Thematic Highlight

This fortnight’s thematic highlight was Pankhuri’s update on the Patent Working PIL matter at the Delhi HC. The Delhi HC had disposed of the matter on April 23, 2018. The Court directed the Government to complete all the steps towards effecting necessary amendments in the patent working provisions, strictly within the timelines proposed by it. Pankhuri highlighted how the stakeholder consultation process has already been undertaken by the government. She hopes that the Government comes up with a more optimal working disclosure format and implements it more rigorously in the years to come.

Topical Highlight

The topical highlight of this fortnight was brought about in a two-part guest post by Adarsh Ramanujan. Adarsh analysed a recent order passed by the Bengaluru Bench of the ITAT, where the ITAT held that the Google India was not a mere re-seller of advertising space to Indian advertisers but a licensee of Google Ireland’s IP. As a result, the payments made by it to Google Ireland were in the nature of  ‘royalty’, for which it was under the obligation to deduct tax at source as per the Income Tax Act.

In the two-part post:

• First, he highlights that the two issues in consideration pertain to one, whether the payment is to be treated as ‘royalty’ as opposed to just business income in the hands of Google Ireland. And two, who is the beneficial owner of the sum payable by Google India. He later notes in relation to the first issue that the payment can be taxable, if and only if, it is treated as Royalty. In regards to the second issue he notes that, if Google Ireland is not the “beneficial owner”, the beneficial rate of 10% under the Indo-Ireland DTAA would not be available.
• After highlighting the critical findings of fact recorded by the ITAT, Adarsh in his second post, critiques the findings of the ITAT specifically with respect to its treatment of the payments as royalties. He criticises the preliminary finding of ITAT with respect to treating the entire payment as royalty, when clearly it has identified that the payment was for a composite transaction. He also argues and explains that the payments made for “obtaining advertising space” and “facilitating the display and publishing of an advertisement to targeted customers” would not amount to “royalty”, as the Advertiser gets no access to any IP. He later also rebuts several findings and inferences drawn by the ITAT and highlights the fallacies in its approach.

Other Developments

Indian

Judgments

Parminder Singh Ashok Grover & Anr. v. The State Of Maharashtra & Anr. — Bombay High Court [June 8, 2018]

The Court refused to quash the records pertaining to an F.I.R. lodged under S. 51, 63 and 63B of the Copyright Act, 1957 and SS.406 and 420 of the IPC, by the publisher of a book, for infringement of copyright in it by the applicants by way of publication of a 2nd edition of the book, without obtaining a license or permission for it and paying appropriate consideration. The Court noted on facts that the wording of the agreement between the parties was ambiguous, and the applicant should have printed a 2nd edition only after obtaining a license for the same, showing an intention to make a wrongful gain. The court also rejected the argument that the police made wrongful seizure and investigation as such powers are not available under S. 51, 63 and 63B of the Copyright Act, 1957 holding that SS.406 and 420 of the IPC were also alleged in the complaint. The Court rejected the application as dishonest intention was shown.

Oppo Mobiles India Private Limited v. M/S.Samaira Online Enterprises — Madras High Court [June 8, 2018]

The Court held that a case of trademark infringement was made out against the defendant, who was selling products under the plaintiff’s mark ‘OPPO’ online at discounted prices, thus hampering the business prospects, reputation and brand value of the plaintiff, who received complaints from consumers regarding poor quality goods. It noted that the method of marketing and the manner of sale by the Defendant was to deceive, mislead and create confusion in the minds of the ordinary consumers or buyers as to the origin of the product.

News

1. Supreme Court refuses to stay release of Rajinikanth starrer ‘Kaala’ over copyright infringement claims
2. Delhi HC restrains Indian firm from using H&M trademark
3. UltraTech Cement wins copyright infringement case against Everest
4. Nusrat Fateh Ali Khan’s daughter threatens to sue his plagiarists
5. Bombay HC Restrains Jackson Labs From Manufacturing Or Selling Drug Deceptively Similar To Wockhardt’s Spasmoproxyvon
6. LIC wins trademark case against textile firm
7. A small design studio in Delhi takes on global luxury goliath Christian Dior for a knockoff -and wins
8. India Lacks Landmark Judgments On Design Piracy, Only Identical Imitations Attract Copyright Infringement
9. Samsung Acquires Hera Wi-Fi Patents Through (Patent Troll?) Sisvel
10. Copycat monuments: Flattery or fakery? 
11. ‘Ithihasa 2’: Scriptwriter Aneesh Lee Ashok accuses the makers of copyright infringement
12. KVIC moves HC against Fabindia over use of ‘khadi’ trademark
13. Metro Shoes takes Flipkart to Bombay HC over brand name 

International

1. US Imposes USD 50B In Tariffs On China For Forced IP/Tech Practices, Cybertheft
2. EU Files WTO Case Against China Over IP Rights Protection
3. Countries Discuss Prospect Of Plurilateral Agreement On Genetic Resources Protection
4. BREAKING: UK Supreme Court rules that ISPs do NOT have to pay implementation costs in Cartier case
5. BREAKING: CJEU rules that Louboutin red sole mark does NOT fall within absolute ground for refusal
6. DeepMind: First major AI patent filings revealed
7. Former Munich Mayor Warns Against Negative Effects Of City’s Re-Migration To Microsoft
8. U.S. ITC says probing Toyota, others in patent infringement case

In a piece published on June 13, 2018 on the Wire, Anand Grover takes issue with several pieces that I have written regarding the approval of bedaquiline, a new drug meant to treat a certain type of multi drug resistant tuberculosis (MDR). Surprisingly, he doesn’t refer to my 6^th piece on the issue, published on Newslaundry, where I discuss the law on clinical trials.

While I’m glad that we are debating this issue, I disagree with Grover on multiple issues.

Cherry picking data on bedaquiline

To briefly recap the facts of this debate – Janssen & Janssen a pharmaceutical company discovered a new drug called bedaquiline. It is one of the first new drugs developed in the last 40 years that shown promise in treating MDR. The government is controlling access to the drug by administering it only through government hospitals – the data collected from these government hospitals is then given to Janssen (both parties signed a data sharing agreement). Like Grover, there are several other activists who are arguing for more patients to be given access to the drug on the grounds that it is the last hope for patients with XDR i.e. extensively drug-resistant tuberculosis. The problem however is that the drug has only cleared Phase II trials and is still undergoing Phase III trials which will conclude only in 2021.

This is an important point to note because a lot of drugs that clear Phase II, fail Phase III trials. An industry study revealed that only 55% of drugs clear Phase III trials because these trials are more rigorous since they have more patients and are meant to conclusively establish safety and efficacy of the drug. Since bedaquiline hasn’t completed Phase III trials, the medical community simply lacks the data to conclusively determine the safety and efficacy of the drug. One of the reasons this drug needs more safety data is because the cohort that was administered bedaquiline in the Phase 2 clinical trials reported a larger number of deaths than the cohort which did not receive the drug. While causation is yet to be proved between the drug and the deaths, there is enough reason to be apprehensive about the safety of the drug since the clinical trials have also reported that a side-effect of bedaquiline is increased Qt prolongation of the heart, which basically means that there were some alterations to the electrical activity of the heart. The Phase II study can be read here.

In countries like the US, which have granted bedaquiline conditional approval (a regulatory pathway that doesn’t exist in Indian law), Janssen is forced to carry a blackbox warning on the packaging of the drug stating the following: “An increased risk of death was seen in the SIRTURO treatment group (9/79, 11.4%) compared to the placebo treatment group (2/81, 2.5%) in one placebo-controlled trial”. The USFDA also requires Janssen to inform patients that the safety and efficacy of the drug is yet to be established. On the other hand, the consent form drawn up by the Indian Government for Indian patients being treated at government hospitals is entirely silent about these adverse side-effects. The consent form can be accessed here at page 4 and the patient information booklet is in the preceding pages – neither mention the past history of this drug.

Notwithstanding these serious issues raised by medical practitioners and regulators, activists like Grover describe bedaquiline in glowing terms. Grover justifies his enthusiasm on the grounds that the World Health Organisation (WHO) has recommended the drug. It should be stressed that the WHO guidance is ‘INTERIM’ in nature which means that even the WHO is yet to form a final opinion and will not do so until it has Phase III data. In the case of another new TB drug called delaminid, the WHO revised its interim guidance after the drug disappointed in Phase III clinical trials. So, I would take the interim guidance with a pinch of salt.

Grover also claims that the WHO’s latest assessment shows that 63% of the patients administered bedaquiline were cured. That is not an accurate description of the WHO’s report because bedaquiline was only one of the drugs in a multi-drug treatment i.e. bedaquiline is being prescribed along with other drugs. The same WHO assessment also mentions that 30% of the patients experienced Qt prolongations – meaning that the electrical activity of their heart was being affected as reported in earlier trials. The good news however, from the same document, is that there were no mortalities in the later trials and hence the WHO decided to downgrade the risk of undesirable effects from large to moderate, which although better, still represents a risk.

The question that flows from above discussion is how did Indian authorities approve this drug when Phase III trials were not complete especially when the drug has known safety issue? The issue of approval is different from the issue of whether the drug could be given to MDR patients in India if it was not first approved by the DCGI but since the latter issue has caused more concern let me tackle that issue first.

Could bedaquiline have been provided to patients in any other manner?

On reading Grover’s piece, one gets the sense that bedaquiline could not have been provided to patients unless the DCGI approved it immediately without waiting for results from Phase III clinical trials that are due in 2021. As I explained in the Newslaundry piece, it was perfectly possible for the Government of India to sponsor a clinical trial for all the patients. In the last 3 years the government has provided bedaquiline to approximately 1000 patients through six hospitals – that’s about the size of a large clinical trial.  If the government had sponsored the trial and registered the same as per the law it would have been forced to safeguard patient rights. This would have meant a right to compensation, under Rule 122DAB, in case the drug caused the death of patients or any other injury to them (as of now the bedaquiline consent form at govt. hospitals forces patients to waive any right to compensation). The entire treatment plan would have been vetted by an ethics committee. Any serious adverse events during the course of the trial would have to be mandatorily reported to the DCGI. The informed consent form would have to meet the requirement of Appendix V to ensure that patients had complete information. These are just some of the safeguards that would have been in place if the treatment was granted through a clinical trial process. Many of these safeguards have been inserted after the HPV scandal – people have lost their lives before these safeguards were inserted into the law.

In my interaction with one of my other critics, she claimed that only Janssen as the patentee and not the government could have sponsored a clinical trial. This is not true – as long as an institution has access to the drug it can seek approval to carry out a clinical trial. There is no requirement under the law for only the patentee to carry out the trial. In the case of bedaquiline, Janssen is anyway donating the drug to the Indian government for free. If the government had access to the drug, it should have nominated a hospital or research agency to sponsor a clinical trial. Instead, we have a scenario where Indian patients are being administered a drug by the government in an unethical manner while activists cheer on the government.

The regulatory approval granted to bedaquiline

In his piece Grover disputes my interpretation of the law, in particular my assertion that Phase III trials cannot be waived under Rule 122A of the Drugs & Cosmetics Rules, 1945 and that the DCGI could not have approved bedaquiline until Phase III trials are complete. He contradicts my conclusion by saying that “Nowhere do the rules require that data from Phase III clinical trials be available to the DCGI. They only say that relevant “data is [to be] available from other countries.” In plain English, Grover makes the point that as long as “data” is available it is of no consequence whether that data is from a clinical trial or from other sources – to burnish his point he cites data from the WHO to claim that the data was in fact available.

His interpretation of the law is incorrect, as I will explain later, but let’s presume for a moment that he is correct in his interpretation that only data is required and not clinical trials. The problem with the “data” that he quotes is that the DCGI approved Bedaquiline on 14 January 2015 while the WHO data that downgraded the risk associated with bedaquiline from “large” to “moderate” is from 2017. In any event, it is obvious from the minutes of the Technical Committee that the government considered only the US and EU approval and not WHO data while deciding to waive clinical trials. Even on this count, the Technical Committee was incorrect in its assessment because Bedaquiline got only conditional approval after Phase II trials data in both jurisdictions – Phase III trials were not complete and hence bedaquiline could not get final approval.  The Committee also appears to be ignorant of the difference between conditional approval and final approval. Don’t forget that the USFDA made it clear to Janssen that it had to inform patients that the safety and efficacy of the drug was not established since Phase III trial data was pending. How can the Technical Committee depend on such an approval to waive clinical trials for a drug with known safety issues?

Rule 122A read with Schedule Y mandate Phase III clinical trials

Grover also argues that Rule 122A never mentions the phrase “clinical trial” and that it only requires “data” which can come in other forms and not just through clinical trials. Grover has clearly missed the part in Rule 122A that requires all new drug applications to be accompanied by “information and data as required by Appendix I or Appendix IA of Schedule Y, as the case may be.” Schedule Y lists all data that is to be submitted to the DCGI – in particular Clause 1(iv) of Schedule Y, identifies the following as relevant data: “…human clinical pharmacology data as prescribed in Items 5, 6 and 7 of Appendix I”. A reference to Items 5, 6 & 7 of Appendix I indicates that those items reference Phase I, Phase II & Phase III clinical trials as described in Schedule Y which can be accessed here. It is thus clear that data for Phase I, Phase II and Phase III clinical trials is required to be submitted to the DCGI.

I therefore do not understand how Grover is claiming that Rule 122A requires only “data” and not “Phase III clinical trials”.

Can Phase III trials be waived?

The issue now is whether Phase III trials can be waived. Under Indian law, Phase I trials are safety trials meant to establish the toxicity of the drug on healthy volunteers. Phase II is a therapeutic exploratory trial on a small number of patients to understand the efficacy of the drug. If Phase II results are promising the drug moves to Phase III trials which are therapeutic confirmatory drugs that establish the efficacy of the drug on a large number of patients and helps determine the risk/benefit of the drug.

Phase III trials in India are usually split into two parts: clinical trials conducted outside the country and local clinical trials conducted within the country. Schedule Y, states in pertinent part that “For new drugs approved outside India, Phase III studies need to be carried out primarily to generate evidence of efficacy and safety of the drug in Indian patients when used as recommended…”. These are the local clinical trials referred to in Rule 122A.

Thus, even if a drug has been approved in foreign jurisdictions based on clinical trials in those countries, the law requires the drug to be tested on an Indian population to validate the drug in the Indian context. This requirement for local clinical trials however can be waived under the proviso to Rule 122A provided the drug is already approved in foreign countries. The proviso states in relevant part:

“Provided that the requirement of submitting the results of local clinical trials may not be necessary if the drug is of such a nature that the licensing authority may, in public interest decide to grant such permission on the basis of data available from other countries”.

It should be noted that the above Proviso does not state “Phase III trials” may be waived – it only states that “local clinical trials” may be waived, which clearly means that the rulemaker was expecting some kind of Phase III trials. Thus, if the drug had approvals from the US or EU based on Phase III data the local clinical trials in India could be waived. But as discussed earlier, the US and EU approvals were conditional since their regulators were still awaiting Phase III data.

Apart from the proviso to Rule 122A, Grover in his latest piece makes a new argument by citing the following provision from Schedule Y to defend the DCGI’s decision:

“For drugs indicated in life threatening/serious diseases or diseases of special relevance to the Indian health scenario, the toxicological and clinical data requirements may be abbreviated, deferred or omitted, as deemed appropriate by the Licensing Authority.”

