We’re glad to bring to you a guest post by Simrat Kaur, discussing the piracy challenges that may emerge with live music streaming becoming a norm in the wake of the COVID-19 pandemic.

Simrat is a New Delhi based IP lawyer. She pursued her undergraduate law course from Rajiv Gandhi National University of Law, Punjab and masters law course from National University of Singapore. After having worked with leading Indian law firms (Anand & Anand and Luthra & Luthra Law Offices), she is currently practicing under the banner ‘The Endretta’. She does transactional and advisory work in the field of music copyright among others and has advised music creators, owners as well as music distributors or platforms on matters related to it. The views expressed in this post are personal.

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

Real-Time Piracy Concerns Emerge as Live Music Streaming Goes Mainstream in Wake of COVID-19

Simrat Kaur

With the culture of music festivals/ events having come to an abrupt halt in wake of COVID-19 social distancing norms; musicians/ DJs are turning to live streaming to keep their fans entertained and generate some income for survival. In March, world’s largest live streaming platform Twitch saw a viewership surge of over 30%, across all its content categories. American punk band Code Orange was the first one to live stream their performance from an empty venue (10k people watched the stream). Soon after, many others followed suit. As regards digital platforms, artists have many to choose from. There are a number of them with varied business models. While social media platforms like Facebook Live generate money from advertisements; Twitch works on both an advertisement and a subscription-based structure. And then there are some dedicated live music streaming platforms like StageIt, Nugstv etc. which live on ticketing/ a la-carte models of monetization. StageIt, in particular, has an interesting set of unique features. One, it lets performers decide the ticket price of their live events. Two, it does not archive videos of exclusively live streamed events for future access.

Though time will tell if the motivation for online live music survives post the pandemic or not, COVID-19 has successfully played the external trigger in generating initial public interest i.e. the first step in the process of consumer habit formation. If music-tech sector utilizes this time as an opportunity; and offers unique immersive experiences to viewers with the use of cutting-edge technology (extended reality – AR, VR and MR could be helpful); the interest will become a habit in no time. But, this supplemental revenue stream for music industry will come with a two-layered problem of piracy – a) infringing live streams (real-time piracy) and b) unauthorized uploads of recorded live streams on user upload platforms (UUPs) for on-demand viewing. Business models like that of StageIt which do not host recorded videos of their events would add to the appetite for stream ripping and unauthorized distribution/ hosting of ripped files. This is because pirates would see the lack of legally available recorded videos of these events as a business opportunity for catering to fans accustomed to time-shifted viewing and on-demand culture.

As far as the scope of infringement in a music live stream is concerned; in the absence of any basis for availing fair use exceptions like educational purpose, news reporting etc; redistributing it in real-time and/ or uploading the recorded versions thereof on UUPs technically infringe upon the entire bundle of copyrights subsisting therein – a) streaming right of the digital platform; b) performer’s right of the performer and c) the underlying copyright of the music composer as well as the lyricist. In case original live stream contains licensed recorded music, such acts would infringe the sound recording copyright too. Evidently, monopoly rights of music creators and distributors are pretty clear under law, but for enforcement thereof, advanced technology solutions and strong anti-piracy regimes are needed. And with live streaming piracy, challenges seem to be monumental on both the fronts – technology and law.

Ineffective DRM Technologies and Weak Anti-Circumvention Laws

Content owners rely on digital rights management (DRM) technologies to protect their content from unauthorized access and distribution. But DRM tools have not proved to be very promising. Every time, a new sophisticated tool is deployed, pirates find the ways to work around it. Plus, in the digital world, distribution is very easy. It takes just a few skilled people to break the DRM locks and disassociate the underlying content. Once they do so, unmanaged content is distributed online to millions of people, uncontrollably. To address this, US came up with Digital Millennium Copyright Act (DMCA) long back and criminalized DRM circumvention (See DMCA 1201 and US Copyright Office study report on this provision here); but the law faced heavy criticism for being draconian because it penalizes even those who circumvent for legitimate purposes. It is widely claimed that fear of conviction under DMCA has stifled tech innovation because it hampers security testing, encryption research etc. For the same reason, law in India is narrow in its scope and does not make circumvention a “standalone violation” independent of copyright (see Section 65A and B of Copyright Act). It does provide for criminal remedies against those who circumvent DRM, but intention to infringe is the essential element. Circumvention for acts covered by fair use under Section 52 like private use, research, education etc. do not invite liability. Further, unlike DMCA there is no liability for manufacturers/ providers of DRM circumvention technology which facilitates infringement. In other words, law doesn’t help in targeting traffickers. Going after each and every circumventor is the only option – but isn’t it cost prohibitive and almost impractical from an administrative point of view?

Timely Tracing of Offenders – Latency Concerns with Forensic Watermarking

Owing to the above reasons, preventing unauthorized distribution of the streaming content in the very first place is not easy, and the same goes for live stream content. Naturally, the next choice is to have the infringing streams blocked/ removed. In the streaming world, this is done by obtaining website blocking orders from courts; using “notice and take down” mechanism to have the illicit content removed/ blocked through intermediaries. But because of the real-time element; live stream music piracy is difficult to control as pirated videos have to be taken down while they are being streamed and not hours or days later. Further, tracking real time pirates and shutting them down is a technically challenging task. A paradigmatic example is rampant live sports piracy that sports broadcasters have been finding hard to fight against. Forensic watermarking, though not a silver bullet, does provide for a good tracing mechanism. Watermarks (i.e. signals) embedded in the content help in tracking the leaking source (IP address of the offender) and disrupting the illicit stream. But the deployment of this technology is resisted in case of live sports because it causes latency. It may be argued that, with music, latency should not be as big a concern as it is in the case of live sports because of low level of competitive excitement in music events. This is not true because with platforms providing for real time interactions, where viewers have the option to interact with the performer, latency of even 5 seconds could be problematic. Platforms would therefore, resist deployment of such technology, for fear of customer disappointment and subscriber attrition. Even in case of non-interactive live streams, competition would deter platforms from compromising with delivery time, if the live stream is not exclusive (i.e. – say five platforms have legitimate rights to stream).

“Notice and Take Down” Mechanism – Not Quick Enough to Achieve Live-Content Moderation

And when it comes to disrupting the illicit streams, intermediary liability regime of ‘notice and take down’ that we currently follow is almost dysfunctional and useless, because of the time factor. The idea of expeditious removal through human moderators is simply not workable when it comes to live videos. Considering the scale of content and the astronomical number of take down requests that moderators address, how quick can they be expected to be? There is a need to develop some effective technical solution to filter unlawful live content. Several instances of hate speech, violence and child pornography materials going live on platforms are thankfully pushing the intermediaries to put in efforts in this area. While research for developing advanced AI solutions to achieve real-time content moderation can continue, meanwhile, “shared blocking ability” system could be explored. Under this system, verified copyright owners could be granted “limited access” to “blocking mechanisms” of intermediaries so that they can disrupt/ block the illicit streams themselves without putting too much burden of removal on ISPs. This will assist in timely disruption of illicit streams. The concerns for over removal/ blocking, could be addressed through precautionary measures; punitive safeguards and quick administrative assistance. ISPs should be required to appoint a readily approachable team of human moderators to cater to false removal claims and reinstatement requests. Blocking right of those rights owners against whom an ISP receives more than five correct claims of false removal, should be terminated. Intentional abuse of the system to block competitors’ content etc. must subject offenders to penal sanctions (punitive damages and/ or imprisonment).

Final Thoughts

In order to generate enough value from live music streaming and maximize the flow thereof to music industry, piracy will need to be kept in check. And the reactive model of content moderation that we currently follow won’t be very helpful because of difficulty in timely removals. Giving some limited take down rights to copyright owners, seems to be a good option and must be explored. Also, in order to minimize stream ripping in the very first place, anti-circumvention law could be revised to incorporate anti-trafficking provisions so that distributors of jailbreaking technologies could be targeted. Lack of such provisions raise the cost of enforcement to a point that it renders such laws practically useless.

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

Image from here and here

We’re pleased to bring to you a guest post by Akshat Agrawal, discussing the issues relating to first ownership of copyright in musical works in light of the recent Masakali 2.0 remake controversy. He offers a detailed analysis on whether producers, in absence of an assignment, have a right to remake or authorize a remake of songs without the consent of the composers.

Akshat is a 5th year student at the Jindal Global Law School, Sonipat. He’s written a guest post for earlier as well, which can be viewed here.

Masakali 2.0: Unconsented Song Remakes and Ownership of Copyright

Akshat Agrawal

Immanuel Kant once said, “Commercial intermediaries between authors and audiences provide only the mute instruments for delivering the author’s speech to the public; they cannot assume the capacity to dictate or distort this speech.” The recent release of Masakali 2.0 renders this statement irrelevant and meaningless. To contextualise this, the Masakali 2.0 remake has been produced by T-Series, the same record label which produced the original Masakali. A.R. Rahman, composer/author of the original song, had condemned this remake in his tweet here, which affirms my assumption that this was unconsented and he had no say, either because his rights had already been extinguished contractually (which is most likely to be the case) or he was not considered to own any rights in the first place due to the flawed interpretation of law on first ownership of copyright in musical works incorporated in films, in favour of the producers.

In light of this issue, I discuss in this post the issues relating to first ownership of copyright in compositions of songs and whether producers, in absence of an assignment, have a right to remake or authorize a remake of these songs without the consent of the composers. As regards the validity of the assignment of the right to create derivative works in respect of musical works to the producers and the application of composers’ moral rights vis-à-vis remakes, I intend to discuss these issues in another piece later.

First owner of copyright in a musical work – composer or producer?

As per Section 17 of the Act, the composer, being the author of a musical work, is the first owner of copyright in it, unless certain conditions exist. As per proviso (c) to the section, if a work is made in the course of employment under a contract of service and there is no agreement to the contrary, it is the employer who would be the first owner and not the author. So, in case of a musical work made under a contract of service with a producer, the producer would be the first owner of copyright in the composition and not the composer (unless agreed otherwise).

Further, even though proviso (b), which deals with commissioned works, does not refer to musical works, as per its flawed interpretation by the Supreme Court in 1977 in IPRS v. EIMPAA, even if a composition is commissioned by the producer for a film (and not created under a contract of service), the film producer would be the first owner and not the composer (unless agreed otherwise).The decision has been relied upon to argue (for example, see here) that producers are first owners of copyright in literary or musical works incorporated in a film­­­­ irrespective of whether they are commissioned or created under a contract of service. 

The position has remained uncertain despite the 2012 amendment to the Act which inserted a second proviso to Section 17 (in effect) providing that authors of works incorporated in a film would be the first owners of copyright in those works. The power dynamic and inequality in bargaining power in the music industry, as explored in various decisions in the West, as well as the dominance of around five major music labels in Bollywood, leaves composers with little choice to retain copyright as remaining independent follows little chance of commercial success.

In my opinion, for the reasons discussed below, it is only the composers who are the first owners of copyright in the compositions incorporated in a sound recording or a film, whether created before the 2012 amendment or after that.

Application of proviso (b) on commissioned works to musical works

Proviso (b) provides that in the case of a cinematograph film made, for valuable consideration at the instance of any person, such person, in the absence of a contract to the contrary, will be the first owner of copyright. It does not mention musical works. Although it does speak of a cinematographic film made for valuable consideration at an instance of another person, that reference is to a film as a whole and not the individual works incorporated within the film. However, in IPRS, the Court held that even a musical work created for valuable consideration to be incorporated in a film, shall be firstly owned by the producer. This, as argued in earlier posts here and here (and in detailed pieces here and here), is a flawed interpretation of the provision.

As far as the question of applicability of IPRS in the case of Masakali (it being a song made prior to the 2012 Amendment Act) is concerned, I have argued elsewhere that IPRS does not hold any binding value, due to it being rendered per incuriam and mindless of the various precedents of the co-ordinate bench of the SC in the case of Dharangdhara Chemical Works Ltd. v. State of Saurashtra as well as Silver Jubilee tailoring house v. Chief Inspector of shops (contrary view expressed in a comment to a previous post on the blog here).  Hence, if Masakali was a commissioned work, in my opinion, Rahman is the first copyright owner of the work.

Application of proviso (c) on works created in course of employment to musical works

As provided by proviso (c) and confirmed in IPRS, if a work including a composition is made under a contract of service, the producer would indeed be the first owner of copyright in it. However, can the relationship of a composer and a producer really be said to be that of and employer and an employee? In my opinion and as also argued here and here, usually not. In Zee Entertainment v. Gajendra Singh and Ors., the Bombay High Court had noted that the term ‘contract of service’ as used in Copyright Act is to be interpreted using the same principles/tests as applicable under other laws. The Court highlighted the importance of the “principled employment and the organization test” as well as the “exclusivity” test, in conjunction with the all-important, but not exclusive, “control test” to determine the existence of a contract of service. The same was reiterated by the Bombay HC in Exegesis Infotech (India) v. Medimanage Insurance Broking. None of these factors of continuity of service, exclusivity, or principled employment, along with complete control and supervision, are fulfilled in case of the relationship between a composer and a producer. Hence, the assumption of an existence of an inherent contract of service as made by the Madras HC in the recent Ilaiyaraaja case (para 19, covered here on the blog) and consequent copyright ownership of producers is flawed. I have also discussed this argument in detail here.

Thus, the producers are not the first owners of copyright in Masakali under proviso (c) as well, in my opinion.

Effect of second proviso inserted by 2012 amendment : Can it be waived?

Even if IPRS’ position on first copyright ownership of producers is accepted to be correct, it was overruled by insertion of the second proviso to Section 17 by the 2012 amendment. As per this proviso, even if a musical work is considered to be commissioned or created under a contract of service, the composer would be the first owner of copyright in the compositions included in a film. However, the legal position of first ownership of copyright in works created for incorporation in a sound recording (but not a film) remains unclear. There is a legislative need for this clarification.

It has been argued by some (for instance, see here) that despite the insertion of this proviso, the producer can be the first owner of copyright in a musical work if the agreement between the composer and the producer includes a clause to that effect, thereby waiving the application of this proviso. It is worth noting that within section 17 itself, various provisions specifically permit the parties to enter into ‘a contract to the contrary’; however, there is no such phrase used in this proviso. If the Legislature intended to allow the parties to contract out of this proviso as well, they would have expressly provided for the same. In absence of the same, a waiver of the application of this proviso would not be valid in my opinion (as also noted in this post here). Also, it would defeat the entire purpose of its insertion, which was primarily aimed at protecting the authors against the rampant exploitation of the producers, and addressing the inequality in bargaining power. Such provisions, as indicated by Prof. Basheer here, can be reflective of countervailing public policy. Thus, a contractual waiver of the proviso (much like a waiver of a beneficial provision under the rent control legislation in a case) can very well be argued to be opposed to public policy and therefore void under Section 23 of the Indian Contract Act. So, in the present case, if Rahman has contractually waived his rights as the author and first owner of copyright in the Masakali composition, such waiver is invalid in my opinion and he would still own copyright in it (unless he’s assigned it to the producer). Further, the song being made prior to the 2012 amendments shall not change this position as, in my opinion, the second proviso to section 17 must be interpreted to have retrospective application. I have argued this in detail here. Briefly, as this proviso was incorporated recognising a prevailing injustice in the Act, and upon the recommendation of a change by the judiciary (Justice VR Krishna Iyer in IPRS), it acts as a legislative remedy (as also reflected by Prof. Basheer in his post here). And in light of the judgment of the SC in the case of BCCI v. Kochi Cricket (specifically paragraphs 45 and 46), it is an essential principle of statutory interpretation that a legislative provision brought in through an amendment to remedy a sheer injustice prevailing in the Act must be given a retrospective operation. This is because the legislature could not have intended to foster injustice in the first place.

Therefore, by virtue of retrospective application of the second proviso to Section 17 (which cannot be waived in my opinion) also, Rahman is the first copyright owner of Masakali.

Does producers’ copyright in sound recording/film include the right to remake a song?

Some may also argue that even if composers own copyright in the musical work, the producer, being the copyright owner of the work incorporating it, has the right to make derivative works in respect of the underlying musical work. In the case of Mr. Thiagarajan Kumaraja v. M/S Capital Film Works (India) (covered on the blog here and here), the Madras HC held that the exclusive right of a film producer to make a copy of the film or communicate it to the public, as granted under section 14(d), includes the right to dub, but not a right to remake the film. This limited right is analogous in the case of sound recordings as well (under section 14(1)(e)), which indicates that both film or music producers do not have an inherent right to make or authorize the making of derivative works in respect of the works incorporated in their films or recordings, without the consent of the copyright owners of the underlying works.

Therefore, the producers of Masakali could not have remade the song by virtue of their copyright in the sound recording/film incorporating it, without obtaining Rahman’s consent.

Does even an assignment by composer give producers the right to remake the song?

So, in my opinion, it is Rahman who’s the first owner of copyright in the original Masakali composition. This is irrespective of whether it was commissioned by or considered to be made under a contract of service with the producers. Therefore, unless he’d assigned or licensed his copyright, the producers did not have a right to remake (or authorize another to remake) Masakali. That said, does even an assignment of copyright by composers give the producers the right to remake? Is an assignment of a right to remake valid under law? Further, do unauthorised remakes violate the moral rights of composers? I intend to look into all these questions in another piece, later.

