We’re pleased to bring to you a guest post by our former blogger Rajiv Choudhry, discussing the Delhi High Court’s recent order granting an anti anti-suit injunction in the patent infringement dispute between InterDigital and Xiaomi.

Rajiv is a practicing advocate based in New Delhi. He specialises in IP law, with a focus on high – technology and patent law and advises/represents clients on SEP/FRAND and other issues related or unrelated to those discussed in the post. He’s also a founder member of the Fair Standards Alliance, a not-for-profit body that advocates fairness in patent licensing. The views expressed in the post are personal. Rajiv’s previous posts on the blog can be viewed here, here, here, here and here.

Delhi High Court Issues Anti Anti-Suit Injunction in InterDigital v. Xiaomi Patent Infringement Dispute

Rajiv Choudhry

Last week, the Delhi High Court (DHC) issued its order against Xiaomi issuing the anti-anti suit injunction. The Court held as follows:

“I am of the view that a clear case, for grant of ad interim injunction, in terms of prayer (i) in para 33 of the present application, is made out.”

Para 33(i) of InterDigital’s application read as:

“33. (i) Grant an injunction against the Defendant Nos. 1-8 in the present proceedings, restraining them from pursuing or enforcing the anti-suit injunction order dated September 23, 2020 passed by the Wuhan Intermediate People’s Court until the final disposal of the present proceedings;”

The judgement is a bit dense and runs into 73 pages. Indeed the judge is fully aware of the issue and in para 80 remarks:

“I am uncomfortably aware that, as an order deciding a prayer for ad interim relief, this order is considerably prolix. There was, however, no other option, as the injunction, of the enforcement of an order, passed by a court of foreign jurisdiction, in a foreign country, even for a day, is a serious matter.”

What I see here is that Xiaomi should have pursued a different strategy / argument other than the one it used.

The Court here views the lis as follows:

“64…The present ad interim injunction, being granted by this Court, does not, therefore, interfere with the proceedings before the Wuhan Court, in any respect. The plaintiffs are not seeking any injunction against the prosecution, by the defendants, of the FRAND rate fixation complaint, preferred by them before the Wuhan Court, and this Court is not passing any order, to that effect, either. The defendants would, therefore, be perfectly at liberty to prosecute the said proceedings and, at least at this stage, no interdiction, thereof, is being granted by this Court.”

How did the Court reach the above conclusion? : The Court saw that Xiaomi argued for necessity of maintaining comity of courts (para 71) and sets aside the argument in favour of public policy.  The Court then goes on and undertakes a (US – First Re-statement of the law) analysis and determines that public policy trumps the comity principle.

The answer to the above question is more definitively answered in para 76:

“There is, in my view, another, and somewhat more serious, objection, to the order, dated 23rd September, 2020, of the Wuhan Court, which directly involves the principle of comity of courts. By conditioning the continuance of the prosecution, by the plaintiffs, of the proceedings before this Court, with a penalty of about ₹ 1 crore per day, the Wuhan Court has effectively rendered it impossible for the plaintiff to continue to prosecute these proceedings.  The inexorable sequitur is that this Court is also divested of the opportunity of adjudicating on the dispute, brought before it by the plaintiffs, which it has, otherwise, the jurisdiction to hear and decide.”

Accordingly, the Indian Court sees the Wuhan judgement as being a direct impediment in its way in deciding the dispute.

In my view, what could have balanced Xiaomi’s case is the fact that even if one takes the view that InterDigital succeeds in its patent infringement case against Xiaomi (see my previous post),  the end result is that royalty would have to be paid to InterDigital.  This royalty is a FRAND royalty and this issue is before the Wuhan Court before InterDigital sued Xiaomi here in India.  Hence, even arguing InterDigital’s best case if it wins the patent infringement suit here – at maximum it will get a FRAND royalty as it itself prays for (the suits ask that DHC fix a FRAND royalty once infringement is proven).

Second, the number of patents in India owned by InterDigital are far less than InterDigital’s patents in China.  One has to see the list of patents disclosed here in India but that is behind the perverse confidentiality club shield.

In addition, the court should have been aware that InterDigital’s policies in China caused it to be investigated in China in 2013.  See news report titled InterDigital’s executives fear arrest and won’t meet China’s anti-trust agency.

The DHC judgement goes on to cite that Xiaomi did not inform this court  at least half a dozen times about the Wuhan matter:  here the question is did InterDigital inform the court about its investigation in China in 2013?

The DHC also ignores the stark reality in SEP / FRAND disputes that defendants are strategically litigated against in specific jurisdictions.

The DHC also ignores the public interest aspect: this was ignored in the earlier Micromax, iBall, etc. matters as well.  It is the public interest that actually suffers in the absence of a market participant.  Here, one big reason why our homegrown players got sidetracked and did not join the 4G bandwagon was because of the Ericsson litigation.  Xiaomi was a beneficiary as it was the only one who brought in the 4G phones at the time when our domestic players were stuck to 3G.

If I were to put it bluntly, a patent infringement trial in India is an ordeal by trial.  Patent litigation is by far the domain of the right holder, and that too one with deep pockets.

In a patent infringement case, we have seen that if a small independent elects to defend,  he may win at law and lose his business anyway.  If he capitulates and settles he sacrifices his independence, his competitive position, and probably some major part of his patent position as well.  This outcome may occur even where the smaller party has the stronger patent position, or where the larger party is armed with patents of doubtful validity. The results to the competitive system, and to the independent, are the same.   It is therefore 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 obvious reasons, InterDigital does not want the FRAND determination matters to be decided in China, given the manner in which it’s conduct was investigated there last time.

This decision by the DHC is another decision that goes beyond its jurisdiction for the wrong reasons and as Florian argues comity in international patent litigation is history.  For a more detailed analysis of the conflict of law analysis, readers may read the complete post here.

The Committee of Experts on Non-Personal Data (NPD) Governance Framework, constituted by the Ministry of Electronics and Information Technology released its Report on July 12, 2020. The Report purports to be a framework for governance of NPD, meant to grant access to NPD to industry players and the government for overarching public purposes. In order to increase the competitiveness of local and small enterprises and spur innovation, the Report is aimed at mandatory sharing of data to create economic advantages that are currently precluded due to data monopolies of a few dominant players. Here I examine the government’s eminent domain powers against private entities’ right to IP, that arises in the case of data acquisition

Background

Any data which does not constitute personal data (i.e., data pertaining to characteristics, traits or attributes of identity, that can identify an individual) is defined as non-personal data in the Report. This includes data which never pertained to natural persons (weather or supply chains data), or personal data which has been anonymised via techniques in a manner that prevents the identification of persons to whom such data pertains. It further classifies NPD into Public NPD, Community NPD and Private NPD. Public NPD refers to NPD collected or generated by the government, including data collected or generated in the course of execution of publicly funded works. Community NPD includes anonymised personal data, and NPD about inanimate and animate things or phenomena, whose source pertains to a community of natural persons. A community is loosely defined in the Report as “any group of people that are bound by common interests and purposes, and involved in social and/or economic interactions.” The raw data without derived insights is called community data here, which would include datasets of user information collected by even private players.

Private NPD refers to data the source or subject of which “relates to assets and processes that are privately-owned by such person or entity, and includes those aspects of derived and observed data that result from private effort.” There can be significant overlaps between community and private NPD and if the two are defined as distinct categories then all user information collected by private players (an example of community NPD as per the Report) will not necessarily be community data, as it can pertain to or result out of entirely private assets and processes.

Further, there is some sort of distinction attempted between community data that includes only raw/factual data and private NPD which would include inferred or derived data as a product of the application of algorithms and proprietary knowledge. Interestingly, there is a vague carveout for private data that notes that “Algorithms / proprietary knowledge may not be considered for data sharing.” [5.4 (iii), page 26] This assumes that only private NPD involves a narrower subset of proprietary knowledge or algorithms that can be exempted from data sharing, and that products/insights derived from the application of this proprietary knowledge are not necessarily protected.

These classifications and artificial distinctions, misunderstand some fundamentals about the nature of data and the intellectual property law that protects it. Most of the data collected by private entities, and not disclosed to the public can be said to be protected by trade secrets law in India.

Trade Secrets and Databases

Copyright protection for databases would only extend to protecting the manner in which the data has been selected and arranged if there has been a minimum degree of creativity involved. In the absence of sui generis database protection in India, our Courts do not protect the mere investment of labour into collecting, aggregating and storing data (discussed on the blog here).

However, this only means that community data or private data, as defined by the Report may not be protected by copyright per se. This doesn’t preclude trade secrets protection. The Report doesn’t acknowledge the existence of such protection. It confusingly defines a narrower category of sensitive NPD, which includes data constituting business sensitive or confidential information, relating to national security or anonymised data bearing a risk of reidentification. The only implication of this sensitivity, as per the Report, is that NPD would inherit the sensitivity characteristic of the underlying personal data from which it is derived. Thus, the Report provides no consequences or methods of treating confidential business information differently in its data sharing recommendations. Arguably, in order to mandate sharing of such information, any framework would have to upend the confidentiality, equity, contractual and technological protections under which both factual and derived data is collected, aggregated and stored by private entities currently. However, the Report only provides a weak basis of ownership interests in different kinds of data without so much as acknowledging the protections that already apply, and how these ownership interests will override them.

Multiple stakeholders, in many ways, contribute to the same data-based business model while having diverse and often conflicting interests. Therefore, beneficial ownership of huge open datasets and mandatory sharing of information must account for the possibility of conflicts and provide mechanisms to resolve them. Importantly, only NPD collected by the Government, which is afforded confidential treatment under the law would not fall under public NPD. Other information treated as confidential under law is not exempted from constituting private or community NPD to be shared mandatorily.

Property Rights in NPD

Private players collect data in order to gain a competitive advantage in the market and this data constitutes these entities’ trade secrets, which are protected from appropriation by others regardless of the originality or creativity of their content. Compelling the sharing of such data, including both trade secrets and technical knowhow (also protected by IP) that enables insights to be derived from these secrets can impede private investment and innovation in these databases, as noted by the National Association of Software and Service Companies (NASSCOM).

The Supreme Court has recognised the right to IP such as copyright to be covered under the principles of property ownership for the purposes of Article 19(1)(g) and Article 300A of the Constitution. Indian law on protection of confidential information is not codified but has evolved through case law. Indian judgments have evidently held that confidential information such as customer lists do not constitute property. As a result, crimes against property in the Indian Penal Code cannot be invoked for confidential information. In fact, most countries have not recognised trade secrets as property. Further, Indian courts do not even require the information disclosed in confidence to be of commercial significance, in order to protect it as confidential information. Indian cases have often cited English precedents to recognise an equitable duty of confidence, adopting the same tests as English Law. Similarly, like English law, Indian courts have noted that the duty of confidentiality extends to third parties, even in the absence of privity of contract. In other words, confidential information is protected under Indian law under contract and an equitable duty of confidence. However, since trade secret law requires the data to be confidential or secret, not all NPD may fall into this category, particularly the NPD that can be said to be derived from public goods, assets and processes. For instance, data collected by smart cars on public roads could be collected by the cars of many manufacturers and hence, will not necessarily be confidential since it is open to independent discovery by others. Interestingly, courts in many jurisdictions have also rejected arguments of information being protected as a ‘product’ obtained by using a process patent since data lacks the technicity required for patent protection.

Data, IP and Eminent Domain

The fact that confidential information is not recognised or protected as property in India could preclude the state from exercising its eminent domain powers to acquire this data, making the legal basis for data sharing in the Report suspect.

The power of eminent domain is broadly the sovereign’s power to take property for the purpose of public welfare, without the owner’s consent. Amendments to the Land Acquisition Act now mandatorily require the payment of fair compensation to land owners subjected to the State’s eminent domain powers. However, Article 300A of the Constitution, which provides that persons cannot be deprived of property except by the authority of the law, is silent on the issue of compensation. Economist Ram Singh discusses in the context of eminent domain powers that most jurisdictions allow the affected owners a choice to either accept the takings along with compensation or challenge them seeking an action for restitution of the properties in a constitutional or administrative court. The NPD framework doesn’t mandate payment of compensation in all cases of mandatory data sharing.

Further, in the Report’s context of beneficial ownership of data for very broadly defined ‘public purposes’ by the Government as a trustee, it is important to be cognizant of the distinction between government interest/purpose and social interest/public purpose, keeping in mind the fact that real-world governments often pursue their own interests, which may be categorically distinct from those of the public. It is realistic to presume that government interest is not synonymous with public interest because governments, particularly in multi-party democracies are likely to emphasise on vote maximisation by pandering to swing voters and their interests. Thus, there is a need for greater accountability to protect against misuse and one cannot rely on assumptions of benevolence by the government in the context of eminent domain powers.

The NPD framework in its essence is also violative of India’s obligations under Article 39 of the TRIPS which mandates the protection of secrecy of commercially valuable information from disclosure without the consent of the person who maintains such secrecy.

Conclusion

Instead of overhauling existing common law, equity and contractual protections to create a generalised (and ill suited) NPD framework for all sectors of the digital economy, it may make more sense to create frameworks for enabling negotiations on fairer terms (recognised partially by the Report w.r.t private NPD on page 37) to facilitate data sharing in voluntary data marketplaces. Prohibiting unfair contractual clauses and even revising competition law and policy can create fairer access regimes in this regard. Otherwise, datasets created for different purposes and shared with the government for entirely unrelated purposes in a scenario where private players are reluctant to invest and innovate due to mandatory sharing of data, can only have limited value.

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We’re pleased to inform you that the Institute for Intellectual Property and Social Justice (IIPSJ) is organising the Sixth Annual IP Mosaic Conference virtually on 30^th and 31^st October, 2020. The Conference agenda, timings and order of presentations can be accessed here. Registration for the conference is free of cost and the link for online registration is available here. This year the Conference will host presentations by leading IP scholars and academics including Prof. Carys Craig, Prof. Irene Calboli, Prof. Brian L. Frye, Prof. Betsy Rosenblatt, Prof. Jasmine Abdel-Khalik and Prof. Bita Amani, among others. Roundtable topics include equitable access to health, medicines, knowledge, and information; socially beneficial application of information technology and related advances to IP development and dissemination; legal protection for traditional and indigenous knowledge and expression; and promoting IP awareness, education, and entrepreneurial and socio-political empowerment in marginalized communities.

About the Mosaic Roundtable

Since 2014, the Institute for Intellectual Property and Social Justice (IIPSJ) has sponsored the IP Mosaic Conference, a peripatetic scholarly forum in which legal scholars and policy and social activists present and develop progressive theses in the field of IP Social Justice. Through the Mosaic Conference, IIPSJ collaborates with a law school host to provide a venue in which to explore the social ordering function of IP protection in the total political economy, particularly the law’s social justice obligations in promoting human rights and actualization, cultural and technological progress, and self-determination and nation-building. This year’s conference is hosted by Marquette University Law School.

About the Institute for Intellectual Property and Social Justice (IIPSJ)

IIPSJ is a think tank based out of Washington DC, USA, and founded by Lateef Mtima, Professor of Law at the Howard University School of Law. IIPSJ was established to address the social justice implications of intellectual property law and policy both domestically and globally. IIPSJ’s broad work includes the scholarly examination of intellectual property law from the social justice perspective; advocacy for social justice-cognizant interpretation, application, and revision of the intellectual property law; efforts to increase the diversity of the intellectual property legal bar; and programs to empower historically and currently disadvantaged and marginalized communities through the development, protection, use, and exploitation of intellectual property. You can read more about IIPSJ’s vision and work here.

We’re pleased to inform you that LexisNexis is organizing a webinar on ‘How LexisNexis solutions can help with Patent Search and Drafting High quality Non-Provisional Applications for IPO‘ on October 29, 2020. For further details, please read the announcement below:

Live Webinar: How LexisNexis Solutions Can Help with Patent Search and Drafting High Quality Non-Provisional Applications for IPO

From corporate perspective the importance of patent activities is well known however in India, the role of patent activities was generally considered less significant from academia point of view but from recent IP trends and government policies around IPR, the significance is bound to increase in near future. There are plenty of reason for patents to be considered important form academic perspective such as for research activities, enhancing technical capabilities, boosting startup culture and possibly generating additional revenue for institutes however IP knowledge in an academic institute is limited to one department or a single IPR cell.