He claims that the bedaquiline fits the above criteria and hence he supports the DCGI’s decision to approve the drug sans trials. Open ended provisions like the one above do not give the government a blanket licence to act as it pleases. As Grover will surely admit, all administrative decision making has to be reasonable not capricious or arbitrary. In the case of bedaquiline, when the USFDA and WHO have both flagged the safety concerns, it is rather incredible for Grover to cite the above provision to defend waiving all clinical trials of a drug that demonstrated cardiotoxicity in Phase II trials. What then is the point of clinical trials and drug regulation if the regulator can waive trials of a drug with known safety issues? What of the human rights of the patient?

Now that a former UN Special Rapporteur on the Right to Health has offered the above provision as a get out of jail free card expect more pharmaceutical companies to invoke the provision to seek complete waivers.

Blockchain, initially introduced as a part of the Bitcoin currency, has now proven to be the new game-changer technology in several industries, with big corporations using it for various customer-friendly services such as cross-border payment systems, electronic shipping platforms, portable health records etc. Blockchains act as databases that store records for every transaction conducted and which are distributed, indestructible, decentralized, peer-to-peer and independently verifiable in nature.

Controversies arise, however, when companies seek to patent their blockchain based services. Blockchain patents can be likened to software patents since it involves usage of application software and cryptography. It has been argued that such inventions may not be patentable since most of these services merely take an old idea (the blockchain technology) and come up with a new use.

However, one must note the fact that patents for blockchain-based services are increasingly being granted across the world, especially USA and China, with many being granted to applications of blockchain technology in banking and financial sectors. The reasons for this trend are examined within the scope of this post by examining the current legal position in USA and India.

United States of America: Post-Alice Interpretation

Section 101 of the US Patent Act states the categories of inventions which are patentable as “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement”. The judicially recognized exceptions to these categories are “abstract ideas, laws of nature and natural phenomena”. A two-step test was provided in US Supreme Court’s 2014 opinion in Alice v. CLS Bank(“Alice“) to determine the patent eligibility of computer-related inventions: (1) determine whether the claims are directed to a patent-ineligible concept (2) determine whether the claim’s elements, considered both individually and as an ordered combination, contained an ‘inventive concept’ which transformed the nature of the claims into a patent-eligible application. Under the second step, claims which only contain instructions for ‘generic computer implementation’ or whose use is merely limited to ‘a particular technological environment’ would not be granted patent protection. It was stated that the claims must contain ‘additional features’ to ensure that abstract ideas are not monopolized and that such claims on ‘building blocks of human ingenuity’ must integrate them into ‘something more’. It was concluded that there must be an improvement in the functioning of the computer or an improvement in any technology or technological field. While Alice certainly has stemmed the onslaught of patents granted to vague software patents, the decision has been questioned for not defining concepts such as ‘abstract ideas’ and ‘something more’. Certain Federal Court decisions of 2016 and 2017 have elaborated on the application of the Alice test. Chief amongst them is the 2016 decision of Enfish, LLC v. Microsoft(“Enfish“), which stated that the examination of “whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea” must be done in the first step of the Alice test itself. The Court also held that the invention’s ability to run on general purpose computer did not invalidate the claims. The claims must hence focus on “specific asserted improvement in computer capabilities” and it should be ensured that the computer is not used merely as a tool. The latest Federal Court decisions of 2018 follow the same line of reasoning.

Thus, blockchain services must only be patented in USA if their claims are directed to improvements in computer functionality or underlying technology and not the blockchain technology or the blockchain-based service itself i.e., the ‘abstract idea’ which the service seeks to employ must not be patented.

India: The ‘per se’ Debate settled after Erricson

In India, Section 3(k) of the Patents Act lists that ‘computer programmes, per se’ are patent-ineligible subject matter. Previously, there has been a lot of debate about the interpretation of the term ‘per se’. In 2015, the Delhi High Court in Telefonaktiebolaget Lm Ericsson v. Intex Technologies, stated that “any invention which has a technical contribution or has a technical effect and is not merely a computer program per se” is patentable. In order to reach this decision the Court relied on the ratio of the above-discussed Alice case i.e. the invention must contribute something more than an ‘abstract idea’ and the European Court’s 1986 Vicom decision which states that an invention must result in a technical effect/contribution and declared these tests similar to each other. However, the 2016 CRI Guidelines created confusion when it stated ‘novel hardware’ was one of the requirements for patentability of computer-related inventions. The debate was then settled by the revised CRI Guidelines of 2017 where the ‘novel hardware’ requirement was removed and it was stated that the ‘substance’ of such claims have to be examined. Recent patent grants to computer related inventions by the Indian Patent Office indicate that such inventions are patentable under Section 3(k) if they provide technical solution to a technical problem by providing a practical application or an improved technical effect of the underlying software.

In India, there have been few patent applications for blockchain-based technologies by Barclays and Asadel Technologies. Though the legal position in USA and India appear to be similar, there is one hurdle which Indian patent applications for blockchain-based services will face. The 2017 CRI Guidelines specifically state that ‘database’ is a ‘computer programme per se’ and hence it is excluded from patentability under Section 3(k). Blockchains, as has been discussed before, are databases for storing transactions. In my opinion, blockchain-based services will still be patentable in India since these Guidelines are not legally binding and merely provide guidance to patent examiners. Also, since parallels can be drawn between software patents and blockchain patents, the patent application for a blockchain-based service should be granted as long as the claims are not directed at the blockchain technology itself and if it provides a ‘technical contribution’ or ‘a technical solution to a technological problem’.

Implications of Patenting Blockchain-based Services

Blockchain is based on open-source client software and this feature enables new users to join existing systems and other companies to copy this technology and improve upon it. Many argue that granting patents to blockchain-based services aids patent trolls i.e., non-practicing entities who guard their monopoly by using these patents as weapons for stifling innovation by small developers. It is also said that patenting such services will exclude companies from using such technology to develop further industrial applications and it may also lead to patent wars between big corporations. However, these issues are already being tackled with the help of initiatives such as Hyperledger (which aim at creating open-source blockchains and related applications), the creation of patent pools (making patented technologies available for cross-licensing to all members of such pools) and non-aggression agreements signed between companies (agreeing not to assert patents against small companies and engaging in litigation). The blockchain community is also seeking to introduce an initiative called the Blockchain Defensive Patent License, wherein all license holders will share their patents with each other and will be prevented from attacking other license holders’ patents.

However, consideration must be given to the alarming trend of the grant of overbroad patents which only cover basic functionalities of blockchain. For instance, there was a recent report about the US Patents and Trademarks Office approving a patent filing for Northern Trust’s method of using blockchain technology i.e. smart contracts to form an immutable digital record of meetings. On applying the Enfish ratio and on a perusal of the filing, the claims clearly reveal that there is no improvement to computer functionality or underlying technology since they merely use the smart contract technology to employ an ‘abstract idea’ of creating digital meeting records. The Patent Office must, therefore, carefully examine the claims at hand. In the above-described case, if the technology for creating a meeting record would have merely used the smart contracts technology as its underlying basis and significantly improved upon it, then perhaps the patent grant would have been appropriate.

One can, hence, conclude that the respective Patent Offices of USA and India may deem a blockchain-based service to be patent-eligible if, on careful consideration of the claims, it offers a technical solution to an existing problem and improves significantly on the underlying technology. However, questions of how such improvements are to be determined and what category of blockchain-based services can be granted patents need to be settled by issuance of relevant guidelines by the Patent Offices of USA and India.

Image from here

This week we, had a post by Prashant, which forms the latest update on the ongoing debate about the Bedaquiline issue. (Previous SpicyIP posts on this issue by Prashant and Balaji can be accessed here.). In his latest post, Prashant responded to Anand Grover’s take on his views and disagreed with him on multiple aspects. He countered Grover’s argument on increasing access to bedaquiline by questioning the decision of Indian authorities to approve this drug when Phase III trials are yet to be complete. Further, in response to Grover’s contention that Rule 122A of the Drugs and Cosmetic Rules, 1945 does not require clinical trials, Prashant analysed the provision and its proviso to argue that such clinical trials cannot be waived off.

Next, I had written a post on patenting blockchain services in USA and India. Noting that software patents and blockchain patents are to be treated alike, I delved into the post-Alice v. CLS Bank interpretation of software patents by US Federal Courts. I then provided a brief history of the ‘per se’ debate in India and the revised CRI guidelines. Lastly, I analyzed the implications of granting blockchain patents. I also highlighted how claims for such patents must be analysed by the Patent Offices of USA and India.

Events and Announcements

Pankhuri had sent out a call for papers for the First IP & Innovation Researchers of Asia Conference, which will be held on January 31 and February 1, 2019 at the Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia, in Kuala Lumpur. The deadline for submitting abstracts is October 15, 2018.

Other Developments

Indian

Judgements

Krishnamachari Ramu v. Srinivasa Raja – Madras High Court [June 14, 2018]

The court set aside IPAB’s order revoking the process and product patents granted to the petitioners in respect of low glycemic sweets and remanded the matter to it for fresh consideration on basis of scientific or technical evidence. IPAB had revoked the patents on the ground that the invention was not new and lacked an inventive step. The court held that IPAB ought to have sought aid of experts or scientific proof before deciding whether the said invention is new and non-obvious or not and thus directed it to seek such evidence and decide the matter on the basis of it.

Shambhu Nath & Bros & Ors v. Imran Khan — Calcutta High Court [June 13, 2018]

The Court compared both the registered marks of the plaintiff, namely ‘tooFAN’ and ‘SNB’ with the impugned marks used by the defendant, namely ‘TOOFAN’ and ‘SNJ’, and concluded that the latter marks are deceptively similar to ones registered by the plaintiff, given the field of activity and the nature of the products, i.e., sale of electrical fans and coolers. The Court noted that the conduct of the defendant clearly shows the dishonest intention of the said respondent to free ride on the reputation of the petitioners, and establishes a prima facie case of passing off and infringement. Hence, the Court granted an ex parte interim order in favour of the plaintiffs, as it was of the opinion that refusal to pass such an order would be a matter of greater injustice to the plaintiff.

News

• Major Labels could block Spotify’s expansion into India due to Direct Licensing Fallout
• Khadi asks over 200 entities not to use terms such as ‘handwoven’ without nod
• Bihar CM Nitish Kumar Gets Supreme Court Notice in Plagiarism Row
• Madras High Court bars Karnataka firm from naming its oil as ‘Gold Premium’
• Girnar takes BigBasket to court over trademark violation
• India stands against a patently unjust proposal at WIPO meet
• P&G wins trademark case against UP-based Unani medicine firm
• IPAB allows trademark claim of Starwood Hotels

International

• EU takes first step in passing controversial copyright law that could ‘censor the internet’
• Supreme Court win for Patent Owners on Lost Foreign Profits in WesternGeco v. ION Geophysical
• Coke’s Bid for ‘Zero’ Trademark Tossed Back on Dr. Pepper Appeal
• NEM (XEM) powered Copyright Bank is now live
• South Korea First Country To Adopt WIPO’s AI Translation Tool
• Senator Hatch’s New Legislation Would Eliminate IPR Challenges by Generics and Biosimilar Makers

The Internet as you know and love may change. The vote’s out!

On 20^th June, 2018, the European Parliament’s legal affairs committee (JURI) voted to approve amendments to Articles 11 and 13 of the EU Copyright Directive in the Digital Single Market. These Articles have drawn the ire of many since they require internet platforms to monitor copyrighted material uploaded on their platforms and to pay fees to news companies before linking their content. In this post, I’ll be solely focusing on how Article 13 poses various problems to the Internet community and I’ll also be contrasting the draft legislation to the current legal position in India.

Article 13: The “Upload Filter” Mandate

Article 13 (the latest version of the Article can be viewed in the JURI draft compromise amendment here) imposes an obligation on online content sharing service providers (OCSSPs) to conclude “fair and appropriate licensing arrangements, unless the rightholder does not wish to grant a license or licenses are not available”. OCSSPs stand defined in Article 2(4a) as “an information society service” which stores and gives access to public to copyrighted works uploaded by users. A combined reading of its accompanying recitals, Recitals 37 to 39, leads to the conclusion that irrespective of whether OCSSPs enter into licensing arrangements with copyright owners or not, they are bound to employ “adequate and proportionate measures” to ensure “non-availability of copyright or related right-infringing works”.

In other words, this Article imposes liability on internet platforms, which mostly rely on user-uploaded content, to adopt certain automated technologies which will act as “upload filters” i.e., recognize and filter work created by someone other than the copyright holder. The platform would then be required to either automatically reject such content or pay revenue for such identified content. Previously, the Article used the term “content recognition technologies”, which was then replaced by “adequate and proportionate measures” since there was a lot of criticism and uncertainty about the effectiveness of these technologies. It has to be noted that though the Article does not directly refer to these technologies in its present form, the implementation of the Article would still necessitate the employment of such technologies since their obligation to filter uploaded content and pay revenue to content owners remains unchanged.

This Article had been designed to tackle the “value gap” in the musical industry i.e., the unauthorized presence of copyrighted works on internet platforms and the mismatch between revenue earned by Internet platforms from the use of copyrighted content and the revenue earned by owners of such content. It has been argued that such measures would force internet giants such as Google, Facebook etc. to pay their share of revenue to content owners in all industries. The vote has been welcomed by the music industry, who claim that internet platforms were misusing their safe harbor protection to force content owners into entering licensing arrangements where they receive less royalty.

Censorship Machines

The fact remains that these upload filter mechanisms will ultimately function as “censorship machines”, as Julia Reda, a German Pirate Party MEP and a long-time opponent of the EU Directive, puts it. Some have likened this Article to Youtube’s Content ID filtering technology (while others have stated it differs), an automated system in which YouTube helps copyright owners to identify and manage their content in a referenced database by filtering and blocking uploads which matched database entries. The Content ID technology has had its fair share of controversies. Algorithms which sustain these kinds of content-recognition technologies will not be able to tell apart legal uses such as parody, memes, remixes etc. and hence all sorts of legal content may be taken down, which will lead to selective availability of content to users and an impediment to free flow of information. Such fears are not unfounded, as can be demonstrated by YouTube’s decision to take down several legal channels ahead of the June 20^th vote for alleged copyright violations. Article 13 has been termed as a tool for “automated surveillance and control” which would aim to target big corporations, but would end up affecting startups and small companies who cannot possibly afford costly filtering technologies. Also, by targeting all sorts of copyrighted content such as text, photos etc., websites such as Wikipedia may also get affected. Though the drafters attempted to keep such websites out of the ambit of Article 13 by exempting “online encyclopedias” from its application, the exemption is limited to completely non-commercial activity. Since Wikipedia is a donation-based community project, Reda explains that its activities might just be considered as “commercial” since a call for donations can be considered as commercial activity. Lastly, it has to be noted that Article 13 provides a deeply unbalanced liability structure; it only provides for imposition of penalties on platforms for copyright infringement and does not introduce a mechanism to punish false copyright claims or copyfrauds, as they are commonly referred to as.

