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We’re delighted to bring to you another guest post by our Fellowship applicant Anupriya Dhonchak, discussing the relevance of the debate on the legality of parallel importation of books in India in the age of Kindle and e-books. Anupriya is a 4th year law student at National Law University, Delhi. Her earlier posts on the blog can be viewed here and here.

Debate on Parallel Import of Books: Still Relevant in the Post-Amazon Age?

Anupriya Dhonchak

There was a raging debate in 2010-14 regarding the legality of parallel import of copyrighted works in India, centred particularly around the import of cheaper books from foreign markets. The Parliamentary Standing Committee had included an amendment to Section 2(m) within the Copyright Amendment Bill, 2010 to allow parallel imports in India in order to make available latest editions of books at cheaper prices, particularly in order to protect the interests of students. However, due to pressures from the publisher lobby, this amendment was excluded from the final version of the Bill (more on this debate can be read here, here, here and here).

Parallel import refers to the import of genuine goods produced with the rights holder’s permission in one country into another country by an unauthorised distributor. Exhaustion regimes followed by the importing country determine the legality of parallel imports in the country. National exhaustion exhausts the copyright owner’s exclusive right to distribute a copy of the work only once the first sale has taken place in the importing country whereas international exhaustion exhausts these rights once the first sale has taken place anywhere in the world. The creator’s exhausted rights pertain merely to the physical product sold and not the intangible copyrightable content embodied therein.

For instance, India has a flourishing market of second hand bookstores. They allow market segmentation and are considered pivotal in increasing access of persons to cheaper books. These bookstores are legal in India because of the first sale doctrine. This doctrine is premised on not allowing the creator to restrict subsequent alienation of a sold copy of a work since she has already benefitted financially from the first sale. Indian courts have held that the Copyright Act, 1957 prohibits parallel import of copyrighted works since we follow national exhaustion. This leads to an absurd situation rife with uncertainties and risks of potential infringement because second hand bookstores have no way of distinguishing between a copy that was parallelly imported and one that was exclusively imported.

Amazon’s Business Model and Its Impact on Parallel Imports

This debate has fizzled out, or been rendered irrelevant partly because of the advent of new business models. Amazon’s business model enables direct dealing between consumers and distributors, sidestepping the traditional distribution channels within an international marketplace. Its digital bookstore has been immensely successful in capitalising on a market of consumers that were dissatisfied with the physical book trade, by making available books from all over the world at cheaper prices. There are multiple complex options, each with its own legal ramifications, for selling or reselling old or new books on Amazon. Amazon does not require prior proof of authentication from third party sellers regarding their having sourced the books through authorised distribution channels. These sellers are only required to provide proof of authentication after a complaint has been made against them regarding the source of their books by a rights holder. Only when publishers have shared the complaints with Amazon, it has come up with vaguely worded promises to weed out “bad actors”. Further, Amazon permits third party sellers to win the ‘Buy Box’ which allows them preferential listing compared to publishers of new books based on opaque algorithmic criteria, subscription of other Amazon services, attractiveness of prices etc. This impacts the visibility of books sold directly by publishers by pushing them without any notification to Amazon’s secondary or tertiary pages below cheaper substitutes by preferred third party sellers.

Does Amazon’s incentivisation of cheaper prices without requiring authentication by third party sellers enable infringement? Section 79(2)(c) of the Information Technology Act, 2000, requires the platform concerned to exercise due diligence, absent which its liability may arise. Amazon’s marketplace can be used for both infringing and non-infringing purposes by third party sellers. However, not requiring prior authentication may imply lack of necessary due diligence and result in Amazon’s liability.

When a corporate giant like Amazon attempts to disrupt traditional rights holders’ market power, it can successfully do so. According to the proviso to section 51 of the Copyright Act, the prohibition on parallel imports does not apply to the “import of one copy of any work for the private and domestic use of the importer.” As per Amazon’s terms and conditions, the quantity limits (if any) on certain items are influenced solely by the need to “provide all customers with a great selection and great prices.” There is no prohibition on bulk orders of books from abroad based on territoriality or parallel import restrictions. This means, I can, in effect, import a bulk of new or used books from Amazon, regardless of the state enabled distributor monopolies in India that prohibit parallel imports. This has practically enabled Amazon to do, what civil society and rights-based policy makers have been trying to for a long time. However, this also widens the access gap between technologically equipped Indians having payment options with foreign currency and those who lack the wherewithal to purchase cheaper books online. This latter group of people arguably has a more pronounced need to get access to cheaper books.

Has the Parallel Imports Debate Become Redundant in the Age of the Kindle and E-Books?

Distributing digital work such as e-books via transactions through the electronic medium can allow the user to re-transmit and copy the work at negligible cost. However, the transient reproduction of a work on the internet for the purposes of transmission complicates the first sale doctrine which is largely premised on physical sales. Copyright owners are now using novel technologies to restrain the user’s exercise of rights over purchased digital copies. For instance, I can buy, lend and resell a physical book bought from a bookstore but if I buy an e-book on Amazon’s Kindle, I cannot lend or resell the e-book without parting with the Kindle itself since it is meant for use only on the device. This is because as per Amazon’s terms and conditions, an e-book purchaser becomes a licensee of the e-book and not its owner. This is because of the applicability of the first sale doctrine to only sales and not licensing transactions.

Conclusion

Finally, copyright law’s foundational justification for tolerating monopolies is said to be based on promoting culture and the dissemination of information. This justification assumes pronounced importance in a developing country like India which has codified through case law and a constitutional amendment, a fundamental right to education. Indian judicial decisions have been criticised for reading a prohibition of parallel imports into the Copyright Act without any statutory basis. It is important that judicial decisions or copyright policy do not interpret the statute at loggerheads with its normative spirit and constitutional justifications. The fundamental right to free speech and expression in India has been broadly interpreted by the Supreme Court and barriers to it include not just censorship but also state-enabled property rights that impede free speech by reducing access to information. The judicially invented right of the copyright owner to exclusively import even after she has realised the profits from the first sale of the product in a different country, is one such right. Ideally, it should not have taken a corporate giant like Amazon to disrupt these monopolies.

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We’re excited to bring to you a guest post by one of our former bloggers, Aparajita Lath. Aparajita is a lawyer based in Bangalore. In this post, she examines the legal enforceability of the prohibition on reverse engineering imposed by the terms of service of the Govt’s COVID-19 tracking mobile app Aarogya Setu, in light of the fair use rights of users under Section 52 of the Copyright Act, 1957. Her previous posts on the blog can be viewed here.

Reverse Engineering and Aarogya Setu App: Contracting Out of Fair Dealing?

Aparajita Lath

The Aarogya Setu app that was launched on 2nd April and that has been made mandatory for certain sections of society, continues to raise to several questions regarding effectiveness, security, privacy and technology. As of May 8, this app has 9 crore users and is one of the world’s top 10 most downloaded apps. Users are probably treating this app just like any other app. Given that it has been launched by the Government of India, the expectations of safety and reliability, for most such users, is presumably high.

The app, however, is not open source and the terms of service impose a blanket prohibition on reverse engineering. Due to this, independent auditing of the app, by the community in general has not been possible. An ethical hacker has reportedly identified vulnerabilities but the government maintains that the app is safe. Security researchers and privacy advocates have argued that if the app is mandatory then people have a right to know what the app is really doing. For this, the app’s code should be opened/ revealed for the community to understand its actual functioning. Reports state that the government is now planning to open source the code of the app.

While we wait for this, the terms of use of the app continue to prohibit ‘reverse engineering’. The term ‘reverse engineering’ is neither defined under the terms of service nor the Copyright Act, 1957 (‘Act’). In the context of software, it is a pretty technical term and could mean a lot of different things.

Software per se is entitled to thin protection as a ‘literary work’ under the Act. The Act also affords users several fair dealing rights with respect to computer programs, some of which permit reverse engineering of varying degrees. For instance, section 52(1)(ac) allows users to observe, study or test the functioning of the computer programme in order to determine its underlying ideas and principles while performing such acts necessary for the functions for which the computer programme was supplied. This fair dealing clause, is a research exemption, and permits users to unlock the functionality of the software, its underlying principles and ideas while loading, running, displaying or doing any other acts that are necessary for performing the functions for which the program was supplied. Reverse engineering is also permitted as per section 52(1)(ab) where the purpose is to obtain information essential for achieving inter-operability of computer programs.

Rajiv has discussed the concept of reverse engineering, in detail, on this blog here and here. SFLC has made reference to these reverse engineering fair dealing rights, the prohibition of reverse engineering in the Aarogya Setu app terms and the need to remove such a prohibition. Certain commenters have argued that section 52(1)(ac) cannot be read as a right to reverse engineer software – to them it is a ‘testing and integration’ provision. Section 52(1)(ac) is a clear research exception and not an integration exemption. This fair dealing right allows users to determine underlying ideas/ principles of the software through monitoring the functions of the program. Ideas/ principles are not copyrightable and users are permitted to test the software to reverse engineer the ideas/ principles of the app. Section 52(1)(ab), on the other hand, is an integration exemption – since reverse engineering (which could include through decomplication) under this section is only permitted for integrating/ achieving inter-operability of computer programs.

In any case, it is difficult to argue that the Act does not permit any kind of reverse engineering whatsoever. Since this term is a technical term, if the app wanted to prohibit certain kinds of behavior through reverse engineering, to begin with, reverse engineering should have probably been defined under the terms of service. Since it has not been defined and since the Act permits certain kinds of reverse engineering, can the terms of service of the app impose a blanket prohibition on reverse engineering i.e. make users contract out of their fair dealing rights?

Certain legislations e.g. labour-related legislations like the Employees Compensation Act, 1923 (ECA), Minimum Wages Act, 1948 (MWA), explicitly prohibit employees from contracting out of the rights/ benefits conferred to them by these statues (e.g. Section 17 ECA and Section 25 MWA). The Act, however, does not expressly prohibit users from contracting out of their fair dealing rights. It can therefore be argued that private parties are free to contractually forego user rights (the right to reverse engineer) and that parties have the freedom to contract as they like.

However, the freedom to contract argument may be rebutted on the ground that this app is being imposed as mandatory and users have no meaningful choice but to accept the terms (whether reasonable or not). Further, it can be argued that any contractual provision that defeats the purpose of a statute or one which is against public policy is unenforceable (section 23 of the Contract Act). The Copyright Act grants ‘exclusive rights’ to authors/ owners, but also imposes limitations on these exclusive rights that are in the nature of the user’s rights. Such a balancing of rights, is not a mere default position, but a conscious policy decision of balancing competing interests. Further, statutory rights that are designed to serve a public purpose and which operate for the general benefit of the community should not be permitted to be waived by private agreements. Shamnad and Pankhuri have also highlighted in their response (pg 74 &75) to a survey on copyright user rights that user rights cannot be contracted out of and have cited Delhi High Court and ITAT decisions which state that ‘holders of copyright are not entitled to impose any restrictions curtailing fair use’ and that any conditions put in a license restricting its fair or reasonable use will be ignored.

Making users contract out of their fair dealing rights is questionable, especially given the present context where such rights may serve a public purpose of identifying vulnerabilities with an app launched by the government, used by crores of people, that collects vast amounts of personal and sensitive information.

In addition to the above, given that ethical hackers are investigating this app and the government is committed to opening up the code, should this blanket prohibition be taken seriously if reverse engineering, to the extent permitted under the Copyright Act, is used to serve a public purpose?

Please click here to view our other posts related to COVID-19 and here to view other important IP developments related to it.

Prof. (Dr.) Shamnad Basheer

On the occasion of our Founder Prof. (Dr.) Shamnad Basheer’s 44th birth anniversary today, we at SpicyIP are proud to announce the first edition of the Shamnad Basheer Essay Competition on Intellectual Property Law. Shamnad’s family has kindly consented to us conducting this competition in his name.

A master with the pen, Shamnad was a prolific writer. Apart from publishing extensively in academic journals (most of the publications can be accessed on his SSRN page), he was also the rare Indian academic who wrote extensively for law students and the lay audience, through various media such as SpicyIP and mainstream newspapers. We have put together a collection of all his publications and public interest interventions here (also accessible from our Resources page). Please do let us know if you come across any that we may have missed.

Today on his birth anniversary, we wanted to celebrate his memory and his legacy of outstanding scholarship, by conducting an essay competition. In his time, Shamnad won prizes in three prestigious essay competitions. The first was an essay competition held by the Stanford Technology Law Review. He won the second prize in that competition for a great piece on the ‘Policy Style’ Reasoning of the Indian Patent Office. The second essay competition that he won was held by the International Association for the Advancement of Teaching and Research in Intellectual Property (ATRIP) for young academics. Shamnad won the very first edition of that competition for his essay on Section 3(d) of the Patents Act. The third was an essay competition held by CREATe on the topic of how Artificial Intelligence would change the practice of intellectual property law. Shamnad won the second prize in that competition for his essay titled ‘Artificial Invention: Mind the Machine’.

Submission Details

For its first edition, the competition will be open to students currently enrolled in any LLB program (or its equivalent – meaning students enrolled in J.D. programs can take part) across the world. The prize money will be INR 15,000 for the first prize, INR 10,000 for the second prize and INR 5,000 for the third prize.

Prof. (Dr.) Shamnad Basheer

The word limit for submissions is 5,000 words (inclusive of footnotes) and the deadline for submissions is June 30, 2020 (23:59 IST). All submissions and any queries should be e-mailed to submissions@spicyip.com. The topic of the essay can be anything related to intellectual property rights – the more creative the better. We encourage participants to take inspiration from Shamnad’s work, which has challenged the orthodoxy of conventional IP wisdom by looking at the subject through the lens of the global south and its development needs. Two values that guided Shamnad through the course of his academic writing, were the need for transparency and democratic participation, during the process of making the law and implementation. His commitment to transparency in enforcement of India’s patent law led him to suing the Patent Office on two occasions in order to secure our right to information. He was also playful in his writing, never afraid to think and communicate unconventionally. He brought rigour and substance to his non-conforming ways and we encourage you to bring the same spirit into your entries.

