Land of 100 Hazi Biriyanis: The ignorance of IP rights in Bangladesh

Although delayed, the 26th Dhaka International Trade Fair (DITF) will take place, and this year, like every year, you can be rest assured you will get to see and eat at not only one, but a number of Hazi Biriyani outlets at the fair.

Using a name similar to a brand gives a business a boost in sales, though it is highly unethical and can be illegal too, if the original brand establishes its intellectual property (IP) rights by making a trademark. 

Hazi Biriyani is probably the most copied brand name in the category of food at DITF. Unethical businesses often use the name, or something close to it, to sell and advertise their products. There are - Hazi Biriyani Restaurant, Hazi Biriyani and Kabab House, Shahi Hazi Biriyani and Kabab, Hot and Spicy Shahi Hazi Biriyani – the list is endless.

Such trademark theft is fairly common in Bangladesh. It happens because owners are often not aware of how a trademark can protect their business interests or do not know the process to provide legal shelter to their businesses, which ultimately damages their revenue and image. The original business owners lose business, and the customers get deceived because they think they are buying from the original brand.

Back in the 1990s and early 2000s, Bangladesh had a number of restaurants with names such as Kintuki, MgDonals, New Wimpy and Dominous Pizza (There is still a Wendy's at Lalmatia.) As global food chains such as KFC, Pizza Hut or Domino's Pizza began entering the local market, these imposters gradually disappeared and in some instances had to be forced to stop.

Domino's Pizza in 2000 filed a case against a local Bangladeshi company named Dominous Pizza. Unquestionably, both names sound similar. The intention of the local company is not hard to understand. That is why the original company filed a suit to save its brand, business, and reputation.

In the case of Dominous Pizza and others vs Domino's Pizza Inc, the latter claimed that it had 385 registrations in different countries and had filed applications for registration in about 114 different countries, including Bangladesh.

The notable case of Messrs Tabaq Restaurant vs Messrs Tabaq Restaurant can be mentioned here as well, where it was held that "what is described as a passing off action (misrepresenting products or services) may be a case of infringement of trademark joined with passing off, trademark being registered or unregistered".

Section 24 of the Trademark Act 2009 says no action against infringement of an unregistered trademark can be taken. For this reason, new and traditional companies should register their trademarks at any cost.

The core elements of IP laws are patents, trademarks, copyrights, and trade secrets. Being one of the members of the World Trade Organisation, Bangladesh has some IP laws covering the subject matter.

The Copyright Ordinance of 1962 has been substituted by the Copyright Act of 2000. The Trademarks Act of 1920 has been replaced by the Trademarks Act of 2009. Patents and Designs Act of 1911 has not been swapped by any law, and it is still the prevailing law of the land to protect innovations. Bangladesh lacks any law concerning the protection of trade secrets.

It is evident that the laws are there, but there is an extreme lack of awareness of IP rights among business owners.

Hazi Biriyani is probably the most copied brand name in the category of food. Photo: Noor A Alam

Innovation is indispensable to economic growth. It leads to higher productivity. As productivity rises, more goods and services are produced. In the USA, innovation is responsible for up to 50 percent of annual gross domestic product growth.

A knowledge economy is a mechanism for production that is based on intellectual capital. In a knowledge economy, a significant component of value may contain intangible assets like IP.

Less developed countries tend to have agriculture- and manufacturing-based economies. If we want to become a developed country, there is no alternative to grow our knowledge economy. IP rights have to be respected and ensured to increase the contribution of innovations to the GDP.

The impact of unawareness of IP rights among business owners is that no innovation will come to the market if entrepreneurs or traditional businesses see no incentive for innovation.

To understand the potential of a knowledge economy, let us take the iPhone as an example. Apple owns the brand. No one else can manufacture it because the company has ensured its IP rights, including patents and trademarks.

For each iPhone sold at a retail price of $600 in 2013, Apple grabbed $270, Korean companies supplying main components got $80 while Chinese companies assembling them earned $6.5, only around 1% of the total.

For its strong performance in innovation in different sectors and getting IP rights protected, developed countries continue to be economic superpowers.

Our companies need to understand the importance of getting IP rights protected and how it is essential to the survival and growth of the business. Secondly, our government must realise that if we want to become a developed country, strengthening up the knowledge economy can expedite the process. To rely on the knowledge economy for a higher GDP, we have to innovate, and innovations must get legal protections.

The government can hold workshops and training programmes for business owners to spread awareness of IP rights and laws. Companies cannot move around in markets to check whether their IP rights are getting violated or not. The administration can work proactively to protect the businesses because it will increase tax collection and the economy will grow.

America's commerce department released a report, which showed that IP-based industries support at least 45 million jobs and contribute more than six trillion dollars to the economy or 38.2% of the GDP. Bangladesh's GDP is around $275 billion and 2.68 million youths are unemployed.

This shows if we grow our knowledge economy, GDP will increase, unemployment will reduce, and Bangladesh can become a developed country.

IP rights are essential for knowledge-based commerce for two reasons. First of all, they compete by inventing the next generation of products or services rather than competing with a lower price. Secondly, they may have high initial fixed costs (research, development, or design) but the marginal cost of production is low.

For betterment, our government can merge the Copyright Office Bangladesh and the Department of Patents, Designs and Trademarks, and set up an IP office to provide fast and one-stop service for IP matters.

In addition, a task force should be formed which will actively keep an eye on the market and take legal actions against any sort of violation of IP rights not for only local companies but for global companies too, so that foreign investors get a sense of security about their investment and IP rights.

For a developing country like Bangladesh looking to diversify its economy and progress to the rank of a high-income nation, the practice of IP rights is more important today than at any other time in history.