CASE STUDY ON GEOGRAPHICAL INDICATIONS

(I.P.R.)

NATIONAL INSTITUTE OF FASHION TECHNOLOGY,

NEW DELHI

CASE STUDY

ON

GEOGRAPHICAL
INDICATIONS

BY :-

AMIT KUMAR SINGH (01)

ANUJ KUMAR (02)
AMARTO CHAKRAVARTY (04)
AJAD KUMAR PANDEY ()

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

THE STRANGE CASE OF DARJEELING TEA

November 07, 2003

If you can't brew champagne in California (even though you use the same sort of grapes) but
have to call it sparkling wine or something equally silly, why should you be able to call tea
grown in Kenya or Sri Lanka from the same sort of tea plants as you find in Darjeeling,
Darjeeling tea?

According to the Darjeeling Planter's Association, 40,000 tons of tea are passed off in the
world as Darjeeling and "consumers of these 40,000 tons of tea are being misled into
believing that they are consuming Darjeeling tea when in fact they are not."
This writer first came across this question in July 1985 while on a visit to Darjeeling with
Purno Sangma, who was minister of state for commerce then. The Darjeeling Planters
Association had arranged the trip.

As I recall, Sangma gave his beatific smile and promised to "look into the matter" apparently
unmindful of the fact that his ministry was, at that very moment, busy opposing the inclusion
of Trade Related Aspects of Intellectual Property Rights (TRIPS) in the new round of trade
talks that the US had proposed in 1982. O tempora, o mores!

How times change. Today, India is busy making the case that Darjeeling tea can be grown
only in Darjeeling and basmati rice can be grown only in Dehra Doon.

Both, it seems, have the special geographic qualities needed to grow the real thing. This, by
the way, was the basis on which the vineyards of Champagne in France won their case back in
the 1970s.

The proper name for the basis for establishing this kind of thing is "geographical indications"
now. It falls in Section 3 of Part II of the Agreement on TRIPS.
In a recent paper C Niranjan Rao*, who is a consultant at the Indian Council for Research on
International Economic Relations (ICRIER), discusses the issues involved.

Rao gets his teeth properly into it all and the paper is worth reading for the sheer detail it
provides.

The 40,000 ton question is whether the higher level of protection that is available to wines
and spirits under Article 23 should be available to Darjeeling tea and basmati rice also.
Rao thinks not, because he says that while Article 23 protection is indeed discriminatory, it
makes no sense to extend it to other products like Darjeeling tea or basmati rice.

Instead, he says, developing countries "should experiment with Article 22 protection for some
years and if the results are unsatisfactory should then ask for enhanced protection."
Far simpler and cheaper, he says, to go the trademarks route via logos. "The producers of
Kenya would not be able to use the Darjeeling tea logo if it is protected in Kenya or it could

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

be stopped at the border of the importing country if the logo is protected in that country." Or,
"protection afforded by Article 22.3 in respect of trademarks seems to be sufficient."
Will there be any takers for his proposition? Unlikely, because amazingly, the list of problems
that afflicts Darjeeling tea today is identical to the one Sangma was given that rainy day in
1985.
Thus, first, most of the bushes are more than 100 years old because the planters have not
bothered to replace them at the required rate. The best yield comes between 30 and 50 years.
"The rule of thumb is that 3 per cent of tea bushes should be replaced every year, while the
current rate is only 0.5 per cent per year." The old age affects both yield and taste. And with
every postponed year, the cost increases.

Secondly, in 1985, the USSR used to buy the bottom end of Darjeeling tea to mix with their
Georgian tea to fool upmarket Russians. Now that market has collapsed completely and the
bottom has fallen out of the market. And even Indians don't want the summer and autumn
flushes.

The result: the growers in Darjeeling have been bleating on and on to the government, which
has done precious little to address the real problem, which is inadequate investment. Instead,
it is focusing on trying to protect the unprotectable.
That leads to the inevitable question: if the planters in Darjeeling, by not investing enough,
are not giving us proper Darjeeling tea, but something quite inferior, an approximation if you
will, why should we not get something that approximates it better -- never mind where it is
grown?

