During the British rule in India, Khadi was not just a cloth, it was a movement by Gandhiji where he promoted it as an ideology and instilled in the minds of Indians that they could be self-sufficient if they wore only khadi and that they needn’t rely on the high priced goods of the British. Over the years, khadi lost its hold on the Indian market and sales of khadi products became abysmal owing to the wide variety of cloths and garments available in the market.

Lately, there has been a visible change in trend and khadi had made a comeback. More and more people are buying khadi for its traditional value. Khadi also seems to be the latest trend in the fashion world and fashion icons are now walking the ramp with the best outfits made of khadi. Addressing the nation through All India Radio, the Prime Minister of India stated that khadi sales had gone up by 125% after he had urged people to buy khadi.

Recently, going by news reports, on the legal front, the use of the KHADI trademark by a German company Khadi Naturprodukte GbR has enraged the Indian government and they now want to take steps to prevent them from using Khadi trademark. The German company manufactures and sells shampoos, oils, soaps, and gels etc. that are made from natural ingredients primarily in the European Union.

The Khadi Village and Industries Commission (KVIC) which comes under the Ministry of Micro, Small and Medium Enterprises (MSME) has registrations for the mark KHADI and KHADI GRAMODYOG in classes 3 (soaps; perfumery, essential oils, cosmetics, hair lotions etc.) and 25 (clothing, footwear and headgear) in India, however, according to the online records these marks haven’t renewed and one of the marks has been withdrawn. Interestingly, class 3 and 25 have a number of applications for the mark KHADI from individual applicants and even companies not affiliated to the government and some of them have even been registered. The German company doesn’t seem to have a trademark application in India though they have registrations in the EU and USA. While KVIC seems eager to take action against the German company in the EU it would be interesting to see if they are as enthusiastic about taking action against the Registrants in India.

The German Company obtained registration for the mark KHADI is Europe (classes 3, 21 and 31) and USA (class 3) in May 2012 and February 2013 respectively. The Community Trade Mark (CTM) Database which contains details regarding trademarks in Europe indicates that the mark is pending cancellation, however details regarding the same could not be accessed. Also, the registration is limited to classes 3, 21 and 31 and the mark is not being used to the market the khadi cloth per se. However, it is pertinent to note that KVIC manufacturers and sells village oil, soap and other natural products and these overlap with the products being sold by the German company.. This gets even better – the packaging of some of the German company’s goods are almost identical to that of KVIC’s products sold in India but no news reports seem to have made mention of this rather intriguing fact.

The news reports in Indian newspapers suggest that the Government’s course of action is to apply for cancellation of the mark in US and Europe (cancellation proceedings are already pending) and also to apply for the registration of the mark KHADI in these jurisdictions with a view to provide protection for this mark beyond India.

Trademark rights are territorial in nature and one needs to have a registration in that particularly country to oppose registration or even use of that particular mark. Some countries follow the first-to-file approach, thereby implying that the first to file a mark will have rights irrespective of usage of the mark and some countries like India, UK, and Australia etc. follow the common law system which places more reliance on prior usage of the mark than on the date of filing. CTM system in Europe is based on the first-to-file system and therefore it might be rather difficult for India while pursuing any legal action.

In addition to filing trademark applications in other countries, the KVIC should ensure that their existing marks in India are renewed because there seems to be a pro-khadi trend in India and it won’t be too long before traders in India claim rights to the mark Khadi based on usage of the mark. So this is a lesson learnt not only for the government but also Indian businesses, both small and big, expanding into the international market with the a view to market their goods and services. As mentioned earlier, trademark rights are territorial in nature and applying for registration in the countries where there is an intention to the mark the goods or services would be a smart move. Now that India is a party to the Madrid Protocol, the process of applying to many countries using has become easier because it can be done through one route.

This article has been authored by Nikita, an IP Law practitioner.