We are delighted to invite you to join a live webinar organized by LexisNexis on ‘How LexisNexis solutions can help with Patent Search and Drafting High quality Non-Provisional Applications for IPO‘ on October 29, 2020. In this webinar our experts will highlight the problems faced by universities, research centers and start-ups related to IP activities in India and how we at LexisNexis are providing solutions and enabling academic institutes in fulfilling their IP goals.

Key Takeaways from the Webinar

• How patent search can safeguarded the work of the organizations?
• How to understand the scope of any idea and to know whether the idea is pursuable or not?
• How to improve the invention/technology by understanding the previous known patents?
• How to ensure the quality of patent application before submitting the same to Indian Patent Office?
• Understanding best practices for patent drafting using LexisNexis PatentOptimizer.

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. You may follow the updates on these events on our LinkedIn page here.

When?

The webinar will be held on October 29, 2020 (Thursday) from 3.00 to 4.00 pm IST.

By Whom?

The webinar will be led by Tharraniiswari 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.

We’re glad to inform you that the Centre for Intellectual Property Rights at National University of Advanced Legal Studies (NUALS), Kochi is seeking papers for its book on themes relating to sports, e-sports and their interplay with IPR. The last date for the submissions is November 15, 2020.

Call for Papers: NUALS’ Book on Sports and Intellectual Property Rights | Submit by November 15

The Centre for Intellectual Property Rights is one of the 16 different centres of excellence at the National University of Advanced Legal Studies, Kochi. Since its inception, it has been at the forefront of promoting research and education in the field of IPR. Sports and intellectual property rights enjoy an inseparable connection. As companies, brands and leagues look to make the most out of every single element in sports, intellectual property rights associated with them goes a long way in making it happen. The Centre seeks papers for its book on themes relating to sports, e-sports and their interplay with IPR. The publication aims to call for and gather papers primarily from teachers, academicians, researchers, practitioners and other stakeholders.

Themes

1. The Importance of Trademarks for Sports Clubs and Leagues
2. Patents and Sports Equipment
3. The Impact of Counterfeit Sporting Goods and Sportswear
4. Personality Rights among Sportspersons
5. Broadcasting and Media Rights for Sports Events
6. Piracy of Live Broadcasting Sports Events : Unauthorized Streaming
7. The Need for Legislative Intervention to Protect the IP Involved in E-sports
8. Streaming of E-sports Gameplay and Copyrights
9. Ownership of IP in E-sports : Publisher or Gamer
10. The Cheatbot Complication – An Infringement of Copyright?

Note: These themes are only suggestive and not exhaustive.

Submission Guidelines

• Submissions are to be made in electronic form only and are to be sent to ciprpublications@nuals.ac.in [Subject is to be “Submission for CIPR Sports and IP Publication”]
• Submissions should be in English, between 3500-5000 words, exclusive of footnotes.
• An abstract of the manuscript of not more than 250 words should be included with the submission. This shall not count towards the word limit.
• Co-authorship is allowed for a maximum of two authors.
• The cover page should include the name, address, e-mail ID, contact number and the name of the College/University along with address and class of the participant. In case of co authorship, the cover page should include details of both the authors.
• No part of the submission should have been published earlier nor should it be under consideration for publication or a contest elsewhere.
• All contributions must represent original ideas and interpretations coupled with critical evaluation and assessment.
• Kindly avoid the general and common information about the sub theme of your paper as far as possible. For example, those who are writing about patents, kindly avoid elaborating about patents instead of discussing the topic as doing so may result in duplication of information in the chapters coming under a single sub-theme.
• Plagiarism will result in summary rejection of the submission.
• Any queries regarding the book shall be addressed to ciprpublications@nuals.ac.in.

Formatting Guidelines

• The submission is to be made in Times New Roman, Font Size: For Title – 16; For Headings – 14; Main Text – 12, Line spacing: 1.5, Footnote size: 10.
• Submissions should follow The Bluebook (20th edition) style of citation.
• Submissions must be made in .doc/.docx/.odt formats only.
• Alignment shall be Justified. One inch margin to be maintained on all sides.
• Use of headings and subheadings is encouraged.

Deadline

The last date for the submission of papers is 11:59 pm, 15th November 2020.

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The multi-media conglomerate, Zee, has recently launched a pay-per-view service, ZEEPLEX. The service allows users to rent a movie from the platform by making a payment. This rent is valid only for 48 hours after the payment and the users can view the movie with their family within 6 hours of starting it. Zee seeks to make this platform “like a multiplex” and targets 50 million DTH subscribers. The platform, however, found itself in the midst of a passing off suit heard one day before its scheduled launch date. This challenge was brought forth by PLEX, a client-server media player that also provides services such as Live TV and free movies. The Bombay High Court declined to give the desired interim injunction against Zee. In this post, I analyse the impugned order on two counts: first, the passing off concern, and second, the issue of last-minute injunctions.

Passing Off

The pre-requisites in a passing off claim have been specified by the Supreme Court in cases such as Laxmikant V. Patel v. Chetanbhat Shah (‘Laxmikant’). They are the “reputation of goods, possibility of deception and likelihood of damages to the plaintiff”. On the first count of reputation, the court noted that Plex’s domestic sales “were rarely more than US$ 24,000 to 30,000” and found that prima facie it failed to establish its reputation within India, and the defendant, Zee, instead had greater reputation. It also took note of the fact that before the announcement of ZEEPLEX, Plex had applied for registration of its mark wherein it stated that it was “proposed to be used”, and only after the announcement of ZEEPLEX moved an amendment application to show use in 2008. Importantly, the court brushed aside the plaintiff’s attempt to seek comparative treatment as other content providers such as Sony, Disney, or Hotstar. It rightly held that a “one-size-fits-all approach” cannot stand in determining reputation given its case specific nature.

Since the court already ruled the first requirement to be absent it did not need to delve it into the other two elements, but it briefly touched upon them possibly to further strengthen the denial of an injunction. On the count of deception, the factors to be considered have been provided by the Supreme Court in Cadila Healthcare Limited v. Cadila Pharmaceuticals Limited. While the court did not address the different elements individually, it made an important observation that the two services are different in nature. On one hand, ZEEPLEX’s model is based on a pay-per-view model without any user content sharing, on the other Plex features free to watch movies and sharing of user content across devices. Other factors, though not noted by the Court, also weigh against Plex due to differences in class of purchasers, mode of purchasing, and the character and performance of the two services. Finally, on the issue of damages, the court noted that Plex was “unable to show any anticipated injury” and rather a greater financial harm would be caused to Zee that had invested Rs. 11 crores in the project, an amount greater than “Plex’s combined India sales for the last five years”.

The court, thus, arrived at an appropriate conclusion in denying the relief. As the Supreme Court in Laxmikant had noted, citing Salmond and Heuston, “[t]he gist of the conception of passing off is that the goods are in effect telling a falsehood about themselves” and that its “legal and economic basis” is to protect reputation or goodwill of the plaintiff. In a scenario where a relatively lesser known player in the relevant market operates in a service substantially different from that of defendant, the concern of passing off is untenable. This is because it would neither affect the reputation or goodwill of the plaintiff, especially if the defendant is itself of much greater repute, and would neither deceive consumers as to the source of the goods or services. An alternate ruling would in fact lead to trademark expansionism which would merely increase trademark monopoly without any reduction in search costs, a delicate balance that the law seeks to maintain as discussed here.

Last Minute Injunctions

The instant case was heard a day before the launch of the defendant’s platform despite the launch being announced a month prior to that. While Justice Patel, as a one-time reprieve, let the plaintiff go on count of this delay in bringing forth the suit, he made a pertinent observation:

“Where a plaintiff has had enough notice and yet chooses to move at the eleventh hour — and makes no allowance at all for any adjustment that may be required — the plaintiff must be prepared to face the consequences.”

This is in line with his consistent approach against last minute injunctions sought in IPR cases as can also be seen in the decision in Dashrath B. Rathod v. Fox Star Studios India Pvt. Ltd (‘Dashrath Rathod’) I have earlier discussed the impact of such injunctions, if granted, on free speech at large. In this light, it would be an interesting idea to mainstream the incorporation of due diligence in form of taking immediate remedial measures on the part of the plaintiff while deciding upon the balance of convenience and irreparable injury, an approach followed in Dashrath Rathod. Inordinate delays in approaching the courts for seeking interim injunctions have also traditionally been considered as grounds for denying an injunction under Order 39, CPC (see here, here, here, here, here, and here). From a law and economics perspective, this appears to be an approach furthering efficiency. Since those impacted significantly due to a passing off, acting rationally, would seek an immediate redressal to the issue in order to minimise the associated risk, an unreasonable delay indicates lesser risk and loss involved. Accordingly, the probability of success of a plea of injunction should be inversely proportional to the extent of delay on part of the plaintiff. If a last minute injunction is granted, the associated social costs with the order are severe as that would impede investment and innovation, especially if a large sum has already been spent on the concerned service. Such an injunction is thus tenable only if the social benefits are so high that they outweigh the costs as may be the case where some development takes place only at the last moment.

In the above framework, the present case not only involves a last minute plea but also another interesting development, the plaintiff’s amendment of its registration application to indicate use since 2008 as against earlier ‘proposed to be used’. This hints towards a possibility that while the plaintiff did not initially associate much benefits flowing through its popularity in the Indian market, and thereby sidelining the earlier use, it deliberately altered the application to show greater value attached to the business. Even if this error in the application would have been a genuine oversight, it did not preclude filing of the injunction application where proof could have been shown of prior use. This implies a delay without any reasonable cause as far as the interim injunction plea is concerned, and hence the success rate had to be minimal. Since no extraordinary social benefits were shown by the plaintiff, the plea was rightly dismissed.

Topical Highlight

Delhi High Court Issues Anti Anti-Suit Injunction in InterDigital v. Xiaomi Patent Infringement Dispute

In a guest post, Rajiv looks at the anti anti-suit injunction granted by the Delhi High Court (‘DHC’) against Xiaomi in the patent infringement dispute with InterDigital. He highlights that the court viewed the lis as not impacting the proceedings before the Wuhan Court concerning fixation of FRAND rates. He considers that Xiaomi should have pursued a different strategy than the one it adopted. The court noted Xiaomi’s argument to be predicated on comity of courts and held public policy concerns to trump the comity principle, considering the Wuhan judgment to be a direct impediment to its ability to decide the matter before it. Rajiv argues that even at best case if InterDigital wins the case it will be awarded royalty based on FRAND terms, which issue is pending before the Wuhan Court prior to the institution of the Indian suit. He then highlights how DHC failed to consider the greater number of InterDigital’s patents in China than India, investigations against InterDigital’s policies in China in 2013, and strategic litigation against defendants in SEP disputes. Finally, he emphasises that DHC ignored the public interest aspect that lies at core of a patent infringement suit.

Thematic Highlight

Non-Personal Data Governance Framework and Intellectual Property Implications

In this post, I analyse the Non-Personal Data (NPD) Committee Report (‘Report’) in context of its intellectual property implications. I first provide a background on the definition of NPD and its classification as per the Report to highlight how they misunderstand some fundamentals about the nature of data and IP law. I argue that even though the copyright protection in databases might be limited, it doesn’t preclude trade secrets protection that the Report fails to acknowledge. The Report rests on weak ownership claims over data without pointing out why the same should override, inter alia, confidentiality protections. I then argue that private players use data to gain a competitive edge which is protected as trade secrets and technical knowhow. Mandatory sharing of such data could impede investment and innovation. I then argue that confidential information is not considered as property in India but is protected under contract law and equity. This takes away the state’s legal basis of claiming an eminent domain over data. Moreover, even in exercising eminent domain powers, the State has to offer compensation which isn’t provided in all cases by the Report. Finally, I end with cautioning about broad wording of ‘public purposes’, possible violation of TRIPS, and a need to look at alternative solutions.

Other Posts

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Sixth Annual IP Mosaic Conference: The Arc is Hot!  Using IP to Further Social Justice

Recently, we informed our readers about the Sixth Annual IP Mosaic Conference being organised by the Institute for Intellectual Property and Social Justice (IIPSJ) virtually on 30th and 31st October, 2020. Registration for the conference is free of cost. Further information on the conference is mentioned in the post.

Call for Papers: NUALS’ Book on Sports and Intellectual Property Rights [Submit by November 15]

We also informed our readers that the Centre for Intellectual Property Rights at National University of Advanced Legal Studies (NUALS), Kochi is seeking papers for its book on themes relating to sports, e-sports and their interplay with IPR. The deadline for submission for the papers is November 15, 2020. Further information on the submission guidelines is mentioned in the post.

LexisNexis’ Webinar on How Its Solutions Can Help with Patent Search and Drafting High Quality Non-Provisional Applications for IPO [October 29]

We further notified our readers about a webinar on ‘How LexisNexis solutions can help with Patent Search and Drafting High quality Non-Provisional Applications for IPO’ being organised by LexisNexis. The webinar will be held on October 29, 2020 (Thursday) from 3.00 to 4.00 pm IST, and will be led by Tharraniiswari Gunasekaran. Further information on the webinar, including the procedure for registration, is mentioned in the post.

Decisions from Indian Courts

• The Supreme Court of India in M/S Laxmi Agro Impex India v. M/S Ladli India Commodities, while disposing of a Special Leave Petition, affirmed the order of the Division Bench of the Delhi High Court which had upheld a Single Judge’s order in a suit for permanent injunction for infringement and passing off of a trademark wherein an initial ex-parte injunction was later modified by the Single Judge, permitting the defendant to use the proposed trade mark, which was ultimately registered later. [October 16, 2020]
• The Delhi High Court in Allied Blenders & Distillers Pvt. Ltd. v. Agrobiotech Industries Ltd., granted ad interim relief restraining the defendant from using, manufacturing, selling etc. or otherwise dealing in any product, under the impugned “Chetak” label, or under any trademark deceptively similar to the plaintiff’s registered trademarks—”Officers Choice” and “Officers Choice Blue.” The Court held that in quia timet IP actions, the mere likelihood of the defendant launching the allegedly infringing product within the territorial jurisdiction of the Court would be sufficient for its exercise of jurisdiction for the grant of ad interim relief. [October 15, 2020]
• The Delhi High Court in Minda Corporation Ltd. v. Star Minda Oil Lubricants, granted an ex-parte ad-interim injunction in the case pertaining to passing off of plaintiff’s device/label mark, ‘MINDA’ on account of irreparable loss to the plaintiff in the absence of such an injunction. [October 14, 2020]
• The Delhi High Court in Sporta Technologies Pvt. Ltd. v. Dream11 Prime, granted an ex parte ad interim injunction restraining sports platform Dream11 from using any mark or logo deceptively similar to that of Sporta Technologies as well as directing the take down of infringing material from its social media pages. The Court also directed the defendants to provide the Basic Subscriber Information regarding domain name registrants to the Court and the plaintiff prior to the next hearing of the case. [October 14, 2020]
• The Delhi High Court in Mattel Inc v. Present Enterprises, directed Flipkart to remove listings pertaining to the advertisement and sale of the products that violated Mattel’s copyright in the six characters of the ‘Rainforest Family’. [October 13, 2020]
• The Delhi High Court in Gulf Oil Lubricants India Limited v. Voltronic India Lubricants, allowed the plaintiff’s application for appointment of Local Commissioners to ascertain the alleged infringement of its registered trademark “GULF PRIDE 4T PLUS” within eight weeks’ time, after the plaintiff alleged that it had become aware of rampant infringement of its marks pursuant to an investigation by a specialized intellectual property company. [October 13, 2020]
• The Delhi District Court (Tis Hazari) in State v. Dheeraj Kumar, a case pertaining to a tempo carrying spurious engine oil of Indian Oil Company, acquitted the accused on charges of copyright infringement since there was no evidence to show that Indian Oil Corporation had any Copyright in the packaging or containers of the Servo diesel engine oil. The accused were also acquitted of charges of trademark infringement since the prosecution failed to prove that the articles recovered were infringed/ spurious, and also failed to connect the accused persons with the alleged recovered articles. [October 13, 2020]
• The IPAB in Hawar Technologies Ltd. v. The Assistant Controller of Patents, allowed the appeal by Hawar Technologies, remanding the matter back to the Patent Office on account of denial of a fair opportunity to be heard to the applicant. [October 12, 2020]
• The Delhi High Court in Urban Fitness LLP v. Max Life Insurance Company, pertaining to an allegation against the respondent regarding passing off of petitioner’s trademark THE RUN, recorded that the defendant conceded and assured that the impugned marks have since been removed from its website and will not be used by it henceforth. The defendant also assured the withdrawal of its application for registration of the trademarks before the Trademark Registry. [October 12, 2020]
• The IPAB in Prism Cement Ltd. The Controller of Patents & Designs, allowed Prism’s appeal and amendment of the claims as sought while directing the Controller of Patents to grant the patent sought to Prism [October 12, 2020]
• The Delhi High Court in Delhivery Pvt. Ltd. v. Treasure Vase Ventures Pvt. Ltd., allowed the defendant’s prayer and vacated the Court’s interim injunction dated July 3, 2020 against the defendant, on a prima facie basis without commenting on the merits of the case. Pertinently, the Court held that the mark ‘DELHIVERY’ is a phonetically generic word and cannot be registered to seek the benefit of statutory rights. [October 12, 2020]
• The Delhi High Court in Mohit Rastogi v. Shyam Madiraju & Anr., issued summons regarding the allegation that despite the film ‘HARAMI’ having been jointly produced by the plaintiff and defendant as co-owners of the copyright therein, the defendant was exclusively commercialising the same in collusion with unrelated third parties. The Court also held that if the defendant entered into any commercial agreement with any third party regarding the rights in the film, the same would be subject to the outcome of the suit. [October 12, 2020]
• The Delhi District Court (Tis Hazari) in Puma v. R.J. Enterprises, held that the defendant’s business of manufacturing garments bearing the plaintiff’s trademark without authorization constituted trademark infringement, passing off, dilution of the plaintiff’s goodwill and unjust profiteering. It granted a permanent injunction restraining the defendant from use of the impugned mark, directed the deliver up of all finished and unfinished goods bearing the mark, payment of compensatory damages worth rupees 1 lakh, punitive damages worth rupees 1 lakh and costs of the suit worth rupees 1,68,500, to the plaintiff. [October 9, 2020]
• The Bombay High Court in Parle Products Pvt. Ltd. v. Future Consumer Ltd., granted ad interim injunction holding that Parle’s packaging of its products ‘MONACO’, ‘KRACKJACK’ and ‘HIDE & SEEK’ was copied by the Future Group’s packaging of its ‘CrackO’, ‘Kracker King’ and ‘Peek-a-Boo’ products. [October 9, 2020]

