We’re pleased to inform you that the International Trademark Association (‘INTA’) is organizing its second Asia-Pacific Moot Court Competition, which is scheduled to take place in Singapore on March 1 & 2, 2019. The deadline for teams to register is November 2, 2018. For further details, please see the post below:

INTA’s Asia-Pacific Moot Court Competition 2018-19

The Asia-Pacific Moot Court Competition will be open to law students from law schools that are located in the Asia-Pacific region and globally. This competition will feature a fact pattern consisting of important issues related to trademark and unfair competition law and practice. The law students who participate in the Asia-Pacific Moot Court Competition will have the opportunity to develop their brief-writing skills and mastery of oral advocacy in a mock courtroom experience. Additionally, law students will receive practical feedback, after each set of arguments, from the panel of judges. The judges will be INTA member volunteers, all of who are accomplished trademark practitioners and professionals from the region.  

Now entering its 28^th year, the Lefkowitz Competition is an annual event bringing together hundreds of law students in the United States. Building on the success of the Lefkowitz Competition, INTA hopes to develop regional moot court competitions around the globe in years to come.

The winning law school will receive a donation from INTA of 1000 USD. The winning team members will each receive a monetary prize as well as complimentary INTA student memberships, giving them access to all of INTA’s online resources (at no cost) and all of INTA’s conferences, meetings, webcasts, and more (at highly subsidized pricing). INTA student membership also gives your law students access to INTA’s international community of trademark professionals, the world’s premier professional network of intellectual property attorneys.

The Moot Problem can be accessed on INTA’s website here and the Rules of the Competition here. For more information about the competition, please click here.  

Please reach out with any questions that you may have to Ms. Kensey Cybul at kcybul@inta.org.  

Doctor offers informed consent to place signature

For the last 6 months, we’ve seen The Hindu reporting on bedaquiline, Janssen’s new experimental TB drug from various angles. There was the first set of reportage by Vidya Krishnan, which was mostly incorrect and possibly fake news. Then there was the opinion editorial by R. Prasad, a correspondent at the paper, who while noting the pending Phase III trials for the drug, recommended ramping up access to the drug. I’m not sure whether it is regular for health reporters to be in the business of endorsing new medicines. He simply skipped any discussion on the flawed consent form being used by the Indian TB program instead publishing a news report quoting one doctor on urgent ethical requirement in making bedaquiline available to TB patients.

Thankfully though, on Sunday, the Hindu published yet another report, this time by its correspondent Priyanka Pulla who went and actually spoke to patients being given bedaquiline at a government hospital in Delhi. One of the patients told her that the patients are not even asked to sign the informed consent form, forget being provided the information recommended by the US FDA and the World Health Organisation (WHO), namely the fact of the deaths in the Phase IIb trials.

Pulla quotes a patient stating the following:

“Kumar doesn’t remember being told all this. “They didn’t tell me anything. Nor did I sign any form,” he says. Even if he had been given the patient-information booklet (designed by India’s Central TB division) for bedaquiline, he may not have learnt about the mortality risk.”

Pulla’s report also quotes Dr. Jennifer Furin, who was associated with the drafting of the Indian guidelines on bedaquiline treatment, as saying the following (print issue of Hindu has the following quote):

“While the patient information booklet mentions side-effects such as dizziness, it does not disclose the Phase 2B results. Such a lack of disclosure is egregious”.

The question then is whether Dr. Furin will continue to demand increased access to the drug before fixing the consent form.

The silence on the deaths during the Phase IIB trials is only aspect of the flaw on the consent form. The other lapses are listed in a post I wrote over here comparing the WHO prescribed consent form and the actual form drafted by the Indian government. The other serious lapses in the consent form, under Indian law, is the clause forcing patients to waive any right to compensation in case anything went wrong and the complete silence that they were not informed that their data was being transferred to Janssen, the company that made the drug.

The flaws in the consent form that I mentioned above, are serious ethical and legal lapses. This episode is a reminder of the moral and ethical hazards of dropping/waiving regulatory requirements to allow access to experimental medicine in a country like India. Unfortunately, as long as there are single issue activists in India who have to make a living off “selling” the need for faster access to drugs, we will continue to see more such cases of Indians being used as guinea pigs for pharmaceutical companies being run by white men. I hope even white activists learn from this fiasco and stop trying to dabble in remote control activism aimed at influencing Indian policies when they clearly don’t understand the Indian ecosystem related to drug regulation. It is simply irresponsible to urge India to adopt regulatory decisions made in the West without accounting for the weak rule of law framework in the Indian health sector. For whatever reason, the voices of white activists and doctors get amplified in the Indian press and that gives them a lot more influence in India than is normal for a country of a billion brown skinned people. I do not fully understand why this happens with the press but they are hardly the only ones privileging white voices. I’ve seen it happen even in the context of Indian academia where white scholars get special treatment for no other reason than their race.

As for Janssen’s public relations team, congratulations on convincing, nay, brainwashing, a large number of Indians into thinking that Phase III trials are a simple formality that is not important and not required under Indian law.

Image from Wikimedia Commons

The IPR administrative offices form the backbone of the legal system of India’s IP regimes. The efficacy of the law depends, to a large extent, on how these offices manage their administrative tasks, which includes substantive evaluation of claims over IP, as well as tasks of effectively maintaining registries and public records. We have written, in the past, about many worrying aspects of their administration, such as non-transparent functioning of the Copyright Office, or the skewed incentives system within the IPO for processing patent applications. However, to give credit when its due, these offices have also taken laudable measures to improve efficiency and transparency, particularly given how over-burdened they are with their administrative tasks.

Below are some developments that particularly caught our eye for looking to emerging technologies, something that Government Offices are rarely known to do:

IPR Offices Open Up Video-Conferencing for Hearing Applicants

Following on the heels of the Indian Patents Office, which recently allowed video conferencing facilities for hearings of applicants (subject to the Controller’s discretion), the Copyright Office recently published a public notice introducing video conferencing as an alternative mode of hearing applications for copyright registrations under Rule 70(12) of the Copyright Rules, 2013 (pertaining to the right to a hearing). Interested applicants may request a video conference hearing by emailing the registrar of copyrights within 14 days of the receipt of the notice of hearing.

Controller General of Patents, Designs and Trademarks calls for use of AI, Blockchain and Internet of Things

Another fascinating development is the invitation for Expressions of Interest (EoI) called for by the Controller General of Patents, Designs & Trademarks asking for companies or agencies working in artificial intelligence, blockchain, IoT and ‘other latest technologies’ to describe methods for “utilizing their mettle to address issues ranging from inception of a possible IP to its enforcement.” After receipt of the EoI’s, they will be evaluated on whether the proposals indicated can augment patent processing within the office. On this basis, a limited tender may be floated by the IPO for implementing these proposals.

Several other jurisdictions have already started implementing emerging technologies in a bid to improve administrative efficiency for a wide range of tasks – from reverse image searches for trademarks, or more efficient tools for recognising prior art in patents, to utilizing blockchain for copyright registration – and its never too late for India to join the bandwagon.

The issue of foreign law firms allegedly defying SC instructions in their practice in India was recently brought into attention by a complaint filed by Sumit Sinha, an advocate on record. The complaint was filed before the Bar Council of India, the Controller General of Patents, Designs and Trademarks and other authorities. It identified certain foreign law firms namely Zacco, Abu Ghazaleh, Mirandah Asia, United GIPS, Clydes and Anderson Global. Notably, all these firms have some sort of local presence in India i.e., either they have offices in India or a collaboration/association with an Indian firm. It is alleged that the patent office and the trademark registry accepted vakalatanamas from these firms and communicated with them.

Foreign lawyers and firms can practice in India only after compliance with the relevant laws and rules of registration. Sections 7(1) and 47 of the Advocate Act, 1961 recognise the principle of reciprocity i.e., nationals of another country can be admitted as an “advocate” under the Act only if the same is allowed for Indian nationals in that country. Further, Section 49 gives the Bar Council of India the power to prescribe rules for admission of persons other than Indian citizens as advocates in India. (These rules for can be found in the 2016 Bar Council Rules.)

The debate over foreign lawyers and law firms practicing in India was first addressed by the judiciary in the 2009 Bombay HC decision in Lawyers Collective v. Indian Bar Council which held that the RBI was not justified in allowing foreign law firms to open liaison offices in India since these entities were not allowed to practice the profession of law in India unless and until they complied with the relevant provisions of the Act and Bar Council Rules. It also considered the question of whether a person needs to be registered as an advocate under the 1961 Act for practicing in non-litigious matters (matters which deal with drafting documents, advising clients etc. and differing from litigious matters such as acting and pleading on behalf of client before Court or any other authority). It delved into the interpretation of Section 29 of the 1961 Act for the same and held that the provision required persons practicing both litigious and non-litigious matters to be registered as advocates. The debate was continued by the Madras HC in 2012 in A.K. Balaji v. The Government of India where they held that although foreign law firms and lawyers could not practice in India, there is no bar for them to enter India on a “fly in and fly out” basis to conduct arbitration proceedings and to advise clients on matters of foreign or international law. The matter was then appealed to the SC and the Court mostly reiterated the Madras HC ruling in its decision in Bar Council of India v. A.K. Balaji, albeit with certain modifications and stated that foreign players could “fly in and fly out” only on a “casual basis” and that foreign lawyers had “no absolute right to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration”.

Coming back to the complaint: The main issue here is that the patent office and trademark registry are allowing these foreign firms to file vakalatnamas. Vakalatnamas are documents by which an advocate is empowered to appear or file pleadings before a court, tribunal or any other authority and to act on behalf of their client. Allowing these law firms to file vakalatnamas would practically tantamount to allowing them to practice in litigious matters in India, thereby overlooking the SC instructions in this regard. Hopefully, the allegations in this complaint will be properly addressed by the concerned authorities and investigation will be conducted to examine the veracity of such allegations. In any case, care should be taken by Indian IP law offices to ensure compliance with the SC ruling in such matters.

Image from here

We’re pleased to bring to you the fifth post in the ongoing series of insightful posts by Prof. (Dr.) N.S. Gopalakrishnan on problems with India’s plant varieties’ regime. The earlier posts in the series can be viewed here.

Problems with the Indian Plant Varieties Regime (V):

Farmers’ Rights – A Myth or Reality (I)?

Introduction

One of the significant contributions of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 is the Chapter on Farmers’ Rights. It is intended to comprehensively address simultaneous promotion and sustenance of informal innovation in agriculture along with formal modern breeding. Hence, the farmers’ rights in the Act include: (a) the right to register new and existing varieties bred, evolved and developed by farmers; (b) benefit sharing, recognition and award for the farmers and communities considering their contribution towards the evolution, conservation and improvement of farmers’ varieties  which are used for breeding new varieties; (c) the right to save, use, sow, resow, exchange, share or sell farm produce including seeds of new varieties; (d) compensation from the breeder of new variety for failure of the performance of the new variety; (e) protection from innocent infringement; (f) authorization in case of use for breeding essentially derived variety from farmers’ variety; (g) exemption from all kinds of statutory fees; (h) creation of Gene Fund and its utilization; and (i) obligation of the breeder to disclose the information regarding the use of genetic material conserved by the tribal or rural families in breeding of new varieties. Thus, farmers’ rights in India are far beyond the limited protection of farmers envisaged in the international instruments of UPOV and ITPGRFA of FAO. It is to be noted that as per Article 15(2) of the UPOV (1991), the obligation of member states to provide for a farmers’ right is optional and is confined to the right to save and use of the propagating materials in their own holdings. Similarly, according to Article 9 of ITPGRFA (2001), farmers’ rights are confined to the right to “save, use, exchange and sell the farm-saved seeds/propagating materials” and right to protect traditional knowledge and sharing of benefits arising from the utilization of plant genetic materials for food and agriculture. In addition, Article 13(3) of ITPGRFA also envisages benefit sharing from the Multilateral System to the farmers, especially from developing countries, to promote conservation and sustainable use of traditional varieties. The attempt here is to highlight the practical problems faced by the farmers in enjoying farmers’ rights as envisaged in the PV Act and the lackadaisical efforts made by the Authority in implementing some of its obligations. An analysis of the implications of conferring intellectual property rights to new and existing farmers’ variety is discussed in Part – I of this post and the practicality of implementing other economic benefits such as benefit sharing, recognition and compensation etc., is dealt with in Part – II.

IP Rights of farmers on new and existing farmers’ varieties 

Farmers’ varieties, whether existing or newly bred, are the outcome of traditional methods of natural breeding followed by the farming communities, which involve skill, effort, patience of careful observation, selection, saving, sowing and re-sowing of seeds, sharing the seeds for cultivation etc. These breeding methods are often termed as “collective breeding” and have prompted many to argue that farmers’ varieties belong to the communities/groups rather than to individual farmers. This is indicative of the traditional names associated with farmers’ varieties. Even if an individual farmer is responsible for evolving a variety and it is known in his/her name, the sharing, conservation and promotion of the variety has been considered as a collective responsibility of the community. These practices have resulted in treatment of the farmers’ varieties as collective property of the communities. Hence, at the time of enactment of the Act, there were powerful arguments made in favour of considering farmers’ rights as “community rights”. However, it appears the Parliament has departed from this traditional community notion of farmers’ varieties and recognized both individual and group rights for existing and newly bred farmers’ varieties. In this context, it is to be noted that the village and tribal communities in India have been substantially influenced by the perils of individualism, which is changing their traditional way of life and this seems to have significantly swayed the policy making. This is evident from the right of the farmer to register his/her new variety under section 39(1)(i) (hereinafter termed as “new farmers’ variety”) and the right of farmer, group of farmers and community of farmers to register the existing farmers’ variety under section 39(1)(ii). The attempt is to examine the problems that the farmers confront in their earnest efforts to enjoy the exclusive IP rights promised by the Parliament by registering both these categories of farmers’ varieties.

IP Rights for “new farmers’ variety”

The problems that are faced by a farmer in protecting the “new farmers’ variety” developed by her/him include (a) compliance with the formalities for registration; (b) payment of statutory and other fees; and (c) enjoyment of the IP rights. According to section 39(1)(i) of the Act, a farmer who bred or developed a “new farmers’ variety” is entitled to protection similar to that available to a breeder of a new variety under the Act. This presupposes that for registration of a “new farmers’ variety” under section 14(a) read with sections 15(1) of the Act, a farmer is expected to follow the same registration procedure as that prescribed for a new variety developed following formal breeding techniques. Hence, a farmer is also under an obligation to provide all information sought in Form 1 of the application for registration of new variety including technical details as per the “Technical Questionnaire” for determination of the criteria of DUS. In practice, this is possible only if a “new farmers’ variety” is tested both at the lab and field by a modern breeder and the technical details are found out. Needless to reiterate, a farmer develops a “new farmers’ variety” using informal breeding methods. This means that the outcome of informal breeding based on genetic variability (phenotype) has to be scientifically validated by modern scientists based on DUS standards set by the Authority on the basis of genetic makeup. Leave alone the problems of finding out the technical details as prescribed by the Act, it is anyone’s guess that this is not going to work in reality.

