India: Fabindia agrees not to use ‘Khadi’ for their products anymore

September 4, 2018


Khadi, is handspun, handwoven natural fiber cloth from India and some parts of Bangladesh and Pakistan, mainly made out of cotton. Colloquially, depending upon the Geographical region, it is also known as Khaddar. The cloth is usually woven from cotton, and may also include silk, or wool, which are all spun into yarn on a spinning wheel called a charkha. It is a versatile fabric, cool in summer and warm in winter. In order to improve the look, Khadi is sometimes starched to give it a stiffer feel and is widely accepted in fashion circles.

In India, Khadi is being promoted by Khadi and Village Industries Commission, under the patronage of the Ministry of Micro, Small and Medium Enterprises. The Khadi and Village Industries Commission (hereinafter referred to as the ‘KVIC’) is a unique statutory body formed by the Government of India, under the Khadi and Village Industries Act, 1956. The Statement of Objects and Reasons of the Act states that, the organization is constituted to ‘plan, promote, facilitate, organise and assist in the establishment and development of Khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary’.

Recently, during the month of May, KVIC filed a case against Fabindia at the Bombay High Court claiming INR 525 crore in damages for the unauthorized use of the ‘Khadi’ mark. The Khadi mark is registered as a trademark (bearing Registration Number 2851551) in India by KVIC and the Commission has also sought a Geographical Registration Protection (bearing Registration Number 492) over the same.

This is not the first instance of misuse of the Khadi mark by a commercial entity. As the table below lists down, there is a growing trend world over of entities applying for registration of the trademark ‘Khadi’.

Mark Country Registration Number Class Applicant Name Date of Application
Khadi Turkey 2016-08891 3 Khadi Naturprodukte GBR February 2, 2016
Khadi Germany 3020110340617 3, 30, 44 BNP Best Natural Products GmbH June 22, 2011
Khadi Argentina 3475609 24 Vazquez, Graciela Norma February 2, 2016
Khadi Italy 0000874985 3,8,14,18,25 Fusco Argenti S.R.L. August 6, 1999
Khadi United Kingdom UK00003295463 3 Claudia Williams March 8, 2018
Khadi Cash & Carry Market France 4192955 29 M. Mouiz Khalbous June 29, 2016

For instance, in Germany, a foreign company, BNP Best Natural Products GmbH, was granted a trademark over Khadi, thereby allowing the use of Khadi by the German company without paying any compensation to the community of Khadi weavers in India. The ongoing legal battle over Khadi involving Fabindia also led to a recent meeting by the Indian government that plans to promote Khadi as an Indian brand abroad to prevent further misappropriation of the Khadi mark.

The use of the Khadi mark (without the authorization of the KVIC) by commercial entities amounts to an infringement of KVIC’s trademark and a loss of licensing fee payable to KVIC for the use of the Khadi mark.

KVIC’s dispute with Fabindia goes back to 2015 when it first asked Fabindia to stop making unauthorized use of the Khadi mark. Despite giving assurances to KVIC that it would not use the Khadi mark, Fabindia continued using the Khadi mark without taking a licence from KVIC (the trademark owner of Khadi). KVIC sent a legal notice to Fabindia in February 2017 and finally filed a case at the Bombay HC to resolve the matter. Under the Khadi Mark Regulations, 2013 (issued by the Ministry of Micro, Small and Medium Enterprises), only those entities/individuals which sell genuine Khadi can use the Khadi mark tag/label.

Finally, on August 28, 2018, news broke out, that Fabindia has informed the Bombay High Court that it will not use the term “Khadi” in their current or future products. The Counsel representing Fabindia, informed the court that the company is currently not using the word “Khadi” for its products, and even if they want to use it in the future, they will give four weeks’ advance notice to KVIC. Hon’ble Justice S.J.Kathawala, who was hearing the case had accepted the undertaking of the company.

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