Challenges in the Digital Age: Online Counterfeiting of Gi Products

INTRODUCTION

Geographical Indications, often known as GIs, is an intellectual property given on goods obtained from a particular geographical location and have characteristics, reputations, or features that are fundamentally traceable to that origin. The law enacted the Geographical Indications of Goods (Registration and Protection) Act, 2003 to protect and regulate the registration of geographical indications (GIs) in India.

A registered Geographical Indications (GIs) provides legal protection to the authorised user through its registration with the Controller General of Patents, Designs, and Trademarks (CGPDTM). Once registered it also gives the authorised users various rights to exercise along with the right to take legal action against unauthorized use of their goods.

Some examples of Indian Geographical Indication products are as follows:

• West Bengal’s Darjeeling tea is recognized for its scent, flavor, and liquor color, all of which are distinguishing characteristics.
• Tamil Nadu’s Kanchipuram Sarees are very well-known for their exquisite designs, Zari work, and rich silk weave.
• Maharashtra’s Alphonso Mangoes are renowned for their exceptional sweetness, distinctive taste, aroma, and juicy pulp.
• Nagpur’s Oranges are sweet and juicy and have a color that is obviously orange.

The Growing Problem of Counterfeiting Online

As wisely said, every coin has two sides and the impact of digitalization was also both positive and negative, the online distribution networks have transformed content creation, delivery, and consumption, but they have also increased online piracy, threatening creators, and copyright holders’ Intellectual Property Rights. The rights of the authorised users are threatened by torrent sites, shopping apps, websites, and misuse of lawful platforms due to the ease of duplicating and distributing digital content.

Counterfeiting directly violates authorised users’ rights, causing several problems. First, counterfeit goods replace genuine transactions of the protected goods, causing GI holders a loss of money. This financial loss limits their ability to make fundings in various other goods, which may stifle industry creativity and innovation. Furthermore, due to the increase in counterfeiting of goods it has discouraged the producers from dedicating their time, energy, and resources to their work. When their work is freely available online, the producers lose their financial incentives that they get to create such goods. Finally, counterfeit goods damages customer trust in genuine channels and authorised users. Producers may lose money if consumers choose free, counterfeit options.

The commercial viability of GI items in India, as well as the cultural relevance of these products, is significantly threatened by the phenomenon of online counterfeiting. There are some of the ways that counterfeiting of goods across the internet lowers the worth of GIs. Where the consumers are deceived into buying counterfeit products at high rates thinking that they are genuine GIs or sometimes they buy products at unbelievably cheap rates from shopping apps like Meesho, Flipkart or Amazon. This is referred to as “deception of consumers.” These counterfeit goods undermine the faith of consumers and harm the reputation of genuine GI goods. Counterfeiting of these goods also results in loss of sales and decreased income for producers of GI products, it also then influences their capacity to maintain their livelihoods and their ability to continue in business.

Counterfeits frequently use substandard materials and do not have the quality associated with authentic GIs. This undermines the value proposition and erodes consumer confidence in the GI system. Some of the examples of counterfeiting of GI products include, the fake Darjeeling tea is flooding online marketplaces, and it is frequently blended with teas of lower quality. This has a negative influence on the reputation of genuine Darjeeling growers. Similarly, Kanchipuram sarees are made with less expensive synthetic materials being sold online, which is misleading customers and causing harm to traditional weavers.

Current Legal Framework

The legal framework governing the registration and protection of origin-linked products came into being in India in 2003 with the adoption of the Geographical Indications (GI) Goods (Registration and Protection) Act 1999, and Rules 2002. The Act mentions Section 11(2)(a) of the GI Act[1], which stipulates what an application for GI Registration should contain and refers to the “geographical environment”, with its inherent natural and human factors. The GI Act also contains a system of registration. The registration is for 10 years, it may subsequently be renewed. A registered GI Is protected against infringement.

An interesting feature of the GI Act is the distinction that It makes between the two concepts, ‘Registered Proprietor’ and ‘Authorised User.’ Regarding a GI, the term “registered proprietor” refers to a group of people or producers in any organization that is currently listed in the registrar as the GI’s prop writer, and “authorized user” refers to a user who has the right to use a GI that is registered under the GI Act. Products that are made, handcrafted, natural, or have strong documented evidence linking them to a specific geographical area are protected under the Act.