Further, as per the Act, the farmer is also bound to pay all statutory fees for registering his “new farmers’ variety” which as of now include, a registration fee of Rupees 7,000 along with a DUS test fee of maximum Rupees 2 lakhs (both mandatory) depending on crops prescribed by the Authority. In addition, an onsite DUS test fee of a maximum of 8 lakhs depending upon the crops, if required, must also to be paid. Thus, it is clear that the fee is different for different types of crops. To illustrate, for rice, which does not require an onsite DUS test, the fee is Rupees 37,000 [7,000 + 30,000 (DUS)] and for black pepper, which requires an onsite DUS test, the fee is Rupees 1,12,000 [7,000 + 45,000 (DUS) + 60,000 (onsite DUS)]. This is in addition to a professional fee of Rupees 25,000 to 50,000 charged by a reasonably good law firm whose assistance is needed to complete the registration procedure. It is also to be noted that once the registration is over, the farmer has to pay an annual fee of “Rupees 2000 plus 0.2 per cent of the sales value of the seeds of the registered variety during the previous year plus 1 percent of royalty, if any, received during the previous year from the sale proceed of seeds of a registered variety”. The farmer must also keep in mind that the first registration is valid only for nine years for trees and vines and six years for other crops and there after she/he has to pay Rupees 7,000 as renewal fee. Hence, it is safe to conclude that as of now a farmer who has developed a “new farmers’ variety” has to spend an estimated amount of about Rupees 2 to 3 lakhs to get the variety registered and maintain it till the end of the registration period. It is a foregone conclusion that no ordinary farmer (small and medium) can afford this.

Furthermore, according to the Act, the incentive for a farmer to register a “new farmers’ variety” is the exclusive right “to produce, sell, market, distribute, import or export the variety” for a period of fifteen or eighteen years, as the case may be. It is important to examine whether the farmer breeder would enjoy considerable economic returns from this exclusive right and thereby, from the registration of a “new farmer’ variety”. Unlike the hybrid varieties bred using modern technology, the “new farmers’ variety” is based on traditional breeding and the outcome is a “typical” variety which could be replicated by saving the seeds from the farm produce. Hence, once it is released to the farmers for cultivation, it is possible for the farmers to save the seeds from their farm produce for the next season and not return to the registered farmer for them each season. In this context it is important to note that as per section 39(1)(iv) of the Act, all farmers cultivating a registered new variety have the right to “save, use, sow, resow, exchange, share or sell farm produce including seeds” except the branded seeds. Hence, the economic incentive for the farmer who registers his “new farmers’ variety” spending a lot of money is very limited. This is not the case with modern breeders, particularly from the private sector, who use modern technology (eg., F1 Hybrid) and ensure that the farmers come back to them for seeds every season. This is an important limitation in extending formal IP rights as an incentive to promote the continued practice of traditional breeding.

This means that the present approach of treating the “new farmers’ variety”, bred by the farmer using informal breeding, similar to a variety bred using formal breeding for protection would not provide much economic return to the farmers. An examination of the Annual Reports of the Authority from 2008 to 2017 show that only six applications were received for registration of “new farmers’ variety” (one each in 2012-13; 2013-14 and 2014-15 and three in 2015-16) but no information is available regarding issue of registration certificates to these applicants. It is extremely difficult to find out the details of these applications from the list of status of applications or list of certificates issued by the Authority.

It appears that the Parliament made a bad judgment in treating “new farmers’ variety”, based on informal breeding, equivalent to a variety bred using formal breeding. If the intention of the Parliament was to simultaneously promote informal breeding by farming communities, there is an urgent need to prescribe different parameters for testing and registration of the “new farmers’ varieties” bred by the farmers using informal breeding.  The fees must also be revised to make the registration more pocket friendly for the poor farmers. There is also a need to revisit the approach of conferring of formal IP rights as an incentive to breed these varieties.

IP Rights for Farmers’ Variety

There are also problems with the enjoyment of formal IP rights by the farmers who have registered their farmers’ varieties under section 39(1)(ii) read with section 14(c) of the Act. Here also, departing from the traditional notion of collective breeding, the Act recognizes both individual and community of farmers to separately file application for protection of existing varieties. As per section 24(6)(iii) read with section 28(1) of the Act, the registrant of a farmers’ variety will also enjoy the exclusive right to “produce, sell, market, distribute, import or export the variety” for a period of fifteen years from the date of registration of the variety. Since the registered farmers’ varieties are “typical” varieties developed by the farmers, the seeds of these varieties are already in the hands of farmers cultivating the same and they need not again approach the registered owners for seeds for the next season and make any payments to them. As mentioned earlier, due to section 39(1)(iv), the farmer who is already cultivating the farmers’ variety has the right to save the seeds and resow them without seeking permission from and paying any amount to the registered owners. Hence, it appears that the right and the duration of protection is practically of no value and is not going to bring any economic benefit to the registered owners of a farmers’ variety. The only reason behind the farmers showing unprecedented enthusiasm to register farmers’ varieties (11420 applications and 1550 registrations) seems to be the free of cost registration assured by the Parliament and religiously implemented by the Authority. The large number of awareness activities (1135 till 2016-17) initiated by the Authority in the last decade for the farmers on the economic benefits promised by the Parliament also seem to have influenced them to register their traditional varieties. One wonders whether this is what the Parliament conceived when the farmers were conferred with the right to register their traditional varieties.

The formal IP rights conferred to the farmer for the “new farmers’ variety” and traditional farmers’ variety has proved to be of very little incentive for promotion and sustenance of traditional breeding practices by the farming communities. Limited but systematic empirical research carried out after the introduction of PV Act concluded that farmers still prefer to continue with the sharing practices and that modern IP is not an incentive to promote traditional innovation and in situ conservation of farmers’ variety (Mrinalini Kochupillai, 2016). It is true that, as suggested in the study, additional evidence is required to conclude the negative impact of extending formal IP protection to promote informal breeding. However, the available evidence indicates that the earlier the Parliament revisits its present approach the better it would be for preservation and promotion of an informal breeding culture which has proved central to sustainable agriculture and food security in India.

Image from here

Stay updated with our recap of this week’s posts!

Thematic Highlight 

Prashant provided his latest report on the burgeoning Bedaquiline controversy. In his previous posts, he had commented on The Hindu’s lack of reportage on the harmful effects of this drug. In this post though, he reports that a Hindu correspondent visited the patients who were being given this drug and it was discovered that the patients were neither informed about the deaths in the Phase 2B trials nor were they asked to sign the informed consent form.

Topical Highlight

Divij wrote about how Indian IPR administrative offices are opening up to new technologies in their practice. He first reports that the Indian Copyright Office has put out a public notice introducing video conferencing as an optional mode of hearing applications for copyright registrations. He then reports that the Controller General of Patents, Designs and Trademarks recently released an invitation for Expression of Interest for companies or agencies utilising AI, blockchain, ‘internet of things’ and other such technologies to describe methods for their usage in addressing IP issues.

Other Posts

I had written a post on a complaint filed before the BCI and the Controller General of Patents, Designs and Trademarks about foreign IP law firms allegedly being allowed to file vakalatnamas. Giving a brief recap of past rulings of the judiciary on the issue of foreign law firms practising in India and also the latest SC ruling on the same, I note that, such allegations, if found true, would amount to overlooking the SC instructions. I conclude by highlighting the need for proper investigation and redressal of these allegations.

Prof. N. S. Gopalakrishnan provided us yet another incisive take on the Indian Plant Varieties Act. In his latest post, he describes the hurdles in the implementation of Farmers’ Rights to register new and existing plant varieties. He concludes that the formal IP rights proffered to farmers for such registration have proven to be ineffective for promotion of traditional breeding practices and require revision.

SpicyIP Events

Pankhuri announced that the International Trademark Association is organizing its second Asia-Pacific Moot Court Competition. The competition is scheduled to take place in Singapore on March 1 & 2, 2019 and the deadline for registration is November 2, 2018.

Other Developments

Indian

Judgments

M/s Dia Health Foods Pvt. Ltd. v. M/s Diabliss Consumer Products – Madras High Court [September 06, 2018]

Plaintiff-respondents are the manufacturers and distributors of food products such as Diabliss Sugar, Diabliss Herbal Lemon Tea, and are owners of the artistic design for the pouch ‘Diabliss Diabetic Friendly Sugar’. D1 is the plaintiff’s distributor of products. D2 filed a complaint to the Indian Trade Promotion Organization requesting the plaintiff’s to desist from displaying their products with an artistic design similar to that of D2. Plaintiffs allege the infringement of their copyright by D2, who started using the design only from October 2017 while the plaintiffs started using their design from May 2015. Defendant-appellants were found to have registered the trademark for the pouch, and the plaintiff would not be barred from claiming copyright protection. Further, designs belonging to D1 were found to be very similar to that of the plaintiff, and were found to be taking advantage as being the plaintiff’s distributor as per orders of the Single Judge. The High Court, on perusing evidence [the distributorship agreement specifically provided that D1 acknowledges the plaintiff-respondent to retain all TM, Copyright and proprietary rights] found the defendant-appellants not be acting bona fide. The appeal was thus dismissed.

Bharati Consumer Care Products v. Ganesh Industries – Madras High Court [September 18, 2018]

Plaintiff’s are the registered trademark owners of XXX, and copyright owners of the artistic design XXX LABEL with a red, white and yellow colour scheme with metallic blue background. Defendants own the trademark MAXX to manufacture and distribute detergent powder, detergent cake, and washing powder. Plaintiffs sought a permanent injunction restraining the defendants from infringing and passing off the latter’s products as that of the plaintiff. Both parties have agreed to settle amicably and enter into a Memorandum of Compromise, and a compromise decree in accordance with the MoC terms shall be passed.

Tablets (India) Ltd. v. D.R. Johns Lab Pharma Pvt. Ltd. – Madras High Court [September 26, 2018]

The issue in this ex-parte order was a case of infringement and passing off trademarks pending registration. Plaintiffs are the owners of three medicinal and pharmaceutical preparations Streptococcus faecalis T-110 [T1], Clostridium butyricum TO-A [T2] and Bacillius mesentericus TO-A [T3]. T1 is registered while T2 and T3 are yet to be registered. The defendants were found to manufacture, use and market the aforementioned bacteria strains in their products, and thus arose a case for infringement and passing off the trademarked bacteria strains. Being generic pharmaceutical names, all the marks were found to be deposited with the International Depository Authority pursuant to the Budapest Treaty by the plaintiff. Communications between both parties revealed that the defendants recalled all stock of the infringing medicinal products. The plaintiffs prayer to grant a permanent injunction restraining the defendants from infringing and passing off their products as that off the plaintiffs along with liquidated damages was decreed in part.

Mr. A.D. Padmasingh Issac v. M/s Sri Aachi Appalam – Madras High Court [September 26, 2018]

In this summary judgment, the Court granted a partial permanent injunction restraining the defendants [owner of registered trademark AACHI/AACHI APPALAMS/SRI AACHI APPALAMS] from passing off and infringing the plaintiff’s registered trademark AACHI and AACHI APPALAMS with respect to appalams/masala items and using the same pouches/packets. Spices are mentioned under Class 30, while masala powder and appalams are not specifically enumerated under Class 30 and the plaintiff submitted that masala powder and appalam can fall within the existing heads under Class 30. In deciding whether or not the TM Office can issue registration certificates for goods specifically not  o enumerated in any of the Classes, the Court left the question open and unanswered. Note: The Court specifically held that this judgment is not to be treated as precedent on the question of whether or not the TM Office can grant registration for products not specifically enumerated in any of the 45 classes.

M/s Vini Cosmetics Pvt. Ltd. v. M/s Abhay Enterprises & Ors – Delhi High Court [October 01, 2018]

Plaintiffs have applied for the registration of a word and label mark of their product GLAM UP LABEL which is a cream powder in red colour packaging. The defendant was found to be using an identical mark and carton, and was importing the same. The Customs Officer, Mumbai sent a notification regarding one such consignment to one of the plaintiff’s manufacturers. The Court found the plaintiff’s rights to be violated from a simple perusal of the carton and packaging products. The defendant has undertaken not to manufacture, sale or import these infringing products, and has been ordered to pay 20% of the total import consignment value along with damages to the plaintiff.

Montblanc-Simplo Gmbh v. M/S Bajaj Belts – Delhi High Court [October 11, 2018]

The plaintiffs filed a suit seeking a permanent injunction restraining the defendants from infringing their trademarks or passing off any good/service of the defendant as that of the plaintiff and compensatory costs on account of loss of sales, reputation and goodwill. The court examined the reports by the Appointed Commissioners and found that the defendants’ plea of being first-time infringers had no merit in light of the volume of the infringing goods seized and held that the defendants were seasoned infringers and counterfeiters. Accordingly, the court disposed of the suit, granting a permanent injunction according to the prayer of the plaintiff and awarding costs to the extent of actual costs and litigation cost.

Sun Pharmaceutical Industries Ltd v. Infocom Network Limited – Delhi High Court [October 12, 2018]

The plaintiffs filed a suit seeking a permanent injunction restraining the defendants from infringing their trademarks or passing off the goods and business of the defendants as that of the plaintiff and sought an order for costs. The court examined the reports by the Appointed Commissioners and found that the defendants’ trade names like “SUN PHARMA AGENCY”, “JBK SUN PHARMA”, “SUN PHARMA WORLD” and domain names like “www.godsun.in”, “www.sunpharmachem.com” and “www.raisingsunpharma.com”, were deceptively similar to that of the plaintiff’s and did infringe the plaintiff’s trademarks. Accordingly, the court disposed of the suit, granting a permanent injunction according to the prayer of the plaintiff, directed the defendants to cancel the domains and awarding costs to the extent of actual costs.

M/s. Super Cassettes Industries v. M/s Ram Cable Network &  M/s. Super Cassettes Industries v. M/s Raghunathpur Cable Network   – Delhi District Court [October 20, 2018]

In both cases, the court granted an ex-parte permanent injunction restraining the defendant, a cable operator, from infringing the copyright of the plaintiff, the owner of the ‘T-Series’ label, by broadcasting cinematographic films and musical works owned by it, over the cable. It further directed the defendant to hand over all the infringing material to the plaintiff and pay punitive damages of Rs. 20 lakhs to the plaintiff.

