, RiceTec, a private American company based in Texas, claimed to develop a new variety of aromatic rice by interbreeding Basmati rice with other varieties of rice and called the alleged new variety as American Basmati or Texmati. Soon after the introduction of TRIPS, in 1997 RiceTec moved an application before the United States Patent and Trademark Office (USPTO) for a Patent on Basmati rice lines and grains. Subsequently, on September 2nd, 1997, RiceTec was issued Patent number 5663484 on its novel rice lines and on the procedure used to develop a new variety of rice[11]. The company raised 20 claims in the patent application out of which claims 1 to 14 were based upon the general features of rice grown in Central America, South America, and North America. Claims 15 to 17 were based upon rice varieties that were not related to any geographical region. Claims 18 to 20 were bases upon the novel process used by the company to develop a new variety of rice. The characteristics of American Basmati were identical to the Basmati rice. Therefore, in the year 2000, the Government of India through APEDA challenged the issuance of a patent to RiceTec on American Basmati before the USPTO and specifically filed an objection on Claims 15 to 17 of the RiceTec as they were related to the Basmati Rice jeopardizing the interest of the Indian Basmati rice export traders.

Questions Raised

  • Whether the term ‘Basmati’ is a generic word used to describe aromatic rice or has a special connotation of long aromatic rice harvested in the Indian Sub-continent attached to it?
  • Whether RiceTec was involved in biopiracy or not?
  • Whether the alleged new variety developed by RiceTec involved novelty or not?
  • Whether the grant of a patent by USPTO breached the provisions of TRIPS or not?
  • Whether the patent granted to RiceTec should be revoked in the interest of Indian farmers or not?

Case Analysis

Basmati rice already existed as a staple food in India and was exported to the United States by India. One of the main parameters to get a patent is a novelty. However, something which already existed cannot be called an invention. Thus, the creation of an alleged new variety of rice identical to Basmati rice cannot fulfil the legal requirement of a patent. Therefore, it was argued that USPTO should not have in the first place granted a patent to RiceTec. It was also argued by the Government of India that the term ‘Basmati” is not a generic term and has a special connotation attached with it i.e., long grain aromatic rice grown in the Indian Sub-continent for centuries long. Therefore, the usage of such a term to advertise any other variety of rice would create confusion among the consumers with respect to its geographic origin and would have a detrimental effect on the goodwill attached with Basmati rice solely grown in the parts of India. Due to the objection filed by the Indian government and the uprising protests by the farmers in India, RiceTec voluntarily agreed to revoke its rights on several of the claims. However, USPTO held several other claims of RiceTec as questionable and issued a Re-examination certificate cancelling claims 1 to 7, 10, and 14 to 20 which were related to Basmati rice grown in India.  All this resulted in RiceTec holding a patent specific to few claims which could not cause any detrimental effect to Basmati rice harvested in India and RiceTec losing the right to use the term ‘Basmati’ while advertising the rice varieties developed by them through their research.

The patent granted to RiceTec and the usage of the name ‘Basmati’ by it created the issue of morality among the Indian farmers who were involved in harvesting and nourishing the Basmati rice for generations. It was neither acceptable nor ethical for a foreign company to enjoy the fruits of the labour of Indian farmers who have been indulged in evolving the aromatic rice for centuries. Especially, when the cultivation of Basmati rice has been the only source of income of poor farmers and it was hugely exported all over the world, the government of India was forced to take action against the unfair advantage taken by RiceTec. The government of India took steps to let the Indian farmers reap the economic benefits of the reputation and goodwill the Basmati rice has achieved in the world. Dr. Vandana Shiva, an environmental activist, commented that the issuance of a patent to RiceTec was a theft of the collective intellectual and heritage of Indian farmers and Indian traders involved in the export market. Lastly, confusion in the minds of consumers[12].

