In today's Finshots, we talk about rice, intellectual property and the fight for Basmati.

The Story

In 1997, an American company, RiceTec obtained a patent for a strain of rice never historically grown in America — “Basmati”. They had achieved this feat by crossbreeding India's native plant with a US long rice variety and then claimed exclusive rights over any basmati hybrid grown in the western hemisphere. Naturally, Indians were outraged. After all, this was identity theft, a matter of economic importance, and an insult to our heritage. How could a corporation claim rights over a native plant that fed billions of people? How could they use a traditional name and prevent Indian suppliers from exporting Basmati rice to the US? More importantly, how did a Patent office grant the company protection when Basmati is and will always be unique to India?

And with tensions mounting, the Indian government challenged this claim. The only problem — India was fighting an American company over intellectual property infringement, at a time when the country did not have robust domestic IP laws in place. But then, India found support from an unlikely source — Pakistan.

Pakistan, along with India, shares vast tracts of land in the Indo-Gangetic plains where Basmati cultivation is a prime occupation and farmers from both countries demanded rights over their produce. RiceTec for its part argued that its Basmati had a distinctive taste (and smell) making it unique in every respect. India, however, countered this claim, by providing pages of scientific evidence on how the unique taste and smell of Basmati came from Indian soil irrigated by the Himalayan rivers. They argued that RiceTec’s products were poor imitations of the original product and in 2002, forced the company to withdraw most of its claims. Eventually, RiceTec rebranded its products and we had a minor victory of sorts.

However, it was evident that India was pretty ill-equipped to deal with Intellectual Property (IP) disputes. As Environmental activist, Vandana Shiva noted at the time — "The battle against RiceTec is just the beginning of India’s battle against bio-piracy and theft of indigenous plant wealth." But that was the early 2000s. Cut to 2020 and India is much more assertive about her culture and heritage. In September this year, India applied for a European Geographical Indication (GI) tag in a bid to claim exclusivity over Basmati rice in the region.

Think of GI as this special trademark that gives you an indication about a product’s origin and its unique qualities/reputation. For instance, Scotch whiskey belongs to Scotland and Parmigiano Reggiano (a type of cheese) belongs to the region of Parma, Italy. So if you are a generic whiskey producer or an ordinary cheesemaker trying to sell your products in say, Europe, you can’t use the names 'Scotch' and ‘Parmigiano Reggiano’. The GI tag belongs to the region and the people making this stuff and they’ll be offered special protection under European GI laws.

Also, the GI mark allows consumers to trust the original product and its promise of quality. After all, if you are looking to pay hundreds of dollars for scotch whiskey, you do not want a Chinese knockoff. So the tag not only offers protection but also adds a lot of brand equity and monetary benefits. In fact, according to the European Commission, the sales value of a protected name is on average double than that for counterparts without a certification. For agricultural produce, the value premium stood at 1.5X.

And so, in a bid to obtain the GI tag for Basmati, India’s application presented details such as geographical peculiarities, environmental factors and all things that make Basmati “Indian”. It even cites the epic Punjabi poem Heer Ranjha dated 1766, where the first known mention of ‘Basmati’ is found. But… it did leave out one key detail — Pakistan.

That’s right. The application completely ignored the fact that some of the Basmati is also grown in their country and we just claimed full exclusivity. Pakistan, of course, was outraged. After all, the global export market share for Basmati shows that they contribute 35% of the total produce. But if we were to be awarded this tag, then Pakistan can no longer export their Basmati rice under the header “Basmati”. And although they can dispute our application (during a 3 month period between September and November), it might be a bit difficult to build the case.

As a prerequisite, EU regulations require third party countries to have their own GI laws in place that protect the product in question. Pakistan got its domestic GI laws passed just this March, whereas India passed its laws in 1999. India also has a domestic GI tag for Basmati. While Pakistan doesn’t. So now, they have around 2 months to build their case, demarcate areas that cultivate basmati and obtain a domestic GI tag for Basmati rice under their own domestic laws before they can raise a dispute.

But that doesn't mean India will have a free pass either. Disputes like these don't bode well for us. In fact it would have been a lot easier if India and Pakistan had filed a joint GI application. But really, what's the likelihood of that happening eh?

Until next time...

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Also don't forget to check our daily brief. In today's issue we talk about The US government's latest ruling on H-1B Visas, Disney's renewed focus on streaming, and Foreign bribery in India. Do read the full draft here.