Image from here

A single-judge Bombay High Court bench recently passed an order refusing an interim injunction to stall the release of the Netflix series ‘Betaal’. The Plaintiff, in this case, Sameer Wadekar, a writer, sought an ad-interim injunction against Netflix Entertainment Services to prevent them from airing their latest series ‘Betaal’. The Plaintiff claimed that the series infringed the copyright held by him in the literary work in ‘Vetaal’. The order denied an ad-interim injunction to the Plaintiff as he could not prima facie prove that the Defendants had infringed the copyright held by him.

Background

The Plaintiff claimed that his story ‘Vetaal’ was an original script based on a fictional story. The Plaintiff came across a video promotion for the Netflix web-series ‘Betaal’ on 07^th May 2020 and found that the Plaintiff’s characters, locations, and props were depicted in manners similar to the work that the Plaintiff held copyright in. Betaal was set for a worldwide release on Netflix on 24^th May 2020. The Plaintiff claimed that the Defendants had infringed his registered copyrighted work and hence should be restrained from releasing the series through an ad-interim injunction.

When the judge inquired about how the Defendants could have possibly come to know about the Plaintiff’s story; and based on the Plaintiff’s claims, how there could have been so many similarities, the Plaintiff averred that since 2015 he had shared his copyrighted work with many known and established producers. In support of this claim, the Plaintiff averred that he had also shared his work with a filmmaker who claimed to have contacts with Netflix, and this is how Netflix could have gotten hold of the story. To establish the same, the Plaintiff produced emails between himself and the said filmmaker as exhibits.

The Judgment

The judge denied the Plaintiff an ad-interim injunction and allowed the Defendants to release their series online based on three points. First, the judge found the link drawn up by the Plaintiff to establish how Netflix could have copied his story to be contentious. The judge noted that the mere fact that the filmmaker claimed to have contacts with Netflix does not prove that Netflix copied the Plaintiff’s story with such detail. Second, the judge observed that the Plaintiff had majorly delayed bringing this case to court. While the Plaintiff claimed that he came across the Defendants advertisement only on 07 May 2020, the Defendants had actually made several print and online publications, dated 16^th, and 17^th July 2019, on popular platforms to advertise their web-series. The Plaintiff’s lack of awareness of these publications that were available in the public domain did not help his case. Finally, the judge noted that the word ‘Betaal’ originates from ‘Vetalam’, which is a part of Hindu mythology and is a well-known story, so this also does not work in favour of the Plaintiff’s request for granting ad-interim relief.

Analysis

While the first two reasons – there being no conclusive link to prove that the Defendants had used the Plaintiff’s story and the delay on part of the Plaintiff – are fairly straightforward reasons and are sufficient for denying the interim injunction, the third reason should have ideally been elaborated upon. The mere fact that the story of ‘Vetalam’ is well-known in Hindu mythology would mean that it is an idea that is available in the public domain. However, individual expressions of it, that incorporate specific stories, props, characters, etc., does cross-over to the realm of expression and can benefit from copyright protection if the work is original.

Another factor for consideration could have been the scenes a faire of the genre of zombie horror. The scenes a faire doctrine in copyright law holds that certain common stock of expressions are not protectable because they are customary to a particular genre. This doctrine was formulated in the US case of Cain v. Universal Pictures wherein it was recognized that while there were similarities between the plaintiff’s story and the defendant’s movie, the similarities cannot be held to be copyright infringement because the scenes in question were an inevitable part of the genre. While Indian copyright law does not explicitly refer to the concept of scenes a faire, the Courts follow the US doctrine. In NRI Film Production Associates v. Twentieth Century Fox Films, it was observed that when same/similar ideas are developed in different manners, there are bound to be similarities. It was further stated that in judging such similarities the test should be whether the works are copies of each other in substantial and material ways. If that is held in the affirmative, only then an actionable claim for infringement can arise. It would have been useful to explore the same in this case and identify whether the alleged infringement claim was against stock expressions or if the similarities were material and substantial, especially given the observation that the story is quite well-known.

To simply dismiss the claim of copyright infringement because it is a well-known story overlooks the idea/expression dichotomy that acts as an initial barrier for copyrightability claims. While only a prima facie test is undertaken to check whether there are grounds for granting an interim injunction, in this case, the test undertaken seems to place a mistaken emphasis on what the story is about than whether there was any similarity between the Plaintiff’s story and the Defendant’s series. In that, if the Plaintiff’s story has already received copyright protection and is registered, there can be a fair assumption that the story did pass the originality test and was held to be a copyrightable expression of a well-known idea. Ideally, in a case of copyright infringement, the contested works need to be compared under the idea/expression dichotomy rather than under the originality test, which is more appropriate for checking if individual works can be copyrighted. The idea/expression dichotomy test helps establish the extent of infringement if any, as it compares the contested works. By bringing in the originality test and not elaborating on why it should be applied here, the order seems to skew the line between the originality test and the idea/expression dichotomy, which is more appropriate for infringement claims.

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

Topical Highlight

Bombay High Court Finds Web Series ‘Singardaan’ Prima Facie Infringing: Does Copyright Law Protect Themes of Stories?

Arun covered the decision of the Bombay HC in Shamoil Ahmad Khan v. Falguni Shah, wherein the Defendants were temporarily restrained from making further adaptations or using their web series. He notes that the Court applied a distinct ‘abstraction’ process to compare the Parties’ works through which it extended copyrightability to the theme of the Plaintiff’s work. He states that the court concluded on the similarity between the works based on the later half of the Defendant’s work, and that this produces a varied approach as compared to the court’s previous approach. He claims that the case considers a ‘theme’ to be a mode of expression, thereby significantly expanding the scope of protectable subject matter. He observes that there is a requirement for definitive parameters to deal with such commonplace disputes, and suggests that the American standard of ‘total concept and feel’ may provide a viable solution.

Thematic Highlight

Masakali 2.0: Unconsented Song Remakes and Ownership of Copyright

In a guest post, Akshat discussed the issues relating to first ownership of copyright in musical works in light of the recent controversy over the Masakali 2.0 remake. He argues that under section 17 of the Copyright Act, a composer is the first owner of a musical work (whether created before or after the 2012 amendment) and thus without a license or assignment from him, the producers cannot remake a song incorporated in their film or sound recording. He claims that even if the work was commissioned by producers, they cannot claim ownership under proviso (b) as it doesn’t apply to musical works and the IPRS decision that held otherwise is per incuriam. Noting that the composer-producer relationship is usually not an employer-employee relationship, he states that even under proviso (c) producers cannot claim ownership unless such a relationship between the two can be proved. Further, he argues that the the second proviso to section 17, that was inserted by the 2012 amendment to clarify the ownership of composers in their works included in a film, cannot be contracted out and also has a retrospective application. Furthermore, he notes that even by the virtue of their copyright in the sound recording/film, producers do not have the right to create a remake of the musical works incorporated therein.

Other Posts

The Frequently Overlooked Corollaries of Academic Patenting

In a guest post, Vedangini Bisht wrote about the points to be considered while framing a patent policy for academic institutions. First, she states that an academic patenting policy may lead to the creation of patent thickets, thereby making licensing an expensive affair. Second, she notes that granting patents to publicly-funded research shall result in double taxation for taxpayers. Third, she observes that the research exemptions in IP statutes may lead to universities getting sued more often, especially when there is no judicial clarity on the terms ‘experiment’ or ‘research’. Fourth, she states that academic patenting is highly susceptible to interference from industries, thereby translating an academic effort into a commercial affair. Fifth, she indicates that the patenting culture will hinder free sharing of research and dissemination of knowledge in universities. Further, she observes that the policy of academic patenting has its own advantages, but the aims to be attained through a country’s IP laws should be well delineated before configuring such a policy.

Real-Time Piracy Concerns Emerge as Live Music Streaming Goes Mainstream in Wake of COVID-19

In another guest post, Simrat Kaur discussed the piracy challenges which may emerge when live music streaming becomes a norm after the COVID-19 pandemic. She notes that the most formidable piracy challenges to live streaming may be presented by infringing live streams, unauthorized uploads of recorded live streams and stream ripping of live streams. She states that the digital rights management technologies are inept to offer reliable protection to copyrighted works as they are eventually circumvented by pirates. Considering that live streaming requires a time-sensitive notice and take-down mechanism, she states that forensic watermarking provides a satisfactory solution to trace illegal streams. Further, she suggests that the introduction of an AI-backed moderation system and shared-blocking ability model may prove effective in disruption of illegal streams. In conclusion, she suggests that piracy needs to be checked for live music streaming to flourish and generate revenue.

Bombay HC Denies Interim Injunction in ‘Betaal’ Web Series Copyright Infringement Case

Namratha wrote about the Bombay HC’s decision in Sameer Wadekar v. Netflix Entertainment Services Pvt. Ltd., wherein the Court refused an interim injunction to prevent the release of the web series ‘BETAAL’. She notes that the decision in favour of the Defendant was influenced by three factors namely, the Plaintiff’s lack of proving a conclusive link through which the Defendant got hold of his story (i); Plaintiff’s delay in filing the case (ii), and finally the judge’s observation that ‘BETAAL’ is a common Hindu mythology story (iii). She notes that the final reason for refusal of an injunction should have been detailed, considering that original expressions of a work in the public domain may make it eligible for copyright protection. She suggests that the American doctrine of scenes a faire could have been applied to examine if the similarities between the works were incidental or material and substantial. Further, she observes that the Court turns a blind eye to the idea/ expression test, contrarily suggesting that the same could have been used to compare the works.

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

Last week, we informed readers about I-Win IP Services’ first virtual national IPR moot court competition to be organized in association with CIPAM. The moot court is open to law, science and engineering students for participation and shall be held from 4^th to 6^th July, 2020. The deadline for registration has been set at 15^th June, 2020. For the moot problem, the moot rules, information on prizes and registration details, please see the detailed post.

Other Developments

Decisions from Indian Courts

Delhi HC restrains the use of the mark ‘DEVTOL’ for hand sanitizer [May 28, 2020]

In Reckitt Benckiser (India) Pvt. Ltd. v. Mohit Petrochemicals Pvt. Ltd., the Delhi HC directed the Defendants to refrain from infringing the Plaintiff’s mark “DETTOL”. The dispute between the Parties arose on account of the Defendants’ alleged infringement of the Plaintiff’s mark “DETTOL” by using the mark “DEVTOL” in respect of manufacturing and selling hand sanitizer. In arriving at this decision, the Court noted that the Defendants had already instructed their dealers to withdraw infringing products from the market, and had confirmed that they would no longer manufacture or sell the infringing product. Moreover, the Court directed the Defendants to deposit Rupees 1 lakh in the fund for Juvenile Justice.

Delhi HC grants an interim injunction restraining Barcodes SL from issuing fake barcodes under the ‘890’ series [May 29, 2020]

In GS1 India v. Barcodes SL & Ors., the Delhi HC restrained the Defendants from issuing illegal bar codes through its web portal. The dispute between the Parties arose on account of the Defendant’s alleged infringement of the Plaintiff’s certification mark ‘890’, by issuing barcodes beginning with identical numbers. The Plaintiff noted that it was the only authorized issuer of barcodes beginning with ‘890’ in India, which were compliant with the standard set by GS1. Accordingly, the Court observed that the Plaintiff had made out a prima facie case and the non-grant of an interim injunction would lead to irreparable loss even to customers who were being cheated through the issuance of fake barcodes.

Delhi HC grants a permanent injunction restraining BDR Pharma from using the mark ‘LULIBET’ [June 5, 2020]

In Sun Pharma Laboratories Ltd. v. BDR Pharmaceuticals Int’l Pvt. Ltd. & Anr., the Delhi HC granted a permanent injunction restraining the Defendants from dealing in the mark ‘LULIBET’. The dispute between the Parties arose on account of the Defendants’ alleged infringement and passing off of the Plaintiff’s mark ‘LABEBET’ by using a deceptively similar mark ‘LULIBET’ in respect of medical preparations. The Court observed that the Defendants’ mark was phonetically, visually and structurally similar to that of the Plaintiff, so as to result in confusion amongst the general public. The Court also stated that the test to be applied to medicinal products is stricter than other products, as administering of a different medicinal product may have adverse consequences on the health and life of a person.

Other News from around the Country

• IP Office informs that a Twitter account has been created under the id RGNIIPM_Nagpur and the same will be used to post details on IP training and other updates.
• India grants marketing authorization to Gilead’s remdesivir for ‘restricted emergency use’ in patients with severe symptoms.
• A team of researchers at the Indian Institute of Technology, Hyderabad file for a patent for a cheap rapid coronavirus detection kit which can detect the virus within 20 minutes.
• Sanjay Gandhi Post Graduate Institute of Medical Sciences files a patent for a cheap rapid COVID-19 detection kit which is capable of giving results within 30 minutes.
• A team led by Dr. Brijesh Rathi files for a patent for a novel molecule believed to have high potency against COVID-19.
• NASSCOM report states that over 5,000 IoT patent applications were filed in India over the last five years.
• Honda sues Hero Electric for design infringement of its Moove electric scooter.
• A piece in the Economic Times argues that the implementation of AI and blockchain in management of IP protection will result in higher efficiency.
• A piece in the Times of India discusses that patients in India have no access to the two drugs touted to be ‘life-saving’, namely remdesivir and tocilizumab due to lack of marketing approvals in their respect.
• A piece on Bar and Bench argues that the Indian government may need to frame new regulations and review existing ones in relation to IP in wake of the coronavirus.

News from around the World

• Campaigners urge AstraZeneca to make its COVID-19 vaccine patent-free to ensure better access.
• Penguin Random House, Hachette, HarperCollins and Wiley sue Internet Archive for its Open Library project on grounds of copyright infringement.
• The China National Intellectual Property Administration publishes the first patent application covering a vaccine for COVID-19.
• Kalytera Therapeutics Inc. announces filing of a provisional patent application for its liquid nitric oxide donor, believed to be effective against COVID-19 associated pneumonia.
• USPTO launches the COVID-19 Response Resource Center in order to facilitate better access to IP information, programs and initiatives.
• Twitter, Instagram and Facebook disables Trump’s tribute video to George Floyd due to a copyright-related complaint.
• A piece in The Mandarin argues that the Australian government should commit towards collaborative research to fight COVID-19, while ensuring that it uses regulatory tools whenever required.
• A piece in the Journal of Global Health argues that compulsory licensing can be a possible solution in the times of the COVID-19 pandemic, and governments should not hesitate in issuing them.

Image from here

We’re pleased to bring to you a guest post by our former blogger Rajiv Choudhry, discussing why it is not in a defendant’s best interests to agree to a confidentiality club arrangement in a SEP litigation.

Rajiv is a practicing advocate based in New Delhi. He specialises in IP law, with a focus on high – technology and patent law. His core IP interest areas are the intersection of technology and IP, Indian IP policy, innovation, and telecommunications patents. His previous posts on the blog can be viewed here.

SEPs and Confidentiality Clubs: No Compatibility With Each Other

Rajiv Kumar Choudhry

Recently, there was a post on the blog regarding merits of confidentiality clubs to standard essential patent (SEP) litigation. When I read it, my view was that the confidentiality clubs being applied to a defendant in a SEP litigation was highly problematic and the same was not suited for the defendant: the very basis for using confidentiality clubs to share information in SEP litigation was highly questionable and should be challenged by a defendant.

This post concludes that it is not in a defendant’s best interests to agree to a confidentiality club arrangement in SEP litigation and provides several reasons for the same.

Having observed and being part of multiple patent litigations in India and elsewhere, I view a patent infringement trial as an ordeal. Patent litigation anywhere across the globe is the domain of the right holder, and if I might add, of one with deep pockets.

It is easily observable in any patent litigation that there is a basic minimum economic qualification. Right at the outset of the lis between parties, one element that has nothing to do with competing claims, is introduced. This element is the financial strength: ability to endure trial. This element is extremely important. A generalization can be made that a conclusive decision after going through a full trial, including evidence, expert witnesses, etc. is possible only in the case where both parties are evenly matched or are economic equals. This might be seen currently in Europe where several big-ticket SEP litigations involving vehicles are underway and both parties are evenly placed (Readers may be interested to go through the summary of the ongoing litigation between patent owners and vehicle manufacturers such as Diamler etc.).

One can also observe from past cases, that if a smaller party decides to defend, he may win at law, but still lose business. If he capitulates and settles, he sacrifices his independence, his competitive position, and in all probability some part of his patent position as well. It is immaterial whether the bigger party has dubious patents/ vice versa. The results to the competitive system and the independent judicial system are the same.

It is essential to recognize that when a patent suit is decided, something more than the respective rights of the litigants is involved. A patent infringement suit is predominantly a problem in public interest – it is in the public interest that the patent system finds its justification – and a problem in the relation between economic law and technology. The rights of the litigants are embraced within the public interest at issue and dependent upon it for the exceptional character of the rights contested.

For a SEP litigation, it is even more lop-sided. This is because in SEP litigation, it is not general competition in the market. Rather, it is competition for the market. The more entrenched a standard is, the more power a SEP owner has. Those that give examples of multiple businesses operating in the same market (where SEPs are implicated) mistake the presence of multiple players as a healthy sign. However, they are not comparing the right market and make multiple logical fallacies: mistake cause for effect, confuse between apples and oranges, etc. Just because there are 10 handset brands does not mean it is a healthy market. If one looks closely, all 10 brands are based on the same standard and all 10 have to approach the SEP owner for a license. There is no competition here as the market is already locked in into a particular standard. Just think, what other cellular standard are any of your phonebook contacts using today? Hint: They all use some form of LTE (Long Term Evolution)/ 4G technology as it is popularly known. You don’t even buy a phone because it is LTE compliant: you buy it because of other reasons, such as price etc.