Panel of Judges

Entries will be scored on creativity and analytical strength. Judges will also take into account entries that demonstrate the values Shamnad displayed in his life and career. This does not mean you have to necessarily agree with everything he wrote. Judges reserve the right not to award the prize if it is considered that no entry is of sufficiently high standard or to divide the prize between two or more entries if they so decide. Judges’ decisions in this respect will be final.

The SpicyIP team may shortlist essays to be submitted to an external panel of experts for the final decision. The following experts have very graciously consented to judging the competition and we are very thankful to them for sparing their time and providing us with their inputs for this essay competition:

1. Justice (Retd.) Prabha Sridevan, Former Chairperson of Intellectual Property Appellate Board (IPAB): As a judge on the IPAB and before that the Madras High Court, Justice Sridevan has delivered several landmark IP judgments, including in the constitutional challenge to Section 3(d) of the Patents Act, the Pegasys case, the Nexavar compulsory licensing case. Some of her contributions to Indian IP jurisprudence include the P.Sita test for obviousness, which is an elevated standard of the conventional obviousness test that is followed in most western countries. To know more about Justice Sridevan, please read this wonderful interview that Shamnad has conducted a few years ago.

2. Jayashree Watal, Former Counsellor in the Intellectual Property Division of the World Trade Organisation (WTO): Ms. Watal, who has recently retired from the WTO was formerly a senior bureaucrat with the Government of India and was one of India’s key trade negotiators for the TRIPS Agreement in the early nineties. She subsequently wrote one of the most useful and accessible accounts of the negotiations in her book Intellectual Property Rights in the WTO and Developing Countries (OUP 2001). She then joined the WTO as a Counsellor in its IP division 2001 and only recently retired from the job in 2019. Ms. Watal has for long had one foot in academia and has held an adjunct professor position at Georgetown Law since 2009 apart from being an Honorary Professor at the National Law University, Delhi since 2019. She is currently on the Board of Governance of the Medicine Patents Pool (MPP).

3. Siva Thambisetty, Professor at London School of Economics (LSE): Siva Thambisetty is an Associate Professor of law at the Law Department, London School of Economics and Political Science. Her research interests include comparative and international patent law, emerging technologies and the institutional and regulatory dimensions of intellectual property. Her recent work includes a Horizon 2020 funded project on the Nagoya Protocol and an advisory role attached to the Office of the Pacific Ocean Commissioner on treaty negotiations related to biodiversity beyond national jurisdiction. Her policy work is often inter-disciplinary and she has been consulted by the EU’s Joint Research Council, WHO India, The Nuffield Bioethics Council, the UK Intellectual Property Office and the UK Government’s Commission for Intellectual Property Rights. Amongst others her work is published in the J of Law and the Biosciences, Oxford J of Legal Studies, Jurimetrics, European Intellectual Property Review, Intellectual Property Quarterly, Nature Sustainability and the Journal of World Intellectual Property Law. You can read more about Prof. Thambisetty on her LSE page over here.

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We’re glad to bring you another post by our intern, Bhavik Shukla, discussing the various aspects of trademark registration for virtual currencies. Bhavik is a 5th year student at NLIU, Bhopal. His earlier posts on the blog can be viewed here, here, here, here, here and here.

Trademarking of Blockchain Technology and Virtual Currencies: An Unsolvable Conundrum?

Bhavik Shukla

I read Arun’s post on trademarking of virtual currencies with much interest. He lucidly explained the concepts relating to the ‘befuddling’ blockchain technology, and further espoused the trademarking of cryptocurrencies. This post is a follow-up post that seeks to explore some of the ideas introduced by Arun, and related aspects. As such, before you read any further, it would help to first read Arun’s post.

In this post, I seek to highlight the issues which may make trademarking of blockchain-related technologies (encompassing cryptocurrencies, smart contracts, among others) a tricky affair, while also expounding on reasons for this.

Case against Trademarking: A Blockchain Perspective     

In this section, I attempt to elaborate on why the trademarking of blockchain-related technologies present an insurmountable challenge to the application of trademark law.

To begin with, I draw on an issue that forms the basis of many of the trademark-related issues surrounding blockchain (as I will explain through the length of this post): as Arun explains, public blockchain technology and cryptocurrencies have no “central control or ownership.” Further, this lack of centralized control over such technologies makes it particularly improbable for them to be protected under trademark law.

First, Arun suggests that it would be “worthwhile considering if such blockchain technology can be brought within the ambit of “collective marks” i.e. marks belonging to a community of users.”  In my view, a collective trademark cannot afford any protection to such technologies, as section 2(1)(g) of the Trade Marks Act (‘Act’) necessarily envisages collective trademark ownership to ‘members of an association of persons which is the proprietor of the mark.’ As, it has been emphasized before public blockchains are not controlled by any entity, much less can they be said to have a ‘single’ proprietor. As such, a public blockchain merely has participants, and such participants cannot be equated to be ‘proprietors’ within the meaning of the Act. The bottom line is that participation in blockchain is constantly subject to change, and its activities are controlled by no one in particular. It is a community platform on which all have an equal participating right.

Second, in respect of public/ community blockchain-related technologies, anonymity forms a core principle to the extent that it has been termed a ‘necessary evil’. The requirement of anonymity or even pseudo-anonymity (see more on the concept here) is stressed upon, keeping in mind the breaches of data, hacking, or even kidnapping of persons linked to a cryptocurrency address. So, would a person or an organization of persons having vested interest in a community blockchain give up their anonymity, in order to seek a trademark registration? It appears highly unlikely. It has to be borne in mind that the central purpose of affording trademark protection to goods/ services is to indicate the source of goods and/ or services, and thus, distinguish proprietors in the market. In a reflection of this, the Form TM-A (for registration of a trademark in India) requires applicants to reveal details. This strikes at the heart of the requirement for anonymity in blockchain technologies conflicting directly with the blockchain participants’ maintenance of anonymity.

This brings me to Arun’s call for doing away with decentralization in such technologies, where he states that an adoption of trademarks for blockchain-related technologies may “also overcome the paradox of de-centralized control”. To quickly relay this paradox for our readers’ benefit:  the blockchain technology is not owned/ controlled by anyone, thereby being purely decentralized, but such decentralization does not, in itself, make the blockchain system trustworthy or resilient to frauds. I do not think that decentralized nature of the technology is undesirable, (except perhaps to the government, see here). I feel, instead, that it gives public blockchains its flair. Decentralized control ensures that there is no single authority through which, changes may be effectuated to the blockchain, thereby making it a trustless system (i.e. one not controlled by a single authority). In this sense, although it may be beneficial to grant trademark protection to blockchain related technologies, thereby overcoming the paradox, such protection should not be extended at the cost of doing away with its core infrastructural characteristic- decentralization.

That said, the decentralised nature of the blockchain throws up another set of issues. For instance, in such a decentralized system, what if certain members of the blockchain disagree with obtaining a trademark registration? This will result in a forked blockchain, which refers to a split in the original blockchain into two or more separate paths due to a disagreement: one which supports the registration and other which does not. This will cause highly complex issues for trademark law to deal with, considering that the basic infrastructure of both the paths is identical. In that case, can the other path (group which does not seek registration) use a registered trademark? Further, what if an action is brought against them for their use of the trademark? Strictly speaking, the forked blockchain remains a part of the parent blockchain. It is uncertain how these issues may be resolved by the Indian trademark law – that is if they ever come up!

Will Trademark Registration for Blockchain Related Technologies Actually Help?

The underlying infrastructure of blockchain related technologies make it a Herculean task to grant them protection under the trademark laws. However, let’s, for the sake of argument, consider a situation where a trademark is granted in respect of these technologies. In my view, the trademarking of blockchain related technologies may make no difference to the status quo.

First, it is admittedly improbable that every new participant in the blockchain, where a collective trademark is granted, or a registered user in case of an ordinary mark, may be in favour of stripping his anonymity only to ‘use’ the trademarked name.

Second, one must remember, the blockchain is just a medium over which transactions are carried out. For clarity, the creation of ‘blocks’ through the solving of a puzzle is the participative key, and in some ways this technology is a true symbolism of ‘reap what you sow’. So, a person who adds a ‘block’ does not need an authorization from an organization/ guild to use the blockchain’s name or even that of a specific cryptocurrency. Therefore, it is unlike a good or service which can be further sold or distributed by a proprietor who uses a mark as a source indicator.

Third, the problem with trademarking blockchain/ cryptocurrency also stems from its ‘illegal’ classification in some countries. Fortunately, the Supreme Court struck down the RBI’s ban on dealing of cryptocurrencies in India. But in countries where cryptocurrency is banned, seeking a trademark registration, may be quite impossible. ‘Public policy’ and ‘morality’ may be invoked in order to deny trademark protection to blockchain/ cryptocurrency. In a nutshell, such countries will not afford protection from misrepresentation and deception through actions of third parties.

Recent times have seen a surge in the discussion surrounding trademarking of blockchain related technologies across the world. However, the trademarking of these technologies calls for an overhaul of the understanding and application of trademark laws to the digital space. These technologies, being ‘disruptive’ in nature, have majorly impacted the surroundings in a way that their reconciliation with existing laws may well be a stretch. Accordingly, it is worth exploring the need for the development of new jurisprudence, with these technologies in perspective. I welcome readers’ thoughts and comments on the subject and sign off in agreement with Arun’s conclusion: the blockchain technology is here, and we are not ready for it.

Thanks to Sreyoshi Guha for her helpful inputs on this post!

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We are pleased to bring you a post by our Fellowship applicant, Shivam Kaushik, critiquing the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions that was released by the Government in September last year. Shivam is a 5th year law student at Banaras Hindu University, Varanasi. This is his first submission for the Fellowship.

CIPAM’s Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions: A Critique

Shivam Kaushik

In September 2019, the Department for Promotion of Industry and Internal Trade (‘DPIIT’) released the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions (‘Model Guidelines’). The Model Guidelines were formulated because there is no uniform IP policy for academic institutions on the national level. Till now, the practice has been that individual academic and research institutions frame their own IP policies. The Model Guidelines have been drafted by the Cell for IPR Promotion and Management (‘CIPAM’) and owe their genesis to the National Intellectual Property Rights Policy, 2016 (‘NIPRP’).The NIPRP had tasked CIPAM with promoting public sector initiatives for IPR commercialization and outlined the need to devise suitable contractual and licensing guidelines to enable commercialization of IP rights (see page 15 of the NIPRP).

It is to be noted that the Model Guidelines are a part of a long-standing effort to put in place an IP Policy for academic/ research institutions on a pan-India level. A similar framework was sought to be established by the Protection and Utilization of Public Funded Intellectual Property Bill in 2008 (‘PUPFIP Bill’). The introduction of the PUPFIP Bill in the Rajya Sabha led to a huge furore and commotion in the academic circles (see here and here). It was subsequently referred to a Standing Committee of the Parliament which returned the Bill to the Government due to numerous inherent flaws in it (see the Committee’s report here). Later in 2014, it was withdrawn by the Government from the Upper House.

Substance of the Model Guidelines

The Model Guidelines can be characterized as a knock off of the American Bayh-Dole Act, 1980 in terms of its underlying philosophy and legal framework. They seek to promote transfer of technology and knowledge from academia to industry through better clarity on IP ownership and IP licensing. They implicitly advise mandatory registration of all the IP generated at academic institutions, developed utilizing the resources of the academic institution. The ownership of such IP, ordinarily, is to be vested in the academic institution itself. After vesting of ownership, the academic institutions are required to endeavor to commercialize the inventions by licensing (exclusive or otherwise) or assigning them to private players. The licensing or the assignment fee so generated is then supposed to be split between the inventor and the institution. Thus, the Model Guidelines have adopted the ‘incentive model’ to allure creators to respond to the needs of the industry.

For the purpose of handling all IP related activity in the academic institution, the Model Guidelines propose the establishment of an ‘IP Cell’. The IP Cell is the nodal agency to implement the mandate of the Model Guidelines. The Model Guidelines are an attempt to overhaul academia-industry relation by incentivizing research led education. In a nutshell, they are structured on the idea of patenting as an obligation, technology transfer as a necessity and royalty as a right to inventors.

The Pitfalls

Unfortunately, what Prof. Basheer and Pankhuri said about the Model Guidelines’ provenance i.e. NIPRP is squarely applicable to them too – They are more faith-based than fact-based and endorse a fairly formalistic view of IP, taking it to be an end in itself. The object of the Model Guidelines to promote technology transfer and commercialization of IP generated in academic institutions is certainly laudable. But the framework and the path adopted by them have many apparent flaws. While it is not possible to examine all of them in a single blog post, in the forthcoming paragraphs, I attempt to point to the major drawbacks that infect the Model Guidelines.

1. The Model Guidelines are not backed by any empirical data and no (publicly stated) study or research was conducted to locate the ‘proximate cause’ of the lack of innovation in the country before arriving at the ‘solution’ in the form of Model Guidelines. Self-admittedly, the provisions are primarily based on the Guidelines on Developing Intellectual Property Policy for Universities and R&D Organizations, WIPO. But ideally, any international or foreign policy before being adopted should be tested; to know if it can work in the Indian context. It is expected that policy decisions are taken on basis of some data that points to a problem and not because they are in vogue in the international domain. The Model Guidelines do not come out clean on this touchstone. The least that could have been done, before putting in place a measure that has the potential to re-shape the future research ecosystem of the country, was to conduct a wider consultation process. Roping in R&D leaders in India like- CSIR, or other top ten or twenty universities in terms of research output, would have certainly aided in formulation of a more ‘Indianised’ version of the guidelines, by painting a better picture of the Indian scientific research landscape and its associated drawbacks.

2. The Model Guidelines assume that IP is the best way to transfer technology from the academia to the industry. The assumption seems to be based on the apparent success of American Universities in commercializing inventions in the last two decades of the 20^th But what the Indian policymakers have left out of their consideration are the well articulated views of numerous scholars who have questioned the precise role of Bayh Dole Act in this success story. They claim that unrelated and extraneous factors like breakthrough in biological sciences and increased corporate funding for universities in the US led to this surge in innovation. These reinforcing circumstances are simply absent in present day India, leaving one to wonder about the probability of the Model Guidelines achieving their desired outcomes. Moreover, there is a general argument against university patenting that it affects the quality or direction of scientific research being undertaken. Patenting tempts universities to undertake commercially viable applied research, while eschewing fundamental/ basic research. Such trends are harmful in the long term for the research ecosystem of any country.

