We’re pleased to inform our readers that P.S. Davar & Co., a boutique IP law firm based in New Delhi, is looking to recruit two Senior Associates for their Patents and Trademarks teams. For further details, please see the job description for each of the two positions below:

About the Firm – P.S. Davar & Co. is a boutique intellectual property law firm. The firm has an increasing client base comprising a wide range of clients. The firm is looking to recruit qualified senior patent attorneys with a background in mechanical/electrical/ chemical/ biotechnology as well as senior trademark attorneys for its South Delhi offices.

The firm prides itself in having associates who work as a team and where the contribution of each member is given equal importance.

A. Senior Associate (Patents)

Position – Senior Associate (Patents)

No. of Positions Available – 1

Responsibilities : Candidates should:

• Have extensive experience and practical knowledge in patent prosecution/ office actions/ hearings/ oppositions/ advisory and litigation; and
• Be open to business development activities and developing the domestic client base of the firm.

Qualifications

• Tech./B. Sc./B.E. in Mechanical/Electrical/ Biotechnology /Chemistry
• Patent Agent qualification/Legal degree is preferred, but is not mandatory
• Only candidates with 7-9 years of experience in the patent field may apply

B. Senior Associate (Trademarks)

Position – Senior Associate (Trademark Enforcement)

No. of Positions Available – 1

Responsibilities – Candidates should:

• Have extensive experience and practical knowledge in Oppositions/ Trademark Prosecution (Civil and Criminal)/ Enforcement of IPR by Custom authorities/ advisory and litigation; and
• Be open to business development activities and developing the domestic client base of the firm.

Qualifications

• Registered Trademark Agent /Legal Degree
• Only candidates with 7-9 years of experience in the field of trademark enforcement may apply

How to Apply?

Applications must be submitted to adavar@psdavar.com and should include a recent CV and expected retainer fee.

NOTE: CANDIDATES WITH SPOUSES WORKING IN COMPETING LAW FIRMS NEED NOT APPLY

On August 13, the Madras High Court ruled in favour of coaching institute, ‘Fermat Education’ holding that there had been infringement of copyright in the 2IIM CAT questions authored by them. The case presents an interesting factual matrix, and before moving on to the more compelling legal issues, it would be helpful to go over the same.

The Facts

Fermat Education (the plaintiff) has been engaged in providing coaching to students for competitive exams, since 2014. Of particular interest to our case, is the  ‘2IIM-CAT’ coaching they provide to graduates in order to train them to take the Common Admission Test (CAT). A part of their course materials – dispensed both in literary and video form – is the CAT question bank, which includes a series of questions along with their solutions to further help students prepare for the CAT examination.

In February, 2018, the plaintiff claims to have discovered that about 200 of the above-mentioned questions had been reproduced as is, both in literary and video form, on the website, ‘Unacademy’. As a quick aside, Unacademy is also an e-learning platform operated by ‘Sorting Hat Technologies Pvt. Ltd.’ (the defendant). It is slightly different from the plaintiff in its functioning – it connects educators and students. As an educator, one may provide/upload materials on unacademy, which are then utilised by the students accessing the website. Both the students and tutors are deemed ‘Users’ of the Unacademy website, and materials uploaded/used by them are referred to as ‘User Content’.

Upon discovery of the unauthorised reproduction, the plaintiffs reached out to the defendant, requiring them to take down the infringing material. Even though the defendant admitted to the infringement, and claimed to have taken action against certain educators as a consequence, it was the case of the plaintiffs that the infringing materials remained on the website without being taken down.

It is pertinent to mention that the unauthorised reproduction of the literary works was not challenged before the Court. There was also enough undisputed evidence to the effect that the said literary works had been authored by the plaintiffs. As a consequence, the deliberations came to rest on the issues underpinning the broader question of whether or not the defendants had infringed upon the plaintiff’s copyright.

Is Unacademy an ‘Intermediary’?

Perhaps one of the most crucial aspects of the case was the examination of the facts from the IT Act perspective. The defendants argued that they were an “intermediary” within meaning of section 2(1)(w) of the IT Act, 2000. As a consequence, they were entitled to the exemption granted to intermediaries under the IT Act, under section 79. Interestingly, the Court disagreed with the defendants and observed that Unacademy cannot be considered as an “intermediary.” This is interesting because it takes us to an important piece of deliberation: Who is an intermediary? What qualifiers are essential to classify a particular internet platform as an intermediary?

A reading of section 2(1)(w) indicates that an “intermediary” is to be “any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service provides, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online market places and cyber cafes” (emphasis mine) Keeping aside the illustrative list of intermediaries on the latter end of the section, we understand that for one to qualify as an “intermediary”, one would have to: (a) receive, store or transmit any electronic record on behalf of another person; or (b) provides any service with respect to an electronic record, on behalf of another person. In essence, whatever be the function of the e-platform with regard to the electronic record in question, it essentially has to be on behalf of someone else.

The Court perused the “Terms & Conditions” of the Unacademy website against this provision. It observed that although Unacademy hosts User Content on behalf of educators, for utilization by other users, it could not be called an “intermediary”. This was because, according to Unacademy’s T&Cs: (a) User Content so published could be created by the use of the software/services provided by Unacademy itself; (b) a User could only publish User Content on the website, after being approved by Unacademy. Such approvals would be based on a ‘demo video’ to be submitted by a User; (c) Unacademy had the power to review, approve, reject, edit or modify any User Content (albeit, not all) so uploaded; (d) there was to be payment of consideration to Users by Unacademy for submitting User Content; (e) exclusivity provisions restricting Users from uploading/publishing any User Content uploaded/published on Unacademy, elsewhere.

The questions that come up at this point are: does the exchange of consideration/ imposition of exclusivity affect the classification of an e-platform as an intermediary? does editorial control (or the lack thereof) determine the qualification of an e-platform as an intermediary? Or do these only come into play while determining the extent of liability (or exemption therefrom) of the said intermediary?

Atleast with respect to editorial control, I wonder if it is the latter understanding. The language of section 2(1)(w) has no mention of any editorial control, or lack thereof, as exercised by an “intermediary”. This is different from Section 79(2), which exempts an intermediary from liability for any third party data, communication link or information made available/hosted by them, provided that the “(a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or (b) the intermediary does not- (i) initiate the transmission, (ii) select the receiver of the transmission, and (iii) select or modify the information contained in the transmission; (c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf.” The IT Rules (Intermediaries Guidelines) on due diligence to be exercised by intermediaries are similar – Rule 3 of the Guidelines obligates the intermediary not to knowingly host, publish, transmit, modify or edit any information that is unlawful. An exemption to this obligation is the “transient, intermediate storing of any information…involving no human editorial control..” What seems to follow from this, is that the existence of editorial control, merely affects the liability or extent of liability of the intermediary, not its classification as an intermediary per se.

Exemption from liability of an intermediary

The Hon’ble Court may have kept this in perspective. Despite holding that the defendant’s T&Cs as adduced above, “take it further away from the definition of an intermediary” – and ideally, if so, the deliberation on intermediary liability should have ended there – it went on to opine that “it would have to be examined whether Section 79 of the Information Technology Act, 2000, would give protection to the first defendant.”

While the defendants relied heavily on the Myspace judgment to claim exemption from liability, the Court correctly held that the facts of the instant case were entirely different from that of Myspace. Unlike in Myspace, and contrary to the exemption laid out under section 79, the defendants of the instant case exercise(d) editorial control over the materials uploaded and pay consideration for the same, to the educators who upload them. It could not be said that the material was uploaded as is. Further, the infringing material were literary works, (as opposed to the musical works in Myspace) which would have been simpler to scour for any infringement, upon being brought to the (actual) knowledge of the defendants and, should then have been duly taken down by them in accordance with the provisions of Act, guidelines and rules, and their own take-down policy. The Myspace Court had also considered the myriad issues flowing from ownership of copyright and authorisation of the works in question by T-Series, which were not applicable to the present case. (see our coverage of the Myspace judgment here) As a result, the Court held that the defendants were not exempted from liability for infringement in the present case.

Fair Use

The Court also briefly delved into a fair use deliberation with regard to the works. The defendants argued that due to an operation of section 52(1)(i) of the Copyright Act, which exempts from infringement liability, any reproduction of copyright material, “by a teacher to a pupil, in the course of instruction; as part of questions to be answered in an examination; or in answers to such questions” The Court held, that in the instant case, the defendants through Unacademy, paid consideration to educators, for the materials uploaded on their website. This essentially makes them a business venture, with an obligation to ensure that there is no infringement of any works. As such, the Court held that section 52(1)(i) will not be applicable to the present case.

Concluding thoughts

The Terms & Conditions of Unacademy as they exist at present and accessible here, are different from those extracted before the Court. As it stands, Unacademy still pays consideration to certain “eligible” content uploaded on the website/submitted to Unacademy for being uploaded by Users. Registrants of courses on unacademy will also essentially be making some amount of payments to Unacademy in order to make use of their e-platform. The remaining details about services carried out by Unacademy in relation to User Content and their extent (at present) such as editing, modifications, approvals, etc remain unclear, due to their current absence from the T&Cs. As such, the questions of the qualification of Unacademy or e-platforms like it, as “intermediaries” and the scope of their liability for infringement remain open.

I chanced upon a report published by the Centre for Internet & Society, accessible here, which makes a case for the classification under Indian law, of different types of intermediaries, and imposition of a separate set of liabilities for each such class. I recommend it as suggested reading, against the backdrop of the present case. In the meanwhile, as always, I invite readers’ thoughts and comments.

We are pleased to bring you a guest post by our Fellowship applicant Arth Nagpal. Arth is a 3rd year student at NLS, Bangalore. This is his first submission for the Fellowship.

Developments in ISP Liability on Copyright Infringement

Arth Nagpal

This piece intends to draw a comparison between Internet Service Provider (ISP) liability on parties for copyright infringement in the United States and India. The former has in place a system of ISP liability through the mechanism of graduated responses, as has been restated in the recent judgment of BMG v. Cox Communications. However, in India, John Doe ord­ers are issued against websites, resulting in frequent victimization of innocent websites hosting content. ISP liability in its true sense does not exist in India. The liabilities for copyright infringement are laid down in such a manner that the true infringers might be in a position to escape liability. Since ISPs are users’ gateways to the World Wide Web, it is only logical to break the chain at the initial level. This necessitates a change in Indian copyright law to limit ISP immunity under Section 52(1)(b) of the Indian Copyright Act, 1957 (Act) for a more efficacious curtailment of copyright infringement. Hence, this post tries to analyze the standard of responsibility and the mechanism of apprehending copyright infringers followed in the United States, and also attempts to examine the provisions of the Act and the Information Technology Act, 2000 to gain a clearer understanding of the law in place and the need for transformation therein.

Legal Developments in US

Recently, a US-based ISP, Grande Communications, was sued by the Recording Industry Association of America for various copyright infringements perpetrated by its customer base, constituted by more than 160,000 customers. It has been reported that Grande is merely one of the many service providers that are guilty of providing internet services to customers who choose to illegally download data which ranges from music, video files, books and so on. Although U.S. Magistrate Judge Andrew Austin acknowledged the fact that the “availability of copyrighted music lures customers”, as well as Grande’s actions to alert its customers regarding infringing copyrights, he denied the motion to dismiss the contributory infringement claim against Grande.

This suit takes its cue after the recent appeal decided by a United States Circuit Court in the case of BMG v. Cox Communications, wherein the respondent, an ISP, appealed the lower court’s judgment on being found guilty of contributory infringement  for not taking sufficient measures to curb copyright infringement by its customer base. In fact, the appellant, a management company that owns copyrights in musical compositions, contended that the service provider sheltered repeat infringers by reactivating their accounts after terminating them, to give an appearance of compliance. The judgment delivered on February 1, 2018 diluted the standard for contributory infringement of copyright. Rather than a negligence or ‘should have known’ standard, a ‘willful blindness’ standard has been prescribed, or rather, reinforced. Willful blindness is defined as a situation in which it is evident from the facts that the accused has deliberately shut his eyes to the obvious. In effect, the person will be considered to have actual knowledge of those facts. This differs from actual knowledge which encompasses a belief that a certain fact exists, wherein it can be conclusively assumed that a person ‘must have known’ a particular thing. In copyright law, however, willful blindness is equated with actual knowledge, and is instrumental in imputing knowledge to the accused party. In case the service provider believes or has reason to believe that its customers are infringing on copyrights, it must take suitable measures to stop such illegal activity. If it fails to do so, it is guilty of contributory infringement, and cannot take shelter under the guise of unawareness.