The way I see it, confidentiality clubs are used as a sword by the right holder. And the defendant can’t even claim use of the same information as shield. Let me give some background to put things in perspective. In any confidentiality club, confidential information is sought to be confined to a limited set of people – some from the plaintiff/ some from the defendant. And, ostensibly the purpose is so that the defendant can make an informed commercial choice. That is almost never the case.

This is because of asymmetric information skew in favour of the plaintiff in SEP matters. What the plaintiff seeks to put under the cloak of confidentiality are the rates offered to third parties and the fact that those third parties adopted those rates. What is never disclosed are the circumstances under which that decision was taken by those third parties. Sometimes, even technical information such as claim charts mapping the patent to the relevant standard are also disclosed under this arrangement. This is extremely problematic and Prashant has written about it here.

The circumstances under which the supposedly similarly placed parties signed those agreements are not disclosed. It may very well be the case that these were signed under duress – the threat of an injunction to stop goods at customs. It is not possible now but surely it was possible up to three years ago. Or for that matter imposed in court – whether as a stop gap arrangement or having no choice, the defendant taking the license, having suffered not one but two reversals in court.

There are other questions such as: what if the agreement was signed after the injunction was issued? What agreements were shown to these parties? How many patents were there in the license at the time the agreement was signed? How many were sold off to a third party post licensing them to a party?

Suffice it to say that answers to these questions won’t be volunteered by the patent owner. These are obtained when the plaintiff is put under scrutiny, and that too in an environment that is not to its liking. One can see previous blog posts on Ericsson’s litigation with Micromax, Intex, Lava, iBall and others to see these issues raised.

Putting claim charts as confidential information in the confidentiality club is another aspect that is simply overreach. Mind you, the entire standard such as LTE is public and even the configuration is public information. Each party who is desirous of having its IP included in the standard agrees to its disclosure and there are several disclosures made regarding this particular IP. Once a standard is adopted, then the patent is automatically covered by a standard compliant device. Hiding claim charts and putting them in a confidentiality club is overkill because this is a public interest issue and can’t be brushed under the carpet simply by putting it in a confidentiality club.

Other manufacturers should be able to see what is happening and if possible be able to take out revocations/ or at least become part of the litigation once the process is initiated by the right holder by suing one party.

Now coming to confidentiality of the defendant’s information that is supposedly protected in a confidentiality club. This information by nature is public. It is easy to count the unit sales of the defendant and there are many ways and multiple databases from where the volume of sales can be deduced. First is IMEI (International Mobile Equipment Identification) series for a mobile, which is a 16 digit number and each series has a million units. This information is with customs and all mobile operators and is easy to determine which series are being used by each device provider. Trade journals, etc. are a resource that is also available to those inclined towards more specificity in terms of absolute numbers and margins.

The point here is that the defendant really has no information that can be protected under a confidentiality club.

So far, this discussion has focused on a single aspect of information that is sought to be protected. Now let us view the issue from another perspective.

This is the space where the SEP owner refuses to license component manufacturers and approaches the brand owner. This is obviously to extract more money from brand owners as the royalty base is much higher. The argument that it is easier to approach a single brand owner rather than multiple component manufacturers is plain bunk: there is only one component that adds communication capabilities to any device. And to say that it is easier to approach brand owners, to me, is going for the bigger target that can be squeezed ever harder. Obviously, this information is never forthcoming in a cozy confidentiality club where the rules are set by the right holder.

This strategy of reaching out to the end brand results is a great skew and distorts the entire market. This approach to the brand owner results in numerous inefficiencies as costs are passed on to the end-consumer. My view is that these inefficiencies will increase substantially in the context of 5G SEP licensing, given the plethora of standard compliant connected devices in 5G technology.

Coming back to the harm caused by a confidentiality club in SEP litigation: It is public interest that suffers when one has to pay extortionary costs to a SEP owner. These costs are not just higher royalties, but payment for expired patents that are bundled into a patent license, irrelevant patents, and non-essential patents.

On the occasion of our Founder Prof. (Dr.) Shamnad Basheer’s 44th birth anniversary on 14th May, we had announced the first edition of the Shamnad Basheer Essay Competition on Intellectual Property Law to celebrate his memory and his legacy of outstanding scholarship. After the announcement of the competition, we’d answered some common queries that we’d received from the interested participants here.

We wish to remind you that the deadline for submissions for the competition is June 30, 2020 (23:59 IST).

The details of the competition are as follows:

Submission Guidelines

Eligibility: For its first edition, the competition will be open to students currently enrolled in any LL.B. program (or its equivalent – meaning students enrolled in J.D. programs can take part) across the world.

Registration: There is no registration fee or registration process for the competition. You may send us your essay whenever it is ready.

Co-authorship: 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.no 

Selection of Topic: 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.

Word Limit: The word limit for submissions is 5,000 words (inclusive of footnotes).

Format:

• Please submit the essays in a MS Word format, with 1.5 line spacing. Please do not submit essays in a PDF format.
• We are not prescribing any specific format for footnoting. As long as it is consistent, it should not be a problem.

Deadline and other Details

• All submissions must be original and unpublished.
• The deadline for submissions is June 30, 2020.
• Please e-mail all submissions and queries to submissions@spicyip.com (only).
• Please submit a covering letter stating the law school where you are enrolled as a student, along with your essay.

Winning Essays

The winning essays will receive the following prizes:

First prize: INR 15,000

Second prize : INR 10,000

Third prize : INR 5,000

Also, a copy of the winning essays will be uploaded on our website when announcing the winners. This does not stop the winning essays from being published in law reviews/journals though. In fact, we would be glad to assist the authors of the winning essays to get published in quality law reviews/journals.

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.

If you’ve any queries, please drop us an e-mail at submissions@spicyip.com. We look forward to your submissions!

We’re pleased to inform you that LexisNexis IP is organizing a live webinar on how to conduct a prior art search using their patent search software ‘TotalPatent One’ on June 18, 2020. For further details, please read the announcement below:

Live Webinar on How to Conduct a Prior Art Search in the Largest Pool of Patent Documents

We, LexisNexis Intellectual Property, are a leading global provider of the entire patent workflow solutions designed specifically for professionals in the intellectual property market, government agencies, and the life sciences industry. LexisNexis has worked in the patent arena with the U.S. Patent and Trademark Office (USPTO) for nearly half a century and offers a suite of IP solutions that deliver the results you need across the patent workflow under the LexisNexis IP name. LexisNexis IP solutions are a comprehensive approach to patent analytics and search.

We conduct various webinars and share recordings every month on the latest topics in the IP industry. Next week, we’ll be conducting a live webinar on how to conduct a prior art search in the largest collection of patent documents.

What will you learn?

In this webinar, you’ll learn how to get the best results possible for your patent searches by using our patent search software tool TotalPatent One. You’ll learn how to:

• Conduct a Prior Art Search
• Identify and Organize Relevant Prior Art documents
• Deal with Non-English Information
• Use custom export options to create more efficient reports
• Create an automatic alert, with customizable email notification

When?

The webinar will be held on June 18, 2020 (Thursday) from 3.00 to 3.45 pm IST.

Who?

The webinar will be led by Tharaniiswari Gunasekaran, who joined LexisNexis IP as IP Specialist for India & SEA region in 2018. She is a qualified attorney since 2007 and has worked in various multinational corporations.

Registration

Please click here to register for the webinar.

Contact Details

If you have any questions, please feel free to contact us at ip@lexisnexis.com.

Covid 19 seems to have done what public health activists have been crying hoarse about for years – that is, shine a bright spotlight on the various inadequacies of the public health systems around the world, and its related issues. With several public calls for letting patent rights on pharmaceuticals take a back seat vis-a-vis this pandemic, this bright spotlight has also shone on those who’ve been lobbying for ever-restrictive patent rights on pharmaceuticals. For example, as KEI has pointed out, countries with sizeable pharmaceutical industries are still (successfully) lobbying for restrictive usage of IP on vaccines and know-how, such as in their negotiations in the World Health Organization (WHO) Covid 19 resolution. Where the WHO of all bodies should’ve been focused primarily on maximising health benefits, it too eventually allowed for a watered down resolution. For what its worth – several other world leaders and public health activists have signed an open letter clearly asking for any Covid 19 vaccine to be made available in a manner that prioritises health needs over ability to pay.

This post will first look at a bit of the general public health context in which the patent system functions, and then will focus more specifically on broad level questions of the suitability of the patent system to play the role its been given as a pharmaceutical innovation mechanism. (Long post ahead – approx 10-12 min read).

Every morning there are dozens of reports about the infection rates, death rates, and sometimes even a few conversations about recovery rates. Technically speaking though, in terms of disease-centric effects, this is not a new phenomenon, as the table below shows.

In an age when private parties are flying to the moon, why are so many millions of people still dying from diseases that have existed for decades? The reasons are of course varied. For example, diarhheal diseases, which really stand out, taking more than 7 lakh lives a year (data above is for 6 months), are presumably strongly linked to the highly inadequate state of sanitation in the country. One common underlying factor in India at least, is no doubt the grossly inadequate spending on public health.

 BRICS Countries along with a few arbitrarily selected countries selected for comparison. Click here for source

Currently at a measly 1.28% of the GDP, India’s spending on public health is much lower than other BRICS countries as well as many of the poorer countries in the world. For perspective, it was ~1.3% of the GDP in 1990 as well and has more or less been stagnant since then, with minor variations.  What makes this worse, is the context that several diseases (such as those in Table 1 above) have been at worrying levels for decades now. Every now and then, there are noises to indicate that this spending will increase. The National Health Policy 2002 planned to increase it to 2% of the GDP by 2010. In their 12th Five Year Plan (2012-17), the Govt of India’s Planning Commission targeted 2.5% by 2017, and 3% by 2022. The 2017 National Health Policy (PDF) re-targets the apparently elusive 2.5% figure for the year 2025. However, India’s dismal spending on public health is only part of the reason, and most definitely doesn’t explain how the rest of the world has been faring so badly with some diseases at least. 

Where are the cures? The treatments?

With the lack of a cure or recognized treatment for covid19, populations in developed countries are feeling something that the global poor are long since familiar with – desperation, fear, and anxiety over lack of treatment possibilities. After all, whether the reason is the lack of existence of a treatment option, or lack of any chance of finding or affording a treatment option – the end result is there is nothing you can do except wait and hope for the best.

These cries for access to medicines were last really ‘listened’ to (and even then, just to a limited extent, after tremendous effort) during the global HIV/AIDS crisis at the turn of the century, but have nonetheless been going on for decades. As has now become evident, when “important” lives are at risk like today, saying “the system will take care of it eventually” is not really accepted for an answer. Perhaps it will take this new globally recognized crisis to mobilize genuine political will around addressing some of the gross inadequacies of the patent based pharmaceutical innovation system? As is popularly claimed, the patent system encourages innovation especially in the pharmaceutical sector because it provides a mechanism through which investments can be recouped and profit margins attained. With close to 50 million people expected to plunge into extreme poverty due to the ongoing lockdowns, combined with the well known close inter-relationship of poverty and disease, pricing matters are only going to become more contentious. While several public health movements have shown a sharp spotlight on the price concerns brought about by patents, this is far from the only concern, but let’s start with price:

1. Pricing: Once the vaccine/treatment does come along – will it be available, accessible and affordable by the poor as well? Or once the affluent have access to the treatment, are the poor to continue waiting and hoping the same way they’ve had to for so many other diseases. For that matter, what about the next novel disease? Many experts indicate that more such novel diseases will break out, as we continue to live at odds with nature. There’s a new interesting angle at play now – which is that so long as there are no treatments for any novel notable infectious disease, it is (finally) in the affluent’s interests to ensure the poor stay healthy as well! Since they want to reduce their own chances of catching an un-treatable disease.
Nonetheless, as long as we rely on the patent system (or more specifically any market based system) for deciding how drugs should be priced, the price point will always be aimed at profitability first and foremost.

The first thing this means is that rich markets are naturally considered more important that other markets. Looking at new medicines between 2012-2017, US (64.1%), Europe (18.1%) and Japan (7.1%) together account for nearly 90% of the market for sales of new medicines. Overall sales in 2017 indicated that US,Canada (48.1%), Europe (22.2%), and Japan (7.7%) accounted for 78% of the total sales. (source) It only makes business sense to price according to more profitable markets. And what about those Indian generic pharmaceutical companies who have made India famous as the pharmacy of the developing world? The government may declare self reliance as a policy, but the one ‘principle’ all corporations have in common (and in fact have a fiduciary duty towards), is the maximisation of profits – and guess where that will take them, given the opportunity? Even sales within India will be naturally be incentivized to focus on those who can pay more, rather than the vast masses who cannot afford much. Not to mention, that “Indian” or not, generic pharmaceuticals who can collaborate with Big Pharma, will have access to a much bigger markets – so there is a reduced incentive to annoy them with compulsory licences and the like over here, or sometimes a greater incentive to enter into license deals even when not needed. This not only unnecessarily raises prices, but reduces the possibility of weak patents being challenged. Will our current shared empathy over lack of treatment options, continue when some of us start to have access to treatments? Or will access for others then fall back to “the system will take care of it eventually“.

Its also very important to note that despite all the fuss that pharmaceutical companies make about the heavy costs incurred in developing drugs – none of them want to disclose their actual numbers. Researchers have come up with wildly varying estimates as to the cost of new drug development, from near $300 million to near $3 billion, with each set having its own set of criticisms – but no transparency in actual costs still. It has also been pointed out that big pharmaceutical companies don’t actually do much of the research themselves anyway, and prefer to buyout smaller companies instead. (see here and here for eg). Needless to say, this demonstrates weaknesses in the arguments that justify high drug prices based on high capital requirements for innovation. And that takes me to the next major point:

2. Distortion of raison d’etre: With it being easier and often more profitable to acquire small companies that seem successful, rather than do the actual research themselves, several big pharma companies seem to have shifted focus towards acquiring marketable products rather than actual drug innovation. There are also studies showing that Big Pharma companies spend almost $30 billion dollars a year (as of 2016) on marketing in US. If my calculations are correct, India’s public health spending (1.3% of USD 2.8 trillion), is only slightly more, at approx $36 billion! Rather than incentivising pharmaceutical innovation, the overall system seems to be incentivising corporate strategy innovation to capture and sell someone else’s patents/products! And it is doing a great job at elevating the latter at the cost of the former. John LaMattina, former head of R&D at Pfizer (which has also been involved in perhaps the most number of mergers and acquisitions), has notably stated “their impact on the R&D of the organizations involved has been devastating“. Pedro Cuatrecasas, former director of Glaxo also shares similar views: ” I have to stress that the merging of companies has resulted in the loss of excellent established R&D organizations with their high level of manpower, their research programmes and their unique cultures — presumably because these were perceived to be redundant.”

Whether this holds true for the Indian landscape is perhaps difficult to tell. However, as per this 2016 study done by Beena Saraswathy, there are some concerns. On pages 24-25, she indicates that these mergers may lead to disappearing products and raising price levels for domestic consumers. The table below is from the same study.

Sourced from here (Table 9, page 18)

A prominent example of focusing on corporate strategy is the story of Sovaldi. This is a treatment for Hepatitis C that was developed by Pharmasset, a small biotech company led by two University professors with mostly federal funding. Pharmasset’s development of Sovaldi was funded largely with federal funds. Gilead bought the whole company for $11.2 billion in 2012, and started selling Sovaldi for $84,000 per treatment regiment. In 2014, its first year on the market, it made $10.3 billion from Sovaldi alone, along with an additional $2.1 billion from the sales of Harvoni (a combination of Sovaldi with ledipasvir), nearly all from US markets alone. That year, India and China had about 483,000 and 760,000 new cases respectively, of acute Hepatitis C, compared to US’ 111,000 cases (as per the Global Burden of Disease 2017 study). Gilead has continued to make big sales in the years that followed. Soon enough, a substantially cheaper version of Sovaldi was made available in India but that too came with its own share of problems.
Not actually doing the R&D – check; pricing it prohibitively high – check; making very high profits – check; maximising health benefits – hmm?

3. Distortion in Research Direction:

On the question of whether those high prices lead to better research or more drug innovation – As per this report, of the 59 new drugs launched in US in 2018, 38 (64%) of them were patented by emerging biopharma companies (defined as <$500million or R&D spend <200million) , and only 15 (25%) were patented by large pharma companies (defined as >$10billion). Additionally, various studies (like this and this for example) seem to indicate that drugs coming from public sector funding tend to be more innovative than drugs coming from private sector funding.

When investment is tied to profits, it is clear that even the focus of research, will be on profitable markets rather than addressing health concerns. Till recently this was very stark. For eg, around 2010 annually more money was channeled into treatments for male pattern baldness ($2billion) as compared to malaria ($547million), due to the simple fact that the average balding old man in US or EU could pay much more than the malaria patient in a developing country. This was what was known as the 10/90 gap – that is only 10% of the world’s health research expenditure would go towards diseases that afflict 90% of the world’s population (ie communicable diseases that mostly affect those in the developing world). This is also a major reason that so many communicable diseases, mostly prevalent in the developing world, have had so little R&D investments, despite the tremendous number of lives they’ve taken. Massive amounts of charity and huge protests have moved this needle a bit – but is charity a business model on which millions of lives should depend?