Other News from around the Country

• Given technological developments, the Copyright office of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, is seeking comments on the need for amendments to the Indian Copyright Act, 1957, latest by October 26, 2020.
• Biswajit Dhar and K.M. Gopakumar write for The Wire, discussing India and South Africa’s proposal to incorporate greater flexibilities in the TRIPS Agreement to enable WTO members to deal with public health concerns in the midst of the Covid-19 pandemic.
• India TV filed an FIR under section 420 (cheating) of the IPC and sections 60 and 63 of the Copyright Act, against a Twitter user called ‘arnabofficial17” for spreading a “fake WhatsApp chat” between the media company’s chairman and a doctor in the Sushant Singh Rajput case, thereby allegedly misusing India TV’s logo and maligning its reputation.
• Juhu Police (Mumbai) filed an FIR against the owner of Box Cinema, Narayan Sharma, for copyright violation, cheating and impersonation on account of airing an old movie produced and directed by the late Prakash Mehra.
• The Shamshabad (Telangana) police have booked a case against JM Joshi, owner of Goa pan masala and his son and actor Sachin Joshi for allegations of infringing the trademark of Manikchand while selling its products.

News from around the World

• Microsoft claimed to have utilised a court order based on strict provisions in copyright law to gain control of computers installing Trickbot ransomware since Trickbot unauthorizedly uses Microsoft’s copyrighted software. Malicious software like Trickbot can pose a threat to the upcoming November election in the US.
• The United States Patent and Trademark Office (USPTO) published a report on “Public Views on AI and IP Policy”.
• The 128th China Import and Export Fair (Canton Fair) initiated a dedicated intellectual property rights (IPR) protection and trade dispute settlement platform through an overhaul of Fair’s old website as well as the introduction of a comprehensive online complaint filing system pertaining to IPR.
• A new study published by the EUIPO through the European Observatory on Infringements of Intellectual Property Rights examines EU firms’ use of patents, trademarks and registered designs to unravel distinct patterns of ownership of IPR bundles among SMEs and large firms.

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An IPAB bench consisting of Chairman Manmohan Singh J. and the new technical member for Patents Dr. B.P. Singh has quashed the Controller of Patent’s decision that revoked Novartis’s patent on the anti-cancer drug Ceritinib. It held that while the compound was contained in a broader genus patent, it was not ‘disclosed’ therein, as it hadn’t been specifically identified. The 104-page order examines several issues regarding novelty and obviousness, the extent of coverage and disclosure, and timelines for filing of evidence.

Background

Novartis’s Ceritinib is an ALK inhibitor targeted at non-small lung cancer treatment. The compound was granted an Indian patent on 26th September 2016 (IN 276026). Natco had filed a post-grant opposition in 2017, and the patent was eventually revoked by an order dated 16th August 2019. In July 2020, this revocation was stayed on grounds of serious procedural lapses (discussed here).

In the present appeal against the Controller’s revocation, Novartis argued that the Controller completely disregarded the Opposition Board’s report which had recommended that the opposition be dismissed and the patent be allowed to stand. It also accused the Controller of violating principles of natural justice by selectively considering Natco’s additional evidence but rejecting the subsequent rebuttal evidence filed by Novartis. On merits, it insisted that the Controller had not applied the test of novelty to assess the patent, instead relying on hindsight analysis and cherry-picking of the compound’s constituents.

Fee Payment, Timelines and Additional Evidence

Before delving into the merits, the order tackled several procedural issues plaguing the post-grant opposition. Natco had paid an amount of ₹2,400 at the time of filing opposition on 26^th September 2017, which is the amount payable by a natural person. As a legal entity it was required to pay ₹12,000. The balance was paid on 8th November 2017, after the statutorily permissible 1 year period for filing opposition had expired on 30th September 2017. Although this issue had not been raised, IPAB pointed to Section 142(2) of the Patent Act and held that the Controller’s order of 16th August 2019 being passed on a non-existent post-grant opposition was not maintainable ab initio.

The failure to adhere to timelines prescribed by the Patent Rules 2003 was also taken up. Like the stay order mentioned above, the present order criticised the fact that additional evidence was accepted long after the fixing of hearing on 25th September 2018, against the mandate of Rule 60. It further clarified that Rule 138 (Controller’s discretionary power to extend time periods) could not have been invoked in any circumstances as Rule 60 does not provide any timelines to begin with. The order also criticised the contradictory statements made in the revocation order where the Controller first states that no further evidence was considered (para 3), and then goes on to say that an ‘important document’ has been brought into its notice and has therefore been considered (para 6). IPAB was also of the view that the rebuttal evidence filed by Novartis ought to have been considered by the Controller as the Delhi High Court had intended the same in its order.

This reiteration of the significance of statutory timelines is much needed, seeing as there has been another recent case of Ibrutinib patent, where additional evidence was admitted several days after the fixing of hearing, at odds with Rule 60. Interestingly, in this case too, both IPAB and the Delhi High Court had reprimanded the Controller, with the former awarding a stay on the Controller’s revocation due to this reason (discussed here and here). This revocation has now been quashed as well.

What amounts to Disclosure?

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Natco’s ground for opposition was that Ceritinib is covered in the markush structures of two earlier patents (IN 240560 and IN 232653) which reveal a broad genera of compounds that anticipate it. They argued that there is no technical advance that Ceritinib makes over these patents. Novartis had countered this, arguing that the generic disclosure of a chemical class did not take away the novelty of a specific compound within the class, unless the latter was ‘individualised’.

IPAB noted that all the documents relating to the earlier patents that were considered for post-grant revocation had already been scrutinized at the stage of pre-grant examination. The objection had been dropped as Novartis’ reply was deemed satisfactory. No additional facts had been brought forth. With that established, it looked into the Opposition Board’s report. The report had concluded that while a series of compounds had been described by way of a Markush Structure, none of the earlier patents exemplified compounds suggested the modifications required to obtain Ceritinib.

Novartis insisted that only identification, and clear and unmistakable directions (in the prior art) to do what the patentee claims to have invented would anticipate the claim, and in the absence of that, Ceritinib could not be said to have been ‘disclosed’ by IN ‘653 and IN ‘560. Natco refuted this, citing the judgment of Merrel Dow Pharmaceuticals v. HN Norton & Co., to suggest that there is no specific requirement in law that a compound must be disclosed by name, structure or formula in prior art. Scrutinizing the exact wording of Merrel, IPAB rejected Natco’s interpretation and sided with Novartis on requirement of specific identification (para 10).

Looking into the expert affidavits submitted by the parties, IPAB took the view that listing the compound in question in the Orange book for Patent Term Extension (PTE) under US law does not amount to disclosure. It only means the compound is ‘read on’ or ‘encompassed’ in the structure of the broader genus patent under which it is listed. Requirements of PTE are different from those of novelty and inventiveness and ought not to be mixed up. As the former is inapplicable in India, it cannot have a bearing on the decision.

It then referred to the cardinal rule that any anticipatory disclosure must be contained within a single document, unless multiple documents are linked in a manner intended to be read as one. Lack of novelty cannot be established through a cumulative effect by forming a ‘mosaic of elements’ taken from several documents. It also found that one could not have worked Ceritinib naturally from the prior art except through ‘hindsight analysis’. This refers to the method of drawing a line from the solution to the problem with the benefit of hindsight, as opposed to working the solution from the problem. For this reason, IPAB agreed with the Opposition Board’s recommendation and held that the cumulative effect of unclear and ambiguous prior art could not be said to have anticipated the compound. The Controller should have considered the report and if he disagreed, he should have explained with reasons.

Notably, this view captures the essence of Rule 62(5) which requires Opposition Board’s recommendation to be considered and reasons to be provided. Previous decisions such as Supreme Court’s Cipla v. Union of India have laid great emphasis on this. The IPAB itself has stressed this in the Ibrutinib stay order discussed above.

Coverage v. Disclosure

It is stated in para 9.5 that Novartis cited AstraZeneca v. Emcure (AstraZeneca), a recent controversial decision where the Delhi High Court had accepted an argument asserting that coverage may be greater than disclosure. The court had interpreted Supreme Court’s decision in Novartis v. Union of India (Novartis) to hold that while the earlier genus patent in question covered the compound of Ticagrelor, it was only disclosed and marketed in the later species patent (discussed here).

Although the present order does not discuss how Novartis relied on AstraZeneca to build its case, IPAB has analysed the issue of the (false) dichotomy between coverage and disclosure by relying on Novartis, which held that ‘the coverage in a patent might go much beyond the disclosure thus seems to negate the fundamental rule underlying the grant of patents’. This complements the principle in Section 10(5) which requires claims to be clear, succinct and based on the matter disclosed in the specification in order to be patented. IPAB observed that since sufficiency of disclosure is a prerequisite for grant of patent, the question of whether a given claim sufficiently discloses all that it seeks to cover, relates to the patentability of that particular claim. Therefore, it is to be ascertained by the Controller while examining that patent, not raised in opposition to any subsequent patent which adequately describes and claims a specific subject matter (para 19.8). As the two earlier patents had been examined and granted, there was a natural presumption that there was no gap between coverage and disclosure that needed to be addressed.

It is important to note that unlike AstraZeneca, the patent in question here was the species patent. The primary inquiry did not focus on whether a compound could be covered in the earlier patents and disclosed in a later one, but on what amounted to disclosure. Once it was established that the earlier patents did not disclose (identify) the compound, a plain application of Novartis led to the natural conclusion that only the subject matter that disclosed it was covered (patentable).

IPAB’s take on the coverage-disclosure issue is a sound one, drawn from the fundamental economic principles behind patent law. The system of patenting awards a limited monopoly in exchange for complete disclosure of the invention. If a party were to claim that it ought to enjoy monopoly despite not disclosing the invention in the same patent, it would defeat the bargain. This view is reflected in Novartis. After the perplexing ruling in AstraZeneca, the Ceritinib interpretation helps clarify the law by emphasizing disclosure/enablement for the purpose of determining coverage.

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On 2nd October, 2020, India and South Africa issued a joint statement before the WTO TRIPS Council, with a request to waive “the implementation, application and enforcement of Sections 1, 4, 5, and 7 of Part II of the TRIPS Agreement in relation to prevention, containment or treatment of COVID-19.” This waiver, annexed with a draft decision for the WTO General Council, was requested to ensure that IPRs do not encumber the access to affordable medicines or R&D, manufacturing and supply of medical products essential to combat COVID-19.

The TRIPS Council met on 15th and 16th October, 2020 with an agenda to discuss the joint proposal, among other issues. Apart from the original proposers, the joint statement was co-sponsored by  Kenya and Eswatini and was supported by a number of developing and least developed countries (LDC) in the meeting. The proposal received staunch opposition from a bloc of developed countries including European Union, United States of America, Switzerland, Norway, Australia, Canada, Japan and the United Kingdom, joined by Brazil (et tu Brazil? This also makes me wonder if BRICS is still a challenge to western economic supremacy, when their own members are sabotaging proposals of other members). Till the official report on the meetings is made available from the WTO, readers can refer to this informal update by Thiru Balasubramanium of Knowledge Ecology International.

Un-BRICS-ing apart, this joint statement is another addition to the long list of initiatives proposed by the global south. One major example includes the Call for technology pooling initiative by Costa Rica. Other examples have been listed by TWN and South Center. Nonetheless, there are still apprehensions that despite the pandemic, the practice of “business as usual” will likely prevail (see Page 16 specifically).

In this two part post I shall first assess the reasons and the key aspects of the proposal in the first part; and, in the second part I shall focus on the submissions made by India and South Africa followed by a discussion on the challenges which the proposal must overcome and the scenario if the proposal is rejected.

The Proposal

The statement emphasizes that as new diagnostics, therapeutics and vaccines for curing COVID-19 are developed, there are concerns about prompt, affordable and adequate availability of the end products. The joint statement states that countries are now manufacturing the medical products domestically to satisfy the surging demands. However, as per reports cited by the proposers (see here and here) patent protection has hindered or may hinder effective accessibility to such products and medicines. The statement argues that there are other IPRs too which act as barriers to accessibility, with limited mechanisms to overcome them. It  notes that many countries, especially developing ones, may face institutional and legal difficulties in using TRIPS flexibilities. And that the requirements and cumbersome processes for import and export of pharmaceutical goods under Article 31bis are a cause of concern for countries with insufficient or no manufacturing capacity. Owing to the above, the present proposal of waiver was made.

Another issue, though not directly addressed by the proposal, is that of “vaccine nationalism”. As reported by Oxfam here,  nations representing mere 13 percent of the world population have signed deals with manufactures of promising COVID-19 vaccines for preferential access to more than 51 percent of the doses. As a consequence, nearly 61 percent of the world’s population will not have access to the COVID-19 vaccine at least till 2022. Going by recent actions, there is good reason to be worried about this version of ‘nationalism’.

If you have it, why not use it?

The argument by India and South Africa on “institutional and legal difficulties” in using TRIPS flexibilities is slightly confusing, since it is coming from countries which  possess the required domestic provisions to ensure accessibility to such devices and medicines. While the South African delegate did refer to impediments it is facing in implementing the different TRIPS flexibilities, the Indian statement restricted its stated reasons to difficulty in implementing Article 31bis, which deals with issuing compulsory licenses for public health reasons through importing the drugs from other countries. (More on this below and in part 2). Domestically, the Indian government has talked about price controls, however, it hasn’t made any visible efforts to actually implement the existing flexibilities yet, nor is there any discussion on the same that I can find any information on.  Swaraj and Varsha here, have elaborated the provisions present under the Indian Patent Act (notably Section (s) 66, 92, 100, 102)  whereby the Indian government is authorized to issue compulsory licenses and even revoke patents to ensure accessibility to needed products in pressing times. Similarly, Marco Vatta asks why won’t the South African government issue compulsory licenses, despite being armed with “arsenal of interventions at its disposal”. It is only legitimate to expect that these countries will make use of such provisions in times of crisis and if not then at least explain the “difficulties” which are faced by them in using it.