Although, the government of India was successful in challenging the patent issued by USPTO to the RiceTec for Basmati rice lines and grains it did not end the trouble for them as they had to fight 40 more legal battles in other 25 different counties. Due to the biopiracy issues in Neem, Turmeric, and Basmati Rice faced by India, there was a realization towards the adaption of a specific law protecting the geographical indications. Thus, there was a shift to the sui generis system of law by enacting Geographical Indications of Goods (Registration and Protection), Act, 1999. However, the RiceTec case not only showed the failure of the TRIPS in providing equal market access but reiterated the need for a globally accepted law that will uniformly protect geographical indications[13]. The Government of India in the RiceTec case also raised an argument that the Basmati rice should be accorded protection similar to the protection given to wines and spirits under Article 23 of the TRIPS. However, it was not accepted as it lacked backing from the provisions of TRIPS. Though, TRIPS does not put any obligation on the other countries to accept the geographical indication on the traditional goods of the country of origin[14]. But, with the enactment of a specific law, India would be in a better position to prevent biopiracy and the economic loss resulted from that.

In Brazil, the Government of India objected to the usage of the term ‘Basmati’ as a trademark for sweets and condiments and got successful in reversing the decision. The Government of India got success against RiceTec in the UK where registration of ‘Texmati’ as a trademark was challenged and in Greece where registration of ‘Jasmati’, ‘Texmati’, and ‘Kasmati’as a trademark was challenged. In both the case, it was argued by the Government of India that all the names were similar to Basmati rice and thus, might mislead the consumer[15]. In Spain, an application for the registration of a trademark for Basmati Rice was filed by the APEDA which would prevent rice imported from other countries except India to use the term ‘Basmati’ before their varieties of rice. The registration of a trademark was allowed by the Government of Spain and subsequently, the trademark was allotted to the Government of India. In India, the All India Rice Exporters’ Association created a Basmati Development fund to generate money for covering the legal expenditure. The Government of India sought help from the Trademark Watch Agency to keep a check on the new trademark registration applications filed by different countries for Basmati rice or any other similar variety of rice.

V. Foreign Jurisdiction

The decree of 1351 passed by King John II in France which disallowed the mixing of two wines together was the first law that granted protection to geographical indications. After which in the 15th century Roquefort cheese was extended protection under the Royal Charter of France. In 1883 Paris convention on Intellectual property came up to prevent unfair competition among nations and thus, covered an extensive list of industrial properties for protection. It recognised the concept of geographical indication but did not provide a specific definition to the same. Most of the signatories to the Paris Convention were members of the European Union. It was because members of the European Union recognised themselves as Old world countries and thus, wanted to grant protection to their local products which have gained a reputation among consumers. In the late 19th century the phylloxera epidemic destroyed most of the vineyards for wine grapes in France[16]. In the aftermath of 1905, a new law was enacted in France which gave birth to the concept of Appellations of Origin. The law vested an exclusive right on all the local producers of wines to name their wines with respect to its origin[17]. On 6th May 1919, Law relating to the protection of Appellations of Origin was enacted in France which was extended particularly to wines and spirits because of the pre-existing French wine culture. It gave both civil and criminal remedies to the local producers against false appellations of origin. Another multilateral agreement came up in 1958 to provide protection of appellations of origin. Lisbon Agreement for the Protection of Appellations of Origin defined appellation of origin under Article 2(1). Even though the Lisbon agreement ensured automatic protection in all member countries through single registration but it failed to attract countries to become signatories. However, some members of the European Union did become signatories to the Lisbon agreement. The European Union on 14th July 1992 enacted, a sui generis legislation, Council Regulation (EEC) No 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuff. The legislation prevented abuse of the reputation of the regional food and promoted agricultural activity. It curbed unfair competition and prevented misleading of consumers in the relevant market. The law also recognised and explained the concept of Geographical indication through Article 2(2)(b). Due to the failure of the Lisbon Agreement, another multilateral agreement administered by the World Trade Organization (WTO) known as Trade-Related Aspects of Intellectual Property Rights came into effect. Unlike Lisbon Agreement it was less restrictive in nature and therefore, was accepted by some new world countries too. Even though TRIPS was widely accepted, the European Union repealed Council Regulation No 2081/92 and replaced it with Council Regulation 510/2006 which was later repealed and replaced by Regulation (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs. The regulation merged the three regimes of Geographical indication (GIs or Protected designation of origins/ Protected Geographical indications), Traditional Specialities Guaranteed (TSGs), and the Optional Quality Terms (OQTs) into single legislation and thus, unified the whole legal structure on the protection of geographical indications[18]. The members of the European Union always played an active role in the protection of Geographical indications and were the first ones to recognize the need for such a law. It is advent from the facts that they have developed and nourished the concept of both the Geographical Indication and the Appellation of Origin. The fact that they belonged to an old-world country also made them the first one to evolve from a trademark system to a sui generis system.