This is now changing though, due to two reasons: the slowly increasing market power of emerging markets, and the changing disease burden of the world. As per WHO, rapid unplanned urbanization, globalization of unhealthy lifestyles and population ageing are leading to populations in the developing world being now facing a heavier burden from non-communicable diseases (NCDs) such as cancers, heart diseases, chronic respiratory diseases, etc, which were earlier more limited to the developed world. (which takes one back to the pricing issue).

Earlier, investments into ‘me-too’ drugs (usually drugs that are largely duplicative of existing blockbuster drugs, with minor modifications to their chemical compositions such that they too can be patented) were lucrative earlier – since it meant very little R&D needed to be done to tap into an already proven hungry market. As long as chemical drugs continue, patents will continue to incentivize research towards ‘me-too’ drugs. In general, a long exclusivity period incentivises attempts to gain such rights at minimum cost – thus also resulting in the pushing of weak patents wherever/however possible, not to mention continued spending of resources on lobbying for laws which allow weak patents. And this would mean continued high prices and delayed barriers to entry for cheaper generics, while offering little therapeutic benefit. The pharmaceutical industry is now starting to shift focus from chemical drugs to biological drugs (“biologics”). Will research here too be incentivized towards me-toos over drugs that offer more / new therapeutic benefits? It’s not as clear. Biosimilars (drugs which seek to establish similarity to established biologics) are not like chemicals in that there is still high cost and some risk attached to their development.

Biosimilars versus ‘Biobetters’ – A Regulator’s perspective – by Rene Anour. Available here

Nonetheless, as this paper suggests, biologics may bring with them the dual problems of me-too biologics, as well as originator companies weaponizing “bio-betters” close to patent term ends, against the price-drop possibilities posed by biosimilars. (see snippet on left).

While biosimilars can bring down prices as compared to the extremely high priced originator biologic, they can still be priced very highly. For example, the world’s top selling biologic drug, Humira costs about $4500-$5000 a carton (~$72,000 a year), and is expected to bring in $21 billion in 2020; and despite its core patent having expired in US in 2016 and biosimilars being present, the price is still in fact rising (common to other biologics as well) because of patent thickets, as this link describes.  In India, the situation is playing out very differently though, with more than 7 biosimilars launching, and the average cost price being less than 1/5th of the US version as this link describes. Even assuming this type of situation becomes the prevalent type, it doesn’t change the fact that at even 1/10th the price, this amounts to more than INR 5,00,000 a year – far, far above the average of INR 120,000 that nearly half the country’s regular workers make. How this will play out in India, with the increasing presence of biosimilars – we will need to wait and see.

4. What the patent system does not incentivize:

Among pharmaceutical products – vaccines, by far, give the most health benefits to human lives, as they give benefits not only to those who take them but also to those who haven’t taken them but are still protected (including future generations) by virtue of wide-spread vaccine usage in an area. Therefore, it would make sense for a pharmaceutical innovation system to strongly incentivize vaccines. As is known though, the patent system does not incentivize the creation of a vaccine for infectious diseases, until the infection hits populations (or governments) who can pay well for it. So regions most prone to infectious diseases (i.e., the developing world) rarely incentivize the creation of new vaccines. If they are made, they are usually done by the public sector (for non-patent reasons) or, are unaffordable until patent expiry, when generics bring the prices down. Even in situations like the current pandemic, it has been argued (see this paper) that patents are a redundant incentive, as there is already a guaranteed captive world-wide market, aside from non-tangible effects such as being part of the solution to Covid 19. (Side note: if you’re interested in how a pharmaceutical firm tried to classify coronavirus as a rare disease, check here)

The patent system does not incentivize public health goods that have social value (even if tremendous) if they are not translateable into monetary value that can be captured. This paper (PDF here) starts off with the ‘humble checklist’ example and discusses this concept in much more detail. The ‘humble checklist’ (it is what it sounds like) was a simple non-proprietary public health intervention which resulted in highly reduced infection rates in US hospitals by stopping infections before they could happen, even as patent-incentives were instead driving heavy investments into creation of antibiotics for the same infection problem. Both may have their roles, but this shows the clear difference between focusing on maximising health benefits, and focusing on the market for health benefits. Similarly, information from clinical trials could be very useful information goods for society, if they were treated as global public goods (see this proposal for instance) rather than data which private corporations prefer to keep secret due to the market advantages it gives them (not to mention the controversies and ethical lapses that can stem from that).

Conclusion: While this post has touched upon several issues thrown up by a patent dependent / market-centric pharmaceutical innovation system, it is not an exhaustive one. For example, how many patients are not getting access to medicines due to a system which incentives the lobbying for further exclusion rights such as data exclusivity or patent-regulatory linkages? How many new therapeutic uses of existing drugs are not being explored because the patent has expired? What are the health effects on the patient population when a side effect of focusing on market profits is increasingly lax drug regulation? Even supposed ‘solutions’ within this patent framework, such as compulsory licensing, tighter patentability requirements, etc hardly seem to have any impact in the real world, other than to give areas for proponents of more restrictive IP rights a topic to coalesce over. Not to mention, in the limited real world scenarios where they are actually used, they can only at best tackle the price issue and not issues of research distortion, etc.

This post has attempted to lay out some of the first level issue areas with the patent system in pharmaceutical innovation, and if nothing else, shows that there is much to be improved at a systemic level. But are there any actual possibilities for change or is this too idealistic? Many policy makers, activists and scholars have looked into creative partial solutions, including alternative systems, which place health maximisation, (rather than markets or patents), at the centre of pharmaceutical innovation mechanisms. Certainly, they may not, and probably cannot, address all these concerns, and will likely have other criticisms of their own. Needless to say, all the issues mentioned here are much more nuanced than described in this first level description. And all its criticisms notwithstanding, the patent system does certainly act as a decent proxy for a pharmaceutical innovation system with several points working in its favour. But it is high time that we stop simply accepting that this is the best we can do, and work towards systems that will be at least slightly more health-need centric in their outlook. Part II of this topic, will come out soon, looking more closely at some of the partial solutions and alternative possibilities put forward by various scholars and policy makers.

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Late last month, the Supreme Court issued notice to the Union of India in an appeal against the Delhi High Court’s decision in Arpit Bhargava v Union of India and Anr. As I had covered earlier on the blog, the Appellant, Arpit Bhargava, had approached the Delhi High Court on the ground that publication of state and central laws by private publishers was an infringement of government’s copyright over them. Moreover, he had sought a direction from the High Court to mandate the Union to make available, at a reasonable price, hard copies of legislations.

The High Court though was unwilling to issue any such reliefs and disposed of the Petition with liberty to the government to initiate action against private publishers as and when it finds any infringement. Thus, the Court left open the larger question of whether publication by private parties amounted to infringement. Moreover, no general duty was cast on the government to mandatorily make available hard copies of legislations. This decision has now been challenged before the Supreme Court.

Copyright and accessibility issues

The crux of the Appellant’s grouse seems to be that governments have time and again failed to make legislations available to the public at a reasonable price. Private publishers are exploiting this failure and publishing these laws at a high price, as per the Appellant.

The copyright argument appears to be a strategic one to me and meant to jolt the government into taking action. Otherwise, it is absurd that a party who wants greater accessibility to legislations would want lesser number of entities publishing them. So, my guess is that the Appellant wants the Court to find private publishers to be infringing so that it is then left to the government to publish these bare acts at reduced costs.

Interestingly, if news reports are to be believed, the Union itself had submitted before the High Court that private publishers are not in violation of its copyright, as long as some original material or commentary is added to the text of the legislations.

I think that the Appellant’s arguments on both counts – accessibility and copyright – may be slightly misplaced. The Appellant’s prayer for accessibility is being addressed by the Delhi High Court in another case – Union of India v. Vansh Sharad Jain. As for the copyright argument, we need a more lenient copyright regime and not a more stringent one, as will be discussed later.

Development of IndiaCode and access to legislations

In my earlier post on this litigation before the Delhi High Court, I had discussed in detail the facts leading up to Union of India v. Vansh Sharad Jain. I will not repeat them here and it is suffice to say that the High Court had directed the Union to make all legislations available online in an intelligible and machine readable format. Union tried to comply with the order by redesigning the Indiacode portal and making available most of the legislations.

Rather than letting the government off the hook after delivering its order, the High Court is still monitoring Union’s compliance with its order, periodically summoning the concerned officials to apprise it of the improvements made to the portal.  Although the portal is far from being a finished product, my own experience suggests that it has improved considerably from its earlier versions.

With the Vansh Sharad Jain bench actively shepherding access to laws, is the prayer in the Arpit Bhargava appeal, as regards access, redundant? It is true that the prayer in the Appeal is specifically for hard copies of bare acts and not any type of access. But, both lawyers and non-lawyers alike are now relying more and more on digital resources for their research. Even if someone wants to use hard copies, Indiacode provides the option to download the legislations and print them. Would it not be a stretch to then argue that access can only be ensured by government printing and distributing hard copies? Thus, as long as the government makes available the legislations in a reasonably accessible manner, as is being done with Indiacode, can one insist that they publish it in hard copy?

Moreover, the government had clarified before the Delhi HC that it has, as a matter of policy, decided to limit physical printing. Thus, the Court would be encroaching into government’s policy domain if it were to direct it to print physical copies.

But, all these still do not address the huge demand for physical copies, especially among the legal community. As long as such demand exists, private publishers will continue to tap into it. Thus, it is important to settle whether private publishers are in violation of government’s copyright.

Government’s copyright over legislations

This question too was touched upon in my previous post. To put it briefly, Section 17(d) lays down that government shall be the first owner of all its works [which includes legislations as per Section 2(k)], unless there is an agreement to the contrary. Nevertheless, Section 52(1)(q) allows for fair use of such works. Specifically, Section 52(1)(q)(ii) provides that the reproduction or publication of “any Act of a legislature subject to the condition that such Act is reproduced or published together with any commentary thereon or any other original matter” shall not constitute infringement. Interestingly, the requirement of including commentary or original matter is confined to Acts of legislature and no other category of Government Work covered under the provision has a similar requirement.

Although no Indian judgment seems to have directly addressed the question of what constitutes ‘commentary’ or ‘original matter’ for the purpose of Section 52(1)(q)(ii) , the threshold for this could not possibly be high, given that EBC v DB Modak found that even simple alterations to judgments could be accorded copyright protection. Add to this the fact that the government had conceded before the High Court that private publishers are not infringing, as long as some original material or commentary is added. Assuming that the government made such a submission based on its assessment of the bare acts available in the market, it can be safely said that these publications are not infringing in nature (for a more detailed discussion on this point, see this).

Nevertheless, this still leaves us with a few problems. A number of online portals reproduce legislations without adding any original material or commentary to it. They, in fact, go a long way in ensuring access to Indian laws and are a lifeline to anyone who does not have access to pay-walled law portals. Although the government does not seem to be bothered about asserting its copyright against such portals, a plain reading of the provisions discussed above indicates that it can theoretically assert its copyright if it wanted to.

Government Edicts doctrine

Arul, in his recent post discussing the SCOTUS decision in Georgia et al v. Public.resource.org, had suggested a way around this conundrum. In Georgia et al, the SCOTUS had relied on the ‘Government Edicts’ doctrine to hold that even annotated versions of legislations produced under the authority of the government are not copyrightable. The ‘Government Edicts’ doctrine posits that any work which is carried out under the ostensible authority of the government is exempt from copyright protection. The doctrine is grounded on the premise that laws are produced by judges/legislators in their official capacity and lacks personalization (an identifiable author) required for claiming copyright. Moreover, given that a law can only be expressed in a limited number of ways, it runs into the problem of idea-expression merger.

Drawing inspiration from the decision in Georgia et al, Arul had suggested that statutes in India too may be exempt from copyright protection. I am unsure if the US doctrine can be easily transplanted to India. One major reason is the difference in the language used in the respective statutes. 17 US Code §105 specifically lays down that ‘Copyright protection under this title is not available for any work of the United States Government..’ Unlike the US Code, the Indian Copyright Act, 1957 specifically acknowledges government’s copyright in its works. Thus, although the ‘Government Edicts’ doctrine seems to be a theoretically cogent argument, judges may inevitably run into textual roadblocks.

As Arul recognizes in his piece, the ideal solution to this would be an amendment to Section 52(1)(q), freely allowing reproduction of legislations without the added burden of including any original commentary. Nevertheless, till such time the amendment takes place, can the judiciary read the law in a way so as to allow free reproduction?

One way out of this is a purposive reading suggested by Prashant Iyengar in his comment to an earlier piece by Arul. As per him, Section 52(1)(q)(ii) only requires “faithful reproduction of statutes along with any commentary and other original matter that came embedded with the original statute” and not addition of any new commentary or original matter. This interpretation, he observes, is in line with the legislative intent of enabling public dissemination of legislations without corrupting the original. Unless the Court is ready to completely read down provisions relating to government copyright, Prashant’s interpretation gives it sufficient leeway to accord the provision a liberal interpretation and enable access till such time the legislature amends the provision.

Conclusion

It is deplorable that the requirement of original material in S.52(1)(q)(ii) has remained in the Copyright Act for this long. It impedes the fundamental right to know and serves no particular benefit to the copyright holder – government – as well. While the very idea of government owning copyright in its works is antithetical to the free flow of critical information in a society, the least it can do is to ensure that its works are allowed to be freely reproduced for non-commercial purposes.

Unless the Court decides to make the Arpit Bhargava appeal India’s own Georgia et al moment, we may have to wait for another round of litigation to ‘liberate (our) laws from the clutches of copyright law’.

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We’re happy to bring you a guest post by our Fellowship applicant, Vedangini Bisht, arguing for expansion of the copyright exhaustion doctrine to the digital medium in India. Vedangini is a 3rd year law student at National Law University, Delhi. Her first submission for the Fellowship can be viewed here.

Digital Copyright Exhaustion in India: A Need For an Expansive Application

Vedangini Bisht 

According to the doctrine of copyright exhaustion, when the owner of a copyrighted work gives consent for that work to be put up on the market and it is lawfully sold, the copyright owner’s right with respect to control of the distribution of that copy is exhausted. In India, this doctrine has been recognized under section 14(a)(ii) of the Copyright Act, 1957 (‘Act’).

Digital exhaustion of a copyright means application of the doctrine of exhaustion to digital copies of a work. It is not something which has been explicitly dealt with under the Indian law, except for removing computer programmes from its ambit. This article makes a case for recognition of digital exhaustion of copyright, including computer programmes. It shall also acknowledge the difficulties which shall have to be addressed before the doctrine can be broadened. It is especially important in the time of this pandemic, with people stuck at home and digital consumption at an all-time high.

A Case for its Expansion

First, recognition should be accorded to this doctrine in the digital sphere because its rationale does not undergo change with a change in the medium of expression. Regard needs to be given to the digital age we live in. Mere lack of tangibility can no longer be a plausible justification for non-application of this doctrine. The rapid unfurling of digitisation also results in changes in consumer demands. The possibility of instant access to the internet ensures that the customers do not keep a stock of tangible goods, and access them in a digital form. An absence of its recognition would overthrow the decades of precedents which have supported economic and public benefits of secondary markets.

Second, this would enable affordability. Infinite copies of a digital file can be created without any loss of quality. Further, there are no economic costs attached with sale. There is no requirement of a tangible carrier. What is ultimately sold is a de facto right to use. Affordability is also achieved when there is more intense price competition between the two markets, leading to a more satisfactory consumer experience and an improvement in innovation. It also puts downward pressure on new copies. While this is not particular to digital goods, it still gives the customer additional opportunities to sell products at a below-retail ate. This should be allowed once the author has received an adequate remuneration for the full value of the product with the first sale, known as the ‘remuneration or reward doctrine’. No further control over the distribution should be granted.

Third, it ensures a free movement of goods, which is more effective through digital transfers. It increases access to valuable work and creates an avenue where if a work is withdrawn by the right holder, due to it being out of print or is withheld due to some marketing strategy, the work would continue to remain in circulation. This free flow of goods increases the supply of cultural assets in society and it ensures that movement of goods remains unrestricted. Exhaustion ensures that it is not inhibited by the requirement of users to seek permission each and every time there is a reselling of digital goods.

Fourth, if exhaustion is not extended to digitally transmitted goods, it shall constitute discrimination against the buyers of such goods, compared to the buyers of tangible products. They shall have fewer valuable goods since they cannot resell it or would have to secure licenses for them every time.

Problems to Address

First, the sale of a digital copy not only entails the transfer of an asset, but also making of another copy, extending this principle to reproduction rights. However, exhaustion is a limitation on the copyright owner’s right to distribution, not reproduction. In the case of UsedSoft GBMH v. Oracle International, the CJEU held that reproduction rights shall not be infringed during resale if the original acquirer makes his copy unusable. US has a more conservative approach. In the case of In Capitol Records LLC v. ReDigi Inc, the Court held that a resale of preowned music leads to an infringement of copyright because it requires reproduction of ‘unauthorised’ copies, even when the original copy is destroyed.

However, the law needs to mindful of the end users of the technology. From their perspective, what matters is who has access to the work, not the mechanism of transfer of copies. Courts need to allow reproduction in order to facilitate the transfer of a copy. If Indian law does not want to scupper free movement, it is unlikely that the courts will let reproduction rights undo the exhaustion of distribution rights, just because the technical process requires a copy. Reproduction in this context is mere ancillary. CJEU has already followed this approach in the context of trademarks.