Looking at global developments we can see a rise in the number of the countries which are making necessary changes within their domestic legislations to ensure accessibility to medicines. Nations, like Germany, who were once skeptical of provisions like compulsory licenses are now turning into believers, due to the ongoing crisis.

However, one must note that the compulsory license system comes with its  own inherent flaws. As pointed out by Eduardo Urias and Shyama V. Ramani, issuing compulsory licenses would make sense only when the government has a generic producer available within the territory of the country and the same is prepared to manufacture sufficient quantities of generics. It must also be noted that this generic churning infrastructure of the country should also be technologically advanced so that minimal time is consumed in the process of reverse engineering and the cost effective products are available sooner.

So what about such countries with no manufacturing infrastructure?

To assist such countries Article 31bis was introduced in TRIPS.  This provision acts as the legal basis for members to grant special compulsory licenses exclusively for the production and export of affordable generic medicines to other members which cannot domestically produce the needed medicines in sufficient quantities. (see page 172 here) However, as suggested by the joint statement, Article 31bis is not exactly ‘user friendly’ and  has been subjected to excessive criticism for its complex and cumbersome requirements, due to which it has been used only once- to export Anti Retroviral Vaccines from Canada to Rwanda. (See also “Why the High Income Countries that opted-out from the Art. 31bis WTO TRIPS system must urgently reconsider their decision in the face of the COVID-19 pandemic”)

Any device/ medicine which is patent protected could also be protected under other IPRs. Out of these protections, the protection granted to trade secrets warrants special attention as it protects undisclosed information. (see Article 39.2 of TRIPS). It is noteworthy that , even if a compulsory license is issued against use of a patented product, the undisclosed information on the product will still be protected. Prof. David Levine explains the significance of this“For vaccines and other biologic medicines, cell lines, genomic information, and other biological material can also be held as trade secrets. Data about the effectiveness of medicines and vaccines are trade secrets. Even so-called negative information — information about what does not work — can be a trade secret. All of this information is essential to the rapid development of, and access to, safe and effective COVID-19 diagnostics, treatments, and vaccines worldwide.”

Apart from patents and trade secrets, there is also the issue of technology transfer and know how. Abandoning patents and disclosing trade secrets will not do any good unless effective transfer of technology and sharing of know-how takes place. The most vulnerable in this regard are developing countries and LDCs which lack the necessary expertise to overcome a pandemic of this massive scale without expert assistance.  While Article 66.2 of the TRIPS does talk about transfer of technology from the developed countries to LDCs (which is neither justiciable nor mandatory) it is silent on such transfer to developing countries. (refer here for a detailed discussion on Article 66.2)

In Part II of the post we shall see the arguments advanced by the delegates of South Africa and India and how the events unfolded in the TRIPS Council meeting.

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In the first part of the post, I assessed the joint statement proposed by South Africa and India for waiver of certain key provisions of TRIPS.

Following the joint statement, 379 NGOs and members of civil societies wrote to WTO, in support of the waiver. On the day of the meeting, the proposal attracted the support of a large number of developing countries and LDCs notably Tanzania, Chad, Bangladesh, Sri Lanka, Pakistan, Venezuela, Honduras, Nepal, Nicaragua, Egypt, Indonesia, Argentina, Tunisia, Mali, Mauritius and Mozambique . And recently, on 18th October, the WHO extended its support in favor of the waiver, as well. However, no formal declaration for support from WHO has come into being apart from a tweet from the account of the WHO chief Dr. Tedros Adhanom Ghebreyesus.

In the TRIPS Council meeting, the delegates of both India and South Africa elaborated on the reasons for making the proposal and responded to the questions posed by those opposing it. The most notable points from the statements (available here and here) of are summarized below:-

• On TRIPS Agreement being fit and its flexibilities usable without limitation

Representative of South Africa suggested that some countries face limitations with respect to their national laws, pressures from their trading partners – particularly noting the EU IP enforcement report 2020 and USTR 2020 Special 301 report–  or lack the practical and institutional capacity required to exercise TRIPS flexibilities during the pandemic quickly and effectively. It argues that the requirements of specific packaging  and quantities of goods to be exported under Article 31bis can lead to unnecessary delays in the context of COVID-19 where countries need urgent access to medical tools.

Representative of India, didn’t make a reference to the above reports of EU and US, (despite regularly being named expressly) and chose to restrict itself to Article 31bis. It stated that Article 31bis is limited to pharmaceutical products, and was not designed to address challenges arising from pandemics of this scale. Medical devices like ventilators, dialysis machines etc. that are crucial for combating the ongoing pandemic, may not be covered under the scope of Article 31bis.

• On voluntary licenses as a solution to the COVID-19 crisis

The South African delegate asserted that voluntary approaches have proven to be insufficient. It cites the case of Remdesivir as an instance wherein despite receiving significant public funding of at least US$70.5 million, Gilead signed “secretive” bilateral licenses with a few generic companies which excludes nearly half of the world’s population from its licensed territories. It, along with India’s delegation, emphasised that till date not a single company has committed to the voluntary COVID-19 Technology Access Pool (C-TAP) of WHO.

• On the argument that intellectual property is not a hindrance but a help instead

The South African delegate responded that vast public funding has been poured into R&D for COVID-19 treatment. Globally, people are taking voluntary substantial risks in supporting and joining clinical trials, which has nothing to do with IP. On the other hand the pharmaceutical industries have asked governments to take over their liability and have requested for indemnity, so that they do not have to bear the risk but can make all the profit without much value add.

• On the argument that the waiver will deter innovation

The South African delegate responded by saying that the R&D of drugs is a joint effort and involves significant amounts of public taxpayer money.  It states that finding a cure for COVID-19 is a global effort and involves multiple actors and not just the pharmaceutical industry alone. It proposes that the governments thus must attach strings to any public money given for COVID-19 medical tools to guarantee that, if they prove safe and effective, they are available to everyone.

The statements of both the proposers re-affirmed that the waiver must be “granted to the WTO members so that they do not have to implement, apply or enforce certain obligations related to COVID-19 products and technologies under Section 1 (copyrights and related rights), 4 (industrial design), 5 (patents) and 7 (protection of undisclosed information) of Part II of the TRIPS Agreement.”

Probable Challenges for the Waiver

Theoretically, the proposed waiver will enable countries to have access to medicines/ medical devices without payment of any royalties to the IP holders, which in a compulsory license system, they would have been bound to pay. Also, MSF has elaborated some of the other benefits of the waiver, most notably that the waiver will put the governments back in the driving seats instead of pharmaceutical companies. But to be accepted, the waiver has a long road ahead of it. As evident from the meeting, the proposed waiver faced stiff challenges from the developed nations and is bound to face an uphill battle owing to the consensus based decision making in the WTO.

Even if the proposal is ultimately passed by the General Council, its effective fulfillment will depend entirely on the will of the members to cooperate with each other. Both the joint statement and the draft decision are silent about situations where one member is unwilling to cooperate with the other. One may argue that ultimately the fear of “bad publicity” may force them to forgo such implementation, but the fear of “bad publicity” among patent holders stands true without the waiver as well. For instance, Moderna declared that it will not enforce COVID-19 vaccine patents during the pandemic and similar examples of voluntary waivers by IP holders are given here and here.

Furthermore, the waiver will not solve the problem which is inherent in the protectionist nature of the countries. Not long ago, the Indian government imposed a blanket ban on the export of Hydroxychloroquine (which was later lifted). Similar was the case of US stockpiling nearly all the available stocks of Remdesivir, upon thinking it might be effective in treating COVID-19, leaving its availability to other countries in limbo. Swaraj has discussed the Remdesivir controversy here. In such a situation, this waiver will be of no use when the countries themselves retract from its obligations.

Another potential challenge is the one posed by obligations under Bilateral Investment Treaties (BITs) signed by the members with each other. BIT accords an additional layer of protection to the IP of the investor against expropriation by the host state. The question which arises out of this waiver is how effective would this waiver be in removing that additional layer of protection? While Prof. Prabhash Ranjan and Pushkar Anand have argued that India has exempted issuance of compulsory license and revocation of IP from the application of BIT obligations (see model text here), one would still need to look at the IP related provisions of the individual BITs signed by different countries, to know the general trend.

What if the proposal does not materialize?

It doesn’t seem like the rejection of waiver will bring any new problems to developing and LDCs. Waiving the proposed provisions of TRIPS may be redundant for LDCs since the transition period granted to them, from application of TRIPS, extended till 2021 and if Republic of Chad’s request on behalf of the LDC group is accepted then it may be extended further by 12 years. And though not ideal, countries like India, and South Africa, which have a decent infrastructure for manufacturing generics, can fall back on the security exception under Article 73(b)(iii) of TRIPS, whereby it can suspend enforcement of IPRs if it can prove it was done to resolve the existing “emergency in international relations” i.e. COVID-19. Prof. Emmanuel Oke has discussed this alternative in depth here and here. However, the situation will be precarious for developing countries which do not possess such infrastructure as they will ultimately depend on the cooperation with other members, probably via Article 31bis and on international initiatives like the Costa Rica technology pooling initiative and WHO Access to COVID-19 tools Accelerator.

The joint statement by the two developing countries is a bold move and certainly shows that their heart is in the right place. While the TRIPS Council in the meeting could not reach upon a decision with regard to the proposal, the South African representative in its above statement has requested the joint statement to be kept open for discussion. With uncertainty looming, only time will tell if this proposal will float any further or if this is the end of the story for it.

We’re pleased to bring to you a guest post by Dr. Enrico Bonadio (City, University of London – Fellow of the Innovators Network Foundation during 2019-2020), Dr. Luke McDonagh (London School of Economics – Fellow of the Innovators Network Foundation during 2019-2020) and Dr. Plamen Dinev (Goldsmiths, University of London), commenting on the recent Chinese decisions granting anti-suit injunctions in two SEP cases, one of which was discussed on the blog earlier this month here.

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China Enters the Realm of Anti-Suit injunctions in Standard Essential Patent (SEP) Cases

Enrico Bonadio, Luke McDonagh & Plamen Dinev 

Courts in China have recently issued anti-suit injunctions (ASIs) in two high-profile cases involving standard essential patents (SEPs) on 3G and 4G technology (Xiaomi v. InterDigital (2020) E 01 Zhi Min Chu 169 No 1; Zui Gao Fa Zhi Min Zhong (2019) No.732, 733, 734 (Huawei v. Conversant)). The former case has been followed by a controversial ‘anti-anti-suit’ injunction granted by the Delhi High Court on 9th October, 2020.

ASIs typically aim to prevent an opposing party from initiating proceedings in another jurisdiction or forum. While controversial, these measures are commonly justified on the grounds that they prevent forum shopping and conflicts of jurisdiction.

Xiaomi v. InterDigital

On 3rd June, 2020, Chinese consumer electronics maker Xiaomi—known for its prominence in smartphone industry—initiated proceedings at the Wuhan Intermediate Court, seeking to determine the FRAND (fair, reasonable and non-discriminatory) royalty rates for a number of 3G and 4G SEPs owned by US company InterDigital. In response, on 29 July 2020, InterDigital launched action against Xiaomi at the Delhi High Court, alleging infringement of its Indian patents on 3G and 4G (Nos. 262910; 295912; 298719; 313036; and 320182) and H.265/HEVC video compression standards (Nos. 242248; 299448; and 308108). According to a regulatory filing, InterDigital is “seeking…injunctive relief to prevent further infringement of the litigated patents in India, unless Xiaomi elects to take a license on terms determined to be FRAND…“.

In the meantime, on 23rd September, 2020, the Wuhan Court issued an anti-suit injunction against InterDigital which effectively prohibits the US company from seeking an injunction against Xiaomi in India. InterDigital is subject to a fine of up to one million yuan (125,000€) per day, should it breach the order. The Wuhan Court provided a number of justifications for its decision, stating that: InterDigital intentionally started proceedings in India to hinder the ongoing case in China; the outcome in Delhi might not be reconcilable with the decision in China; the injunction is needed to safeguard Xiaomi’s interests; imposing an injunction will not harm InterDigital’s interests.

Not even a week later, on 29th September 2020, InterDigital—which claims that the Chinese order was imposed with no prior notice and there was no opportunity to be heard in China—responded by filing an ‘anti-ASI’ application before the Delhi Court. The Indian Court granted the injunction on 9 October 2020, effectively restraining the defendants from enforcing the Wuhan anti-suit order until it completes its own proceedings. The Court reached this decision on the basis that ‘public policy trumps the comity principle’ (for more details on its reasoning and the comity arguments made by Xiaomi, read more here). There is little doubt that the Wuhan Court will see this action as a breach of its order. Moreover, InterDigital’s suit in India has already been criticised as a ‘deliberate attempt by InterDigital to scuttle or at least severely (sic) dilute the matter before the Chinese courts’.

Huawei v. Conversant

Huawei, the world’s top smartphone maker in terms of market share (as of 2020 Q2), initiated a non-infringement action against Conversant in the Nanjing Intermediate Court on 25 January 2018 (for an overview of the UK court dispute between the two companies, read more here). In the Nanjing proceedings, Huawei requested a determination of FRAND royalties for a range of SEPs on 2G, 3G and 4G held by Conversant. On 20th April, 2018, Conversant brought a separate action in the Düsseldorf Regional Court, alleging that Huawei had infringed a number of its German patents. Before the German Court had made a decision, on 16th September, 2019, the Nanjing Court responded by imposing ‘relatively low’ royalty rates, which prompted Conversant to take the case to the Chinese Supreme People’s Court (CSPC).

Then, on 27th August, 2020, the Düsseldorf Court found that Huawei had infringed Conversant’s patent EP1797659, which Conversant itself had acquired from Nokia in 2014. Critically, the Düsseldorf Court prohibited Huawei’s operations within the territory of the country, including the sale of UMTS-enabled devices (Universal Mobile Telecommunications Systems), and approved the FRAND terms originally requested by Conversant (which are nearly 20 times higher than those initially imposed by the Nanjing Court).

This prompted Huawei to immediately apply for an anti-suit injunction at the CSPC. The Supreme Court approved the request, thus prohibiting Conversant from enforcing the German decision until the CSPC reaches its own verdict in the ongoing Chinese proceedings. As in Xiaomi v. InterDigital, the Court imposed a fine of one million yuan a day for violating the order. Moreover, its justifications are strikingly similar to those provided by the Wuhan Court. The CSPC stated that, inter alia, enforcing the German decision would have a negative impact on the Chinese proceedings; the injunction is necessary to prevent irreparable harm to Huawei; and that the Chinese case was launched prior to the German case.

The CSPC decision is still pending. Interestingly, this may result in another ‘anti-anti-suit’ injunction between a German and a foreign court, which reportedly happened for the first time in a recent dispute between Nokia and Daimler (covered on the blog here).

The continuing relevance of anti-suit injunctions in SEP cases

Although the full implications of the above disputes remain to be seen, it is clear that both ASIs and ‘anti-ASIs’, such as the recent order granted by the Delhi High Court in the dispute between Xiaomi and InterDigital, are becoming increasingly common in SEP proceedings.

While controversial, anti-suit injunctions have the merit of reducing both the costs associated with defending cases in court, and the risk that conflicting judicial decisions will occur in parallel jurisdictions. The remedy is particularly useful to SEP implementers when patent holders disrespect their commitment to license their patents on a FRAND basis. For example, a judge who is in the process of assessing whether the SEP owner complies with FRAND terms may at the same time grant an anti-suit injunction to stop the patentee taking patent infringement actions in other jurisdictions until the FRAND litigation has been concluded (see Jorge Contreras – Michael Eixenberger, ‘The Anti-Suit Injunction – A Transitional Remedy for Multi-Jurisdictional SEP Litigation’, in Jorge Contreras (ed) ‘The Cambridge Handbook of Technical Standardization Law – Antitrust, Competition and Patent Law’, Cambridge University Press 2017).