* Geographical Indications in the Indian Context: A Case Study of Darjeeling Tea, ICRIER
Working Paper No 11, September 2003.

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

BASMATI TALKS BETWEEN PAKISTAN AND INDIA END

INCONCLUSIVELY

Islamabad, Nov.9 : A two-day meeting between Indian and Pakistani officials over the
possible joint registration of Basmati rice in the world market came to an inconclusive
end on Saturday.

Both countries have, however, agreed to continue their dialogue in the first quarter of 2009 in
New Delhi to achieve a 'uniformity of views' on three agenda items - consensus on the
definition of Basmati, the area where Basmati is produced historically and how to make a
joint effort to stop third parties from registering Basmati under the Geographical Indication
(GI) of the World Trade Organisation agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS).

According to the Dawn, this was the second meeting of the Pak-India Joint Working Group on
the possibility of registration of Basmati rice as a joint GI.

The Pakistan delegation was headed by Joint Secretary (Exports), Ministry of Commerce,
Azher Ali Chaudhry, while the Indian team of experts was led by Joint Secretary of the Indian
Department of Commerce, Dinesh Sharma.

A commerce ministry official said that both sides shared technical information on standards
and the delimitation of Basmati growing areas. They also discussed how both the countries
could challenge 'a third party infringement'.

Due to immense pressure from growers and exporters of Basmati, Pakistan had last year
considered legal action against India for announcing Super Basmati rice as an originally
Indian produce.

The Trading Corporation of Pakistan (TCP) and Rice Export Association of Pakistan (REAP)
were ready to represent Pakistan and proceed with the case in an Indian court.

However, during the course of a composite dialogue in June 2006, both countries decided to
resolve the issue through dialogue by constituting a joint working group. The working group
held its first meeting in New Delhi in April this year and agreed to iron out differences.

It is not only India and Pakistan who have tried to patent Basmati rice. Rice Tec Inc, a US-
based company, was granted a controversial patent in September 1997 on Basmati rice grains
and lines. India challenged this patent and Rice Tec Inc was forced to withdraw its claim.

The meeting also discussed how both the countries could take a joint stand against any such
infringement in the future. Due to persistent Indian lobbying and diplomacy, the European
Union (EU) has already stated that it would not accept Basmati registration separately and
considered it a product of both Pakistan and India. This was one of the reasons that Pakistan
had agreed to holding talks over the joint registration of Basmati.
--- ANI

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

SCOTLAND AND CHINA AND CASHMERE TRADE (CASHMERE)

CASE NUMBER: 275

CASE MNEMONIC: Cashmere
CASE NAME: Scotland and China and Cashmere Trade

THE ISSUE

Since the Victorian Era, British textiles have been regarded among the world's finest knits.
Dawson International, Britain's largest textile company, requires one metric ton of cashmere
wool per day to operate, while Britain's cashmere breeders produce less than one metric ton
annually.
(1) Presently, China supplies 60% of the world's cashmere, which amounts to 3,000 metric
tons per year.
(2) With economic liberalization, growth in textile and apparel industries, and direct access to
cashmere wool, the Chinese are encroaching upon the domain of the British knitters and rival
the British for the limited supply of cashmere wool. With the
limits of wool produced globally, the increased popularity of cashmere apparel, and the
inexpensive textiles from China, Scotland is faced with the possibility of inadequate supplies
of quality cashmere wool at elevated prices.
(3) While China seeks to expand markets and continue economic growth, Britain fights to
maintain the cashmere supply at responsible prices while carrying on the tradition of high-
quality woolen knitwear. Environmentally, the Scottish Highlands and the Himalayan regions
of China will be impacted by increased herding, over-grazing, deforestation, and increased
textile manufacturing. Within China, an environmentally unstable country, goat herding
seems to attract little concern. More pressing environmental issues, such as elevated carbon
dioxide levels and polluted water supplies are the focus of a quickly modernizing China.

