In a very notable recent order, AstraZeneca was denied an injunction by the Delhi High Court against Intas Pharmaceuticals and Alkem Laboratories (Defendants) in a case relating to the manufacture of anti-diabetic drug Dapagliflozin, which allegedly infringed AstraZeneca’s patents IN 205147 (IN ‘147) as well as IN 235625 (IN ‘625). The order has revealed what could turn out to be a case of double-patenting that has escaped scrutiny for 17 years! It also explores important questions regarding coverage-disclosure dichotomy and public interest during pandemic.

Interestingly, it appears that another recent order has refused an injunction to IN ‘625 against other generics manufacturers.

Background

The two patents in question were originally registered by Bristol Myers Squibb, which assigned them to AstraZeneca in 2014. IN ‘147 is the genus patent which expired on 02.10.2020, and its species, IN ‘625, expiring in 15.05.23, is a compound which forms a part of the markush structure claimed by the former. Marketed as Farxiga, Dapagliflozin is an SGLT2 inhibitor which has recently been approved for the treatment of hypertensive heart failure.

The defendants argued that since a single compound could not be protected by two different patents, the expiry of IN ‘147, which had disclosed Dapagliflozin, ended the plaintiffs’ monopoly over the drug. The injunction ought not to be granted as the validity of IN ‘625 was questionable. On the other hand, the plaintiffs insisted that while the compound structure of Dapagliflozin was covered within IN ‘147, it was disclosed and marketed only in IN‘625.

Validity of the Patent

The plaintiffs listed several additional factors in favour of IN ‘625’s validity, including its great commercial success – a factor which is not actually a sign of validity, as consumer interest is not influenced by the requirements of patent law. Further, various entities had attempted to infringe it, leading to several injunctions granted by courts. The application had been examined by the Patent Office for 7 years before it was granted and there had been no pre-grant or post-grant opposition against it in the 15+ years of its life cycle. Thus, they argued, there had to be a presumption regarding the patent’s validity owing to its age.

In making its decision, the court adopted the Roche v. Cipla standard and held that a patent was only valid until it was challenged. According to Section 64 of the Patent Act, 1970, a patent could be revoked as a result of a counter-claim against its validity in a suit for infringement. It held that crossing the threshold of examination is not the ultimate test of validity and the age of a patent did not strengthen the firewall around it. Moreover, at this stage, the defendant did not have to prove the patent to be invalid, but only establish a credible challenge showing it to be vulnerable.

A Case of Double Patenting?

The Defendants challenged IN ‘625’s validity on grounds that it was anticipated by IN ‘147. They referred to various instances to substantiate this, one of which deals with the issue of “Obviousness-type double patenting”(ODP) objection. ODP is a judicially created doctrine in the US which prevents the monopolization of inventions that are mere variations of earlier patents and not “patentably distinct.” If both patents are commonly owned, the ODP objections can be overcome by filing what is called a “terminal disclaimer” which disclaims the portion of the 20-year term of the second patent that extends beyond the earlier patent’s term. This ensures that the monopoly is not unjustly extended. (Interestingly, a recent bill introduced in the US Congress aims to work ODP into statute and impose a default burden on pharma patent applicants to prove patentable distinctiveness. Given the controversy surrounding the high threshold of Section 3(d) in India’s Patent Act, one wonders how ODP may fare as a targeted anti-evergreening measure).

The defendants showed that when the ODP objection had been raised by USPTO at the time of applying for US ‘117 (equivalent to IN ‘625), the plaintiffs had filed a terminal disclaimer. The plaintiffs argued that the mere filing of a terminal disclaimer cannot be construed as an admission of double patenting, as it is only a methodology to overcome USPTO’s objection.

The defendants also argued that IN ‘625 is anticipated by what is published or publicly known from IN ‘147. The plaintiff maintained that IN ‘147 cannot be considered prior art as it was published only on 18.03.2005, while the priority date of IN ‘625 is 20.05.2002. The defendants countered that it is nevertheless anticipated by the prior publication of WO2001/27128 (PCT equivalent of IN ‘147) on 19.04.2001. Further, the defendants showed that in a US infringement suit against Zydus Pharmaceuticals, the plaintiffs had prayed that allowing manufacture of Dapagliflozin tablets would infringe certain claims in US Patent 126, which are identical to IN ‘147.