After all, the notion that ASIs sought by SEP implementers can be acceptable and compliant with patent law has been confirmed by a US court in Microsoft v. Motorola (see the first instance ruling (W.D. Wash. 2012), affirmed on appeal (9th Cir. 2012)). In that case, Motorola had signalled its willingness to license patents relating to the 802.11 (WLAN protocols) and H.264 (video compression) standards on FRAND terms. Following unsuccessful negotiations, Microsoft alleged that Motorola had violated this commitment and filed a breach of contract action against the telecommunications company in Washington, DC. While the US proceedings were still ongoing, six months later, Motorola responded by filing an infringement action in Germany. The German court found Microsoft liable and enjoined the company from selling its popular Xbox (and other PC) products on the territory of the country. This string of proceedings culminated in Microsoft filing an ASI application in Washington. The US Court granted the ASI and held that the dispute in the US was dispositive of the German matter, despite the fact that one concerned breach of contract and the other focused on infringement (for more details on the case and recent trends in ASI litigation, see Jorge Contreras’ articles here and here). The Ninth Circuit affirmed the decision on appeal.

That also Chinese courts have started using these injunctions is certainly an encouraging signal. Of course, this is not to say that patent rights over standards should be neglected. While patent owners’ rights to enforce their monopolistic rights against alleged infringers is undoubtedly the raison d’être of the patent system, it cannot be denied that – when it comes to SEP disputes – making it easier to obtain anti-suit injunctions enhances the possibility for implementers to fight unfairness related to forum shopping across different countries. And symmetrically anti-anti-suit injunctions deprive SEP owners’ competitors of a legal tool for neutralising patent holders’ rent-seeking behaviours – actions that can not only cause harm to prospective implementers, but also have the potential to affect negatively the interests of final consumers.

Finally, it is worth noting that following the high profile UK Supreme Court decision in Unwired Planet v. Huawei (2020) (covered on the blog here) the recent Chinese decisions may be a signal to SEP owners and implementers that the courts in China intend to play an increasingly important role in the ‘global game’ of SEP litigation. 

Template from here

In an interesting turn of events, the Delhi HC on 12th October, 2020, vacated an interim injunction effectively permitting the Respondent (Treasure Vase Ventures Pvt. Ltd.) to use the impugned trademark ‘DELIVER-E’.  In doing so the court held that the Applicant’s (Delhivery Pvt. Ltd.) registered trademark ‘DELHIVERY’ is phonetically similar to the English word ‘delivery’ and is a generic mark, not eligible for benefit of statutory rights. The court reiterated that unless a generic mark has achieved distinctiveness, it cannot be accorded protection under law, and to determine the ‘so claimed’ distinctiveness of the mark at the interim stage would essentially amount to conducting a mini trial, which is prohibited. In this post I shall highlight the reasons of the court to vacate the interim injunction and expand on the concept of so called “spectrum of distinctiveness”.

Brief Background

The Applicant claims to be the proprietor of the trademark ‘DELHIVERY’ since 2011 and has 27 trademark registrations for the mark and its variants under classes 35, 39 and 42.  Sometime in May 2020, one of the Applicant’s employees noticed the use of the impugned mark ‘DELIVER-E’ on an E-rickshaw, following which the Applicant approached the court for an interim injunction. The court via its order dated 3rd July, 2020 (pdf) granted an interim injunction restraining the Respondent from manufacturing, selling and / or offering for sale any goods / services bearing the impugned mark ‘DELIVER-E’ or any mark which is identical / deceptively similar to the Applicant’s registered trademarks ‘DELHIVERY’, till the next date of hearing.

On merits of the interim injunction, the Respondent argued that the court was wrong to pass the injunction since the conflicting trademarks ‘DELHIVERY’ and ‘DELIVER-E’ are visually, structurally and phonetically dissimilar and that the Applicant cannot restrict the use of the mark ‘DELIVER-E’. The court agreed with this and vacated the interim injunction.

The Degree of Distinctiveness

The Applicant claimed that its mark ‘DELHIVERY’ is a portmanteau of “Delhi” and “Very” and thus it is neither a generic term nor a descriptive one. It argued that registration of a mark is prima facie evidence of its validity and in absence of any cancellation petition, no questions with regard to the validity of Applicant’s mark can be raised. It complained that the Respondent’s mark is deceptively similar to its mark ‘DELHIVERY’ and alleged that by use of mark ‘DELIVER-E’ the Respondent is passing off its services as that of the Applicant’s.

The Respondent on the other hand argued that its mark ‘DELIVER-E’ is different as it contains an “E” device, denoting use of an electronic vehicle by them. It claims that it adopted the mark ‘DELIVER-E’, in February 2020, for “last mile” delivery of goods and the same is derived from its earlier marks ‘SMART-E’ which it has been using since 2014. The Respondent argued that both the marks ‘DELHIVERY’ and ‘DELIVER-E’ are adaptations of the descriptive word ‘delivery’ and asserted that ‘DELHIVERY’ is a trademark which is descriptive of the business it performs. Citing Marico Ltd. v. Agro Tech Foods Ltd., it  argued that registration of a descriptive mark does not bar others, in the same trade, from using the word described.

The general principle says that the ability to be registered as a trademark and the corresponding protection thereof depends on the capability of the trademark to distinguish a good/ service from that of other traders. Bombay High Court’ in Indchemie Health Specialties v. Intas Pharmaceuticals And Anr reiterated this and elaborated the principle by viewing it from the lens of Miller Brewing Company’s spectrum of distinctiveness rationale [Sidenote: It was Abercrombie & Fitch Co. v. Hunting World, Inc. in which the court had actually framed this rationale] The court held, whether a mark is distinctive and thus registrable or not is assessed on the basis of the category it falls in-

1. Generic:  one which describes the kind of the goods/ services it is applied on and thus cannot be registered.
2. Descriptive: one which describes one or the other characteristics of the good/ service. And  is not registrable unless it has acquired “secondary meaning” in the market..
3. Suggestive: one which “suggests” and not “describes” the characteristics/ ingredients of the good/ services. Here, some sort of imagination is required in part of the consumer to determine the nature of the goods and thus such marks are registrable without the need of acquiring secondary meaning.
4. Arbitrary or fanciful: These, including invented words, are most likely to distinguish the goods of the applicant from the goods of others and therefore enjoy the fullest protection along the spectrum.

This brings to mind Justice G. S Patel’s words in People Interactive (I) Pvt.Ltd v. Vivek Pahwa And Ors– “The degree of distinctiveness, and, therefore, the possibility of registration as a trade mark, is inversely proportional to the degree of obviousness: the more obvious the word, the less the degree of distinctiveness and the chances of its registration.”

No Country for Generic Marks?

The court in the present case reiterated that the rights of Applicant’s trademark are not absolute and the competing marks are to be seen disjunctively. The court essentially held that the Applicant cannot have its cake and eat it too. It applied the logic that the Applicant claims the mark ‘DELHI’ ‘VERY’ to be coined and to have no relation with the generic word ‘delivery’. Thus, there shouldn’t be any comparison with the mark ‘DELIVER-E’ as the origin of the marks will be different. The court then held that the fact that Applicant alleges ‘DELIVER-E’ to be deceptively similar to its mark ‘DELHIVERY’ it relates its own mark to the generic word ‘delivery’. The court observes that the marks ‘DELHIVERY’ and ‘DELIVER-E’ are not structurally similar, however, noted the phonetic similarity of both the marks with the word ‘delivery’ and expressly held “the mark ‘DELHIVERY’ if pronounced in a routine manner shall mean ‘delivery’ and being a generic word, cannot be registered as a trademark.”

Ruling that the registration granted to the Applicant was for a generic mark, the court relied on Parveen Kumar Jain v. Rajan Seth, where the court said that if the registrations are “wrongly granted” for a completely generic expression, the court cannot ignore the generic nature of marks and confer monopoly on the same in favor of any party.

The court also rejected the Applicant’s argument that owing to high sales figures the mark ‘DELHIVERY’ has acquired secondary meaning. Citing para. 19 from the People Interactive case, the court rejected this argument and reiterated that “evidence, showing the displacement of the primary meaning by the secondary meaning, must be of the members of the public as well, not merely those specially placed to attest to its uniqueness.”

It also referred to the “classical trinity” test of- goodwill of plaintiff in market; misrepresentation to public from the services of defendant as that of plaintiff’s and; consequential suffering occurred to the plaintiff’s reputation because of the above misrepresentation. And held that the Applicant must establish the above during the trial.

Interestingly, the Applicant presented an arguendo stating that at best the mark ‘DELHIVERY’ can be accepted as a suggestive mark and not a generic one. The court disregarded this argument and held that “the mark which is phonetically similar to the English word ‘delivery’ does not require any imagination, thought and perception, more so for delivery services…. And cannot be termed as suggestive.”

The order is one of the rare ones which discuss the phonetic similarity of a mark with a generic word. It also highlights one of the most important problems about the Indian Trademarks Office i.e. the liberty at which protection is granted to a mark. The order specifically noted that “mark ‘DELHIVERY’ is a phonetically generic word and cannot be registered so as to seek benefit of statutory rights” during an interim hearing. It’s interesting to note that the examiner did not raise a Section 9(1) objection during the prosecution of the mark “DELHIVERY”(for instance see examination reports for the word mark ‘DELHIVERY’ under classes 35, 39 and 42). The court’s order is also laudable for clearly explaining, perhaps again, that registration of a mark will not give the owner unencumbered rights and will be subjected to limitations especially if the mark is a generic one.

We’re pleased to bring our readers an in-depth post looking at the grant of a patent application related to the anti-cancer drug Nivolumab, written by Dr. Venkata Subramanian Raman and Ms Sai Ratna Manjari. Dr. Venkata Subramanian Raman is a registered patent agent and proprietor of Patentszone, and Ms. Sai Ratna Manjari is a registered patent agent providing IPR consulting service and also associated with Patentszone. (Please note that given the nature of examination in the current post, it is longer than our usual posts).

Nivolumab and 5C4- Big brother or Twin brothers
Dr. Venkata Subramanian Raman and Ms. Sai Ratna Manjari

In an interesting grant recently, an application (PDF) related to anti-cancer drug Nivolumab (Opdivo, Opdyta in India) survived 4 pre-grant oppositions before finally being allowed by the patent office. Bristol Myers Squibb and Ono Pharmaceuticals were the applicants, and the Indian Pharmaceutical Alliance (IPA), Pankaj Kumar Singh, Restech Pharmaceuticals, and Dr Reddy’s Laboratories were the opponents.

The patent (5057/CHENP/2007) relates to a human monoclonal antibody raised against Programmed Death-1 (PD-1) protein, which was isolated from transgenic mice. Among multitude of anti-PD1 antibodies isolated, applicant arrived at 5C4 antibody based on its affinity and lower non-specificity compared to other antibodies. Among other arguments, opponents claimed that this 5C4 was already disclosed as Nivolumab, whereas the applicants claimed this is as an improved version of Nivolumab. This post endeavors to bring to the fore all the interesting arguments (Opponent/Applicant) during the prosecution and how it was eventually granted.

Background

The patent in this case, 5057/CHENP/2007, belongs to a family of patents (US 8779105), which entered India as a national phase application through PCT route PCT/JP06/309606. This patent covers anti-PD 1 human antibody, 5C4. Antibodies are macromolecules, which are glycoproteins produced by our body in response to invading pathogens to neutralize their effect.  From 2008, at least 48 therapeutic monoclonal antibodies (mAbs) have been approved by the US FDA and 18 new approved between 2018 to 2019; the revenue for antibodies is expected to hit US $ 300 billion in 2025 (see here). Nivolumab was the first recognised antibody against PD-1, approved in 2014 for the treatment of advanced melanoma, advanced renal cell carcinoma, non-small lung cancer, and metastatic melanoma.

Nivolumab was first invented by Japanese scientists at Medarex, which was licensed to Ono pharmaceutical in 2005. Later, Bristol-Myers Squibb (BMS) acquired Medarex in 2009 for US $2.4 billion. The first filed patent covering Nivolumab dates back to 2006, (EP 1896582 A1) which was granted in 2013 to BMS and Ono Pharmaceuticals, while the corresponding US patent, US 8779105 was granted in 2014.

The sales of Nivolumab went from US $ 2.1 billion in 2015 to $7.6 billion in 2018. Another antibody, pembrolizumab by Merck, was second best in sales for the year 2015 at US $566 million targeting the same protein. Incidentally, BMS and Ono Pharma signed a global patent license agreement with Merck in 2017, wherein BMS and Ono would get 6.5% royalties on sales of pembrolizumab, for settling patent infringement of PD-1 antibody.

Considering the complicated transaction history of the case, we have attached a flowchart to help readers navigate the case history (Fig .1 below).

The Initial set of 105 claims, were amended to only 34 claims based on the objections raised in the FER, with claims related to a method of treatment removed from the initial set. During the opposition proceedings the claims were further amended to 13 claims and finally this application was granted with 8 claims covering the product (antibody) and a composition comprising the product and a pharmaceutically acceptable carrier. The 4 sets of oppositions were filed at various points ranging from 7 years to 10 years after the date of publication. The Applicant had raised concerns about the conduct of the opponents to delay grant of the patent. But the Patents Act clearly allows opponents to file oppositions under Section 25(1) any time before the grant of a patent.

Figure 1: Simplified transaction history of 5057/CHENP/2007

Objections and Arguments

Section 25(1) (b) Novelty:  The recurring argument made by the opponents is that the current case reclaimed Nivolumab. Specifically, that WO/2004/04771, filed on 02/07/2003, disclosed human PD-1 antibody for the treatment in cancer, and the Japanese equivalent of this WIPO patent, JP 4409430, sought a patent term extension covering the active ingredient, Nivolumab.  Based on the priority date this anticipates the current case. Interestingly, the applicant agreed but added that the prior art did not cover unique sequences of the antibody disclosed as 5C4 in this case, asserting that  a drug product can be covered by different patents with different priority dates.

This of course raises the question of whether it is a suspect under Section 3(d), which requires new forms of known substances to show enhanced efficacy.

In another significant argument of the opposition it was pointed out that the applicant had relied on the examples of WO 2006/121168 (5057CHENP/2007) to prove anticancer activity for a European patent, EP 1537878 (family of WO 2004/04771), during the prosecution. An infringement suit had been filed against Merck by the applicants of this case for exploiting EP 1537878 (family of WO 2004/04771) in their patent for pembrolizumab. The opponents suggested that the applicant might not have used these prior art as references unless there was overlap in its scope and coverage.  In essence, the oppositions eluded that the antibody claimed in 5057/CHENP/2007 was already documented in the prior art as Nivolumab.  However, the applicant denied these stating that none of the prior art had the sequence of complementarity determining regions (CDRs) of the antibody, as claimed in the current case. Considering all the arguments made by the opponents, the applicant had accepted that prior art claimed Nivolumab, whereas the current case claimed 5C4 antibody, with the only difference between Nivolumab and 5C4 is the sequence of the CDRs domain (Fig. 2). (see here for readings on this).

It is worth noting that the opponent referred to EP 1537878, which discloses Nivolumab, and patents covering recombinant mouse models for inherently anticipating 5C4 antibody. A claimed invention anticipates a prior art even if the feature of the invention is found missing, and the prior art was considered to inherently disclose the missing feature. And the applicant dismissed this saying that inherency cannot be established based on “probabilities” or “possibilities” and reasoned that it is hard to arrive at 5C4 with superior properties without any undue experimentation. This is along the lines of what was held by the IPAB in Enercon v. Aloys Wobben (2013).

The Controller’s decision in the current order was in favor of the applicant since none of the prior art carry specific CDRs sequence similar to the current case and deemed the case as new and novel.