India: The Shreya Singhal Case  

Prior to the 2015 ruling of the Supreme Court in Shreya Singhal v. Union of India (“Shreya Singhal”), under Section 79(3)(b) of the Information Technology Act, 2000 and the Intermediary Rules, an intermediary was required to either remove or block access to content on receiving notice of illegality of such content by monitoring content, communication to intermediary by an affected entity or by a notification from the government. This enabled the filing of numerous frivolous complaints and multiple aggressive takedowns by intermediaries. In the Shreya Singhal ruling, the Court read down the provisions to hold that such takedowns can only be preceded by a court order or a notification from the government. It placed reliance on similar takedown systems followed in other countries such as Argentina. In doing so, the Court struck a balance between prevention of online censorship and protection of IP rights of content users. Unlike the European Parliament, the Indian Supreme Court makes a definite attempt to protect free speech rights of its netizens by providing a fair and balanced takedown mechanism.

Coming back to the issue at hand: There is a pressing need to curb such “reforms” since they make netizens question whether copyright laws can survive in the digital era. In providing an unworkable framework for protection of content owners’ rights and reduction of the value gap, the EU Parliament cannot hope for any changes in the status quo. Hope still remains for EU citizens, though. The Directive will only become a final legislation if it is approved by a plenary vote passed by the EU Parliament. Hopefully, the decision to approve Article 13, along with other equally controversial Articles of the Directive, will be reversed by that vote.

Image from here

The IP-customs linkage has always been a contentious one. Particularly so in the case of patents, an area of law which is difficult enough to decipher for trained judges, much less customs officials (more often than not generalist bureaucrats appointed by the Government of India).

Given this problematic linkage, it is heartening to note that vide a recent notification dated 22^nd June, 2018, issued by the Central Government, the linkage between patents and customs has effectively been broken (a bit). In other words, the new Intellectual Property Rights (Imported Goods) Enforcement Amendment Rules, 2018 (“IPR Amendment Rules”) revokes the power of custom authorities to seize imports upon receiving mere complaints of patent infringement. For the benefit of our readers, I will briefly recap the events and cases where this issue repeatedly arose. I will then proceed to analyse the implications of this amendment.

The Ramkumar Saga: “Patent Murder”

In 2009, Samsung filed a writ petition, challenging the decision of the Customs Officer to bar imports of dual-SIM phones under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (“IPR Rules”) and the Indian Customs Act, 1962. Ramkumar, a Madurai-based scientist and partner of Vikar Kumar Systems, had a patent on dual-SIM phones. In his post on this issue, Prof. Basheer stated that the IPR Rules were likely to be deemed unconstitutional since they allowed custom authorities to determine patent legality of imports on mere representations of the patent owner without consulting the importer. He raised a pertinent question regarding the competence of these authorities in dealing with such cases. He also went on to analyse and apply Article 51 of the TRIPS, which deals with suspension of release by custom authorities. The Article requires member nations to provide border control measures only with respect to “counterfeit trademark or pirated copyright goods”. In other words, Prof. Basheer concludes that the Article does not impose any border control obligation with respect to patented goods and that India should come up with fairer measures with respect to this. It was later reported that Samsung withdrew its writ petition and Ramkumar obtained an ex-parte decree from the Madras High Court restraining other manufacturers of dual-SIM phones. Since Ramkumar claimed rights over all dual-SIM phones, Indian custom authorities of Mumbai, Chennai and Delhi held against him. (The Ramkumar saga has received a lot of bad publicity since it involved the murder of a partner of Vikas Kumar Systems and a defamation threat against Prof. Basheer, but I won’t delve into those details since it does not form the direct concern of this post.)

The Delhi High Court Judgements

In the 2012 decision of the Delhi High Court in L. G. Electronics Pvt. Ltd. v. Bharat Bhogilal Patel (“Bhogilal Patel”), Mr. Patel had been granted two patents by Patent Examiners on behalf of Controller of Patent Office and he filed a complaint against L.G. Electronics and various other importers for infringing his patent rights. A Circular, providing instructions for implementation of the IPR Rules, was issued by the Central Government in 2009. The Court relied on Clause 4 of this Circular which stated that it was not easy for custom authorities to determine Patents, Designs and GI infringements unlike those of copyright and trademark and that for such infringements, the offences must have already been judicially pronounced and the custom authority would merely be required to implement such order. In his post on this judgement, Prashant questioned this decision on various grounds, one of them being that the circular merely stated that “extreme caution” was to be taken in examination of the 3 identified IP areas and that the circular did not explicitly state that custom authorities did not have the power to examine patent eligibility. He stated that the decision clearly went against the IPR Rules and it could only stand if the Rules were amended.

Later, this decision was overruled by the same Court (and on the same date!) in the case of Telefonaktiebolaget Lm Ericsson Torshamsgatan v. Union of India and Ors (“Ericsson”) They held that Section 7 gave the power to Deputy Commissioner of Customs or Assistant Commissioner of Customs to suspend clearance of such goods as long as they had specific and clear “reason to believe” that the goods in question infringed the patents claimed. In case the alleged infringer claims that the matter is too complex for the custom authorities to decide and the custom authority does not give proper “reason to believe”, the Court held that it can direct him to approach the competent court to assert his patent rights.

In addition to the above, there were also two petitions filed against the IPR Rules in the Delhi High Court (Saral Communication v. Union of India [2014] and Sumeet Kumar v. Ministry of Finance [2015]), which are currently pending.

Implications of the Amendment

Under Section 6 of the IPR Rules, goods which allegedly infringe intellectual property rights are deemed to be “prohibited” under Section 11 of the Customs Act, 1962. The IPR Amendment Rules omitted the terms “patent as defined in the Patents Act, 1970” and “the Patents Act, 1970” from the definitions of “intellectual property” (Clause 2(a)) and “intellectual property law” (Clause 2(b)). Such an amendment was much required since it is clear that custom authorities should not be tasked with examining patent infringement claims. As pointed out in Bhogilal Patel, neither the IPR Rules nor the Circular provide the custom authorities a mechanism for determining patent infringement.

Presumably, in the face of this amendment, the Ericsson judgement will no longer be enforceable i.e, custom authorities can no longer determine patent eligibility of the imports. We cannot clearly conclude, however, that the Bhogilal Patel ratio will be applied since the Amendment merely removes patent examination from the scope of custom authorities’ powers and does not give any guidance about the determining authority in case of patent infringement claims. Hence, it remains unclear if the relevant High Court will be the authority to pass the order for suspension of clearance of goods which allegedly infringe patent rights of rightholder. Hopefully, the Courts will clarify this in the future.

H/T: I would like to thank Mr. Rajiv Kumar Choudhry for notifying the SpicyIP Team about this amendment and its implications.

Image from here.

On June 22, 2018 the Wire re-published my last piece, along with a rejoinder by Anand Grover, in our ongoing debate on the manner in which Bedaquiline was approved by the DCGI after waiving Phase III clinical trials. Grover ends his piece with the following dramatic question:

“The question is, if the use of bedaqualine is going to cure two out three persons, and in its absence, they would face certain death, would any reasonable medical person withhold that drug from those persons. That is question that the learned professor, Mr. Prashant Reddy, has been avoiding and would like to avoid, but needs to answer.”

I am amazed at the degree of exaggeration in Grover’s commentary on bedaquiline. I cannot understand why Grover describes this drug as a life-saving wonder drug that is going to cure two out of three persons. For the record, there is at least one Nobel prize winner who has cautioned against the portrayal surrounding bedaquiline. Speaking at the Lindau Nobel Laureate Meeting, Sir John Walker who won the Nobel Prize for Chemistry in 1997 had categorically warned against classifying bedaquiline as a wonder drug. The accompanying photograph of his presentation was tweeted by Divya Rajagopal a reporter from the Economic Times who was attending the conference.

In an interview with Divya Rajagopal, the Nobel laureate reiterated his caution against using the drug on a large patient population until there is more data on the drug’s side-effects. His statement to the ET is as follows: “One should always be cautious when it comes to using new agents like these. There might be unforeseen circumstances that may arrive yet because clinical trials (that) have been conducted have been quite limited, with only phase 2 clinical trial with 440 people. So, it would be unwise to use in large populations,”.

Referring to the roll out of the drug in India, the ET report states “This is what has alarmed scientists like Walker. “We should wait for more data to emerge. You have to approach in a step-wise manner and expand gradually once it becomes clear if there are not any contraindications,” he said.”

The confidence that Grover and others repose in bedaquiline

 Grover’s claim that patients without access to the drug is incorrect. Like many other activists, Grover is under the impression that bedaquiline is the only drug out therefore MDR or XDR patients but the fact of the matter is that we have no data on how bedaquiline works in isolation. This is because the only published studies have used bedaquiline as part of a multi-drug combination to treat patients. The phase II study of bedaquiline published in the New England Journal of Medicine explains that the treatment plan for the study involved a combination of known drugs for two groups of multi-drug resistant patients. In addition, one group was given bedaquiline, while the other was given the placebo (a dummy pill). The group that was given bedaquiline plus the regular combination of drugs showed a cure rate of 58%, while the other group that was given the regular combination along with a placebo showed a cure rate of 32%. The difference in cure rates for both groups was 58% and 32% i.e. the group that got bedaquiline showed a cure rate that was 26% better than the group that got the placebo. These results tell us that Bedaquiline has promise but only a 26% better outcome than existing treatment regime. The problem however, as reported by the same study is that the group that got bedaquiline showed a higher death rate (10 patients died but no causation has been established) and also reported Qt-interval prolongation for bedaquiline (i.e. an effect on the heart’s electrical activity).

The question now for the medical community is – Does the 26% increased benefit in adding bedaquiline to the treatment regime compensate for the possible side-effects of the drug? The regular practice, as established by law and convention, is to conduct Phase III trials on a larger set of patients to generate better data for regulators and medical community so as to enable them to make an informed decision. The challenge is to generate data that show that the advantages of bedaquiline outcome not only its own side-effects but also that it is significantly better than existing drugs used to treat MDR-TB. This is why Phase III trials are so important, which is why some of us are amazed at the decision of the government to waive Phase III trials entirely.

What I find more surprising is the confidence with which activists like Grover speak about the drug when it is so clear that there is risk associated with bedaquiline and when there are other treatment options for MDR and XDR patients. Grover isn’t the only one who is so confident. A few months ago, I was tweeted, in response to similar issues that I raised about bedaquiline, the following tweet by a charming young chap who claims to be handling MSF’s social media handle. (I couldn’t confirm this because MSF’s India head Leena Menghaney did not reply to my email asking for a confirmation whether he worked directly for MSF). What surprised me about the tweet, apart from the language, was the confidence with which this chap states that Phase I & Phase II trials are good enough to scale up the usage of the drug. He is most likely repeating arguments he has heard in the MSF office.

Chapal Mehra and the advocacy around bedaquiline  

In a bid to understand what led to the incredible confidence in bedaquiline, I decided to research the writings about the drug in the Indian media. The one name that popped up frequently was that of Chapal Mehra. He has written a few pieces on TB survivors and several of these pieces slip in references to bedaquiline as the silver bullet to treating TB patients. He is also quoted as a public health specialist by health reporters writing on TB.

Sample this paragraph from an op-ed Mehra wrote for Huffpost:

“Sitting in his one-room house in Dharavi, on a rainy Mumbai morning, Owais, India’s first patient to be put on Bedaquiline, one of the newest drugs in the arms race against DR TB, once asked me, ‘Who would have been responsible if I didn’t receive this drug?’ In this one question, he sought the answer that most of the TB-affected in India want to know: Do their lives matter? And if so, who is accountable?”

Here’s another extract from a piece he published in BMJ:

“How do poor patients survive in this climate of apathy? Who responds to their needs? I recall interviewing the first patient to be put on bedaquiline at Hinduja Hospital in Mumbai—a city considered the epicenter of drug resistance in India. He spoke movingly about staring death in the face and the hope this drug provided to him. There are thousands like him in India alone, though most cannot access or afford this drug. Who will give them hope?”

In a piece for the Hindu he states:

“Access to new drugs like Bedaquiline is best explained in the struggle of an 18-year-old girl who desperately needed the drug and went to the Supreme Court to get it. Had she got this treatment sooner, she may not have died.”

A ToI reporter from 2014 quoted Mehra making the following statement on bedaquiline:

“Chapal Mehra, an activist working with civil society groups on TB, wants the government to lay down protocols to avoid misuse. “Considering India’s rising drug-resistant TB burden, access to new drugs like bedaquiline is essential,” he said.”

Another piece published in the Huffpost stated the following:

“With the tests revealing extreme resistance patterns, Udwadia chose to put her on Bedaquiline—a new drug— obtained with great difficulty through a compassionate use program. Tejal responded to Bedaquiline well. “It wasn’t as difficult a medicine to take. None of the side effects were extreme and I began to feel better.” Her tests, six months later, revealed she was sputum negative for the first time in almost two years. For the first time, Tejal was hopeful of a TB-free future.”

Another published in Scroll where he states:

“In September 2013, he finished the Bedaquiline course and his tests came back completely clean. Despite this, Owais kept taking category three drugs because of the previous reappearance of the disease. In March 2015, he finally stopped TB drugs completely-almost a decade after he began treatment.”

The piece in Scroll published a disclosure that the piece was an extract from Mehra’s book titled ‘Voices from TB’ and that his work was supported by the Lilly MDR TB Partnership. The Lilly MDR foundation was setup by the pharmaceutical company Eli Lilly in partnership with the World Health Organisation (WHO) to ramp up efforts to fight TB. Pharmaceutical companies funding patient advocacy efforts is not a completely unknown phenomenon in the West. It was recently reported that pharmaceutical companies donated $116 million dollars to patient advocacy groups in the West, in a single year.

I first encountered Mehra when I wrote to the ‘Survivors Against TB’, a patient group that describes itself as “Survivors Against TB is a community-based movement led by of a group of TB survivors who are working to strengthen India’s fight against TB.” It has petitioned the government for better access to bedaquiline. I had written to the group while researching for the first set of stories I published on SpicyIP with Balaji. I received a reply from Chapal Mehra offering to talk over the phone. I did not take him up on the offer since we had managed to collect enough information to write the first set of pieces that we published in March. I did however start researching to understand how SATB worked and the role played by Mehra who is described as the group’s convenor. It appears that some point he was working with Global Health Strategies, an international firm that describes itself as follows: “GHS uses advocacy, communications and policy analysis to advance issues and power campaigns that improve health and wellbeing around the world.”

As per information that I could find, he was supposed to work as a project director for REACH, a NGO where has was to be a Project Director to implement the “TB Call to Action” a project that was funded by USAID and supported by another international NGO called KNCV which is based in Netherlands. The Chairperson of REACH, which is based out of Chennai, is Dr. M. S. Swaminathan (father of Dr. Soumya Swaminathan who was the Director General of Indian Council of Medical Research and presently a Deputy Director General at WHO – she was involved in framing guidelines for bedaquiline’s rollout in India and also wrote the introduction to Chapal Mehra’s book). REACH has received sizeable contributions from USAID and KNCV for TB advocacy. USAID is an American government body and has been involved in India’s TB program for several years now. One of its current programs, apart from the ‘TB Call to Action’, is a joint effort with Janssen to contribute bedaquiline to the Indian Government.

