Offences and penalties under the GI Act — Intellectual Property Rights I Notes

Offences and penalties under the GI Act

Passing off a Mumbai soap as “Mysore Sandalwood” is not only a civil wrong the community can sue over — it is a crime. The GI Act backs its protection with imprisonment and fines, because a false origin claim cheats every honest producer and every buyer at once.

The criminal side of the Act

Beyond the civil suit for infringement, Chapter VIII (ss.38–44) creates criminal offences, closely modelled on the Trade Marks Act:

s.38 — falsifying and falsely applying a GI. Making a GI without authority, or applying a registered GI (or a deceptively similar one) to goods, without the proprietor’s authority.
s.39 — penalty for applying a false GI. Applying a false GI to goods, without authority, is punishable with imprisonment for a term of not less than six months, up to three years, and a fine of not less than ₹50,000, up to ₹2,00,000 (the court may reduce the minimum for adequate special reasons).
s.40 — penalty for selling goods to which a false GI is applied. Selling, letting for hire, or possessing for sale goods bearing a false GI is punishable with the same imprisonment (6 months–3 years) and fine (₹50,000–₹2,00,000) range.
s.41 — enhanced penalty on a second or subsequent conviction — imprisonment up to three years and a higher fine.
s.42 — falsely representing a GI as registered — punishable with imprisonment/fine.
s.43 — improperly describing one’s place of business as connected with the GI Registry, and s.44 — falsification of entries in the Register — are further offences.

The offences are cognisable, and the goods bearing a false GI may be forfeited.

GI Act, 1999, s.40: “Any person who sells, lets for hire or exposes for sale, or hires or has in his possession for sale, goods or things to which any false geographical indication is applied… shall, unless he proves [the specified defences], be punished…”

In Simple Terms: Misusing a GI is a crime, not just a civil wrong. Falsifying or falsely applying a GI (s.38), applying a false GI (s.39), or selling goods carrying a false GI (s.40), is punishable with imprisonment of six months to three years and a fine of ₹50,000 to ₹2 lakh, with enhanced penalties for repeat offenders (s.41).

🧩 WORKED EXAMPLE — the counterfeit “Kolhapuri” seller

Facts. A trader knowingly sells cheap footwear falsely labelled with the registered “Kolhapuri” GI.

Rule. ss.39–40 — selling goods to which a false GI is applied is an offence, punishable with imprisonment (6 months–3 years) and a fine (₹50,000–₹2,00,000).

Apply. The trader is not an authorised user and knowingly sells falsely-labelled goods; he cannot show a good-faith defence.

Conclusion. The trader is criminally liable under ss.39–40, in addition to any civil injunction for infringement under s.22.

flowchart TD
    OFF["Offences under the GI Act (ss.38-44)"]:::root
    OFF --> S38["s.38 — falsifying / falsely applying a GI"]:::leaf
    OFF --> S39["s.39 — applying a false GI (6 mo-3 yr + fine 50k-2 lakh)"]:::leaf
    OFF --> S40["s.40 — selling goods with a false GI (same penalty)"]:::leaf
    OFF --> S41["s.41 — enhanced penalty on repeat conviction"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;

Case Laws

Scotch Whisky Association v Golden Bottling Ltd (2006) — reinforced that misusing an origin name attracts both civil and penal consequences.
Imperial Tobacco v Registrar (1977) — on deceptive/geographical descriptors, the reasoning underlying penal protection of origin names.

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