Legal Consequences of Copyright Infringement

In the present BitTorrent era, copyright infringements aren’t surprising. In fact, they’re quite common in most spheres of cyber awareness. There have been judgments in the past, the most significant one having been decided in 2017 in a Finnish Court, wherein the founders of Pirate Bay were held guilty of copyright infringement and fined $477,000. Another instance of a similar judicial action was seen in the Australian Federal Court in 2017, effectively banning 42 torrent sites. In India, the last update on piracy-related crackdowns was probably in last September of the arrest of the administrator of a Tamil torrent site. However, these relate to site-owners being penalized and not the ISPs that facilitate piracy of copyrighted material by consumers. ISPs are the entities that provide internet access to users, and it would be amiss to permit them to evade accountability for something occurring on their radar.

The Madras High Court, under a suit for copyright infringement filed by Prakash Jha Films, directed several ISPs to disable user access to websites that allowed users to view copyrighted material, particularly two movies that had released recently. The Order of the Court has been adequately covered here. What’s peculiar here is that the target of this Order was websites and not the ISPs facilitating the infringement. The concern is still whether there exists any concrete legal basis for ISPs to be held liable for infringements made by constituents of their customer bases. This Order of the Madras High Court came across as excessive due to its blanket ban on entire websites and not merely the URLs that had been identified as hosting copyrighted data. The lack of an appropriate standard indicates the need for looking towards contemporary practices of other nations. Moreover, a perusal of the provisions of the Indian Copyright Act, 1957 must be made. Also critical in the jurisprudence on liability of intermediaries is the recent MySpace judgment delivered by the Delhi High Court in 2016.

ISP Safeguards versus John Doe Orders

The standard applied in BMG v. Cox is that of ‘willful blindness’ towards infringements happening under the ISP’s nose. This essentially translates to contributory infringement, since the ISP does not take action against its users. This ensures a system in which an ISP is compelled to establish a system to tackle repeated infringements by users without requiring the Court to impose a restriction on numerous websites (unlike the Indian scenario where websites are disabled even upon mere speculation of presence of copyrighted material). In countries such as the United States, this is known as a graduated response system, or three-strikes. A governmental agency, as in the United Kingdom, or otherwise, as in the United States, prescribes a code for ISPs to follow in order to limit infringements. In India on the other hand, exists a common practice with respect to protecting copyrights called the John Doe Order, which essentially safeguards copyrighted material against an anonymous infringer. This approach is centered on data-specific prohibition, rather than a broader, more pervasive measure against copyright infringement in general.

The problem with John Doe Orders, or Ashok Kumar Orders as they are known in India, is a greater probability of innocent websites getting caught in the mire, due to the uncertainty of infringing parties. This has been properly elaborated upon by Kian Ganz in his article on LiveMint. This is at variance with the practice in the United States of establishing a mechanism to hold the ISP and its customer base liable, rather than innocent websites. A study undertaken by Copenhagen Economics on Indian Online Intermediaries perfectly portrays the problem with the present liability regime targeting intermediaries, in the sense of content-hosting websites. Intermediaries do not have direct control per se over the information being exchanged or hosted via their platforms. Hence, John Doe Orders, especially in light of the more stringent prohibition they impose now, are greatly unjust to such websites that are unaware of the material that they are facilitating the exchange of.

The Indian Copyright Act, 1957

The Indian Copyright Act provides penal punishments for infringement of copyright under Chapter XIII. Sections 63 and 63A correspond to infringement of copyrights by first-time offenders and repeat offenders respectively. However, these relate to infringements made by individuals and not the liability of the ISP itself. As per Section 52(1)(b), ISPs are exempt from liability since they are merely intermediaries “storing work in the technical process of electronic transmission or communication to the public.” Intermediaries, covered under Section 52(1)(c), are provided similar immunity, except in situations wherein they are “aware or have reasonable grounds for believing that such storage is of an infringing copy”. The application of this is grave, since the awareness of an intermediary with respect to infringing material cannot be conclusively proved. It is considerably difficult to be informed about copyrights and whether one is infringing them or not. The idea of blocking websites to curb infringement has been equated to ‘whacking moles’ in Australia, in the sense that it would be inconsequential due to the rapid movement of website owners in reproducing the same data elsewhere. The MySpace judgment is significant in this respect, since it prevents unaware websites from being penalized by enforcing the ‘actual knowledge’ test. However, what the judgment does not cover is the distinction between an ISP and an intermediary, and adopting the same level of culpability to each of these entities would result in fewer copyright infringers being penalized, especially the ISPs.

ISP Liability: Need of the Hour

With the advent of streaming services in India such as Netflix and Amazon Prime, copyrights that need to be procured have increased, implying a greater scope for infringements. Hence, piracy should be taken seriously. A ‘willful blindness’ test for holding ISPs responsible for contributory infringement of copyright should be introduced to inculcate legal and scrupulous practices in the ISPs and the users. Upon confirmation (from copyright holders or knowledge gained by the ISP upon monitoring unusual activity of a user) of infringements made by a customer, action must be taken by the ISP itself, by disabling access for a certain number of days, rather than deactivating websites without any notice whatsoever.

As of now, there does not exist any scope for ISP liability, thanks to Section 52(1)(b). In fact, Section 79 of the IT Act, 2000 strengthens this immunity and even blurs the distinction between an ISP and an intermediary such as Google, Yahoo! etc., in the absence of clarificatory case law. The safe harbor provision does not distinguish between types of intermediaries, which ought to change considering the degree of piracy operations conducted through ISPs. A willful blindness standard would enable the accountability of ISPs for their inaction towards infringing customers. Instead of holding websites accountable for their potential storage of copyrighted data, the ISPs and in turn the consumers must be brought to book.

A reform of the Copyright Act is required to address copyright infringement at the basic level of commission, and modify the provisions that hold websites vicariously liable on the basis of mere apprehension of storage of copyrighted material. The European Union is already persistent in its attempts to overhaul its copyright law to ensure stricter implementation of copyrights. India should undergo a similar redefinition to ensure holding the actual perpetrators of the crime responsible and realigning the penal consequences that need be effected.

Image from here

In their latest efforts to stop the University of California, Los Angeles (UCLA) from pursuing a patent for Xtandi, the Universities Allied for Essential Medicines (UAEM) is sending an e-mail petition to Janet Napolitano, the President of University of California. This attempt comes after UAEM made a representation before the Regents of the University of California for a third time, demanding that Xtandi be made more accessible in India.

Xtandi has an eventful if not long history of controversies in India. The right to commercially exploit the drug in India has been licensed by UCLA to global pharma giants Pfizer, who market and sell the drug through their sister companies Medivation and Astellas Pharma. The controversies began when Astellas Pharma began selling the drug at a reported INR 3.35 lakh per month, restricting access to the drug significantly.

In 2007, Pfizer had filed a patent application for Xtandi, which was rejected by the Patent Office in 2016, because it lacked an inventive step and fell foul of Sections 3(d) and 3(e) of the Patents Act, 1970. Subsequently, UCLA had filed a writ petition before the Delhi High Court, praying for a re-examination of their patent by the Patent Office. They assert that not granting a patent to Pfizer goes against the academic and educational objectives of the University. In the past, several organisations have requested UCLA to withdraw its petition before the Delhi High Court. Several commentators have also questioned the motives of UCLA, with some alleging that they are a stooge doing the bidding of Pfizer in India.

Now, sources close to the matter have apparently said that the court may issue a judgment. This has initiated the last-ditch attempt to convince the President of the University of California to withdraw their petition from the Delhi HC.  The most recent hearing was on August 16, 2018, before Justice Vibhu Bhakhru, following which the court has not issued an order in the matter.

While the road ahead could be long, with potentially multiple rounds of litigation still possible, one would hope that the Delhi HC would reach a decision that takes into account the ground realities of several patients that have to embrace death because they cannot pay the bills.

Thematic Highlight

This week’s thematic highlight was brought forth by our fellowship applicant, Arth Nagpal. In his submission, he compares ISP liability on parties for copyright infringement in USA and India. He examines the problem of John Doe orders in India and highlights the necessity of reforming the Indian Copyright Act for introducing ISP liability in India.

Topical Highlight

Sreyoshi wrote a post on a Madras High Court judgment which analysed the issue of whether there had been infringement of copyright in Fermat Education’s 2IIM CAT questions by  Unacademy, which had reproduced these questions on their website. The Court examined the “Terms and Conditions” of the Unacademy website and concluded that it could not be considered as an “intermediary” under the IT Act and was, hence, not entitled to the exemption from liability granted to intermediaries under the Act. In her analysis of the judgment, Sreyoshi questions the interpretation of “intermediary” by the Court.

Other Posts

Prof. N. S. Gopalakrishnan continues to provide us insightful posts on the numerous faults in the Indian Plant Varieties Regime. His latest post forms the continuation of his previous post on registration of farmers’ varieties.  He mainly focusses on Annexure 1 for endorsement which is attached with application for registration of farmers’ variety and, though its requirements, effectuates discrimination against farmers.

Rishabh wrote about the efforts of Universities Allied for Essential Medicines (UAEM) to stop the University of California, Los Angeles (ULCA) from pursuing a patent for Xtandi, an anti-cancer drug. UAEM had reportedly sent an e-mail to the President of ULCA regarding this matter.

SpicyIP Jobs

Pankhuri announced that there is a job opening for two senior associates in the Patents and Trademarks teams of P.S. Davar and Co., a boutique IP law firm based in Delhi.

Other Developments

Indian

Judgments

Goal Educational Services Private Limited v. Goal Institute – Delhi District Court [August 18, 2018]

The Court granted an ex parte permanent injunction restraining the Defendant from infringing and passing off the Plaintiff’s registered mark “GOAL” and its trade name “GOAL PRACTICE CENTRE” by using a deceptively similar mark “GOAL COACHING CENTRE” in respect of education for providing coaching for medical/engineering entrance examinations, computer training and other allied and cognate services. In arriving at this decision, the Court stated that the Defendant’s mark was identical in all respects and served recipients of the same services as that of the Plaintiff. The Court also observed that if the Defendant was allowed to use such a mark, it would cause wrongful loss to the Plaintiff Company and harm to the public. Moreover, the Court awarded punitive and compensatory damages of Rupees 2 lakhs in favour of the Plaintiff.

M/s. Chetandas Rajkumar Batra v. M/s. Gulshan Enterprises – Rajasthan High Court [August 16, 2018]

The dispute concerned the trial court’s grant of injunction in favour of the Respondent in respect of its mark “1482 SURYA BHOG”, wherein the Appellant claimed that the trial court had erred in granting the injunction for the unregistered label mark “1482 SURYA BHOG” and passing off as they were not mentioned in the pleadings.  The Court dismissed this stay application stating that the trial court had comprehensively compared the marks of both parties and found substance in the allegations of the Respondent along with the balance of convenience and irreparable injury for grant of injunction.

News

• India: JCB Loses Patent Due To Non-Compliance Of Section 8
• Lensman in eye of storm over photo
• Live Streaming of court proceedings can be introduced as pilot project: Govt to SC
• Magic rice set for US debut

International

• Proctor & Gamble applies to trademark acronyms ‘LOL’ and ‘WTF’
• Texas ISP slams music biz for trying to turn it into a ‘copyright cop’
• BMG Wins a ‘Substantial Settlement’ Against Cox Communications over Copyright Infringement Claims
• Bank of America Wants to Patent a Cryptocurrency Storage System

We’re pleased to bring to you a guest post by Subhajeet Roy. Subhajeet is a recent graduate of Tamil Nadu National Law School, Tiruchirappalli.