News

• Sun Pictures gets notice for Vijay-starrer ‘Sarkar’ over copyright infringement allegations
• Competition Commission’s policy prescriptions to make healthcare transparent, affordable
• ZEE secures US patent on a unique technology platform
• India-based ‘Infosys Ltd.’ Wins Trademark Case Against New York Indian American Firm ‘Infosys International

International

• New copyright ruling protects right to repair gadgets and archive video games
• Kendrick Lamar Must Face a Black Panther Copyright Infringement Suit, Judge Rules
• Qualcomm Seeks to Cut Patent Claims From Apple License Fight
• Johnson & Johnson loses ruling over patent for prostate cancer drug Zytiga
• Judges: Georgia can’t Copyright its Laws

We’re pleased to bring to you a guest post by Simrat Kaur. Simrat is a New Delhi based IP lawyer. She pursued her undergraduate law course from Rajiv Gandhi National University of Law, Punjab and masters law course from National University of Singapore. After having worked with leading Indian law firms (Anand & Anand and Luthra & Luthra Law Offices), she has recently started independent practice under the banner “The Endretta”.

Registration of RMPL as a Copyright Society – Will It Set the Stage for New Repertoire of Problems?

Simrat Kaur

The system of collective management of copyright, through state recognised copyright societies, has been in place for a long time. These societies administer the rights of the authors / copyright owners by licensing their works to commercial users and collecting royalties on behalf of them. Since this regime provides for a practical, relatively efficient, convenient and cost effective solution for copyright licensing, its central idea has always appealed to all the stakeholders. However, the model and execution thereof has been widely criticised to be flawed. The primary ground of criticism has been and continues to be the value deprivation suffered by authors / original creators of works, on account of subjective functioning of the copyright societies (“CSs”) and the arbitrary control of big music companies who legally own and exploit their works.

To combat dominant position of music biggies in the CSs, the regulatory framework which was already oriented against abuse of power was further sharpened; vide significant amendments to the Copyright Act in 2012. Firstly, the author’s right to receive royalty was made non-assignable. Secondly, the authors were provided with the administrative control in the CSs, at par with the copyright owners. Authors now possess an equal right to be members of the CSs and their governing bodies. Thirdly, for public interest, publication of fixed tariff scheme for each type of commercial exploitation of works was also mandated in order to save small users from losing out due to weak bargaining power. Users were further enabled to contest those tariffs, by making a complaint to Copyright Board, if they feel that tariffs are arbitrary. This put big companies and small users at the same footing. Apart from these crucial changes, the amendment also mandated that existing copyright societies shall get themselves re-registered within a period of one year from the date of amendment.

Despite these major alterations in law to enhance social welfare and put authors / creators of works at par with those who own the works legally, stakeholders continue to voice their concerns over the working of the copyright societies, implementation of law and sometimes even the current model of collective management.

Recently, an application has been made by The Recorded Music Performance Ltd. (“RMPL”) for its registration as a copyright society which has again sparked the longstanding debate.  While Phonographic Performance Limited (“PPL”) has been operating to administer the public performance and broadcasting rights for decades, in the capacity of a copyright society, RMPL’s registration is being objected to by many, as the Copyright Act, recognises the principle of one copyright society in respect of one category of works. But the catch here is – PPL is currently not a registered copyright society as it has not obtained re-registration from Copyright Office, as mandated by the amended Copyright Act. Though, the Indian Performing Right Society Limited (“IPRS”) which works for and on behalf of the lyricists, the composers of music and the publishers of music was re-registered as a copyright society, in 2017, the application of PPL is still pending. Now, the question is out of PPL and RMPL, which society should be granted registration and whether both could be registered? Another question which needs to be addressed is that should there be an initiative to encourage an improved functioning of a society which has been working for decades or would it be better to replace it with a new one?

At the outset, it is important to make it clear that although law does recognise the principle of a single society for each sector of activity, however, there is no specific bar on the registration of more than one society. The proviso to Section 33(3) of the Copyright Act goes as follows: “that the Central Government shall not ordinarily register more than one copyright society to do business in respect of the same class of works”. It implies that the Copyright Office does not lack the power to register both PPL and RMPL, if it deems fit. But would it be sensible to allow plurality of copyright societies in the same category of works?

Allowing plurality of copyright societies for the same class of works will have some detrimental and impractical consequences. It will place a substantial burden on the users and could lead to irrelevant competition and confusion. As opposed to a convenient arrangement where users have a single access point to seek licenses, they will have to undertake research as to which copyright society controls a particular work. Multiple licenses will be required from different societies in order to gain access to a broader repertoire with more variety. Large intermediaries may manage, but this will be too much of a hassle for small users like hotel / cafe owners etc. who will need to invest a lot of time and labour to research on representation. Such complexity in the process and consequent confusion will put off people from seeking licenses, which will in turn contribute to piracy.

Some would defend plurality on the ground that it would create a competitive environment, in terms of pricing and services, benefiting all. However, considering the fact that the statutory framework confers the final power to determine the tariff rates on the Copyright Board and not the societies, the critical question is – how will it actually create competition in pricing?

Moreover, the traditional argument that copyright societies operate on economies of scale still holds good – broader the repertoire, lesser the costs, as the administrative cost per work decreases with increase in the number of works. This is another reason monopoly mandate works best in the case of copyright societies. The nature of the work is such that even if there is no statutory monopoly, natural monopoly is bound to exist. If multiple societies are allowed in each segment of works, big copyright societies will emerge stronger as they will attract more users owing to their good distribution service and a broader / more valuable repertoire. Smaller societies will lack users and therefore, further cut down on their administrative costs to survive, which will affect their quality of service. Apparently, disadvantages far outweigh the advantages; making exclusivity of CSs for a given form of copyright, the most apposite option. As far as the abuse of monopoly position is concerned, it could be checked by imposing statutory limits on the power of copyright societies, in relation to user engagement, pricing, membership and governance. The amendments in law, as mentioned above, abundantly take care of these aspects and provide for enough regulation.

Opting for RMPL over PPL too does not, apparently, seem to be a prudent move as PPL is a society which has been working since 1941, has a wide membership and has collected / delivered huge royalties in the past. The collective management of copyright requires administration competence; ability to deal with digital environment; wide networks for tracking down infringement and the knowledge of basic tariffs, licensing conditions, model contracts, distribution criteria and documentation. It requires staff with expertise in accounting, copyright law etc. Moreover, with the explosive growth of online content in past few years, copyright management has become a very costly affair. World class technology platforms are required for the same. It would not be wrong to say that RMPL, being a beginner, is no more than an amateur when compared to PPL. Additionally, the application of RMPL reflects that all the seven members of its governing body are record label owners which is, anyway, in contravention of Section 35 of the amended Copyright Act, that mandates equal share of authors and owners in the governance. Therefore, there seems to be no rational basis for choosing RMPL over PPL. Rather, the focus should be on the improvement of the functioning of PPL in terms of transparency and efficiency. It is time to explore new technologies to meet the requirements of digitalisation and deploy tools like incorruptible block chain systems for controlling royalties and reducing the processing costs.

Since the law is interventionist in nature, the Central Government has all the power to exercise control over the societies and enforce compliances. It can make enquiries into societies, put pre-conditions to their registration, suspend the registration and even cancel it if there are compelling reasons.  The regulatory framework is very much in good shape as it provides for a system of permanent supervision and not just an ad-hoc control. Therefore, the solution lies in an honest, pro-active and corrective approach by the Government coupled with a solution oriented perspective, to achieve democratic functioning and transparency in the existing societies. Looking for alternatives such as replacing old societies with new ones or recognising plurality of societies will not offer a solution but worsen the problems in many areas.

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A Google search throws up some amusing examples when one searches for oxymoron examples.

The recent decision by the UK Court of Appeal in Unwired Planet v. Huawei (click here) is exactly that.  Why, would you ask? Because on one hand there is Brexit and on the other hand this judgement-it seeks to enforce those patents that are not under its own jurisdiction.  Ergo-oxymoron.  Perhaps some part of the judgement seems to be yearning for the good old days of the British legal system and hence the grand assumption of having global jurisdiction, or maybe a colonial hangover that refuses to go away.

This decision would no doubt be very much welcomed from the SEP owner side and would make London (like New Delhi) as the go to court for SEP litigation / assertion.

To recap, I will refer to my previous post on the issue (Click here to see the previous post- Justice Birss / single judge decision).  In the post, I had focused on a limited set of issues: global portfolio licensing, valuations of patents.  Similarly, for this post I am focusing the analysis on these issues.

Summary – a few selected paragraphs from the judgement regarding the FRAND framework

27. First, an undertaking given to ETSI pursuant to clause 6.1 has international effect. This is because the standards supported by the ETSI undertaking are themselves of international effect so that businesses can make and supply, and members of the public can use, products which comply with the standard all over the world. To this end clause 6.2 provides that an undertaking given pursuant to clause 6.1 in respect of a member of a patent family shall apply to all existing and future ESSENTIAL IPRs of that patent family unless there is an explicit written exclusion of specified IPRs at the time the undertaking is given.

28. It was common ground at the trial that UP was bound in law to license its ESSENTIAL IPR on FRAND terms. The ETSI IPR Policy is governed by French law and the judge found (and there is no appeal against his finding) that the FRAND undertaking given by UP was binding upon UP and enforceable by Huawei and, indeed, any third party……     34…..    The judge was not persuaded that global portfolio licensing necessarily foreclosed or restricted  competition. Indeed, he found that portfolio licensing was common industry practice and had efficiency benefits. It saved transaction costs for both licensors and licensees and obviated the need to determine a royalty on a patent by patent basis. What was more, the vast majority of patent licences before the court were worldwide licences or at least covered a number of different territories. The judge drew the inference from all of the evidence before him that multi-jurisdictional portfolio licences were in and of themselves unlikely to have anti-competitive effects and that a demand for a worldwide licence was not inherently likely to distort competition. He therefore rejected the general submission made to him that worldwide portfolio licences were necessarily and inherently objectionable. They might or might not be, and all would depend upon the circumstances pertaining to each particular agreement and licence.

Predictably, Huawei had challenged some of the issues: an important one of which is Global nature of a FRAND license.  Huawei (correctly) claimed that the imposition of a global licence on terms set by a national court based on a national finding of infringement is wrong in principle.

19.  Huawei now appeals against Birss J’s final order with the permission of the judge on the following three grounds. It contends first, that, far from being FRAND, the imposition of a global licence on terms set by a national court based on a national finding of infringement is wrong in principle and leads to results which are manifestly unjust. That is particularly so in the present case, it continues. The judge held that, in order to be FRAND, the licence had to be global and had to include all SEPs owned by UP which it wished to license anywhere in the world. UP LLC was a party to the action only as a defendant to the competition law counterclaims and did not own any UK patents but only patents in other jurisdictions. Despite this, the judge set the global rate and terms of a licence in circumstances where 64% of the money to be paid relates to Chinese patents owned by UP LLC, rather than to any patent owned by UP International. What is more, the judge settled this licence notwithstanding the facts that (a) there was ongoing patent litigation in relation to corresponding patents in Germany and in China, and (b) there were some countries where UP had no relevant patents at all.   For example, in this case it led to a licence where 64% of the money to be paid relates to Chinese patents owned by the second Defendant, UP LLC. UP LLC is a company which owns no UK patents. The English court had, in effect, set rates for a portfolio for which a large part had no enforceable English patent.

The Appellate Court brushed aside this reasoning and found merit in the single judge statement that

34.  The judge was not persuaded that global portfolio licensing necessarily foreclosed or restricted competition. Indeed, he found that portfolio licensing was common industry practice and had efficiency benefits. It saved transaction costs for both licensors and licensees and obviated the need to determine a royalty on a patent by patent basis.e p

Here it ironic that the court sees only the examples provided by the Unwired.  Most of the licenses that were entered into were those of Ericsson LM as Unwired was formed very recently a few months before litigation commenced.  This is a logical assumption (wrong one) that just because something that was true in the past, is also true for the future.  Portfolio licensing was alright earlier as the parties were on an equal footing.  The present situation is not the same.  The Licensor and Licensees are at poles apart.  The situation may be compared to the jungle – the tiger and the deer have equal rights to live in the jungle – but we know who sets the rules.

The second assumption that transaction costs are minimized for both is also wrong.  The costs may be minimized for Licensor, but not for the Licensee.  Under the garb of a portfolio, patents of dubious quality may be pushed across as a part of the portfolio.  Second, expired patents may also be pushed across.  For example, GSM 2.0 standard came into being in 1995.  -GPRS came in 1997, and EDGE in 1998. All GSM 2.0 patents have expired and so have GPRS.  How can someone license something that is already in the public domain.

Here royalty must be determined on a patent-by-patent basis as the portfolio is not composed of equally valuable patents.  Some are peripheral, some may be central, or some may be prospective.  Hence it does not make sense to club everything together at the same rate.

Other important highlights:

Justice Birss had found that there was a single (set) FRAND term. The Appeals Court agreed with Justice Birss and found that the Non-Discriminatory aspect of FRAND was not hard edged.  Huawei claimed that similar / same sets of terms of rates should be offered to similarly situated parties.  The Appeals Court agreed with J. Birss that different rates could be offered to different licensees as long as there is some valid rationale for it / is not per se objectionable.

Conclusion:

Huawei is now faced with an obvious predicament.  It can choose to challenge the decision in English courts or challenge it in other territories where it has the upper hand – i.e. those territories where Unwired has no or less number of patents, on the grounds that an English court judgement goes beyond its jurisdiction.  There is also the unthinkable – It may also choose to voluntary forego an entire market depending on the valuation of the market viz. the costs of operating in the market.

This decision is bound to have an impact on future standards / and FRAND set up.  For 5G, will courts award royalty on the component level or on a use case basis as being touted by IP heavy weights?  One sees US courts decide in many cases on a reasonable royalty being awarded on the scope of the patent basis rather on the entire market rule.  UK courts go the other way.  Some European cases decide in favour of the licensee and so do some Japanese, Chinese and Taiwanese courts. Indian courts go in favour of patent owner.  Clearly, some more clarity is needed as the situation is gray.

It’s been around a week since the CCI released its press release on its policy note on ‘Making Markets Work for Affordable Healthcare’. In the past, the CCI has recognized the need to address issues in the healthcare industry on several occasions. For instance, it has observed in a past order that the lack of competitive forces in the pharmaceutical market has resulted in “innovative business practices, superior services, consumer choice, lower prices, etc.” taking a back seat. (In fact, the press release itself notes that the CCI has received “around 52 cases pertaining to the pharmaceutical and healthcare sector”.) This “first of its kind” policy note addresses issues of transparency of information and affordability of drugs in the healthcare industry and provides solutions for the same.