3. A direct implication of the policy would be a spike in the cost of products based on technology or invention sourced from academic institutions. Enactment of the Model Guidelines will lead to imposition of a camouflaged ‘IP tax’ on the consumers. The public will have to pay twice for the same invention! First, in the form of taxes that lead to the creation of the invention and second, additional cost paid to the profit seeking company. Because the licensing and assignment fee imposed on licensee and assignee would be further transferred to the ultimate consumers. The condition would be even worse in the case of an ‘exclusive licensee’ who would be able to thrust monopolistic prices in the market without investing a single penny in R&D. The phenomena can be best explained with the oft cited example of the medicine stavudine, which was developed by Yale University for the treatment of HIV/ AIDS. The drug was exclusively licensed to Bristol Myers Squibb (BMS) which charged an exorbitant price on it, thereby making it inaccessible in developing countries like South Africa. When a humanitarian organization approached BMS to reduce prices in South Africa, big pharma companies sued the government and threatened to sue the generic pharma companies as well. The impasse was eventually resolved after massive protests, including when students and professors of Yale University joined the demand to lower prices.

4. The Model Guidelines do not grant ‘march-in rights’ to the Government over the IP generated out of public funding. March-in rights owe their genesis to Section 401.14 of the Bayh Dole Act, which provides the funding Federal Agency the ability to march in and provide an exclusive/ partially exclusive/ non-exclusive license to responsible applicant(s). But this power can only be exercised if the Agency determines that an action is necessary due to the existence of any of the four specific circumstances, namely– absence of effective practical application of the invention (i), presence of unsatisfied health and safety needs (ii), breach of public use requirements specified in Federal Regulations (iii), or if the invention is not manufactured substantially domestically without obtaining a waiver in this regard (iv). The right can become extremely important in times of any health emergency or unforeseen event, much like the COVID-19 pandemic, which may require ramping up production of any invention in a relatively short period. The absence of march-in rights in the Model Guidelines is conspicuous. Even the erstwhile PUPFIP Bill had a provision in this regard. Section 13 of the Bill gave the Government the right to practice and assign public funded IP to carry out its obligation under any international treaty or agreement. Admittedly, this could be redundant based on compulsory licensing (‘CLs’) provisions in the Patents Act, however, given the international political climate surrounding CLs, it seems necessary to at least refer to those provisions, if not outright provide for the equivalent of march-in rights. From this aspect, the Model Guidelines can be called a retrogressive step.

(This post has been authored by our intern, Bhavik Shukla, a 5th year student at NLIU, Bhopal)

Topical Highlight

Reverse Engineering and Aarogya Setu App: Contracting Out of Fair Dealing?

One of our former bloggers, Aparajita wrote a guest post examining the legal enforceability of the prohibition on reverse engineering imposed by the terms of service of the Govt’s COVID-19 tracking mobile app Aarogya Setu, in light of the fair use rights of users under Section 52 of the Copyright Act.  She begins with noting that the application prohibits ‘reverse engineering’, and that the term itself has not been defined anywhere. She further mentions that sections 52(1)(ab) and 52(1)(ac) of the Copyright Act permit reverse engineering as a fair dealing right. She notes that the prohibition on reverse engineering is equivalent to parties being made to contract out of their fair dealing rights, while simultaneously observing that the application is imposed as mandatory and users are left with no real choice. In that backdrop, she argues that the application’s terms of service which prohibit reverse engineering are unenforceable, as they defeat the purpose of the Copyright Act and being rights meant to serve a public purpose, cannot be waived by a private agreement.

Thematic Highlight

Govt’s Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions: A Critique

In his first submission for the SpicyIP Fellowship, Shivam Kaushik critiqued the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions that was released by the Government in September last year. Shivam notes that the Model Guidelines have borrowed from the Bayh-Dole Act, 1980, as they seek to promote transfer of technology and knowledge from academia to the industry, by incentivising research led education. He points out various flaws with them: first, he observes that the Model Guidelines are not backed by any data or study, and merely aim to extrapolate a foreign policy to India. Second, he states that the circumstances prevalent in present day India may prevent the desired emulation of the American model. Third, he notes that the implementation of the Model Guidelines may result in the imposition of a camouflaged IP tax. Fourth, he states that the absence of march-in rights for IP generated out of public funding in the Model Guidelines is a retrogressive step.

Other Posts

Same Old Disparagement Story: Delhi HC Grants Interim Injunction against Lifebuoy Ad

Namratha wrote about the Delhi HC’s decision in Reckitt Benckiser v. Hindustan Unilever Limited, wherein the Court granted an interim injunction restraining the defendant from airing its commercial. She notes that the plaintiff argued that its antiseptic liquid was being unfairly compared with the defendant’s bath soap. Highlighting the three-step test employed in examination of disparagement claims, she observes that the defendant’s advertisement was held to be ‘detrimental to the distinctive character’ of the plaintiff’s mark. Subsequently, she points out the long history of disparagement cases between the parties involved in the case, while also alluding to the HC’s statement on the parties indulging in the ‘game of litigation’. She observes that the guidelines mentioned in the Advertising Standards Council of India’s Code prevent advertisements which mislead customers or attack competing products, and stresses upon the need to reconsider strict guidelines or adopt measures beyond self-regulation to prevent the occurrence of disparaging claims in the future.

Debate on Parallel Import of Books: Still Relevant in the Post-Amazon Age?

In another guest post, our fellowship applicant Anupriya discussed the relevance of the debate on the legality of parallel importation of books in India in the age of Kindle and e-books. She notes that the Copyright Act prohibits parallel import into India, which leads to absurd circumstances for second-hand book stores and e-books. With reference to e-books, she notes that Amazon sells books on its platform without a requirement for prior proof of being sourced from authorised distribution channels. She also states that Amazon’s ‘Buy Box’ policy acts to the disadvantage of publishers, by pushing books sold by them below its cheaper substitutes. She notes that Amazon’s policies are in contravention of the existing laws, as first, it fails to exercise due diligence in offering third party books and second, it does not limit orders for books as per the proviso to section 51 of the Copyright Act. She further observes that the introduction of e-books has made the parallel imports debate redundant, as e-books are not sold but merely licensed to readers.

Trademarking of Blockchain Technology and Virtual Currencies: An Unsolvable Conundrum?

In a follow-up post to Arun’s post, I discussed the various aspects of trademark registration for blockchain-related technologies. First, I note that the concept of public blockchain cannot be reconciled with traditional trademark law to afford it a collective mark protection. Second, I state that divulging details for registration of a trademark shall defeat the technologies’ requirement of maintenance of anonymity. Third, I argue that doing away with the ‘paradox of de-centralized control’ shall result in a fundamental infrastructural change in the technologies. Subsequently, I note that the grant of trademark protection to such technologies shall make no difference as, first, it is improbable that every participant may relinquish his anonymity to merely ‘use’ the trademark. Second, I argue that a participant does not require an authorization from an organization to use a blockhain/ cryptocurrency’s name. Third, I observe that a significant hurdle to the trademarking of such technologies is its illegal classification in some countries.

Announcing the 1st Shamnad Basheer Essay Competition on Intellectual Property Law

On the occasion of our Founder Prof. (Dr.) Shamnad Basheer’s 44th birth anniversary, we announced the first edition of the Shamnad Basheer Essay Competition on Intellectual Property Law. The competition is open to all students enrolled in any LL.B. program (or its equivalent) and the deadline for submissions is June 30, 2020. For further details on the prize money, the stellar panel of judges and the selection of topics etc., please view the post here.

We’ve also put together a collection of Prof. Basheer’s publications and public interest interventions here (also accessible from our Resources page). Please do let us know if you’re aware of or come across any that we may have missed.

Other Developments

Decisions from Indian Courts

Delhi HC restrains a New York-based corporation from using the domain name ‘www.hindustan.com’ and also grants an anti-suit injunction against it  [April 28, 2020] 

In HT Media Ltd. & Anr. v. Brainlink International, Inc. & Anr., the Delhi HC granted an interim injunction restraining the Defendants from using its domain name ‘www.hindustan.com’, and also an anti-suit injunction against the proceedings filed in New York. The dispute between the Parties arose over the Defendants’ alleged infringement and passing off of the Plaintiffs’ mark ‘HINDUSTAN’ and its domain names ‘www.livehindustan.com’ and ‘www.hindustantimes.com’ by using a deceptively similar domain name ‘www.hindustan.com’. The Court observed that in the internet age, a domain name serves as a trademark and adoption of similar domain names may result in diversion of users. It was further noted in respect of the anti-suit injunction prayed by the Plaintiffs, that the Defendants had not used their domain name since 2000, and had merely registered it to profit from it. The Court also noted that the Defendant’s intention of profiteering was solidified when they increased their offer price of the domain name to USD 3 million from USD 1 million on being approached by the Plaintiffs. The Court noted that there were sufficient points of contact for vesting the jurisdiction in it, and accordingly it had formed the prima facie opinion that it had personal jurisdiction over the Defendants.

Delhi HC suspends operation of the public notice on extension of deadlines issued by the IP Office on May 4 [May 11, 2020]

In Intellectual Property Attorneys Association v. The Controller General of Patents, Designs & Trade Marks & Anr., the Delhi HC ordered for the suspension of operation of the public notice dated May 4. The dispute between the Parties concerned the public notice published by the Respondents dated May 4 through which litigants and their advocates were extended time till May 18 to complete certain acts and filings in IP matters. The Court observed that no tribunal or authority could act contrary to the order of the SC and that all such tribunals and authorities were to act in aid of the SC. The Court agreed with the Petitioners that the protection against limitation should have been triggered from March 15 and not March 25. Moreover, the Court stated that the time period granted for filings is very narrow, and that there was no merit in the same.

Delhi HC extends the application of interim orders in all cases to June 15 [May 15, 2020]

In Court on its Own Motion v. State & Ors., the Delhi HC observed that the restrictions imposed by the Government of India were still in operation and hence, all interim orders in matters pending before it and the courts subordinate to it were to be extended till June 15. This extension was granted in all cases except where a contrary order was passed by the Supreme Court.

Other News from around the Country

• IPAB issues a public notice informing that cases will be heard through video conferencing until further orders. It also issued a subsequent notice delineating the procedure for e-filing of cases.
• Delhi HC extends suspension of functioning of itself as well as its subordinate courts till May 23.
• IP Office and DPIIT urged to release Annual Reports for last two years, 2018-19 and 2019-20.
• Gilead Sciences announces that it has entered into a non-exclusive licensing agreement with Jubilant Life Sciences, Cipla Ltd., Hetero Labs Ltd., Mylan and Ferozsons Laboratories for manufacturing a generic version of Remdesivir in India.
• Kerala announces its support for the Open COVID movement and intends to become a part of international collaborations for research and development.
• Four professors of Nagpur University patent two disinfection devices for sanitizing of COVID-19 contaminated surfaces.
• Panjab University’s professor files for a patent for a cost-effective disinfectant which uses a photodynamic therapy to kill microbes.
• The Defence Ministry of India patents affordable personal protective equipment developed by the Indian Navy.
• Thanjavur Netti works and Arumbavur wood carvings of Tamil Nadu have been granted a GI tag. The Sohrai-Khovar paintings of Jharkhand have also been granted a GI tag along with Puttapaka Telia Rumal of Nalgonda.
• A piece in the Economic Times contemplates if voluntary licensing of patents will become the norm in light of the COVID-19 pandemic.

News from around the World

• WIPO launches a COVID-19 IP Policy Tracker to provide information on the measures adopted by IP offices in light of the COVID-19 pandemic.
• WHO urges countries to make COVID-19 vaccines universally available in order to ensure access to everyone.
• Various world leaders sign an open letter urging all vaccines, tests and treatments to be made patent-free and distributed fairly.
• Israeli researchers file a patent application for 8 antibodies believed to be effective against the coronavirus.
• The US is likely to issue a warning to China to allegedly restrain Chinese hackers from stealing data on vaccines and treatments for the coronavirus.
• A piece in Wion argues that American pharmaceutical companies may not put human lives above their own profits in the grim times of the coronavirus.
• A piece in C&En covers the relaxations of patent rights by various companies in different parts of the world in the times of COVID-19.
• A piece in JDSupra argues that Amazon’s Utility Patent Neutral Evaluation Program provides for an effective and affordable online patent enforcement strategy during the coronavirus pandemic.
• A piece in Trade Experettes argues that the COVID-19 vaccine, when developed should be compulsorily licensed with the aid of the Doha Declaration.

For regular updates on IP news and opinions related to COVID-19, please visit our COVID-19 & IP Updates page here (also accessible from our Resources page).

Image by Gerd Altmann from Pixabay

After the announcement of the Shamnad Basheer Essay Competition on IP Law on May 14, we have received several emails from students asking similar questions regarding the format of the competition. We have answered a few such common questions below. In case you have any specific doubts, please feel free to email us at submissions@spicyip.com and we will get back to you as soon as possible.

1. There is no registration fee or registration process for the competition. Just send us your essay whenever it is ready.

2. Please do submit a covering letter along with your submissions, stating the law school where you are enrolled as a student.

3. Only single author submissions will be accepted for the essay competition. A submission cannot have two or more authors. Submission with more than one author will not be considered.

4. All submissions must be original and not already published elsewhere.

5. The winning essays will be uploaded as PDF files on the SpicyIP website when announcing the winning entries – this does not stop the winning essays from being published in law reviews/journals. In fact, we would be glad to assist the authors of the winning essays to get published in quality law reviews/journals.

6. Please submit the essays in a MS Word format, with 1.5 spacing. Please do not submit essays in a PDF format.

7. We are not prescribing any specific format for footnoting. As long as it is consistent, it should not be a problem.

8. Students enrolled in a B.A. LL.B. (Hons.) course can participate in the competition.

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When the lockdown restrictions came into effect, the physical distribution and door step delivery of newspapers became affected. Faced with these constraints, most newspapers started offering free trials on their websites for e-papers and even free PDFs of the day’s paper.