Deconstructing the FRAND Regime vis-à-vis Recourse to Injunctive Relief

Subhajeet Roy

Background

Before one gets into the question of availability of injunctive relief in disputes related to Standard Essential Patents (SEPs), a quick recap of some important terms would be helpful. SEPs are those patents that must be used in order to comply with a said standard, for the purpose of achieving interoperability between devices, such that, compliance becomes impossible without the use of the patents. A SEP therefore, owing to its “essentiality” must compulsorily be licensed on FRAND (Fair, Reasonable and Non Discriminatory) terms, based on the undertaking a SEP holder gives to the Standard Setting Organization (SSO). FRAND encumbered patents have always been the subject matter of a lot of legal battles, arising due to the ambiguities surrounding the current FRAND regime. One of them is the question as to whether or not a holder of a SEP should be allowed to take recourse to injunctive relief. After all, isn’t the very nature of a SEP such that without its use, competitors would be driven out of the market? If so, doesn’t seeking an injunction violate anti-trust laws? This article seeks to provide a layout of the prevailing jurisprudence with respect to SEPs and recourse to injunctive relief.

Should Recourse to Injunctive Relief be Banned?

Traditionally, in most jurisdictions in the world, a patent holder has the right to take recourse to injunctive relief, in cases of patent infringement. He can also claim monetary damages. This right to exclude is also granted under Section 48 of the Patents Act, 1970.

The following are the two main arguments as to why there should be a ban on the ability of a SEP holder to seek injunctive relief :

a) Seeking injunctive relief is a violation of the FRAND commitment : One of the strongest arguments made by those who are against injunctive relief in SEPs is that the SEP holder, by virtue of the FRAND commitment he has made to the SSO, is precluded from taking recourse to injunctive relief, for the simple reason that doing so would be going against the undertaking which he has given to license the SEP on FRAND terms. All that a SEP holder would want is a royalty rate that is not prejudicial to either of the parties. Owing to the essentiality of a SEP, an injunction does not help either party. Seeking an injunction unfairly prejudices the implementers (who are usually not unwilling licensees) to secure such a license, because of which they will not survive in the market, and consequently, be put out of business.

b) Taking recourse to injunctive relief constitutes an abuse of dominant position and violates anti trust laws : The second line of reasoning is as follows: Due to the fact that it is impossible to conform to the said standard without the use of the SEP, it puts the SEP holder in a superior bargaining position, so as to impose unfair royalty rates. The mere threat of injunction is enough to compel parties to agree to such rates, and therefore this in itself constitutes an abuse of dominant position, thereby violating anti-trust laws. Thus, if it is made categorically clear that no remedy of injunction lies in cases of SEPs, then there can be a level playing field, and negotiation between parties can proceed in a manner that’s not prejudicial to either of them, especially the licensees.

Advocate General Melchior Wathelet opined on how the CJEU should address the questions, observing that a proprietor of SEP, having made a FRAND commitment, to license the patent to third parties on fair, reasonable and non discriminatory terms, will have abused his dominant position where he takes recourse to injunctive relief, even though the implementer has shown itself to be ready, willing and able to enter into a licensing agreement. The cases of Huawei vs ZTE and Orange Book Standard  also lay down guidelines as to when seeking an injunction can constitute an abuse of dominant position. For example:

– prior to commencing the action, the patentee must alert the infringer of the infringement complained about by designating that SEP and specifying the way in which it has been infringed;

– the defendant has made an “unconditional offer” to conclude a license agreement “that the patent holder cannot reject”; and

– the defendant behaves as if it is an actual licensee—in particular, by paying for the use of the licensed technology.

The Other Side to the Story

Those who argue that there should not be a ban on the remedy of injunctive relief, hold that limiting the availability of injunctions against infringers of SEPs will encourage infringers to behave opportunistically during the licensing negotiation in an attempt to secure lower royalties. An infringer may refuse to pay a FRAND royalty or may even refuse to engage in good-faith negotiations over FRAND terms if it does not face the risk of its infringing products being subject to an injunction. If the penalty for infringement were limited to the payment of court-determined FRAND royalties, it would be in the infringer’s best interest to consistently infringe and litigate ex-post. Barring injunctions outright could incentivize some implementers of an industry standard to forgo negotiating a license if its worst case outcome is to pay the same amount, after litigation, which it would have anyway had to pay earlier for a license. Infringe first, pay later would become the norm.

It is often argued that a SEP holder, by the mere virtue of being the owner of such a patent, assumes a superior bargaining position. However, the reverse is also true. If it is barred from seeking a defensive injunction, the SEP holder possesses negligible bargaining leverage. This becomes especially true in the case of unwilling licensees. Sometimes, the threat of injunction is the only way to bring such licensees to the negotiating table. Therefore, recourse to injunctive relief by the SEP holder, inter alia, is not violative of anti-trust laws.

Position in Other Jurisdictions

The Supreme Court of the United States, in the eBay case, held that the issuance of an injunction is not automatic upon the finding of patent infringement. To obtain an injunction against a patent infringer in the United States, a SEP holder must prove that:(1) it has suffered an irreparable injury; (2) the remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and the defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

At this point, a distinction should be made between the ability to seek an injunction and the actual grant of such injunction. The commentators who are against the recourse to injunctive relief by a SEP holder are actually against them seeking injunctive relief at all. It appears that in the eBay case, the Supreme Court isn’t barring the seeking of injunctive relief. It is observing that a plaintiff has the right to seek, inter alia, an injunction, but whether or not such an injunction is granted is subject to the four pronged test laid down by the court. Most national laws allow for grant of an injunction in SEP infringement cases; the degree of discretion conferred on these authorities varies. For example, in Germany, once the infringement is proved, there is no discretion on the court to not grant an injunction.

The Beijing IP Court gave a landmark decision in the case of Iwncomm v. Sony (which was subsequently upheld by the Beijing High Court) in which it granted the first ever injunction in a FRAND encumbered SEP. The court stated that an injunction would be granted in order to prevent reverse patent hold up, and where the infringer was acting in bad faith. Thus, it seems that as far as China is concerned, there is no longer an outright ban on seeking an injunction. The courts primarily follow a fault based approach, and in doing so, if it comes to the conclusion that the implementers were at fault, an injunction could be allowed.

As for India too, the courts have not shied away from issuing ex parte injunctions in SEP infringement cases (Injunctions against Xiomi, LAVA and Intex). Such exclusion orders can be allowed if for example, the implementers are unwilling licensees and refuse to accept a FRAND royalty rate, demands royalty rates that are outside the scope of the FRAND commitment etc. As far as India is concerned, there is also no ban on seeking injunctions with regard to SEP infringement.

Conclusion

One gets the impression that injunctive relief in SEPs is quite limited and narrow in its applicability, and that SEP holders should be quite cautious before seeking an injunction, so as to not violate any anti trust laws. Courts generally tend to adopt a pro-licensee tendency in cases involving SEPs. The key takeaway from this debate is that it is crucial to encourage the parties to engage in good-faith negotiations and induce them to reach a consensus. More often than not, in the absence of a universally acclaimed method of determining FRAND royalty rates, courts go into the negotiating history of the parties. This often turns out to be the single most important factor in grant of an injunction in FRAND encumbered patents.

Image from here

It has now been over 6 years since the revolutionary Copyright (Amendment) Act, 2012 was passed by Parliament. As most of our readers may remember, the background to that amendment was corruption in Indian copyright societies and allegations of patently unfair contracts being thrust onto Indian composers and lyricists. The amendments were aimed at changing the regulatory framework for Indian copyright societies and inserting statutory safeguards to protect songwriters and composers. We’ve covered the background of those amendments extensively on this blog. For a consolidated reading of the events, do refer to the special edition of the NUJS Law Review edited by Shamnad or at Chapter 7 of my book with Sumathi.

A key component of the new law were provisions aimed at reforming existing copyright societies. When a hotel owner plays a sound recording, as per conventional copyright wisdom, the hotel owner will have to procure a license from the copyright owner in the sound recording and another set of licenses from the songwriter and music composer. The license for the sound recording used to be procured from PPL, while the license for the music and lyrics is procured from IPRS. Thanks to the Aditya Pandey judgment of the Supreme Court, there is now an argument being made that the licence from IPRS is not required if PPL grants a licence. The Supreme Court’s decision is highly questionable and threatened to reduce IPRS to collecting royalties from only live performances of music where sound recordings were not involved.

Post 2012, the issue for users became more complicated since singers claimed that even they should be remunerated. There is a Delhi High Court decision that supports this position but it is a very weak precedent. Post 2012, the Indian Singers Rights Association (ISRA) was formed as a copyright society to assert the rights of singers demanding that a third license be procured from it (apart from IPRS and PPL).

IPRS and PPL both ran into rough weather when it came to their re-registration as copyright societies. The central government announced an inquiry into the functioning of the Indian Performing Rights Society (IPRS). The government appointed a Commission of Inquiry headed by a retired bureaucrat Dr. Y. P. C. Dangey. Although this commission was appointed in 2015 and it submitted its report to the government, the report is yet to be made public. I filed an application under the Right to Information Act, 2005 with the government but was denied a copy of the report.

While IPRS was eventually re-registered by the Copyright Office, PPL’s registration is still pending. To add to the confusion, a fourth company called Novex Communications Pvt. Ltd. started collecting public performance royalties, as a de-facto copyright society, on behalf of a select bunch of music labels such as Yash Raj Films, Tips etc. Under the law, PPL and Novex cannot be in the business of issuing licenses unless they register themselves as copyright societies. They however continue to collect licenses under the guise of different legal fictions – while Novex claims it is an agent, PPL claims that it owns the rights in all the music.

The earning of the different licensing bodies post 2012

Over the last couple of days, I had a look at the financial statements of most of the above licensing companies and the figures aren’t very impressive.

The annual reports for IPRS and ISRA for 2016-17 are available on the websites of the companies. For 2016-17, IPRS earned a licensing fee of Rs. 33.06 crores across broadcasting, public performance (bars & events), affiliated societies, webcasting and overseas royalties. In the world of Indian music, a sum of Rs. 33 crores, is peanuts. Back in FY 2008-09, IPRS was earning a sum of Rs. 26 crores and this was a recession year. An increase of just Rs. 7 crores over a decade is insignificant.

The other registered copyright society, ISRA is doing even worse. According to its annual report, its income for FY 2016-17 is at a grand total of Rs. 88.21 lakhs of which Rs. 62.20 lakhs are from licensing rights. Its annual report reads the most optimistic of any legal report that I have read so far.

Novex Communications isn’t doing that well either. For FY 2016-17, Novex reported a total revenue of Rs. 9.05 crores and a loss of Rs. 1.2 crores. Since the company’s annual report is quite vague and because the company has other businesses it is not clear whether the entire sum of Rs. 9.05 crores is from public performance licensing.

Now let’s get to the big dog in the room – PPL. In FY 2016-17, PPL earned a whopping sum of Rs. 140 crores, which is actually down from its previous year’s earnings of Rs. 177 crores. While these figures are impressive when compared with IPRS, it is not impressive when contrasted to PPL’s earnings from almost a decade ago. In 2009-10, PPL’s revenues were at Rs. 203 crores. So, in other words, PPL is earning less today than what it was back in the day. One possible reason could be that the various music labels at PPL have chosen to withdraw their works from PPL and license them individually – there is no other logical explanation for the shrinkage of PPL’s revenues especially when the digital space is simply exploding with new deals and demand for music.

I guess the question on everyone’s mind is why exactly are PPL’s revenues so much higher than IPRS’? When a sound recording is played, it follows that the music and lyrics are also being played and if I’m not mistaken, in most countries the royalties for music and lyrics are substantially higher than sound recording and that is because the skill required to compose music and lyrics is far greater than creating a sound recording. In India, from what I understand PPL always charged higher royalties than IPRS.

One possible answer for PPL logging much higher royalties is that the Aditya Pandey decision can be interpreted to require licenses from only PPL and not IPRS. The other possible reason is that PPL is more aggressive than IPRS when it comes to royalty collection.

Legal expenses

The last issue that jumps from the pages of these annual reports is the money being spent on legal expenses by IPRS, ISRA and PPL.