The Policy Note: It’s a great start…

Noting that the “information asymmetry” pervading the industry is resulting in restriction of consumer choice, the CCI pointed out four main issues and also gave related recommendations for dealing with the same:

1. Role of intermediaries in drug price build-up: The CCI noted that high trade margins have majorly contributed to high drug prices. Trade margins are the difference between the price at which manufacturers or importers sell to trade (“price to trade”) and the price at which patients avail the drugs (“maximum retail price”). The CCI recommended that high drug prices can be evaded by effective procurement and distribution of drugs, including e-trading of drugs.
2. Quality perception behind proliferation of branded generics: According to the CCI, the Indian market is filled with “branded generics which limit generic-induced price competition”. Note that branded generics are “drugs which are produced/marketed by the companies under their registered brand names/trademarks but their active pharmaceutical ingredients or process of manufacturing are not patented by them.” It was recommended that quality perception of these drugs should be addressed by ensuring that they adequately comply with quality control measures and regulations. The CCI also recommended combating the practice of artificial product differentiation with a “one-company-one drug-one brand name-one price policy”.
3. Vertical arrangements in healthcare services: The CCI made several recommendations such as issuing of periodic validated data by hospitals regarding mortality rate, infection rate etc. for better consumer choice, hospitals allowing consumers to purchase products from pharmacies outside, and not just in-house pharmacies, ensuring uniform quality of standards applied for accrediting diagnostic labs across India and ensuring portability of patient data between hospitals to aid hospital switching and to prevent lock-in effect.
4. Regulation and competition: The CCI noted that multiplicity of regulators at Centre and State level has led to lack of uniformity in implementation of regulations and suggested the promulgation of a mechanism under the Central Drugs Standard Control Organization to harmonize these regulations. It further recommended to make “approval of new drugs time-bound along with publication of detailed guidelines”.

Finally, the CCI also noted the issues of lack of healthcare professionals (attributable to the high cost of medical education) and inadequacy of health insurance.

…but what’s really in it for us?

It’s been opined that the Policy does not set out any new recommendations; similar suggestions have been put forward in the past. For instance, most of the aspects mentioned in the Policy regarding information asymmetry, quality perception of branded generics, procurement and distribution of drugs have found mention in this study by the CENTAD, prepared in consultation with the CCI and published way back in 2010.

The Policy, however, does take note of an important development: the governement’s shift from price control measures to trade margin rationalization. When price control mechanisms are adopted to protect consumers from high prices, the Government sets market prices of products (maximum price ceilings and minimum price floors) instead of letting market forces of demand and supply determine the rates. The latest price control order imposing price caps on scheduled drugs (“scheduled formulations” in the Act) was released in 2013. Price controls have mostly been criticized for being ineffective and having several unintended consequences. For example, in cases where low price ceilings are set, firms who cannot afford to sell products at such low prices are forced to exit the market, thereby restricting availability of drugs in markets and restricting consumer choice. (See our posts on the ineffectiveness of the Indian price control regime here, here and here.)

Trade margin rationalization, on the other hand, would involve “imposing a cap on upstream margins across the entire value chain, rather than imposing caps on prices of products downstream”. The Government has been taking several steps for introducing it in the healthcare industry and the NITI Aayog has also released a consultation paper for its introduction in pricing medical devices. Further, the Government is also considering introduction of trade margin caps for medicines and medical devices, respectively.

Responses to these measures have been mixed. Some say that these measures are a half-baked idea that would put Indian companies at a strategic disadvantage and affect consumers. It would lead to huge drops in MRPs of products and affect quality of healthcare. They further feel that these measures won’t have any real impact on product prices and will only need to unnecessary litigation and disputes and hence, lean in favour of continuation of price controls. On the other hand, these measures have been welcomed by many and have been termed as a game-changer for consumers, “if implemented in the right way, and at the right time”.

All in all, the Policy does give useful recommendations for reforming the healthcare industry. The problem, as always, lies in realization and implementation of these recommendations. Hopefully, these measures and solutions will be rationally implemented and will prove to be effective in increasing accessibility and affordability of products in the healthcare industry.

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I had written a post few days ago covering the main highlights of the CCI’s press release on its Policy Note on healthcare. In my post, I had summarized and explained the main aspects of the Note (covered by the press release) and observed that though the Policy Note doesn’t really bring in many new recommendations, it does pay heed to the current shift from price control mechanisms to rationalisation of trade margins.

With the recent release of the Policy Note itself by the CCI (which basically elaborates upon the points already mentioned within the press release), few more aspects are worth taking note of.

The CCI’s take on E-Pharmacies

Stating that these e-pharmacies aid in increasing transparency and price competition amongst platforms and retailers, the CCI puts this across as a solution to high trade margins prevalent in drug prices.

Efforts for regulating and legitimizing the e-pharmacies by the Indian Government were kick-started in 2015 with the release of a notification which stated that the Drugs and Cosmetic Rules, 1945 do not differentiate between “conventional and over the Internet sale/distribution of drugs”, thereby making the then-existing laws and regulations applicable to e-pharmacies. Several initiatives were thereafter taken to facilitate their functioning in India. Surprisingly, while highlighting recent developments in this regard, the Policy Note only makes mention of the draft rules on Drugs (Sale and Distribution) Rules, 2017 and points out certain discrepancies in registration and compliance standards under these Rules; it does not take any note at all of the recently released Drugs and Cosmetics (Amendment) Rules 2018!

One of the most notable features of these 2018 Draft Rules is the requirement of creation of e-pharmacy portals which are strictly required to keep the data generated localized. According to Rule 67k of the Draft Rules, “information received by the e-pharmacy registration holder from the customer by way of prescription or in any other manner shall not be disclosed by the e-pharmacy registration holder for any other purposes” but the information will be provided to the appropriate government when required for “public health purposes”. It further mandates that data generated in e-pharmacy portal should be “localized” i.e., the data in Indian e-pharmacy portals should not be sent or stored by any means outside India.

Note: E-pharmacies have run into a bit of trouble recently. The Madras High Court recently passed an interim stay on online sale of drugs till November 9 following a petition filed by the Tamil Nadu Chemists & Druggists Association containing allegations of risky drugs sold by unlicensed online pharmacies. (For more on this, visit here.)

Recognition of Patient’s Right to Data Portability

The CCI recommends the introduction of patient’s right to data portability to protect them from lack of transparency in healthcare services. It opined that the free flow of data from one fiduciary to the other would empower “data principals” (as mentioned in the Bill) by giving them control over personal data and would enhance competition within the industry. It relies on Section 26 of the  Personal Data Protection Bill, 2018 (“Bill”) and suggestions given in the Data Protection Committee Report(“Report”) for the same.

Possible Privacy Issues?

Implementation of both these recommendations will give rise to several privacy and data protection concerns.

Data localization measures in India would currently fall under the ambit of the Chapter VIII of the Bill dealing with “Restrictions on Cross-Border Transfer of Personal Data” and Chapter 6 of the Report dealing with “Transfer of Personal Data Outside India”. The need for such measures is highly debated and has been questioned by many since it may have a deleterious impact on the presence of foreign companies in India by decreasing competition in the Indian market. The Draft Rules too seem to impose a blanket ban on cross-border transfer of personal data since the Rules clearly mention that the “data generated or mirrored through e-pharmacy portal shall be sent or stored, by any means, outside the India”. This contradicts the guidelines laid down in the Report which lays down that in cases such as health “cross-border transfers will have to be permitted where certain prompt action needs to be taken in order to protect the life or health of an individual.” Also, in cases where mandatory sharing of personal data of patients with the appropriate government needs to be carried out, the “public health purposes” for which it can be done and the mode of transfer of such information needs to be clarified. Further, the Report mentions that “any obligation requiring the storage and processing of personal data within India should be based on clear advantages arising out of the implementation of such a measure.” Hence, the CCI needs to construct a framework for implementing data localization by e-pharmacies. Also, the need for introducing such cross-border measures in the healthcare industry needs to be adequately justified by the Government before proposing such a measure or legislation.

Similarly, a framework for protection of data privacy of consumers needs to be introduced before introducing the right to data portability. The CCI doesn’t note any exception to this right and simply looks into the benefits of introducing such a right. However, the Report in this regard has mentioned that this right must be provided only “to the extent that it is possible to provide such data or profiles without revealing the relevant secrets”. The Report further provides that this right should be restricted on grounds of technical feasibility i.e., if “technical capabilities as currently existing would make the required access or transfer unfeasible”.

Conclusion: The CCI needs to fine-tune its recommendations a bit by looking into possible data protection and privacy concerns which may arise and ensure that quick, effective implementation of these recommendations takes place.

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Thematic Highlight

In his latest post on the issue, Rajiv discusses the impact of a recent UK case on Standard-Essential Patent (SEP) litigation. He provides excerpts portions of the judgment that encapsulate the judgment and brief and confines his analysis to the issues of global portfolio licensing and valuation of patents. He also highlights certain flaws in the judgment and concludes by highlighting the disparity in jurisprudence across jurisdictions on royalty payments.

Topical Highlights

In her guest post, Simrat Kaur discusses the nuances affecting the functioning of copyright societies. She discusses the recent application by Recorded Music Performance Ltd.’s to become a copyright society and argues that it would better if this application is rejected. She argues that Phonographic Performance Ltd. already operates as a society in the sphere of public performance and broadcasting rights, and adding another society would be detrimental to all stakeholders involved.

Prarthana covered the recent policy on health care released by the Competition Commission of India. In Part-I, she notes that the attempt by CCI to address issues of competition in the pharmaceutical is unique, and brings out important issues that lead to an informational asymmetry between the consumers and manufacturers. She also highlights that the policy shifts the approach of the government from price control measures to trade margin rationalisation. In Part-II of her post on the Policy, she analyses the attempt of the policy to regulate ‘e-pharmacies’ with the release of the 2018 Draft Rules. However, she advises caution on privacy issues that may arise, especially with respect to the portability of patient’s data amidst bans over cross-border transfers.

Other Developments

Judgments

Sony Corporation v. Mr. Suresh Kaouromal Gambani – Delhi High Court [October 22, 2018]

The court granted a permanent injunction restraining the defendants, M/s Ashish Garments from infringing upon the Plaintiff’s trademark, SONY, by selling their goods under the mark SONY or any other mark deceptively similar to the mark SONY. The court also directed the defendants to voluntarily withdraw their trademark applications consisting of the word ‘SONY’ and change their Trade address from “SONY House” to a name which did not infringe upon the Plaintiff’s trademark. The court took note of the defendants’ acquiescence to the suit being decreed according to the prayer of the Plaintiff and allowed the defendants’ plea to exhaust their existing stocks within 9 months.

M/S. SuperCassettes Industries v. Sky Cable Network – Delhi District Court [October 30, 2018]

The court granted an ex-parte permanent injunction restraining the defendant, a cable operator, from infringing the copyright of the plaintiff, the owner of the ‘T-Series’ label, by broadcasting cinematographic films and musical works owned by it, over the cable. It further directed the defendant to hand over all the infringing material and also pay punitive damages of Rs. 20 lakhs to the plaintiff.

Star India PrivateLimited v. Department of Industrial Policy and Promotion – Supreme Court [October 30, 2018].

The plaintiff challenged the jurisdiction of TRAI and the Telegraph authority in regulating the content of the broadcast, like the channels or its programmes and contended that the TRAI Act impinged upon the compensation payable for copyright, which was protected by the Copyright Act, by regulating prices for channels. The court held that the TRAI and the Telegraph Authority have jurisdiction in regulating the content and that such regulation was valid because broadcasters were regulated only to the extent of discriminatory pricing and unreasonably restricting the choice of consumers. The court further held that in case of any inconsistency between the Copyright Act and the TRAI Act, Telegraph Act, the latter were statutes conceived in public interest, protecting the interests of both broadcasters and consumers and hence would prevail over the Copyright Act which only protected the property rights of the broadcasters. The court took the view that there was no merit in the appeals and accordingly dismissed them.

Christian Louboutin Sas v. Nakul Bajaj – Delhi High Court [ November 2, 2018]

The Plaintiff, a luxury shoemaker approached the court seeking an injunction restraining the defendants, owners of the e-commerce website “darveys.com”, from infringing the mark, CHRISTIAN LOUBOUTIN through their website or using it without authorization from the Plaintiff. The court rejected the contention of the defendants that they were intermediaries and held that the defendants played a very active role in selling the product and hence could not claim the immunity of being an intermediary under S. 79 of the IT Act. The court directed the defendants to disclose the complete details of all their sellers on their website, to obtain a certificate from the sellers regarding the authenticity of the products and remove all meta-tags consisting of marks belonging to the Plaintiff, a luxury shoemaker The court did not award damages or costs as although the Plaintiff’s products were advertised, they were not sold on the platform.

M/S Ganesh Marketing Co. v. Jai Hanuman Trading Co. – Delhi District Court [November 2, 2018]

The court refused to grant an injunction restraining the defendants as the Plaintiffs had exhausted their right to lead any evidence to prove their claim that the defendant, through their mark, SHYAM SAVERA infringed upon the Plaintiff’s mark, ASSAM SAVERA. The court had arrived at a preliminary finding that the marks are not deceptively similar owing to the limited geographical area of operation of the Plaintiff and the fact that their areas of business had no similarity, however, due to the non-appearance of the defendants and the failure of the Plaintiff in proving their claim, the court dismissed the suit and no orders as to costs were passed.

News

• SC upholds TRAI tariff order, dismisses Star India’s challenge
• ShareChat drags Bytedance to court over copyright row
• Copyright violation case: Nitish Kumar told to record evidence via video conference today
• Sarkar release: Madras high court clears roadblocks for Vijay Starrer
• Flipkart told to stop selling products under MarQ label

International

• Apple Wins Photonic Crystal Coatings Patent that produces Bright Color Smart Spots on the back of iPhones acting as Alerts
• Prince’s estate wants to trademark purple, the colour synonymous with the late pop singer
• HBO calls Trump’s Game of Thrones-tinged tweet a “misappropriation” of trademark

We’re pleased to bring you an unconventional post. A hilarious hard hitting letter penned by Prof. Glynn S. Lunney, Jr. to the US Supreme Court, taking issue with the uncertainty unleashed thanks to the doctrine of equivalents, as elucidated in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. This letter is likely to resonate with many of us who’ve been at the receiving end of court decisions that may be difficult to understand, much less teach.

Professor Lunney is an internationally recognized scholar and holds a joint appointment at the School of Law and the College of Engineering at Texas A&M University.  He has an engineering degree from Texas A&M, a law degree from Stanford, and a Ph.D. in economics from Tulane. He is the author of a casebook, Trademarks and Unfair Competition (West 2d Ed. 2015), a book on copyright and music, Copyright’s Excess: Music and Money in the U.S. Recording Industry (Cambridge U. Press 2018), and numerous law review articles.