This also led to a surge in e-papers getting forwarded on social media by individuals, rather than newspapers themselves. Newspaper Dainik Bhaskar then came out with a piece claiming that downloading and circulating PDFs of e-papers was illegal. This was perhaps a result of an alleged advisory issued by the Indian Newspaper Society (INS) to its members. The advisory took the position that downloading, modifying and/or circulating e-papers were illegal and members should take strict legal action against this.

IndiaToday did a fact-check on this. As per it, the Dainik Bhaskar claim was not entirely true because circulation of free PDFs was not illegal. Thus, the thrust of the IndiaToday fact-check was that as long as the e-paper was free, one could circulate it.

To what extent are the claims of Dainik Bhaskar and IndiaToday true?

Categories of E-Papers

For our analysis, let us divide e-papers into two broad categories: (1) those which come with a user agreement, and (2) those which do not. I have consciously chosen this classification, instead of a paid/free (as the India Today fact check does) one. This is because a newspaper’s terms and conditions act as the distinguishing factor in deciding whether one can circulate an e-paper, irrespective of whether it is free or not. This should become clearer from the discussion below.

The Hindu’s e-paper falls into the first category as their website clearly mentions the terms of use, including in relation to downloading, copying and circulating. These terms appear even for those who access the e-paper on a free, trial basis. For instance, following is their term in relation to sharing/circulating copies:

“Content sharing: The contents of this e-Paper are proprietary and should not be shared with anyone. This condition doesn’t apply to sharing individual articles on social media websites for the purpose of initiating discussions and expressing opinions.”

Thus, even if you receive free access to The Hindu, you are normally bound by these terms as they do not provide any exceptions. The fact that the Hindu e-paper requires you to access it through a social media account or create a new account too may be indicative of how the service is limited to an identifiable user and not meant for circulation.

Outside of these terms, the fair dealing provisions in Section 52(1)(a)(ii) and (iii) of the Copyright Act, 1957 allow users to copy/circulate these materials, if it is for the purpose of criticism/review or reporting of current events. Thus, limited circulation of individual articles for the purposes of discussion and/or reporting should not fall foul of the Act. Even here, whole sale downloading and circulation of e-papers (as opposed to specific reports/stories) may not pass scrutiny, unless it is accompanied by any material which makes the use transformative.

Implied License?

It is the second set of e-papers/PDFs which is shrouded in confusion. For instance, the complete PDF of Indian Express newspaper (along with its business news counterpart, Financial Express) is available online now for free. One can simply download them without having to log in or provide any user information. Moreover, I could not find any terms or conditions on the website which hosts these PDFs.

On the other hand, The Statesman’s e-paper, which too is freely downloadable, comes with a short click-wrap agreement: “Circulating any copies of this publication or part thereof, is ILLEGAL and strict legal action will be taken against individuals”. Thus, although one can freely download the paper itself, there is a clear prohibition on circulating it.

Courts have in the past held that if a user is being bound by certain license terms, they have to be given reasonable notice of the same. In the case of The Statesman, it would appear that users are free to do what they wish with the PDF as long as they don’t circulate it.

Does this mean that in the case of newspapers with no terms at all, like the Indian Express, users get the right to circulate? In the absence of a written user agreement, what are the terms one is bound by?

One way to look at it is that there is an implied license to circulate the e-paper. Such a term may be implied from the fact that anyone is free to download the paper without providing any identifying information. Moreover, the Managing Editor of Financial Express too seemed to affirm this position on a Twitter discussion about circulating e-papers. Nevertheless, his clarification indicated that such a license may expire once the lockdown ends.

In the absence of a user agreement though, it is difficult to conclusively decide one way or the other. We will then have to place reliance on the doctrine of implied license. The vital test to determine the limits of an implied license is to see if the act in question is important to give meaning to the arrangement between the parties. Moreover an implied license exists so that the licensees can make normal use/exploitation of a product that is licensed to them. Also, the conduct of the licensor is relevant to determining the limits of such a license.

A useful decision in relation to implied licenses is Field v. Google, where the Plaintiff sued Google for ‘caching’ his works. Caching involves storing a copy of the pages that Google indexes. As an archive of these pages, users can access the cached page for a copy of the page even when the original website is down.

The Plaintiff argued that Google was in infringement of his content every time a user accessed Google’s cache for his works. Nevertheless, the Court held that Google had an implied license to cache the Plaintiff’s works. Since websites could always easily opt-out from having their content cached (by using a meta-tag) and this had become a well known standard within the industry, the Court held that Google had an implied license to cache the Plaintiff’s works.

Thus, if the websites failed to opt-out, it was implied that Google had the license to cache their pages. Such an interpretation stems from the fact that it is almost impossible for Google to individually reach out to each website owner.

There is no straight forward way to apply the concept of implied license in the case of free e-papers and their PDFs. On one hand, it is difficult to argue that circulating the full copy en-masse on digital platforms can be considered as normal use of the product. On the other, one could always argue that allowing a PDF to be freely downloaded, without any user agreements, implies a license to distribute it too. This makes even more sense when read in conjunction with the purpose for which these e-papers are being allowed to be freely accessed – more publicity for newspapers when physical distribution is difficult. Moreover, in cases where newspapers themselves are actively encouraging circulation of PDFs (as in the case of Financial Express), there is an even stronger argument in favour of an implied license to circulate.

Conclusion

Whichever way one looks at the question of implied license, it should be clear that the right to circulate is not dependent on whether or not an e-paper is freely available. Instead, it is contingent on the terms attached to the specific e-paper as well as the existence of an implied license.

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[Disclaimer: I represent Monsanto (now acquired by Bayer) in India in ongoing litigation on related and unrelated issues. However, views expressed here are personal and do not represent the views of the company.]

The IPKat recently reported that the Enlarged Board of Appeals operating under the EPC regime handed down its ruling in G 3/19 on the patentability of plants and animals developed from essentially biological processes. The Enlarged Board of Appeals has approved the Rule 28(2) recently inserted in Implementing Regulations of the European Patent Convention, by which products exclusively obtained by essentially biological processes were declared not patentable. They were declared not patentable in the context of the exclusion in Article 53(b) of the EPC – “…essentially biological processes for the production of plants or animals”.

In substance, the Enlarged Board of Appeals has basically recognised that this exclusion, while worded to apply to process claims, would also extend to the products obtained by such process. In my reading, the opinion (rather, should I say, change of heart?) seems heavily influenced by the subsequent factual/ legal developments in terms of how the majority of members supported the insertion of Rule 28(2) and how significant number of members within the EU already had and/or were otherwise proposing amendments to their respective legislations to the same effect.

I have previously written on this when the controversial Rule 28(2) was inserted by the Administrative Council. I don’t intend to repeat much of what was said then, except to reiterate that none of this has any impact as far as India is concerned because of the differences in statutory language.

Nevertheless, I am reproducing an updated version of the table I had created in my earlier post and modifications, if any, arising from this latest ruling of the Enlarged Board of Appeals, marked in red:

As can be seen, in my reading nothing really changes except for the minor amendment I have done to the table above in the identification of what is not patentable – this accounts for product-by-process claims. For the Indian context, except for the fact that the judgement makes an interesting read, it does not bear significant relevance to the construction of the Indian statute.

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The Delhi High Court recently granted an anti-suit injunction in HT Media Ltd v. Brainlink International in an ex-parte interim injunction proceedings. Part I of this two part post shall summarise the judgment. Part II shall critically analyse the judgment.

Brief Facts

The plaintiff owns the trademarks “Hindustan” and “Hindustan times” under Class 16 and Class 38. The defendant owns the domain name www.hindustan.com. The negotiations between the plaintiff and the defendant for handing over the domain name were not successful. In the instant suit, the plaintiff sought permanent injunction against the defendant from using the domain name www.hindustan.com or any other mark which is identical or deceptively similar to the plaintiffs’ trademarks. (para 8)

Meanwhile, the defendant, which is based in United States, had filed a declaratory suit for non-infringement before the United States District Court for the Eastern District of New York (Brainlink International, Inc. v. HT Media Ltd. & Anr. (Civil Action No.1 20-cv-01279). In the instant suit before the Delhi High Court, the plaintiff sought permanent injunction against the defendant from proceeding with this suit in United States (para 9 and 18).

Judgment

The Court held it to be a case of cyber squatting. The following legal and factual aspects were considered:

• It is a settled legal position that a trademark can be infringed by a domain name. (para 27, citing Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd., (2004) 6 SCC 145)
• When the plaintiff expressed its willingness to acquire the domain name of the defendant, the defendant quoted an amount of USD 3 million (para 38)
• The entire conduct of the defendant evinces mala fide (paras 37, 38, 43)
• The defendant has not been using the domain name since 2000 (para 37)

The Court relied on the Supreme Court judgment in Modi Entertainment Network & Another v. W.S.G. Cricket Pte. Ltd., where the court laid down the criteria for granting anti-suit injunction. The Court relied on its own judgment in India TV, Independent News Service Pvt. Ltd. v. India Broadcast Live LLC & Ors., (“50. Insofar as the position in this country is concerned, there is no long arm’ statute as such which deals with jurisdiction as regards non-resident defendants. Thus, it would have to be seen whether the defendant’s activities have a sufficient connection with the forum state (India); whether the cause of action arises out of the defendant’s activities within the forum and whether the exercise of jurisdiction would be reasonable.”) and held that the defendant is amenable to the personal jurisdiction of the court. In short, the court embraced the “effects doctrine” i.e. if the effects of the conduct of the defendant are felt in India, then the Indian court can exercise jurisdiction.

The court examined as to how the now-inaccessible website of the defendant would confuse the consumers in India and damage the reputation of the plaintiff (para 39, 40). Since cause of action arose in Delhi (implying that the effects of the conduct of the defendant were felt in Delhi where inter alia the plaintiff has its registered office), the Delhi High Court can exercise jurisdiction vide Section 20 (c) of CPC.  The Court, thus, concluded that it has prima facie personal jurisdiction over the defendant (paras 41 and 42).

Based on the following finding, the Court granted interim injunction and anti-suit injunction in favour of the plaintiffs:

“43. Insofar as infringement of the Trademarks is concerned, from the correspondence on record, it is clear that the Domain name registration of the Defendants is in Bad Faith, as defined under Clause 4 of the Uniform Dispute Resolution Policy, as the Defendants are neither using the Domain name for any legitimate activity and also appear to have registered the same with the intention of earning monetary benefit. Owing to the Registered Trademarks owned by the Plaintiffs and the reputation and goodwill enjoyed by the said Marks, which is not restricted merely to India but is global, as also the fact that the Domain name is registered in “Bad Faith‟, the Plaintiffs are entitled to an interim injunction from further use of the Domain name www.hindustan.com.

44. This Court is also of the prima facie opinion that the Suit before the Eastern District of New York, is vexatious and oppressive, as the Plaintiffs have not asserted Trademark rights in USA. The Trademarks of the Plaintiffs are registered in India and the Plaintiffs‟ goodwill spills over Internationally. But the Plaintiffs do not carry on any business in USA. Defendants had offered to sell the Domain name to the Plaintiffs at a price of US $ 3 Million but once unsuccessful, in the attempt to profiteer, they filed a suit for Declaration in order to further their intention to frustrate the Plaintiffs from availing of their remedies. The filing of the suit is also an attempt to legitimise the alleged infringement action of the registered Trademarks of the Plaintiffs. Plaintiffs have made out a prima facie case for grant of an anti-suit injunction before this Court.“

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[Please read Part I of this two-part post for the summary of the judgment discussed herein]

Introduction

I am unable to agree with the judgment of Delhi High Court on various counts. At the outset, this is an ex-parte proceeding. The evidentiary threshold, as held by the Supreme Court in Ramesh Chand Ardawatiya v. Anil Panjwani (AIR 2003 SC 2508), is as follows:

“33. ………In the absence of denial of plaint averments the burden of proof on the plaintiff is not very heavy. A prima facie proof of the relevant facts constituting the cause of action would suffice and the court would grant the plaintiff such relief as to which he may in law be found entitled. In a case which has proceeded ex parte the court is not bound to frame issues under Order 14 and deliver the judgment on every issue as required by Order 20 Rule 5. Yet the trial court should scrutinize the available pleadings and documents, consider the evidence adduced, and would do well to frame the “points for determination” and proceed to construct the ex parte judgment dealing with the points at issue one by one. Merely because the defendant is absent the court shall not admit evidence the admissibility whereof is excluded by law nor permit its decision being influenced by irrelevant or inadmissible evidence.”

Strength of the Mark

Any word, abbreviation or acronym which has become ‘publici juris’ cannot be exclusively claimed by anyone. Applying this principle, I am of the view that the word mark “Hindustan” per se is a weak mark. By using the expression “word mark”, I am referring to the text “Hindustan” (and not to the typographic treatment of the text).

The Trademarks Act treats registered trademarks as prima facie valid. This should apply to the trademark taken as a whole (comprising of both the word mark and the label mark). The court should be cautious in examining the prima facie validity of the marks. As I see it, the judicial focus must be on “Hindustan” only which is per se a weak word mark (for Delhi High Court’s judgments, dealing with the tenability of the mark “Krishna”, see here and here).

Trademark Infringement

In a trademark infringement, the focus must be on evaluating the overall impression conveyed by marks. In Cadila Healthcare Limited v. Cadila Pharmaceuticals Limited, the Supreme Court laid down the criteria for deciding the question of deceptive similarity in case of passing off:

“a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works.

b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.

c) The nature of the goods in respect of which they are used as trade marks.

d)…..”

In this fact situation, there is a domain name www.hindustan.com which cannot be accessed. The scope for an overall impression test is quite limited.  As for a finding of resemblances, the scope of the test is quite narrow. A finding of trademark infringement, on “Hindustan” alone, is counter-intuitive (please refer section 17 (effect of registration of parts of a mark) and section 29 (infringement of registered trademarks) of the Trade Marks Act).

Anti-Suit Injunction

The High Court relied on Supreme Court judgment in Modi Entertainment Network & Anr v. W.S.G. Cricket Pte Ltd. The relevant parts of the Supreme Court judgment are as follows:

“(1) In exercising discretion to grant an anti-suit injunction the court must be satisfied of the following aspects : –

(a) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court;

(b) if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and

(c) the principle of comity – respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained – must be borne in mind;

(2) in a case where more forums than one are available, the Court in exercise of its discretion to grant anti-suit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens;

(3)…….”