ISRA with hardly any litigation has spent Rs. 46.12 lakhs as legal and professional expenses. That is almost half of its revenues.

IPRS also has shown mind-boggling legal expenses. In 2016-17, IPRS spent Rs. 6.74 crores on legal expenses – this is higher than the Rs. 5.79 crores it spent in 2015-16. Together that is Rs. 12.53 crores on lawyers in two years. In contrast its royalty distribution to its members for the same period of two years has been Rs. 21.4 crores.

PPL on the other hand, which has initiated dozens of lawsuits across the country has spent a sum of Rs. 6.52 crores + Rs 3.45 crores (Rs. 9.97 crores) for the same period, on its lawyers but the royalty distribution to its members for the same time period is at Rs. 247 crores.

I leave it to our readers to judge whether the copyright amendments in 2012 have contributed to the present state of affairs at IPRS and PPL. The larger question to dwell on is whether copyright societies are even relevant in the future and whether Indian law should continue to regulate existing societies in the manner prescribed under the present law.

We’re glad to inform our readers that the Centre for IPR Studies and Moot Court Society, School of Law, Galgotias University is inviting institutions to participate in the First Galgotias University National Moot Court Competition (GUNMCC), which they will be jointly organizing from 28-29 September 2018 at Galgotias University, Greater Noida, Uttar Pradesh. The moot problem (which can be accessed here) is based upon the important debate regarding access to creations versus their legal protection. For further details of the competition, please see below:

Key Dates

Key Information

1. Only 24 teams shall be allowed to participate on first come first serve basis.
2. Registration fee: ₹4,000 per team (including food and lodging)
3. All communications to be directed at:

E-Mail: mootcourtsociety@galgotiasuniversity.edu.in

Phone: Mr. Mohammad Umar, Assistant Professor, SoL (8742962096);

Mr Nizam Khan, Assistant Professor, SoL (09953747624)

To check the environmental and economic costs involved in our traditional moots, the SoL-GU has decided to keep the competition completely paperless. Hence, no hard copies of the memorials are required.

The rules of the competition can be viewed here and further details, here.

‘Access to medicine’ activists at MSF are kicking off yet another campaign to increase access to Janssen’s new drug bedaquiline. Based on a new study and a new set of guidance from the WHO, the activists want the government to give all multi-drug resistant TB patients in India access to bedaquiline. A recent piece published on India Spend, with “support from MSF”, interviews the lead author of a recent study in the Lancet Respiratory Medicine to make the case for the government of India to ramp up bedaquiline for all Indian patients.

Like most of the advocacy around bedaquiline, the reporter who conducted this interview Swagata Yadavar takes the familiar, incorrect line of questioning by asking Dr. Francesca Conradie, the author of the study, whether the drug should be made available in light of the Indian government’s concern that drug resistance would increase by making bedaquiline available to more patients. However, as I have explained, repeatedly, on SpicyIP, the government is on oath before the High Court of Delhi stating that there are safety related concerns with bedaquiline since it has demonstrated cardio-toxicity. Yadavar is aware of the affidavit and our writing about bedaquiline because she links to SpicyIP’s copy of the affidavit (the URL literally had Balaji’s name) in her interview which most likely means she is aware of the debate on the issue. But like all good ‘activist-journalists’ she sidesteps the most obvious tough questions on cardio toxicity and the deaths in the Phase 2 trials. She does pose a softball question towards the end of the interview about the “safety of new TB drugs” without raising the issue of the deaths in the clinical trial or the lack of enough data on efficacy of the drug or the ongoing Phase III trials. There is not a single mention in the interview of the comments made by John Walker, the Nobel Prize winner, to the ET’s reporter Divya Rajagopal, on how more safety and efficacy data is required to ramp up access to bedaquiline.

The study that is the subject of the interview by Yadavar is a retrospective study on the mortality rates of patients administered bedaquiline compared to patients who were not administered bedaquiline. The patients who got bedaquiline reportedly had a lower mortality rate than those administered other drugs that form standard part of the current treatment. I extract the main findings of the study below:

“24 014 tuberculosis cases were registered in the EDRweb between July 1, 2014, and March 31, 2016. Of these,19 617 patients initiated treatment and met our analysis eligibility criteria. A bedaquiline-containing regimen was given to 743 (4·0%) of 18 542 patients with multidrug-resistant or rifampicin-resistant tuberculosis and 273 (25·4%) of 1075 patients with extensively drug-resistant tuberculosis. Among 1016 patients who received bedaquiline, 128 deaths (12·6%) were reported, and there were 4612 deaths (24·8%) among 18 601 patients on the standard regimens.”

(I don’t quite understand the rationale of comparing 1016 patients with 18,601 patients.)

While I don’t have access to the entire study, the point to be noted is that these studies on mortality are quite different from efficacy related studies where there is evidence of sputum conversion i.e. proof that the drug has actually worked on the disease. The only way we will have substantive evidence of bedaquiline’s efficacy is if we await the results of the Phase III trials and as demonstrated in the case of delaminid, the results of Phase III trials can be very different (disappointing) from Phase II trials. The second point that should be noted with regard to the study on mortality rates, is that as per the WHO studies, bedaquiline is given in very controlled circumstances, wherein patients are admitted to the hospitals, constantly monitored and administered a proper diet. The existing medication consumed by TB patients in their home without necessarily being admitted to hospitals which also means that they are less likely to have a proper diet and monitoring regarding their medication.

This is not to belittle the study but point out that it can only form one component of the overall decision to approve bedaquiline – the swing factor will still have to be proof of efficacy in the Phase III trials. Decisions to approve new drugs are done by balancing benefits with risk – a drug with risks associated can be approved if it efficacious. But those decisions can be made only when there is sufficient evidence. And no matter what the MSF folks (the tweet on the left was directed at me by MSF’s crack social media team in India, presumably, with the blessings of MSF’s India head Leena Menghaney who refused to reply to my email pointing out the need for civil discourse) may say, the Phase 2 trial for bedaquiline was certainly a small study. If they can force the government of India to make public the efficacy data of the drug as administered on over 1000 Indian patients at Indian government hospitals they may have a better case to argue that the efficacy of the drug outweighs its risks.

The issue of informed consent for bedaquiline – when ‘access to medicine’ trumps patient rights

Even presuming that the government does bite the bait and ramp up the use of bedaquiline without waiting for the Phase III data (it has already started), there remains the question of the informed consent form & patient information booklet designed by the Ministry of Health. In earlier posts, we’ve pointed out some serious issues with the information consent process, such as the forceful requirement to give up right to compensation and the lack of information that the data is being shared with Janssen. But I’ve discovered even more issues with the government’s form when compared to the format recommended by the WHO information booklet. You can read the WHO’s information booklet for bedaquiline over here. The very first piece of information provided to patients by WHO is the following:

“Bedaquiline can cause serious side-effects.

• In one clinical trial, more deaths were seen in people who were treated with bedaquiline compared to people who did not receive bedaquiline.
• Heart rhythm problems can happen with bedaquiline.”

The first warning about the deaths find no mention in the Indian information booklet. The second problem is mentioned in the Indian document but in a muted manner.

Under the heading of possible-side effects of bedaquiline the WHO prescribed format reads as follows: “

• Serious heart rhythm changes. Tell your healthcare provider right away if you have a change in your heartbeat (a fast or irregular heartbeat), or if you faint. Your heart will be monitored periodically with a machine that checks for heart rhythm.
• Liver problems (hepatotoxicity). Liver toxicity can present in many ways. Inform your doctor about symptoms, such as nausea or vomiting, stomach pain, fever, weakness, itching, unusual tiredness, loss of appetite, light coloured bowels, dark coloured urine, yellowing of your skin or yellowing of the white of your eyes.
• Other side-effects of bedaquiline may include nausea, joint pain, headache, an abnormal laboratory test associated with damage to the pancreas, coughing up blood, chest pain, loss of appetite, and/or rash.

It is possible that it may also cause some problems that we are not aware of. However, you will be observed closely for any unwanted effects or any problems. Other medicines may be administered to decrease the symptoms of the side-effects or reactions.”

The Indian information booklet has no mention of side effects on the liver and the issues with heart rhythm are listed as “common side effects” along with nausea and joint pain – there is no effort to use language that conveys just how serious the effect can be on the heart. Similarly, there is no mention that doctors don’t yet know all the side-effects of the drug.

Regarding information on monitoring for side-effects, the prescribed format by the WHO informs patients the following: “You will need the same monitoring test that all patients on MDR-TB treatment need. In addition, you will need heart monitoring, extra blood tests for the liver and your electrolytes”. Again, there is no mention of this in the Indian form.

All of the above are serious defects in the information that was given and is being given to Indian patients on bedaquiline. Not so long ago, there was a massive outrage on the issue of informed consent when the HPV vaccine was administered to minors. NGOs took the issue up till the Supreme Court and it became a big deal. Today, we have enough evidence that the government (Dr. Soumya Swaminathan, currently at WHO, was part of the committee that approved this faulty information booklet) of India has cocked up the informed consent process by preparing a faulty information booklet. While the government is not bound by the WHO’s recommendation, it is clear that the most damaging information was held back from Indian patients and that is in violation of the prescribed format for ‘informed consent’ laid down in Schedule Y to the Drugs & Cosmetics Rules, 1945.

I’m quite sure all the activists operating in the ‘access to medicine’ space and lobbying for increased access to bedaquiline are aware that the informed consent form is massively flawed but they won’t make an issue of it. Why is this so?

The answer is simple. Single-issue activism focuses only on one aspect. In this case, access to medicine activists are focussed only on increasing access to medicine and nothing else. They are concerned with nothing else other than the one issue that they are paid for because their incentive structure, both individually and institutionally are designed in this manner. And that is why I’m always suspicious of activism. I hope somebody with the resources to take on this battle, makes an issue of this before the government of India ramps up access to bedaquiline to even more patients. If Indian citizens are being given drugs that are not tested, the least the government can do is inform them of all the associated sideffects.

Obscenity under  the Indian Penal Code (“IPC”) is a relic of India’s colonial past. Though the need for such a provision is often subject to debate, it is indisputable that the judiciary’s interpretation of this provision has been often been anachronistic in past instances. The judiciary has, no doubt, evolved from the infamous Hicklin Test (tendency of the impugned material to deprave and corrupt those whose minds are open to such immoral influences) to the contemporary community standards (testing the impugned material against contemporary national standards and not by the standards of sensitive people). However, the latter test has still been criticized for its vagueness and subjectivity.

In examining the treatment of obscenity under IP law, it is not surprising to unearth that it suffers from similar legal lacunae, lack of clarity and skewed opinions of morality, as shall be demonstrated by the following instances.

Copyright

In a guest post on SpicyIP, Justice Gautam Patel considered the hypothetical example of extending copyright protection to content which would be “obscene” under the IPC. In his discussion, he raised an interesting question: Does the legality of the content have any impact on whether it should receive copyright protection? He noted that the Indian Copyright Act makes no mention that the content which is sought to be protected must be “lawful”. Does this imply that illegal content, and for that matter “obscene” content, can be copyrighted? In his response to Justice Patel’s post, Professor Sarnoff opined that, in such cases, it must be seen whether the existing legislative and constitutional framework allows for the judiciary to examine the legitimacy of the content. No legislative or judicial clarification has, however, been given on the same and hence, the question of whether the legality of content impacts copyright protection in India remains an unsettled one.

Patent

Recent posts on SpicyIP have dealt with the disturbing attitude of the IPO in its denial of a patent grant to a creative and unique sex toy.  In its decision, it claimed that the sex toy was not patentable according to Section 3(b) of the Indian Patents Act since its use would affect “public order” and “morality”. Claiming that sex toys were neither “useful” nor “productive”, it went on to brand sex toys as “obscene” objects and state that the sale and import of them would be illegal under Section 292 of the IPC.

Trademark

Section 9(2)(c) of the Indian Trademarks Act prohibits the registration of a trademark which consists of “scandalous or obscene matter”. A quick look at the Draft Manual of Trademarks Practice and Procedure(“Draft Manual”) reveals that “scandalous marks” are ones which offend “accepted principles of morality”. The Proposed Trademark Manual for Comments(“Proposed  Manual”) states that whether a mark is obscene or not  is a “question of fact and it is for the applicant to demonstrate that it is not so when faced with objections” under this Section.

