GI Protection in High Spirits in the Chile-Peru Pisco Saga – SpicyIP

Times are spicy for GI cases! After the Prada-Kolhapuri Chappal GI fiasco, we present to you, the Delhi High Court’s (“the Court”) judgment in Asociacion De Productores De Pisco A.G vs Union of India. At the centre here is Pisco, a popular grape brandy produced using unique methods in Chile and Peru for over five centuries. The challenge was brought by an association of Chilean Pisco producers, to an order passed by the IPAB in November 2018 in favor of the Embassy of Peru (“the Respondent”). Herein, the IPAB permitted the registration of the GI “Pisco” in favor of the Peruvian Embassy, instead of the prefixed tag “Peruvian Pisco”, allowed by the Registrar in 2009.

In setting aside the IPAB’s order, Justice Pushkarna undertook a meticulous application of Sections 9(a), 9(g) and 10 of the GI Act (“the Act”) pertaining to the prohibition of GI registration in certain cases, and the registration of homonymous GIs respectively. Homonymous GIs are indications that sound/spell alike, but identify products/services originating from different regions. Apart from analyzing this concept for the first time, the Court delved into a wide array of FTAs, relevant TRIPS provisions, and the social and political histories of Pisco production in Chile and Peru. In this post, I comment on the interface of Trademark and GI law and registration of Homonymous GIs, while highlighting procedural complexities in the examination of the Pisco GI applications.

Whose Pisco Is It? Balancing Tradition, Flavor, and the Law

Thanks to some astute lawyering for the Chilean Association, we have some interesting arguments to unpack:

At the outset, the Court highlighted the legislative intent behind the GI Act as protecting and promoting goods with specific origins (“Indications” under Section 2(1)(g)), thereby curtailing unfair trade practices causing consumer deception. Citing Tea Board India v ITC Ltd. (2011), it differentiated IP protection under the Trade Marks Act, 1999 (“the TM Act”) with the GI Act. This was done to exclude the relevance of the “prior use” factor, erroneously applied by the IPAB in determining Pisco’s geographical origin (discussed below).  

In this backdrop, the Court observed the following:

1) Firstly, both countries have a shared history in Pisco manufacture. Chile’s FTAs with its trading partners Canada, the US, Australia, etc. identify the Chilean liquor as Pisco. While FTA recognition is not tantamount to IP protection, EU Regulation (EC) No. 110/2008 on the protection of GIs in spirit drinks, safeguards Chile’s interests in the use of the GI “Pisco” for goods originating therein. Therefore, goods produced by the Petitioner are indeed Pisco.

2) Secondly, Section 9(a) of the Act prohibits registration of indications, the use of which would be deceptive/confusing. Herein, not only is Pisco produced in varied geographical regions in both Peru (Lima, Moquegua, Tacna) and Chile (Atacama, Coquimbo), diversity exists in the kind of grapes, distillation, and other processes involved. Hence, grant of a blanket GI “Pisco” to Peru, without any geographical identifiers, would fall foul of Section 9(a).

3) Thirdly, Section 10 of the Act recognizes registration of homonymous GIs if the Registrar is satisfied of: one, the practical conditions under which both indications shall be differentiated; two, the need to ensure equitable treatment of the producers; and three, there being no consumer confusion between the GIs. The case of “Banglar Rasogolla” and “Odisha Rasagola” demonstrates how homonymous GI protection may be granted when a product with the same name is associated with different regions. Additionally, in case of homonymous GIs for wines, Article 23.3 TRIPS provides for protection to each indication. Given how Chile and Peru share an alcoholic beverage of the same name (Pisco), addition of the prefixes (Peruvian and Chilean) would be consistent with Section 10.

Having undertaken this comprehensive analysis, the Court set aside the IPAB’s impugned order.

It’s not the Pisco that’s Sour, but Something Else!

1. Interplay of Trademark and GI Law
   The Court’s discussion on the distinction in factors relevant for Trademark and GI protection respectively, merits examination. Section 34 of the TM Act safeguards “prior use of a mark” – it prohibits the proprietor/registered owner of a trademark from interfering with someone’s continuous use of an identical mark, if such use had commenced before the proprietor’s use/registration. “Prior use” with respect to GI is an entirely different issue. For wines and spirits, Article 24.4 TRIPS “grandfathers” the continuous use of GIs by nationals/domicilaries of a Member-State, even when such GI is owned by another Member-State (on fulfillment of certain conditions). It is indeed puzzling to see how the IPAB borrowed a ground of refusal for trademark registration (Section 11 of the Trade Marks Act) into the determination of GI ownership.