I did write to the email ID run by ‘Survivors Against TB’, asking Chapal Mehra for details about his funding and his advocacy around bedaquiline. I did not receive a response to my email sent to him on June 19, despite a reminder. I am reproducing the email below:

“Dear Chapal,

As you may know, I’ve been writing on the bedaquiline issue. I’m examining the advocacy around the drug and I’ve learned that you have been working for REACH – a NGO that receives funding from USAID for TB advocacy and I was hoping you could respond to some of the following questions.:

(i)  Do you continue to work with REACH and have your writings on bedaquiline been a part of the USAID advocacy project?

(ii) Have you received funding from any other pharmaceutical company or foundation supported by any other pharmaceutical company to write about bedaquiline?

(iii) From where does Suriviors Against TB receive its funding?

(iv) Do you disclose the source of your funding to editors who publish your opinion pieces related to bedaquiline?

Thank you,

Prashant”

If Mehra replies I will publish his reply.

That aside, I presume a lot of people may not be too happy about pharmaceutical companies or USAID funding advocacy efforts like the “TB Call to Action”. Personally, I don’t think it’s a problem because patient advocacy groups play an important role in the public health debate and there is very little funding for such efforts in India. However, I do think transparency is a must because a writer disclosing a pharmaceutical company or its foundation as a source of funding will likely be subject to higher levels of scrutiny and that is a good thing.

Image from here.

On March 4, 2018 the Hindu published a frontpage news report on bedaquiline, the new drug that has shown promise in treating multi-drug resistant tuberculosis (MDR-TB). While we have written extensively on other aspects of bedaquiline, the one issue that we have not commented on so far is the reporting in the Hindu on the compulsory licensing/voluntary licensing for the patents covering bedaquiline.

The Hindu’s report made two assertions.

The first assertion was that a panel headed by Dr. Soumya Swaminathan, then the Director General of the Indian Council for Medical Research (ICMR) and currently the Deputy Director General of the World Health Organisation (WHO), had recommended to the Ministry of Health that it should negotiate with Janssen (which owns the patents for Bedaquiline) and Otsuka (which owns the patents for Delaminid) to get them to issue voluntary licences for the drugs and if that failed to issue compulsory licensing.

The second assertion was that the Union Health Ministry had requested Janssen and Otsuka to issue voluntary licences to Indian manufacturers and that both companies had turned down the request.

I wanted more information on both aspects and decided to file a RTI application with the Ministry of Health asking the following questions:

“1. In the attached report, the Hindu reported the following: On September 19, 2017, a panel chaired by Dr. Soumya Swaminathan, then Director-General of the Indian Council of Medical Research and currently the Deputy Director-General of the World Health Organisation (WHO) recommended, among other steps, that the Health Ministry consider issuing a compulsory licence (CL) for the two TB drugs.

Please provide a copy of the panel report that was sent to the Health Ministry recommending the issuance of a CL for bedaquiline and delaminid along with notings of the Ministry in relation to the panel report.

2.In the attached report, the Hindu reported the following: The Union Health Ministry told The Hindu that it had requested Janssen and Otsuka, to grant Voluntary Licenses (VL) to Indian manufacturers.

Please provide a copy of the letters/communication from the Health Ministry to Janssen and Otsuka requesting them to issue VLs. Please also provide copies of their response.”

The Ministry of Health transferred this application to the Director General of Health Services (DGHS) which then transferred the application to the Central Drug Standards Control Organisation (CDSCO) which then transferred my application to the Indian Council of Medical Research (ICMR) with the following noting:

“Reply:- For point no 1 & 2: Your application has been transferred u/s 6 (3) to the CPIO, Indian Council of Medical Research to provide available information, if any directly to you. CDSCO regulates safety, efficacy and quality of the drugs including vaccines as per Drugs & Cosmetic Act, 1940 and Rules made there under and hence no comments and information to offer in respect of grant of voluntary licenses.” I am yet to hear from ICMR.

Under Section 6(3) of the RTI Act, public authorities are allowed to transfer RTI applications if the information requested from them does not fall within their purview. A transfer of application by a public authority usually means they do not have the information required. The transfer of the application to the CDSCO is rather odd since the only conclusion from the Hindu’s report is that the panel report by Dr. Swaminathan was communicated to the Ministry of Health and that the Ministry had written to Janssen and Otsuka for voluntary licensing which both companies declined. In such a scenario, the Ministry should have a record of the panel report and of its communications with Janssen and Otsuka. So why then were the RTI applications transferred to the CDSCO, which has nothing to do with either compulsory licensing or voluntary licensing? If the Ministry of Health doesn’t have any of the information reported by the Hindu it should simply say so, on the record. Why get into this game of passing the parcel?

Privacy continues to remain a contested subject matter. I don’t mean contests over the bounds of privacy (particularly in the digital milieu), but a contest that is rather specific to IP: does privacy really count as a species of IP? IP lawyers (and I count myself as part of this blessed breed) are a covetous lot: seeking to constantly expand our kitty of IP kinds. In fact, so influential is our lot in India that unlike the rest of the world, where the right to publicity (or personality rights) developed from the right of privacy, we had more jurisprudence around the right of publicity (Daler’s dolls, Rajnikant’s mannerisms and what not!), before we even began to take the right to privacy seriously.

But for those that continue to worry about the tenuous link between privacy and IP, remember this is the land of Yoga…we’re meant to stretch!  Therefore, please permit me the luxury of presenting a privacy perspective to you on this IP blog. A perspective around Aadhaar: that behemoth of a project that resulted in “privacy” finally taking centre stage in India. And the Supreme Court ruling in no uncertain terms that there is a fundamental right to privacy under Article 21 of the Constitution of India. A ruling that was triggered in no small part by the then Attorney General’s assertion that the government effectively owns our body!

The Aadhaar Act itself came under a separate constitutionality challenge, with the second longest set of hearings ever in Supreme Court history (the first prize going to the landmark Keshavananda Bharathi case that laid down the Basic Structure doctrine). A decision is expected anytime now.

In the meantime, as part of our P-PIL Project at IDIA, I filed a writ petition before the Delhi High Court taking the Aadhaar “Authority” (UIDAI) to task for various privacy breaches and claiming compensation. Not under the Aadhaar Act, which is a bit self serving, but under various common law (tort) theories. Given the poverty of tort jurpsrdence in india (I’ve always wondered why…after all, our judges love crafting their own norms, and tort law provides one of the best avenues for judicial creativity), I hope our judges will bite. Or at the very least appoint a neutral committee to investigate the various Aadhaar breaches. Particularly so, since the Aadhaar authority (UIDAI) has not come clean, but is not more interested in media spins, constantly claming that there has been no breach. And that the Aadhar database is safe and secure behind a 5 foot thick wall.

For those interested, Livelaw, Medianama and Bar & Bench covered this writ petition here, here and here. These articles also link to the petition as filed (where in order to break the monotony of legal lingo, I begin with a poem: an “Ode to Aadhaar”).

I’ve also summarised some of the issues in a piece for the Wire which I reproduce below. Grateful for comments, critiques and suggestions.

Twisting the Truth Around Aadhaar in the Land of Luddites

Joseph Goebbels, the famed guru of Nazi propaganda, is supposed to have once said: “If you repeat a lie often enough, it becomes the truth.”

Goebbels appears to have found a devoted disciple in the UIDAI (Unique Identification Authority of India) and its head honcho, Ajay Bhushan Pandey, who’ve been relentlessly arguing that Aadhaar is one of the most secure systems ever. And that there’ve been no data breaches till date.

Nothing could be further from the truth. Even since its inception, the Aadhaar ecosystem has been characterised by some of the most egregious breaches ever. An undercover investigation by The Tribune demonstrated how Aadhaar details of more than a billion Indians could be accessed for a paltry sum of Rs 500! All thanks to the carelessly cultured regime of Aadhaar enrollment agencies (comprising village-level operators and the like) who were offered wanton access to the database by the “authority”.

A later breach involving an entrepreneurial engineer, Abhinav Srivastava, demonstrated how unauthorised private parties (such as Srivastava) could conduct Aadhaar authentications on their own. All thanks to the sheer callousness of government agencies such as National Informatics Centre (NIC)  in opening up their applications (in this case, “e-hospitals”) to surreptitious spoofing. Till date, there has been no known action taken against NIC.

More recently, two cybersecurity experts, Srinivas Kodali and Karan Saini found that a government website effectively permitted unauthorised third parties to access Aadhaar style authentication services. There are countless other horror stories doing the rounds.

And yet, the authority and its creative chairman continually claim that there has been no “breach”. They even go to the extent of branding those that complain against Aadhaar as tech “luddites”.

So consistent has been their stand that that they repeated the same claim in the Supreme Court… on oath! Funnily enough, they even contended that a five-feet thick wall would ensure the perpetual security of Aadhaar data. One wonders who the Luddites really are.

The claims of UIDAI are nothing more than a deliberate attempt to obfuscate and mislead. Worryingly, they also demonstrate an irksome ignorance of basic privacy tenets; not to mention the express provisions of the Aadhaar Act, under whose benevolent umbrella, the chairman and others at UIDAI draw their authority.

Section 28 of the Aadhaar Act makes clear that the UIDAI has to ensure the security and confidentiality of all “identity information” held by it, either directly or through its various partners/affiliates. In fact, so strict is the obligation that the authority has to even protect against the “accidental destruction or loss” of data.

Importantly, protectable data under the Act has been defined to include not only “biometric” data, but also an individual’s Aadhaar number and demographic information (address, telephone number etc).

The Tribune breach more than amply demonstrated that all of the above was compromised: for a paltry Rs 500, one could enter any Aadhaar number and get access to the corresponding demographic information and even biometric data (defined under the Act to include a “photograph”).

I have recounted all of this meticulously in a writ petition filed before the Delhi court, where I’ve sought to make the government accountable for these various breaches; and claimed damages from them for violating my right to privacy.

A right that has now been affirmed by a nine-judge bench of the Supreme Court of India in the Puttuswamy case to merit the highest level of protection under the law of our land; namely as a “fundamental” constitutional right.

Unfortunately however, the Aadhaar Act engenders a classic conflict of interest-type situation, in that it relies on the “authority” to take action against itself! As John Perry Barlow, the founding father of internet freedom,  famously said: “Relying on the government to protect your privacy is like asking a peeping tom to install your window blinds.”

Fortunately, however, not all is lost. The Information Technology (IT) Act as well as common law doctrines enable the common man to directly sue the authority and its various affiliates and hold them accountable for privacy lapses. Unfortunately, while the remedy under section 43 of the IT Act for a privacy breach is constitutionally suspect, in that it permits a government-appointed person to unilaterally adjudicate upon what is essentially a legal dispute, the various common law doctrines to protect privacy (deriving from an area of law called tort law) are more robust.

I have highlighted all of this in the writ petition mentioned earlier and requested the court to appoint an expert committee that would investigate these various breaches and the level of compliance with reasonable security/privacy policies by the Aadhaar authority. Given the obfuscatory claims around the breaches, such a neutral investigative report would go a long way in helping us understand the true extent of the breaches and the damage(s) caused to privacy interests.

Interestingly, in The Indian Express piece referred to earlier, the pugilistic Pandey attempts to draw a disingenuous distinction between “secrecy” and “privacy”; claiming that Aadhaar numbers are not “secret” and, therefore, need not be protected.

He is wrong on the law, and wrong on the underlying concept. While privacy and secrecy are no doubt inter-related, the right to privacy does not depend on something being an absolute “secret”. Rather, privacy is about the level of control that one has over information pertaining to oneself. I decide how much information I want to give out and to whom. Merely because I dole out my Aadhaar number to a couple of service providers does not mean that other service providers are entitled to access this number without my permission.

The same with my telephone number, email ID and so on. Privacy ultimately is about self-determination and my ability to control my public persona.  Even otherwise, the terms of the Aadhaar Act and the IT Act make amply clear that one’s Aadhaar number operates as a “password” and is to be protected as such.

It bears noting that the “Aadhaar” project was never designed with privacy in mind. Much like a number of other programmes in India, it began with one set of objectives, namely to eliminate identity fraud whilst providing for government benefits. This quickly morphed into another set of objectives once its potential for private gain was realised. Indeed, at the heart of the Aadhaar debate today is not just government control over data subjects. But the ability of private corporations to exploit our data (the new “oil”) for their own commercial gain.

Section 57 of the Aadhaar Act enables such private enterprises to ride on the backbone of Aadhaar authentication architecture. Little wonder then that an entire ecosystem of private enterprises have developed around Aadhaar. One such enterprise is iSPIRT, that has the blessings of Nandan Nilekani, the technocratic mastermind behind Aadhaar.

In a now deleted tweet, a colleague of Nilekani’s recounted a dinner conversation where he allegedly quipped that the best way to roll out new projects in India is to “Make it too big to reverse”.

The Aadhaar enterprise is no doubt a “big” one today. But bigger things have been reversed by our courts in the past.

Indeed, the “bigness” of an enterprise should be no consideration for courts that adjudicate on critical issues of civil liberties. Liberties that foster our autonomy and help us blossom to our fullest potential. For in the end, these are what define us as humans and distinguish us from machines, artificially intelligent or otherwise.”

Image from here

The upcoming session of Parliament may see the passage of a legislation that will have the effect of hardcoding ‘public interest’ into Indian injunction jurisprudence. The Specific Relief (Amendment) Bill, 2017 which has already been passed in the Lok Sabha is the offspring of a report submitted by a committee of experts which is yet to be released to the public. The Law Ministry never conducted a public consultation on the bill and the Lok Sabha passed the bill with no debate – in other words, its like any other legislation passed by Modi Sarkar.

Two of the provisions of this pending legislation are going to affect the ability of Indian courts to grant injunctions in cases involving public infrastructure projects. This will impact even injunctions to be granted in patent infringement cases against the government. The wording of the two provisions is as follows:

A new provision to be inserted: 20A. (1) No injunction shall be granted by a court in a suit under this Act involving a contract relating to an infrastructure project specified in the Schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project. Explanation.—For the purposes of the section, section 20B and clause (ha) of section 41, the expression “infrastructure clause project” means the Category of projects and infrastructure Sub-Section specified in the Schedule.

An existing provision to be amended: 13. In section 41 of the principal Act, after clause (h), the following clause shall be inserted, namely:— “(ha) if it would impede or delay the progress or completion of any infrastructure project or interfere with the continued provision of relevant facility related thereto or services being the subject matter of such project.”

(Section 41 lays down the grounds when an injunction cannot be granted.)

These amendments are being marketed by the government as a part of its initiative to improve ease of business. In simple English, the government is saying that too many of its big ticket infrastructure projects are getting stuck in litigation and that it has run out of patience with the judiciary. The solution as per the government, is to strip the judiciary of its power to grant injunctions in certain categories of infrastructure projects. This puts private parties, in a terrible position vis-à-vis the brute power of the bureaucracy who can now steamroll any objections or disputes. If anything, this provision is going to make business a lot tougher in India. As I wrote in a piece for the Wire a few months ago, this legislation is likely to adversely affect the land owners. Of what use is land when the owner lacks the option of injunctive relief?

