A drive along one of the highways in any tourist destination of the world can often seem like a parody of brands. Big names in hospitality all make an appearance on boarding houses, motels and restaurants, in their localised, often confusing versions.
Globalisation and the rapid growth of the hotel industry in India have meant that the owners of hotels with similar brand names are likely to come to a face-off.
Anil Madhok, MD Sarovar Hotels & Resorts, says, “You need to register a trademark, otherwise there can be issues. For instance, we have a chain called Sarovar here but when expanding into Kenya we were advised not to, since there is already a chain by that name in the country.”
India has recently witnessed the case of New York-based Hilton International Corp v/s Hotel Hilltone. In the case that came up last year, the latter, a Mount Abu-based hotel, established in 1964, filed a petition contending that it was registered under the Companies Act, 1956. The petitioner had sought to restrain Hilton International Corporation from carrying on business in India by using a “deceptively similar trademark”. Hilton has moved Supreme Court seeking exclusive rights over trade mark ‘Hilton’ in the Indian hotel industry. Conrad Hilton had bought his first hotel in 1919 and founded the international chain of hotels named Hilton in 1925. Hilton has a joint venture in India with DLF.
Hoteliers such as Madhok are determined to register the trademark in the country that they are planning to expand into. “Kenya became a trigger,” he says.
As the largely insular Indian hotel industry watches the trademark row unfold between veteran hoteliers Vithal Kamat of now-rebranded Kamat Hotels India Limited (KHIL), which owns Orchid Hotel, and Chander Baljee of Royal Orchid Hotels Limited (ROHL), over the name Orchid, the trademark issue has come back into focus.
Chander Baljee says, “I think it is an evolving matter. It is a new concept in India and the legal system is evolving.”
In the film industry, movie names are routinely traded – or not – depending on relationships. In the world of hospitality, which works like an old boys club of sorts, one would assume that these battles wouldn’t reach court room. But hotel consultant Vijay Thacker, director Horwath HTL disagrees. “Typically,” he says, “these are not settled informally. Let’s say that sometimes they do not, unless you are able to wield the threat of litigation.”
Madhok says that he has had to send notices four to five times, particularly for the Park Plaza brand. “It is a generic name that people use. We had lawyers send a notice, saying please don’t use it. Most people don’t even know that it was a registered trademark. So when they do know, via a letter, it gets settled very amicably.”
Legal sense and common sense may not often match since intellectual property rights are subject to national laws in a global world.
In the case of KHIL v/s ROHL, while Baljee started his company in January 1997, Vithal Kamat opened his hotel in September 1997. The first Royal Orchid opened in 2001.
“We were using the Orchid name for catering and other businesses much prior to that as well. Our first hotel started in 2001 and they went to court in 2008. Our contention is why they went after seven years,” says the senior Baljee.
The case is now posted for July. In the meantime the Baljees are allowed to continue using the name for their existing 17 hotels and a few upcoming properties as well.
“We as a business are open to any reasonable settlement. We never want to keep on fighting,” Baljee says.
In a statement Vithal Kamat, CMD KHIL, says, “We have been staving off similar incidences for a decade now.” KHIL claims to have blocked over 12 other hotels and companies from using the trademark ‘The Orchid’, to date. Trademark protection is not only relevant in case of infringement. Protecting your brand is a useful business strategy.
Last year, the New York-based Cipriani family lost restaurant trademark battle with Orient-Express Hotels, the owners of the luxury hotel Cipriani in Venice. Dominic Walsh Cipriani London, the fashionable Italian restaurant frequented by celebrities including Elton John and the Beckhams, ordered the Cipriani family to remove the name from the restaurant, ruling that the trademark resided with Orient-Express Hotels.
Giuseppe Cipriani opened the Cipriani London in Mayfair in 2004, eight years after the Hotel Cipriani registered the trademark in the UK. The hotel was founded in 1956 by Arrigo Cipriani, the inventor of the Bellini cocktail but the family sold their interest in 1967.
“For many years people were not conversant with brand value and the fact that you are writing away the name if you sell the property,” says Thacker.
In India, each time shares are acquired in a public listed company such as EIH, speculation is rife about the brand. The rule of thumb is to separate the asset and the brand management into separate companies, and create another company for the brand, charging a royalty, Madhok explains.
Thacker says, “Even if you sell the asset you can choose to sell with or without the brand. If you do sell the brand, it may have far more value and recognition than the asset.”
But the solution does not work for everyone. Baljee, who has signed on a legal team to research and structure, says they have no immediate plans of separating the brand from the assets. “We have to see the implication of that in terms of franchising and regulating. We have to see where there is a benefit involved.”
Be that as it may, trademarks and copyrights are a serious matter in today’s world. Thacker says, “Essentially, if you have a management company and an asset company then you ensure that the brand belongs to another tier. If you default on the asset or get taken over then the brand still stays with you. Not everyone has done it but I do think it is advisable to separate.”