It further states:

“If a mark is merely distasteful an objection under Section 9(2) (c) is unlikely to be justified whereas if it would cause outrage or would be likely significantly to undermine religious, family or social values then an objection must be raised.”

Further, in his assessment of the trademark, the Examiner is required to be objective, not subjective.

Analysis

The above discussion gives rise to the following conclusions:

1. A distinction needs to be drawn between illegality and immorality.

Unlike the Indian Patent Act and the Trademarks Act, the Copyright Act does not make any reference to the morality of the content which necessarily implies that the Copyright Office and Courts cannot assess the morality of the content sought to be copyrighted. Assuming, however, that  the legality of the content needs to be assessed in India, the main problem would arise when legal institutions attempt to blur the distinction between obscenity as an offense under the country’s penal laws and their personal opinions on morality and public policy. A recent Israeli Magistrate Court ruling in the case of Sex Style v. Abutbul serves as an example of this. In this case, the plaintiff, a producer of pornographic movies, sued the defendant for providing links to the producer’s porn movies on his own website. While the Court recognized the movies were entitled to copyright protection, it refused to extend the same. In its discussion, though they ruled that the content was “obscene” and hence illegal under their Penal Code, they went on to base their decision on a number of other moral and public policy considerations. This leads to the question: Would the Indian Court, faced with a similar factual scenario, adopt a similar approach and examine the morality of the “obscene” content which is sought to be copyrighted? Given the tendency of the Indian Courts to base its decisions on traditional notions of propriety and decency, I would not put it past them.

It is clear that the Courts and IP law offices should not be allowed to use the garb of the law to pontificate about their opinions on morality. Surprisingly (or not), the same has been done by the IPO in the above-described case of the rejection of patent grant to a sex toy in its interpretation of the term “obscene” and “useful”. As explained in the post, the IPO’s conclusion merely applies the bare interpretation of Section 292(1) and does not apply the presently accepted contemporary community standards test to reach its conclusion that sex toys are “obscene”. The IPO also deliberates on the law’s negative attitude towards sexual pleasure and other unrelated grounds to reach its faulty conclusion (more of which can be read here).

2. The interpretation of the Indian trademark law needs to be revisited.

As pointed out in a previous post, the interpretation of Section 9(2)(c) by the Patents and Trademarks Office is decidedly vague. How is one to determine these “accepted principles of morality”? The Proposed Manual vaguely states that it is hard to define these principles and “general principles applied in UK” would be relevant in determining them. Also, as pointed out in the post, how is the Examiner supposed to remain objective in his examination when he is provided with fairly subjective standards such as “distaste” and “outrage”?

It is important to note that I am not questioning the law here and whether the law should dictate moral standards (and hence, I am not reproducing the Hart-Devlin debate in this context!). My conclusion is this: Faulty and vague interpretation of existing legal provisions dealing with obscene/scandalous content ultimately leads to imposition of arbitrary moral standards in IP practice. As has been rightly pointed out by the Supreme Court itself, courts have often used the obscenity provision under IPC to appoint themselves as guardians of morals. Indians can certainly do without more such self-appointed “moral guardians” in the realm of IP law!

Image from here

In a trademark infringement suit, Texmo Industries inter alia prayed that their mark, TEXMO, be declared as a well-known mark under Section 11 of the Trade Marks Act, 1999. Under sub-sections (6)-(9), this section lays down a number of factors that must be considered before granting well-known status to a mark. However, in this particular case, the issue that was raised, was whether the High Court had the power to declare a mark as well-known.

This question arises primarily due to the text of Section 11(6)-(9), which mentions the Registrar as the authority when determining whether a mark is well-known.  It seems, therefore, that the Registrar has the power to determine whether a mark is well-known. However, in practice, courts have declared marks to be well-known; for instance, in the Tata Sons case or Brahmos Aerospace case (covered on the blog here and here).

In this case, the court argued that only the Registrar has the power to accord well-known status to marks, but referred the question to a higher bench due to differing views from benches of similar strength.

According to the court, the text of Section 11 makes it clear that the Registrar is the proper authority. Further, it stated that the Registrar is more suited to make investigations on this question, since it has the requisite expertise and capability to do so. Specifically, the court noted that it cannot give a complete answer for the following factors:

1. the extent of knowledge of the mark to, and its recognition by the relevant public,
2. the duration of the use of the mark
3. the extent of the products and services in relation to which the mark is being used
4. the method, frequency, extent and duration of advertising and promotion of the mark
5. the geographical extent of the trading area in which the mark is used
6. the state of registration of the mark
7. the volume of business of the goods or services sold under that mark
8. the volume of business of the goods or services sold under that mark
9. the nature and extent of the use of same or similar mark
10. actual or potential number of persons consuming goods or availing services being sold under that brand

While the Registrar does seem to be well-placed to make a decision on these factors, it would seem that the court is similarly placed in terms of legal expertise and the power to requisition documents and evidence. If these capabilities are the same, then it would be difficult to agree with the court’s practicality argument. Further, if one were to look at Rules 124-126 of the Trademark Rules 2017, and the specifics of Form TM-M (through which applications for well-known status are to be made), the Registrar does not make or have the power to make any special investigation that is beyond the ability of a court.

One would also wonder how the renouncing the power to declare marks as well-known to the sole domain of the Registrar would play out in cases where the plaintiff couches their cause of action within the law on well-known marks. Would the plaintiff first have to approach the Registry in such circumstances? Further, would the court have the power to hear appeals to the Registrar’s decision in such matters (after following the procedure prescribed in Rule 125 of the Trademark Rules 2017)? Is the Registrar a credible authority to wield such exclusive authority (see Prashant’s post discussing Rule 124 of the Trademark Rules 2017)? We hope that the bench constituted in the Madras High Court to address this question will deal with these intricacies.

H/T: Our thanks to Vineet Subramani for bringing this development to our attention.

Last week, our IPO granted a patent to Amgen covering the drug Broadlumab.  Brodalumab is a human monoclonal antibody designed for the treatment of inflammatory diseases including psoriasis  In the United States, Broadlumab is known as Siliq and in Europe it is Kyntheum.

The application for Broadalumab was filed as a PCT application – PCT/US2007/021174 (click here to see the page on WIPO – Patentscope) and was accorded application number: 2350/CHENP/2007. One can see the entire file on this link – https://www.quickcompany.in/patents/il-17-receiptor-a-antigen-binding-proteins

Sandeep Rathod – sent a link (http://ipindiaservices.gov.in/decision/2350-CHENP-2009-63576/2350chenp2009.pdf ) indicating that the patent had been granted: This was the controller’s decision in granting the patent.  It is a concise half page document as can be seen in the snapshot below:

Once I saw the decision, I was curious to the the submission made on 04/04/2018 – It is a whopping 60 page document! It includes responses made to the office action issued – granted EP patent claims, studies done by Amgen and submitted to the US FDA.

It is my belief that the decision granting a patent should include basic reasoning that why it is being granted.  This would be helpful to the patentee – the absence of reasoning for grant is indicative of the (less) amount spent in analysing the response.  Typos aside (the hearing and notice dates are reversed) this half page order basically agrees with the detailed submissions made.

Reasoning is helpful.  For example, the recent post where patent was denied to Standard Innovation Corp for a sexual stimulation device (See complete application and file wrapper here: https://www.quickcompany.in/patents/electro-mechanical-sexual-stimulation-device

This application had a reasoned order where the objections were not removed. These included objections on the ground of novelty / obviousness. As far as morality is concerned, even though I do not agree with the Controller decision, the reasoning is there.

We’re pleased to announce that the Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia, the WIPO Academy, World Intellectual Property Organization (WIPO), the World Trade Organization (WTO), Texas A&M University School of Law, and the Faculty of Law of the University of Geneva are co-organizing the First IP & Innovation Researchers of Asia Conference, which will be held on 31 January – 1 February 2019 at the Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia, in Kuala Lumpur, Malaysia. The deadline for submitting an abstract and placing a request to present is 15 October 2018. For further details, please read below:

First IP & Innovation Researchers of Asia Conference

Call for Papers

Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia

31 January – 1 February 2019

The First IP & Innovation Researchers of Asia Conference is an initiative created to provide a forum for researchers interested in Asian Law, International Law, and Comparative Law, to present and discuss their papers and works-in-progress with colleagues from Asia, Asia-Pacific, and beyond (including Europe, the Americas, and Africa). Submissions from researchers at all stages of their careers (juniors, seniors, and mid-career), and from a variety of disciplines, including law, economics, social science, the humanities, etc., are encouraged.

The scientific organizers are: Ida Madieha Abdul Ghani Azmi (International Islamic University Malaysia), Irene Calboli (Texas A&M University School of Law & Nanyang Technological University), Sherif Saadallah (WIPO Academy), Antony Taubman (WTO), and Jacques de Werra (University of Geneva).

Submissions 

Researchers interested in presenting at the First IP & Innovation Researchers of Asia Conference should submit their request by emailing the following information at the address IPResearchersAsia@gmail.com:

• A title and short abstract of the paper or work-in-progress (500 words or less) submitted to present as a Word or PDF attachment
• Their academic affiliation, including a short bio (200 words or less) as Word or PDF attachment. They should include a recent picture as part of their bio.

Please indicate “First IP & Innovation Researchers of Asia Conference” in the email subject line.

The deadline to submit an abstract and a request to present is 15 October 2018. Late requests will be considered only based on schedule availability. Notifications to accepted applicants will be sent in early November 2018 and no later than 10 November 2018. Accepted applicants will need to confirm their participation to the Conference no later than 30 November 2018.

Workshop on Research and Teaching Methodologies

In addition, the organizers plan to hold a half-day Workshop on Research and Teaching Methodologies during the morning of Saturday, 2 February 2019 (tentatively from 9:00 a.m. to 1:00 p.m.). The Workshop will also discuss publications, placement in scientific journals, and negotiating book contracts, including open access.

Costs and Limited Financial Assistance

There will be no registration fee or any other costs associated with attending the First IP & Innovation Researchers of Asia Conference and the Workshop on Research and Teaching Methodologies. However, all presenters must cover their own travel-related and accommodation expenses, including travel visas.

The organizers are working to secure funds to partially assist a limited number of researchers from developing countries who cannot otherwise secure financial support to attend the Conference. More details in this respect will be announced in October 2018.

Further Information

The full text of the call for papers can be viewed here, and further information on the conference here.

In Glenmark Pharmaceuticals Ltd. vs. Curetech Skincare and Anr., Mr. Justice Kathawalla of the Bombay High Court imposed costs of 1.5 crores against the defendant found to be ‘habitually’ committing trademark infringement of pharmaceutical products. The decision is significant for the quantum of damages awarded and the reasoning (or lack thereof) behind the award of exemplary costs.

Brief Background

The dispute concerns Mumbai-based generics manufacturer Glenmark, and its product Candid – B (an anti-fungal cream). The principal defendant is Galpha Laboratories is the proprietor of a similar drug, selling under the trade name Clodid – B. The two products have similar packaging and trade dress, as made out from the images in the judgement. Having been nabbed for what appears to be obvious infringement, the defendant claimed that the mark was adopted by mistake, and chose not to contest the suit.

Judgement and Order as to Costs

Given that the suit was not contested, the defendants submitted to the imposition of costs and prayers preferred by the plaintiff. The manner and rationale for the imposition of costs is important to examine.

The Court examined the history of the defendant of committing trademark infringement. In particular, it noted the Delhi High Court’s adverse findings against the defendant in Win-Medicare Pvt. Ltd. Vs. Galpha Laboratories Ltd. & Ors. (covered here), where it noted that Galpha was a ‘habitual offender’. Further, the Court also examined the defendant’s history of producing sub-standard drugs, which had been pointed out both by the Central Drugs Standard Control Organisation as well as the Maharashtra Office of the Drug Control Administration.