These amendments will have an impact on patent litigation involving contracts fulfilling tenders floated by the government. So far, we have seen at least 2 patent infringement cases filed in the context of railways contracts. In most of these cases, the issue is whether the government use is exempted from patent infringement by virtue of Section 47 of the Patents Act. The Delhi High Court in the Chemtura case and the Bombay High Court in the Garware case have come to very different conclusions.  The second type of cases are those where the government isn’t directly impleaded in the lawsuit but where the alleged infringement is by a company fulfiling a government tender.  For example, the Sergi v. CTR litigation involved components to be used in fulfilment of tenders for power plants meant to generate electricity – this was also the case in some of the Enercon litigation over wind turbine plants. Another case that we covered was filed against the Government of Telangana and private contractors.

Once the new law in enacted, all infrastructure projects in the field of electricity generation and distribution are covered by the schedule to this amendment bill meaning no injunctions can be granted in cases of contracts involving these projects. Railways are also covered in the ambit of this schedule although it is not clear whether locomotives and wagons are covered within the ambit of the schedule. The enactment of the new law will deprive patentees the right to seek an injunction against either the government or private contractors involved in scheduled infrastructure projects.

 This does not mean that the patentee cannot claim damages. This amendment would be similar but narrower, than the American provision – 28 USC 1498 which is basically a compulsory licensing provision for government use. This clause basically immunises the US Govt. and its contractors from injunctions in patent infringement cases, leaving the plaintiff with the remedy of claiming only damages. This provision is of early 20^th century vintage and was enacted after it was found that multiple patent thickets were affecting military supplies for the American military. The provision was used by the American government to threaten Bayer during the Anthrax crisis in 2001 in order to ramp up production of ciprofloxacin. Recently, the New York Times, in an editorial, called on the American government to use 1498 as a solution to lower drug prices. The editorial cites an academic paper to argue that “In the late 1950s and 1960s, the federal government routinely used 1498 to obtain vital medications at a discount. According to a paper in The Yale Journal of Law and Technology, it enabled the Department of Defense to save a total of $21 million on 50 drugs in one three-year period.”

Getting back to the Specific Relief (Amendment) Bill, 2017, I think the bill will sail through the Rajya Sabha with no opposition. The long-term effect of this bill will be to knock down the prevalent belief amongst the Indian bar that injunctive relief is to be given when demanded by the plaintiff. Injunctive relief was always a discretionary remedy but this bill takes us in the opposite direction by stripping the courts of any discretion to grant injunctions in certain infrastructure projects. Once Indian judges get used to the fact that injunctions are not a holy sacrament under the law, it will likely have an impact on how they fashion their remedies in all cases and not just infrastructure cases.

We are extremely pleased to present before you a guest post written by Sheetal Srikanth. She is an associate at MVS Chambers, Chennai. She is a practising advocate at Madras High Court. She pursued her LLM from University of Toronto, specialising in IPR.

She critically analyses the Madras High Court judgment in Thiagarajan Kumararaja v. M/s. Capital Film Works India (Pvt) Ltd. SpicyIP had dealt with this judgment here. This post brings in certain dimensions and perspectives which are quite interesting.

Title: The Producer’s Dubbing Right– A Note on the Madras High Court’s Decision in Thiagarajan Kumararaja v. M/s Capital Film Works

Author: Sheetal Srikanth

It was recently reported that the Hindi language dubbing rights for SS Rajamouli’sPrabhas- starrer, ‘Saaho’, were sold to T-Series for a whopping 150 Crores. Dubbing and sub-titling allow for a film to be communicated to audiences who do not speak or understand the language of the original film. And naturally, in a country like India with several major mainstream film industries, dubbed films break language barriers and seamlessly travel between India’s biggest cinematic industries. Not only is dubbing a lucrative option for producers, with India’s enormous appetite for foreign and domestic content, dubbed films are extremely popular and artists are able to make an entire career out of it.

As far as copyright law is concerned, the lingering question of who has the right to dub a film was recently put to rest by the Madras High Court in ThiagarajanKumararaja v. M/s Capital Film Works. ThiagarajanKumararaja (TK), the appellant in the present case, is the script-writer and director of the Tamil film ‘Aaranyakaandam’, a highly critically acclaimed film that even won TK a National Award. The producer of the film, S.P. Charan (through Capital Film Works, his production company), decided to dub the film to Telugu almost three years after its making, and was possibly also looking to remake the film. Although the Tamil film did not do well at the box-office, it eventually acquired a major cult following which might be the reason for the producer’s renewed interest in exploiting the film. It has always been TK’s case that he did not assign the rights in thescript to the producer and the producer, therefore, has no right to remake or dub the film without his consent. After several rounds of litigation, both at the interim and final stages, the Division Bench, broadly, had the following questions to answer:

• Did TK, even in the absence of a formal assignment agreement, assign the rights in the script to the producer?
• Does the producer have the right to dub the film?
• Does the producer have the right to remake the film?

Although the court held that TK had not assigned the script to the producer, curiously, it reached two different conclusions as far as the dubbing right and remake right are concerned. On the one hand, the court held that since the script had not been assigned, the producer had no right to remake the film. On the other hand, however, the court held that the producer’s right to communicate the film to the public also extends to dubbing a film and showing it in different languages. In fact, the court, in its judgement, decided the dubbing issue first and only then went on to adjudicate upon the issues of assignment and remaking the film.

Put simply, this is the court’s reasoning for why the producer’s copyright included the right to dub a film–

• Section 2(ff) of the Copyright Act, 1957 (the Act) defines communication as making the work available to be seen, heard, or otherwise enjoyed. The use of the expression ‘otherwise enjoyed’ after the words ‘seen’ and ‘heard’ enlarges the scope of how communication to the public has to be made and, as a result, includes the right to dub a film and communicate the dubbed film to audiences across the country.
• While the translation of a literary work is carried out by using a writing medium, dubbing only involves the reconfiguration of the sound track which is already part of the cinematograph film of which the producer is the owner.
• As the author of the literary work i.e. the script, the writer had, inter alia, a right to make a cinematograph film.He cannot circumscribe that right, if, “authority qua that right is given to another person.”

This analysis of the producer’s copyright is by far one of the most incisive. It clarifies the application of Sec. 14(d) to a large extent. However, in unpacking the dubbing right and its various components, it is my view that the court missed a few finer points in arriving at the conclusion that it ultimately reached.

First, the judgment draws an artificial wedge between translation and dubbing in order establish that dubbing is a reconfiguration of the soundtrack which already forms part of the film and, as such, has nothing to do with the script. Although this interpretation is not incorrect, the first step of the dubbing process, undeniably,is the translation of the script.Even in this case, TK argued that changing the sound track of a film results in the creation of an entirely new film– a separate work for the purposes of copyright law.Assuming arguendo that the communication right included the right to dub the film, such dubbing would ordinarily require the translation of the script which belongs to a different person, the script-writer (TK in this case),and would also require the latter to separately authorize the translation of his script.

Second, the court recognizes the fact that the rights in the underlying works are separate from the rights in the film itself. This is even explicitly mentioned in Sec. 13(4) of the Act. Technically, then, the rights that the writer has in her script (that she still owns) should not be affected by the rights that a producer has in the film.

Third, the court explicitly states that if a restrictive condition was placed by the script-writer preventing the producer from dubbing the film, then the producer has no such right. If it is within the authority of the author of a script to prevent the dubbing of a film, how can dubbing, also, simultaneously, be the producer’s right under Sec. 14(d). It should either be that the producer always has the right to dub a film or the script-writer (who has not assigned the rights to the script) has to specifically authorize such dubbing. In other words, if the producer already has the right to communicate a film in any manner he pleases including dubbing the film in different languages, how can a script-writer restrict this just by virtue of owning the script itself?

Fourth, there might be reason to believe that the court’s reliance on Art. 14 of the Berne Convention and the Sunder Pictures case was also slightly misplaced. It seems that Art. 14 of the Convention applies to contributing authors. In many jurisdictions, for instance, the principal director of the film is considered a contributing author. However, authors of musical, literary and other underlying works are authors in their own right. While contributing authors cannot object to the dubbing or the sub-titling of a movie, I am not entirely convinced that the writer of a script (who is still also the owner of the script) can be subject to the same restrictions as a principal director or other contributor.

The High Court relied on the Sunder Pictures case to support its observation that there is a practice in the Indian cinema industry of dubbing films into a number of languages, and the copyright in the movie is separate from the copyright in the talkie, thereby allowing the rights owner to dub the film in more than one language and assign dubbing rights accordingly. However, the decision in Sunder Pictures was based on the assumption that the producer (owner of the film in question) had the right to dub the film. The Plaintiff in Sunder Pictures, who was the assignee of the Tamil talkie film, sought to restrict the rights of the defendants to exhibit the talkie in Hindi, and it was in this context that the Court held that assigning the copyright to a film in one language does not deny the owner the right to dub the film in other languages. This is fundamentally different from the facts of the present case wherein the copyright in the script is still owned by TK, and the rights in the script have not been assigned to the Producer (who only owns the Tamil language film).

TK’s special leave petition challenging the decision of the Division Bench pertaining to the dubbing rights was recently dismissed by the Supreme Court and the court did not grant leave as prayed. In any case, it is common in the industry for the producer to buy all rights in the underlying works and a situation like the present case does not normally arise.But the truth is that dubbed films translate into good incomes. And in cases such as TK’s, it remains to be seen whether the writers will have their own Javed Akhtar-moment and take back what might be theirs to keep.

We are extremely pleased to bring to you a guest post by Prof. (Dr.) N.S. Gopalakrishnan. Prof. Gopalakrishnan is a leading IP academic from India, who has taught and groomed a number of other IP academics and researchers, including our very own founder of SpicyIP, Prof Basheer. He is now a Honorary Professor at the Inter University Centre for IPR Studies, CUSAT, Kochi, a centre that he kickstarted some years ago.

This post is the first in the upcoming series of posts by Prof. Gopalakrishnan on India’s problematic PVP regime. Backed not just by analysis, but by meticulous data collection and empirical surveys. As he will demonstrate through a series of posts, the regime is hardly farmer friendly and is beset with multiple issues on the structural and implementation front. So without much ado, here goes the first post dealing with the issue of “extant” varieties, a category that is unique to India. As Prof. Gopalakrishnan demonstrates, the data around registration of these varieties effectively reveals a new kind of “enclosure” movement of existing public domain material by various government institutions, corporates and others.

Problems with the Indian Plant Variety Regime: Old Vine in Newly “Enclosed” Bottle?

Prof. (Dr.) N.S. Gopalakrishnan

The Protection of Plant Varieties and Farmers’ Rights Act, 2001 is a unique attempt by the Indian Parliament to create a sui generis system in India to protect the interests of the modern breeders and the farming community. In order to achieve the same, the Act recognized the registration of “extant” and “farmers’” varieties in addition to “new” and “essentially derived” varieties.

“Extant varieties” as per section 2(j) of the PVP Act comprise the following:

1. Notified under section 5 of the Seed Act, 1966, or
2. Farmers’ variety, or
3. Variety about which there is common knowledge (VCK), or
4. Any other variety which is in public domain

Outside of “extant” varieties, the Act also mandates the separate registration of farmers’ variety which means “traditionally cultivated and evolved by the farmers’ in their field and wild relative or land race or a variety about which the farmers possess the common knowledge”. These are all varieties that are publicly available and freely used by the farming communities.

The inclusion of freely available varieties for registration is a major departure from the UPOV model of protection of plant varieties which primarily focus only on registration of the newly bred variety that satisfies the conditions of distinctiveness, uniformity and stability (DUS). The Indian law also envisages different standards of distinctiveness, uniformity and stability for extant varieties and is silent on farmers’ variety, probably because they are time tested varieties evolved and developed by the farming communities. This gives the impression that Parliament had in mind two categories of farmers’ variety, i.e., (i) farmers’ variety that are extant variety and (ii) other farmers’ variety. The first category is one that satisfies the different standard of DSU test and specifically identifiable with a farmer or group of farmer or community and the second is traditional varieties that are not identifiable with a specific person or community but existing from generation to generation to be registered without any DSU test.

An examination of registration trends demonstrates that till 7^th May 2018, there were 16104 applications filed under the three major heads identified by the Authority – i) new ii) extant and iii) farmers’ varieties.

3074 certificates were issued in these three categories (until 28^th February 2018) and around 400 applications were closed/rejected (until May 7^th 2018). A large number of applications were filed in the last two years, particularly in the category of extant and farmers’ variety, resulting in the delay in issue of certificates.

It is interesting to note that more than 80% of the certificates issued are from extant and farmers’ varieties for the 150 crops open for registration under these categories. Out of 3074 certificates issued, around 1290 are for extant varieties which include varieties notified under section 5 of the Seed Act 1966 and varieties that are commonly known (VCK). More than 80% of the registered extant varieties are owned by public funded institutions such as ICAR, Agricultural Research Institutions and State Universities and the rest are by the private seed industries both national and multinational.

Almost all the VCK (320) are registered by the private industries including Monsanto India Ltd.,(6), Maharashtra Hybrid Seed Co., (19), Rasi Seed Pvt., (11), Nirmal Seed Pvt.,(20), Nuziveedu Seed Ltd.,(86), Safal Seed and Biotech Ltd.,(2), Shakti Vardhak Hybrid Seeds Pvt Ltd.,(8), DCM Shriram Ltd., (8), Asian Agri Genetics Ltd.,(2), Prabhat Agri Biotech Ltd., (7), Kaveri Seed Co (27), Syngenta India Ltd., (11), Vibha Agrotech Ltd., (9), Bayer Biosciences Pvt Ltd., (11) JK Agri Gnetics Ltd., (19) etc.

It is surprising to note that there is not a single farmers’ variety that is registered in the category of extant variety, even though the definition of extant variety include farmers’ variety and there are specific Regulations made in 2009 to determine the standards (DUS) for registration of farmers’ variety which is an extant variety.

It appears that the fourth category of “other varieties in public domain” included in the definition of extant variety is completely excluded from registration by the Authority since there is no Regulations made for this category and there are no applications.

Similarly around 80% of the applications closed/rejected is also for “extant varieties”, out of which the majority is for VCK. There are 28 applications pending registration due to litigation and surprisingly 11 are on VCK filed by private seed industries. As per the provisions of the Act, all the registered varieties are bestowed with the exclusive right to produce, sell, market, distribute, import or export the variety for a maximum period of 15 years. The term of protection for the varieties notified under section 5 of the Seed Act is calculated from the date of notification and for VCK, it is from the date of registration.

Conclusion

This shows that unlike the UPOV model for protection of plant varieties, Indian law is facilitating the enclosure of the otherwise publicly available varieties hitherto freely used by the Indian farming community. What is worrying is that the private seed industries are making serious attempt to get the maximum benefit out of this new enclosure movement which was supposed to be created to the benefit the farming community. It is important to keep a track and find out the nature of the VCK seed industries are trying to convert into private property and the implication for the same for access to seeds that were until now freely available to the farming community. Whether the farming communities are getting the benefit of this new enclosure movement is something that creates more concern.