Defendants then argued that in producing Dapagliflozin, IN ‘625 does not identify any unknown technical effect. Rather, it simply restates the utilities of IN ‘147 (see page 29). They submitted that the plaintiff’s evidence in the form of Dr. Washburn’s affidavit asserting enhancements is inadmissible as it was sworn in April 2020, long after the priority date, whereas the validity of the patent is to be assessed on its priority date.

What is Covered? What is Disclosed?

The plaintiffs claimed that a markush claim running into millions of compounds did not disclose every possible compound contained in it, unless specifically identified. It relied on the Supreme Court’s decision in Novartis v. Union of India (Novartis) which had held, “there could be some gap between what is covered as against that which is disclosed,” and its application in the recent AstraZeneca v. Emcure case concerning the Ticagrelor patents which was held to have been covered by a genus patent but disclosed only in the species. The defendants pointed out that Novartis had in fact rejected the coverage-disclosure dichotomy both in principle and as pleaded for imatinib mesylate! They contended that the plaintiff’s suggestion that manufacturing of Dapagliflozin infringed IN ‘147 implies that it was disclosed in IN ‘147 itself, as Section 10(5) holds that a claim shall be fairly based on the matter disclosed in the complete specification. They also relied on Section 64(1)(a) read with Section 13(1)(b) of the Act, insisting that only the coverage of the subject matter by a prior claim is sufficient for revocation as disclosure has not been stated as a requirement.

The court took into account the statements made in US litigations, the terminal disclaimer and the fact that the USPTO had asked the plaintiff to elect between one of the two patents for grant of Patent Term Extension, and sided with the defendants. It compared the complete specifications of the two patents and concluded that there appeared to be no technical advance of the species over the genus (para 30.1, 30.4). Referring to Section 10(4) it held that it would be incongruous for a patentee to sue for infringement of a patent and maintain that it is not disclosed (see para 22.1-22.2). This decision does well to dispel the doubts raised by the inconsistent interpretation of Novartis in Emcure. The flaws with the argument that a patent can monopolize what it does not disclose have been discussed at length before, here, here and here.

Public Interest

The plaintiff pleaded that in Novartis, public interest was taken into consideration as there was a huge price difference between the patented drug which cost INR 1,20,000 while the defendant’s drug cost INR 8,000. In the present case, they pointed out, the price difference was only INR 37 per capsule, and that Dapagliflozin is used to treat diabetes, a non life-threatening disease, thereby arguing that there is no threat to public interest.

The court however, accepted the defendants’ computations that revealed a price difference of more than 250% between the patentee’s medicines and theirs when looked at from a monthly-expenditure-per-patient perspective. Further, during the COVID-19 pandemic, patients already suffering from diabetes are at a greater risk in case they get infected. The court’s interpretation of what is otherwise seen as a lifestyle disease in light of the pandemic is an interesting development. Previously, Indoco Remedies Ltd had raised a similar defence to obtain permission to sell its anticoagulant, but had been denied owing to lack of evidence of shortage in availability or affordability issues (discussed here). While the present case definitely turned on other, stronger factors, the court did not delve deep into the interesting issue of how public interest might have implications on access to medicine in the time of pandemic.

Suppression of Material Facts

The plaintiffs have been accused of violating the foreign applications-disclosure requirement in Section 8, by failing to disclose the non-final rejection letter issued by USPTO with regard to US 117 (IN ‘625) and the subsequent terminal disclaimer filed. This would have informed the Patent Office of the limitations in the application for IN ‘625. The plaintiff contended that since the patent was ultimately accepted, there was no obligation to disclose the office actions. Unimpressed, the court observed that the particulars had to be furnished regardless of whether they were deemed serious enough by the plaintiff (Para 32.3).

Ultimately, the court held that a credible challenge had been raised against the validity of IN ‘625 and refused the injunction. It accepted the defendant’s arguments that since the plaintiff had licensed the patent to two entities, if the challenge were to fail in the end, the plaintiff’s losses could be computed through those royalty payments. Thus, the defendants were ordered to maintain accounts of their sales.

While it is no doubt too early to decide whether IN ‘625 will stand, the court’s refusal to favour the patent on account of its advanced age is a very reasonable one, considering the Patent Office has been reported to have a very poor record in granting secondary pharmaceutical patents. In a world that has recently and rudely awoken to the gravity of the access to healthcare problem, the court’s invocation of India’s obligations under the TRIPS Agreement and Doha Declaration to balance patent protection with the public’s right to health offers a cautionary note against the ever-greening of pharmaceutical patents.