Here goes the letter:

“Dear Supreme Court,

I taught your Festo decision on the doctrine of equivalents yesterday.  While I welcome your return to patent law, I have a complaint.  I understand that patent law is complex, complicated, and sometimes nearly nonsensical.  It can be very tempting as a result to listen to those very insistent voices in our head and offer a new grand unified theory to explain some doctrine in, or aspect of, patent law that is troubling.  Otherwise, you might have to review a nearly uncountable number of earlier cases in order to understand why patent law is the way it is.  To take the doctrine of equivalents as an example, you might have to read four or five Court decisions to understand the historical roots and traditional justifications for the doctrine. That’s a lot to ask given how busy you are.  Nevertheless, I would ask that before you tie some central doctrine of patent law to your newly discovered pet theory that you at least test your pet theory against the facts in the case before you.

In Festo, for example, you insist that we need a doctrine of equivalents because language can be inadequate to describe new technology. Often, the words just don’t exist, you tell us.  As pet theories go, I can see where someone with a background in literary theory might like that one.  Unfortunately, it just doesn’t work.  How am I to tell my students that, while the patentee could say “two single-lipped sealing rings,” the words “single dual-lipped sealing ring” just didn’t exist back then? Or that while a patentee could include the phrase “at a pH of 6 to 9,” the words simply weren’t available to say “at a pH of 5 to 10”? If there were even a single Court decision on the doctrine of equivalents where the words just didn’t exist, I could at least teach your pet theory without too much overt ridicule. Unfortunately, in more than one hundred fifty years of Court case law on the issue, there’s not.

As a result, I’m forced to explain that we have to follow your rules on the doctrine of equivalents not because they are well-reasoned, sensible, or otherwise just. Rather, we have to follow your rules on this issue for the same reason we had to put down our toys and come to dinner when our parents called us: Because I said so. And that’s just so hard on my students.

They’re so young and idealistic, you see. (Some might say naïve, but not me.) They truly believe that you are a source of wisdom and justice. When I teach them Festo, I can see the light of that belief start to fade from their eyes. If they choose to practice patent law, they will become cynical soon enough.  Help me preserve their faith in the legal system just a little longer.

Sincerely,

Glynn S. Lunney, Jr.

Disgruntled Professor of Law”

P.S. This letter was sent by Prof. Lunney to the IPProfs mailing list and has been reproduced here with his permission.

We’re pleased to bring to you Part II of the fifth post in the ongoing series of posts by Prof. (Dr.) N.S. Gopalakrishnan on problems with India’s plant varieties’ regime. Part I of the post can be viewed here and all the earlier posts in the series, here.

Problems with the Indian Plant Varieties Regime (V):

Farmers’ Rights – A Myth or Reality (II)?

Prof. (Dr.) N.S. Gopalakrishnan

Concept of benefit sharing

The origin and development of the concept of benefit sharing is closely associated with the problem of biopiracy. It is an accepted fact that genetic resources and associated traditional knowledge has been used for the development of new products using modern technology, particularly biotechnology. The modern researchers and industries use these resources and associated knowledge without recognizing or rewarding the communities who are the custodians of these resources and associated knowledge. One of the reasons for this was the traditional approach of considering these resources as the common heritage of human kind. Similarly, modern IP has also treated publicly accessible traditional knowledge as part of the public domain, facilitating free raid. For the first time, the international community reversed this position through the Convention on Biological Diversity (CBD), 1992 that declared sovereign rights over natural resources and mandated prior informed consent and mutually agreed terms before access to genetic resources and associated traditional knowledge. CBD also mandates benefit sharing for the custodians of the knowledge associated with genetic resources. Article 8(j) of CBD specifically states that the use of traditional knowledge associated with genetic resources must be “—- with the approval and involvement of the holders of such knowledge, innovations and practices and encourage the equitable sharing of the benefits arising from the utilization of such knowledge, innovations and practices”. This was further clarified in the Nagoya Protocol (2010), Article 5(4) of which envisages both monetary and non-monetary elements as part of benefit sharing. It was also clarified that the State must ensure active participation of the custodians of these resources and associated knowledge in deciding access and determining benefit sharing.

Regarding the plant genetic materials, after the conclusion of CBD, the Food & Agriculture Organisation took the initiative to conclude the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), 2001. ITPGRFA created a multilateral system (MLS) of PGR for facilitating modern plant breeding activities to promote agriculture and ensure food security. It also envisages the recognition of farmers’ rights and provide for benefit sharing. It is pertinent to note that the Preamble of ITPGRFA affirmed “that the past, present and future contributions of farmers in all regions of the world, particularly those in centres of origin and diversity, in conserving, improving and making available these resources, is the basis of Farmers’ Rights”. Article 9 of the Treaty, dealing with Farmers’ Rights, specifically mandates adoption of measures to protect traditional knowledge associated with PGR and promote the right to equitably participate in sharing the benefit arising from its utilization. It is in this context that one has to examine how the Protection of the Plant Varieties and Farmers’ Rights Act, 2001 (‘PV Act’) has conceptualized and included the benefit sharing provisions for the advantage of the farming communities.

Benefit sharing to the farming communities under the PV Act

The PV Act envisages three types of benefit sharing to the farming communities. These include (a) benefit sharing from the registered variety (section 26); (b) compensation to the village or local communities for the conservation of the genetic materials used for breeding new variety (section 41) and (c) recognition and award for conservation of traditional varieties useful for breeding new varieties (section 39(1)(iii)). At the outset, it is important to note that under the PV Act only monetary benefits are envisaged as part of benefit sharing. It is also clarified that benefit sharing under section 26 and compensation under section 41 is for the conservation of the genetic materials used for breeding of the registered varieties.  But the ‘reward and recognition’ is for general conservation of genetic materials useful for breeding new varieties. The way in which these provisions are implemented by the Authority is examined below.

Benefit sharing under Section 26

According to section 26, once the registration certificate is issued, the Authority shall publish the contents of the same and invite claims of benefit sharing. Rule 40 makes it clear that the Authority shall advertise the contents of the certificate including (a) name of the family, genus, species, variety and common name, (b) parentage and geographical location of the variety, (c) the details of the distinguishing features or the characteristics and (d) the name and address of the contributor, nature and amount of the contribution or the community knowledge used in the development of the plant variety. The claim of benefit sharing is for the “extent and nature of use of genetic materials of the claimant in the development of the variety”.

It is to be noted that the definition of variety includes not only new varieties but also extant and farmers’ varieties. Similarly, the definition of breeder also includes formal and informal breeders. No clarification is provided in the Act as to whether the obligation of benefit sharing under section 26 is confined only to new varieties and essentially derived varieties or applicable to extant and farmers’ varieties as well. A literal interpretation of the provision gives the impression that the obligation is upon all breeders who have registered any variety under the Act. Since the objective of benefit sharing is to ensure economic return to the traditional farming communities for using their traditional varieties for breeding new varieties protected by IP rights, it is assumed that the intention of the Parliament is to confine the obligation of benefit sharing to breeders of new and essentially derived varieties.

It is also surprising to note that according to section 26, the claim can be filed by “any person or group of persons or firm or governmental or nongovernmental organization”. This gives the impression that in addition to the farmer, group of farmers and community of farmers, other persons and organizations (modern breeders) are also entitled to file claims of benefit sharing. But if one examines the origin and development of benefit sharing, it is clear that it must be confined only to the farming communities. In this context, it is unfortunate to note that the Delhi High Court in Nuziveedu Seeds Ltd., v. Monsanto Technology LLC (2018), without examining the details of section 26, made a passing observation that Monsanto could claim benefits under this provision, which triggered considerable debate.

On receipt of the application for benefit sharing, the Authority is expected to inform the breeder and give him the opportunity to submit opposition if any, hear the parties and decide the amount to be deposited in the Gene Fund. It is the Authority who has the power to make the payment to the claimant once the amount is deposited based on the provisions dealing with use of the Gene Fund. In case of failure of the breeder to deposit the amount, it is again the Authority who has to initiate the revenue recovery proceedings before the District Magistrate where the breeder resides. It is pertinent to note that there is no direct payment by the breeder to the claimant. One is worried about the practical difficulties that the poor farming community has to undergo in order to enjoy the benefit of this provision. The entire procedure is unlikely to work for the following reasons. Firstly, the Act expects the poor farmer to keep track of the registration of new varieties and the notification for benefit sharing in the official journal of the Authority in order to make a claim, that too within six months. It is extremely difficult for him to get access to these notifications. It may also be difficult for the farmer to find out whether the genetic material used by the modern breeder is from his traditional variety, unless assisted by a modern breeder. Secondly, it is difficult for the farmers, who are invariably from villages, to appear before the Authority located in Delhi with limited branches (Ranchi, Guwahati, Shivamogga, Pune and Palampur) and establish their claim in case it was contested by the breeder. Thirdly, the farmers have a very limited incentive to file claims since the amount determined by the Authority is not directly paid to them but deposited in the Gene Fund. There is also no guarantee that the Authority will take timely action to recover the amount if the breeder fails to deposit the amount to the Gene Fund. Even if the amount is deposited in the Gene Fund, the farmer has to follow a set of procedures to claim it.

In this context, it is pertinent to note that as per section 18(1)(e), for registration of a new variety, it is mandatory for the applicant to disclose in the application the “complete passport data of the parental lines from which the variety has been derived along with the geographical location in India from where the genetic material has been taken and all such information relating to the contribution, if any, of any farmer, village community, institution or organization in breeding, evolving or developing the variety”(emphasis mine). If all these details are made available to the Authority by the applicant, it is difficult to comprehend the reasons for the Parliament to not provide for a suo moto action by the Authority to determine the benefit sharing and make direct payment to the farmer or village community after ascertaining their entitlements. Since the Act also envisages the registration of farmers’ variety, it is also possible for the Authority to cross check and confirm the beneficiaries without any further procedure.  This would have made it easier for the farming communities to enjoy the benefits.

It is unfortunate to note that the Authority diluted this mandatory disclosure in Form 1 and limited the disclosure to the parental line of the traditional variety if it is repeatedly used in propagation of hybrid. It is also pertinent to note that in Form 1 there is a provision to describe “what sort of farmer/community recognition the Applicant has planned”? One is at a loss to appreciate the same since it is the Authority who has to determine the amount of benefit sharing. An independent study is required to find out the nature of the disclosure made in the application of the registered varieties and the steps taken by the Authority to ascertain the veracity of the same.

No wonder, the benefit sharing provisions remain a nonstarter till date. The Authority did not take any steps to realize this provision even after the issue of more than 600 certificates to new varieties. No information is available in the Annual Reports regarding the implementation of the provisions and the sharing of benefits from the Gene Fund. The Annual Accounts also do not reflect the amount deposited by the breeders in the Gene Fund under this section. Similarly, no expenditure is met from the Gene Fund for the payment to the claimants of benefit sharing. This also shows the apathy of the Authority in implementing a provision which is intended to benefit the farming communities.

Compensation under Section 41

The Act recognizes the right of the community to claim compensation from the breeder of the new variety for the contributions they made in the evolution of the variety used for breeding. According to section 41(1), the right to claim compensation on behalf of the people of a village or local community is vested with “persons or group of persons (whether actively engaged in farming or not) or any governmental or non-governmental organization”. The claim for compensation is to be made before the Centers notified for this purpose. The Centre is expected to verify the claim and if satisfied, report the same to the Authority. The Authority on receipt of the report, if satisfied and making such inquiry, issue notice to the breeder, give opportunity to file objections and hear him before deciding the amount of compensation. The compensation to be paid may be subject to the limits notified by the Central Government. The breeder is expected to deposit the amount in the Gene Fund and in case of failure to do so can be recovered by the Authority as arrears of land revenue. The practical problems as identified in case of implementation of section 26 dealing with benefit sharing are equally applicable in this case as well. It is also significant to note that the Act failed to clarify whether compensation is payable only if there is no claim for benefit sharing under section 26. No information is available regarding the implementation of this provision by the Authority. The Central Government is yet to notify the Centers where the claims for compensation can be filed under this section. Thus, this provision also remains as a dark horse till date. It is unfortunate to note that no effective steps for the implementation of these provisions have also been taken by the NGOs who were instrumental in inclusion of these provisions in the Act.

Gene Fund and its functioning

It is evident from the provisions dealing with benefit sharing and compensation, that the amount determined by the Authority must be deposited in the Gene Fund. According to section 45 which deals with Gene Fund, in addition to these amounts, the annual fee to be paid by the breeder must also be transferred to the Gene Fund. As per section 35(1), the annual fee for retention of the registration of the new variety shall be determined on the basis of benefit or royalty gained by such breeder. Accordingly, the Authority has fixed the annual fee as “Rupees 2000 plus 0.2 per cent of the sales value of the seeds of the registered variety during the previous year plus 1 percent of royalty, if any, received during the previous year from the sale proceed of seeds of a registered variety”. The Act also envisages contributions to the Gene Fund from national, international organizations and other sources.

The Government of India, vide Gov. order No. 1-11/2005-SD-V/(Part) dated 26th March, 2007, constituted the National Gene Fund and released the first grant of Rupees 50 lakhs. As per the Annual Report of 2016-17 the Gene Fund has a total balance of more that Rupees 6.5 crores. An examination of the Annual Accounts of the Authority till 2016-17 shows that the income credited to the Gene Fund is limited only to the funds granted by the Government of India and the annual fee collected from the breeders. The total amount received under the annual fee head from 2009 – 10 to 2016 – 17 is Rupees 2.17 crores and the balance seems to be the interest accrued and the contributions from the Government. Till 2016-17 there was no deposit from the breeders based on benefit sharing under section 26 or compensation under section 41. As explained earlier, there is also no evidence available regarding any payments made under benefit sharing or compensation from the Gene Fund. The only expenditure from Gene Fund has been for the award to the farmers under the schemes discussed below.