Figure 2: Structure of Antibody

Inventive step: Section 25(1)(e) Multiple oppositions argued that it was ‘obvious’ to identify antibodies against a target with high specificity by using a transgenic mouse, based on the combination of teaching references, such as references of PD-1 as a target for modulating immune response (WO 2001/014557), human antibody against human PD-1 (WO 2004/05685, WO 2004/04771), hamster monoclonal antibody raised against mouse PD-1 (EP 1445264 B1 (corresponding to WO 2003/042402)), generating human antibody, conceptualized by Medarex LLC, from a transgenic mouse (WO 2001/009187).

The applicant argued that mere existence of other antibodies cannot be used as an obviousness argument for human anti-PD1 and the concept of somatic hypermutation, a natural selection process for introducing close to 15 amino acid mutations per antibody, rendered “unexpected superior properties” thereby characterizing  the inventiveness of this case. (see here for more on this point)^.

The applicant compared superior binding property of 5C4 to other related antibodies, disclosed in WO 2004/056875 (PD1-28, PD1-33, and PD 1-35), and concluded that to arrive specifically at the 6 CDRs sequence of 5C4 antibody is difficult despite the existence of human or non-human antibody.

Highlighting the distinction between human interventions and natural selection, the opponents retorted that “selection of human germline to produce antibody has been carried out by the biological system of the mouse” with minimal human intervention (Fig. 3), which seem to fall under the purview of someone skilled in the art.

Data scrutiny by the opponent draws attention to the expert affidavit of the applicant, which compares specificity of 5C4 (Figure 14 of the specification) over a prior art antibodies (WO 2004/056875) under two different experimental conditions. Here data was compared to show superior specificity of 5C4, but the data presented were in two different scales to be comparable. The opponent was trying to point out that if the same scales were used for comparison, the 5C4 antibody would have shown only comparable specificity with prior antibodies, rather than the superior specificity claimed by the applicant. The expert affidavit of an opponent further adds that error bars were missing in Figure 14 of the specification, which makes this inconclusive and also scientifically inappropriate since the data from two different experimental conditions cannot be compared. In addition, the cytokine release which reflects level of antibody in the blood, in response to different antibodies were compared with 5C4, and all the antibodies exhibited comparable cytokine levels with no superior property of one antibody over the other. In essence, the opponent put forth the argument that 5C4 only had comparable properties like other antibodies and not superior.

Interestingly, the applicant had not replied to this and the Controller in the order accepted the defense by the applicant for arriving at specific 6 CDRs sequence of 5C4 is non-obvious and inventive.

It is also interesting to note that the applicant used unique sequences of CDR to get over novelty and inventive steps. It is a fact that the applicant’s case has unique sequences in 5C4, but a skilled artisan at the time of filing of this application had prior knowledge about immunizing transgenic mice with antigenic human protein to generate high affinity antibodies. This may be the reason for deleting method claims involved in isolating the antibody and including only product and composition claims for protection.

Figure 3: Process associated with isolating antibody as in 5057/CHENP/2007

Section 25(1)(f) Non-patentable inventions: Section 3(c) of the Patents act keeps check of inventions that are mere discovery of any living or non-living thing.  To overcome Section 3(c), the applicant has to prove that subject matter is not naturally occurring and involves human intervention in isolating them, which has to be novel and inventive. All the oppositions delved on the role of human intervention, since the antibody isolated was obtained from a transgenic mouse, which performs its own selection.

The applicant argued that 6 CDRs of 5C4 antibody is different from 6 CDRS of germline sequences, and the process involved more of human ingenuity than mere isolation from the transgenic mouse and proved they are non-naturally occurring sequences based on alignment with the germline sequences. (see here for more).

Further, it was mentioned that PD-1 is a naturally occurring protein and nature prevents production of antibodies against self-antigens. This raises the question of what promoted sequence change in the CDR region:- is it due to somatic mutation (i.e., natural process) or by human intervention? Both the applicant and the opponents relied on previous granted and refused cases in arguing their case to the Controller. The decision rendered this objection mute since the 6 CDRs sequence were not naturally available, and opponents also failed to prove otherwise.

Under Section 3(e), if either substances or processes for producing substances are mere admixture resulting in aggregation of properties, they are not patentable. The composition claim of this case came under scrutiny, but the applicant muted this objection suggesting the combination of novel and inventive antibody with another substance is also novel and cannot be viewed under the purview of Section 3(e). The Controller’s decision was in the favor of the applicant since the opponent failed to prove the non-patentability under section 3(e).

Finally, under Section 3(d), the opponents challenged the claimed antibody as a new form of known substance and asked for therapeutic efficacy of the antibody over the known antibodies, and the applicant’s rebuttal pointed out that none of the prior art carry sequence similar to that of CDRs of 5C4 antibody, and Section 3(d) is not applicable to novel compounds.

With regard to sufficiency of the disclosure, the opponents raised objections on the know-how for the number of mutations in the variable or the CDR region, and lack of information about the source of hybridoma. The opponents reasoned that if the process of obtaining antibodies is through the formation of hybridoma, any skilled person would not be able to comprehend this information without the source and knowledge of the hybridoma. The applicant insisted that the patent was directed towards antibody, and its sequences are clearly disclosed and no deposition was required. The applicant went on to clarify who is a skilled person in the art, and emphasized that the patent sufficiently discloses information for someone skilled in the art, and sufficiency of disclosure must be ascertained from the viewpoint of person possessing average skill, who can follow the instructions of the examples provided, and not directed to any general public. Further it was pointed out that the application sufficiently discloses the sequence information of the variable region and it must have been obvious to a person skilled in the art that the other regions beyond CDRs are constant.

Conclusion

This case bordered between human intervention and the natural process under the blurred lenses of Section 3(c). But is there a threshold for a natural process beyond which one can term it as human intervention? Transgenic mice are a result of human ingenuity, but these mice have become a natural source for obtaining antibodies from the time of creation. Assuming the steps involved in isolating antibodies from transgenic mice are known in the art, would antibodies produced from transgenic mice constitute inventiveness? The 2013 Indian biotech guidelines (page 11) give direction on non-patentable products isolated directly from nature, but when it comes to the process of isolating them it reroutes to Section 2(1)(j).  More clarity in categorizing natural against human intervened process would put the inventive argument to rest. Also patentability criteria for a product by process involves providing evidence for modification in the process that results in products that are distinct in properties over the products known in the prior art. Such technical evidence may vary from case to case and this case brought those issues to the fore.

We’re pleased to inform you that the Centre for Intellectual Property Rights at National University of Advanced Legal Studies (NUALS), Kochi is seeking papers for its book on the theme: ‘Innovate for a Green Future: Role of IP Rights in Encouraging Innovation and Creativity’. The last date for the submissions is November 15, 2020.

Call for Papers: NUALS’ Book on Sustainability and Intellectual Property Law | Submit by November 15

The Centre for Intellectual Property Rights is one of the 16 different centres of excellence at the National University of Advanced Legal Studies, Kochi. Since its inception, it has been at the forefront of promoting research and education in the field of IPR. The Centre seeks articles for its book on the theme: ‘Innovate for a Green Future: Role of IP Rights in Encouraging Innovation and Creativity’.The paper may be on any one of these sub-themes:

• On how the patent system fosters innovation and the development and diffusion of eco-friendly technologies
• On how trademarks and other identifiers support the emergence and growth of businesses built on principles of environmental sustainability
• On how rights, such as geographical indications are encouraging more sustainable natural resource use

Or any other aspect related to the main theme.

The publication aims to call for and gather papers primarily from teachers, academicians, researchers, practitioners and other stakeholders.

Submission Guidelines

• Submissions are to be made in electronic form only and are to be sent to ciprpublications@nuals.ac.in [Subject is to be “Submission for CIPR Publication”].
• The paper should be in English, not exceeding 4000-5000 words (excluding footnotes).
• The paper should be accompanied by an abstract not exceeding 350 words. Please limit keywords to 4. This shall not count towards the word limit.
• Co-authorship is permitted to a maximum of two authors.
• The cover page should include Name, Address, E-mail ID, Contact number and the name of the College/University/Firm along with the address of the author/s. In case of co- authorship, the cover page should include details of both the authors. A brief profile of the author/s not exceeding 250 words should be attached with the abstract.
• Kindly avoid the general and common information about the sub theme of your paper as far as possible. For example, those who are writing about patents, kindly avoid elaborating about patents instead of discussing the topic as doing so may result in duplication of information in the chapters coming under a single sub-theme.
• No part of the submission should have been published earlier nor should it be under consideration for publication or a contest elsewhere.
• All contributions must represent original ideas and interpretations coupled with critical evaluation and assessment.
• Any form of plagiarism will result in immediate disqualification.
• Any queries regarding the book shall be addressed to ciprpublications@nuals.ac.in.

Formatting Guidelines

• The submission must follow the Bluebook system of citation 20th edition.
• The submission is to be made in Times New Roman, font size: for title – 16; for headings – 14; for main text – 12, line spacing: 1.5, footnote size: 10
• Alignment shall be justified. One inch margin to be maintained on all sides.
• Submissions may be made in .doc/.docx/.odt formats only.
• Use of headings and subheadings is encouraged.

Deadline

The last date for the submission of the essay is 11:59 pm, 15th November, 2020.

On the occasion of International Open Access Week, we’re delighted to bring to our readers an insightful post by Dr. Arul George Scaria, discussing whether the process of relinquishment of rights granted to authors under the Indian copyright law may cause copyright to be a hindrance for open access in India.

Dr. Scaria is an Associate Professor of Law and Co-Director of the Centre for Innovation, Intellectual Property and Competition (CIIPC) at National Law University, Delhi. He did his doctoral research (2008 – 2011) at the International Max Planck Research School for Competition and Innovation, Germany, and post-doctoral research (2012 to 2014) at the Catholic University of Louvain (UCL), Belgium. His key areas of interest and specialisation are science and technology policies, open movements, intellectual property law, and competition law. He has two single authored books to his credit, Ambush Marketing: Game within a Game (2008) and Piracy in the Indian Film Industry: Copyright and Cultural Consonance (2014). Dr. Scaria has previously written guest posts for us here, here, here and here.

Is Copyright a Hindrance for Open Access in India?

Dr. Arul George Scaria

The world is celebrating the open access week from October 19 to 25 and the theme for this year is Open with Purpose: Taking Action to Build Structural Equity and Inclusion.  I was fortunate to be a part of seminar series organised by the DST Centre for Policy Research at IISc to celebrate the open access week. When the moderator of the panel, Mr. Madhan Muthu (Librarian, Azim Premji University), suggested that the topic of our panel discussion can be ‘Is copyright a hindrance for open access in India?’, the immediate answer that came to my mind was “No, it’s not a hindrance”. Many factors might have influenced my quick response and this includes the fact that major open movements like the Creative Commons licenses are built on the existing copyright framework. But a deeper reflection of the question in the context of some of the provisions in the Indian copyright law made me change my answer from “No, it’s not a hindrance” to “May be, it is”. This post is intended to discuss one of those provisions that compelled me to change my answer.

Is it easy to waive off rights under Indian copyright law?

A question that hasn’t received due attention in the context of open access in India is whether it is easy for authors to relinquish the rights granted to them under copyright law. As most readers of this blog are aware of, copyright protection is automatic in nature. In other words, the moment an author creates a work that qualifies as a subject matter of copyright protection, it gets protected under copyright law, provided it can meet the minimal standards of originality, as defined by the Supreme Court decision in Eastern Book Company v. D. B. Modak.

But many authors may not want to retain all their rights and some may even want to waive off their rights completely. Section 21 of the Copyright Act, 1957 discusses the possibility of relinquishment of all or some of the rights granted under copyright law and it reads as follows:

“21. Right of author to relinquish copyright – (1) The author of a work may relinquish all or any of the rights comprised in the copyright in the work by giving notice in the prescribed form to the Registrar of Copyrights or by way of public notice and thereupon such rights shall, subject to the provisions of sub-section (3), cease to exist from the date of the notice.

(2) On receipt of a notice under sub-section (1), the Registrar of Copyrights shall cause it to be published in the Official Gazette and in such other manner as he may deem fit.

(2A) The Registrar of Copyright shall, within fourteen days from the publication of the notice in the Official Gazette, post the notice on the official website of the Copyright Office so as to remain in the public domain for a period of not less than three years.

(3) The relinquishment of all or any of the rights comprised in the copyright in a work shall not affect any rights subsisting in favour of any person on the date of the notice referred to in sub-section (1).”

As at least some of the readers of this blog may recall, it was the 2012 amendments to Copyright Act, 1957 that tried to make the relinquishment process easier by also adding the possibility of relinquishment through a public notice. So most people are under the presumption that any public notice (say for example, the use of CC0 symbol and/ or a link to associated text) is sufficient to meet the requirements of relinquishment of rights under Indian copyright law.

However, to get a complete picture, one has to also look at the manner in which the Copyright Rules, 2013 tried to implement Section 21. Chapter III of Copyright Rules, 2013 deals with relinquishment of copyright. As per Rule 4 of the Copyright Rules, 2013, an author who wants to relinquish all or any of the rights as per Section 21 has two options: (i) give a notice to the Registrar of Copyrights in Form 1 or (ii) give a public notice, as per Rule 5(2) of Copyright Rules, 2013. While the first path is non-ambiguous (but certainly not the easiest path in the digital era!), it is the second one that warrants more attention, as the option for relinquishment through public notice was introduced to ease the process of relinquishment. But if one looks at Rule 5(2), it can be seen that such a public notice should mandatorily include the following information:

(a) Class of the work;

(b) Title of the work;

(c) Full name, address and nationality of the author;

(d) Language of the work;

(e) Name, address and nationality of the publisher, if published, with year of publication and country of first publication;

(f) If copyright in the work is registered under section 45, the Registration number;

(g) The right or rights to be relinquished; and

(h) The date of relinquishment of the rights.

Rule 5(3) says that the author may forward a copy of the public notice, along with proof of his identity, to the Registrar and on receiving such notice, the Registrar shall post the same on the website of the Copyright Office.

Copyright Rules, 2013 has also defined the term ‘public notice’ for the purpose of the chapter on relinquishment and as per that definition, the term ‘public notice’ means-

• mentioning of notice on the work or cover of the work; or
• publication in one issue of a daily newspaper in the English language having circulation in the major part of the country and also in one issue of any daily newspaper in the same language of the work; or
• Posting the notice on the web site of the Copyright Office at the request of the author by giving the details as required under sub-rule (2).

While the option for relinquishment through a public notice was introduced in Section 21 primarily to enrich the public domain through easier relinquishment of rights, a combined reading of Section 21 of the Copyright Act and Chapter III of Copyright Rules, 2013 make one wonder whether this objective has been more or less completely defeated. As one can imagine, not many authors would be willing to spend so much of time and efforts in compiling and sharing all the mentioned mandatory information, even if they intrinsically wish to relinquish all or some of the rights in their works for the broader social benefit. It is also doubtful how many authors would be able to identify precisely the class of work. Even identification of the nationality of the publisher could be difficult at times, particularly when the work was published in an online media. One should also try to view these challenges in the digital context, wherein millions of works are created every second and ask how much time the authors can spend on compiling the information required for relinquishment of rights in all their copyrighted works. A quick search on the Copyright Office website also did not show any public notices published under Rule 5(3). If any readers of the post have seen any such notices on the Copyright Office website, they may provide the links to such notices through the comments section of this post.

Are there practical consequences?

The cumbersome procedure envisaged under Chapter III of Copyright Rules, 2013 may also raise some practical questions. The most important among them is whether the attempts for relinquishment of rights through tools like CC0 of the Creative Commons would be valid relinquishments under Indian copyright law. As one may notice from the procedural requirements mentioned in the previous section, the answer may be negative. Most people who are currently using tools like CC0 fail to follow all the requirements of a public notice under Chapter III of Copyright Rules, 2013, even though the intention of using such tools is to convey clearly to the public the relinquishment of all rights in the work.

While it can be reasonably presumed that our legislators did not intend to outlaw relinquishments through tools like CC0, Copyright Rules, 2013 may in effect be making relinquishment through such easy tools in the digital world meaningless in India. From a policy perspective, it might also be important to ask ourselves what additional benefits we as a society are gaining by imposing such procedural hurdles for relinquishment of rights under copyright law. If copyright protection doesn’t demand formalities, we have hardly any justification in demanding formalities for relinquishment of rights granted under copyright law. Specific requirements regarding the notice are bringing in unnecessary uncertainties regarding the validity of waivers through user-friendly tools and it is desirable to make necessary changes in the copyright rules for easier relinquishment of rights.