Like other intellectual properties, GIs grant their owners several rights. These are ‘the power to control the resource, the right to determine what use is made of it and under what conditions and, most importantly, the right to exclude others from it’[2] geographical borders established after careful assessment of the uniqueness supplied by natural and human elements give rise to the right to exclude others.

The TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) is the European Union’s attempt to implement the concept of geographical indication. Intellectual property rights have been introduced in a systematic way attributed to the recognition of IPRs as essential to human development[3]. Articles 22.2 and 23 of the agreement reveal that it provides for two different levels of protection for GIs. Article 22.2 provides for the general standards of protection that must be available for all GIs against unfair and misleading business practices.

While infringements on products that are linked with the region through natural factors are not unheard of (Darjeeling Tea), products that are linked with the region mainly because of human skills are more liable to be infringed. This is due to the (1) mobility of skilled labour and (2) availability of similar/core raw materials in other parts of the country. Unlike the other Ips, infringements in GI would affect all the producers of a product in each region due to its collective ownership and hence, should be addressed immediately. For that, Chapter VIII of the act Is entitled ‘Offences, Penalties and Procedure.’ Therein, Section 38[4] mentions the elements necessary for constituting the offenses of falsifying and falsely applying GIs.

The two important parts of the GI application are Part A and Part B. The application’s first part addresses GI registration for a product. The identification of individuals who may use the GI certification is covered in Part B of the application. The owners of GI must fill out part B of the GI application, called the application for recognition of the Authorized user, to stop unauthorized use of GI. Section 2 (1)(k) of the GI Act (1999)[5] defines the “producer in relation to goods, means any person who: if such goods are agricultural goods, produces the goods and includes the person who processes or packages such goods; if such goods are natural goods, exploits the goods; If such goods are handicrafts or industrial goods makes or manufactures the goods and includes any person who trades or deals in such production, exploitation, making or manufacturing as the case may be of the goods”.

According to the GI Act, a producer is defined extremely broadly to include not only other producers but also traders and other dealers, such as those involved in packing the goods or, in the case of online trading, those involved in other aspects of the value chain. Consequently, to stop any misuse of GI, all parties involved in the value chain must register with the GI Registry to be recognized as authorised user.

SUGGESTIONS AND CONCLUSION

When the India's Geographical Indications Law was enacted, it was a pivotal step towards protecting community interests and fostering economic growth. Almost every state in India has registered its own Geographical Indication and had followed all the required procedures in registering the said GI, however the number of registrations varies greatly among states. Many states like Karnataka, Tamil Nadu, Uttar Pradesh, Maharashtra, Kerala, and West Bengal have achieved significant numbers of GIs registered, mainly in agriculture and handicrafts sectors, while other states struggle to increase registrations.

The main challenges include the high international market presence of GI products and the expenses associated with monitoring and enforcement. Despite initiatives like "Digital India" aimed at globalizing local artisanal products, many producers, who are often uneducated, are unable to benefit. Recommendations to address these issues include providing export subsidies to low-income producers, standardizing GI product labeling on online platforms, targeted awareness campaigns, expediting registration processes, implementing stricter penalties for infringement, and establishing accessible government branches. These steps are designed to strengthen GI protection, support local economies, and empower marginalized artisans across India.

REFERENCES

1. The Geographical Indications of Goods (Registration and Protection) Act, 1999,

2. J Adithya Reddy & Siladitya Chatterjee, A critique of the Indian Law and Approach

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Genericide, 6, JIPR, 553, 573 (2007).

3. Shilpa Rathod, Challenges Posing to Geographical Indication in India, 1, IPR JOURNL

MLNU, 16, 18-20, (2023).

4. Scotch Whiskey Association (SWA) V. J.K Enterprises 2023 SCC Online MP 5352.

5. Tea Board v. ITC Ltd (2019) 79 PTC 1.

6. Gayialis SP, Kechagias EP, Papadopoulos GA, Masouras D, A Review and

Classification Framework of Traceability Approaches for Identifying Product Supply

Chain Counterfeiting, Sustainability, Vol. 14, No. 11, 2022.

7. Yashna Walia. Shreya Kumar, The Success, and Failure of GI tag in India: A Critical

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Protection) Act 1999, E-Journal of Academic Innovation and Research in Intellectual

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9. Shruti Verma, Challenges in preserving and promoting GI Products in India,

AISHWARYA SANDEEP PARENTING AND LAW, 2023.