Awards and Recognitions

One of the Farmers’ Rights specified in section 39(1)(iii) is recognition and award from the Gene Fund for the conservation of genetic resources of land races and wild relatives of economic plants and their improvement used for breeding new varieties. It is surprising to note that section 45(2) dealing with utilization of the Gene Fund is silent about providing recognition and award as per section 39(1)(iii). There is also no Rule framed under the PV Rules, 2003 to implement section 39(1)(ii). But interestingly, Rule 70(2) dealing with utilization of the Gene Fund provided for “support and reward farmers, community of farmers, particularly the tribal and rural communities engaged in conservation, improvement and preservation of genetic resources of economic plants and their wild relatives, particularly in areas identified as agro-biodiversity hot spots”. Based on this provision, the Authority from 2008 onwards started awarding the “Plant Genome Saviour Community Recognition Certificate”. As per the consolidated statement on the awards given till 2014 in Annual Report 16-17, 16 PGSCR Certificates were issued [2007-08 (5), 2008-09 (4) and 2010-11(7)]. The Authority, in 2011, constituted the Standing Committee on Farmers’ Rights in accordance with section 3, to advise on farmers’ rights. One of the activities undertaken by the Committee was to recommend schemes for recognitions and awards. The Committee in its first meeting (2011) recommended a maximum of five ‘Plant Genome Saviour Community Awards’ of Rupees 10.0 lakhs each per year. 23 communities were given awards till 2014-15 (Annual Report 2016-17). The Standing Committee also recommended a maximum of ten “Plant Genome Saviour Farmers’ Rewards” of Rupees 1 lakh (from 2013 onwards, Rupees 1.5 lakhs) each for individual farmers as recognition of their conservation activities. 33 awards were given in this category from 2011-12 to 2014-15 (Annual Report 2016-17). From 2012 onwards, the Standing Committee recommended a maximum of twenty “Plant Genome Saviour Farmers’ Recognitions” with a citation and memento (from 2013 onwards, also with Rupees 1 lakh) for individual farmers. No information is readily available to find out the difference between these two awards for individual farmers. A total number of 50 awards were given in this category from 2012 to 2015 (Annual Report 2016-17). Thus, till date, 23 communities of farmers and 88 individual farmers have benefited from this scheme. It is surprising to note that no awards have been given for the last four years and no information is available as to the reasons for the same, irrespective of the fact that the Gene Fund remains underutilized. The total number of awards seem to be very limited when compared to the large number of farmers’ varieties registered under the Act and also the number of new varieties registered. It is difficult to appreciate whether this is an adequate incentive for the farmers to continue with the conservation activities.

Conclusion

The above analysis of the various provisions in the Act demonstrate that the farmers’ rights introduced by our Parliament with much fanfare, remain as an anathema for the farming communities. The examination of the provisions dealing with registration of “new farmers’ variety”, farmers’ variety, benefit sharing and compensation evidenced the practical difficulties in the enjoyment of these benefits by the farmers and also the lethargy of the Authority in initiating steps towards their possible implementation. The only positive measure taken by the Authority was the granting of award and recognition to farmers which also seems inadequate to incentivize the farming communities to actively engage in traditional innovation. This calls for rethinking of the provisions on the farmers’ rights included with the intent to facilitate traditional innovation in plant breeding and preservation and promotion of farmers’ variety to maintain sustainable agriculture by the farming communities.

Image from here

Do Not Tread on This Trademark (Image From Wikimedia Commons)

In a significant judgement for e-commerce in India, the Delhi High Court in Christian Louboutin SAS v Nakul Bajaj and Ors., (decided on November 2), has recently attempted to clarify the responsibilities and liability of online intermediaries for trademark infringement. The judgement both clarifies and in some part obfuscates India’s intermediary liability regime as it relates to trademark infringement. Ms. Justice Prathiba Singh’s judgement is particularly important considering it is the first time the issue of trademark infringement by online intermediaries has reached final determination. We previously covered the issue of intermediary liability for online marketplaces on the blog here.

Background and Arguments

The plaintiff is Christian Loubatin, owner of registered trademarks, including the notorious single-colour mark for its distinctive “red sole”. According to the plaintiff, its products are only sold in India through authorized dealerships. The defendant is “darveys.com”, a website marketing itself as a ‘luxury brands marketplace.’ The plaintiff alleges trademark infringement against the defendant, by, inter alia, selling counterfeit goods, using the plaintiff’s registered trademarks as ‘meta-tags’ and using the plaintiff’s marks on its website. The defendant argued that the goods sold were genuine, and that there was no infringement on its part because it was a mere intermediary, and entitled to protection under Section 79 of the Information Technology Act, 2000.

Section 79 of the IT Act, known as the ‘safe harbour’ provision, essentially immunizes certain classes of intermediaries from liability for third-party content hosted or made available by them, provided that such intermediaries fulfill certain conditions laid down in that section. Intermediary liability in cases of IPR infringement is a major issue affecting online freedom of expression, protection of copyright and trademark, and, as such, it is incredibly important to have legal clarity on the issues surrounding Section 79. Unfortunately, India’s legal regime has not always provided sound jurisprudence around the issue. (For more coverage of this issue on our blog, see here.)

Although the parties disputed the genuineness of the goods sold on the website, no factual issue arose for determination because no actual goods had been booked as of the date of the judgement. Therefore, the only issue for trial was whether the defendant was liable for safe harbour protection as an intermediary, under Section 79 of the IT Act.

The Court’s Analysis and Decree

The High Court went on to examine in detail what constitutes an ‘intermediary’ under Section 2(w) of the IT Act, and when online marketplaces as intermediaries may qualify for safe harbour protection under Section 79.

Upon an examination of the defendant’s website, the High Court found on several counts that Darvey’s takes responsibility for the authenticity of the products and commissions checks on all its supplies, facilitates the purchases and sourcing of the products from third party sellers and arranges for the transport of the goods. At the same time, the website claims that the invoices are raised directly from the supplier to the consumer, without the intervention of the website, and does not offer any warranties on the product beyond its ‘authenticity guarantee’.

Keeping these factors in mind, the Court goes on to discuss the principles of intermediary liability in three jurisdictions – the EU, the US and in India, and notes that this is the first time the court is extensively discussing the regime applicable to trademark infringement in India. Subsequently, the Court discusses the precise nature of ‘intermediaries’ contemplated under the Act (unfortunately, without reference to its legislative history). The Court notes that the precise role of an online marketplace may be ascertained by looking at two factors:

1. The role performed by the marketplace with respect to the goods – In particular, the Court lists 21 ‘tasks’ which an online marketplace may engage in, ranging from ‘identification of the seller’ to ‘packaging the product with its own packaging’, ‘giving discounts’ and ‘providing reviews’, among others.
2. The policies of the marketplace with respect to ensuring that the sellers are not engaged in illegal conduct – including the processes in place for enforcing terms of use and consequences for violation of such terms.

Upon a consideration of the above factors, the Court concludes that the defendant is more than an intermediary, given that it identifies, enables and promotes the sellers and thus exercises complete control over the products being sold. The Court also notes that conduct of intermediaries, in failing to observe ‘due diligence’ with respect to IPR, could amount to ‘conspiring, aiding, abetting or inducing’ unlawful conduct would disqualify it from the safe harbour exemption, as per Section 79(3)(a).

The Court notes that the question of whether an online marketplace is an ‘intermediary’ is a factual one, which must take into account the two factors enumerated above and the basis on which the business is conducted. If a large number of the elements are present, then the marketplace would cross the line from an ‘intermediary’ to an ‘active participant’. Further, the Court holds that ‘any active participation’ by the online marketplace would rob it of the exemption from liability provided by Section 79.

The Court also refers to the IT (Intermediaries Guidelines) Rules, 2011, made under Section 79(3)(b), which lay down due diligence guidelines to be observed by the intermediary, including, inter alia, including terms of use that third party content should not violate IPR rights. However, the Court notes that mere observance of the guidelines may be necessary but is not a sufficient condition for safe harbour protection.

Finally, the Court examines whether there has, in fact, been a use of the plaintiff’s trademark in a manner that would constitute infringement. The Court bases its examination upon Sections 2(2)(c), 101 and 102 of the Trademark Act, which relate to the meanings of using, applying and falsifying a mark, respectively. The Court states that, with respect to applying and falsifying a mark, the following may constitute infringement, if applied to a counterfeit product (but not a genuine product). The Court notes that committing any of these activities would amount to ‘conspiring, aiding, abetting or inducing’ the unlawful act, contemplated under Section 79(3)(b), and displace any safe harbour available to a marketplace. Illustratively, and in the context of darveys.com, the Court notes that the use of the mark in an invoice, displaying advertisements containing the mark, enclosing the goods with its own packaging and selling them onwards, would all constitute falsification and infringement under Section 29 of the Trademark Act and thereby constitute aid, abetment or inducement under Section 79 of the IT Act. Further, the Court held that the use of meta-tags by the defendant constituted infringement, as upheld by another bench of the Delhi High Court in Kapil Wadhwa v Samsung Electronics.

Upon a consideration of all of the above factors, the Court held that the defendant was not an intermediary entitled to protection under Section 79, and would be liable for infringement if proven that the goods it was selling are counterfeit. However, in the absence of such proof, the Court decreed instead that the defendant disclose the details of its suppliers, and shall not upload any products bearing the plaintiff’s mark without their concurrence. Moreover, the Court ordered that the defendant must implement a system whereby upon being notified of any counterfeit product by the plaintiff, the defendant must ascertain the authenticity of the product with the seller, and examine the evidence to see if it must be removed. Finally, the Court ordered that the intermediary must require its sellers to honour the warranties and guarantees provided by the plaintiff, and must also remove all meta-tags containing the plaintiff’s mark.

In the next post, I will examine what the judgement means for e-commerce marketplaces, as well as its merits and demerits.

This is a monumental development: Judge Lucy H. Koh of the  Northern District of California has held that Qualcomm must license any willing licensee – this includes rival chipmakers, such as MediaTek or Intel or any other player.  This is huge: Qualcomm admittedly had never licensed any of its competitors.   Hence the decision may be read to hold that Qualcomm is in breach of its FRAND commitments.

In my view, this judgement is also valuable from another perspective: Whether chipsets can implement a complete standard.  There are several parties (like Ericsson, Nokia, etc.) who claim that the complete standard can only be implemented by an end device provider (for example a fully functioning mobile phone).  However, if I read it correctly, chipsets can indeed implement a complete standard (otherwise how would they be certified as conforming to a standard), and hence chipset providers are also to be licensed, if they approach the SEP owner.  This is in line with the SSO policy of widespread adoption of the relevant standard.

This is just based on a quick read and I might do a follow up on this later.  Regardless, the impact on Qualcomm would be huge.  Parties may line up to take a license to whom Qualcomm have refused to deal with earlier.

In its complaint, the FTC had alleged that Qualcomm had a dominant position in the industry and was the dominant supplier of modem chips.  Qualcomm also held SEPs for multiple cellular standards.  The FTC further alleged that Qualcomm had caused harm to the competition (Section 5 of the Sherman Act / abuse of dominant position) by not selling its cellular chips unless the customer also took a license to its SEPs.  These SEPs were licensed at an inflated price.  And also that Qualcomm entered into exclusive dealing arrangements, such as with Apple – thereby foreclosing access to rival chip manufacturers.

Our readers may read my previous post on the actions against Qualcomm – under fire (click here)

The court looked in detail at Qualcomm’s written assurances to TIA and ATIS to license its SEPs on FRAND terms.  Qualcomm had assured TIA that Qualcomm would make licenses available “under terms and conditions that are reasonable and non-discriminatory . . . and only to the extent necessary for the practice of any or all of the Normative portions . . . for the field of use of practice of the Standard.”

Likewise, Qualcomm assured ATIS that Qualcomm would make licenses available “under reasonable terms and conditions that are demonstrably free of any unfair discrimination to applicants desiring to utilize the license for the purpose of implementing” the relevant standard.  The court also cited the recent decision in TCL Communication Tech. v Telefonaktiebolaget LM Ericsson (C.D. Cal. Sept. 14, 2018) holding that under French law, ETSI’s acceptance of a standard that incorporates a SEP “forms a contract which includes the patent holder’s obligation to license”.

In Ericsson, the Federal Circuit affirmed that Ericsson’s FRAND commitments to license its SEPs under a SSO IPR policy were “binding” on Ericsson. and also Realtek Semiconductor Corp. v. LSI Corp., 946 F. Supp. 2d 998, 1006 (N.D. Cal. 2013) noting that the parties did not dispute that a SEP holder’s letters of assurance to license its patents on FRAND terms created a binding obligation.

This issue closes the case on the issue whether a SEP owner can exclude parties in the value chain to extract royalty from end device sellers.  This makes it clear that SEPs must be licensed to chipset owners, as they too are a willing licensee.

We’re pleased to bring to you a guest post highlighting the discrepancies in this year’s Patent Agent Examination that was held last month on October 28. The post also raises a few fundamental and larger issues afflicting this exam. The author of this post wishes to remain anonymous.

Our earlier posts discussing the concerns regarding the conduct and nature of this exam can be viewed here.

The 2018 Patent Agent Examination – Discrepancies and Some Fundamental Issues

Anonymous

The Indian Patent Office conducted the patent agent examination (“the exam”) on October 28, 2018. The exam was held after a gap of two years, with the last one having been held in November 2016. Based on the roll numbers allotted to candidates, it appears that 4366 candidates enrolled for taking the examination, a high number considering the unique interdisciplinary nature of the examination.

The Patent Office has now released an answer key for each set of the question paper. This post examines some of the discrepancies with the answers mentioned in the answer key for the 2018 exam as also some of the more fundamental issues regarding the manner in which the exam is conducted.

Discrepancies in 2018 Examination

The Patent Office has released the examination paper (Set C) and the answer key (for all sets). These are available here.

In my view, the answers suggested by the Patent Office to Questions 16 and 32 (reference Set C) are wrong.

Question 16, a multiple choice question with one correct answer, is quoted below for ready reference:

Q.16 A researcher finds an idea on recycling of biodegradable plastic. How does he proceed for patenting his idea?

1. He needs to publish in the Scientific Journal and has to wait for invitation from Patent Office
2. He needs to submit Provisional Specification and subsequently to file Complete Specification
3. Both A and B
4. None of the above

The answer key suggests that the correct option is ‘b’. According to this option, the inventor “needs” to file a provisional specification before filing the complete specification. However, there is no “need” under the Patents Act to file a provisional specification before filing the complete specification. In my view, option ‘d’ – none of the above – is the correct and, at the very least, the more appropriate option.

Question 32 is quoted below for ready reference:

Q. 32 

1. Rao is a researcher from a reputed institute of Bangalore and has filed one ordinary Patent application before Patent Office though he has published the same subject matter in an International Journal 5 years back before the filing date of the above mentioned Patent application, as he is confident regarding the fact that author of the Journal and the Patent applicant being same and his application shall not be refused within the provision of the Patent Act.

2. Rao is a researcher from a reputed institute of Bangalore and has filed one ordinary Patent application before Patent Office though he has published the same subject matter in an International Journal after the filing date of the above mentioned Patent application, as he is confident regarding the fact that author of the Journal and the Patent applicant being same and his application shall not be refused within the provision of the Patent Act.

This is a true or false question and the candidate is required to suggest whether any or both of the statements is true.