   This misapplication of law by the IPAB stems from a deeper confusion regarding the interface of Trademark and GI laws. Back in 2008, when the Supreme Court upheld Khoday Distilleries’ right to use the mark “Peter Scot” against a complaint of deceptive similarity with the mark “Scotch Whiskey” (then GI-protected in several jurisdictions), a few observers deemed the same as undermining India’s efforts to seek greater international protection for its GI-tagged Darjeeling Tea and Basmati Rice. Except, neither was Scotch Whiskey GI-protected in India then, nor did the Court find the GI Act relevant to determining non-infringement. Prof. Basheer also commented on this misunderstanding here. Similarly, when Pisco is neither registered as a trademark nor a certified mark in India, how can “prior use” under Section 34 have any bearing on the case? Had Pisco been a trademark, “prior use” and use in “good faith” under Section 26 of the TM Act would both be relevant.

   Here, it is also pertinent to note that Peru’s efforts in securing a certification trade mark (“CTM”) for Pisco in Australia met with failure. In holding that the Pisco mark was not inherently adapted to distinguish for CTM registration, the Australian Trade Marks Office stated that GI-protection for Pisco in Peru and other jurisdictions carried no implication. Unfolding of greater clarity on the relevance of Trademark and GI disciplines for each other would make for exciting observation in the coming times.

2. Homonymous GIs, but Heterogenous Application of Law
   In citing “Banglar Rasogolla” and “Odisha Rasagola” as homonymous GIs, the Court did not discuss how, in contrast to Peru’s “Pisco” application, the Registrar did not amend the GIs for these sweet treats without the Proprietors’ consent. However, as the IPAB noted herein, the Registrar “amended the mark from Pisco to Peruvian Pisco without the consent of the Appellant.”

   As per the GI Rules, after submission of a GI registration application, the same has to be examined by the Registrar (Rule 33). For this purpose, a Consultative Group is constituted, post whose consideration the Registrar issues an Examination Report. Rule 34 obligates the Registrar to communicate in writing to the Applicant, “any objection” to accepting their application, or other necessary “conditions, amendments, modifications” to the same. Except, no such communication is on record here. Neither the Examination Reports dated December 22, 2015 and December 28, 2015 discuss the need to amend the GI from “Pisco” to “Peruvian Pisco”, nor is the same mentioned in the Minutes of the Consultative Group. The Registrar’s order of July 2009 that considered the Chilean opposition did not “require” the Peruvian Embassy to amend its application, rather effected the same to bring it in accordance with the formal requirements of the GI Act.

   Here, two differences may also be noted between the applications for “Pisco” and “Odishara Rasagola”:

   i) When Odisha Small Industries Co. Ltd. (“the OSIC”) presented Form GI-1 for the Registrar’s consideration, protection was sought for the name “Odishara Rasagola”. The Consultative Group opined that GI should instead be applied for “Odisha Rasagola”, after which an amended application was presented for the new name. Here, neither was any observation made by the Consultative Group in considering the “Pisco” application, nor did the Registrar seek an amendment by the Peruvian Embassy later.

   ii) Furthermore, in considering the GI application for “Chilean Pisco”, the Registrar made no observations on the requirements of Section 10 of the Act, which necessitates them to consider the “practical conditions” under which the homonymous indications may be differentiated. In considering the OSIC’s application however, the Consultative Group required furnishing of a “comparative chart” highlighting the uniqueness of, and differences between Odisha Rasagola and other “Rasagolas of India”.

   Hence, even though the Court’s observation on the tags “Peruvian Pisco” and “Chilean Pisco” as being consistent with Section 10 is not incorrect, several procedural irregularities of the Registrar have been ignored here.

Concluding Remarks

While the market for Peruvian and Chilean Pisco drinks continues to grow in India, it remains to be seen whether future IP battles between the two Latin neighbors reach Courts again. In a unique legal battle for the “Pisco” tag, the Court has brought to focus, the interface between Trademark and GI laws, and the concept of “homonymous GIs”. The case reminds us how GI protection extends beyond law to individuals, communities, and businesses that bank on a product for their survival. The Pisco saga is no different. Chau, readers!

The author would like to thank Swaraj and Praharsh for their comments and guidance.