Applying the “effects doctrine”, the High Court held that the defendant is amenable to the personal jurisdiction of the High Court (The High Court did not use the expression “effects doctrine”. But the reasoning is essentially the “effects doctrine”). That is a convincing legal position. But the Court went on to suggest that the plaintiff is not amenable to the jurisdiction of the US court. I do not agree with this since the “effects doctrine” can be invoked by the defendant as well to argue for the jurisdiction of the US court (i.e. the website of the plaintiff is available in US; and the plaintiff is alleging trademark infringement). My knowledge of US law is limited. As far as I understand, the defendant exercised a legal option which is available under the US system i.e. filing a declaratory suit of non-infringement. A declaratory suit is generally filed to address legal uncertainty. As I see it, the defendant is well-within its rights to file this suit in US.

When there are two jurisdictions – US and India, the court is required to get into a deeper analysis on the appropriate forum (as laid down by the Supreme Court in Modi Entertainment). But the judgment is silent on this aspect. It just stops short of stating that the plaintiff has not asserted its rights in US and therefore, it is not amenable to the jurisdiction of the US Court (para 44 of the judgment). As I stated earlier, the effects doctrine can be applied by the defendant as well to invoke the jurisdiction of the US court. Therefore, the argument that the plaintiff has not asserted its rights in the US is a weak argument. Further, as I stated earlier, this is a case involving a weak mark – “Hindustan”. Therefore, the grounds for issuing an ‘anti-suit injunction’ must be stronger and convincing.

I am of the view that the courts must be extremely cautious in treading the path of ‘anti-suit injunction’ in a case involving foreign jurisdiction. The UK High Court, in Huawei v. Unwired Planet, held that it can decide on a global FRAND licence (covered here). The matter is now before the UK Supreme Court. Many legal scholars have already raised eyebrows on the jurisdiction of the UK High Court to make such a determination. The issue of jurisdiction is a sensitive issue and therefore, this path should be treaded cautiously. For instance, if a US court grants an ‘anti-suit injunction’ against a suit filed in India, how will the Indian court react to it? In the given case, how will the US Court react to the grant of ‘anti-suit injunction’ by the Delhi High Court?

The courts in Europe are increasingly becoming conscious of foreign jurisdictions which are being approached for grant of ‘anti-suit injunctions’. As a retaliation, the courts in Europe have started issuing ‘anti-anti-suit injunctions’. Recently, the International Commercial Chamber of the Paris Court of Appeal (ICCP-CA) granted ‘anti-anti-suit injunction’ in Lenovo et al. v. IPCom, RG 19/21426 (for a detailed summary, click here.) This is the second time in European Union’s history where an ‘anti-anti-suit injunction’ has been granted (the first one was granted by Munich Higher Regional Court).

The ICCP-CA, basing its reasoning on French national law and European law, inter alia held that the French courts are competent to issue ‘anti-anti-suit injunctions’ against corporations which initiate motions for ‘anti-suit injunctions’ from courts in foreign jurisdictions provided such ‘anti-suit injunction’ motions enjoy nexus with French jurisdiction.

As to understand the ‘anti-anti-suit injunction’, an understanding of the brief facts will be helpful. IPCom GmbH & Co. KG (IPCom) owns a portfolio of patents covering 2G, 3G and 4G standards. One among the patents is EP 1 841 268 B2 (EP 268) which is essential to the 3G standard. IPCom made an offer to license its patent portfolio (which includes EP 268) to the Lenovo group. The Lenovo group did not respond to the offer.

IPCom initiated patent infringement proceedings before the High Court of Justice in London. In response, the Lenovo group moved a motion for ‘anti-suit injunction’ before the District Court for the Northern District of California (US District Court) against the infringement proceedings in UK and any new infringement action. In retaliation, IPCom sought ‘anti-anti suit injunction’ from the courts in United Kingdom and France. The Paris Court of First Instance granted ‘anti-anti-suit injunction’ in favour of IPCom. The Lenovo group went in appeal to the Court of Appeal. The Court of Appeal inter alia reasoned that, if IPCom’s request for ‘anti-anti-suit injunction’ was rejected, IPCom would be deprived of its rights arising from the french part of the European patent.

These case laws evince the general sentiment of not willing to easily cede one’s jurisdiction. The courts are keen to protect and preserve their jurisdictions. Illustratively, in IPCom (discussed above), the French Court is keen to protect and preserve its jurisdiction over the french part of the European patent. This sentiment enjoys a close nexus with the concept of sovereignty and therefore, an ‘anti-suit injunction’ must be granted only after careful deliberation. It is not apposite for the Indian judiciary to get entangled in ‘anti-suit injunction’ and ‘anti-anti-suit injunction’ proceedings without convincing reasons.

Unfair Competition Law and UDRP

I am of the view that the remedy in a fact-situation like the instant one, lies in unfair competition law (and not trademark law). [For the uninitiated, unfair competition law and competition law are different. This fact situation is a classic case of unfair competition – as the defendant seems to be engaged in a deceptive business practice that is ostensibly causing economic harm to the plaintiff. The facts, as stated in the judgment, do indicate cybersquatting.] Though mandated by TRIPS, India does not have a robust unfair competition law framework. Therefore, the practical feasibility of this option is limited. Given this situation, the Uniform Domain Name Dispute Resolution Policy (UDRP) route is a tenable legal option (paragraph 4(a) and 4(b) of the UDRP Policy).

We’re pleased to inform you that Texas A&M University School of Law has launched a new blog ‘TradeRx Report‘ which explores questions of access to affordable medicines and health care that arise at the intersection of IP law and international trade, and is inviting contributions for it. For further details, please read the announcement below:

Texas A&M School of Law Invites Your Contributions to its New Blog, TradeRxReport

Texas A&M University School of Law, is launching a new blog and associated website www.TradeRxReport.com, which explores questions of access to affordable medicines and health care that arise at the intersection of intellectual property law and international trade.

With the increasing impact of the coronavirus on the global economy and our healthcare systems, the importance of issues around the affordability of pharmaceuticals, access to healthcare and medication, and globalization become more apparent each day.  The inter-relationship of health, trade, and intellectual property has been a “hot topic” since the 1980s, when the World Trade Organization was established and the TRIPS Agreement on intellectual property rights was enacted.  The current global pandemic merely underscores the need to find a workable solution to the challenge of ensuring innovation and access to medicines on a global scale – and the value of a forum focused on that topic.

As Robert B. Ahdieh, dean of Texas A&M School of Law, notes: “At a time when the global nature of the health challenges we face today could not be more clear, TradeRx Report offers a platform to ensure that the very best ideas about access to health and medicines – from academia, industry, and the policy community – are widely disseminated and thoughtfully engaged.”  The hope, as such, is for TradeRxReport.com to become a global forum for the exchange of views on how trade intersects with affordability of pharmaceuticals, access to healthcare and medication from a global, national, and local perspectives.

The value of academic engagement and dialogue with practitioners, industry, and non-governmental organizations has long been part of Texas A&M School of Law Professor Srividhya Ragavan’s work on questions of access to and the affordability of healthcare.  She began working with Doris Long, Professor Emeritus at UIC John Marshall Law School, on issues of trade, intellectual property, and access to medicines in connection with a documentary on the topic. This important new blog and website are a natural outgrowth of that collaboration for both professors.

Professor Long, former director of the Center for Intellectual Property, Information & Privacy Law at UIC John Marshall, will serve as moderator of the blog. She says: “I am thrilled to be serving as the moderator of a blog that I believe provides a necessary forum for an exchange of views between all interested parties – academics, as well as practitioners and industry representatives – as we seek to uncover solutions to the critical issues of healthcare, reasonable access to medicines, trade, and intellectual property in the 21^st Century.  I look forward to what I am certain will be informative and exciting debates!”

Noting the timeliness of the blog, Professor Ragavan of Texas A&M School of Law adds that: “[O]ur current trade regime treats efforts to protect public health as a potential barrier to trade. Covid-19 has brought the converse realization that an ineffective public health system can potentially devastate the entire framework of modern trade.  Dialogue directed to making our system functional from a public health perspective is thus critical.”

TradeRxReport.com’s focus is a strong fit with Texas A&M School of Law’s existing strength in Intellectual Property, Technology & Innovation, where it is ranked among the top 10 in the United States, and will also have strong synergy with an emerging area of strength in Health Law, Policy & Management.

[This post has been authored by our intern, Bhavik Shukla, a 5th year student at NLIU, Bhopal]

Topical Highlight

The Delhi High Court and an Anti-Suit Injunction – Part I & II

In a two-part post, Mathews wrote about the Delhi HC’s recent decision in HT Media Ltd. v. Brainlink Int., wherein it granted an interim injunction restraining a New York-based corporation from using the domain name ‘www.hindustan.com’ and proceeding with this suit or filing a related suit before any court. In Part I, he highlights the contention between the parties to the suit, before noting that the Plaintiff sought an injunction against the proceeding filed by the Defendant before a US District Court. He notes that the Court held that the Defendant was engaged in cyber-squatting, and further found it amenable to its jurisdiction based on the ‘effects doctrine’.

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In the second part of the post, Mathews discussed his reasons for disagreement with the judgment of the Delhi HC. First, he states that the judgment is contradictory to the ‘evidentiary threshold’ laid down by the SC. Second, he observes that the Plaintiff’s mark ‘Hindustan’ is weak as it has become ‘publici juris’ and cannot be exclusively claimed. Third, he notes that the application of the ‘overall impression test’ is limited, as the Defendant’s mark is a domain name. Fourth, he states that the Defendant is also entitled to invoke the jurisdiction of the US courts through the ‘effects doctrine’. Highlighting further examples of anti-suit injunctions and their repercussions, he states that it is uncommon for courts to cede their jurisdiction. Accordingly, he observes that the Delhi HC should have been cautious with the grant of the anti-suit injunction. In conclusion, he notes that the appropriate remedy in such cases of cyber-squatting lies through the UDRP route.

Thematic Highlight

Fact Checking the Fact Check: Is Circulation of Free E-Newspapers Permitted under Copyright Law?

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In a pertinent post in the COVID-19 times, Balu wrote about the legality of downloading and circulating of PDFs of newspapers. He divides e-papers into two categories, first, which come with a user agreement and second, which do not. Giving the specific example of ‘The Hindu’, he observes that ‘terms of use’ may prevent sharing of entire newspapers. However, he states that the Copyright Act permits sharing of individual articles from such newspapers. Subsequently, he gives examples of newspapers which do not have a specific ‘terms of use’ clause attached to them. In such case, he argues that one may construe the presence of an implied license to freely download and circulate the paper. Delving into the scope and application of implied license to e-papers, he observes that a definite determination cannot be arrived at as circulation of complete e-papers cannot be considered a normal use, but the absence of user agreements for certain e-papers may be construed to permit their free download and circulation.

Other Posts

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Submission Guidelines for the Shamnad Basheer Essay Competition on Intellectual Property Law

Having announced the Shamnad Basheer Essay Competition on IP Law on the occasion of Prof. Basheer’s birth anniversary, we received several queries concerning the format of the competition. We answered a few common questions, the responses to which can be viewed here. In case of further queries, do not hesitate to write to us at submissions@spicyip.com.

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EBA’s Recent Ruling on Patentability of Plants and Animals : Any Impact on India?

Adarsh covered the decision of the Enlarged Board of Appeal through which it approved Rule 28(2), which provides that products obtained exclusively by essentially biological processes are not patentable. He opines that the ruling comes in light of the various EU Member States’ approval of Rule 28(2) through its inclusion in their domestic laws. He further notes that the ruling does not have any impact in India due to differences in the statutory languages of the EU and India, and delineates through a lucid table the patentability criteria in the EU as influenced by the case discussed.

Other Developments

Decisions from Indian Courts

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Delhi HC grants an interim injunction against Zydus Wellness’ prima facie disparaging advertisement [May 14, 2020]

In Horlicks Ltd. & Anr. v. Zydus Wellness Products Ltd., the Delhi HC restrained the Defendant from airing its prima facie disparaging advertisement till the disposal of the suit. The dispute between the Parties arose on account of the Defendant’s advertisement for its mark “COMPLAN” which was allegedly disparaging and injurious to the goodwill and reputation of the Plaintiffs’ mark “HORLICKS”. The Court noted that the Parties had a litigation history, wherein the impugned advertisement over television was previously made over print media. In that case, the Defendant agreed to publish a revised advertisement, which clearly noted that the comparison of the protein quantity was based on the serve size recommended by the Parties. However, the Plaintiffs stated that in the short 6 second advertisement over television, the Defendant did not run such a disclaimer concerning the basis of comparison. In the absence of such a disclaimer, the Court observed that the Defendant’s advertisement would be prima facie disparaging in nature.

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Bombay HC refuses an interim injunction to the Plaintiff and permits release of the web series ‘BETAAL’ [May 22, 2020]

In Sameer Wadekar & Anr. v. Netflix Entertainment Services Pvt. Ltd., the Bombay HC refused to grant an interim injunction, thereby not restraining the Defendant from releasing the web series ‘BETAAL’. The dispute between the Parties arose on account of the Defendant’s alleged infringement of the Plaintiff’s copyright in his script titled ‘VETAAL’, through its adaptation in a web series to be released on the Defendant’s platform as ‘BETAAL’. The Court noted that the Plaintiff had failed to establish a link to indicate that his script was copied. Moreover, the Court observed that the Plaintiff should have been aware of the Defendant’s web series, as it was advertised on numerous occasions before the release of the trailer. The Court also noted that it is common knowledge that ‘Vetaal’, a Hindu mythological character is associated with super natural powers. Accordingly, the Court refused to grant an interim injunction in favour of the Plaintiff.