Chastising the defendant for its practices, the Court held that it was a fit case for imposing exemplary costs, despite the fact that the matter was being finally settled in terms of the plaintiff’s prayers, and imposed costs of 1.5 Crores (which the plaintiff generously agreed to be deposited into the CM’s Kerala Flood Relief Fund).

As far as I am aware, this is the largest order of such exemplary costs in a trademark infringement case, and is particularly interesting given the compromise reached between the parties. However, the Court’s order is also notable for its examination of the public interest in preventing such undesirable practices in the pharmaceutical sector in India, which is notorious for rampant trademark malpractice, leading to significant public health concerns due to spurious drugs, something that has been repeatedly stressed by courts when assessing pharma trademark cases. On that note, I end with this grave observation by Mr. Justice Kathawalla –

“Drugs are not sweets. Pharmaceutical companies which provide medicines for health of the consumers have a special duty of care towards them. These companies, in fact, have a greater responsibility towards the general public. However, nowadays, the corporate and financial goals of such companies cloud the decision of its executives whose decisions are incentivized by profits, more often than not, at the cost of public health. This case is a perfect example of just that.”

We are pleased to announce that Inter University Centre for IPR Studies, Cochin University of Science and Technology (CUSAT) is organising the sixth annual ‘Rethinking Intellectual Property Rights’ workshop on the theme ‘Intellectual Property Rights and Competition: A Social Perspective’ for law students and students of other disciplines interested in this area (under graduates, post graduates and research scholars). The programme is scheduled to be held from January 18-20, 2019. For further details, please read below:

Objectives of the Annual Workshop

Rethinking IPR is an annual National Level Workshop for law students and students of other disciplines interested in IP research (undergraduate, post graduate and research scholars) organized by the IUCIPRS, CUSAT to initiate critical thinking regarding the role of Intellectual Property Rights in a social context. The pedagogical practice existing among the Law Schools in India predominantly approaches IP from a commercial angle, often ignoring the social implication of IP.

The main objective of Intellectual Property law is to maintain a correct balance between protection of IP and providing access to the public to the modern technology and its benefits. The western approach of looking at IP as a catalyst of development is being followed by our law schools without being interrogated. Our experience with the western approach signifies that it stifles innovation and research and creates barriers in the enjoyment of benefits by the public. The question therefore is, should India imitate the western practices, both statutory and judicial, or whether we should evolve our own jurisprudence of IP reflecting wider questions of national development and the welfare of people.

About the Theme of 2019 : ‘Intellectual Property Rights and Competition: A Social Perspective’

The intellectual property rights and the competition may seem to be in conflict with each other at the first instance. However, a deeper understanding of the same sheds light to the fact that both aim to achieve a common end- i.e. global welfare. The means to this end, followed by both the systems, might be diverse.  Intellectual property, in itself, does not confer absolute monopoly to the IP holder but a limited monopoly keeping in mind the consumer welfare that the IP seeks to achieve. If IP is to promote affordable access, one cannot do so forgoing competition. It is with this view that competition principles are pushed into the IP framework. This is evident from the express competition provisions present inside the TRIPs agreement, which is the present international document binding the member countries to create national IP law. Apart from the express provisions on competition, TRIPs contains provisions which has an effect of encouraging competition. The positive side of bringing competition inside the IP law is that the dynamic efficiency of the IP regime does not get hampered. At the same time, this does not prohibit the national competition policy and authorities from monitoring the conduct of the IP holders. It is therefore the aim of this programme to have a better understanding of the tryst between competition law and IP.

The programme includes lectures, invited talks, case studies, corner discussions, students’ presentations, exercised, scenario analysis, role play, field exposure etc.

Sub themes

• The interplay between competition, innovation and IPRs.
• Competition principles within TRIPs framework
• Indian Competition Act and IP- Balance between affordable access of IP and development.
• Competition Commission of India and IP – Trends in handling of Indian IP cases dealt by CCI.
• Patents and competition – (a) Competition principles within the Indian Patent Act- Compulsory licensing, Exhaustion, Patent Standards, and Patent rights, (b) Role of Patent pools, SEP, Patent Licensing agreements in promoting competition.
• Competition Principles within the Indian Copyright Act – compulsory licensing, statutory licensing, Role of collecting societies, Refusal to License, the role of Collecting Societies, exhaustion of rights.

Registration and Selection Process

Law students and students of other disciplines interested in this area (undergraduate, post graduate and research scholars) willing to prepare a paper on any of the sub-themes could apply. The sessions of the workshop are designed in a manner reflecting the concerns of the access to intellectual property goods and the role of competition in facilitating affordable access to the IP goods. Students are urged to prepare papers accordingly so that each session will comprise of two student presentations representing the conflicting interests.

Step 1: Each student is allowed to register by sending an abstract (maximum 300 words) on one or two sub-themes on or before 22^nd September 2018. Based on the title and abstracts submitted by the students as approved by IUCIPRS, the subthemes will be allocated to the students. We encourage original single author papers, though joint submissions with a maximum of two authors are also permissible. Selection will be based on the quality of the paper submitted.

Step 2: Intimation for the selection of abstracts will be given on or before 1^ST October, 2018.

Step 3: The students are further required to send the full paper by 31^st October, 2018. Students shall be asked to revise their paper after screening.

Students are required to register by paying ₹ 500. Total number of participants is limited to 35. All participants are expected to take an active role in the workshop.

Awards/ Certificates

Quality papers will be published in the renowned IP Journals.

Coordinators

Vishnu Sankar P., Ph: 08089726467, vishnusankar.cusat@gmail.com

Bilal A.Nazeer, Ph: 08547082805, nazeer.bilal1@gmail.com

For registration, visit: ciprs.cusat.ac.in.

Image from here

In a column published on September 4, 2018 the Hindu’s science editor R. Prasad has explained why India should ramp up access to bedaquiline to treat MDR-TB. Unlike most of the other cheerleaders for bedaquiline, Prasad thankfully points out that the drug demonstrated higher cardiotoxicity and that Phase IIb trials experienced more deaths and that the Phase III trials are yet to be completed. He however concludes that the recent revision of the WHO treatment guidelines on bedaquiline, that was released on the basis of effectiveness and safety of bedaquiline from several clinical trials, observation studies etc. is sufficient for ramping up access to the drug across India.

At the risk of sounding like a broken record, let me point out once again that as per the law, as well as the regulatory standards followed in most developed countries with white people, require Phase III clinical trial data before the drug can receive regulatory approval. This is because Phase III trials are conducted on a much larger set of patients when compared to Phase II trials. The pharmaceutical industry itself has admitted that a lot of drugs which show promise after Phase II stage, fail during Phase III trials. By ‘failure’, I mean the ability to get regulatory approval from the tough regulators like the USFDA and the EMA. A study by the USFDA provides a list of 22 drugs where the results of Phase II and Phase III were divergent.

In the case of the other new TB drug, called Delaminid, the Phase II trials showed promised and several journalists had labelled the drug as a ‘wonder drug’ or a ‘miracle drug’. In January, 2017 activists from MSF and other groups like AIDAN wrote to the government demanding that the government give more patient Delaminid. The letter stated the following:

“The WHO has indicated a 23% improvement in cure rates of M/XDR-TB on use of Delaminid. With present world-wide cure rate of about 28% for XDR-TB and 52% for MDR-TB, availability of Delaminid is imperative to treat the life-threatening condition. To improve outcomes for MDR/XDR-TB, at least 39 countries introduced Delaminid by the end of 2015…………We hope that the Central Government would take immediate action to ensure that Delaminid is made available to the MDR-TB and XDR-TB population.”

A year later, writing for the Hindu, Prasad reported how Delaminid had disappointed in Phase III trials. I extract some paragraphs of his reporting below:

“Delamanid drug, approved for use in multidrug-resistant tuberculosis (MDR-TB) patients by the World Health Organisation in October 2014, did not show any statistically significant difference in successfully curing the disease or reducing the mortality rates compared with a dummy in a Phase III human clinical trial, WHO’s position statement issued on January 15 says. However, the drug was found to be safe unlike many of the other second-line medicines used for MDR-TB treatment.”

“In addition to optimised MDR-TB regimen, participants in the trial received either delamanid or a dummy for six months. At the end of 30 months of follow-up, 77.1% of MDR-TB patients who received delamanid drug were cured compared with 77.6% of those who received a placebo (dummy), and mortality was 5.3% in the delamanid group and 4.7% in the placebo group.”

Delaminid is a good example of why Phase III trials are important and Prasad’s reporting on the issue was good example of nuanced reporting.

With bedaquiline, the issue is infinitely more complicated because of the safety concerns, namely the cardiotoxicity experienced by patients after consuming the drug. The studies that have been conducted so far, as quoted in Prasad’s report are observational studies or retrospective studies, none of these studies are double-blind randomized clinical trials (RCTs)(save for the Phase IIB studies on a smaller set of patients), which are considered the gold standards of drug regulation. RCTs are conducted with two sets of patients – one set gets the actual drug and the other a placebo and neither the patients nor doctors know who is getting what. Both sets of patients otherwise undergo otherwise similar treatment regimens, in similar conditions and are closely monitored. On conclusion of the trials, the results are compiled and the results of both groups are compared to note whether there has been a substantial increase in efficacy of the new drug. Since Phase III is done on a much larger set of patients than Phase II, it is usually considered more reliable. Such RCTs are considered to be several times more reliable than observational studies or retrospective cohort studies because of which they are considered the gold standard by regulators.

A few months ago, while reporting on bedaquiline, the Hindu had described one the observational studies on bedaquiline as demonstrating a cure rate of 74%. What the report does not mention is that the observational study was conducted on a grand total of 28 patients in three different locations with only 7 being from India who were given bedaquiline. In contrast, a Phase III study could involve up to 1,000 patients.

There has also been a lot of reportage around a recent retrospective cohort study by South African doctors on bedaquiline where data from patient registries was used to establish that patients given bedaquiline had died at a less frequency than patients given the prevalent treatment. The study reported “A bedaquiline-containing regimen was given to 743 (4·0%) of 18 542 patients with multidrug-resistant or rifampicin-resistant tuberculosis and 273 (25·4%) of 1075 patients with extensively drug-resistant tuberculosis. Among 1016 patients who received bedaquiline, 128 deaths (12·6%) were reported, and there were 4612 deaths (24·8%) among 18601 patients on the standard regimens.” There could be many reasons for the lower mortality. It could be the possibility that bedaquiline actually works as claimed or it could be due to the fact that bedaquiline is given under more controlled conditions because it is an experimental drug. (The WHO treatment guidelines for bedaquiline prescribe a rather stringent monitoring mechanism) So while the study is useful, it cannot be the determinative factor – the Phase III RCTs still need to be completed.

Ultimately any regulatory decision will have to weigh the results of the Phase III study against the above studies and also the efficacy and toxicity of existing medication before making an informed decision. If the cardiotoxicity issues associated with bedaquiline are of less concern than the toxicity of the existing treatment whose toxicity leads to deafness, there is no reason to not prescribe bedaquiline as the preferred line of treatment. But whatever the final decision it should be based on the Phase III RCTs.

My concern with the cheerleading around bedaquiline, and the reason that I am criticizing all these journalists for their lop-sided reporting on the issue, is the fact that once the pharmaceutical industry establishes a precedent for scaling up access for an experimental drug without Phase III RCTs, they will demand more such waivers in the future when the recipients of those drugs are brown or black people in developing countries. And now that they have former UN Rapporteur for Health, Anand Grover’s whole-hearted support for waiving Phase III trials entirely they will most likely succeed. Are we ready for the consequences that will follow?

Would it simply not make sense to wait for the Phase III trials to conclude before advocating for increased access to bedaquiline?

Calling for increased access to bedaquiline while ignoring the information deficit in the informed consent form

My second major grouse with Prasad’s latest report, as also the reportage of other journalists on the issue, is their drum beating for increasing access to bedaquiline while keeping entirely quiet on the scandalous consent forms prepared by the government for providing access to bedaquiline. As I described in an earlier piece, not only has the Indian government forced patients to forgo any claim to compensation for death or injury due to bedaquiline, it has also not provided the patients with accurate and realistic information about the potential and actual side-effects of bedaquiline. The consent form prepared by the government has deviated significantly from the format prescribed by the WHO. On most days, Indian health journalists treat the WHO like the reincarnation of god. This time around though they are maintaining a deathly silence on the Indian government’s deviation from the WHO prescription. Why is this so?

