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KVIC – A Role Model For MSME In IP Protection

Khadi- a symbol of self-reliance and swadeshi movement during the freedom struggle is one of the most popular indigenous Indian goods. The fabric also spearheaded the ‘Make in India’ initiative, setting an example for other local businesses to takeover global markets. KVIC (Khadi and Village Industries Commission), the statutory body established under ‘Khadi and Village Industries Commission Act of 1956’ has been facilitating the development of khadi industries. When it comes to the promotion of handicrafts in the global market, IP rights, such as trademarks, geographical indications, industrial designs, or patents can be trusted, they also protect against unauthorized reproduction and adaptation, and against misleading use of their style and reputation. KVIC has been active on the IPR front to ensure that local craftsmen get the recognition and monetary benefits they deserve.

Trademark and GI tags have helped many local handicraft businesses to set themselves apart in the global market. KVIC has been actively defending its Trademark rights in the global arena. Since 2015-2018, KVIC has provided Khadi Mark Certificate to 2,238 entities in addition to this they have issued a legal notice to 222 organizations demanding them to stop selling non-Khadi items as ‘Khadi’. The Khadi mark is registered as a trademark (Registration Number 2851551) in India by KVIC. KVIC holds Trademark registration for the word 'KHADI' and 'KHADI' formative marks.

According to the Trademarks Act, 1999, “trade description” means any description, statement or other indication direct or indirect

(ii) as to the standard of quality of any goods or services according to a classification commonly used or recognized in the trade or

(vi) as to the mode of manufacture or producing any goods or providing services: or

(vii) as to be material of which any goods are composed

To put it simply, ‘trade description’ gives details regarding the product or service that a company is providing. Trademark registration will give sole rights to its owner but only with respect to the trade description given in the application. For example, if M deals in Mobile manufacturing industry with the brand name “Tangerine” and has got it registered, then another person can use that brand name for the trade of any other description except for Mobile manufacturing.

Section 2(d) of the Khadi and Village Industries Commission Act defines 'Khadi' as, "any cloth woven on handlooms in India from cotton, silk or woolen yarn handspun in India or from a mixture of any two or all of such yarns".

According to Section 2 of the Khaddar (Protection of Name) Act, 1950, "the words "Khaddar" and "Khadi" whether in Hindi or in any other Indian language or in English, when applied to any woven material, shall be deemed to be a trade description within the meaning of the Indian Merchandise Marks Act, 1889, (4 of 1889) indicating that such material is cloth woven on handlooms in India from cotton, silk or woolen yarn handspun in India or from a mixture of any two or all of such yarns".

In the case of Khadi, any other individual or company can use the word khadi for their trade as long as their trade is not related to clothing material. And KVIC has been actively taking action against entities who infringe this right. In 2018, KVIC filed a petition in Bombay High Court against Fabindia for using their trademark ‘Charkha” for selling their apparel. They alleged that Fabindia sold factory-made cotton garments in the name of Khadi. KVIC asked to be paid Rs 525 crores as damages since this “illegal” use of the Khadi mark had caused a loss of opportunity and earnings to Khadi artisans. Later, Fabindia agreed not to use the term ‘Khadi’.

In 2014, The Khadi & Village Industries Commission (KVIC), sought cancellation of the trademark given to the German company Khadi Naturprodukte to use the khadi trademark for selling a range of Indian-origin products, including shampoos, soaps, and oils in European markets. However, the trade description of Khadi Naturprodukte differs from that of Khadi by KVIC. Thus, to prove infringement KVIC has to bring this case under trademark dilution, which gives owners of famous trademarks a right to forbid others from using that mark even if their line of business is different. The Paris Convention is a multilateral treaty dealing with the protection of industrial property in the widest sense. It helps creators ensure that their intellectual works are protected in other countries. KVIC is also seeking an international trademark for ‘khadi’ under the Paris Convention for protecting this intellectual property globally.

Intellectual Property Rights Attorneys Association had also applied for a GI tag for khadi products on behalf of all Indian producers. As per section 2(1)(e) of the Geographical Indications of Goods (Registration and Protection) Act, 1999, "geographical indication", in relation to goods, means an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, 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 preparation of the goods concerned takes place in such territory, region or locality, as the case may be”. Khadi is primarily associated with India, thus the provision of a GI tag can work in the favor of KVIC when dealing with other countries.

The provision of GI on khadi will lead to the cancellation of the khadi trademark for the fabric under section 25(a) of the Geographical Indication Act, 1999. However, if Section 26 of the GI Act, 1999 is considered then KVIC might get to keep the Trademark. The section states that "Where a trade mark contains or consists of a geographical indication and has been applied for or registered in good faith under the law relating to trademarks for the time being in force, or where rights to such trademark have been acquired through use in good faith either-(b) before the date of filing the application for registration of such geographical indication under this Act”. KVIC mainly supports underprivileged artisans and one of their main objectives is providing employment in rural areas. Thus, they are acting in good faith and the trademark was also granted before filing application of GI tag.

KVIC also issued notice to Aditya Birla Group's, Madura Fashion & Lifestyle for using the name ‘Khadi’ to promote their apparel brand “Peter England”. Through active participation in protecting their IPR, KVIC has managed to negotiate deals with profitable brands like Raymond and Peter England. Such collaborations provide a financial boost to this handicraft industry.

In this way, KVIC has set a good example for MSME dealing with indigenous goods. Their resilient actions to protect their brand name and to use IPR to set their products apart have helped them carve a niche for their brand in the global handicraft market; thus, emphasizing the importance of IPR in business development.



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