Second, most of the digital copies are not sold in the conventional sense. It falls closer to licensing – a permission to have access to a certain content online for some time instead of getting a copy. End User License Agreements (EULA) are quickly replacing the doctrine.

Unfortunately, the Indian courts tilt towards an exclusive licensee of the copyright holders, as is evident in their decisions regarding copyright exhaustion in tangible goods. This should not be encouraged as it implies that consumers do not own the goods they buy. They are left with empty pockets, empty hands. The courts ought to follow the approach of UsedSoft where they held that the sale of an existing software license shall not be a copyright infringement if the license is perpetual; it is sold as a whole; and the original purchaser disables the copy on resale, regardless of whether it was purchased pursuant to a license agreement. If the case demands, the courts should hold that the restrictive licensing schemes are in contravention of the basic purpose of copyright by being conscionable adhesion contracts or against antitrust laws.

Third, an extension of this doctrine is considered separately for computer programmes and other digital work. In the judgement of Tom Kabinet, the CJEU ruled that sale of e-books qualify as a ‘communication to the public’, as distribution applies only to physical goods. They acknowledged that exhaustion applied to computer programs because they are subject to the Software Directive, which assimilates both tangible and intangible copies of computer programs for the purposes of protection, and while copyright on e-books is meant to protect creative work, computer programs are tool for a creative work. This probably could be the reason why the Indian statute elected for the exception of computer programmes separately and not a generalised exception of digital work.

India does not have a separate Software Directive, hence such a distinction is not a requirement. Further, computer programmes are in themselves creative works, for instance, video games. When viewed from the point of legal certainty of the doctrine of exhaustion, there is no difference between terming one as ‘communication’ and the other as ‘distribution’.

Other issues which will have to be considered are: the fact that one copy can be employed many times can reduce innovation by obviating incentives; the privacy of the consumers with respect to what they read, listen to, play, can be compromised because of the possible large-scale monitoring; it needs to be made clear whether the right holders are required to positively enable the resale, or they can employ a technical protective measure, such as cloud lock-in, to prevent resale.

Digital exhaustion has not been given a precise definition by the Indian legislature or courts so far. Such a clarification is a requisite due to the rapid proliferation of today’s secondary copyright marketplace. There needs to be a more thorough development of jurisprudence on the subject and an openness to amending the statute as per the digital evolution of the market.

The applications for the next edition of the Fellowship close on June 30. If you’re interested in applying, please visit our Fellowship page for the details.

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The Ministry of Science and Technology recently announced the initiation of the consultation process for the new Science, Technology and Innovation Policy 2020. Notably, the consultation process which started recently, seems to be very inclusive as it is described (more on that below). For those interested, there is a virtual town hall meeting, as the launch event for public consultations, happening later today, from 6:30 pm to 8:00 pm IST – more details here.

Reproducing the PIB notification:

“The Office of the Principal Scientific Adviser to the Government of India (Office of PSA) and the Department of Science and Technology (DST) have jointly initiated a decentralized, bottom-up, and inclusive process for the formulation of a new national Science Technology and Innovation Policy (STIP 2020).

The fifth S&T policy of India is being formulated at a crucial juncture when India and the world are tackling the COVID-19 pandemic. This is only the latest among the many important changes in the past decade that have necessitated formulation of a new outlook and strategy for Science, Technology, and Innovation (STI). As the crisis changes the world, the new policy with its decentralized manner of formation will reorient STI in terms of priorities, sectoral focus, the way research is done, and technologies are developed and deployed for larger socio-economic welfare.

The STIP 2020 formulation process is organised into 4 highly interlinked tracks: Track I involves an extensive public and expert consultation process through Science Policy Forum – a dedicated platform for soliciting inputs from larger public and expert pool during and after the policy drafting process. Track II comprises experts-driven thematic consultations to feed evidence-informed recommendations into the policy drafting process. Twenty-one (21) focused thematic groups have been constituted for this purpose. Track III involves consultations with Ministries and States, while Track IV constitutes apex level multi-stakeholder consultation. For Track III nodal officers are being nominated in States and in Ministries, Departments and Agencies of Government of India for extensive intra-state and intra-department consultation and for Track IV consultation with institutional leadership, industry bodies, global partners and inter-ministerial and inter-state consultations represented at the highest levels are being carried out.

The consultation processes on different tracks have already started and are running in parallel. The Track-II thematic group (TG) consultation started with a series of information sessions last week. During the information sessions, Dr Akhilesh Gupta, Head of Policy Coordination and Programme Monitoring Division of DST, made the presentations and steered the discussions. The sessions were attended by around 130 members of the 21 thematic groups along with 25 Policy Research Fellows and scientists of DST and Office of PSA.

“The STI Policy for the new India will also integrate the lessons of COVID-19 including building of an Atmanirbhar Bharat (self- reliance) through ST&I by leveraging our strengths in R&D, Design, S&T workforce and institutions, huge markets, demographic dividend, diversity and data,” said Prof Ashutosh Sharma, Secretary, DST

The six-month process involves broad-based consultations with all stakeholders within and beyond the scientific ecosystem of the country –including academia, industry, government, global partners, young scientists and technologists, civic bodies, and general public.

A Secretariat with in-house policy knowledge and data support unit, built with a cadre of DST-STI Policy fellows, has been set up at DST (Technology Bhavan) to coordinate the complete process and interplays between the four tracks.“

The Consultation Process

As is evident, the consultation process seems to ground-up, with public input being collected prior to a first draft of the policy. It is also interesting that an “open independent collaborative platform”, as the Science Policy Forum describes itself, is being used to facilitate this process. As per the website, its founders include DST-Centre for Policy Research, Indian Institute of Science (DST-CPR-IISc), Sustainable Water Futures Programme, and IndiaBioScience. The website provides a brief overview of previous STI Policies (see here), an explanation of the Science Policy Ecosystem in India (see here), as well as a discussion forum (see here). These seem to be very useful entry points for those who may want to contribute and are looking for more information and context. However, the question does arise as to whether this effectively acts as a non-governmental body acting as a host for the  consultation process? And if so, would that be a potentially problematic precedent? Or perhaps this is acting only as a venue, and the actual consultations etc will also be reflected on a government website as well? Those with more knowledge and insight could perhaps comment on this.

Coming back to the policy: Dr K Vijay Raghavan, Principal Scientific Advisor to the Prime Minister, has noted in an interview (here), that “Fundamental research is the core of science. We need that balance on applied and basic research in different fields. This would be at the core of the policy,” He also notes that the importance of action on climate change, environment and sustainable development.

In an interview (here) with Chagun Basha, who is listed on the Founding and Management team page of the Science Policy Forum, he talks a bit more about STIP 2020. He mentions that around 4500 consultation inputs were received in the previous policy (STIP 2013) and the aim this time is to get substantially more consultative inputs. He also mentions the indicative list of the 21 themes:

1.Research 2.Education 3.Innovation 4.Financing STI 5.Entrepreneurship

6.Data and regulatory framework 7.Capacity Building 8.Access to knowledge and resources 9.Equity and Inclusion 10.System Interconnectedness

11.Mega Sciences (Blue sky) 12.International S&T Engagement and STI Diplomacy 13.Policy and Program Linkage 14.STI Governance 15.STI Policy Governance

16.Strategic Technologies 17.Disruptive and Futuristic Technologies 18.Sustainable Technologies 19.Health 20.Agriculture, Water and Food Security

21.Energy, Environment and Climate Change.

Comments

To see where we can go, we should see where we’ve come so far. And a quick look at the 2013 STIP shows some significant issues.

As Mathews had noted in his post analysing the 2013 STIP, “The Policy intends to position India among the top five global scientific powers by 2020, facilitate S&T-based high-risk innovations through new mechanisms; facilitate partnerships among stake holders for scaling successes of R&D; and trigger changes in the mindset and value systems to recognize, respect and reward performances which create wealth from S&T derived knowledge. It engrains the principle of social inclusion and private participation for achieving its objectives. It also sets out the need for nurturing a conducive STI ecosystem”. Some of the other STIP 2013 goals for 2020 were: ‘increase global share of publications from 3.5% to 7% by 2020’; ‘four fold increase in publishing in top 1% of journals’; and ‘increase FTE personnel by two-thirds 1.54 to 2.50 lacs’.

In addition to the 2013 STIP, there were also various connected policy documents with overlapping mandates, such as the National IPR Policy 2016, MSME Policy Statement, Startup India Action Plan 2016, National Innovation and Startup Policy 2019, Technology Vision 2035 etc.

Without going into each issue individually, or the various reasons behind it – it is evident that India has not done nearly as much as it set out to do over the last 7 years. It is important that the 2020 STIP does not become yet another policy document to look back and lament on, when the next STIP comes about. A workable and accountable action plan would be crucial to this. While a bottom up, inclusive and wide consultation process is a good sign, it is only but a start – one that hopefully is indicative of things to come.

A reminder again – of the launch of the consultative process through the virtual town hall meeting this evening – details here.

Thanks to Vedangini Bisht for her input on this post!

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The Government released a public notice for the Patent Agent Examination 2020 sometime in February this year. Around the same time, we received information regarding a grievance to the Prime Minister’s Office on the Patent Agent Exam being conducted only in English and not in Hindi, even though patent applications are allowed to be filed both in English and Hindi. The other issues highlighted in another set of grievances relate to a few discrepancies concerning e-filing of patents in Hindi, non-publication of patent documents in Hindi and non-availability of updated and consolidated versions of the major IP Acts and Rules, Manuals, etc. in Hindi, which creates a gap between the rules on paper and the actual practice. This post looks into how these issues affect access to the patent system and its benefits and also its impact on innovation, particularly at the grassroots level.

Non- Conduct of Patent Agent Exam in Hindi

A patent agent is a person certified by the law to handle patent applications. For the same, the DPIIT is supposed to conduct the Patent Agent Examination (PAE) every year and any person who holds a degree in science, engineering or technology or any equivalent degree (Section 126), can apply for the same. As per Section 127 of the Patents Act, an agent can practice before the Controller of Patents, prepare patent documents, transact businesses concerning patents, and discharge any such other functions.

As per Rule 9 and Rule 19 of the Patents Rules, patent applications, and other related documents can be filed either in English or Hindi. However, PAE is conducted by the Government only in English. In response to a grievance raised on this issue, the Government stated that “As per the Patent Rules, patent applications can be filed in Hindi or English. However, to be a patent agent, the work of a patent agent in English is also important. Hence, the exam is conducted in English. So that any Indian patent agent can apply for patents and do work related to it in English also other than in Hindi.” (translated from Hindi). This rather vague reply by the Government reveals a two-fold assumption. First, that the work of a patent agent cannot be done in Hindi alone and knowledge of English is necessary even though patent applications and other related documents can be filed even in Hindi. Second, that everyone taking the exam in English knows Hindi by default and can carry out the work in Hindi as well. Since patent applications can be filed in Hindi too, the documentation process and business transactions conducted by a patent agent can be done in Hindi and all other related work that happens in the Patent Office may be undertaken in Hindi (a requirement for mandatory filing of an English translation in the Rules is with respect to only international applications under the Patent Cooperation Treaty (PCT)). So apart from the fact that PAE does not take into account the need for proficiency in Hindi despite the Rules allowing the use of the same, it also actively creates an unnecessary barrier against patent filing, etc. by those who have proficiency in Hindi and have the qualifications to be a patent agent but are not proficient in English.

E-Facility for Patent Filing in Hindi

The second issue concerns the online filing facility for patent applications in Hindi. From a public grievance brought to our attention, it appears that the e-filing facility is not fully compatible with the use of Hindi for filing patent applications and the software often does not recognize the script being used. For instance, as pointed out in the grievance raised, a complete specification of a patent that was submitted online in Hindi earlier this year did not appear in the patent applications as published in the Patent Journal – thereby indicating that the online portal does not accept submission of specification in Hindi. This compatibility issue throws a spanner in the works as it would not only inconvenience the applicant/agent by requiring them to submit the details to the Office separately and pay fees for the publication of the application again but also render the patent search incomplete as the details for patents filed in Hindi may not come up in the search results. It may thus also deter filing of patents in Hindi, as e-filing is significantly more convenient and also a little cheaper than physical filing of patent applications.

Non-publication of Invention Details in Hindi

The public grievance, filed in 2017, relates to the publication of patent applications and related documents in English only. The Patent Office publishes a weekly journal in accordance with Section 145 of the Patents Act that covers information in respect of the various proceedings on patents including the details of patent applications and patents granted. The journal is published only in English and is unavailable in Hindi. As per the grievance, the patent monopoly is granted in exchange of full disclosure of an invention, but since the details of the invention are published only in English, they are inaccessible to a significant part of the population and thus full benefit of the disclosure is not realized. Accordingly, there was a request for amendment of Patent Rules to mandate publication of patent documents in Hindi also. In reply to the grievance, the Government stated that it would take the issue into consideration but there still seems to be no progress on the matter.

Non-availability of Patent Manual, Consolidated Acts, and Rules, etc. in Hindi

Images are screenshots from the IP India website and can be accessed here

A look at the Patent Office website would show that many important (legislative and government) patent documents are also not published in Hindi. The Patent Manual and related documents and the consolidated and up-to-date version of the Patents Act and Rules are not available in Hindi (see here, here and here). Same is the case with other IP statutes (see here and here). This non-availability is despite the fact that Section 5 of the Official Languages Act, 1963 requires the publication of Hindi translations of all Central Acts, rules, regulations, etc. Also, while the English version of the Act and Rules is available both in searchable PDF as well as HTML format, the Hindi version of the Act and Rules available on the website (or on any other government website) are scanned copies for which the search function (which considering the length of these Acts, saves a lot of time) does not work.  

Non-availability of Data on Patents Filed in Hindi

Along with the grievances discussed above, the RTI seeking data on patents filed in Hindi has also been brought to our attention. The application, filed with the DPIIT in 2018, sought information on the number of patent applications that were filed in Hindi and the number of applications that were published in Hindi from 2005 to 2017, the application numbers of those applications and the journals in which they were published. The application also requested information on the number of trademarks in the Devanagari script registered till 2017. The Government, as we’re told, disposed of the RTI stating that the information sought is not readily available.

Role of Language Barriers in Low Patent Filing?

An interesting point to think about given these issues is whether the language barrier may possibly be one of the reasons for the low patent filing in India when Asia is responsible for almost 66.8% of patent applications filed worldwide (for patent statistics see here and for India’s patent statistics see here and here). Whether these numbers are truly indicative of innovation may be an open question but it is quite necessary to consider if there is a case for expanding functioning patent filing facilities to beyond English.

Other comparable jurisdictions where English often takes the place of a second language like China, Taiwan, Japan, and Korea while allowing for patent applications to be filed in English, make it mandatory to provide a translation in Chinese, Japanese and Korean respectively. While it is not possible to conclusively say that language has a direct impact on the number of patent applications filed, allowing patent applications to be filed in other prominently used languages apart from English and having adequate facilities for the same certainly does increase accessibility. This holds good especially for India where language acts as one of the many diversifying factors in the country. While the Patents Rules does recognize this and allow for the use of Hindi, presumably because of its official language status and because it is the most spoken language, the lack of adequate facilities to actualize the same does act as a potential hurdle in increasing patent filing which is one of the objectives under the National IPR Policy.

The IPR Policy pushes for outreach and promotion of IPR as its first objective and also recognizes the need to use IP promotion material in multiple languages (objective 1.2.8), yet there doesn’t seem to be much thought concerning the need to address the gap between the language used for innovation and those available for (English and Hindi in India’s case) translating the same into a form that would accrue them patent protection. Expanding the languages available for patent filing would also really help to tap into the potential of grassroots level innovation which can further a culture of learning and innovation that is recognized by formal legal mechanisms such as patents.

While it is easy to make an argument for expanding the languages available for patent filing beyond English and Hindi, the stark reality of the resources available to do the same asks us to reconsider the possibility of this working. While it would perhaps be optimal to allow for the PAE to be taken in languages other than English like the other national level exams such as the Civil Services Exam, Banking Exams, etc., this cannot be done without addressing the Exam’s current shortcomings such as the lack of regularity in conducting it. Further, the translation of technical knowledge from non-English languages to English would require expertise that may not be readily available. However, this shortcoming also provides the appropriate opportunity to increase the capacity of the Patent Office. Removing the language barrier would increase the pool of people who can be trained to become patent agents and would also increase opportunities for employment generation (hiring translators, scribes, etc., apart from patent agents), particularly during a time the country is facing increasing rates of unemployment.

Telegram, a widely used instant messaging platform, is in a copyright soup before the Delhi High Court, concerning the circulation of ‘e-papers’ or digital versions of newspapers, through open Telegram Channels, a group messaging feature available on the app.

In an order dated May 29, 2020, Justice Mukta Gupta issued an ad-interim injunction directing Telegram to provide information about the subscribers or ‘owners’ of certain Telegram Channels allegedly circulating online versions of Dainik Jagran, a Hindi daily. Further, Telegram was directed to take down the impleaded Telegram Channels. The order raises interesting questions about copyright over freely available newspapers, as well as on intermediary liability concerning copyright infringement. The issue of copyright liability of the circulation of e-papers has previously been covered in this great post by Balu last month.

Case Background

Dainik Jagran brought a suit against Telegram and unnamed defendants operating certain Telegram channels, which allegedly circulate versions of the plaintiff’s newspaper through PDF. The version circulating is downloaded from the plaintiff’s web-portal, where registered users can view the e-paper free of cost. According to the plaint, the plaintiff’s have also included a technological protection measure which restricts the download of the e-paper.