As of now, around 1380 Farmers’ varieties are registered.  Out of this, a substantial number is registered in the name of individual farmers and only a very limited number in the name of communities. As per section 18(1)(i) of the Act, all the details including technical details that are expected to be given by the breeders in the application for registration is exempted for registration of farmers’ variety. If one examines the content of the new application form notified in 2013 for registration of farmers’ variety, the farmers are directed to give details such as botanical name approved by the International Code for Nomenclature of Cultivated Plants, 2004, family name and denomination. The farmer must also give the date of first sale of his variety, details of the registration if applied in foreign countries etc. In addition there must be a declaration to the effect that the farmer, group of farmers or community is the initial and exclusive developers and conservers of the candidate variety. An endorsement to this effect must also be obtained either by the concerned Panchayat Biodiversity Management Committee, or District Agricultural Officer, or Director of Research of concerned State Agricultural University or District Tribal Development Officer. The certificate must clearly state that candidate variety is bred/developed and continuously conserved and cultivated only by the applicant/s and is due to their efforts. These requirements not only creates hurdles for the farmers, but also exclude the second category of farmers’ varieties i.e., wild relative or land race or a variety about which the farmers possess the common knowledge from the scope of protection. It is evident that the details to be submitted by the farmers is unfriendly and makes it difficult for them to reach the Authority without the help of more proficient experts such as lawyers, scientists etc.

From the above, it is clear that the Authority permits only varieties bred by identifiable farmers, group of farmers or community to be registered and a large number of traditional varieties are excluded from registration. As per the interpretation of the Authority, the registered farmers’ varieties are also entitled to the exclusive rights for a period of 15 years from the date of registration. Since the new enclosure movement is extended to the farmers’ variety also, it is important to keep track of the nature of the registered varieties, the individual farmers’ who own it and find out the long term implications for the protection of farmers’ variety. The way in which the law is put into practice by the Authority gives a clear signal that the new enclosure movement is for both extant and farmers’ varieties and for a limited period.

This being the legal position, the registered extant and farmers’ varieties will move to public domain once the period is over. One wonders whether this is what the farmers and farming communities bargained for when the law was enacted. From a long term perspective, this short term enclosure movement is not going to be beneficial for the farming communities or the Indian agriculture.

It is a fact that there is lack of clarity and overlap in the manner in which the Parliament captured the demands of the farming communities particularly the right to protect their traditional varieties and sharing of benefits they are entitled from the new varieties developed based on traditional varieties. It appears that the uncertainties in the law are conveniently used by the Authority to develop new norms against the legislative mandate to deprive the farmers and farming community what they are entitled to. One need not re-emphasise the need for preserving, evolving and developing traditional varieties and breeding practices of the Indian farming communities to promote sustainable agriculture in India. In this context, there is an urgent need to revisit the norm setting practices and procedures followed by the Authority in registering the extant and farmers’ variety. Simultaneously attempts must be made to introduce necessary changes in the law to bring in more clarity on what is due to the farmers and farming communities for promoting sustainable agriculture in India.

Image from here

On July 4, 2018, the Union Cabinet approved the proposal to accede to the WIPO Copyright Treaty, 1996 (‘WCT’) and the WIPO Performance and Phonograms Treaty, 1996 (‘WPPT’). These treaties are part of a series of international instruments created by the World Intellectual Property Organisation (‘WIPO’) to promote the protection of intellectual property throughout the world. They are commonly referred to as the ‘WIPO Internet Treaties’ due to their emphasis on protection of rights in a digital environment.

While India became a member of WIPO in 1975 and has acceded to a number of treaties administered by WIPO, it has not become a party to either of the Internet Treaties till date. Following the approval of the Union Cabinet, however, India’s accession to these treaties will become official once the Instrument of Accession is deposited with the Director General of WIPO (according to the latest Standard Operating Procedure issued by the Ministry of External Affairs). Once this process is complete, the treaties will become binding upon India.

The first of these treaties – the WCT – is a treaty that falls under the Berne Convention. It specifically sets out a framework for the protection of authors’ rights in the digital environment and also makes the protection of computer programs and databases mandatory. The WPPT, on the other hand, pertains to the rights of performers and producers of phonograms. It protects, specifically in a digital environment, the rights of actors, musicians, singers and producers of soundtracks.

In 2012, the Copyright Act, 1957 (‘the Act’), went through a number of changes to, inter alia, make its provisions compliant with these treaties. These amendments include changes to the definition of “Communication to the public” in order to make it applicable to the digital environment [Section 2(ff)], the introduction of provisions related to Technological Protection Measures [Section 65A] and Rights Management Information [Section 65B], and safe harbour provisions over electronic medium [Section 52 (1) (b) and (c)], among several others. The approval of the Union Cabinet to accede to these treaties comes in furtherance of these amendments and is a step towards fulfilling the objectives laid down in the National IPR Policy, 2016.

While accession to the Internet Treaties will benefit copyright owners in the digital environment, one is not sure as to how it might impact some of the progressive provisions that India introduced via the 2012 amendments. Rights holder lobbyists from the US and EU are likely to allege that the unique Technology Protection Measures (‘TPM’) provisions in the Indian regime are not compliant with the strict standard mandated by these treaties. Others may counter that the treaty provisions are flexible enough to permit the custom-made Indian provision.

By way of background, TPMs are digital management tools used to restrict what users can do with digital materials, and include mechanisms such as encryption and digital watermarking. Section 65A of the Act, which restricts circumvention of TPMs, dilutes the rights of the owner in several ways. For instance, Section 65A does not penalise the actions of a third party that creates or facilitates the circumvention of TPMs, provided that the purpose of the facilitation is not a prohibited act under the Copyright Act, 1957. Section 65A also states that a person may be penalised only if it is proved that there was an intention to infringe upon the rights of the owner.  As is evident, these provisions on TPM are less friendly to the copyright owner than other provisions found in the US and EU.

One has to wait and watch to see the kind of pressure that will come to bear on India in the aftermath of this accession.

What is most worrying though is that this decision to accede to the major Internet Treaties accession appears to have come out of the blue—unlike earlier years, where no major reforms in copyright law were unleashed without public stakeholder consultations, this one appears to have slipped by without much public discussion.

But for now, copyright owners at least have cause to celebrate.

Image from here.

In 2012, Australia was the first country to adopt plain packaging measures for tobacco products. Several countries such as France, Ireland, UK etc. followed suit and other countries such as India have initiated legislative processes for introduction of such measures. Plain packaging laws and measures generally impose requirements of removal of logos, minimal branding and colouring, and warning signs. These laws have attracted a lot of debate in recent times since opponents of these laws (mainly tobacco producers) claim that these laws run afoul of their intellectual property rights and fail to affect smoking prevalence rates and proponents of this law claim the opposite by celebrating such measures and citing studies and examples where these measures have proven to be effective.

The WTO Dispute: A Brief Background

On 28^th June 2018, Australia recently won a long-standing trade dispute, after a WTO panel (the Panel Report can be found here) rejected complaints brought against it by Cuba, Indonesia, Honduras and Dominican Republic (“Complainants”) regarding its plain packaging measures (in which India had also intervened as one of the third parties). The Complainants argued that the following Australian measures (“TPP Measures”) were inconsistent with Australia’s obligations under the TRIPS agreement-

• The Tobacco Plain Packaging Act 2011;
• Tobacco Plain Packaging Regulations 2011; as amended by the Tobacco Plain Packaging Amendment Regulation 2012;
• The Trade Marks Amendment (Tobacco Plain Packaging) Act 2011

Earlier, Thomas had written a brilliant post describing the legal basis of these complaints. This post will focus on the Panel’s findings on the alleged violation of the Trademarks and Geographical Indications (“GI”) rights safeguarded under the TRIPS agreement.

On Trademarks

The Panel rejected the argument that Article 6quinquies of the Paris Convention (1967), as incorporated by reference in Article 2.1 of TRIPS, provides for a minimum standard of protection to trademarks registered in the country of origin. Article 6quinquies states that registered trademarks shall be “accepted for filing and protected as is in other countries of the Union”. The Panel found that 6quinquies only requires registration “as is” in other countries in the Union, but the protection afforded to such registered trademarks would be in accordance to the domestic laws of the registering country. The Panel found that the TPP measures do not abrogate the right to duly register a trademark as required under Article 6quinquies.

Article 15.4 states that nature of the product to which trademark is applied should not “form an obstacle to registration of the trademark”. It was argued that since the TPP measures restrict the ability of trademark holders to use their sign on a particular good (tobacco products), it is inconsistent with Article 15.4. The Panel interpreted Article 15.4 to mean “that signs or combinations of signs that are otherwise eligible for registration as a trademark may not be denied such registration on the basis of the ‘nature of the goods or services’ to which the trademark is to be applied.” Thus, the Panel rejected the argument that link between registration and usage and restricted Article 15.4 to registration only. On applying this interpretation to the TPP measures, the Panel found that the TPP measures are not inconsistent with Article 15.4.

Article 16.1 gives the exclusive right to the trademark owner to prevent third parties from using “identical or similar” trademarks without his consent. The complainants argued that the TPP measures reduces the distinctiveness of tobacco-related trademarks in a manner which would reduce the ability of trademark owners to demonstrate a “likelihood of confusion”; thus, it is inconsistent with Article 16.1. The Panel noted that this was not a positive right of using the trademark, but rather a negative right of excluding others. The Panel further went on to note that the restrictions imposed by the TPP measures were limited to packaging and products and did not extend to advertising, promotion and other uses of trademarks which are also essential for creating distinctiveness and hence they were consistent with Article 16.1. This finding of the Panel, however, needs to be reconsidered. If a Member country bans tobacco trademark uses such as advertisement and promotion too, the question of how such “distinctiveness” is to be created arises and remains unresolved.

Next, Article 16.3 incorporates Article 6bis of the Paris Convention, which states that countries of the Union can refuse or cancel registration or prohibit use of trademark which creates confusion with respect to a well-known trademark. The complainants argued that the TPP measures violated Article 16.3 of TRIPs since, by prohibiting certain uses of tobacco-related trademarks, they reduce knowledge of the trademarks and they prevent trademarks from attaining or maintaining well-known status. The Panel noted that there was no positive right to use a well-known trademark under the Article. It further noted that possibility of reduced knowledge of well-known trademark does not violate Article 16.3 since, outside the express obligations mentioned in the Article, Members are neither required to specifically refrain from measures which may affect well-known trademarks nor are they required to maintain their well-known status.

The Complainants next contended that the TPP measures violate Article 20 since it imposes “special measures” which unjustifiably impinge the use of trademarks “in the course of the trade”. By noting that the burden of proof to show that the measures are unjustifiable lies on the complainants, the Panel proceeded to apply Articles 7 and 8, which state that Member countries must enforce IPR in a “manner conducive to social and economic welfare” and adopt measures necessary to “protect public health” respectively to determine whether such measures were unjustifiable . The Panel found that the measures were consistent with Article 20 since the complainants had failed to show that the TPP measures were an overreach of the latitude available under Article 20. In applying Articles 7 and 8, the Panel concluded that, by reducing use and exposure to tobacco products, the measures contributed to Australia’s objective of improving public health and is in line with “emerging multilateral health policies in the area of tobacco control”.

On Geographical Indications

Under Article 22.2(b), Member countries are obliged to prevent uses of GIs which leads to unfair competition. The complainants argue that the measures are likely to violate Article 22.2 (b) since the restrictions on use of GI and uniform trade dress would compel competitors to use indications which are likely to mislead the public. The Panel rejected this argument by stating that mere absence of GI on tobacco packaging would not amount to misleading consumers about product characteristics.

Article 24.3 states that Members must not diminish protection of GIs available prior to date of entry into force of WTO Agreement. The Complainants contended that the TPP measures violated this Article since they diminished the protection available to GIs prior to 1^st January 1995 by weakening the reputation of tobacco-related GI and consequently, making it difficult to take action against passing off. In response to this, the Panel found that the protection available under the statutory consumer protection laws and common law remedies for misleading representation prior to 1995 was not diminished in any manner under the TPP measures since there had been no legal entitlement to use a GI to maintain the strength of its protection against passing off previously.

Implications of the Ruling: India and Other Countries

In 2012, India first considered the issue of plain packaging for tobacco products when a Bill to amend the Cigarettes and Other Tobacco Products Act (“COTPA”), 2003 was introduced in the Lok Sabha. The Bill, however, did not pass. Later, in 2014, the Allahabad High Court allowed a PIL for implementing plain packaging for cigarettes and tobacco products. In the same year, the government also released the Cigarette and other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014 via a notification which introduced a mandate that 85% of the surface area of tobacco products must be covered by specific health warnings. In 2017, these Rules were challenged before the Karnataka High Court and were declared to be unconstitutional by the Court since it was not found to be based on substantial empirical data. This judgement was however later stayed by a three-member bench of the Supreme Court on January 8, 2018, stating that the warnings were essential to safeguard the health of citizens.

Since India has, in general, exhibited a pro-plain packaging stance over the years, this ruling is likely to accelerate the implementation of similar laws in India. The feasibility and effectiveness of such laws in India, however, has been questioned previously. The ruling will also most probably lead to a domino effect and accelerate implementation of plain packaging laws in other countries like Canada, Thailand etc. where these laws are still pending. In a nutshell, it seems like the tobacco industry’s campaign to claim its brand rights is nearing its end.

These laws may also have a wider impact on general public health legislation and may lead to implementation of stricter laws for producers of unhealthy foods and alcohol. While Honduras has declared that it will appeal the decision of the Panel, Australia has responded that it is ready to contest the appeal in order to protect the health of its citizens.

Image from here.

Last month, I had the opportunity to attend the colloquium for IP teachers from developing countries that is organized jointly by the World Trade Organisation (WTO) and World Intellectual Property Organisation (WIPO). The event brings IP teachers from almost 30 different developing countries to Geneva, Switzerland, at the expense of WIPO-WTO for a rigorous and fun, 10 days event. The colloquium is a rare opportunity to meet IP academics from developing countries and hear about their national experiences in the post TRIPS world. This particular colloquium had participants from South America (Uruguay, Paraguay, Venezuela, Columbia, Brazil), Africa (Kenya, Nigeria, South Africa, Uganda, Zambia), Asia (India, Pakistan, Bangladesh, Sri Lanka, Iran, Malaysia, Indonesia, Kyrgyzstan, Turkey, China, Vietnam), Fiji, Jamaica (!!!) and Eastern Europe (Slovenia, Ukraine, Moldova, Belarus). Needless to say, the wonderful organizing team at the WTO-WIPO puts in an incredible amount of work to make sure the event is a success.  

I presume the colloquium began as a capacity building exercise for developing countries but given the presentations that I sat through at the colloquium, it is safe to say that capacity has been built over the last 15 years. Several of the presentations were fascinating. Where else would you get an opportunity to hear about copyright societies in Moldova or the traditional knowledge legislation in Kyrgyzstan or a really unique copyright law from China or the constitutional challenges to Turkey’s IP legislation or Pakistan’s new Plant Variety Protection legislation or the various IP challenges faced in the African continent. These were just some of the fascinating issues that were discussed at the colloquium.

The second great takeaway from the colloquium is the opportunity to hear from the top brass at WIPO and WTO. While the presentations from the WIPO folks were interesting especially since WIPO sets the IP agenda for the world, I really enjoyed the sessions chaired by the WTO IP team (which is surprisingly small!) because they gave us a lot more analytical insight into how institutions and the law works at the international level.   

From the WTO IP team, we got to hear from Antony Taubman (who heads the WTO IP team), Jayashree Watal (who negotiated TRIPS on behalf of India), Xiaoping Wu, Roger Kampf & Hannu Wager. We even got a briefing from Mr. Wager on the Plain Packaging dispute within a few hours of it being announced!