The answer key suggests that the first is false and the second statement is true. The first statement is clearly false – no issues there. The second statement states that a patent application shall not be refused if it is filed before the publication of the invention in an International journal “as [the applicant] is confident” regarding the fact that the applicant is the same as the author of the journal. The second part of the statement is false – well, the applicant’s confidence is not supported by any legal theory and is legally irrelevant – because the reason for non-refusal is not the identity of the author and the applicant but the fact that the application has been filed before the publication in the journal.

Since the patent will not be refused in the second situation, there may be sufficient ambiguity in Question 32 to justify the Patent Office’s answer. However, this continues the disturbing trend of vague questions with unclear answers in the exam. This happened with the 2016 examination as well (see earlier post on this blog here) – there was a writ petition filed with respect to the answers for one of the questions and the Patent Office’s only response was to point to the ambiguity in the answer. Unfortunately, the Court rejected the writ petition on the basis that the candidate had not shown that the Patent Office’s answer was not “undoubtedly wrong”.

In my view, it is critical for multiple choice questions and answers to be unambiguous and clear. This responsibility is on the examiner. Requiring the candidate to prove that the answer in the answer key is “undoubtedly wrong” illogically places the burden on the candidate since s/he has no involvement in the drafting of the question. With an ambiguous answer for a multiple-choice question, the candidate is left helpless – because s/he has no insight into the examiner’s mind and also has no way to explain her/ his reasoning. This is particularly true for law-related questions, which are often subject to interpretation.

There are some more fundamental and larger issues plaguing the Patent Agent examination.

Nature of the Examination – Focus on Recall Skills as Opposed to Analytical Skills

Closed Book Examinations

The exam is “closed book” – candidates are not allowed to carry statute books or reference material to the exam. The syllabus of the examination is the Patent Act and Rules with only two questions on drafting of patent specifications (See Rule 110 of the Patent Rules). As a result, the exam turns out to be primarily a memory test with candidates being required to recall and regurgitate provisions of the Act and the Rules, including the exact sub-section or sub-rule or form number. This, in my view, is a completely wasteful exercise and misunderstands the basic nature of law practice. In my experience, even some of the most talented and celebrated lawyers refer to the statute book again and again for deciphering different interpretations of statutory provisions. Even domain experts revisit the statute each time they are called upon to provide an opinion on a provision.

In short, the statute book is a tool which lawyers and patent agents have handy at all times; they are rarely called upon to recall exact sub-sections, rules or form numbers without reference to the statute book. Further, as anyone who has given an open-book exam would confirm, these are often harder than closed book exams since they test both analytical and recall skills. Open book exams are better suited to test higher cognitive ability (see an article on this issue here).

Contrast the Indian patent agent exam with the USPTO Registration Examination or the European Qualifying Examination (EQE). Both examinations are open – book; the USPTO allows candidates to refer to all the reference material tested in the examination including the Manual of Patent Examination and Procedure. Similarly, the EPO allows candidates taking the EQE to carry books, timelines, charts etc (see here at page 33). A parallel can also be drawn to the All India Bar Examination which is also “open book” with students being allowed to carry the relevant statutes and notes.

In my view, if the patent agent exam is to achieve its avowed purpose, then it should focus on selecting candidates with analytical skills as opposed to recall and regurgitation skills.

Nature of Questions

The 2018 examination is a classic example of the focus on recall skills. Take for instance, Part 2 of the exam which is supposed to ask “situation based questions”. However, a quick glance at the exam questions that were actually asked shows that this is hardly the case. Some the questions asked were:

1. Write a short note on non-patentable inventions within the provisions of the Patents Act and Rules; 

2. The grant of a patent is based on certain conditions as stipulated under Section 47 of the Patent Act. Briefly explain those conditions. 

3. Explain the various provisions in the prevailing rules for ‘expedited examination’, small entity and ‘start-up’. 

4. Explain briefly the different provisions of the Patent Act for the following:

a. Role of a Patent Agent;

b. Criteria for disqualification of a patent agent

5. One client ‘A’ has come to your office seeking advice regarding assignment for a “solar cooktop” which ‘B’ has already patented. As a practicing patent agent, brief him about the applicable issues as per the Patent Act and Rules to your client A. 

Questions 1-4 are clearly not “situation based”. Question 5 is ostensibly situation-based but essentially requires a regurgitation of the provisions regarding assignment of a patent. Paper 2, which is supposed to be the analytical part of the exam, requires the candidate to answer 9 questions in total – 5 of these 9 are non-analytical.

Again, the EQE serves as a stark contrast. The EQE is divided into 5 papers (see here) and each and every question tests the analytical skill of the candidate. In the most recent round of examinations, each question in each of the five papers required the candidate to apply the law to a detailed fact situation. In a way, this is a byproduct of the EQE being open book – the examiner’s focus has also moved from assessing recall ability to analytical ability since the candidate already has the resource materials during the examination to aid in recall.

Subjectivity in the Viva – Voce

The subjectivity of the viva-voce examination has already been written about extensively on this blog (for instance, see here). I don’t have much more to add except to say that the subjectivity goes to the level of the examiners asking candidates the name of the firm to which they belong – those coming from bigger IP firms are more likely to score higher on the viva-voice. Anecdotal evidence also suggests that candidates are asked the number of years of practice and those who have less than 2 years of practice often score low on the viva – voce.

If India is to improve the quality of its patent agents (which will have a direct impact on the quality of patents which come out of this country), it must test its patent agents on their analytical skills and their ability to apply the law. Till that happens, we will primarily remain a country of patent agents who refile applications prepared by patent attorneys in other jurisdictions and patent specifications originating from India will have to undergo significant amendments for them to be granted abroad. This requires a complete rethink and an overhaul of the patent agent examination system.

Since the dawn of private sports broadcasting in the early nineties, private broadcasters and Prasar Bharti, which is the government owned broadcaster, have been constantly squabbling over the sharing of broadcast signals of international cricket matches featuring Team India which is officially owned by the Board of Cricket Control of India (BCCI).

 Boria Majumdar has a very interesting account of these early battles in this article published in Open. These disputes often end up before the Supreme Court which in the past, ordered private broadcasters to share their signals with Prasar Bharti’s Doordarshan (DD) at a royalty determined by the court. For example, in 2004, Ten Sports was forced to share its signals with DD after a deposit of Rs. 50 crores was made with the Court. Ten Sports of course demanded a much higher sum of Rs. 200 crores. These disputes between private broadcasters and the state broadcaster was an annual feature until Parliament enacted the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti) Act, 2007 which required all private broadcasters to share signals for sporting events of national importance with Prasar Bharti which would then have to share its advertising revenue with the private broadcasters at a ratio of 75:25 in the case of television and 50:50 in case of radio coverage.

The simply policy driving the litigation before the Supreme Court and the enactment of the SBS Act, 2007 was to ensure the widest possible access to sporting events in a country which is obsessed with cricket. Whether you like the game or not, cricket is one of the few unifying sports in this country of bewildering diversity.

The enactment of the SBS Act in 2007 gave rise to new litigation. In the last two years we saw two big judgments from the Supreme Court which have been the subject of three excellent posts by our former bloggers Aparajita (over here) and Ashwini (over here and here). The second judgment from last year covered by Ashwini was on a very interesting issue. Basically, the SBS Act allowed DD to rebroadcast the signal shared by the private party on its terrestrial and DTH network. The terrestrial network is a network of broadcasting towers across the country, which allows televisions to pick up DD’s signal without the requirement of a satellite dish or a cable network. The number of viewers who depend on only the terrestrial network seems to be quite small because of expanding cable TV and DTH networks. Interestingly however, the Cable Television Networks Act, 1995 requires all cable operators to mandatorily re-transmit all DD channels to all their users. This then meant that everybody could get the sports matches for free through DD. The private broadcasters challenged the retransmission of the signal under the Cable Television Networks Act before the courts and the Supreme Court declared in 2017 that notwithstanding the mandate of the Cable Television Networks Act, 1995, the signal shared with DD under the SBS Act could not be retransmitted over cable networks.

The sports broadcasters have been gloating over this judgment for a year until the Ministry of Information & Broadcasting recently invited comments on a proposed legislation which if passed by Parliament will over-rule the Supreme Court’s judgment. In its notice, the Ministry reasoned that the Supreme Court’s interpretation basically extinguished the very rationale of the SBS Act. The notice states the following:

“As such, the viewers, who do not have DD FreeDish or Doordarshan’s terrestrial network, are either unable to watch these sporting events of national importance or are compelled to watch these sporting events on highly priced sports channels and thus, the very objective with which the Parliament had enacted the Sports Act, has been defeated.”

 Simply put the Ministry has proposed an amendment to the SBS Act that will allow DD’s signal to be rebroadcast under the Cable Television Networks Act, 1995. This means that everyone in the country who has access to cable TV or DTH networks, can view all the cricket matches without having to purchase high priced subscriptions to Star Sports or any other private broadcasters. The deadline for sending comments to the government has been extended to the last day of this calendar year.

The broadcasting industry has predictably gone into a PR overdrive about how the government’s proposal is unfair and likely to cause untold harm to the entire sector. Business journalists have lapped up anonymous quotes handed out by industry moguls and have published several pieces against the government’s proposal. The issue has been pitted as one of private property rights versus government expropriation. The fact of the matter however is that in the last ten years, despite the existence of the SBS Act (and the rebroadcasting of the signal on cable networks), broadcasters have been paying a higher and higher sum for broadcasting rights for cricketing events. It would then appear that the sports broadcasters are making profits despite the mandatory sharing of signals.

I think the government’s proposal requires a far more nuanced debate. Sports broadcasting is usually a monopolistic affair, primarily because sporting bodies are usually monopolies. And monopolies are regulated in pretty much every country. Almost every country in the world, has some variation of the SBS Act, called anti-siphoning off laws. In the context of sports, there is a strong case to argue that the cultural significance of these sporting events is reason enough to regulate them. In addition, it is possible to argue that if broadcasters are using spectrum which is a public resource, the state should have a say in how that spectrum is used. It will be interesting to see if the government can get this amendment through Parliament before the ICC World Cup in 2019.

Image from here

Less than a month ago, Livelaw and Bar & Bench reported on shocking allegations of bench fixing in a number of trademark infringement cases filed by KRBL Ltd. before the Delhi District Courts through the law firm K.G. Bansal & Co.

The issue came to light when one of the litigants, Capital Ventures Pvt. Ltd. which had been sued by KRBL Ltd. for trademark infringement filed a contempt petition before a Division Bench of the Delhi High Court. Ordinarily it would have been possible to dismiss these allegations as the ramblings of a disgruntled litigant but it appears that others who have been sued by this company have made similar allegations against KRBL forcing the Delhi High Court to take the extraordinary step of restraining three district judges – Mukesh Kumar, Veena Rani and Chandrashekhar from hearing lawsuits filed by KRBL Ltd. until such time that the Delhi High Court has had an opportunity to examine the allegations in more detail. I reproduce below the main allegation from the court’s order:

“The grievance highlighted in the present contempt petition as well as in the intervention application raises very serious concerns about the manner in which the matters particularly, suits are listed before a particular Judicial Officer in the District Courts. The petitioner and the intervenors has brought out several instances where the same counsel representing the respondents has moved repeated applications in different suits to have the different suits listed before particular Judicial Officers, namely, Mr. Mukesh Kumar, Ms Veena Rani and Mr. Chandersekhar. The petitioners claim that favourable orders were obtained by the respondents from the said Judicial Officers to which they were not entitled on merits.”

I spoke to a few lawyers who are familiar with the listing practises before the District Court to understand exactly how cases are listed before different judges. Apparently, the normal course of action is for all new lawsuits to go to the presiding judge, usually one of the senior judges of the court complex who then marks cases to specific judges. Litigants however may move an application requesting that a case be specifically listed before certain judges who are hearing similar or connected lawsuits. It saves judicial time to have the same judge hear similar or connected cases. The allegation in the present case is that KRBL had specifically sought for the cases in question to be listed before the three judges who then passed favourable orders that were allegedly not entirely warranted on the merits. In order to investigate these allegations, the High Court summoned the following information from the district court:

“i) The number of suits it has filed in respect of its IPR with complete particulars of suit number, the date of its filing, the counsel through whom the same has been filed and the Judicial Officers before whom the matter was listed initially;

ii) Whether an application for marking and listing before a particular Judicial Officer was moved;

iii) The name of the Judicial Officer before whom the matter was sought to be listed;iv) Whether the matter was listed before the Judicial Officer as desired by the respondents;v) Whether any ex-parte orders of injunction were passed, and;

vi) The date of the ex-parte ad-interim orders of injunction, if any.”

In an interesting coincidence, similar information was requested from the District Court by a gentleman called Harish Lamba under the Right to Information Act. The specific questions are as follows:

“1. During his tenure as ADJ, in how many cases Shri Mukesh Kumar ADJ as given ex- party injunction orders in cases represented by advocate M/s K. G. Bansal & company, New Delhi.” And “1. During his tenure as ADJ, in how many cases Shri Mukesh Kumar, ADJ has given ex-party injunction orders in cases/suits filed by KRBL Ltd. and (old name ‘khusi ram behari lal’) 5190 Lahori Gate, Delhi-110006.”

The district court refused the information under the RTI Act before being over-ruled by the Central Information Commission whose order was in turn stayed by Justice Bakru of the Delhi High Court until he hears the case on merits in January, 2019. His order can be accessed here.

Bench fixing in India  

Allegations of bench fixing are quite common within the Indian judicial system. In 2014, Senior Advocate Dushyant Dave had levelled similar allegations against one particular bench of the Supreme Court. He had accused the then Court Room No. 10 of being a ‘builder’s court’ that was hearing matters that should have been listed before other benches. I’ve heard whispers of the practice from different courts in different cities. It isn’t necessarily the case that the judge in question has been bribed. Sometimes lawyers and litigants try to get matters listed before particular judges because they are perceived to be more inclined to grant injunctions or because the lawyer has a good equation with the judge. It is also entirely possible that litigants manage the ‘fixing’ without getting the lawyer into the loop.

Trying to determine the exact reasons for why certain cases are being listed before certain judges is going to be difficult without a criminal investigation. If the Delhi High Court found the allegations in this case credible enough to restrain three district judges from hearing any future lawsuits by this particular litigant, it should order a criminal investigation or at the very least initiate an administrative inquiry and withdraw all judicial work from the three judges in question. Trying to get to the bottom of these allegations through contempt proceedings is going to be difficult.