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Other News from around the Country

• SC seeks Government’s response to whether the publication of bare Acts by private parties violates its copyright.
• IP Office extends timelines under the IP Acts and Rules administered by it to June 1. Copyright Office also extends deadlines under the Copyright Act and Rules for a duration of 15 days after the lockdown is lifted.
• Patent Office issues a public notice concerning submission of documents for a petition filed under Rule 6(6) of the Patent Rules.
• Patent Office issues a public notice regarding the postponement of the patent agent examination until further notice.
• India urges countries to use the flexibilities contained within the TRIPS Agreement to ensure access to treatments during the COVID-19 pandemic.
• ISRO receives a patent over its process to manufacture lunar soil simulant, which is used to test rovers and study the properties of lunar soil.
• Tripura University’s assistant professor to file a patent for a robot believed to be effective in the fight against COVID-19.
• A piece in The Wire argues that the coronavirus pandemic has the potential to bring about a change in the understanding and application of IP law.

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News from around the World

• More than 130 countries at the World Health Assembly adopt a resolution to fight the COVID-19 pandemic collectively by ensuring access and distribution of health technologies.
• WHO and Costa Rica announce the progress of their technology pooling platform which shall ensure access to COVID-19 treatments.
• University of Valencia files a patent application for a COVID-19 vaccine which is based on the SARS-CoV-2 protein.
• NellOne Therapeutics Inc. files for a patent for a COVID-19 treatment aimed at curing viral respiratory infections.
• US rejects clauses pertaining to intellectual property in the EU-backed resolution on the global handling of the COVID-19 pandemic.
• US Copyright Office notes in its Report that the prevalent safe harbour system in the US in ‘unbalanced’ and ‘out of sync with Congress’ original intent’.
• US and UK object to a global patent pool for COVID-19 drugs at the recently concluded World Health Assembly.
• A piece in The Guardian argues that the widening of the patent eligibility criteria in the US during the COVID-19 pandemic will sound a disaster for public health.
• A piece in IPWatchdog argues that the patent mechanism for access to life-saving medicines during the COVID-19 pandemic will differ in the US and EU, considering their diverging views on compulsory licensing. 

For regular updates on IP news and opinions related to COVID-19, please visit our COVID-19 & IP Updates page (also accessible from the Resources section on our website).

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We’re delighted to bring to you a short guest post by our former blogger Aparajita Lath, updating us on the issue of prohibition on reverse engineering of the Govt’s COVID-19 tracking mobile app Aarogya Setu. She had recently questioned the legal enforceability of this prohibition in light of the fair use rights under the Copyright Act in a guest post here. Aparajita is a lawyer based in Bangalore. Her previous posts on the blog can be viewed here.

SpicyIP Tidbit: Reverse Engineering of Aarogya Setu Not Prohibited Anymore

Aparajita Lath

The Government of India has updated the terms of service of the Aarogya Setu app. The terms of service no longer prohibit reverse engineering. The restriction on tampering has also been removed. However, acts that are intended to cause damage/ impair the functionality of the app/ attempts to gain unauthorized access or are not acts for the intended purpose of the app are still prohibited.

While it can still be argued that reverse engineering is use of the app for purposes for which the app is not intended, the specific removal of the term ‘reverse engineering’ coupled with the fair dealing right to reverse engineer, point to the intention to permit legitimate reverse engineering.

I had earlier written about this restriction here. The question was whether this restriction should be taken seriously since the Copyright Act, 1957 permits reverse engineering for certain activities, including research.

It is good to see that this restriction has been removed. While the app is not open source, at least legitimate research through reverse engineering can continue without fear. An audit and independent verification of the app could help both the government and people understand whether the app actually functions as specified.

There are several other updates to the app’s terms. The app is also no longer prescribed as ‘mandatory’. The app is, however, not purely voluntary. Employers / district authorities are required to, on a ‘best effort’ basis see to the installation of the app.

Please click here to view our other posts related to COVID-19 and here to view other IP developments related to it.

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The COVID-19 pandemic has in many ways shown the benefits of collaborative research. Data is being released freely almost every day on preprint servers, which is proving to be crucial for understanding the biology of the virus and in the search for possible drugs and vaccinations. Research and discovery of genome structures too, which has traditionally been limited to private institutions is now being publicly shared on platforms such as GISAID to help researchers and scientists work with open access resources. One of the main proposals for promoting this type of unprecedented collaborative research is the endorsement of voluntary intellectual property pools, particularly patent pools for pharmaceutical drugs. The World Health Organization (WHO) and the European Union are strongly backing the same whereas the US and the UK have pushed against a resolution for the same in the 73rd World Health Assembly held virtually on 18-19 May 2020. The Medicines Patent Pool (MPP), an UN-backed public health organization that works for increasing access to life-saving drugs in low and middle-income countries, has been instrumental in pushing for the establishment of this pool and has also expanded its mandate to cover COVID-19 related health technologies. The idea of a patent pool may be particularly useful for a generic drug manufacturing major like India. The pool can help combine expertise and know-how to help with faster production of drugs found to be effective for the pandemic.

What is a Patent Pool and How Does it Work?

While patent pools themselves are not a new instrument for sharing patents and allowing easy licensing procedures, the proposal for a global patent pool is quite unprecedented. The biggest of pools, Mega Pools, have been at industry-wide levels which now seems minuscule in front of the proposed global level patent pool. Recently, patent pools have come to be considered for industry-wide Standard-Essential Patents (SEPs) licensing too. Especially with the EU seeing an increasing amount of litigation concerning SEPs, it is beginning to identify SEPs patent pools as a solution that will help create a predictable framework for standard-setting and promoting transparency. The success of such patent pools and their licensing terms will in turn determine the success of the SEPs.

A patent pool is an agreement between parties who are patent holders to license their patented products to each other or to other defined third parties. Patent pools have mostly been used by industry players when they need to share complex and mature technologies that require the use of patents held by other parties and cannot be successfully worked without infringing them. Instead of going through an arduous route of seeking permissions and licensing at each level and for each patent, a patent pool allows the use of the pool’s products readily once the initial terms of licensing are accepted by the parties. A patent pool is an aggregation of patent rights that is made available collectively to the members of the pool based on a payment of fees or in proportion to their contribution to the pool etc., with the instrument allowing many customizing options to the parties.

Patent pools have an effect on innovative and competitive behavior. The pandemic has brought out the need for collaborative research and the outlining of recognized outcomes with respect to patent pools is useful here. There are several benefits to the creation of patent pools. Amongst the benefits are efficiency and the reduction in transaction costs. Through the creation of patent pools and the subsequent sharing of available information, the production of goods speeds up. It allows for the development of technologies with the use of existing information and increases the chances of innovation than in instances of having to build a product from scratch. Further, instances where patents are complementary to each other, that is, when a particular technology can be built using existing patented products and the patent holders happen to be different parties, the existence of a patent pool helps in sharing not just use of the patented product but also the know-how that goes with it, thereby helping and speeding up innovation.

Connected to this point is the reduction of transaction costs through patent pools. By facilitating usage of patented technologies readily, patent pools help overcome administrative hurdles by allowing licensing through membership to the pool instead of interested parties having to go through the process of seeking permissions, licensing,  distributing royalties, etc., for the use of the technology. Over here, SEPs via patent pool licensing would prove to be particularly helpful for both SEP holders and SEPs licensees in reducing transaction costs. Also, the adoption of FRAND (fair, reasonable, and non-discriminatory) compliant licensing practices that benefit SEP owners would amplify the possible success of patent pools.

While on the one hand patent pools help in innovation, on the other they raise concerns of anti-competitive behavior. Often the creation of patent pools has led to questions on how it actually aids the fostering of innovation when it has the effect of moderating competition by allowing the use of competing products within the pool. Particularly, this problem is amplified when there is a search for alternative or substitute products. Given this issue, competition regulators are generally of the view that patent pools should ideally consist of complementary patents (patents that work together) rather than substitute patents as this reduces the incentive to innovate when there is already a similar product available in the pool. Another problem within a patent pool is that of the possibility of collusion amongst the pool members with respect to aspects beyond the agreed sharing of patents such as sharing of information on pricing and market strategies etc., which is more harmful to the market and consumers than otherwise.

The Proposed Voluntary Patent Pool

Initially, the Costa Rican government had suggested the creation of a pool of right to tests, medicines, and vaccines for the coronavirus pandemic to be freely available or be available at minimal and affordable licensing terms to ensure that countries with low economic resources are not left to fend for themselves. Last month, the European Union proposed the use of a voluntary patent pool to the World Health Assembly, which is WHO’s decision-making body, and WHO’s Director-General, Tedros Ghebreyesus endorsed the same. The proposed pool aims to collect patent rights, regulatory test data, and any other information and intellectual property that will help in the development of vaccines and drugs and improve diagnostic abilities.

The voluntary pool is an alternative to the compulsory licensing and voluntary licensing options that is being mooted by governments and advocacy groups. In that, what it aims to do is accelerate scientific discovery and ensure the broad sharing of the benefits that create access rather than only focus on the production of the patented products deemed to be necessary. The sharing of all relevant data and technologies related to COVID-19 in the pool could lead to the creation of a global public good that is much desperately needed for dealing with the pandemic. The focus of such a pool is not only scientific advancement but more importantly to make sure that the outcomes of such advancement is made available across the globe, particularly to countries that would not be able to afford the same otherwise. While many countries like Israel, Canada, and Chile have already taken measures to speed up licensing processes and have tweaked their patent regime to dilute the rights of patent holders, the voluntary pool can be used either as an alternative or as a complementary mechanism to these regimes. Further, with pharma companies allowing voluntary licensing for their COVID-19 products, the use of the voluntary pool may prove to be very useful for collaboration and research.

While there are obvious benefits to the creation of this voluntary pool, concerns have been expressed as to how a voluntary pool can possibly incentivize firms and pharma companies to share their IP. Further, while patent pools were proposed even during the public health crises of the SARS outbreak in 2002 and the H1N1 pandemic in 2009, they were not formed, therefore leaving this open to doubts over its success during public health emergencies. Also, given that patent pools are not common in the pharma sector, it further adds to doubts over its success. Given the high costs of production involved in the pharma sector, a long incubation period in the form of clinical trials and regulatory barriers alongside the search for market exclusivity for products, the possibility of collaboration has been very minimal. Apart from this, the creation of a voluntary patent pool cuts into the power of countries to exercise compulsory licensing as a mechanism to ensure the availability of life-saving drugs. The proposal being for a voluntary pool, a patentee can simply choose not to participate in the same. Considering that COVID-19 presents a goldmine to pharma companies, it remains to be seen how many will voluntarily share their patented products in the pool. For a comparable situation, the response of pharma companies to the AIDS crisis in developing countries is perhaps indicative.

However, there seems to be enough pressure from the public and media on private entities, particularly pharma companies, that seeks to push them into sharing their products and patents in more open manners and to add to the efforts of tackling the virus, alongside emergency measures taken up by governments to overcome patent barriers. So, if not the carrot, the stick certainly seems to be working in favour of more collaborative research rather than privatized research methods; and having a voluntary pool for sharing IP can possibly push collective efforts in the right direction.

We’re pleased to bring to you a guest post by Sripada Yashwant Prasad, discussing the consequences of the plausible exclusion of the parties from Confidentiality Clubs in SEP court proceedings and suggesting that their presence is warranted.

Yashwant is currently a Masters candidate, pursuing IP and Competition Laws at the Munich Intellectual Property Law Center, Germany. He has previously worked at Saikrishna & Associates (‘S&A’), New Delhi and Legalexcel, Bengaluru. At S&A, Yashwant was part of a couple of SEP cases, especially in the trial and final arguments in one such case. He also has experience in website-blocking copyright claims, quia timet trademark actions and design infringement cases. During his stint at Legalexcel, Yashwant addressed key arguments in medical negligence cases before the Karnataka High Court, NCDRC and the Supreme Court. The views expressed in this post are personal.

Confidentiality Clubs: Why Parties’ Presence is Imperative in Indian SEP Case Proceedings?

Sripada Yashwant Prasad

Confidentiality Clubs (‘Clubs’) have found their way into litigation in India including in big-ticket Standard Essential Patent (‘SEP’) suits. These Clubs facilitate access to confidential documents that is restricted to a close-knit group namely, advocates and external experts. They generally exclude parties to the suit and are governed by the Delhi High Court (Original Side) Rules, 2018 as notified here. This post highlights that the Clubs functioning to the exclusion of parties per se guarantee no efficacious remedy. To this end, it suggests that parties’ presence is warranted, particularly in SEP suits.

SEPs and Confidentiality Clubs

SEPs, as I explained in one of my papers here, are patented technologies that function on par with a technical standard declared as the industry best. These patents are so declared for they guarantee seamless performance and interoperability. Few examples of SEPs include 3G and 4G telecommunication standards. SEP suits are atypical patent infringement disputes wherein questions beyond validity and infringement unfold. They relate to the essentiality of the patent and FRAND (Fair, Reasonable and Non-Discriminatory) commitments of the SEP owner. The conduct of the SEP owner is questioned predominantly either when it categorically refuses to license or does not license its SEPs on FRAND terms. How does one gauge if the SEP owner’s conduct is FRAND compliant or not? This is where the Club comes into the picture, and scrutinizes confidential third-party license agreements of the SEP owner. These agreements are assessed in conjunction with the license terms offered to the defendant. Members of the Club subsequently participate in the recording of evidence which is redacted for the parties and general public. The redaction thereby supplements the ‘restricted access’ terminology. The Court appreciates the evidence on record and issues independent findings on the questions of validity, essentiality, infringement and FRAND commitment.

Rule on Plausible Exclusion of Parties from Confidentiality Clubs and its Consequences

Rule 17 of the Delhi High Court (Original Side) Rules, 2018 (‘Rules’) establishes Clubs in commercial suits for purposes as mentioned earlier. The Rule also encourages the Court to exercise discretion to tailor-make a Club on a case-to-case basis. The relevant portion of the provision states, “…… the Court may setup a structure/protocol, for the establishment and functioning of such Club, as it may deem appropriate.” Annexure F to the Rules illustrates a protocol for the establishment of a Club and restricts its members to advocates (three from each party) and external experts only. It prohibits in-house advocates of either party or even the parties themselves to become members. Although Annexure F is merely illustrative, it runs in direct contradiction to Rule 17. On the one hand, Rule 17 recognizes the Court’s discretion to effect changes to a Club, but on the other, Annexure F does away with the said discretion by strictly mandating the exclusion of parties. Irrespective, an exclusion has far-reaching consequences that can potentially prejudice a party’s interests due to the reasons discussed below:

Need for Securing a Client’s Instructions

First, vide Rule 19 of the Bar Council of India Rules, an advocate shall not act upon the instructions of any person, barring his client or the client’s authorized agent. In stark contrast is clause (b) of Annexure F that severs communication between the advocate and the party. Under Annexure F, the advocate is duty-bound to take key decisions upon accessing confidential information without seeking any instructions from the client whatsoever. Despite the advocate acting in the best interests of the client, any decision taken by the former simply does not substitute the need to obtain the client’s instructions. Consequently, the advocate may end up binding his client on matters that the latter has absolutely no information about! Can this form of decision-making by the advocate bear any legal sanctity? Is the advocate not circumventing standards of professional conduct?