Way forward

As the world celebrates the open access week, we as a nation may critically examine whether we have done enough to ease sharing of knowledge resources within the framework of our copyright law or whether we are defeating the objectives of enriching the public domain by putting in bureaucratic hurdles for waiver of rights. This is particularly important in view of the increasing recognition of the value of sharing knowledge resources for promoting innovation and creativity. The current Covid-19 crisis has further highlighted diverse dimensions of the importance of sharing knowledge sources. Let the current open access week celebrations be a good reminder to us on the value of sharing and the need for fine-tuning our copyright law to promote sharing.

We’re pleased to inform you that DPIIT IPR Chair at Maharashtra National Law University (MNLU), Nagpur is organising a three day free virtual workshop for students on ‘Nuances of Patent Processing’ from October 26-28, 2020. For further details, please read the announcement below.

Three-day Virtual Workshop on ‘Nuances of Patent Processing’ by DPIIT IPR CHAIR at Maharashtra National Law University, Nagpur | October 26-28, 2020

The Chair for Intellectual Property Rights of Maharashtra National Law University, Nagpur proposes three-day virtual workshop on ‘Nuances of Patent Processing’ from October 26 – 28, 2020.

In the changing paradigm of global business, one central force that supports this change and shall regulate more closely in the time to come, is intellectual property laws and practices. It is therefore important for all Innovation based bodies to regulate research and development duly aligned with an IP profile; to ensure that the amount of resources spent on research is well justified and allows efficient ‘Intellectual Property Creation & Management’. To achieve this, it is inevitable for each University/Institute to have expertise in processing of intellectual property.

Managing of IP includes acquiring of intellectual property, managing its use and appropriation of intellectual property. For all these, two things are important: one is getting property registered under the IP Laws and second, is its protection. Government policies have declared the extension of protection to various intellectual properties with some objectives, for example, patent is granted to promote progress and prosperity by encouraging technological innovations.

Drafting of necessary applications for grant of protection, is a very vital issue. Many times, though invention qualifies the legal criteria for protection, but some technical flaws in drafting result in its rejection by the registration office. Thus, it is the need of the hour that the future lawyers have to be very vigilant at this crucial stage. It requires thorough knowledge of drafting and filing of an application. Further, the second stage is protection of intellectual property. Once the inventor starts exploiting the IP rights, it is necessary that the awareness tools must be known to the owner. For that reason, the nuances of filing infringement application play an important role. Practicing lawyers are the best persons in this field who can be said to be the ‘Guardians of Intellectual property’.

This workshop is planned in phased manner and this is the first event. This event is aimed to disseminate knowledge amongst the participants to gain a comprehensive understanding of the nuances of drafting, litigation and related issues of patent.

Objectives of the workshop

The objectives of the workshop are to aid the participants:

• To understand the vital concepts of intellectual property;
• To know the process of search and filing of patents;
• To acquire the preliminary skills of patent drafting; and,
• To obtain knowledge about patents.

Schedule of the workshop: October 26-28, 2020 

Registration and e-certificates

Registration is compulsory for attending the workshop. No registration fee for attending the workshop.

Link: https://docs.google.com/forms/d/e/1FAIpQLSduTiEsZwn_OD2PVkZQ1Zq0xUEImpYkB0Uw3gAOcZRoGb5hfQ/viewform

E-Certificates will be given to all participants who attend all three days’ workshop.

Who can attend?

The program is focused from students’ point of view, thus students from UG and PG courses can join the workshop.

Patron

Prof. (Dr.) Vijender Kumar Vice-Chancellor

Maharashtra National Law University, Nagpur

Coordinator

Dr. Ragini Khubalkar

In-charge of IPR Chair

Assistant Professor of Law

Maharashtra National Law University, Nagpur

Co-Coordinator

Ms. Divita Pagey

Assistant Professor of Law

Maharashtra National Law University, Nagpur

Student Organising Committee

• Yashi Agrawal (+91 9013516099)
• Gunjan Baheti (+91 8777450124)
• Rushikesh Patil (+91 7498732798)
• Sherry Shukla (+ 91 9520193361)

Topical Highlight

Delhi HC Delivers a Blow to “Delhivery”: Rules the Mark to be Phonetically Generic; Ineligible for Statutory Benefits

In this post, Praharsh analyses the Delhi High Court order vacating an earlier interim injunction granted in favour of DELHIVERY. He first notes the arguments made by both parties towards distinctiveness of the mark. He highlights the spectrum of distinctiveness approach followed by courts to determine if a mark is registrable and thus assess whether it fall within the following categories: generic, descriptive, suggestive, arbitrary or fanciful. The court noted how both the marks, ‘DELHIVERY’ and ‘DELIVER-E’ were related to the generic word ‘delivery’. It pointed out that where registrations are wrongly granted to generic marks, the court cannot ignore the same to grant monopoly on generic terms. As far as the question of secondary meaning to the term is concerned, the court held that the same had to be established at a trial. The court also dismissed the arguendo of considering the mark as a suggestive mark. Praharsh argues that this decision highlights the liberal approach to trademark registration in India and that registration does not give unencumbered rights to the owner.

Thematic Highlight

Wishful Thinking? Analyzing India and South Africa’s Joint Statement to Waive Key Provisions of TRIPS – Part I

In this post, Praharsh analyses the joint statement issued by India and South Africa for relaxation of certain TRIPS provisions in the wake of Covid-19. The rationale behind the proposal is to ensure accessibility of medicines and diagnostic products to cure the virus that might be hindered due to patent protections. Many countries might also face difficulty in using the TRIPS flexibilities. Additionally, for those countries lacking sufficient manufacturing capacity, the cumbersome process of Article 31bis of TRIPS is a cause of concern. Praharsh also notes the issue of vaccine nationalism given that as per manufacturing deals a large part of world’s population will not receive the vaccine till at least 2022. He then highlights that despite pointing towards the “institutional and legal difficulties” in using TRIPS flexibilities, both India and South Africa have not made any efforts in using these provisions despite domestic statutory backing. Finally, he points to the non ‘user friendly’ nature of Article 31bis for countries without manufacturing capacity. He notes that even a compulsory license would not suffice since trade secrets protections also come in the way. Moreover, effective technology transfer and know how sharing is important for which the developing countries are particularly not protected.

Wishful Thinking? Analyzing India and South Africa’s Joint Statement to Waive Key Provisions of TRIPS- Part II

In this post, Praharsh continues his analysis of the joint proposal by India and South Africa before the WTO. He summarises some important points mentioned by the delegates of the two countries in the TRIPS Council meeting. These include delays and difficulty in applying the TRIPS procedure, insufficiency of voluntary licensing, and the role of public funding in the R&D for drug making. He then notes the possible challenges to this proposal. He first notes the reluctance of developed nations to agree to this proposal. Even if the proposal is indeed passed, there remain problems of cooperation between members, protectionist approach of states, and obligations under several BITs. Finally, he assesses the impact of failure of the proposal’s passing. He highlights that the least developing nations already have a transition period for TRIPS compliance until 2021 which might even be extended. Nations such as India and South Africa can use the security exception and bank on their manufacturing infrastructure. The developing nations without such infrastructure would bear the brunt and seek recourse to Article 31bis or other international initiatives.

Other Posts

Only ‘Disclosed’ if ‘Identified’: IPAB Quashes Ceritinib Patent Revocation

In this post, Adyasha analyses the IPAB order quashing the Controller of Patent’s decision that revoked Novartis’s patent on the anti-cancer drug Ceritinib. She first notes the procedural issues pointed out by the order such as delay in fee payment and consideration of additional evidence. She then discusses IPAB’s treatment of disclosure of the specific patent in the earlier genus patents. It noted that such scrutiny had already been done at the stage of pre-grant examination and objections had been dropped. The Opposition Board’s report had also concluded that the earlier patents did not show the modifications required to be made to reach Ceritinib. IPAB cautioned against conducting ‘hindsight analysis’ and held in favour of Novartis. Finally, Adyasha analyses the issue of the (false) dichotomy between coverage and disclosure and argues that this order brings in the clarity by emphasizing disclosure/enablement for the purpose of determining coverage.

Nivolumab and 5C4 – Big Brother or Twin brothers?

In this guest post, Dr. Raman and Ms Manjari look at the grant of a patent application related to the anti-cancer drug Nivolumab, surviving 4 pre-grant oppositions before being allowed. They first look at the question of novelty as per Section 25(1)(b). The opponents argued that the claimed 5C4 antibody in the application had already been disclosed in the earlier Nivolumab patent. The Controller, however, held in favour of applicant since the specific CDRs sequence as in the current case was not found in the prior art. They then look at the issue of inventive step under Section 25(1)(e). The Opposition claimed that the claim was ‘obvious’ for a skilled artisan to arrive at and that it had only comparable properties compared to other antibodies. The Controller, however, agreed with the applicant on the non-obviousness and inventiveness of the claim. Finally, they look at whether the invention was non-patentable as per Section 25(1)(f). A Section 3(c) objection on the ground that the claim was naturally occurring was rejected. Similarly, objections under Section 3(e) and 3(d) were also rejected, and the extent of disclosure considered sufficient. They part by highlighting that there is a need for greater clarity in cases bordering between human intervention and the natural process.

China Enters the Realm of Anti-Suit Injunctions in Standard Essential Patent (SEP) Cases

In this guest post, Dr. Bonadio, Dr. McDonagh, and Dr. Dinev comment on recent Chinese decisions granting anti-suit injunctions in two SEP cases. They first look at the proceedings in Xiaomi v. InterDigital where a Wuhan court issued an anti suit injunction that was countered by an anti-anti suit injunction from the Delhi High Court (discussed by Rajiv here). They then discuss the anti suit injunction granted by the Chinese Supreme People’s Court against enforcement of a decision of a German court in proceedings between Huawei and Conversant. This injunction was also granted on similar terms as the Wuhan order. Finally, they look at the increasing commonality of anti suit injunctions in SEP litigation. They highlight its importance as a remedy against rent seeking behaviours of patent owners and that the Chinese courts starting to make use of this remedy is an encouraging signal.

Is Copyright a Hindrance for Open Access in India?

In this guest post, Dr. Scaria discussing whether the process of relinquishment of rights granted to authors under the Indian copyright law may cause copyright to be a hindrance for open access in India. He analyses Section 21 of the Copyright Act and Chapter III of Copyright Rules, 2013 dealing with relinquishment of rights through public notice and highlights that such cumbersome process will deter even those seeking to relinquish their rights for broader social benefit. He then points out the practical significance of this regime. Attempts for relinquishment of rights through tools like CC0 of the Creative Commons, though presumably not intended to be outlawed, would not satisfy requirements under the rules. He questions the emphasis on formalities in relinquishments when none exist for the existence of the right to begin with. He outlines the importance of rethink of these principles for furthering open access and creativity in the country.

PLEX v. ZEEPLEX: Passing Off at the Last Minute

In this post, I analyse the Bombay High Court order denying an interim injunction sought by PLEX for restraining Zee’s recently launched a pay-per-view service, ZEEPLEX. I first analyse the passing off claim and argue that since the three factor test of “reputation of goods, possibility of deception and likelihood of damages to the plaintiff” were not satisfied the claim was rightly denied. Next I analyse the impact of injunction applications moved at the last minute and Justice Patel’s cautious remarks on the same. I argue for mainstreaming the incorporation of due diligence in form of taking immediate remedial measures on the part of the plaintiff while deciding upon the balance of convenience and irreparable injury. From a law and economics perspective such an approach furthers efficiency and in this framework the injunction plea was rightly dismissed in the instant case.

Call for Papers: NUALS’ Book on Sustainability and Intellectual Property Law [Submit by November 15]

Recently, we informed our readers about call for papers for a book on the theme: ‘Innovate for a Green Future: Role of IP Rights in Encouraging Innovation and Creativity’ from the Centre for Intellectual Property Rights at National University of Advanced Legal Studies (NUALS), Kochi. The last date for the submissions is November 15, 2020. Further information on the submission guidelines is mentioned in the post.

Virtual Workshop for Students on ‘Nuances of Patent Processing’ [October 26-28]

We also informed our readers about a three day free virtual workshop for students on ‘Nuances of Patent Processing’ being organised by the DPIIT IPR Chair at Maharashtra National Law University (MNLU), Nagpur. The workshop will take place from October 26 to October 28, 2020. Further information on the workshop is mentioned in the post.

Decisions from Indian Courts

• The Delhi High Court in Bennett Coleman & Co. Ltd. v. Arg Outlier Media Pvt. Ltd., granted an interim injunction against the defendant restraining it from using the plaintiff’s registered trademark ‘NEWS HOUR’ but did not pass any interim order concerning the tagline ‘NATION WANTS TO KNOW’. [October 23, 2020]
• The Delhi High Court in Anil Rathi v. Shri Sharma Steeltech (India) Pvt. Ltd., restrained three proposed defendants from using the plaintiff’s registered mark ‘RATHI’ and issued a contempt notice against two other defendants that continued to use the mark despite the court’s orders to the contrary. [October 23, 2020]
• The Delhi High Court in Asics Corporation v. Laddi Bhai, issued notice in a suit filed by the plaintiff regarding infringement of its mark ‘ASICS’. [October 22, 2020]
• The Commercial Court at Alipore in SVF Entertainment Pvt. Ltd. v. Zee Entertainment Enterprises Ltd., granted an ad interim injunction restraining the defendant from broadcasting the Petitioner’s movie “Chitrangada: The Crowning Wish” on its platform, ZEE5. [October 20, 2020]
• The Telangana High Court in Super Cassettes Industries v. Nandi Chinni Kumar, upheld the trial court order restraining the release of the Amitabh Bachchan-starrer movie ‘Jhund’ in a copyright infringement case. [October 19, 2020]
• The Delhi District Court (Patiala House) in Krbl Limited v. Meenam Trader, granted an ex-parte ad interim injunction against the defendant restraining them from using any mark deceptively similar to plaintiff’s registered ‘UNITY’ mark. [October 16, 2020]
• The Madras High Court in Tirumala Milk Products Pvt. Ltd. v. Swaraj Industries Pvt. Ltd., made an earlier interim injunction as absolute restraining the defendants from using any mark similar to the plaintiff’s registered trademark ‘Thirumala’ / ‘Thirumala Milk’. [October 15, 2020]
• The Delhi District Court (Tis Hazari) in Refread Solutions Private Limited v. Scientific EResource, held the defendants to be liable for infringing the copyright of the plaintiff, a digital library service provider, and awarded Rs 5 Lakhs of punitive damages. It also restrained the defendants from carrying similar trade to the plaintiff for three years in the Indian market. [October 13, 2020]
• The Delhi High Court in Radico Khaitan Ltd. v. Vintage Distillers Ltd., granted an ad-interim injunction in favour of the plaintiff restraining the defendant from using its ‘VINTAGE MOMENTS’ mark owing to similarities with the plaintiff’s registered ‘MAGIC MOMENTS’ mark. [October 12, 2020]
• The Kerala High Court has upheld the ban on Suresh Gopi’s 250th film ‘Kaduvakkunnel Kuruvachan’ on account of copyright violations.
• A Mirzapur court has granted a temporary injunction against the defendants from using the plaintiff’s registered ‘ADANI’ mark.