I do not have a concrete answer but if I had to speculate, I guess they are being silent because reporting on the issue is going to open a pandora’s box. The bedaquiline treatment guidelines (of which the consent form is one component) were drafted by the government and blessed by the Secretary, Ministry of Health, the Director General of the Indian Council of Medical Research (ICMR) and involved consultations with a large number of other big names in TB research including Dr. Furin and Dr. Conradie. Any investigation regarding the consent form issue will also be required to explore the format of the consent form used by MSF and other doctors when they provided access to bedaquiline in India. In other words, any journalist reporting on the issue may end up burning lot of bridges with potential sources.

If the point of all the advocacy and journalism around bedaquiline is about the rights and the lives of TB patients, why is nobody bothered about the right of the patients to be fully informed of the effects of the drug? Isn’t informed consent the bedrock of medical ethics?

Not so long, the HPV scandal blew up in the media precisely on the issue of informed consent. That case led to litigation in the Supreme Court which then led to revamped rules on clinical trials, informed consent and patient rights. The bedaquiline case demonstrates the ineffectiveness of the reformed law and not a single health journalist is talking about the issue. Their silence on the issue could perhaps have been pardoned if they were not actively lobbying for increased access to the drug.

Thematic Highlight 

In Prashant’s latest update on the bedaquiline  controversy, he discusses about how The Hindu’s science editor pitched for increasing access to bedaquiline to treat MDR-TB. In response to this, he reiterates his argument in earlier posts: Since Phase III trials for the drug has not been conducted yet, regulatory approval for the same should not be given. In the latter part of his post, he points out that journalists have not addressed the government’s scandalous consent forms for providing access to bedaquiline. These forms, apart from providing insufficient  information about the adverse effects of bedaquiline, force patients to forgo compensation for death or injury due tot he drug.

Topical Highlight

Divij covered a recent Bombay HC judgment where the Court imposed costs on the defendant for a whopping amount of Rs 1.5 crores! In his post, he notes that this may possibly be the largest order of exemplary costs in a TM infringement case. On finding the defendant guilty of committing habitual trademark infringement of pharmaceutical products, the Court noted various public heath concerns arising due to such trademark malpractice.

Other Posts

Rishabh wrote about a Madras HC decision where Texmo Industries had argued that there TM, TEXMO, be declared a well-known mark under Section 11 of the Trademark Act. In his analysis of the Court’s decision, he notes the ambiguity surrounding the issue of whether the Registrar or the Courts have the power to declare trademarks well-known.

Rajiv posted about the grant of patent to Agmen for Brodalumab, a drug designed for treatment of inflammatory diseases. On perusal of the controller’s decision granting the patent, he notes that the order included the reason why the patent was granted and the various objections to the patent grant were not removed.

Lastly, I wrote a piece on how the concept of obscenity is dealt with under different branches of Indian IP law i.e., copyright, patent and trademark law. Analysing the treatment of the same under these branches, I note that there is either lacunae in the law or there is ambiguity in the application of the existing provisions which allows institutional authorities to provide their own skewed opinions on morality. I conclude my post by stating that there is a need to address these gaps in law to prevent such imposition of arbitrary moral standards.

SpicyIP Events

Pankhuri announced that the Inter University Centre for IPR Studies, Cochin University of Science and Technology (CUSAT) is organising the sixth annual ‘Rethinking Intellectual Property Rights’ workshop on the theme ‘Intellectual Property Rights and Competition: A Social Perspective’. The programme is to be held from January 18-20, 2019.

In a separate announcement, Pankhuri informed us about the First IP & Innovation Researchers of Asia Conference, which will be held on 31 January – 1 February 2019 at the Ahmad Ibrahim Kulliyyah of Laws, International Islamic University Malaysia, in Kuala Lumpur, Malaysia. The deadline for submitting an abstract for the same is 15 October 2018.

Other Developments

Indian

Judgments

M/s. Nandhini Deluxe v. M/s. Nandhini Gardens – Bangalore District Court [August 31, 2018]

The Court granted an ex parte decree of permanent injunction restraining the Defendant from infringing and passing off the Plaintiff’s registered trademarks “NADHINI DELUXE” and “NANDHINI” by using a deceptively similar mark “NANDHINI GARDENS” in respect of carrying on the restaurant business. In arriving at the decision, the Court noted that the mark adopted by the Defendant was structurally, phonetically and visually similar to the Plaintiff’s trademark, and the Parties were engaged in the same business, thereby creating a higher likelihood of confusion among the costumers. Ultimately, the Court concluded that the Defendant had blatantly adopted the impugned mark in order to ride on the reputation and goodwill of the Plaintiff to make a profit.

Burger King Corporation v. Techchand Shewakramani – Delhi High Court [August 27, 2018]

The dispute concerned the alleged infringement and passing off of the Plaintiff’s registered marks “BURGER KING” and “HUNGRY JACK’S” by the Defendant. The Defendant thereafter filed an application seeking rejection of the plaint on the ground of lack of cause of action and lack of territorial jurisdiction of the Delhi High Court as the Defendant’s business was entirely carried on in Mumbai. The Court rejected the Defendant’s application stating that the Plaintiff could make out a cause of action within the territorial jurisdiction of the Court as the Defendant had promoted the impugned mark in Delhi, entertained franchisee queries from Delhi, sought franchise requests through its website “theburgerking.in” and openly and publicly expressed their intention to expand their business across India.

Samsung Electronics Company v. Mr. Akhilesh Tiwari – Delhi High Court [August 28, 2018]

The Court granted an ex parte decree of permanent injunction restraining the Defendant from infringing and passing off the Plaintiff’s registered trademarks “SAMSUNG” and “GALAXY” by using identical marks in respect of mobile phones and accessories. The Court stated that the Plaintiffs were the registered proprietors of the marks in question and that the Defendant had no real prospect of defending their claim as they had not appeared before the Court to argue their case. Moreover, the Defendant were directed to destroy the counterfeiting goods seized by the Local Commissioners.

Texmo Industries v. Mr. Roshan Kumar – Madras High Court [August 27, 2018]

The Court granted a decree of permanent injunction restraining the Defendant from infringing and passing off the Plaintiff’s registered trademark “TEXMO” by using a deceptively similar mark “TEXMEN” in respect of water pumps to be used in the agricultural sector. In arriving at the decision, the Court stated that the Plaintiff are registered proprietor of the mark and have been using the same since a long period of time. It was also noted that the Parties served the same class of consumers and thus, there could be a likelihood of confusion. Moreover, the Plaintiff through its prayer had requested the Court to declare its mark as well-known. However, the Court was of the opinion that the factors to be considered to declare a mark well-known could be effectively determined only by the Registrar of Trade Marks and not the Court, and in holding this referred the question to a Division Bench to be constituted by the Chief Justice of the Court.

News

• Students, Activists, Swarm To Demand UCLA Drop Indian High Court Patent Claim
• Court cancels NBW against Varma in copyright violation case
• Family fight breaks out over Krishna Sweets
• Court Jurisdiction for Trademark Infringement can be invoked under CPC or Trademarks Act, Delhi HC

International

In a notable development, Lahari Recording Company has challenged two provisions of the Copyright Act, 1957 (“Act”) in the Supreme Court. The gravamen of Lahari’s case is that the impugned provisions infringe their fundamental and constitutional rights and fundamentally alter the bargain that the copyright system is founded upon, by taking away the incentive for copyright owners to create original content.

At issue are Sections 31(1)(b) and 31D of the Act. While the former puts in place a system of compulsory licensing of works whose owner has refused to allow their communication to the public on reasonable terms, the latter creates a regime for mandatory licensing of works to broadcasting organizations on terms formulated by the Intellectual Property Appellate Board (“IPAB”).

The Supreme Court admitted the matter on 13th July. The matter
last came up on 31st August and is expected to come up next tentatively on the 17th of September.

While I have unfortunately not been able to access a copy of Lahari’s writ, In this essay, I will try to unpack their key arguments, set forth in this blog post, and assess their tenability and correctness. It bears noting that Chetanya Ramachandran had analyzed for this Blog the arguments made in the Delhi High Court by T-series to assail the constitutionality of the selfsame provisions that are at issue in the present case. The T-series writ was subsequently withdrawn, in light of a similar writ being filed by Eskay Video in the Calcutta High Court which is currently pending.

Key features of impugned provisions:

Before delving into the arguments made by Lahari, it would be instructive to briefly outline the raison d’etre underpinning the impugned provisions viz. Sections 31(1)(b) and 31D and the scheme envisaged by these Sections.

There may be circumstances in which a copyright owner of a musical broadcast or sound recording is willing to license his work to enable its communication to the public, but on terms that are objectively unreasonable. Put differently, while the copyright owner might make an offer to license his content in the eyes of the law, the terms on which such an offer are made may be so unreasonable as to make it unviable for anyone to communicate to the public the copyrighted content as a factual matter.

This problem was best characterized by the Supreme Court in the following words: “An unreasonable demand if acceded to, becomes an unconstitutional contract which for all intent and purport may amount to refusal to allow communication to the public work recorded in sound recording.”

It is precisely to obviate the need to enter into such ‘unconstitutional contracts’ that Section 31(1)(b) enables the IPAB to grant a compulsory license to a party it considers qualified, thereby enabling them to communicate to the public the work on the terms set by the IPAB.

Similarly, Section 31D also seeks to mitigate the impact of the unequal bargaining power that exists between copyright owners and broadcasters, by enabling the latter to broadcast musical works and sound recordings on the rate of royalty and other licensing terms determined by the IPAB.

Petitioner’s Arguments:

Lahari appears to have made the following 4 arguments to challenge the impugned provisions.

First, Section 31(1)(b), Lahari contends, does not envisage hearing the copyright owner on every occasion on which a compulsory license is granted to parties considered qualified by the IPAB. Similarly, Section 31D envisages the grant of a statutory license without hearing the copyright owner. This makes these provisions, in Lahari’s view, arbitrary and thereby violative of Article 14.

Second, given that Section 31(1)(b) gives the IPAB the power to formulate the terms on which a compulsory license is to be granted by taking away this right from the copyright owner’s remit, Lahari argues that it makes an impermissible inroad into the contractual freedom of copyright owners and unduly constrains the exercise of the rights that are a natural consequence of being a copyright owner.

Third, Lahari challenges Section 31D on the ground that the provision removes the relationship between broadcasters and music labels from the realm of commercial negotiation and enables broadcasters to utilize copyrighted content on subsidized and preferential rates. This, Lahari argues, unduly tips the scales in favour of broadcasters by prioritizing commercial profitability of broadcasters over the interests of copyright owners.

Finally, by virtue of the fact that these provisions unduly constrain the exercise of the rights of copyright owners, Lahari argues that they take away the incentive for a copyright owner to create more original content. On a practical level, Lahari argues that, by virtue of the existence of the statutory licensing route, broadcasters are likely to seek an escape hatch from their contractual arrangements with copyright owners and instead seek to access the statutory licensing route which is more favourable for them.

Analysis:

Although no replies have been filed in the matter thus far, I am of the considered view that Lahari’s writ is unlikely to succeed on account of the reasons outlined below.

First, a bare perusal of the impugned provisions makes it clear that Parliament has formulated a finely reticulated statutory scheme to balance the worthy goal of ensuring wide dissemination of copyrighted content with the need to ensure that this does not result in undue curtailment of the rights of copyright owners.

While Lahari is correct in contending that the copyright owner does not have to be heard each time a compulsory license is granted to a qualified party pursuant to Section 31(1)(b), it bears noting that the decision to make a particular piece of work the subject matter of compulsory licenses cannot be made by the IPAB until the copyright owner is given a reasonable opportunity to be heard and until the IPAB conducts any other enquiry that is necessary for the grant of such a license.