The recent past has seen a few blogposts on how public interest is factored in (or isn’t) by courts. A post looking at public interest as viewed in interim injunctions for pharma cases was posted here, and another post looking at public interest in the pandemic context was posted here. We’re very pleased to bring to our readers another post focusing on this public interest element, which among other aspects also puts forward some thoughts on how it could perhaps be (re?) formulated.

This post is authored by Victor Vaibhav Tandon and Devvrat Joshi. Devvrat is a litigation associate at Saikrishna & Associates. He regularly advises clients and represents them in courts of law on issues pertaining to intermediary liability, data privacy, and media and entertainment laws. He is also part of the core litigation team dealing with cases on patent infringement. Victor is an academician turned lawyer. He is also a registered Patent Agent and holds a Ph.D. in patent law. After teaching as a faculty in a prominent NLU, he joined Saikrishna and Associates where he is part of a team dealing with pharmaceutical patent and SEP litigations. He continues to teach as a visiting faculty for PGDIPR courses in ILI and ISIL. Victor has also previously written for us here. The views and opinions expressed in this article are of the authors’ alone in their personal capacity

Back to the Drawing Board: Indian Courts’ Tryst with Public Interest Principle in Pharmaceutical Patent Infringement

Authors: Victor Vaibhav Tandon & Devvrat Joshi

Recently, India and South Africa made submissions to the WTO seeking a pro tem waiver of rules governing certain IPRs including patents to, inter-alia, ensure affordable and adequate access to diagnostic kits, medicines and vaccines needed to combat the SARS-CoV-2 pandemic, a development that once again brought to light the uneasy relationship that IPRs, especially patents, generally tend to have vis-a-vis access to knowledge goods. Much of this uneasy equation, including the tussle between the inventor’s interest and public interest, is well documented in patent literature. Quite unsurprisingly, the struggle to balance these competing interests is reflected in the application of the public interest principle in patent law by the Indian courts, especially when it comes to pharmaceutical patents. To be fair (to, inter-alia, Roscoe Pound!), there is a constant tug of war between two societal interests- one, suitably incentivizing the innovators in any society by what currently appears to be the best mode of doing so- the patent system and the other, ensuring that consumers have a real and meaningful access to innovations. Naturally, each society would like to (and should) fix this equilibrium as per its own specific technological and socio-economic realities.

Courts, where this equilibrium is frequently tested, have a rather daunting task on their hands. In fact, at the time of writing this piece, the Delhi High Court had pronounced its judgment in Indoco Remedies Ltd. v. Bristol Myers Squibb Holdings Ireland Unlimited Company & Ors. (see SpicyIP’s coverage here) wherein it categorically observed that public interest in itself is not a sufficient ground to grant interlocutory relief in favour of the generic manufacturer. It is, however, important to highlight that, per the judgment, the appellants (generic manufacturer) had failed to provide any reasonable evidence supporting their public interest claim. However, subsequently in the Dapagliflozin dispute (SpicyIP coverage here), a Single Judge of the Delhi High Court took into consideration the public interest elements of the price difference as well as the nature of the disease, to hold that the scales of balance at the threshold stage would weigh in favour of the generic manufacturers/defendants.

The three-factor test of interlocutory relief

As far as grant of interlocutory relief is concerned, it is well entrenched in Indian jurisprudence that the same depends on the applicant demonstrating the following three-factor test:

• That there is a prima facie case, i.e. if the case were to go to trial solely on the evidence presented at the time of hearing the application, the applicant would be entitled to a permanent injunction (see American Cyanamid Co. vs. Ethicon Ltd.);
• That if the application is not granted, irreparable and non-compensable harm would be caused to the applicant;
• That the balance of convenience is in favour of the applicant, i.e. severe inconvenience would be caused to the applicant if the injunction/interim injunction is not granted, but no such inconvenience would be caused to the non-applicant/defendant.

The four-factor test in pharmaceutical patent infringement

In addition to the three-factor test, when it comes to patent infringement, Indian courts have rightly recognised that public interest is an important consideration. Unfortunately, instead of giving the public interest principle (as regards affordable and adequate access to users) its due place, especially in a developing country like India, the courts have simply positioned it as the fourth factor. In our view, and as elaborated later, public interest ought to play an autonomous role at the threshold stage of determining interim injunctions, especially in pharmaceutical patent litigations, instead of being reduced to an auxiliary factor used to merely tilt the scales of balance or acting as a tiebreaker.