ANALYSIS

Previously, Chinese wool producers brought raw wool to a central market to sell at set
prices; however, this operation changed. With the economic liberalization of the mid-1980s,
the mountain farmers were free to sell 25% of their crops on the open market for cash. The
transition toward a market economy removed the central authority that set prices, standards,
and amount of wool sold in China. To replace the government control, middlemen entered the
equation and capitalized on the new economic operations by exacting high prices from the
Western buyers. As restraints are removed, the quality of the raw wool decreases and prices
soar as much as 50% in 1990. With the substantial price increase for raw materials, Dawson
International, Inc., the largest British knitwear company, estimated that the volume of
cashmere sweaters sold fell by 30% in 1990.

The increased interest in the market economy led Chinese industries to expand beyond raw
materials to begin processing and spinning the raw wool into cheap alternatives to Scottish
knits. These inexpensive garments already have entered the Asian markets and may begin to
enter the Western markets, which poses a threat to the British textile industry. According to
Dawson International, the problem is not that the Scots will have to compete with the
Chinese, rather, the limited amount of cashmere available.

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

SOLUTION

With the rise in demand for cashmere products, environmental repercussions will follow
unless the farmers take measures to prevent overpopulation, deforestation, and become
environmentally conscious. Goats are notorious for being indiscriminate eaters. In addition to
grain and water, goats consume over 10% of their body weight in roughage daily. With the
land overstocked, the eating habits of the goats are likely to cause deforestation. In the arid
Himalayan region, deforestation can kill pasture land, encourage the growth of weeds, initiate
soil erosion, and desertification. Further, the increased breeding and rising of goats in
Scotland, Australia, New Zealand, the United States, Iran, Afghanistan, Tibet, and Tasmania
will impact the environment.

In Scotland, the highland cattle are being forced to share the land and limited vegetation
with increasing numbers of goats. With less food available, fewer nutrients will be consumed
and the quality of the cashmere fibers will suffer. During the industrialization period, a large
portion of Britain's land was deforested for ship building, and manufacturing. According to
experts, goats may improve pasture land and aid reforestation by eating rough plants and
brush. The danger, however, stems from the maximization of profit through increased herd
sizes, which may result in environmental crises.

The challenge to supply the markets with cashmere wool serves as a significant economic
struggle to meet increasing demand and maximize profits. One must look beyond fashion and
luxury of cashmere garments to the possible detrimental effects on the environment.

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

EC FUR BAN

THE ISSUE

In March, 1991, the EC adopted a provision which prohibited the importation for commercial
purposes of certain goods (including the furs of eight animals) when these goods originated in
a country where animal trapping methods fell below internationally accepted standards of
humanity. In June, 1991, the EC adopted an amendment which broadened the scope of the
agreement to include five more species and to reduce prohibition periods. Imports of these
Products come mostly from Greenland, Canada, and the United States. These countries, and
the people in them, complained that these acts were economically and culturally unfair.

DESCRIPTION

The original proposal for the Council Regulation prohibited the importation, for commercial
purposes, of certain goods (consisting of or including the fur of beaver, otter, coyote, olf,
lynx, bobcat, sable, raccoon) when these goods originated in a country there
(a) The leghold trap was still used, or
(b) Trapping methods fell below internationally agreed humane trapping standards.

It also allowed for the two-year suspension of the prohibition (expiring December 31, 1977),
in which the Commission and appropriate authorities of the countries concerned determined
before July 1, 1994, that sufficient progress was being made towards the development of
humane trapping methods in their territory (Recital 5).

The text of the amendment to the proposal for a Council Regulation on the importation of
certain furs contains the following

The European Union's regulation No. 3254/91 would prohibit member countries from
importing any raw furs made out of fur from 13 species unless the country of origin adopts
internationally recognized standards of humane trapping procedures. This regulation's
implementation, originally scheduled to go into effect on January 1, 1996 had been delayed
until January 1, 1997 in order to allow trapping communities, largely in North America and
Russia, to meet the terms of the EU legislation. However, the legislation has once again been
delayed for an indefinite period.

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI

 CASE STUDY ON GEOGRAPHICAL INDICATIONS
(I.P.R.)

REFERENCES

www.wto.org

www.wipo.com

Geographical Indications in the Indian Context: A Case Study of Darjeeling Tea, ICRIER Working
Paper No 11, September 2003.

http://www.american.edu

NATIONAL INSTITUTE OF FASHION TECHNOLOGY, NEW DELHI