While Telegram was served notices on the alleged infringement occurring through its channels, it did not respond, and consequently, the plaintiff brought a suit for copyright and trademark infringement against Telegram as an intermediary, and against the users, owners and operators of the various ‘channels’ on which the alleged infringement was taking place.

The Court found prima facie infringement of Dainik Jagran’s copyright, and subsequently granted the ad-interim injunctions prayed for, directing Telegram to furnish information about the administrators and members of the channels, and directing Telegram to take down the infringing channels.

Are Administrators of Online Groups and Channels Liable for Unlawful Content?

As noted in our previous post on e-papers, it is possible (or even likely) that circulating PDF’s of a restricted-access online newspapers constitutes copyright infringement. The question then, is to whom is the liability accorded?

According to the Delhi High Court’s decision in Myspace v Super Cassettes, intermediaries (which include online messaging platforms like Telegram) can claim the status of intermediaries and can claim the ‘safe harbour’ from liability for copyright infringement, available under Section 79 of the Information Technology Act. According to Section 79 and the rules made thereunder, the intermediary can claim such safe harbour from liability provided it does not have ‘actual knowledge’ of the illegal (here, infringing) content, and does not expeditiously take down such content upon receiving such knowledge. As per Myspace, the condition of actual knowledge is satisfied when the specific location where the infringement has occurred is communicated to the intermediary.

In the present case, the plaintiff did provide email notice to Telegram of the allegedly infringing locations (i.e. the specific channels). However, Telegram did not take any action against these channels, compelling Dainik Jagran to bring the suit. While the determination of Telegram’s liability under copyright or trademark law would be a distinct matter, the failure to respond to the Plaintiff’s notice likely means that it can not claim safe harbour under Section 79.

The more unsettled question is the liability for unlawful content on closed forums or online groups. This is a question that’s being hotly debated under Indian law – with the Supreme Court adjudicating a matter concerning WhatsApp’s responsibility for unlawful content, and the Government of India pushing to include ‘traceability’ for unlawful content on messaging platforms, through amendments the Intermediary Liability Guidelines. Similarly, there are numerous examples of orders under Section 144 of the CrPC being issued to hold administrators of WhatsApp groups liable for ‘fake news’ and unlawful content distributed on the group. The question of liability of an intermediary for online content becomes significantly muddier if the intermediary itself has no knowledge or means of examining the content in question, as is the case with certain encrypted messaging services.

There is little legal precedent to indicate that administrators of online groups can automatically be held liable for content on those groups, whether for copyright infringement or otherwise. The Delhi High Court, in its 2016 order in Ashish Bhalla vs Suresh Choudhary and Ors. stated that “To make an Administrator of an online platform liable for defamation would be like making the manufacturer of the newsprint on which defamatory statements are published liable for defamation. When an online platform is created, the creator thereof cannot expect any of the members thereof to indulge in defamation and defamatory statements made by any member of the group cannot make the Administrator liable therefor. It is not as if without the Administrator’s approval of each of the statements, the statements cannot be posted by any of the members of the Group on the said platform.” While this statement may not have precedential value, it offers the correct interpretation of the law. While administrators of groups may not be able to claim ‘intermediary’ safe harbour status under Section 79, (as they are not intermediaries under the definition in the IT Act), nor can there be an automatic assumption of liability for administrators or other members of a specific group.

In the case of criminal offences, there is a long history of jurisprudence around both group liability (such as conspiracy (S. S. 120B IPC) or acts done in furtherance of common intention (34 IPC)). Similarly, under copyright law, one would have to examine the facts of the case to see if the elements of secondary liability under the Copyright Act are met, namely, whether the administrators or members of the group have had knowledge of the infringement, or have contributed to the infringement by their acts of administration. Ultimately, the role of the administrator will have to be considered, to see if they have control over the infringing content shared on the channels or groups, to see if they generally exercise editorial control (such as removing posts or filtering messaged), or if they permit unlawful activity despite knowledge of the same.

[This post has been authored by our new intern, Vedanigini Bisht, a 3rd year student at National Law University, Delhi]

Topical Highlight

Government Copyright over Bare Acts: India’s Georgia et al Moment on the Horizon?

Balu discussed the case of  Arpit Bhargava v. Union of India and Anr. which has now come up before the Supreme Court. He notes that the appellants arguments regarding accessibility and copyright issue are misplaced. The Appellant’s prayer for accessibility is being addressed by the Delhi High Court in the case of Union of India v. Vansh Sharad Jain. The High Court directed the Union to make all legislations available online and is still monitoring Union’s compliance with its order.

“Enable Access” by cogdogblog is licensed under CC0 1.0

With regards to the copyright argument, Balu notes that we need a more lenient copyright regime vis a vis legislative texts, rather than a stricter one as argued by the appellant. In order to achieve a more lenient copyright regime, Balu examines if the ‘government edicts’ doctrine, as recently discussed in the Georgia at al, may be relied on. He observes that this may be difficult because of the difference in the language used in the US and Indian copyright laws. Instead, he suggests that an amendment to section 52(1)(q), or a purposive reading of the provision may enable the creation of a lenient copyright regime and through it, better access to laws.

Thematic Highlight

Patents for Pharmaceutical Innovation – Basic Concerns

Swaraj analysed the broad level questions of the suitability of the patent system to play the role it’s been given as a pharmaceutical innovation mechanism. With many millions of people still dying from diseases that have existed for decades, some of the aspects to be considered are, first, as long as we rely on the patent system for deciding how drugs should be priced, the price point will always be aimed at profitability first and foremost. Second, several big pharma companies seem to have shifted focus towards acquiring marketable products rather than actual drug innovation. Third, it is clear that even the focus of research, will be on profitable markets rather than addressing health concerns, although it is changing a little now. Fourth, the patent system does not incentivise public health goods that have social value. Although, the patent system act as a decent proxy for a pharmaceutical innovation system, we need to work towards systems that will be at least slightly more health-need centric in their outlook.

Other Posts

SEPs and Confidentiality Clubs: No Compatibility With Each Other

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In a guest post, Rajiv wrote about why it is not in a defendant’s best interests to agree to a confidentiality club arrangement in a SEP litigation. He argues that patent litigation anywhere across the globe is the domain of the right holder, of one with deep pockets. The rights of the litigants are embraced within the public interest at issue and dependent upon it for the exceptional character of the rights contested, which become even more lopsided for a SEP litigation. This is because in SEP litigation is competition for the market. Asymmetric information skew in favour of the plaintiff in SEP matters. Putting claim charts as confidential information in the confidentiality club is an overreach. The defendant’s information that is supposedly protected in a confidentiality club by nature is public. Further, the strategy of reaching out to the end brand results is a great skew and distorts the entire market.

Digital Copyright Exhaustion in India – A Need For an Expansive Application

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I wrote a post on the need for expansion of the copyright exhaustion doctrine to the digital medium in India. The case is made by noting that first, regard needs to be given to the digital age we live in and customers do not keep a stock of tangible goods. Second, Affordability is achieved because of no requirement of a tangible carrier and more intense price competition. Third, it ensures a free movement of goods. Fourth, if exhaustion is not extended to digitally transmitted goods, it shall constitute discrimination against the buyers of such goods. Problems which need to be addresses before the doctrine is expanded are then noted, that the sale of a digital copy extends this principle to reproduction rights; it falls closer to licensing; and an extension of this doctrine is considered separately for computer programmes and other digital work.

Consultation Process for New Science, Technology and Innovation Policy 2020 Begins – How to Contribute?

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Swaraj wrote a short post on the STIP 2020 consultation process. The consultation process is a ground-up, with public input being collected prior to a first draft of the policy. The question arises as to whether this effectively acts as a non-governmental body acting as a host for the consultation process and if yes, would that be a potentially problematic precedent. The focus appears to be on applied and basic research and climate change, environment and sustainable development shall be taken into account. The aim is to top the 4500 consultation inputs were received in the previous policy (STIP 2013), which is facilitated by 21 thematic groups. A quick look is taken on the comments of the 2013 policy, which notes that the goals have not been achieved. A workable and accountable action plan would be crucial to ensure that 2020 STIP does not become yet another policy document to look back and lament on.

Why is the Patent Agent Exam Held in Only English?: Addressing the Language Barrier to a More Accessible Patent Regime

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Namratha wrote about the non- conduction of the patent exam in any other language than English and how these issues affect access to the patent system and its benefits and also its impact on innovation, particularly at the grassroots level. First, as per the Patents Rules, patent applications, and other related documents can be filed either in English or Hindi. But the government has assumed that the work of a patent agent cannot be done in Hindi alone and that everyone taking the exam in English knows Hindi by default. Second, e-filing facility is not fully compatible with the use of Hindi. Third, the weekly journal of the patent office is published only in English. Fourth, many important patent documents are also not published in Hindi. All of this could be the reason of the low patent filing in India. Expanding the languages available for patent filing would push for outreach and promotion of IPR and help to tap into the potential of grassroots level innovation.

1st Shamnad Basheer Essay Competition on Intellectual Property Law [Submit by June 30]

We reminded you that the deadline for submissions for the first edition of the Shamnad Basheer Essay Competition on Intellectual Property Law is June 30, 2020 (23:59 IST). The competition is open to students currently enrolled in any LL.B. program across the world. The topic of the essay can be anything related to intellectual property rights– the more creative the better. The participants are encouraged to take inspiration from Prof. Basheer’s work and demonstrate the values that he stood for. There are cash prizes for the top three entries which will be selected by a panel of judges comprising three IP law experts, namely, Justice (Retd.) Prabha Sridevan, Ms. Jayashree Watal and Dr. Siva Thambisetty.

LexisNexis IP’s Live Webinar on How to Conduct a Prior Art Search Using ‘TotalPatent One’ [June 18]

We informed you about the LexisNexis IP live webinar on how to conduct a prior art search using their patent search software ‘TotalPatent One’. The webinar will be held on June 18, 2020 (Thursday) from 3.00 to 3.45 pm IST. The webinar will be led by Tharaniiswari Gunasekaran and shall teach, among other things, how to conduct a Prior Art search, identify and organize relevant Prior Art documents, deal with Non-English Information, use custom export options to create more efficient reports, create an automatic alert with customisable email notification.

Other Developments

Decisions from Indian Courts

Delhi HC temporarily restrains a pharma company from infringing Merck Sharp’s patent on anti-diabetes drug Sitagliptin [June 9, 2020]

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In Merck Sharp & Dohme Corp. & Anr v. Angels Pharma India Pvt. Ltd., the Delhi High Court has restrained a pharmaceutical company, Angels Pharma, from manufacturing, using, selling, distributing, advertising, exporting, offering for sale etc. of the anti-diabetes drug SITAGLIPTIN. The Plaintiffs, Merck Sharp & Dohme Corp. & Anr. had filed the case against the infringement of its patent covering the drug. The Court held that if the Plaintiffs are not protected, it would affect their interest, as well as that of the public, since the Plaintiffs are dealing in drugs, which are commonly used by the patients suffering from diabetes.

Delhi HC temporarily restrains a textile company from selling face marks having the registered trademark of Tommy Hilfiger [June 9, 2020]

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In Tommy Hilfiger Europe B.V v. M/S Taqua Textiles & Ors., the Plaintiff had sought a permanent injunction against the Defendants from infringing and passing off the Plaintiff’s trademark ‘TOMMY HILFIGER’ with its variations and the flag logo. The Court was of the view that Plaintiff has made out a prima facie case in its favour and in case no ad-interim injunction is granted the Plaintiff would suffer an irreparable loss. Balance of convenience also lies in favour of the Plaintiff. The Defendant No.1 was not only dealing in counterfeit face mask but also clothing bearing the trademarks of not only the Plaintiff but other reputed brands also.

Delhi HC temporarily restrains Jindal Rolling Mill in a family dispute from using the mark ‘JINDAL’ per se [June 10, 2020]

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In Shree Ganesh Rolling Mills (India) Ltd. v. Jindal Rolling Mill Ltd., the Delhi High Court upheld the rule of trade mark i.e. one mark, one source and one proprietor. The suit was instituted for permanent injunction restraining passing off of the enterprise of the Defendants as that of Plaintiffs’. The High Court emphasized that the genesis of trade mark law is to protect the consumers from being misled, and noted that the Defendant by dropping the suffix and prefix ‘Y.R’ and ‘Co’ to the word ‘JINDAL’, had obliterated whatever little difference was there between the Plaintiff’s mark and its earlier mark and it had been done with the intention of moving closer to the Plaintiff’s mark and deriving benefit therefrom.

IPAB temporarily stays Patent Office’s order revoking Pharmacyclics’ patent on Ibrutinib [June 12, 2020]

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In the case of Pharmacyclics, Llc v. Laurus Labs Pvt. Ltd. & Ors., the main appeal of which has already issued for 9.7.2020 for final hearing, the appellants argued that all other issues including novelty has been decided in favour of the Appellant except the issue of obviousness and sought an interim order for stay. The Board held that the appellant has made a strong prima facie case in its favour. The balance of convenience is also in favour of the appellant and if interim order is not passed, the appellant will suffer irreparable loss and injury.

Other News from around the Country

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• Delhi HC temporarily restrains an entity from manufacturing and selling fruit candies under the trademark ‘Pluss+’, finding a prima facie case of infringement of the plaintiff’s registered trademark ‘Pulse’.
• Delhi HC inaugurates its online e-filing system which will enable advocates and litigants-in-person to remotely file cases, caveat, applications, reply, rejoinder, documents etc. for all matters.
• Indian pharma company Zydus Cadila signs a non-exclusive licensing agreement with Gilead to manufacture and market its potential anti-Covid19 patented drug Remdesivir.
• IIT Delhi grants a non-exclusive open license to the Bangalore-based biotechnology firm Genie Laboratories for commercialisation of its patented anti-Covid19 test kit, but caps the price at INR 500 per kit.

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• Defence Institute of Advanced Technology in Pune plans to file for a patent for a nano-technology based disinfectant spray, called Ananya, developed by it to combat Covid-19.
• Story writer Rajeev Agarwal’s daughter accuses makers of film ‘Gulabo Sitabo’ of infringing copyright in her father’s story ’16 Mohandas Lane’ which had been submitted for a contest where film’s scriptwriter was a jury member; sends a legal notice as well as files a police complaint.
• National Institute of Pharmaceuticals Education and Research (NIPER) files for a design registration and patent for its 3D printed antimicrobial face-shields; signs an MoU with HAL for their large scale industrial-grade manufacturing and commercialization.
• Dr. Suryakantha Swain, a Professor of  SIMS Group of Educational Institutions, Andhra Pradesh bags a patent for a method to provide relief to patients of depression.

News from around the World

• Greece suggests that EU member states jointly buy patent rights for vaccines against COVID-19.
• UK Court of Appeal upholds a decision refusing to grant an injunction to restrain a firm of solicitors acting for a defendant in circumstances where they had previously obtained relevant confidential information belonging to the claimant.

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• CJEU confirms that copyright can subsist in functional shapes but only where the subject matter in question passes the test for originality and not in instances where the product’s shape is solely dictated by its technical function.
• Internet Archive announces that it will be closing the National Emergency Library two weeks early on because of the copyright lawsuit, filed by four book publishers.
• U.S. Court of Appeals for the Second Circuit affirms a decision of the U.S. District Court for the Southern District of New York denying the Welsh government’s motion to dismiss a claim of copyright infringement on the ground of sovereign immunity.
• USPTO announces that it will be extending the two-month time-period for restoring the right of priority to or benefit of a foreign or provisional application for any non-provisional application due to be filed on or after March 27, 2020.

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 pleased to bring to you a guest post by our fellowship applicant Nikhil Purohit, on the issue of permissibility of sub-licensing of copyright in India. A couple of months ago, Latha had discussed this issue on the blog, arguing that sub-licensing is not permitted under the Copyright Act. In this post, Nikhil provides a different interpretation of the statutory provisions and argues that the Indian law does permit sub-licensing of copyright.

Nikhil is a 4th year student at the National Law School of India University, Bangalore. He had written a guest post for us last month as well, which can be viewed here.

Is Sub-Licensing Contemplated under the Indian Copyright Act? : A Response

Nikhil Purohit

I recently came across an interesting post on the blog dealing with the question of whether sub-licensing is permissible under the Indian Copyright Act, 1957 (‘the Post’). The Post answered the question in the negative. This particularly intrigued me in light of a recent decision of a US District Court in Sinclair v. Ziff Davis (‘Sinclair’) where the defendant’s sub-licensing through Instagram of the plaintiff’s photograph that was uploaded on Instagram was deemed to be valid. The terms of use of Instagram are the same for Indian users and specify that the user grants a “non-exclusive, royalty-free, transferable, sub-licensable, worldwide license” over their content. Accordingly, in light of the Post, I wondered whether the terms of use are impermissible as per the Indian Copyright Act. In this post, I seek to provide an alternate interpretation arguing that sub-licensing of copyright is permissible.

Broad Language of the Act

The pertinent provision in respect of licensing of copyrights is Section 30 of the Act, which is reproduced below:

“30. Licenses by owners of copyright.-

The owner of the copyright in any existing work or the prospective owner of the copyright in any future work may grant any interest in the right by license in writing by him or by his duly authorised agent:

Provided that in the case of a license relating to copyright in any future work, the license shall take effect only when the work comes into existence.

