War over Khadi is far from over, as KVIC and Fabindia differ on finer details

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The three-year long legal battle between Fabindia and Khadi and Village Industries Commission (KVIC) is all set to continue.

While KVIC claimed that Fabindia had given an undertaking to the Bombay High Court to not use the 'Khadi' mark, the William Bissell company calls it a mere statement. This tussle is only going to escalate as the Commission promises to have the vigil enhanced and take strict action against those seen violating copyright. The government body has sent over 200 notices to companies that wrongly endorse or use Khadi.

It began in July 2015, when the KVIC had noticed that Fabindia was using 'Khadi' tag and selling products bearing the impugned mark 'KHADI', which was identical to KVIC’s registered KHADI trademark.

According to lab tests reports — seen by Moneycontrol — the samples drawn by KVIC from Fabindia showed that they were not Khadi products, but instead factory-made cotton garments in the name of Khadi.

On August 13, 2015, KVIC issued a notice to Fabindia notifying the violation of the KVIC Act caused by the brand and called upon the retailer to immediately stop sale and advertisement of apparel tagged as Khadi.

Again in January 2016, the KVIC found that Fabindia continued to use the Khadi tag on its products, despite its undertaking of not using it, "which was a blatant violation of KVIC’s statutory and proprietary rights in the Khadi trademarks".

Fabindia, in its letter dated August 16, 2016, informed KVIC that they had stopped advertisement campaigns in all media and had also sent internal directions to stop selling the cloth with reference to Khadi.

But notices were again sent to the Indian retail chain brand in February 2017. Later that month, Fabindia acknowledged receipt of that notice and requested a meeting with KVIC officials. In the meeting, Fabindia officials were categorically informed that their unauthorized use of Khadi mark and sale of fake Khadi products had not only violated the provisions of the regulation, it had also caused loss of opportunity and earnings to Khadi artisans.

"But Fabindia failed to obtain bona fide certification for sale of Khadi products despite KVIC's repeated assurances. They also didn’t pay any monetary compensation for the loss caused by them," said sources.

Finally, earlier this year, KVIC filed a case against Fabindia on June 13, 2018 at the Bombay High Court and categorically asked Fabindia to pay KVIC monetary damages.

KVIC asked to be paid Rs 525 crores as damages, which is 25 percent of Fabindia’s average annual profits over the last three years.

Clearing their stand on the issue, a representative from Fabindia said, “The interim application taken out by KVIC against Fabindia in the Hon'ble Bombay High Court came up for hearing on August 27, 2018. Janak Dwarkadas, senior advocate instructed by us appeared for Fabindia. He informed the Court that Fabindia is presently not using the word Khadi. If Fabindia intends to use the word Khadi in future, it will give four weeks advance notice to KVIC before such use. The Court after considering the above submissions disposed of the interim application filed by KVIC. The Court has also given Fabindia four weeks’ time to file its written statement in the suit.”

So far KVIC has provided Khadi Mark Certificate to 2,238 entities and issued legal notice to 222 organizations in the last three years asking them to refrain from selling non Khadi items as Khadi.