SpicyIP has been bustling with posts this week. Here’s the roundup:

Thematic Highlight

As part of the ongoing series on the problems with the Indian plant varieties regime, Prof. N. S. Gopalakrishnan shared the second part of his guest post that critiques farmers’ rights in India. In this part, he delves into the practical applications of the provisions of the PV Act with respect to benefit sharing, compensation under Section 41, the functioning of the gene fund and recognition for conserving plant varieties. He argues that in their practical application, the PV Act fails to deliver the farmers with adequate rights and protection due to administrative lethargy and ineffective enforcement.

Topical Highlight

Divij wrote a post on the Christian Louboutin v. Nakul Bajaj judgment passed by the Delhi High Court on the liability of online intermediaries in cases of trademark infringement. The sole issue in the case concerned the ‘safe harbour provision’ under the IT Act, and whether it absolved the defendant of liability for infringing Christian Louboutin’s trademark. Divij notes that the judgment goes finds the defendant as an ‘active participant’, and therefore, ineligible for protection under the safe harbour provisions.

Other Posts

By way of a guest post, Pankhuri shared Prof. Glynn S. Lunney’s open letter to the US Supreme Court, which expressed his bemusement at their decision in Festo Corp. v. Shoketsu Kogyo Kabushiki Co. The Professor pokes fun at the dearth of reason in the judgment, which has added confusion to the doctrine of foreign equivalents under patent law.

Pankhuri shared with us an anonymous guest post which highlights issues pertaining to the Patent Agent Examination 2018.  The writer points out a few errors in the answer key to the examination. The writer also notes that the focus of the examination, on a general level is skewed, with the focus being placed on recall skills rather than analytical skills. In light of this, the writer suggests that the exam be made ‘open-book’, with lesser weight given to questions requiring memory rather than analysis. The writer also sheds light on the subjective nature of marking in the viva-voce, urging an overhaul of the testing to improve the standard of patent agents.

In his post, Prashant alerted us to the government’s proposal to amend the Sports Broadcasting Signals Act, 2007. The proposed amendment to the SBS Act will allow Doordarshan’s signal to be rebroadcast under the Cable Television Networks Act, 1995. The last date to submit comments on the proposed amendments is December 31, 2018.

Prashant also wrote a post on bench-fixing allegations in a number of trademark infringement cases filed by KRBL Ltd. before the Delhi District Courts through the law firm K.G. Bansal & Co. He notes that the matter is now pending a hearing on merits before the Delhi High Court, although he observes that finding proof in these cases is a difficult task without initiating a criminal investigation.

Rajiv covered the recent judgment concerning the licensing of its technology to its competitors. The judgment holds that Qualcomm must grant a license to all willing companies, hinting at a potential breach of Qualcomm’s FRAND commitments. He notes that this case makes it clear that standard-essential patents must be licensed to parties in the value chain, including willing chipset owners.

Other Developments

Indian

Judgments

Megha Cashew Pvt. Ltd. v. B.R.Industries – Meghalaya High Court [September 19, 2018]

The court interpreted S. 134 of The Trademarks Act, 1999 and directed the parties to file the suit before the Court of District and Sessions Judge, Nongpoh according to the provisions of the law and directed the lower court to adjudicate and dispose of the matter within 2 months. The court held that the previously granted stay will remain in force until the matter is taken up by the lower court and a decision is passed by the judge independently.

Ultra Tech Cement Ltd. v. Kotai Mineral Products Pvt. Ltd – Delhi High Court [October 25, 2018]

The court granted an ad-interim injunction restraining the defendant from using the mark, ULTRA CEMENT, or using the tagline, The Ultimate Choice, in its goods and services as they were deceptively similar to the Plaintiff’s trademark, ULTRA TECH CEMENT and tagline, The Engineer’s Choice. The court held that the defendant’s conduct was writ with dishonesty as the infringing marks could not have been mere coincidence and directed the Court receiver to make an inventory of all the infringing goods and seal them in the premises of the defendant.

Body Basic Healthcare v. Sachin Raghunath Shinde – Bombay High Court [October 25, 2018]

The court granted an ad-interim injunction restraining the defendants, owners of the gym NEW BODY ART FITNESS CLUB, from using the mark BODY ART or other similar marks in any way relating to the defendants’ trade till the disposal of the suit. The court held that the defendants’ use of the Plaintiff’s marks were not honest considering that the defendant and the Plaintiff have been in the same line of business and the defendant would have had knowledge of the Plaintiff’s Trademark.

 Super-Max Ipr Holdings Ag v. Tigaksha Metallics Private Ltd – Bombay High Court [October 26, 2018]

The court granted an ad-interim injunction restraining the defendants from using the marks, Zorrik, Supermax, Vidyut, Samrat, Rise, Dollar and Thames or other marks that belong to the Plaintiff, by either passing the defendant’s goods as those of the Plaintiff’s or in the course of the defendant’s business. The court relied upon the conduct of the defendants like using the suit trademarks on www.indiamart.com despite the expiry of the license from the Plaintiff to use them, making statements that the defendants were authorized to use the trademarks, to arrive at the conclusion that the Plaintiff’s rights will be seriously infringed if a temporary injunction were not granted.

M/S. Super Cassettes Industries v. Damoh Cable Network – Delhi District Court [October 29, 2018]

The court granted an ex-parte permanent injunction restraining the defendant, a cable operator, from infringing the copyright of the plaintiff, the owner of the ‘T-Series’ label, by broadcasting cinematographic films and musical works owned by it, over the cable. It further directed the defendant to hand over all the infringing material and also pay punitive damages of Rs. 20 lakhs to the plaintiff.

Impresario Entertainment v. Mocha Blu Coffee Shop – Delhi High Court [October 30, 2018].

The court granted a permanent injunction restraining the defendant, a coffee shop, from using the mark, MOCHA BLU as it was virtually identical to the Plaintiff’s registered mark, MOCHA, in running the coffee shop or offering its services to customers. The court awarded costs to the Plaintiff to the extent of actual costs incurred by the Plaintiff and disposed of the suit.

State v. Vikas Sharma – Delhi District Court [October 31, 2018].

The court acquitted the accused, Vikas Sharma, of the charge under S.63 of the Copyright Act as the prosecution hadn’t produced any evidence to prove copyright or trademark violation. The court held that the prosecution had failed on counts of failing to prove how the alleged spurious goods of gel and deodorant were recovered from the accused who exclusively sold artificial jewellery, even assuming the contrary, the prosecution had not proved that the goods were counterfeit, as the original goods were never produced. The court finally held that the Prosecution had not fulfilled its burden of satisfying the court beyond reasonable doubt that the accused was guilty and disposed of the suit.

Hindustan Unilever Limited v. Modi Powder and Soap Company & Others – Bombay High Court [October 31, 2018]

The dispute concerned the alleged infringement and passing off of the Plaintiff’s trade dress in its products. The Court granted an injunction in favour of the Plaintiff and it was subsequently revealed by the Defendants that an entity, namely “Reliable Packaging” had provided them with the infringing trade dress. The Plaintiff filed an application for impleading “Reliable Packaging”. The Court allowed the Plaintiff’s application and restrained “Reliable Packaging” from using or causing the Plaintiff’s trade dress to be infringed in any manner as well as directing them to deliver all the relevant materials pertaining to the Plaintiff’s trade dress on the final disposal of the suit.

Sun Pharmaceutical Industries Limited v. Systopic Laboratories Limited – Delhi High Court [November 1, 2018]

The dispute concerned the alleged infringement and passing off of the Plaintiff’s mark “STORVAS” by the Defendant through the use of a deceptively similar mark “ORVAS”. The Plaintiff filed an application for framing a fresh issue in order to challenge the validity of the Defendant’s registration of its mark. In allowing the application, the Court relied upon its previous decision and stated that in framing an additional issue regarding the invalidity of a mark, it had to be reasoned that the same was a material plea and did not return any prima facie finding. The Court noted that another factor in allowing the application was that the Plaintiff had made detailed averments in its plaint with respect to the similarity of the marks and Defendant’s knowledge of the Plaintiff’s registration at the time of obtaining registration for its mark.

M/S. Malbro Appliances v. Gas Chulla Ghar – Delhi District Court [November 1, 2018]

The court granted a permanent injunction restraining the defendant, a manufacturer/distributor of LPG stoves, from infringing upon the Plaintiff’s trademark, SURYAFLAME or using deceptively similar Trade-dresses. The court held that it was clear that the objective of the defendant was to ride upon the goodwill and reputation of the Plaintiff by using a deceptive identical mark. The court disposed of the suit and directed the defendant to pay Rs. 1 Lakh to the Plaintiff as compensatory damages and further added that the Plaintiff was entitled to a 10% interest p.a on the sum from the date of institution of the suit.

Shoppers Stop Ltd vs Softobell Inc. – Delhi High Court [November 1, 2018]

The court granted a permanent injunction restraining the defendants from passing off the defendants’ goods as those of the Plaintiff’s and from selling goods by using the mark, “VETTERN FRATINI” or other marks which were deceptively similar to the Plaintiff’s mark, “VETTORIO FRATINI”. The court awarded costs to the Plaintiff, to the extent of actual costs incurred by the Plaintiff and disposed of the suit.

News

• Delhi High Court Directs E-commerce Site To Clamp Down On Counterfeits
• Bytedance tweaks Helo design after ShareChat allegation over copyright
• Naga shawl controversy is unnecessary
• Cap royalty payments, technology transfer fees by domestic firms: SJM to govt
• Bare acts published by private companies does not infringe Govt’s copyright: Centre to Delhi High Court

International

• Paris Court Finds Jeff Koons Guilty of Copyright Infringement
• Australian songwriters settle copyright suit with Ed Sheeran
• Morgan Stanley sues Morgan Stanley for wrongful use of name, trademark

In Kokanratna Holiday Resorts vs. Millennium & Copthorne International Limited, the Bombay High Court recently passed an order that required the Defendant to give prior, written notice of 7 days to the Plaintiff before initiating any legal proceedings against them pertaining to the trademark ‘Hotel Millennium Park’. The order passed ex parte by Justice Kathawala, therefore precludes the Defendant from initiating ex parte proceedings to claim interim relief against the Plaintiff.

Background and Decision

The Plaintiff is a hotel based in Maharashtra, while the Defendant is a multinational hospitality company, although, it does not have a hotel in India yet. The Plaintiff approached the court under Section 142 of the Trade Mark Act, 1999, which prohibits groundless threats of legal proceedings against holders of registered trademarks. The Plaintiff’s claim was that, the Defendant, through a series of letters threatened to sue the Plaintiff for using the trademark ‘Hotel Millennium Park’.

The Plaintiff, on a prima facie examination, were found to be using this trademark continuously since 2001, and were concerned that the Defendant could initiate legal proceedings against it anywhere within India, since the trademark was also used in the domain name of its website. It is to prevent this from happening that the Plaintiff approached the Bombay High Court.

In ruling for the Plaintiff, the Court found the prima facie finding pertaining to the validity of the Plaintiff’s trademark, along with the series of letters threatening legal action from the Defendant to be sufficient. In the order, Justice Kathwala also remarked that providing this relief to the Plaintiff would not cause much harm to the Defendant. Given that communication has been ongoing between the parties have been going on for 6 years, it would be fair to presume that depriving the Defendant the speedy relief of an ex parte order would not cause any harm.

The Scope of Section 142: Discussion

I look into two questions that arise for consideration:

1. Threats of what kind of legal proceedings come within the ambit of Section 142?
2. What kind of reliefs can be granted by the court under Section 142?

Section 142 of the Trade Marks Act, 1999 reads:

“142. Groundless threats of legal proceedings —

(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trade mark which is registered, or alleged by the first-mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the court that the trade mark is registered and that the acts in respect of which the proceedings were threatened, constitute, or, if done, would constitute, an infringement of the trade mark.

(2) The last preceding sub-section does not apply if the registered proprietor of the trade mark, or a registered user acting in pursuance of sub-section (1) of section 52 with due diligence commences and prosecutes an action against the person threatened for infringement of the trade mark.

(3) Nothing in this section shall render a legal practitioner or a registered trade marks agent liable to an action under this section in respect of an act done by him in his professional capacity on behalf of a client.

(4) A suit under sub-section (1) shall not be instituted in any court inferior to a District Court.”

What Kind of Legal Proceedings fall within the ambit of Section 142?

Section 142 provides a remedy against groundless threats of “an action or proceeding for infringement of a trade mark […] or other like proceedings”. The scope of the threats, therefore, is limited. While it clearly includes trademark infringement suits, there is lesser clarity with respect to passing off actions.

However, in cases such as Dolphin Laboratories Pvt. Ltd. v. Kaptab Pharmaceuticals and Lakshmi PVC Products v. Lakshmi Polymers, courts have held that a passing off action is included in the phrase “other like proceedings”, and therefore, threats consisting of the same can be adjudicated under Section 142. Similarly, P. Narayanan argues that “other like proceedings” would also include criminal proceedings, since Section 142 is meant to protect businesses from any and all legal proceedings that affect it adversely.

Reliefs granted under Section 142

Section 142 expressly states that in cases where there is a groundless threat, the plaintiff can obtain a declaration stating that the threats are unjustified, an injunction against further threats, and recover any damages sustained due to these threats. These remedies seem to be listed in an exhaustive manner, suggesting that the provision does not warrant any additional remedy.

However, in the present case, an order which effectively bars the Defendant from initiating ex parte proceedings in any situation has been passed. This is clearly outside the ambit of Section 142. It is also inconsistent with existing jurisprudence on the provision, which has consistently refused to pass an order that prohibits the Defendant from initiating legal proceedings of passing off, despite finding their threats to be groundless.

In Dolphin Laboratories (mentioned above), the manufacturer of a drug was threatened with legal proceedings by the defendant for using the concerned mark to sell drugs. One of the reliefs sought by the plaintiff was an injunction that restrained the defendant from filing a suit for passing off. The court emphatically denied this relief and further held that while restraining a person from making unjustified threats, it is not open to the court to restrain him from taking the matter to a court of law and from agitating his rights there. As per the court, this was not the intention behind the provision (Section 120 of the Trade and Merchandise Marks Act, 1958), which is clearly evinced from sub-section 2 of the provision.

Prohibiting the Defendant from obtaining ­ex parte ad interim reliefs clearly deprives them of an important mode to agitate their rights in court. Although the perils associated with ex parte orders are well-known (highlighted on the blog here, here and here), it would not be remiss to note that ex parte ad-interim reliefs are an important legal remedy, which allow for timely intervention in matters which may potentially cause irreparable harm. This order, therefore, clearly strikes a discordant note with existing jurisprudence, which firmly refrains from granting reliefs that prohibit the Defendant from pursuing legal remedies through means other than infringement suits.

The matter is still sub-judice, but it would be interesting to see if this particular order is challenged by the Defendant.

Image from here.