Explanation. Where a person to whom a license relating to copyright in any future work is granted under this section dies before the work comes into existence, his legal representatives shall, in the absence of any provision to the contrary in the license, be entitled to the benefit of the license.” (emphasis supplied)

The above provision contemplates that the owner of the copyright may grant any interest to a licensee, provided that the same is done in writing by her, or her duly authorised agent. I believe that the broad wording of the provision also includes the interest of the copyright owner in sub-licensing her work.

An objection against this interpretation, as raised in the Post, was based on a reading of Section 30A and Section 19(1) of the Act, which are reproduced below:

“30A. Application of section 19

The provisions of section 19 shall, with any necessary adaptations and modifications, apply in relation to a license under section 30 as they apply in relation to assignment of copyright in a work.”

“19. Mode of assignment

(1) No assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor or by his duly authorised agent.”

In the Post, per my reading, it was argued in light of the above provisions, that since a licensee cannot be considered to be an “agent” of the licensor at law, neither the copyright owner nor her duly authorised agent can be said to have granted the concerned sub-license (in satisfaction of the above provisions), making the same impermissible under the Act.

There are two possible alternate interpretations of the three provisions stipulated above, as discussed below.

First Interpretation: A Differentiation between Primary and Secondary Licensing

In my view, an important distinction exists between a primary license, granted by the copyright owner to a license, and a further sub-license granted by the licensee to a third party.  While the former is an inherent right available to a copyright owner and is governed primarily by statutory provisions, the latter solely derives its mandate from the explicit stipulation between the copyright owner and the licensee. Support can be drawn towards this interpretation by reading Section 19(2) of the Act that specifies as follows:

“(2) The assignment of copyright in any work shall identify such work, and shall specify the rights assigned and the duration and territorial extent of such assignment.” (emphasis supplied)

Notably, this provision coupled with the broad language of Section 30 further indicates that the copyright owner is free to grant the right to sub-license her work to the licensor if it is explicitly specified in writing.

Interestingly, on an aside, in case of an exclusive license granted by the copyright owner with the right to sub-license, the Bombay High Court, in 2007 in Shringar Cinemas Ltd. v. Bharat Bala Productions Pvt. Ltd., has held that such right would even be in exclusion to the original owner itself, and unauthorized use by the copyright owner would amount to an infringement. Such an interpretation also holds true to both ends of the copyright spectrum, on one hand it allows greater flexibility in the hands of the copyright owner as to how to license rights to her work, and on the other it aligns with the welfare theory as it allows for wider availability of the concerned work.

Second Interpretation: A Possible Limited Agency Relationship?

The Post analysed in detail, the question of whether there exists an agency relationship between the copyright owner and the licensor by looking at the definition of an ‘agent’ and the interpretation of ‘agency’ and answered the same in the negative. The primary issue highlighted in the Post was as follows:

“Unlike an agent who represents his principal, a licensee cannot represent the licensor. Also, unlike an agency agreement, a license agreement does not alter the licensor’s legal position with respect to third parties through the actions of the licensee. Specifically, a license agreement does not bind a licensor by the acts of the licensee.”

Admittedly, in a scenario where the copyright owner does not grant the licensee the explicit right to sub-license her work, the above concerns hold perfectly valid (unless an isolated relationship of agency is effectuated between parties). The situation, however, might differ in a scenario where the copyright owner does provide such a right. In this context, it is pertinent to note the enquiry conducted by the Delhi High Court in Shakti Sugars Limited v. Union of India (‘Shakti Sugars’), as relied on in the Post, to arrive at a conclusion that an agency relationship did not exist. The Court arrived at this determination after conducting a fact specific inquiry depending on the rights and obligations of the parties concerned. Since the obligations in that case did not exhibit conditions such as those mentioned above, the Court concluded an absence of agency. This proposition of law is also supported by the Supreme Court ruling in Tirumala Venkateswara Timber and Bamboo Firm v. CTO, and in Snow White Industrial Corporation, Madras v. Collector of Central Excise, Madras as per which, “the terminology used by the parties is not decisive of the legal relationship” but the “true relationship” “has to be gathered from the nature of the contract, its terms and conditions”. Accordingly, determination of the existence of an agency relationship between parties in a given case has to be based on whether it satisfies the principles of agency as mentioned above, and further elaborated in the Post, even in cases where “the terminology” used by parties indicates otherwise.

As such, in a particular case of sub-licensing, the requirements of agency may possibly be satisfied. Some other features of a sub-licensing arrangement may support this as well:

• The grant of a right to sub-license implies that the licensee indeed has the authority to represent the copyright owner so far as the limited question of sub-licensing is concerned. In doing so, the licensee represents to the sub-licensee as having the right to grant the sub-license in light of the authority provided by the original copyright owner.

• Similarly, grant of a right to sub-license a work significantly alters the legal position of the copyright owner vis-à-vis third parties. This is because in case the licensee sub-licenses a right to a third party, permitted utilisation of the right would be considered to be valid, even though without such a sub-license it would have been deemed as an infringement of the original work. This is one of the considerations that weighed in against holding an agency relationship in Shakti Sugars as the court deemed that the notification of an entity as export agency of sugar by Union of India would not make it “liable to third parties dealing with” the export agency.

• Finally, given the grant of the right to sub-license to a licensee, the actions of the licensee would bind the copyright owner to the limited extent the question of validity of a sub-license is concerned, as otherwise she would stand in violation of her obligations as entered into the contract with the licensee. Similar principles of copyright law are observed in the US position as well wherein, as explained in Sinclair, a “copyright owner who permits a licensee to grant sublicenses cannot bring an infringement suit against a sublicensee, so long as both licensee and sublicensee act, respectively, within the terms of their license and sublicense”.

Thus, the factors implying an agency relationship may be satisfied by the grant of a right to sub-license. In such circumstances, even if agency licenses are not expressly stipulated in the agreement, it could qualify as an implied agency within the meaning of Section 187 of the Indian Contract Act, 1872.

Exclusive Licensees- An Exceptional Case?

The Post contemplated that exclusive licensees may be considered an alternate class that might be eligible to claim sub-licensing rights. This is considering the definition of an exclusive license under Section 2(j):

“(j) “exclusive license” means a license which confers on the licensee or on the licensee and persons authorised by him, to the exclusion of all other persons (including the owner of the copyright) any right comprised in the copyright in a work, and “exclusive licensee” shall be construed accordingly.”

The differential treatment suggested by the Post, to be granted to an exclusive license scenario seems to stem from the language, “the licensee or on the licensee and persons authorised by him”. However, this does not make it an exceptional scenario in light of the fact that a ‘definition’ provision cannot subvert the primary source of right. In the instant case, the primary source is Section 30 that deals with grant of licenses, with an exclusive license being a specific case under the same. If Section 30 did not provide a right to sub-license, such a right cannot be interpreted to be conferred upon an exclusive licensee merely based on a definition. Instead, I believe that the above definition lends support to my argument that Section 30 contemplates a right to sub-licensing as it contains the authority to confer rights on even persons authorised by the licensee.

Therefore, in my view, sub-licensing is permissible under the Indian Copyright Act and is probably why the practice has not been questioned in any court to my knowledge.

The applications for the next edition of the Fellowship close on June 30. If you’re interested in applying, please visit our Fellowship page for the details.

We’re pleased to bring to you a guest post by Abhilasha Nautiyal, analysing issues related to competition law scrutiny in patent licensing disputes in light of the Delhi High Court’s recent decision in Monsanto v. CCI . Abhilasha is an attorney at Ira Law, a firm that she co-founded with other colleagues. Prior to this, she was a partner at an IP law firm. Abhilasha graduated from the Army Institute of Law and then pursued a master’s in law from Harvard Law School. Her detailed bio can be found here.

Abhilasha has written a couple of guest post for us in the past as well, which can be viewed here and here.

Antitrust Scrutiny in Patent Licensing Disputes: An Alternative Approach to Delhi HC’s Decision in Monsanto v. CCI

Abhilasha Nautiyal

The issue of the Competition Commission of India’s (“CCI”) jurisdiction in a patent licensing dispute has been before the Delhi High Court since at least 2014. Justice Vibhu Bakhru has passed two judgments on this issue, Telefonaktiebolaget Ericsson v. CCI in 2016, (2016) 232 DLT (CN) 1 and Monsanto Holdings Pvt. Ltd. & Ors. v. CCI last month, judgment dated 20 May, 2020 in WP (C) 1776/2016 and WP (C) 3556/2017. Appeals against both decisions are pending before the Delhi High Court.

The scope of this piece is limited to an analysis of antitrust scrutiny in patent licensing disputes. It does not cover other intellectual property rights and conduct.

The questions assessed here are as follows:

• Whether both the Patents Act, 1970 and the Competition Act, 2002 regulate patent licensing terms that maybe anti-competitive?
• If so, is there a ‘sectoral regulator’ to decide patent licensing disputes and what is the impact of the Supreme Court’s 2018 decision in CCI v. Airtel on this?
• Need to avoid conflicting opinions from different bodies on the same legal and factual issues.

Whether both the Patents Act, 1970 and the Competition Act, 2002 regulate patent licensing terms that maybe anti-competitive?

Two parts of the Patents Act are relevant here – Chapter XVI on compulsory licensing and Section 140 on ‘avoidance of certain restrictive conditions’. These provisions were introduced in the Patents Act to, inter alia, check restrictive and anti-competitive practices of patentees emanating from licensing related issues. For instance, in Justice N. Rajagopala Ayyangar’s Report on the Revision of the Patents Law, 1959, it was recommended that a separate legislation may be considered for the area of ‘cartels and monopolistic combinations’ while a provision akin to Section 140 was recommended to deal with ‘using patent rights as a lever to obtain a more extended monopoly or one for a longer duration than what the law allows, by the insertion of conditions in sales, leases or licenses in relation to patented articles or processes’. The legislature balanced the rights granted with the limitations on such rights, including a check for anticompetitive conduct emanating from licensing of a granted right, within the Patents Act itself.

On the other hand, the Competition Act covers both concerted and unilateral conduct of market players in Sections 3 (anticompetitive agreements) and 4 (abuse of dominance). The provision of interest for this topic is Section 3(5) and proposed Section 4A.

Section 3(5) provides that nothing contained in Section 3 shall restrict the right of any person to:

1. restrain any infringement of, or
2. impose reasonable conditions, as may be necessary for protecting any of his rights which have been or may be conferred upon him under, inter alia, the Patents Act.

The proposed Section 4A, if enacted, will extend the exclusion granted under Section 3(5) to Section 4 as well.

Therefore, only ‘unreasonable’ conditions in a patent license are scrutinized under Section 3.

The determination of unreasonableness of a patent license term, in my view, would be covered by Chapter XVI and Section 140 of the Patents Act. The legislature balanced the interests of all concerned stakeholders (i.e. patentees, licensees/ users of patented technology, and the public) and included a mechanism and criteria to check anticompetitive conduct pertaining to patents in the Patents Act itself.

Only once such a determination is undertaken and the concerned license term is found to be ‘restrictive’ under Section 140 by a court, or ‘unreasonable’ under Chapter XVI by the Controller should the term be scrutinized as being ‘unreasonable’ under the Competition Act.

In fact, not all restrictive terms may be anti-competitive. In other words, a violation of the provisions of the Patents Act may not lead to a violation of the Competition Act but for a license term to violate Section 3(4) of the Competition Act it must first be considered restrictive / unreasonable under the Patents Act.

If so, is there a sectoral regulator for deciding patent licensing disputes and what is the impact of the Supreme Court’s decision in CCI v. Airtel?

The above analysis is similar to that in the CCI v. Airtel dispute wherein the Supreme Court held that only after a jurisdictional fact is determined by a sectoral regulator such as TRAI can the CCI step in.

It must be noted that the Controller of Patents, though not a ‘sectoral’ regulator, may be viewed at least as a regulator under Chapter XVI of the Patents Act. However, the Controller does not have the power to determine whether a license term violates Section 140. Hence, a civil court is likely to decide disputes concerning Section 140 of the Patents Act. This is also evident from Section 140(3) which specifically contemplates such a determination in a patent infringement lawsuit.

Strictly speaking, in the absence of a sectoral regulator for patents such as TRAI for telecom, the decision in CCI v. Airtel may not apply. Having said that, in my view, the principal of a two-step process, i.e. determination of a jurisdictional fact under the Patents Act followed by the CCI exercising its jurisdiction, would apply even in the context of a patent license dispute.

Need to avoid conflicting opinions from different bodies on the same legal and factual issues

It is important that if more than one decision maker is seized of a common issue, conflicting opinions on law and fact are avoided.

In patent licensing disputes, it is likely that multiple entities will decide common issues which may give rise to conflicting opinions. What the Delhi High Court has not done so far in its two decisions on patent licensing and antitrust inquiry is to set in place a mechanism to avoid such a conflict. If the two-step approach as stated above is followed, it will solve this problem as well.

Image from here

We’re pleased to bring to you a guest post by Sankalp Jain on copyright issues related to video games and user generated content. Sankalp is a third year student at NALSAR University of Law, Hyderabad.

In the post, he discusses the copyright framework of the video game ‘Dreams’, a collaborative platform for creating and sharing different kinds of user-generated content (UGC), and argues that current Indian copyright law is inadequate to respond to diverse UGC which take the form of fan-creations.

Video Games, User-Generated Content and Copyright

Sankalp Jain

As the Internet moved from Web 1.0 to Web 2.0, we entered an age of ‘platforms’ and user-generated content (‘UGC’) – which has grown far richer than ever imagined. One form of creative expression that has boomed over the years is video-games which are now a multi-billion dollar industry. In general, copyright ownership of a video-game vests in either the game-developers or publishers. As per this comparative analysis (see page 11), some jurisdictions classify video-games as computer software while others break it into its individual components of literary, audio-visual, artistic, etc., works. As argued here, the Indian position is that video-games consist of independently copyrightable components and should not be viewed as single works of authorship. Broadly, these components are: the game engine, underlying software, and the focus of this post – the artistic works (called ‘assets’ in game development parlance). Assets include the plot, textures, 3D and 2D models, sounds, etc. In most games, these assets are owned or licensed to the developers/publishers. Sometimes, users can also create assets (UGC) – popular forms are machinima: gameplay used to create animated content, and mods: custom modifications in game mechanics and design. But what if I told you that there are games which create games and rely exclusively on UGC?

Game Creation Systems (‘GCS’) are “authorial tools” – consumer-level game engines which allow the user to create and modify game mechanics, appearance, and add or create soundtracks. GCS can also function as online platforms where users interact, rate, play, and create games collaboratively. The more powerful GCS become, the more forms of media (UGC) can be incorporated into the games. In this post, I take a groundbreaking GCS, the Play-station 4 game Dreams, as an example and argue that Indian copyright law is ill-suited to a progressive UGC creation regime.

UGC in Dreams

Dreams is an accessible platform for collaboration and the creation of a pool of assets which can be freely shared among user-creators. Original artwork and music can be created, existing works can be reimagined, and users can create interactive works. As per S.4 of the End-User License Agreement [EULA], the copyright ownership of UGC is with the user-creator/s and is licensed to the publisher – Sony Interactive Entertainment. The EULA also provides for a blanket-license, subject to individual user’s in-game share and privacy settings, allowing other user-creators to use the UGC to create derivative works. This wide grant of rights aims to preempt infringement claims among user-creators for works created in Dreams. Thus, the EULA weaves a broad web of rights among different entities within the Dreams ecosystem.

To create a work in Dreams (called “DreamShaping”) the user-creator can either start from scratch or build-on (called “Remix”) someone else’s work. They can create their own assets or choose from assets created by other user-creators or the game-developers. Once a game, visual art, or music has been created, it can be published on the platform (called “Dreamiverse”). As individual components, the visual assets are computer-generated 2D/3D artistic works, in which copyright subsists as per Section 13 of the Indian Copyright Act, 1957 (‘Act’) read with Sections 2(c) and 2(d)(ⅵ). Similarly, copyright in the audio assets subsists as per Sections 13(a) and 13(c) read with Sections 2(d)(ⅵ), 2(p) and 2(xx) of the Act. Games, short films, and visual-novels would be classified as either ‘cinematograph’ or ‘artistic works’ under Section 13 of the Act, however, neither category truly captures the nature of these works. Finally, the user-creator who publishes the work to the Dreamiverse would be its owner under Section 17 of the Act and is credited in the game as such.

Exiting the Dreamiverse

As one might expect, things start to get fuzzy as we come to the edges of ‘originality’ and the Dreamiverse. Viewing the game as consisting of individual copyrightable components, questions regarding the ownership of UGC arise e.g., who has the rights to monetise the UGC when it is displayed outside the Dreamiverse on platforms like YouTube or on live-streams? Further, there arises a hodgepodge of competing claims of copyright ownership on the different assets of the UGC in cases of non-authorised third party use.

Fan Creations or Rip-Offs?

Apart from original creations, many works on Dreams feature already-owned IP like Super Mario, the Hogwarts castle, an Avatar: The Last Airbender game, emulations of other games like Fall-Out 4, etc. The EULA specifically states, “…you [the user-creator] represent and warrant that your [UGC] does not infringe on the intellectual property or other rights of any third party”. Dreams complies with ‘Notice and Take-Down’ requirements. However, the Technical Director of Dreams curiously stated, “Most of the time I see them as homages – as covers, rather than rip-offs.” Taking this idea forward, can such ‘fan-creations’ exist on the platform?