Prejudice to the Defendant’s Rights

The second and related consequence of excluding parties is one that concerns the defendant. In Clubs involving SEP contentions, advocates or external experts have access to third-party license agreements that inter alia reflect royalty rates and royalty bases. However, the defendant (licensee) must agree on paying a royalty rate without having access to those license agreements. This will eventually arm-twist the defendant to agree on a rate that is disproportionate vis-à-vis the true market value of the SEPs in issue. In these high-stake disputes, can the defendant afford to take a shot in the dark? The legitimacy of this concern was found subservient to the principle of confidentiality. In Dolby v. GDN Enterprises Pvt. Ltd. & Ors. and Dolby v. Das Telecom Pvt. Ltd. & Ors., Hon’ble Mr. Justice Sunil Gaur proceeded on the footing that including defendants in the Club was inconsistent with two previous pronouncements (see here and here) of the Delhi High Court. This reasoning, unfortunately, is meritless. Neither is the bench obligated to maintain consistency nor is it restrained from holding a substantially different view. With Rule 17 in force now, the Court must not restrict itself in departing from the existing position of law.

Moving forward, by excluding parties it is predominantly the defendant that suffers a setback as a prospective licensee. The reason being, members peruse confidential license agreements of parties in a similar position as the defendant. In doing so, the plaintiff is privy to the agreements by virtue of being a party (licensor) to the same and hence, its inclusion or exclusion does not strictly bear relevance. Whereas, the defendant’s hands are tied unless it has knowledge of the parties similarly situated to it, nature of licenses executed and the royalty rates agreed for the contested SEPs. The defendant’s advocate may not possess the requisite business knowledge to identify entities similarly-situated to the defendant. Considering the above, a Court must remedy the situation by including parties in SEP disputes as members vide Rule 17. As an example, discretion may be exercised not with respect to whether parties must be included or not but on how many representatives each party may nominate. Hon’ble Mr. Justice R. S. Endlaw in Transformative Learning Solutions Pvt. Ltd. & Ors. v. Pawajot Kaur Baweja & Ors., rightly noted as follows:

“The non-disclosure to the Defendant sought by the Plaintiffs, in my opinion, deprives the Defendant of opportunity of being heard and the right to defend the suit. ……. Annexure – F supra is only illustrative and else there is no bar to a party/litigant being a member of the Confidentiality Club. This is also clear from the bare language of Rule 17 of Chapter VII supra.”

A similar concern was echoed in respect of SEP suits by Hon’ble Mr. Justice Henry Carr’s ruling in TQ Delta LLC v. Zyxel Communications UK Limited & Anr.:

“An external eyes only tier enables a blanket exclusion of access by one of the parties to the relevant parts of key documents. This is incompatible with the right to a fair hearing under Article 6 of European Convention on Human Rights, and with the principles of natural justice. It is incompatible with the obligations of lawyers to their clients. The principles on which solicitors are obliged to act on behalf of clients instructing them require the sharing of all relevant information of which they are aware.”

Conclusion

No rights of the plaintiff stand subjugated, provided strict obligations are imposed on the defendant. Excluding the defendant deprives it of being effectively heard and subjects its advocate to an unjust occasion of putting forth a cogent defence. To reiterate, the inclusion of parties, especially the defendant is warranted. Upon inclusion, the defendant must acknowledge that it accesses commercially sensitive information that steers the plaintiff’s business operations. Finally, it shall remain fair by upholding the confidentiality of such crucial information.

I convey my gratitude to Ms. Anu Paarcha, Mr. Arjun Gadhoke and Mr. Abhirup Paul Bangara for their constructive inputs on this post.

[This post has been authored by our intern, Bhavik Shukla, a 5th year student at NLIU, Bhopal]

Topical Highlight

Are Patent Pools an Effective Solution to COVID-19’s IP Barriers?

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Through an interesting post, Namratha wrote about the effectiveness of patent pools in evading IP barriers to fight COVID-19. She begins by elaborating upon the various initiatives undertaken by organizations to promote collaborative research. Giving an insight into the industry practice of creation of patent pools, she argues that patent pools foster innovation by maximizing efficiency and reducing transaction costs. She also warns against the perpetuation of possible anti-competitive behaviour through patent pools, through dissuading search for alternative products. Subsequently, she notes that the creation of a voluntary patent pool to tackle COVID-19 aims at increasing global access to information and possible solutions. She observes that various concerns have been raised with respect to the creation of such voluntary pools, and further notes that only time will tell if pharma companies will share their patented products. She concludes by stating that a voluntary pool may perhaps nudge the global momentum towards realization of collaborative research.

Thematic Highlight

Confidentiality Clubs: Why Parties’ Presence is Imperative in Indian SEP Case Proceedings?

In a guest post, Sripada Yashwant Prasad argued that Confidentiality Clubs (‘Club’) in SEP court proceedings should involve parties’ presence. He observes that the current functioning of the Clubs exclude parties and also redact the gathered evidence. He states that Rule 17 of the Delhi HC Rules, 2018 enables courts to ‘tailor-make’ a Club, but Annexure F to the Rules contradictorily strip such autonomy by compulsorily requiring exclusion of parties. Providing reasons for how the exclusion of parties translates into prejudice of their interests, he states that first, the exclusion of parties may enable the advocate to bind a party to decisions which it has no knowledge of. Second, he states that the opaque functioning of the Clubs may result in the defendant paying higher royalty rates than the current market value. Third, he notes that the exclusion of the defendant may prevent the Club from identifying and analysing the licensing agreements of entities similarly-situated to the defendant.

Other Posts

SpicyIP Tidbit: Reverse Engineering of Aarogya Setu App Not Prohibited Anymore

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Aparajita gave us an update on her previous post, where she had examined the legal enforceability of the prohibition on reverse engineering of the Aarogya Setu app. Through the update, she notes that the terms of service of the app have been revised to permit legitimate reverse engineering. She states that this move shall enable an audit and independent verification of the app to determine if it functions as specified.

Texas A&M School of Law Invites Your Contributions to its New Blog, TradeRx Report

Last week, we announced the launch of the blog TradeRx Report, run by Texas A&M University School of Law. The blog seeks to explore questions pertaining to access to affordable medicines and healthcare, in light of IP and international trade. For more information on the theme of the blog and the drivers behind its launch, please refer to the detailed post.

Decisions from Indian Courts

Bombay HC directs Entertainment Network to refrain from broadcasting songs belonging to Tips Industries on its platform Gaana [May 26, 2020]

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In Tips Industries Ltd. v. Entertainment Network (India) Ltd. & Anr., the Bombay HC directed the Defendants to refrain from broadcasting the Plaintiff’s copyrighted songs on its platform “Gaana”. The dispute between the Parties arose on account of the Defendants’ alleged illegal broadcasting of the Plaintiff’s copyrighted songs on its application. In arriving at the decision, the Court considered the Defendants’ statement through which it was noted that the Defendant would not provide the Plaintiff’s repertoire on either digital or internet platforms till the next hearing of the interim application.

Delhi HC restrains use of pirated versions of Microsoft software and grants Microsoft damages to the tune of INR 30 lakhs [May 26, 2020]

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In Microsoft Corporation & Ors. v. Satveer Gaur & Anr., the Delhi HC granted a permanent injunction restraining the Defendants from infringing the copyrights in the Plaintiffs’ software. The dispute between the Parties arose on account of the Defendants’ alleged infringement of the Plaintiffs’ software programs by using pirated versions of the same. At the outset, the Court noted that it had jurisdiction to entertain the Plaintiffs’ case, as the principal and registered offices of Plaintiff No. 2 are situated in Delhi. The Court further observed that the reports of the Local Commissioner established that the Defendants were engaged in the use of unauthorized versions of the Plaintiffs’ software. Accordingly, the Court awarded damages to the tune of INR 30 lakhs in favour of the Plaintiffs for the magnitude of copyright violation by the Defendants.

Delhi HC grants an interim injunction restraining OLX India from hosting fake advertisements in relation to Reliance’s marks [May 28, 2020]

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In Reliance Industries Ltd. & Anr. v. OLX India B.V. & Anr., the Delhi HC restrained the Defendants from hosting fake advertisements on its web portal. The dispute between the Parties arose on account of the publication of fake advertisements on the Defendants’ portal, thereby infringing the Plaintiffs’ marks ‘JIO’ and ‘RELIANCE’. The Defendants noted that all, except one infringing URL had already been removed, and the remaining one was also in the process of being removed. Further, the Defendants noted that filters were added to the website so that nobody could misuse their platform to publish false advertisements concerning the Plaintiffs. Relying on the Plaintiffs’ submissions, the Court observed that they had successfully proved the three elements for the grant of an interim injunction.

Delhi HC directs Telegram to disclose identity of group members reproducing the copyrighted ‘Dainik Bhaskar’ e-papers on its platform [May 29, 2020]

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In Jagran Prakashan Ltd. v. Telegram FZ LLC & Ors., the Delhi HC granted an interim injunction restraining the Defendants from reproducing the Plaintiff’s newspaper on its application, and further directing them to disclose the identity of group members engaged in the same. The dispute between the Parties arose on account of the free circulation of the Plaintiff’s copyrighted e-paper and the consequent violation of its trademark “Dainik Jagran” and its logo, over the Defendants’ application. The Court noted that the Plaintiff had written to the Defendants about the issue of reproduction of its e-paper on numerous occasions however, the Defendants continued with such reproductions and also failed to take down the infringing e-papers. Accordingly, the Court observed that the Plaintiff had made out a prima facie case for the grant of an ad-interim injunction and directed Defendant No. 1 to disclose subscriber information and identity of users impleaded as Defendant No. 2. The Court also ordered Defendant No. 1 to take down Telegram channels concerned with the reproduction of the Plaintiff’s e-papers.

Other News from around the Country

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• The deadline for submissions for Vol. 11 of Nalsar Law University’s Indian Journal of Intellectual Property Law (IJIPL) has been extended till June 15, 2020.
• IP Office informs that all show cause hearings fixed till May 31, 2020 are adjourned till further orders.
• Gilead Sciences seeks the drug controller’s approval for marketing authorization of Remdesivir in India.
• BDR Pharmaceuticals seeks drug controller’s approval for the production of a generic version of Gilead’s Remdesivir, without entering into a licensing pact with it.
• APJ Abdul Kalam Technical University files a patent for a multi-purpose robot capable of sanitizing, delivering food and medicines, thermally scanning patients, among other things.
• Self-taught engineer from Nashik files for a patent for a tractor mounted for mass sanitization through the use of a sprayer.
• Lovely Professional University files a patent for a new algae-based respirator which intends to make breathing for people wearing masks easy.
• HSIL sues ICICI Securities over a report which allegedly disparages the former’s products and places sanitary ware manufacturer Jaquar in first place.
• A piece in the Hindustan Times argues for the creation of a fellowship of countries to ensure collaborative research and foster access of a possible COVID-19 vaccine.
• A piece in Orissa Post argues that the Indian government should ensure Remdesivir’s access to all COVID-19 patients by exploring all possible patent law avenues.
• A piece in Scroll argues that efficient access to a possible COVID-19 vaccine cannot be had without the active involvement of India and China.

News from around the World

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• WIPO urges countries to focus on the development of a COVID-19 vaccine in ‘global public good’ and to not give into patent disputes.
• WHO along with 37 nations launches an alliance to share intellectual property to fight the COVID-19 pandemic.
• Numerous heads of pharmaceutical companies express concerns and reluctance over the WHO’s idea of establishing a voluntary patent pool in response to the COVID-19 pandemic.
• The Wuhan Institute of Virology of the China Academy of Sciences files a patent application on the use of Remdesivir as a coronavirus treatment.
• Atossa Therapeutics files a patent over a nasal spray which can alleviate the effects of COVID-19 in patients with a less severe symptoms.
• A piece in Townhall argues that the non-grant of patent rights over possible COVID-19 treatments in the U.S. may deter companies from investing in further research and development.
• A piece in the National Law Review argues that the U.S. government has numerous means to supersede patent protection of an invention for the treatment of COVID-19 on the grounds of public health.
• A piece in IAM argues that though membership to the Japanese COVID-19 patent pledge has tripled, organizations taking advantage of the pledge should read its terms carefully, as many companies have altered default declarations to include additional terms.

For regular updates on IP news and opinions related to COVID-19, please visit our COVID-19 & IP Updates page (also accessible from the Resources section on our website).

We’re pleased to inform you that I-Win IP Services is organising its first Virtual National IPR Moot Court Competition for students. The competition will be held from 4th July to 6th July, 2020. With an intent to encourage interdisciplinary learning,  the competition mandates participation of one student from science or engineering streams along with the law students in each team. The deadline for registration is 15th June, 2020. For further details, please read the announcement below.

I-WIN’s First Virtual National IPR Moot Court Competition 2020 [July 4-6]

It gives us immense pleasure to invite participants from your esteemed institution to the I-WIN’s first Virtual National IPR Moot Court Competition – 2020 to be held from 4th July to 6th July, 2020. The Moot Court Competition is being organized by I-WIN IP SERVICES AND CELL FOR IPR PROMOTION AND MANAGEMENT (CIPAM), Department For Promotion of Industry and Internal Trade, Ministry of Commerce & Industry, Govt. of India, in Collaboration with CENTRE FOR IPRS AND PATENT FACILITATION SERVICES of OSMANIA UNIVERSITY and UNIVERSITY COLLEGE OF LAW, OSMANIA UNIVERSITY with the intention to create greater awareness in the field of IPR litigation.