That said, no review of a conference would be complete without listing its downsides.

The one major issue that I had with the colloquium, is the hijacking of the last day of the event for the purpose of conducting the debut edition of the IP Researchers Europe Seminar (IPRE). The 30 participants from the developing world were basically used as a captive audience (along with some 100 or so students/youngsters attending the WIPO summer school) while European academics (several of them PhD. Students) sat on the stage and made presentations that had almost no relevance to the developing world. I simply fail to understand why the WTO-WIPO had to hijack a day of a developing country event to organize a European conference. If WTO-WIPO really feel that European scholars need support to organise a conference they should organize another event for the Europeans. Making academics (several with more than a decade of teaching experience) from developing countries sit in the audience (with summer school attendees) to be educated by European scholars (several of them PhD students) made for really bad optics. The developing world consists in large measure of countries that were colonized by European powers. As most of you will know colonisation was not just about economic plunder but also about the ‘civilising mission’ of the white man who saw it as his sacred duty to educate the natives, who were usually people of colour. It was about portraying indigenous knowledge systems as inferior to those of the white man. Those attitudes haven’t changed completely. I see shades of that behavior in the patronizing tones adopted by some (not all) developed country scholars towards developing country scholars and their scholarship. So, holding an event where Europeans scholars sit on the stage while the developing country academics sit in the audience for a one-way conversation simply does not make sense.

The WIPO-WTO team responsible for the IP teachers colloquium has built a fantastic brand for this event and has earned both institutions a lot of goodwill amongst the alumni who have attended the event in the past. Both institutions should not dilute the brand by allowing other events to piggyback off this otherwise superb colloquium.

We have had an eventful fortnight at the blog:

Thematic Highlight

For our thematic highlight, we had a guest post from Prof. N.S. Gopalakrishnan. In the first of a series of posts, he writes about the problems in the Indian plant variety regime. In this post, he argues that the ‘enclosure movement’ in extant and farmers’ varieties is resulting in commonly available varieties being monopolised by private players. This has resulted in the plant variety regime working against the farmers since it reduces their access to seeds. He also highlights the procedural hurdles that are faced by ordinary farmers to benefit from the regime. He concludes by noting that the lack of clarity in the legislative mandate has resulted in the Authority developing new norms that have not benefitted the farming community, and urges reform in the law as soon as possible.

Topical Highlights

Prashant brought this fortnight’s topical highlight with his post on the RTI filings he made with respect to drugs that combat multi-drug resistant tuberculosis (MDR TB). He noted a piece in the Hindu that reported that the government would consider compulsorily licensing the MDR TB drugs manufactured by Janssen and Otsuka since did not agree to voluntarily license the same. In furtherance of the same, he filed an RTI application seeking the authentic report of the IMRC and communications between the government and the companies concerning the licensing. The RTI, unfortunately, has not received an affirmative answer.

I reported the recent approval of the Union Cabinet of India to accede to the WIPO Internet Treaties. I noted that the accession to the WIPO Copyright Treaty and the WIPO Performers and Phonograms Treaty would come as a delight to copyright owners in India since it significantly strengthens their rights in the digital sphere. On a slightly more sombre note, I argued that such a move could expose India to lobbyists from the EU and US since the access-friendly TPM provisions in India do not match western standards of stronger protection.

Other Posts

In our first post for this fortnight, we had an interesting piece by Prarthana. In her post, she discusses that Article 13 of the recently approved of the EU Copyright Directive in the Digital Single Market (which has since failed to pass the European Parliament) which imposes liability on internet platforms in cases where copyright infringing material is uploaded by users. She argues that such a stance may result in a loss of faith reposed in copyright law in the digital age. She also discussed the Indian position on this issue, which requires a court order to take down infringing content.

Prarthana also wrote a post on the recent amendment to the recent amendment to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, which reduces the powers of customs officials to withhold import of patented goods. She argues that such a change would do India well since this area has had several issues in the past. She specifically highlights problematic instances in the Delhi High Court and the Samsung case. She then discusses the implications of the amendment, noting that the Ericsson judgment would be rendered obsolete since customs officers will no longer have the authority to determine patent eligibility of imports.

Prashant then wrote a post responding to Anand Grover, in their ongoing debate concerning the waiver of Phase III trials for bedaquiline. He argued that the advocacy that portrays bedaquiline to be a wonder drug is problematic since complete knowledge of its side effects and efficacy has not been garnered. He traces the confidence that people repose in the drug back to sustained advocacy by a Mr Chapal Mehra, who has written pieces for several media houses showcasing bedaquiline as a wonder drug. Prashant notes that such advocacy can be problematic since there is a lack of transparency among patient advocacy groups.

Next, Prof. Basheer wrote about the privacy-related issues with Aadhar. He discusses a PIL filed by him before the Delhi High Court that demands compensation from the government for various breaches of privacy owing to the Aadhar project. He argues that the UIDAI has problematically continuously denied allegations of breaches, without addressing underlying issues with the project. He then notes that the Aadhar Act is notoriously drafted to protect the authority, by highlights various claims grounded in the fundamental right to privacy, common law actions of torts and the Informational Technology Act that may result in such compensation being awarded.

Prashant also wrote on the Specific Reliefs (Amendment) Bill, 2017 which he anticipates will be passed soon by the Rajya Sabha soon. He notes the changes envisaged would affect patent infringement cases against the government or private contractors in certain cases. He argues that once the new law comes in force, patent holders will be unable to seek injunctive relief in cases that involve infrastructure projects in the field of electricity generation and distribution, which would include the railways. He then draws a comparison with a 28 USC 1498, which prohibits injunction in case the US Govt. compulsorily licenses a patent. He concludes by noting that although the changes are with respect to infrastructure projects, it could potentially change the way Indian courts grant injunctive relief due to stripping away of discretion.

Finally, we had a guest post by Sheetal Srikanth, an advocate at the Madras High Court. She delved into the recent judgment delivered by the Madras High Court in Thiagarajan Kumararaja v. M/s Capital Film Works. This decision decided a dispute between a script-writer and producer of a film regarding dubbing rights. According to her, the court’s conclusion of placing the right to dub with the producer was reached without analysing certain important issues. First, she argues that in distinguishing between dubbing and translation of works, the court failed to appreciate that the first step in dubbing is translating the script. Further, the court opined that a script-writer can restrict the dubbing rights of a producer via express agreement. Sheetal argues that this is in contradiction with the court’s conclusion that the right to dub exists with the producer. She concludes by noting that the Supreme Court has rejected an SLP filed on this matter.

Other Developments

Indian

Judgments

Kajal Agarwal v. The Managing Director, M/s. V.V.D. & Sons Pvt. Ltd – Madras High Court [June 25, 2018]

The dispute concerned the ownership over a cinematographic work over which the performer was claiming certain right. The court dismissed the appeal, stating that the producer was the first owner of copyright over the work in which the performer featured for a 60 year period, under Sections 17 and 26 of the Copyright Act, 1957. While the court did acknowledge that the rights of the producer may be overridden by an agreement if Section 17 is attracted, it found that this was not the case in the present dispute.

Wunderbar Films Private Limited vs Pranita Pawar Productions – Madras High Court [June 22, 2018]

The dispute concerned the infringement of copyrights and audio/video rights in the Tamil film VIP. The court granted an ex-parte injunction, restraining the defendant from remaking a Marathi version of the same film, titled ‘MNS’. The court reached this conclusion after finding evidence that proved that MNS had copied the story-line, scenes and songs from VIP.

M/S.N.Ranga Rao & Sons v. M/S.Shree Balaji Associates – Madras High Court [June 13, 2018]

The court upheld the decision of the IPAB, holding that the registration of the trademark CYCLE by the petitioners for agarbathis and other products in Class 3 were invalid because only well-known invented words are entitled to such protection under Section 47 of the Trade and Merchandise Marks Act, 1958, and not generic words and devices like CYCLE

News

P&G wins trademark case against UP-based Unani medicine firm

After two decades, Amul wins legal battle against Anul

HC dismisses actress Kajal Agarwal’s plea against single-judge order on copyright of film

Madras High Court bars Karnataka firm from naming its oil as ‘Gold Premium’

IPAB allows trademark claim of Starwood Hotels

Spurious oil sold in Hindustan Petroleum bottles

International

Apple and Samsung settle seven-year-long patent fight over copying the iPhone

Apple Brings Patent Battle Against Qualcomm to PTAB With Six IPR Petitions on Four Patents

European Parliament Rejects Starting Negotiations On Copyright Reform Proposal

MEPs have voted down the EU’s new Copyright Directive which would have made web giants pay more to use creators’ content

YouTuber in row over copyright infringement of his own song

‘Dancing baby’ YouTube copyright case settled after 11 years

Elon Musk in copyright challenge over a farting unicorn

Copyright Lawsuit Dropped Against Fortnite Creators

Too far fetched? Actually not quite. An Indian patent ruling did produce a big blockbuster. Not a drug, but a movie! Titled “Dying to Survive”, this Chinese film is turning out to be a big hit and making the cash registers ring.

Here are some excerpts from an Indian Express piece. (For those interested, Quartz and the Daily-O also ran interesting pieces on this dark comedy.)

“A Chinese black comedy, a movie lauding the benefits of generic anti-cancer drugs manufactured in India, has gone on to become a huge hit in China, raking in USD 36.14 mn in two days since its release on Thursday.

The film, released on Thursday and making waves in China’s festival circuit, is based on the story of Lu Yong, a textile trader from Wuxi, Jiangsu province. Diagnosed with chronic myeloid leukemia in 2002, Lu had been taking Gleevec, developed by Swiss pharmaceutical giant Novartis for use in the treatment of multiple cancers. The medicine had been costing him around 23,500 yuan (around Rs 2.5 lakh) a month.

In 2004, Lu began to directly procure a version of the same medicine, called Veenat, from India which cost him only 3,000 yuan. He shared this information with 1,000 other patients in support groups and also provided help in sourcing these medicines from India.

But since the drug was unregistered in China, it was deemed counterfeit and Lu was arrested in 2014. After spending four months in prison, Lu was released after Chinese courts found that he had not personally profited from this activity. Many cancer patients had also petitioned for his release.

Lu’s character in the movie has been fictionalised into Cheng Yong, a peddler of ointments. The movie pairs him with a bunch of other eccentric fellow smugglers who help him in his pursuit of Indian drugs to help those afflicted by cancer.

Indian drugs are extremely popular in China with frequent cases being registered of smuggling and selling Indian-made drugs. There is also a massive underground market for Indian medicines in the treatment of diseases such as cancer. About 4.3 million people are diagnosed with cancer annually in China, according to a report on China Central Television.”

As our readers are well aware, “cheaper” and more affordable cancer drugs are possible today owing to India’s progressive patent regime, particularly, section 3(d), a provision meant to eradicate the evil of ever-greening in the pharmaceutical industry. One that may not be as effectively implemented on the ground as we would like it to be; as these hard hitting empirical pieces by a group of outstanding scholars demonstrate (a piece in PLOS by Professors Sampat and Shadlen; and another one by Prof Feroz Ali and team here).

Section 3(d) was invoked most famously in the Novartis patent case involving its anti-cancer medication Glivec (or Gleevec), hailed as a magic silver bullet for patients with Chronic Myeloid Leukemia (CML). Fortunately, the Supreme Court of India ruled that Novartis was not entitled to a patent since its patent  application effectively claimed an obvious variant of an existing molecule that did not differ signficiantly in terms of therapeutic impact. In particular, the court held that only therapeutically more efficacious drugs would gain patent protection under the strict filter of section 3(d).

Had the court dithered and diluted the essence of section 3(d), Novartis might have well walked away with the patent. Costing us an affordable generic alternative. And the Chinese, a blockbuster movie. In short, an Indian Court decision paved the way for a major Chinese blockbuster. QED, as they say!

For those interested, here is a comprehensive piece of mine reflecting on the Novartis Glivec case: one that will go down in history as one of the most seminal patent cases ever. This piece was published earlier this year in the Oxford Commonwealth University Law Journal (OUCLJ) and situates the Novartis case within the broader political history of TRIPS and India’s creative calisthenics around it. Leading to the evolution of an enigmatic (anti) ever-greening provision i.e. section 3(d).

Unfortunately the piece as published is behind a paywall (since Taylor & Francis now publishes the OUCLJ). But for those interested, I have an earlier draft version up on SSRN for free download. Here is the link.

I will do another post elaborating more on this case and its key implications (particularly aspects of the SC ruling that I think may have been missed in the regular debates around this case). For the moment, here is the “introduction”.

Trumping Trips: Indian Patent Proficiency and the Evolution of an Evergreening Enigma

“The Indian Supreme Court decision in Novartis AG v Union of India—that Novartis was not entitled to a patent over its famed anticancer drug Glivec—drew both bouquets and brickbats. While academics and public health activists hailed it for affirming the central role of public health imperatives in patent law, Big Pharma and its supporters decried it as wantonly trampling global innovation incentives.

Central to the Novartis decision was section 3(d) of India’s Patent Act, a highly controversial provision aimed at weeding out the scourge of ‘evergreening’: an egregious industry practice of effectuating trivial tweaks to patented drugs, and then claiming secondary patents on such tweaks to prolong the patent monopoly. Section 3(d) stipulates that in order to merit a patent, a pharmaceutical substance that has been created after tweaking an earlier version must demonstrate significantly enhanced efficacy, over and above the earlier substance. This section was effectively transplanted from a European drug regulatory directive and finds no precise parallel in any other part of the world. The authorship of this provision and the precise mode and manner of its infusion into the text of the Patents Amendment Bill 2005 remains a mystery.

Notwithstanding its curious heritage, I argue that, as a norm that comes closer to a rule than a standard, this is an innovative legal provision that helps developing countries’ patent offices separate the wheat from the evergreened chaff relatively quickly. It also represents a strategically creative deployment of Trade-Related Aspects of Intellectual Property Rights (TRIPS)’s flexibilities. To this extent, India stands out as a sophisticated patent pioneer. However, this sophistication did not emerge overnight, but resulted from a rather long and tortuous history. This paper reflects on this history, dividing it into two major epochs: the ‘tripping’ phase (in which India was still grappling with the nuances of TRIPS, then an unfamiliar international instrument, and came to be tripped up by it), and the ‘gripping’ phase (in which India began interpreting TRIPS in a more sophisticated manner). One might say that this sophistication reached a near crescendo with the emergence of section 3(d).

This paper explores the history of section 3(d), as well as the various interpretative tussles that arose out of the Novartis Glivec case. These tussles, though not completely resolved by the Supreme Court, served to demonstrate the importance of section 3(d) as a rigorous patent filter and to demonstrate India’s ability to strike a different chord from the global patent narrative driven by Western ‘developed’ nations.”

ps: Image from here.

Last week, we had brought to you the first post in an ongoing series of insightful posts by Prof. (Dr.) N.S. Gopalakrishnan on India’s problematic plant varieties’ regime. We are pleased to now bring to you the second post in the series.

Problems with the Indian Plant Varieties Regime (II): Helping Seed Companies at the Cost of the Farmer?