In India, as this post theorised, fan-fiction can sometimes be classified as a ‘derivative work’ and when unauthorised, could constitute infringement. However, due to the non-commercial nature of fan-fiction and possibility of negative publicity, copyright owners rarely exercise their rights against fans of their work/s. Due to the close nexus in terms of the creators and purposes of its creation, the framework of copyright law and ‘fan-fiction’ can be applied to analyse the legal position of ‘fan-creations’ in Dreams. Since ‘fan-creations’ are unauthorized derivative works, there is a presumption to their creation being acts of infringement unless they are saved by the exceptions in the Indian Copyright Act.

Fan-Creations and ‘Fair dealing’

Section 52 of the Act contains a long list of permitted acts (exceptions) along with a broad provision – Section 52 (1)(a) – which prescribes that ‘fair dealing’ with works for the purposes of: (i) private or personal use, including research; (ii) criticism or review, whether of that work or of any other work; (iii) the reporting of current events and current affairs, does not constitute copyright infringement. Therefore, for a fan-creation to not amount to infringement it must fall under any of the provisions of Section 52. While ‘Fair use’ provisions in U.S. Copyright law are akin to standards (as explained in the latter part of this post), Section 52 follows a more strait-jacketed approach. Only Section 52 (1)(a) would be applicable to fan-creations as the other exceptions do not contemplate such uses. Since the works are published to the Dreamiverse and are based on fictional works, the first and third provisions of Section 52(1)(a) would not apply. Therefore, for fan-creations in Dreams to be exempt they must be for the purposes of ‘criticism or review’. The difficulty in dealing with UGC using such exceptions lies in its myriad forms, many of which do not fall under ‘criticism or review’ and constitute prima facie infringement. Gauging by the sheer volume of UGC generation, it would be futile to police platforms for infringement, rather, building meaningful partnerships with the community should be the way forward.

Rebecca Tushnet argues in this paper on the transformative nature of UGC: that fan-fiction should fall under ‘fair use’ as it transforms the original work, is non-commercial and not an economic substitute for the original work. Anupam Chander and Madhavi Sunder advance a deeper argument here and locate a ‘fair use’ protection for fan-fiction through the lens of the ‘Cultural theory of copyright’.

Indian cases have used elements of the ‘fair use’ analysis while determining ‘fair dealing’. E.g., in The Chancellor Masters and Scholars of the University of Oxford v. Narendra Publishing House, Sikri, J., engaged in a lengthy comparative analysis of ‘fair use’ and ‘fair dealing’. The Delhi High Court upheld transplanting of the ‘transformative use’ doctrine (developed under ‘fair use’) to the ‘Fair dealing’ analysis. However, the fact scenario involved looking at the transformative nature of a work through the lens of ‘criticism or review’, thereby potentially limiting the precedent value of this case.

The ‘fair dealing’ approach in Section 52(1)(a), ironically, limits the understanding of ‘transformative use’ in an ever-expanding digital world. As Chander and Sunder note, reimagining popular characters, situating them in different environments, creating alternate interpretations of works by refashioning their narratives, etc., are all creative outputs that add to the culture shared by the fan-community and the masses at large. However, these outputs do not find a clear protected space in either ‘criticism’ or ‘review’.

Two routes could be taken to respond to UGC like fan-fiction. First, would be to follow the U.K, which expressly extended the ‘fair dealing’ protection to “parody and pastiche” (see page 8) in 2014. Arguments for amending UK-style ‘fair dealing’ provisions to include certain purposes/categories of works (which could take the form of UGC) like pastiche, parody, caricature, etc., have been made in Hong Kong and Australia. However, such provisions provide limited protection and would exclude certain types of fan-creations. The second route would be to follow the Canadian Copyright Act which was amended to include a provision which added ‘Non-commercial UGC’ as an exception in 2012. However, this would prohibit the possibility of commercialising the UGC where such work could be ‘transformative’ (‘Fair use’ in U.S. Copyright law may allow this; See Tushnet’s discussion of Campbell v. Acuff-Rose Music Inc., 1994 at page 663). Therefore, for Indian copyright law to foster the creation of UGC like fan-creations, a clear statutory provision would have to be crafted which takes into account the above factors.

Conclusion

Dreams could be a game-changer and could usher-in the “democratisation of game development”. The platform is geared towards maximising creativity and collaboration. However, as shown above, the edifice of this platform starts developing cracks as we move out of its internal licensing framework. The issues highlighted would have to be resolved as there are plans to give “users full commercial ownership of their creations, and allowing them to publish their games on other platforms” (a beta has been launched to test this).

Thanks to Namratha Murugeshan, Ashwin Murthy and Vishal Rakhecha for their invaluable help in shaping this post!

Image from here

[This post was co-authored with Praharsh Gour. Praharsh is a graduate from Hidayatullah National Law University, Raipur and has previously worked with an IP firm, practicing in New Delhi. He is presently an LL.M candidate at the Faculty of Legal Studies, South Asian University, New Delhi]

A recent IPAB order has resulted in a revoked patent over an anti-cancer drug Ibrutinib, being granted a curious new lease of life for the duration of on-going litigation before itself. This post will attempt to look more into this temporary revival and the surrounding circumstances. Prior to that, a quick look at the drug at the centre of this: 

The drug, Ibrutinib is sold under the brand name “Imbruvica”, and as per its website, is used to treat adults with Mantle cell lymphoma (MCL), Chronic lymphocytic leukemia (CLL)/Small lymphocytic lymphoma (SLL), Waldenström’s macroglobulinemia (WM), Marginal zone lymphoma (MZL), and Chronic graft versus host disease (cGVHD). Leukaemia, as many readers would know, is one of the more common kinds of cancer in the country. 

A generic version of Ibrutinib (“Ibrunat”) was launched (seemingly, at risk) in December 2019 at INR 38,000 per month, as opposed to the INR 4,00,000 course for Imbruvica. Post the revocation of the Ibrutinib patent in March, 2020, the generic version was in the clear. This order effectively results in the generic version becoming illegal once again, taking the purchasable option back to only the INR 4,00,000 Imbruvica, at least till the litigation at the IPAB is completed.

Meanwhile in the US, Natco has filed for an Abbreviated New Drug Application (ANDA) containing paragraph IV certification before the US FDA, in January 2019 for the generic version of the Ibrutinib tablets. With respect to this, Natco has also stated, “We further believe that our ANDA may be eligible for 180 days of marketing exclusivity at the time of potential launch of the product under certain circumstances”.  Given that under the US’ Hatch-Waxman Act, 180 days of marketing exclusivity are granted to the first generic company to successfully challenge (or bypass) an existing patent, this indicates Natco may very well be gearing up to challenge the validity of Ibrutinib in the US as well. 

Background: Facts

On 18/12/2019, Pharmacyclics (Petitioner) sued Natco and Laurus Labs (Respondents) before the Delhi High Court for allegedly infringing its patent Ibrutinib. The Respondents contended that Laurus Labs’ post-grant opposition proceedings (under Section 25 (2) of the Patents Act) were pending before the Controller. On 04/03/2020, the Controller passed an order (PDF) revoking the patent for Ibrutinib (Patent number 262968) on grounds of lack of inventive steps. (As the petitioners later point out, the Controller seems to have bypassed certain formalities – more on this later). Based on this order, the Respondents sought dismissal of the DHC plaint. The Petitioner said they would file an appeal before the IPAB “within the next two weeks”, and on that basis, asked for adjournment. The High Court passed a conditional order stating that the suit shall be dismissed with liberty to be revived or reinstituted if the IPAB doesn’t pass an interim stay order by the next date of hearing. 

The IPAB, which was taking up only urgent matters due to the outbreak of Covid-19, resumed its functioning, via video conferencing from 26/05/2020, and took this matter up on 12/06/2020. There, the IPAB passed the interim stay order against the Controller’s revocation of the patent, on apprehension of “irreparable damage to the Petitioner”, and set the final date of appeal on 09/07/2020. This also prevented the Petitioner’s suit from being dismissed at the Delhi High Court.

The IPAB decision was given by its chairperson (Retd.) Justice Manmohan Singh, and the board’s sole technical member Dr. Onkar Nath Singh. It is worth noting that Dr. Onkar Nath Singh is a technical member specializing in matters relating to Plant Varieties (PVPAT), and not Patents. Mylan Labs vs UoI noted ‘the doctrine of necessity’ required that in the absence of appropriate technical members at the IPAB, Dr Onkar Nath Singh, being the sole technical member could act as the technical member for ‘urgent’ Patents, Trademarks and Copyright matters, till the vacancies are filled. Prashant has written on that issue in some more detail here. 

Was the stay justified?

Does the IPAB have the power to stay the opposition decisions by the Controller, and to do so as an interim measure? 

Before looking into that, it is worth noting that the ‘interim’ measure the bench deemed appropriate to pass, does not consider the Controller’s revocation to be prima facie evidence of invalidity of the patent. Rather, the IPAB states that the appellants have made a strong prima facie case in its favour by arguing that (i) the DHC case would be dismissed, (ii) that the Controller did not submit additional evidence filed by the parties to the opposition board, as instructed by the DHC in the order dated 20/11/2019, and (iii) that the controller decided on obviousness without application of mind. While it is good to see the IPAB holding strong on procedural requirements, there was unfortunately no substantiation as to how this last point was reached. 

The Trade Marks Act, 1999 expressly recognizes that the Board is vested with the powers similar to that of a civil court under Section 92 (2) and subjects the powers to grant interim orders to limitations under Section 95. The Board, in M/s. Shreedhar Milk Foods Pvt. Ltd v. Vikas Tyagi and Ors. [2013] IPAB 106 has expressly recognized that it has such powers to grant interim orders to avoid instances of injustice. More specifically, it concluded that this power to pass interim orders must be taken up after considering the following factors- prima facie case, balance of convenience, irreparable hardship and irretrievable injury and most importantly must be used to avoid injustice. Interestingly, the pleadings taken up by those in favour of such a power were the fear of ‘illegal’ registration of a patent, protecting public interest, removing unworthy patents  and fear of deceiving the innocent consumer (paras 14, 16). 

The IPAB also exercised such a stay power in the Sunitinib case (discussed here) but did not discuss these powers there. For the purposes of this post, we’ll continue with the assumption that the IPAB does hold these powers, and perhaps those with more insight can let us know in the comments if this assumption is faulty.

What is pertinent to note here is that this power of the tribunal is to be exercised with due caution and to serve the ends of justice. In the Shreedhar Milk Products case, the Board was very cautious of this, noting that these powers of the Board are to be exercised diligently. In para 45, it held that it cannot simply interfere with the decision of the subordinate authority only because it has a different point of view on the same set of facts. It further stated that unless the original authority’s view is arbitrary or perverse, it shall be hesitant to interfere, much less to grant interim orders. The Supreme Court in Super Cassettes v. Music Broadcast Pvt. Ltd. opined that interim relief which essentially grants the final relief, should be granted in rare and exceptional cases. It further stated that incidental powers like passing the interim orders can at best be used to preserve the status quo, but must not alter the same.  

In the current case, this does not seem to have been followed. The status quo (i.e., the revoked patent) was altered by the stay, and there does not seem to have been any discussion on why this is a rare and exceptional case. Moreover – given that the date of final hearing is only 1 month away – wouldn’t a security deposit have sufficed? Especially considering that this is not merely a matter of products on/off shelves, but also of cancer patients receiving medicines at 1/10th the cost of the alternative option. 

Does this mean that generics can approach the IPAB for a stay order after the Controller has upheld a patent’s validity in opposition proceedings?

Going by the present order, this should also give generic manufacturers an ability to approach the IPAB for interim stays, in the counterfactual scenario as well. The Board in the present case decided in favour of granting a stay essentially only on the basis of the Applicant’s allegations against the Controller’s order, since no representation was made on its behalf on the day of the hearing. Thereby, the Board has set up a very low threshold for any aggrieved party to ask for a stay order. The IPAB has not discussed why it believes the Controller hasn’t applied his mind and has also inadvertently acknowledged that the Controller’s decision in a post grant opposition does not necessarily serve as prima facie evidence of a patent’s status. This opens the doors for generic companies to approach the IPAB for an interim stay on similar grounds, on a controller’s upholding of a patent. This could in fact be seen to be in line with the IPAB’s Shreedhar Milk Products case, which emphasised these interim stay powers as necessary to avoid instances of injustice, in the context of ‘preventing wrong patents from being registered’, etc.

The IPAB has set the next date of hearing to be 9/07/2020. 

Edit: On 17/06/2020, in response to a writ petition filed against the interim order on the basis of it being ‘virtually a non-speaking order’, among other contentions, the Delhi High Court passed an order stating that Laurus Labs could, if it so desires, move an appropriate application before the IPAB for a vacation of the interim order. It also stated that if Laurus Labs does this, the IPAB is requested to deal with it as expeditiously as possible. And directed that the patentee should not seek an adjournment on the next date of hearing (09/07/2020) before the IPAB.

[Hat-tip to Sandeep Rathod for pointing us to this development.]

We’re pleased to inform you that Lexstructor is organizing a webinar on ‘Impact of COVID-19 on Patent Laws in India and the Trade Related Aspects on Potential Drugs’. The deadline for registration is June 27, 2020. For further details, please read the announcement below:

Webinar on ‘Impact of COVID-19 on Patent Laws in India and the Trade Related Aspects on Potential Drugs’ | June 28, 2020

Lexstructor is an online, open access legal news, journals publication and education imparting platform, which is dedicated to express views on varied legal issues, thereby generating diversified research emerging areas in law. This platform shall also encourage the intent of young law students, professionals and members of academia to contribute to the field of law and its relation with various aspects of technology, policy making, management and other disciplines of academia, through journal and blogs sections.

We’re organizing a webinar on ‘Impact of COVID-19 on Patent Laws in India and the Trade Related Aspects on Potential Drugs’. The webinar is being organized by Lexstructor with an aim that the IP protection and in particular, the patent regimes must be managed with great care, as well as a willingness to occasionally set aside financial considerations in favor of ethical or moral concerns, especially when it comes to facing unprecedented global health emergencies such as the COVID-19 pandemic. While IP laws are certainly crucial as they incentivize the development of (often) vital drugs, they are far from perfect, and may very well require further adjustment or reform to meet overarching public interests.

Here are few crucial points which came to rise while assessing the impact of this pandemic:

1. Will intellectual property laws in India be a hurdle or opportunity for the affordable access of the COVID-19 potential drugs in India?
2. Will the provision for compulsory licensing prevail over the exclusive rights of the patent owner, during the ongoing pandemic?
3. Impact of COVID-19 on procedural time limits in patent filings in India
4. COVID-19 and the New ‘Health Trade’ Paradigm: Impact on TRIPS Agreement
5. Various strategies to be adopted by the IP professionals and patent applicants

Who should attend?

• Law students, legal professionals and other professionals having a keen interest in IPR or working in the field of IPR, are eligible to register.
• Limited seats (100) are available; first-cum-first-serve rule will be followed.

Panelists

1. Ms. Nithya Somasundaram, Advocate & Patent Agent at R.K. Dewan & Co.
2. Mr. Vijay Kumar Makyam, Registered Patent & Trademark Agent, Founder and Partner of I-WIN IP Services, Faculty for KSCST Bangalore, IPFC Empaneled Attorney – NI-MSME, Guest Faculty in NI MSME and NIPER Hyderabad
3. Mr. Sukanta Roy, Assistant Manager – Regulatory Affairs and Clinical Study Coordinator at TAAB Biostudy Services
4. Dr. Indranil Saha, IPR Expert – Calcutta High Court, M.Sc from Presidency University, Ph.D from IISC Bangalore, Post-Doctorate from UNESCO, Italy, LLB (IPR) from IIT Kharagpur.

When?

Date : June 28, 2020

Time : 5 PM to 6:30 PM

Registration

No registration fee.

To register, kindly e-mail us at webinar.lexstructor@gmail.com or Whatsapp us on 9641060192.

Contact Details

If you have any questions, please feel free to contact us at lexstructorltj@gmail.com. You may visit our website at www.lexstructor.in.

We’re pleased to inform you that Texas A&M School of Law together with O.P. Jindal Global University are launching a program that will allow students to spend one semester in each university, and earn an LL.M degree from either university. For more details, please see the announcement below:

Texas A&M School of Law launches the Global Immersion Fellowship for Talent & Educational Development (GIFTED) Program with O.P. Jindal Global University (JGU), India’s top-ranked private law school.

For the first time in India, students have the opportunity to spend just one semester in the United States and earn a U.S. law school LL.M degree.

Under the GIFTED Program, students will spend the coming fall semester studying at JGU – the credits from which will in part (up to 12 credits) be eligible for transfer to Texas A&M Law.

The spring semester will then be spent in residence at Texas A&M Law, after which students will (subject to their successful completion of their courses) earn their LL.M degree from Texas A&M Law. Additionally, however, by combining the non-transferred credits from the fall and JGU credit for the student’s spring coursework (adding up to a minimum of 16 credits at JGU), students will be eligible to earn an LL.M from JGU as well.

For the 2020-21 academic year, tuition and academic fees for the program are expected to be approximately $24,000.

Have questions about the bar, OPT, or the application process? Contact Ananya Gupta at ananya@lawnchpad.org or by phone at +91-7204686355, Autumn Lockett at alockett@law.tamu.edu, or JGLS representative Ms. Anshu Gupta at anshugupta@jgu.edu.in.