It therefore follows, from the courts’ positioning of public interest as a fourth factor, that the onus should be on the plaintiff (often the patentee) to satisfy the court that the grant of an interim injunction does not harm or prejudice public interest. However, in practice, this onus rarely falls on the plaintiff. Fulfilment of the three-factor test is deemed to be sufficient. Resultantly, public interest has been reduced to a tool frequently wielded by the defence (often the generic manufacturer) to argue that the fourth factor is not in the plaintiff’s favour and thereby appeal to the conscience of the court to seek refusal of grant of an interim injunction. Interestingly, public interest is not an effective defence in itself either, as the defendant has to first satisfy the threshold test of ‘credible challenge’ to the validity of the asserted patent(s).

The march of law

In 2008, the Delhi High Court, in the Roche v. Cipla series of single judge and division bench decisions, observed that particularly in cases of lifesaving drugs, public interest is a critical factor. What also emerged from Roche v. Cipla is the concept of ‘credible challenge’ i.e. the defendant, in order to avoid interim injunction, has to at the threshold and without exception, demonstrate a credible challenge to the validity of the patent concerned. This position has been fortified by way of the judgments in Bristol-Myers Squibb v. JD Joshi, Bristol-Myers Squibb Company & Anr. v. Ramesh Adige, Bristol-Myers Squibb Company & Anr. v. D. Shah and Novartis v. Cipla.

In Novartis v. Cipla, the Delhi High Court made a pivotal observation that the ground of public interest is not one which can be said to belong to the traditional rules of grant or refusal of interim injunction, thereby tendering due recognition to the nonpareil nature of the public interest principle. Nevertheless, the courts in general have shown a disinclination to wield the power of public interest principle. Interestingly, in the appeal filed by Glenmark against Merck challenging the decision of the Division Bench of the Delhi High Court wherein injunction was granted in favour of the patentee (Merck), the Supreme Court granted a limited stay on the operation of the Division Bench judgment by permitting Glenmark to sell existing stock of its generic product. The Apex Court observed that its primary focus was on balancing the patentee interest on one hand against the public interest in the other.

Reformulating the principle of public interest

It is clear that public interest, as it stands today in the Indian jurisprudence, is an etiolated principle in theory as well as in practice, and rendered subservient to the satisfaction of the three-factor test and/or the ‘credible challenge’ test. To be fair, an interim injunction cannot and should not be denied to the patentee in every single case of infringement of a pharmaceutical patent for that would defeat the very purpose of granting patents and would essentially leave the innovator companies without any real right. But public interest cannot be subservient to patent rights either. It therefore should have a greater role to play in deciding patent disputes in India, at least in the domain of pharmaceutical patents.

A simple reading of the Statement of Object & Reasons of the Patent Act, 1970 reveals public interest as the cornerstone of patent law. A similar understanding is reflected in Articles 7 (“Objectives”) and 8 (“Principles”) of the TRIPS Agreement (to which India is a signatory) which recognise that protection of intellectual property rights must be “conducive to social and economic welfare” and “promote public interest in sectors of vital importance to their socio-economic development”. Undoubtedly, patent law is designed to balance competing interests– the monopoly rights of the patentee and the public interest in availing the consequent benefit from grant of such monopoly rights. Moreover, a first principle understanding of patent law makes it unequivocally clear that the role of public interest is to act as a check on any potential abuse of this monopoly right. Its purpose is straightforward – ensuring that the consumers are not deprived of the benefits of the patented creation by way of availability, accessibility or affordability. In fact, the monopoly rights granted under patent law are in lieu of the patentee working its invention and ensuring that the benefits thereof reach the public. In fact, Franz Xaver, Glaverbel and Sandeep Jaidka have expressly recognised that mere non-working of the patent by the patentee is in itself a sufficient ground for refusing interim injunction as such squatting is to the detriment of the public.

Admittedly, ‘public interest’ is an extremely broad term, and it is therefore the court’s duty to define its scope, application and its limitations. A situation of clear and overwhelming public interest, backed up by prima facie proof that the patentee is failing to meet such public interest in the immediate foreseeable future, should in itself be a sufficient ground for the non-grant of interim injunction.