Moot Courts are quite common to law students, however with the intent to impart intellectual property training to engineering and science students too and make law students work along with engineering and science students in the field of intellectual property rights, we have proposed for the first time participation of Engineering and Science students along with law students in the present competition. Hence it is mandatory for participants to include one student from science or engineering streams.

Since we are in the era of virtual courts and digital evidences, I-WIN IP Services thought it is absolutely essential for upcoming lawyers to equip and skill themselves in dealing with virtual courts rooms and with this idea, we present first I-WIN Virtual National IPR Moot Court Competition -2020 IN ASSOCIATION WITH Cell for IPR Promotion and Management (CIPAM).

It is also an opportunity for other college/university/institution students to go through the proceedings and participate actively since it is virtually available.

Keeping in view the above, we thought it fit to conduct a Moot Court Competition and we look forward to the enthusiastic participation of your institute and make it a grand success by your esteemed presence.

Moot Problem

http://www.i-winip.com/ipmoot2020/Moot_Problem_Final.pdf

Rules & Regulations

http://www.i-winip.com/ipmoot2020/Rules_and_Regulations_Final.pdf

Awards / Prizes

• The Best Team: The Best Team would be awarded with a cash prize of Rs.  25,000/-
• The Second Best Team:The Second Best Team would be awarded a cash prize of Rs. 20,000/-.
• The Best Memorial:The Best Memorial would be awarded a cash prize of Rs. 10,000/-.
• Best Male Speaker:The Best Male Speaker would be awarded a cash prize of Rs. 10,000/-.
• Best Female Speaker: The Best Female Speaker would be awarded a cash prize of Rs.10,000/-.
• Best Researcher:The Best Researcher would be awarded a cash prize of Rs. 5,000/-

Important Dates /Schedule Of Events

1. Moot Problem Release and Registration Open on 1st June 2020
2. Last Date for Registration is 15th June 2020
3. Submission of Moot Memorials for Both Sides on or before 1st July 2020.
4. Briefing Session for The Competition and Exchange of Moot Memorials on 3rd July 2020 for Initial Rounds
5. Preliminary Rounds and Briefing Session for the Quarter Final Round and Exchange of Moot Memorials on 4th July 2020
6. Quarter Final and Semi-Final Rounds and Briefing Session for The Final Round and Exchange of Moot Memorials on 5th July 2020
7. Final Round of Competition and Results Announcement on 6th July 2020.

Registration 

Please visit our website http://www.i-winip.com/ipmoot.php for registration and other details.

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The Bombay High Court has for the past few years emerged as the epicenter of decisions on copyright law relating to films and media. Notable amongst these is the judgment in the XYZ Films case, which has been covered in the past on the blog here. The judgment is a truly delightful read especially the travails of the Judge in viewing the impugned movie. The judgment eventually culminated in a denial of injunction despite multiple points of coincidences and conceptual similarities. The judgments thereafter have been of a similar vein, including the recent order rejecting an injunction against the release of the Netflix series Betaal.

In this seemingly steady line of decisions, a peculiar order has recently been bought to our attention. The order grants limited interim injunction against a web series entitled ‘Singardaan’ against a claim brought by an author of a short story having the same title. The premise of the dispute is the claim that the plaintiff’s story revolved around a vanity case (which is also called a ‘singardaan’) belonging to a courtesan. The vanity box is looted from the courtesan during riots, and taken to the residence of the looter. Thereafter, womenfolk in the looter’s family start behaving in a manner similar to the courtesan, leading the looter to ponder and regret his theft of the courtesan’s article. In dealing with the defendant’s web series, the defendant claimed numerous points of dichotomy and argued that any similarities were merely conceptual overlaps. Interestingly, the order itself records “There is no doubt that the theme, plot and story line of the Plaintiff has been developed in a different manner by the Defendants”.

Unlike trademark law in which stress is laid down on common features rather than on difference in essential features, copyright law is myriad in its approach. The differences are typically not ignored and neither is the treatment of the subject. The requirement to consider the differences in expression allows for artists to draw from the fount of creative commons without treading on copyright law. The inevitability of inspiration in all art would stand severely impeded if only commonalities between two works are considered for determining copyright infringement.

Novel “Abstraction” Process to Determine Infringement

The judgment also applies a hitherto unknown “abstraction” process. The approach (which is novel in India) is “When we strip the story of its embellishments, its description of mood, the motivations and tribulations of its characters and their actual actions, we get the plot and the story line”. The judgment then proceeds to demarcate certain elements as “embellishments – the details which have no essential bearing on theme, plot and story line of the Plaintiff’s work”. The judgment then proceeds to decide on the “theme, plot and story line” which can be protected. Thereafter, the judgment moves to the defendant’s work and says that it is very clearly a copy of the plaintiff’s “theme, plot and story line” (emphasis added). Differences are held to be “mere embellishments”. The judgment reduces the scope of non-protectable matter to only the “idea”. The theme emerging from this idea is held to be protectable as it “has not yet reached the level of extraction where the work can be said to be stripped to its non-protectable idea”.

This approach appears to be at odds with earlier decision in the XYZ Films case that “I must agree with this view that there is, generally speaking, no copyright in the central idea or theme of a story or a play”.

Difficulties of Thematic Protection

The difficulty in providing thematic protection to works is rather apparent. As is the difficulty of an approach which identifies the “essential” elements of a plaintiff’s work and considers whether they are present in the defendant’s work. In fact in the order itself, only the later half of the defendant’s web series is held to be a copy of the plaintiff’s theme, plot and story line. If this rationale were applied to the facts of the XYZ Films case, the outcome in that case would have been altogether different. We are therefore confronted with two wholly different approaches in dealing with this issue from within the same High Court. The protection of themes in copyright law, and deeming the theme itself to be a mode of expression would significantly expand the scope of protectable matter. Highlighting this issue I believe would definitely bring out some interesting views on this blog. What is required without doubt are definitive parameters to deal with these claims, as they are increasingly common place. Virtually every movie release of note is subject to these proceedings, and exhaustive litigation at the juncture of release on claims of such nature is almost inevitable. A possible approach would be taking the American Court standard of “total concept and feel” [as considered by the United States Court of Appeal, Second Circuit in Softel, Inc. v. Dragon Med. & Sci. Commc’ns, Inc., 118 F.3d 955, 967 (2d Cir. 1997)]. This approach considers the similarities of the plot, mood, setting, sequence of events and characterizations from the viewpoint of an average lay observer. Specific instances thereafter, such as dialogue appropriation enable the Court to arrive at a conclusion on infringement. Such approach, obviously requires a thorough examination of the works on either side and even attempting the same at the interim stage appears to be unviable.

The order in discussion does temper the relief granted to preserve the commercial relevance of the defendant’s work. In such matters, even pushing the matter to trial may not be the fix, as the Judge determining the issue has to subject herself to reading/ viewing both works. While this would of course make decisions highly subjective, such approach seems to be the only means to consider the degree and manner of infringement.

[Note: The post has been edited to reflect that the Court did not pass the order without viewing both the works.]

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We are pleased to bring you a guest post by our Fellowship applicant, Vedangini Bisht, discussing the various concerns to be kept in mind while framing a patent policy for academic institutions. Vedangini is a 3rd year law student at National Law University, Delhi.

The Frequently Overlooked Corollaries of Academic Patenting

Vedangini Bisht

A recently published post on the blog looked at the Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions and brought up several concerns regarding it. In the light of these draft guidelines, this post seeks to discuss some vital and often overlooked concerns, which ought to be kept in mind while formulating any policy accompanying academic patenting, to ensure that the policy is in alignment with the conceptual goals of IPR as well as the socio-economic targets of the country. For context, ‘academic patents’ can be understood to be patents which recognise at least one university researcher or university as an inventor.

Concerns to be Addressed

First, there is a preliminary issue that a policy that solely focuses on, and incentivises the increasing academic patents, can cause a rush to gather patents by universities, which generally involves a number of researchers and inventors. This runs the risk of causing ‘patent thickets’. This refers to an overlapping of patent rights or multiple patents granted in a single invention, caused by the desire to maximise number of patents. As a result, those trying to commercialise the technology would have to obtain licenses from multiple patentees. The high density of patents leads to high transaction costs for licensees, increasing the cost of (further) R&D as well as increasing uncertainty to an extent where it may sometimes be unviable to obtain the license. This creates a ‘no-go’ zone (see page 6 here). The fragmented nature of densely populated patent ownership can lead to another way of creating a no-go zone where one of the patent holders simply refuses to grant a license. There is a dearth of case law on the subject in India, making the contours of the law (and therefore the question of how to resolve these issues) a little hazy.

Second, a pertinent issue has been raised often with regards to access to the knowledge created out of publicly funded research. That is, it would result in double taxation for taxpayers who end up paying for the research as well as for the products of the research. It is the taxpayers’ money, in the form of government funding, which goes towards the initial research of the patent. Once this technology is licensed out by the University, the taxpayers who essentially funded the research are then required to pay the eventual increased selling price, as price of the product reflects the licensing costs as well.

Third, there is an increased risk of universities getting sued for patent infringement if there are unclear or inadequate research exemptions in the governing IP provisions. In India, section 47(3) of the Patents Act, 1970 (‘Act’), is understood to contain the provision of research exemption. The phrase “experiment or research including the imparting of instructions to pupils” used in the section is qualified by the term “merely”, which means that the defence of section 47 is available only for academic research and not in case of commercial exploitation. With more research being carried out in collaboration with industries, the divide between public mission and commercial aims is less stark. There is a lack of clarity about the recourse which can be taken in such circumstances. Words like ‘experiment’ and ‘research’, used in the section, have not been defined in the statute, nor is there a direct case law on the subject.  Section 107A of the Act, which contains the ‘Bolar exemption’ delineates certain acts which are not considered infringement. It allows for the conduct of research on a product with a subsisting patent term, provided that the end use is reasonably related to the development and submission of information required for regulatory purposes. This would kick in only in limited circumstances and not for the general broad research done by universities. While industries currently do not particularly seem concerned with litigating over university research, it is best to provide clarity so as to make the universities work in complete freedom from fear of infringement.

Fourth, there is no discussion on the larger scope of interference that sponsor industries ought to exercise. It is true that simply creating knowledge cannot be understood to suffice the role of research in universities. There is also a need to make sure that the power of the market is harnessed appropriately to ensure that the knowledge is put to practical use. But high industrial interference would redirect the research efforts from non-commercial to commercial areas, which could imply a redirection from fundamental to applied sciences, as well as a redirection from research in humanities to hard sciences. This is not a desirable outcome because this could result in emphasis on commercial criteria in the procedure for hiring academic staff, along with a premature implementation and use of service in a race towards commercialisation. It also leads to dilution of new ideas that require basic research and leads to a negative impact on knowledge economy.

Fifth and perhaps most importantly, a pro-patent culture in universities can cast a negative influence on the sharing of research results among the academicians. Industrial sponsors, a very common phenomenon in IITs, can encourage delay in publication and presentation of the research work, sometimes till the filing of the patent application, and sometimes even longer, hence, stifling discourse and gnawing away the culture of sharing of scholarly enterprise. An instance of this can be found in the literature of nanotechnology and intellectual property. Trends (see pages 2 and 9) suggest that universities are highly represented amongst patentees in nanotechnology, and upstream research seems to be getting patented despite industrial applicability criteria. A similar pattern is also emerging in the field of biotechnology; and research (see page 20) indicates that over the years, almost half of the patent licenses by universities in the US have been exclusive.

In reality, companies often do not invest their time, efforts and money to develop a scientific invention which has not yet moved forward from the prototype stage, until they acquire exclusive property rights over it. This is one of the biggest factors which encourages academic inventors to attract industrial investment to their inventions, so as to commercially develop it. It is not difficult to understand why the third parties would further demand an exclusivity in licenses. Developments in research require major investment, both in terms of time and money. The ambition of maximisation of royalty is another obvious factor.

Benefits

Academic patenting is certainly not devoid of advantages and if one talks about corollaries, then certain beneficial ones ought to be mentioned as well. First, it makes the research more responsive to the economy by emphasising on applied research, which can often be aligned to societal needs. Mere abstract knowledge locked in the ivory towers of science don’t really serve an economic or practical purpose until it is developed to a point where it is commercially applied, something industries are best at.

Second, while commercialisation of research has its drawbacks as mentioned above, it provides an advantage that most institutions cannot afford to forgo- money. R&D funding in India is dismal to a fault, and hasn’t shown growth in the last couple decades. As a good addition to more conventional sources of academic funding, patent licensing can further fund capital equipment, access to new research partners etc.

Third, the assumption/ hypothesis that corporate funding academic research can reduce access to knowledge may not always hold true. This study, for example, suggests that industry-sponsored inventions spur more ‘knowledge spill overs’ than traditionally sponsored research. This refers to non-rivalrous knowledge market and encourages researchers to explore further afield. Evidence of this has been found in the US, where the universities which witnessed the largest increase in patents, also had an impressive increase in academic publications.

Hence, there is a need to strike a balance between the two competing sides to extract the best from academic patenting and to ensure that the cons do not outweigh the pros.

Some Suggestions

The innovative approach of Stanford University can be cited here. While the University claims ownership of all the inventions by the faculty, the inventors retain the right to put their inventions on a public platform. This means they can choose to make the invention open to all. A conservative position could be that patenting be allowed by the universities only as a defensive measure in order to prevent it from being patented by a private entity and to ensure standardization in products.

The above mentioned points are merely examples. Whatever the policy may be, it depends on the aims of the IP laws of the country. As the earlier post on the draft guidelines also indicated, it is vitally important that these goals are first clearly identified and listed out, before any system to configure academic research through patents is made.

Despite the relatively small amount of academic patenting in India, the concerns associated with it are here to stay. For instance, would there be an adverse impact on the research in traditional knowledge when it cannot be patented in India due to inherent lack of novelty? Further concerns range from the deflection of the traditional mission of universities, considered to be knowledge dissemination; the effect of this on future research incentives; and more. Given all these thorny issues, finalising a uniform policy should be something to aspire for, with lucid aims decided at the conception. This should ensure that the economic and social costs and benefits of their licencing and the effect of access to publicly funded research results are well thought out, and not merely unintended consequences.