Prof. (Dr.) N.S. Gopalakrishnan

One of the main objectives of the Protection of Plant Varieties and Farmers’ Right Act, 2001 “is to accelerate agricultural development in the country by recognizing plant breeders’ rights to stimulate investment for research and development, both in the public and private sector, for the development of new plant varieties”. It is believed that such protection will “facilitate the growth of the seed industry in the country which will ensure the availability of high quality seeds and planting material to the farmers”. If one examines the trend of registration of new varieties till date, it appears that the law is spearheading towards achieving this target. As on 28^th Feb 2018, of the total of 3074 PVP registrations, 450 were for “new varieties”. It is interesting to note that, apart from the Indian Council of Agricultural Research (ICAR), a government research institution, there are more than 35 private seed industries who are actively involved in registering new varieties.

Out of 450 registrations for new varieties, around 105 were in the name of ICAR, 280 by private industries and the balance by other public research institutions. The industries which registered more than ten new varieties include: Kaveri Seed Company Limited(82); Nuziveedu Seeds Limited(40); Maharashtra  Hybrid Seeds Company Limited(19); Monsanto India Limited(19); Pioneer Overseas corporation-India Branch Office(19); Syngenta India Limited (14); JK Agri Genetics Ltd(10); Devgen NV, Belgium(11); M/S; Vibha Agrotech Limited (10); Hyderabad Nirmal Seeds Private Ltd.(10); Krishidhan Seeds Private Limited (10) and M/S Shakti Vardhak Hybrid Seeds Pvt. Ltd. (10).

It is surprising to note that there is not a single individual who registered a new variety. This shows that even though the Act recognized the rights of farmers under section 39(1)(i) to register a new variety as a breeder, it still remains a myth more than reality.

The most important pre-requisite for the continued development of new plant varieties is the availability of a rich pool of publicly available plant genetic resources and the freedom for modern breeders to access the same without much restriction. It bears noting that the Act “considered necessary to recognise and protect the rights of the farmers in respect of their contribution made at any time in conserving, improving and making available plant genetic resources for the development of new plant varieties”. But the provisions included by the Parliament to protect the publicly available varieties in the form of extant and farmers’ varieties without clarity and overlap seem to have created a serious threat to making available the genetic resources in the public domain for developing new varieties.

The inclusion of farmers’ variety within the definition of extant variety, lack of provisions to distinguish between farmers’ variety which is an extant variety to be registered under extant variety [section 14(b) read with section 15(2)] and other farmers’ variety to be registered as farmers’ variety [section 14(c) read with section 39(1)(ii)] and the lack of specific provisions in the Act regarding the registration of farmers’ variety as a separate category appears to be one set of reasons for the same.

An examination of the way in which the Authority is implementing the provisions in the Act for the registration of the extant and farmers’ varieties demonstrates that the troubled mandate of the Parliament has been conveniently used and blatantly violated to facilitate an effective enclosure by seed industries depriving the farmers their right to register their traditional varieties and enjoy the limited benefits. An evaluation of the Rules, Regulations and notifications issued under the Act to register extant and farmers’ varieties reveal that the Authority adopted a four pronged strategy to silently achieve this. These include: (1) notification of the corps for registration of extant and farmers’ variety; (2) fixing different time limits for the registration of three categories under extant variety and extending it to farmers’ variety; (3) extension of the DUS Regulations created for extant variety to farmers’ variety to be registered under section 14(c) whereby expressly excluding traditional farmers’ variety and (4) use of same set of DSU guidelines for specific crops for all the three varieties – new, extant and farmers to determine the standards for registration. It is interesting to find out how the Authority is quietly implementing this.

Notification of the crops and time limit for registration of extant and farmers’ variety

Section 14 of the Act envisages the registration of three types of varieties:

(a) of such genera and species as specified under subsection (2) of section 29 ; or

(b) which is an extant variety; or

(c) which is a farmers’ variety.

If one examines section 29(2), it is very clear that the notification of genera or species is “for the purposes of registration of varieties other than extant varieties and farmers’ varieties under this Act”. Hence it is evident that Parliament never envisaged any notification for registration of extant or farmers’ variety. Similarly, section 15(2) expressly stated that the extant varieties shall be registered within a specific period of time, if it confirms to the standards of DUS specified under the regulations. This makes it clear that the time limit is applicable only for registration of the four categories that fall under the definition of extant variety and not for farmers’ variety to be registered under section 14(c).  As per section 39(1)(ii), the farmer has a right to register farmers’ variety and there is no time limit prescribed under this section. Hence it is apparent that the notification of the crop or time limit is not applicable for registration of farmers’ variety envisaged under section 14(c) read with section 39(1)(ii).

An analysis of Rule 24 dealing with registration of extant variety under section 15(2) as it stood originally, reveals that the extant variety must be registered within three years from the date of notification under the Act with respect to genera or species eligible for registration that satisfies the DUS as laid down under the regulations. The requirement of notification introduced in the Rule is clearly against the mandate of section 29(2) of the Act which expressly excluded extant and farmers’ variety from notification for registration. This Rule was further amended in 2009 and two different time limits were prescribed for categories that fall under extant variety. Five years from the date of notification for farmers’ variety which is an extant variety and three years for other extant varieties. This goes against the mandate of section 15(2) of the Act which does not make any distinction between different categories covered under the extant variety regarding the time limit. To say the least, this Rule violates the basic principles of delegated legislation and is to be struck down as unconstitutional.

What is more surprising is the further extension of the time period by the 23^rd meeting of the Authority held in 2015 by introducing an amendment to Rule 22(2). The Authority fixed different time period for the three categories of varieties that fall under extant variety. As per the amendment, the time limit for the 92 crop species already notified is “6 years from the date of expiry of original time limit” for the notified variety and VCK and “10 years from the date of expiry of original time limit” for farmers’ variety. Different time limits were also fixed for another 10 crop species (Jasmine, Tuberose, Papaya, China Aster, Peach, Japanese Plum, Strawberry, Chilli, Bell Pepper & Paprika, Finger Millet, Foxtail Millet). The time limit is 6 years for the notified variety and VCK and 10 years for farmers’ variety which is an extant variety from the date of approval of the Authority in the Plant Variety Journal. This means that the time limit fixed by Rule 24 for all the four categories in the definition of extant variety was amended by the Authority based on Rule 22(2). It is pertinent to note that the Authority conveniently excluded the last category of extant variety ie., “any other variety which is in the public domain”. Thus according to the recent publication in the website of the Authority, for crops such as rice, bread wheat, maize, jowar, matar, rajmah, cotton, jute, sugarcane, ginger, turmeric etc., which were notified in 2009 the time period for registration of notified variety and VCK will end on 27/7/2018 and for farmers’ variety on 29/07/2024. As per the publication, the registration of the farmers’ variety must be completed between 2025 and 2030 for the 132 crops notified by the Authority. Thus it is obvious that those farmer’s varieties that are not going to be registered within the time period will be treated to be in the public domain for free raid by the seed industries.

If one examines Rule 22(2), it deals with the power of the Authority to “register extant varieties under clause (a) of subsection (2) of section 8 within such period as may be determined by it with suitable test criteria to conform distinctiveness, uniformity and stability (hereinafter referred to as DUS) of such varieties”. It is clear that this Rule is for section 8(2)(a) which deals with the power of the Authority regarding “the registration of extant varieties subject to such terms and conditions and in the manner as may be prescribed”. Section 8(2) makes it clear that the power is “without prejudice to the generality of the foregoing provisions” in the Act. One is at a loss to notice that there are two similar Rules regarding registration of the extant variety – Rule 22(2) and Rule 24. In the light of section 15(2) and Rule 24 one is equally troubled to appreciate how the Authority can change the mandate in these provisions by exercising the power under Rules 22(2) framed under section 8. The normal rules of legislative interpretation make it clear that Rule 24 is the governing provision and can be changed only through an amendment to this provision by the Government and approved by the Parliament as done in 2009. It is evident that Rule 22(2) is also in violation of the Act, since Rule 24 is specific to fixing time limit and DUS. What the Authority is trying to achieve through the back door is to usurp the power of the Government and Parliament to amend Rule 24 by using the power under Rule 22(2) which is bound to be struck down.

What is more disappointing is the way in which the time limit is extended to farmers’ variety. It is evident from the title of the notification of the crops by the Authority that the notification is for “the extant and farmer’s variety”. The impression one gets is that the notification is meant for registration of extant variety under section 14(b) read with section 15(2) and farmers variety under section 14(c) read with section 39(1)(ii). This is further strengthened if one scans through the three categories included in the list of certificates issued by the Authority – new, extant and farmers’ variety. An examination of the list of certificates issued under extant variety shows that it covers only notified variety and VCK. There is no farmer’ variety included in the category of extant variety. If the Authority registered farmers’ variety which is an extent variety, it would have used “Extant (FV)” to indicate the same similar to what it used to denote “Extant (VCK)”. Hence it is apparent that farmers’ variety has been registered under section 14(c) as a separate variety.

On the contrary, if one examines the notification of the time limit for registration, it is only applicable to the three categories of extant variety. The impression one gets is that the Authority is registering farmers’ variety as a separate category under section 14(c), and the time limit prescribed for registering farmer’s variety which is an extant variety is extended to other farmers’ varieties as well. This is further substantiated from the note appended to the recent publication on the time limit of extant variety which reads: “NB: – With regard to Sl. No. 1 to 82, time limit is three years for Extant Notified Variety end Extant Variety about which there is Common Knowledge from the date of notification of crop species under Section 29(2) of PPV&FR Act, 2001 and five years for farmers varieties from the date of notification of crop species. By virtue of suo motu order dated 11.02.2011 published in PVJ March, 2011, the time limit for registration of extant varieties about which there is common knowledge and farmers’ variety has been extended for a further period of three years and five years respectively from 30th June, 2009. With regard to Sl. No.83 to 132, and with effect from 16.06.2015 by virtue of amended Rule 22(2) of PPV&FR Rules, 2003, the Authority has to fix the time limit for registration of extant varieties. The Authority extended the time limit for registration of ENV and VCK by six years from the date of publication of its approval in PVJ and for farmers’ variety by ten years from the date of publication of its approval in PVJ” (emphasis mine). This is a rather callous way of sabotaging the mandate of the Parliament.

Thus, notification of crops and fixing the time limit for registration is one of the strategies used for helping seed companies at the expense of the farmer. If the crops are not notified, then the farming community is not in a position to file an application. Similarly if the farming community fails to register their varieties within the time limit, then there is no protection under the Act. It is a foregone conclusion that given the social, economic and cultural back ground of the farming communities in India all the existing farmers’ variety envisaged in the definition are not going to be registered within this time limit. Hence the failure of the Authority to notify a crop and failure of the farming community to register their variety that are notified within the time limit will result in making these varieties available free from any encumbrance to be freely used by the seed companies for creating new varieties and essentially derived varieties and claim IP rights. It is evident that the Authority is exploiting the confusion in the Act to create a free pool for seed companies to pillage and pick from. All at the expense of the farmer, whose interests were meant to be paramount under the PVP Act. Hence there is an urgent need to challenge these rules and notifications before the court of law to safe guard the long term interest of the farming communities of India.

Image from here

Outside the Court House at Tehran, Iran.

In a judgment delivered on May 28, 2018 (and which slipped under the radar until Shamnad was alerted to it), a Division Bench of the Delhi High Court has upheld the constitutionality of some provisions of the Copyright Rules, 2013 that were challenged by Anand Bhushan of Pitambar Publishing Co. Ltd. Originally the petitions filed by Mr. Bhushan in 2013 challenged several provisions of the Copyright Act and Copyright Rules. As the matter lay pending, the scope of the constitutional challenge was narrowed to Rules 56(3), 56(4), 56(5), 56(6), 57(5), and Rule 61(5) of the Copyright Rules, 2013. (Several other constitutional challenges to the amendments in 2012 were withdrawn)

While Rule 56 deals with the manner in which copyright societies can frame their Tariff Scheme (laying out the licence fees for different kinds of use), Rule 57 deals with the manner in which the Tariff Scheme can be challenged before the Copyright Board and finally Rule 61(5) deals with the issue of equal voting rights for all members of copyright societies.

The Copyright Rules, 2013 followed the enactment of the Copyright (Amendment) Act, 2012 and were aimed at entirely replacing the Copyright Rules, 1958. Usually delegated legislation like the Copyright Rules, 2013 are meant to be confined to procedural issues that deal with the implementation of the parent legislation enacted by Parliament. The Copyright Rules, 2013 however ventures far beyond procedural issues and into the realm of substantive law making. In an ideal world, constitutional courts would frown at this practice because issues of policy and substantive law should be confined to Parliament which is elected into power by the people. That’s the essence of the landmark In Re. Delhi Laws judgment. Only issues pertaining to procedure should be delegated to the government. However Indian courts are quite permissive of delegation of power making challenges like the present case an uphill battle.

A delegated legislation can be challenged on a number of grounds. The first is to challenge that the rule in question is beyond the scope of the power delegated to the government by the legislature. The second, is to argue that the rule is in itself arbitrary or unreasonable on the grounds that it is in violation of fundamental rights. In the present case, the impugned rules were challenged on the grounds that the rules went beyond the scope of the powers delegated to the government by the government.

The challenges to Rules 56(3), 56(4), 56(5) & 56(6) was on the basis that the rules went beyond the remit of the power delegated to the government under Section 33A of the Act. This provision of the parent legislation requires all copyright societies to “publish a tariff scheme in such manner as may be prescribed”. My reading of the provision is that the government only had power to prescribe rules regarding mode/timeline of publication – for example in newspapers, on the website etc. The Copyright Rules, 2013 however fo much further and lays down an entire policy to regulate tariffs – specifying that the tariff scheme would have to mention different categories of users, different media of exploitation, different durations of use etc. It also specifies how royalties may be collected (for example royalties must be calculated in advance), prohibits minimum guarantees (an issue that was the subject of competition litigation) and prohibits any changes to the tariff scheme for a period of 12 months.

In my opinion, these rules go far beyond the power prescribed by Section 33A because the scheme of the parent legislation is quite clear that the issue of regulating tariff policy is left to the copyright board – an independent judicial body. Seen in this context, the government’s power in Section 33A(1) to prescribe rules governing the mode of publication of the tariff scheme, is limited to procedural issues like mode of publication and timeline.

The Division Bench of the High Court however decided differently. The court concludes, “We are of the opinion that the Rules do not negate the principal enactment and it cannot be said that they are repugnant to or in derogation of the object and purpose, the principal enactment seeks to achieve.” The line of argument taken by the court is not entirely convincing. The court presumes that Section 33A gives the central government the power to make a regulatory policy for copyright society and only conducts an analysis of whether that policy found in the rules impedes the rights of the copyright society to frame its tariff scheme and whether it conflicts with existing statutory provisions. This analysis is however secondary to the nature of power delegated under Section 33A. The court should have first explained the nature of the power delegated under Section 33A. In my understanding, the power to frame rules is confined to the mode of publication and not a substantive tariff policy as presumed by the court. The only regulatory powers are with the Copyright Board as evident from reading Section 33A.

If copyright owners do not get this judgment set aside on appeal it will mean that any future copyright societies will be regulated directly as per the whims and fancies of the bureaucratic babus sitting in the DIPP and the copyright office. I can think of no worse fate for India’s creative industry, than direct regulation by India’s unimaginative and often inefficient babudom (with honourable exceptions, of course).