VI. Conclusion

The author would like to conclude that even though both India and the European Union have marked a shift towards a sui generis legislation to provide a better form of protection to both the suppliers and the consumers. They are still so many legal challenges which they face from new world countries. In order to mitigate such situations, even though the old countries enact new laws but the restrictive view taken by the new world countries always tries to hinder it. There will always be an ongoing debate on the protection of Geographical indications between the old-world countries and new world countries. However, from the past, it can be seen that the awareness regarding the Protection of Geographical Indication has been increased.

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[1] Author is a student at Jindal Global Law School, India.

[2] Section 3, Geographical Indications of Goods (Registration and Protection) Act, 1999.

[3] K.C. Kailasa, Law of Trade Marks & Geographical Indications (Wadhwa, Nagpur, 2003).

[4] ‘BASMATI RICE’, APEDA, <http://apeda.gov.in/apedawebsite/SubHead_Products/Basmati_Rice.htm> accessed on 5th Nov., 2020.

[5] Id.

[6] Sugunya Wongpornchai, Tinakorn Sriseadka & Suppachai Choonvisase, (2003). Identification and Quantitation of the Rice Aroma Compound, 2-Acetyl-1-pyrroline, in Bread Flowers (Vallaris glabraKtze). Journal of Agricultural and Food Chemistry, 51(2), 457-462. doi:10.1021/jf025856x accessed on 5th Nov., 2020.

[7] Supra note 3.

[8] ‘Eligibility of a Rice variety to be Notified as Basmati’, APEDA, <https://apeda.gov.in/apedawebsite/about_apeda/Basmati_Characterstics.pdf> accessed on 5th Nov., 2020.

[9] ‘Exports From India of Basmati Rice’, APEDA, <http://agriexchange.apeda.gov.in/product_profile/exp_f_india.aspx?categorycode=0601> accessed on 5th Nov., 2020.

[10] ‘BASMATI EXPORT DEVEOPLMENT FOUNDATION’, APEDA, <http://apeda.gov.in/apedawebsite/about_apeda/bas_ex_dev_found.htm> accessed on 6th Nov., 2020.

[11] Utsav Mukherjee, ‘A Study of the Basmati Case (India-US Basmati Rice Dispute): The Geographical Indication Perspective.’ SSRN.<http://dx.doi.org/10.2139/ssrn.1143209> accessed on 6th Nov., 2020.

[12] Shantanu Guha Ray, ‘The stealing of basmati’ (1998). < https://www.rediff.com/business/1998/mar/12rice .htm> accessed on 6th Nov., 2020.

[13] Dr. Md. Zafar Mahfooz Nomani & Dr. Faizanur Rahman, ‘Bio-Piracy of Traditional Knowledge Related Geographical Indications: A Select Study of Some Indian Cases.’ Manupatra Intellectual Property Reports (MIPR). 2016; F/3(3):135-152 accessed on 6th Nov., 2020.

[14] Kranti Mulik and John M. Crespi, ‘Geographical Indications and The Trade Related Intellectual Property Rights Agreement (TRIPS): A Case Study of Basmati Rice Exports.’ Journal of Agricultural & Food Industrial Organization (2011) Vol. 9: Iss. 1, Art. 4. <http://www.bepress.com/jafio/vol9/iss1/art4> accessed on 7th Nov., 2020.

[15] Id.

[16] Dev Gangjee, (2012). ‘The Appellation of Origin in France.’ In Relocating the Law of Geographical Indications (Cambridge Intellectual Property and Information Law, pp. 77-126). Cambridge: Cambridge University Press. doi:10.1017/CBO9781139030939.005 accessed on 7th Nov., 2020.

[17] Raz Barnea, ‘Comment, Appellations and Adaptations: Geographical Indication, Viticulture, and Climate Change’, 26 Wash. L. Rev. 605 (2017). <https://digitalcommons.law.uw.edu/wilj/vol26/iss3/8> accessed on 7th Nov., 2020.

[18] Matteo Gragnani, ‘The EU Regulation 1151/2012 on Quality Schemes for Agricultural Products and Foodstuffs.’ European Food and Feed Law Review 8, no. 6 (2013): 376-85 <http://www.jstor.org/stable/24325986> accessed on 7th Nov., 2020.

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