Other News from Around the Country

• The Patent (Amendment) Rules, 2020, have come into force on October 19, 2020.
• The Indian Patent Office, as per a notice published on October 17, 2020, has informed that it will accepting Form 5-1 under Chapter 5 of the PPH Guidelines from 2nd November, 2020.
• The Indian Patent Office has published a list of withdrawn patent applications through Form 29 between April, 2020, and September, 2020.
• Emami apologised before the Bombay High Court for using the mark ‘Glow and Handsome’ despite an interim injunction issued by the court in August.
• The piracy website TamilRockers appears to have been suspended on account of copyright infringements.
• The WHO has welcomed India and South Africa’s joint proposal on relaxation of intellectual property obligations in the wake of the pandemic.
• An article in ExpressPharma discussed whether patented drugs should be included in the National List of Essential Medicines 2020.
• The Digital News Publishers Association has drawn up a voluntary code of ethics for its members that calls for respecting intellectual property rights, particularly seeking prior permission for use of copyrighted works or trademarks, acknowledging moral and ownership rights, and removal of infringing content if reported.
• Sony appears to have gained access to the PS5 mark as a prior application filed for the same by a person based in Delhi has been withdrawn.
• The Union Education Minister Ramesh Pokhriyal ‘Nishank’ decided to celebrate the week of October 15 to 23 as ‘Intellectual Property Literacy Week’, and launched the ‘KAPILA’ Kalam Program for IP Literacy and Awareness campaign.

News from Around the World

• Nokia has sought to enforce an injunction obtained in a Munich court restraining the sale of Lenovo’s products owing to patent infringement.
• An amendment to the Chinese Patent Law has been passed which will come in force on June 1, 2021.
• As per a recent survey, Philippines has one of the highest percentages of population in online piracy in Southeast Asia.
• There has been a sudden burst of DMCA takedown notices sent to Twitch users recently where the content of the users has been taken down without any possibility of counterclaims.
• The Ant Group has recently unveiled its new digital copyright services platform powered by the company’s blockchain-based technology, AntChain, which will aid creators to verify and protect their copyrights more efficiently and at lower costs.

Image from here

We’re pleased to bring to you a guest post by Avani Bagaria, analysing the benefits and pitfalls of using prizes as an alternative to patents for incentivsing innovation. Avani is a 5th year student at Jindal Global Law School, Sonipat.

Critiquing Prizes as an Alternative Mechanism for Promoting Innovation

 Avani Bagaria

Introduction

Under the prize mechanism for encouraging innovation, the inventors are awarded through the means of cash prizes rather than granting a monopoly over the usage of their invention for a certain period of time. Prize mechanism simply requires the inventors to put out their invention in the public domain in exchange for a certain prize which is rewarded to them by the government. Then, the invention of the inventor is used most efficiently in the market for promoting social welfare. The idea of eliminating monopoly distortion is envisaged in this alternative method of promoting innovation.

The origin of this mechanism can be traced back to the seventeenth and the eighteenth century where prizes were granted for technological inventions. One of the most famous prizes of the seventeenth Century was the “Longitude prize”, which was formulated by the British parliament to be awarded to an invention which could precisely determine the longitude at sea. This trend of giving out prizes for stimulating inventions kept on increasing in the eighteenth century and one such example was the reward mechanism which was used in Lyon, France for promoting technological development in the textile industry. These prizes were financed by the Grand Farbrique textile guild and through the taxes which were collected from silk import in Lyon. This mechanism turned out to be one of the most powerful methods of increasing inventions of public goods during that era.

However, this mode of incentivisation started fading out from the nineteenth century due to the introduction of intellectual property rights. The benefits attached to this mechanism, though, has revived the interest of various governments and policymakers around the world to reuse this model to protect sectors which play an important role in promoting public welfare.

Arguments in favour of prize mechanism

Firstly, the prize mechanism promotes the sharing of knowledge of the inventor with the public for the benefit of society at large. The restriction on the use of knowledge is one of the major drawbacks of the patent system as it results in granting unfettered power to the inventor to use his invention in a monopolistic manner. The fatal impact of the usage of this power can be seen in the pharmaceutical sector, where life-saving medications have become unaffordable due to its monopolization. This can be observed from the manner in which the average price of insulin has almost tripled in the U.S. between 2002 to 2013. One of the prominent reasons behind this spike in the price has been the autonomy which the pharmaceutical manufacturers have been given under the laws to decide the prices as well as the power to raise them according to their choices. Therefore, it can be concluded that the prize mechanism eliminates this act of monopolization in the market by making the knowledge of the inventor a part of the public domain.

Secondly, the prize mechanism helps in eliminating the dead-weight loss which is generally caused by the patents. Due to the monopolization which happens due to patents, the inventor gets the power to sell the product at a high price. This high cost reduces the purchase of the invention in the market, which in turn results in causing ‘dead-weight loss’. The prize mechanism prevents this loss from happening as it removes the aspect of monopoly pricing in the market. It eliminates the monopoly pricing through delinking the price of the invented product and the amount of capital invested by the inventor in the research and development of the invention by giving the inventor the cash prize instead of the power to have exclusive rights over its inventions. This de-linkage due to this model results in making the inventions cheaper as well as widening the availability of the invention in the market to maximize consumer welfare.

Thirdly, this mechanism provides the government the means to channelize the invention towards creating solutions to the problems which require urgent redressal. These ‘glittering-prizes’ also grant the government the power to induce inventions in sectors where the inventors generally do not invest their time and energy in developing something for the advancement of that sector. There are also certain innovations where the social value of the innovation is a lot more than its private value. In such situations, the prize mechanism can induce the inventors to invest their capital and time even in those inventions which are of a higher social value rather than a higher economic value. This argument can be further substantiated through the example of the ‘me-too’ drugs as well as other lifestyle drugs which have a higher economic value for the manufacturers in the pharmaceutical sector. These drugs yield more profit as compared to the “life-saving” drugs and hence, the inventors are induced to produce them. But, through the prize-mechanism the government can solve this problem by shifting the inventions in the pharmaceutical sector from the ‘me-too’ drug to the ‘life-saving’ drug.

Arguments against prize mechanism

Firstly, the money for the prize mechanism is mostly raised by the government from the tax that is collected from the taxpayers of the nation. This diversion of money to award the inventions results in a tax distortion effect and in turn increases the plight of the taxpayers. Therefore, even though this mechanism reduces the dead-weight loss which is caused due to patents, the implementation of such a model results in increasing the economic burden of the people by increasing their tax liability.

Secondly, the organizational and bureaucratic framework required for planning and overseeing the prize mechanism would result in increasing the cost of implementing this mechanism and would result in the further investment of the taxpayer’s money. Before any prize mechanism is formulated, it would be required for the prize granting agencies to decide upon the amount of the prize as well as determining the eligibility to claim it.  This would require them to study the market trends of the sector nationally and internationally in which they would want to introduce the mechanism. Subsequently, they would also be required to manage the entire prize mechanism, which would include the task of managing the contest, choosing the winners and giving out the inventions. Therefore, the prize mechanism is not very economical.

Thirdly,  it will always be a difficult task for the government to estimate the correct economic and social value attached to the invention. This will result in creating a situation where the inventors would receive an under-value amount for their inventions. This failure to reward the inventors appropriately would severely hinder the scope of future innovations as the inventors would not be willing to invest their time and money in R&D for an under-valued prize. An example to support this argument would be the undervaluation of the monetary award which was given to the atomic-energy innovators for the military usage of atomic energy under the U.S. Atomic Energy Act of 1946. It was later on found that these inventors could have earned a lot more if they had patented their inventions.

On the other hand, there could be an opposite scenario, where the government could over-value the prize. In such a situation, a lot of players would invest a large amount of capital for the same invention for increasing their chance of winning the over-valued prize. However, it would only be one of these players who would be awarded the prize and this situation would result in the creation of wasteful R&D. Therefore, this mechanism cannot be considered better than patents in the aspect of reducing wasteful R&D.

Conclusion

Based on the analysis of the prize mechanism, discussed in the previous section, the author would like to state that this alternative mechanism to promote innovation has various pitfalls and cannot be considered as a full-proof plan to induce innovation. The problem with this model arises when the power which has been granted to the government authorities to determine and prioritize the line of inventions is exercised erroneously. Along with this, if the government authorities are unable to design a proper implementation mechanism for this model then the entire model crumbles down and then the brunt of the government’s failure has to be borne by the taxpayers of the nation. Therefore, the usage of this mechanism should be restricted to the invention of essential products. It will be the responsibility of the government to make sure that such a model is implemented only in a specific sector where putting the money of the nation’s taxpayers at stake would be worth the risk. The parameter for gauging these inventions would require the government to understand the degree to which these inventions would contribute to the well-being of the society as a whole. Therefore, the author would conclude by stating that none of the mechanisms for promoting innovation are flawless, but a unification of these models has the capacity of turning the vulnerability of the individual models into collective strength.

Image from here

PepsiCo has suffered a blow in its 16 year long legal battle to secure trademark rights for its famous soda, ‘MOUNTAIN DEW’. The Additional Chief Judge of the City Civil Court of Hyderabad has recently ruled that the Hyderabad-based Magfast Beverages enjoys prior user rights over an identical trademark for their packaged drinking water (‘PDW’) business. In this post, I discuss this order and certain other issues in the dispute that may require more attention.

Facts

The plaintiff Syed Ghaziuddin claimed that he decided to set up a PDW plant in 1997-98 and chose the name ‘Mountain Dew’ because he felt that it indicated something pure, emanating from natural sources. Commenced in 2000, the business gained popularity and received various certifications for meeting high standards of quality. In 2003, his firm Magfast Beverages (‘Magfast’) received a legal notice from PepsiCo’s representatives who had approached the Delhi High Court accusing Magfast of trademark infringement. Magfast then sued PepsiCo for passing off, arguing that the latter had no rights on the trademark as it did not use it in India before 2003. Pointing out that PepsiCo does not sell its PDW branded drink as ‘Mountain Dew’ but as ‘AQUAFINA’, Magfast argued that the MNC cannot prevent it from selling its PDW under that trademark. It accused PepsiCo of passing off its goods as that of Magfast’s. In addition, it leveled charges against PepsiCo of colluding with Times of India and Vartha, a Telugu newspaper, to publish defamatory articles about Magfast which caused loss of reputation and mental agony, seeking damages worth 25 lakh!

PepsiCo categorically denied carrying out any acts to defame Magfast. It claimed that it has been selling citrus soda named Mountain Dew since 1940 and has immense popularity all over the world. It also owns registered trademarks of the name in 100 countries including ones in India dating back to 1985. Thus, it accused Magfast of engaging in infringing acts.

(Note: In 2005, IPAB had dismissed a petition by Syed Ghaziuddin which sought to remove PepsiCo’s trademarks from the register on grounds of non-use.)

The Court’s Analysis

To decide whether Magfast enjoyed trademark rights over MOUNTAIN DEW, the court relied on four documents: the advertisement of the PDW plant’s inauguration from November 2000 published in ‘Siasat’, an Urdu language daily; a certificate by the Central Bank of India’s branch manager stating that Magfast has been enjoying credit facilities from July 2000; a tax document evidencing a 3.75 lakh turnover; and a Small Scale Industry registration certificate. It found Magfast to be the prior user of the mark since the year 2000. Referring to the Supreme Court’s decision in Syed Monideen v. Sulochana Bai which recognised the common law principle of priority in adoption prevailing over registration, the court ruled in favour of Magfast.

With regard to the violation of these trademark rights, the court pointed out that in the parallel infringement suit brought by PepsiCo against Magfast (OS No. 95/2004), the latter had maintained that since PDW and citrus soda are two different products, the likelihood of consumer confusion does not arise. Although the two products do fall under Class 32, the court went on to hold that Magfast could not ‘blow hot and cold’ by now asserting confusion is likely because the two products were of the same class. On the issue of publishing defamatory articles, the court found that the news articles in question merely reported the proceedings of the Delhi High Court and couldn’t be deemed defamatory. Having rejected the arguments regarding trademark rights violation and defamation, the suit was dismissed without any relief or costs.

PepsiCo has indicated that it will be challenging this decision in the High Court. Notably, there are certain issues in the dispute that do warrant greater consideration.

Prior User Rights

While the court based its ruling on prior user rights, it did not make any reference to Section 34 of the Trade Marks Act 1999, which embodies this rule. This section limits the exclusive rights available to the registered owner of a trademark under Section 28. It provides that the registered user of a trade mark (here, PepsiCo) cannot prevent any other user (here, Magfast) from the using an identical or similar mark, where the said other user has been continuously using the mark prior to – a) the use of the first-mentioned trade mark (2003); or b) the date of registration of the first-mentioned trade mark (1985), whichever is earlier. In Syed Monideen, the appellant who claimed rights by registration had started using the mark in 2007 and had obtained registration in 2008. However, the respondent was found to be the ‘prior user’ under Section 34 as its continuous use predated the earlier of the two events, i.e., use by appellant. It follows that for Magfast to claim this benefit, its continuous use would have to be dated prior to PepsiCo’s registration in 1985 and not its first-use – which is not the case here. How then, could this rule be applied despite the obvious discrepancy?

Honest Adoption

PepsiCo had suggested that Magfast’s explanation behind adopting the trademark is unacceptable (para 15). In MAC Personal Care v. Laverana GmbH and Co., (discussed here, here and here) the Delhi High Court had restrained the Indian defendant from making dishonest use of an international mark, as it couldn’t provide a satisfactory explanation of its adoption of an identical mark. This question was looked into in the Supreme Court’s NR Dongre v. Whirlpool decision as well.

Aquafina logo

Magfast’s PDW logo (sourced from Trademark e-Register)

PepsiCo had pleaded (para 17) that Magfast’s PDW design and colour scheme is identical to that of PepsiCo’s Aquafina mark. A closer look at their brand labels shows us that both contain images of mountains among other elements. While there may be slight similarity in them, whether that is enough to raise infringement liability is subjective. Regardless, it is worth noting that when Magfast commenced its business in 2000, PepsiCo’s Mountain Dew had been in the global markets for 60 years and had trademarks registered in several countries including India. Its PDW brand Aquafina had been launched in 1994.That Magfast conducted thorough research (para 2), only to come up with a name which happens to be identical to the 60 year-old citrus soda brand of a renown MNC actively offering other products in India (PepsiCo had reentered Indian market in 1988) appears to be a rather convenient coincidence. It is therefore surprising that the court did not inquire into whether Magfast’s adoption of ‘Mountain Dew’ had been honest in the first place.

Trans-border Reputation

According to paragraph 21 of the order, PepsiCo insisted that its Mountain Dew was ‘well known throughout the world’. This is an interesting line of argument. While the court has not evaluated the possibility of PepsiCo’s mark enjoying a trans-border reputation, this may come up at a later stage.

The doctrine of trans-border reputation has been evolved by courts to reconcile the territorial nature of trademark law with the blurring distinction between markets in the digitalized, post-liberalization era. Recognised in Whirlpool, the doctrine holds that when the reputation of a trademark used across countries has transcended geographical barriers to spill over into Indian market and is recognised by consumers despite there being no actual business here, such trademark is entitled to protection from those who may free-ride upon its reputation. In Laverana, it was held that registration of a trademark in multiple foreign jurisdictions, its advertisement in international media, and high profits were good indicators of such reputation. In Milmet v. Allergan, the Supreme Court had held that if a foreign trademark-owner with such reputation can prove its intention to conduct business in India,the mere fact that it has not been using the mark in India would be irrelevant so long as they introduced the mark prior to the defendant in the world market.

More recently, in Toyota v. Prius, limitations were imposed on the pervasive overreach of this doctrine by requiring proof of local goodwill of the international trademark. The court inquired whether Toyota’s ‘Prius’ enjoyed a local reputation among a significant number of consumers in India by 2001, as that was the year when the Indian company adopted the mark. It held that the limited online exposure at the time meant that this local reputation could not have been established in the short period between the global launch of Toyota Prius in 1997 and the defendant’s product launch in 2001. There is, however, a much wider 60-year gap between the global launch of PepsiCo’s Mountain Dew and Magfast’s PDW that allows for consumers to be exposed to the former’s product through other media. Thus, it is quite possible that PepsiCo may seek refuge in this doctrine.

Moreover, the identical marks are being used over the same Class 32 of goods. Although the court has not addressed this issue in detail, a difference in products has not always been enough to alleviate concerns of likelihood of consumer confusion. In Aktiebolaget Volvo Sweden v. Volvo Steels Ltd., once the existence of trans-border reputation was ascertained,  the Indian steel trader had been restrained from using the VOLVO trademark despite the identical international mark in question belonging to an automobile manufacturer.

For now, Magfast has emerged victorious, but with these issues looming large over what is shaping up into yet another battle between a foreign giant and a homegrown brand, it remains to be seen what course this dispute takes.

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