As for the matrix of public interest, the factors of price difference between the innovator drug and the generic version, actual working of the patent in India and the on-ground accessibility (both in terms of quantitative availability and affordability) are critical considerations. The conduct of the patentee, an aspect often overlooked, should also be of paramount consideration, especially with respect to the filing of its working statement (Form-27). While the issue of working statement, unfortunately, stands diluted by the Patents (Amendment) Rules, 2020 (see SpicyIP’s coverage here and here), there is no reason why the same should not be looked at by the courts of law in an incisive manner in as much as it reflects the admitted conduct of a patentee. The working of an invention in India for the betterment of the society (and therefore in public interest) lies at the heart of the Indian patent law and was one of the key concerns of the Ayyangar Report that led to the enactment of the Patent Act, 1970. Any innovator not working its invention is essentially failing to discharge its public duty and this can lead to calamitous consequences for the general public (hence, public interest) because no one else can enter the market either during the subsistence of the patent. This is quite distinct from the consequences that patentee can suffer for non working under the compulsory licensing regime. Further, perhaps, the Courts should not restrict invocation of public interest to cases of life-threatening diseases alone. After all, at the end of the day, the law must not be so tractable as to be rendered unstable. But at the same time, it cannot take such a rigorous, unaccommodating and textualist stance that the broader end goal of public benefit is not met.

We’re pleased to bring our readers an insightful post by Dr. Vikas Kathuria looking into the latest ‘digital gatekeeping’ controversy that Big Tech has found itself in in India, with the Competition Commission of India having ordered an investigation into Google’s conduct relating to Google Pay and the Play Store.

Dr. Kathuria is a Senior Research Fellow at the Max Planck Institute for Innovation and Competition, Munich and was formerly a Research Associate at the Competition Commission of India (CCI). He has many publications to his credit and is a regular contributor to policy discussions at the interface of IP and competition law. He has previously written for us here.

The Antitrust App Store Wars Come to India

Dr. Vikas Kathuria

The Competition Commission of India (CCI) ordered an investigation against Alphabet, the parent company of Google India Private Limited, on 9th November 2020, for abusing its dominant position in the Play Store and Android Operating System (OS), by favouring Google Pay over other competing apps. By opening this investigation, India has joined the EU and the US, where app developers have challenged the practices of Apple (for the App Store) and Google (for the Play Store).

The CCI’s investigation is part of several antitrust challenges world-over against those firms that have acquired the role of Gatekeepers in digital markets through their size, control over data, presence across several markets, and significance in intermediation. In the following, I provide an analysis of the present case. From the standpoint of policy implications, while the CCI can scrutinize Google’s behaviour in the analytical framework of abuse of dominance, a need has arisen to set out ex-ante code of conduct for digital gatekeepers who, even without dominance, can cause significant harm to welfare.

1. Brief facts

An anonymous informant submitted these allegations against Alphabet Inc. The core of allegations concern self-preferencing by Google of its own Unified Payments Interface (UPI) payment app ‘Google Pay’, through its dominance in mobile Operating System (OS) market and the market for app stores for Android OS. The specific allegations are:

a) Google was unfairly privileging Google Pay by prominent placement and search manipulation on the Play Store, which is the dominant app store on Android OS. Being factually unsubstantiated this was dismissed by the CCI.

b) Pre-installation of Google Pay on Android smartphones.

c) Mandating third-party apps to use Play Store’s payment system and Google Play In-App billing for charging their users. Allegedly, this way Google ensures a commission of 30% per transaction, which is unfair.

d) Imposing unfair terms on users by requiring them to use Google Pay, which does not comply with the data localization directive by the Reserve Bank of India and the guidelines issued by the National Payments Corporation of India (NPCI).

2. Market definition and market power

The CCI identified three relevant markets for analysis:

a) The market for licensable mobile OS for smart mobile devices
b) The market for app stores for Android OS, and
c) The market for apps facilitating payment through UPI

The CCI distinguished the markets for ‘licensable mobile OS for smart mobile devices,’ and ‘integrated OS for smart mobile devices’. It found Google to be the dominant player in the former relevant market, which is fairly uncontroversial owing to Android’s market share and high entry barriers. This implies that iOS can also be dominant in the vertically integrated OS and consequently has to comply with the antitrust norms.

This approach seems correct prima facie as it is unlikely that app developers find licensable OS and integrated OS substitutable for distributing their products. For instance, if Play Store increases its subscription by 5-10%, a developer X cannot switch to Apple’s App Store without losing out on all OEMs (and therefore final consumers) who take the license from Android. In the past, the CCI has held that the market for licensable mobile OS formed a separate market. The EC took the same approach to market definition in the Google-Android case (See Section 7.3.5 here).