Similarly, while it is true that there is no requirement of hearing the copyright owner before the grant of a statutory license under Section 31D, it is not the case that their interests have not been duly reflected in the statutory scheme created by the legislature. To illustrate, the IPAB is empowered to direct a broadcaster to pay part of the royalty amount to the copyright owner in advance [Section 31D(4)] and the copyright owner has to be heard in the event the broadcaster decides to alter the copyrighted work for the purpose of broadcast [Section 31D(6)].

Second, insofar as Lahari’s second and third arguments are concerned, it bears mention that the legislature has vested the IPAB with the power to make determinations as to the rate of royalty and the terms on which a compulsory/statutory license is to be granted. Notably, the Supreme Court has itself endorsed the broad proposition that the right of copyright owners to enjoy the fruits of their labour is not unfettered and has to be balanced with the interests of the public. The relevant observation of the Supreme Court, in the case of Entertainment Network (India) Ltd. Versus Super Cassette Industries is quoted below:

“93. …. The owner of a copyright has full freedom to enjoy the fruits of his work by earning an agreed fee or royalty through the issue of licenses. But, this right, to repeat, is not absolute. It is subject to right of others to obtain compulsory licence as also the terms on which such licence can be granted.
…”

Therefore, given that the Supreme Court has affirmed (albeit in passing) the validity of this line-drawing exercise to balance the interests of copyright owners with the interest of the public, the only bone of contention that remains is the manner in which the line is to be drawn in a given case (in terms of ascertaining an objectively reasonable rate of royalty and licensing terms that both parties can live with). In this regard, I would submit that the IPAB, in light of the fact that it is a quasi-judicial body possessing relevant expertise, is best positioned to determine the terms on which this line can be drawn in the facts of a given case. As a result, this arrangement, in my submission, rests on a constitutionally sound foundation.

Third, insofar as Lahari’s argument that the impugned provisions take away the incentive to create copyrighted content is concerned, I would submit that the impugned provisions, in fact, have the opposite effect. Let me explain. The impugned provisions are premised on the understanding that by virtue of the power that copyright owners wield, they are unlikely to be willing to license their content on reasonable terms, making it infeasible for third parties to utilize copyrighted musical content.

Assuming that this premise is correct, third parties would be unwilling to transact with copyright owners of musical content unless such a transaction is mediated by a third party which can help level the playing field to an extent. As a result, Sections 31(1)(b) and 31D help bring to life transactions that would otherwise be non-existent (admittedly on terms that are not as favourable to copyright owners as would obtain in case of commercially negotiated licenses). In so doing, they help increase the number of licensees that copyright owners transact with and increase the incentive for such owners to create copyrighted content.

Even if this premise is incorrect (and I see no reason why it would be,) given the presumption of constitutionality that attaches to all post-independence laws and the fact that it is an arguable position whether these provisions actually disincentivize the creation of copyrighted content, I would submit that a constitutional court would generally be loath to striking down such a scheme as being unconstitutional.

Further, Section 31D(8) preserves the legal sanctity of all agreements entered into between broadcasters and copyright owners before 2012 (the year in which this provision came into effect). As a result, Lahari’s fear of broadcasters trying to wriggle out of existing agreements is unfounded, at least qua a portion of such agreements.

Lastly, it bears mention that the Madras High Court repelled a challenge to the constitutionality of the impugned provisions in a 2016 judgment on a petition filed by South Indian Music Companies Association which I had covered here.

Reasoning that the impugned provisions are a product of a carefully considered balancing exercise and framed in such a way as to protect the interests of copyright owners as well as the public, the Madras High Court had upheld their constitutionality.

For all these reasons, I believe that the writ is unlikely to succeed. Only time will tell if the Supreme Court thinks so, too.

We’re pleased to bring to you a guest post by Adarsh Ramanujan. Adarsh is an advocate primarily assisting clients as a litigation attorney. He has recently started his own counsel practice with offices in Delhi and Chennai after having spent consideraaadble time with Lakshmikumaran & Sridharan at their New Delhi and Geneva offices. He obtained his B.Sc. LL.B. (Hons.) degree (Gold Medalist) from National Law University, Jodhpur  and LL.M. degree from University of California, Berkeley. He is a qualified Patent Agent in India. A major portion of his time is spent, practicing in the areas of IP & Technology Laws as well as in International Trade Law. He was however branched out into doing commercial litigation and arbitration work. His expertise also extends to regulatory laws such as environmental laws, biodiversity laws and cyber laws. Adarsh is currently teaching a seminar course on commercial arbitration in NLU, Delhi and has previously taught patent law in NLU, Jodhpur and at the CEIPI Institute (University of Strasbourg). He has authored or co-authored close to 30 publications on diverse topics, including on IP, WTO, constitutional law and international tax.

Adarsh has written several guest posts for us in the past as well, which can be viewed here, here, here, here, here, here, here and here.

Is There a Hidden Indictment of the Aadhaar in the Justice Sri Krishna Committee Report?

Adarsh Ramanujan

The Justice Sri Krishna Committee, while proposing its draft Personal Data Protection Bill 2018, has given specific recommendations for amendments to the Aadhaar Act. Although there is dissenting view on this subject, the Committee has proposed changes to be made to the Aadhaar Act: (i) “for bolstering privacy protections for residents” and (ii) to covert the UIDAI into a regulatory body with the powers of enforcement.

While there is no express indictment of the Aadhaar in the Committee’s Report (given the pendency of the matter before the Supreme Court), this author believes there is a hidden one. Some of the proposed amendments highlight the flaws in the Aadhaar ecosystem that concerns the constitutional right to privacy.

At the top of this author’s list would be the express mandate that the UIDAI be subject to the proposed Data Protection Bill. Given the critical nature of the information controlled by the UIDAI through the Central Identities Data Repository (CIDR), this author’s view is that there should be strict liability imposed on the UIDAI for any data breach, enforceable directly by the affected persons. As is typical of all legislation in this country, currently, no legal proceeding can be initiated against the UIDAI or its members for actions taken in good faith. While there is an obligation on the UIDAI and the persons responsible for protecting the information in CIDR, the UIDAI itself is not accountable for any breach.

The Justice Sri Krishna Committee, however, considers the UIDAI as a data fiduciary (an entity that the purpose and means of processing of personal data), which will be subject to several statutory obligations under the proposed data protection framework. Although even the Draft Bill does not appear to go the extent of imposing strict liability for data breaches of such sensitive data, the UIDAI and persons involved would be held accountable to data security, notification of breaches, data audits and so on. There has even been a recent litigation initiated in the Delhi High Court seeking damages for data leakage. The current lack of accountability of the UIDAI is a vital flaw that needs plugging.

A crucial second proposal is a mandatory split between online and offline verification for verifying the identity of an individual. Online verification involves the collection of the Aadhaar number and biometric information for submission to the Central Identities Data Repository. Offline verification refers to verification of identity without such collection and submission. Examples of the same include the new Virtual ID implemented recently by the UIDAI. The Committee has proposed that online verification must only be limited to instances governed expressly by Parliamentary law or prior-approved public bodies exercising public functions. Private entities are not entitled to collect Aadhaar number or biometric information and can only resort to offline verification methods.

Currently, the Aadhaar Act does not contemplate this split and allows for online verification by a private party, which exponentially increases the chances of leakage of critical personal information. The UIDAI may happily claim that such Offline verification (Virtual ID) is already in place. However, a gaping hole in the legislation that could be plugged (or as easily taken away) through executive fiat and that too, after everyone was forced to share sensitive personal information with private players, cannot be considered as reasonable protection to the constitutional right to privacy. At least, not in this author’s books.

A final point is the amendment proposed by the Committee to Section 29(4) of the Aadhaar Act. The existing provision, though couched in negative language, allows for the Aadhaar number as well as the core biometric information of an individual to be published, displayed or posted publicly for purposes specified in the regulations. The proposed amendment limits this clause only to Aadhaar number, demographic information or photograph, such that the core biometric information is never publishable. The proposal plugs a technical, but a highly relevant, hole in the current law.

These are but a few key points worth considering. Not for an instance is this author suggesting that the proposed amendments are a panacea to the issues plaguing the Aadhaar system – one would let the Supreme Court decide this. Nevertheless, with the Supreme Court’s judgment on the constitutional validity of the Aadhaar system right around the corner, this author firmly believes that one cannot ignore these critical insights from the Justice Sri Krishna Committee Report and the Draft Bill.

The Bombay HC recently delivered an order dealing with certain objections raised against the Patent Agent Examination, 2016. In their decision, they interpreted the Supreme Court’s decision in Kanpur University v. Samir Gupta (“Kanpur University”). This post examines the questions which arise due to the Court’s interpretation and application of this decision.

The Question in Issue

The Petitioner (a candidate who appeared for the said Examination) raised contentions regarding the answer options of a multiple choice question in the Examination set by the Respondent (the Controller General). The disputed question reads as follows:

“As per the Indian Patents Act, a resident in India:

(a) Is free to file an application for patent in a foreign country without first filing an application for patent for the same invention in India.

(b) Can file an application for patent in a foreign country without first filing an application for patent for the same invention in India, only under certain special circumstances.

(c) Can file an application for patent in a foreign country only after filing a PCT application on same Subject matter.

(d) None of the above.”

Arguments of Petitioner

The Petitioners contended that the correct answer was option (b) since Section 39 (1) of the Patent Act provides that no Indian resident can file application outside India without first filing an application in India, unless written permission is sought in manner prescribed and granted by the Controller. According to them, this statutory condition amounted to the “special circumstances” mentioned in option (b).

They relied on the Kanpur University decision to support their contention. This case had dealt with a similar factual matrix wherein the answer key options of an MCQ had been challenged in the Court. The Court had held the following:

“We agree that the key-answer should be assumed to be correct unless it is proved to be wrong and that it should not be held to be wrong by an inferential process of reasoning or by a process of rationalisation. It must be clearly demonstrated to be wrong, that is to say, it must be such as no reasonable body of men well-versed in the particular subject would regard as correct. The contention of the University is falsified in this case by a large number of acknowledged text-books, which are commonly read by students in U.P. Those text-books leave no room for doubt that the answer given by the students is correct and the key answer is incorrect.”

The Petitioner hence contended that, on the basis of accepted textbooks on patents, option (b) was the correct answer.

Arguments of Respondent

According to the Respondent, none of the given answers were accurate and hence the correct option to the above question was option (d) i.e., “none of the above”. They stated that since a combined reading of Sections 35, 39 and Rule 71 of the Patent Act clearly demonstrated the procedure under which a resident of India could file for patent in a foreign country without filing for the same in India, the same would not amount to “special circumstances” in option (b).

Court’s Decision and Analysis

The Bombay HC decided in favour of the Respondent. Admittedly, the Petitioners did not prove that option (d) was undoubtedly wrong and merely attempted to prove option (b) correct through an inferential line of reasoning. The Court correctly observed that it cannot substitute views of experts with its own views unless the former’s views are against the law. It is clear from the Kanpur University decision that the Court is supposed to proceed on the assumption of the accuracy of the answer key option and that the answer key option cannot be proven to be wrong by an inferential process of reasoning.

The problem arises when the Bombay HC applies such a reasoning to prove the key answer correct. In its decision, it makes a clear assertion that “it would be appropriate to contend that an established law can’t be considered as a special circumstance” when it agrees with the Respondent’s line of reasoning. Does the Kanpur University decision, however, allow the Court to make such a statement or is it supposed to limit itself to the mere assumption that the answer key option is correct? Also, what exactly is “special circumstance” with regard to the Patent Act? The Court does not base its assertion on any legal reasoning or precedent and simply makes a blanket statement regarding the same.

Another point of consideration which arises in this case is the troubling ambiguity of the answer options provided by the Controller. In this regard, the Court merely observes that “in an objective type of test usually the answers in the options are formulated in such a manner that making a choice is made difficult and tricky and it is therefore a real test of making the right choice” However, a candidate faced with such a question with ambiguously worded options is bound to attempt option (b) since Section 39 provides for such a situation in law and “special circumstances” is a fairly vague term. Given that the examination decides the fate of many and the future of the Patent Office, the Controller would do well in ensuring that better questions are framed with less ambiguous options in the future to prevent such confusion.

Image from here.