It appears odd that the Informant did not allege Section 3 violations as well. The restrictions that Play Store imposes on app developers can fall in the category of anti-competitive vertical restraints. On similar facts, investigations in the EU span both Articles 101 and 102 TFEU. Even Epic Games has approached US courts against Google and Apple for their conduct in app distribution under both Section 1 and Section 2 of the Sherman Act.

3. Compliance with the NPCI guidelines and violation of competition law

There were also allegations that Google impeded interoperability between Google Pay and other UPI apps by choosing different technological standards (‘collect flow’ or ‘intent flow’). The CCI found that even though the NPCI guidelines permitted both the standards, Google has reserved the ‘intent flow’ technology to itself, which provides a better user experience. This can result in users choosing Google Pay over other apps. A choice between two standards, although permitted by the NPCI, can still be violative of competition law for two reasons. First, it is doubtful that the guidelines of the NPCI have the force of law. Second, even if it had legal sanctity, compliance with the same could still violate competition law. In the EU, a dominant undertaking can be found to have violated competition law even if its actions comply with some other law if it does not have any objective justifications (see paras 129-141 here).

The Informant also accused Google of using consumer data from Google Pay for its other services in disregard of the NPCI guidelines. In turn, Google argued that the use of Google Pay data for other services was authorized by the NPCI. Even if this was permitted by the NPCI, this can amount to an ‘unfair’ condition in competition law imposed on the users by a dominant undertaking. However, approaching unfairness in data collection through the framework of competition law is highly debatable, if not completely controversial as demonstrated in the German Facebook saga. Additionally, to trigger the application of competition law, Google Pay should be a dominant player in the relevant market for UPI apps. Another way to approach the same issue is through data protection laws that call for ‘purpose limitation’. This course is yet not available in India as the Personal Data Protection Bill, 2018 is yet to become law. Moreover, this safeguard is available only for users’ ‘personal’ data.

4. International antitrust cases against app stores

These allegations remind one of the allegations against Apple in the EU. The first investigation was triggered by a complaint by Spotify, a music streaming provider and a competitor of Apple Music, and one e-books/audiobooks distributor who competes with Apple’s Apple Books app. Apple has been accused of violating competition law by (i)  mandating the use of Apple’s own proprietary in-app purchase system (IAP) for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP; (ii) restricting the ability of app developers to inform users of alternative purchasing possibilities outside of apps (for instance on the website of the app developer) which are usually cheaper. Additionally, the EC is also concerned about Apple getting access to valuable data about the activities and offers of its competitors.

The second investigation concerns integrating Apple Pay in merchant apps and websites on iPhones and iPads and reserving the Near Field Communication (NFC) functionality of iPhones to Apple Pay. Earlier, Pepper had filed a complaint against Apple in the US on similar grounds. More recently, Epic Games has contested the 30% fee that Apple and Google charge.

5. Analysis

5.1 Unfair and exploitative

Concerning the third allegation of mandating the use of Play Store’s payment system, the Informant alleged that the objective is to ensure that Google gets an opportunity to charge 30% commission from app providers, for paid app downloads as well as in-app purchases. As this 30% fee is not for the listing of apps (which is a separate one time 25 USD fee), the Informant claimed it is “one-sided, arbitrary and onerous”. If app developers bear this fee on their own, it will reduce resources available for further innovation. If this fee is instead passed on to users, it will result in increased cost for users.

Is charging a 30% commission per transaction fair?

At the core of the investigations against app stores, is one basic question: how Google and Apple should make money? This question can be answered by asking another question: is mandating a 30% per transaction fee the only way Google and Apple can act as intermediaries through their app store? I have the following concerns with charging a 30% commission per transaction.

a) The app store gatekeepers are tying their incentives to the popularity of the app. This revenue model seems lucrative for app stores as incentives far exceed the cost of intermediating distribution. It appears doubtful that the cost of intermediation for app stores increases significantly with the number of downloads for a particular app.

b) Apple and Google may argue that a blanket 30% fee reduces transaction cost, as app stores do not have to negotiate terms with millions of apps. The same result can, however, be achieved through other business models such as a one-time registration fee.

c) It allows app stores to prize squeeze competitors in verticals.

Revenue models of digital gatekeepers in antitrust crosshairs

This is not the first time that the revenue model of a gatekeeper in the digital economy will invite scrutiny. Several antitrust agencies have looked at the legality of “wide” and “narrow” Price Parity Clauses (or MFN clauses). While the dominant view suggests that “wide” parity clauses are illegal, opinion seems to be divided on “narrow” parity clauses that restrict a party (e.g. a hotel) to advertise prices on its own channels (both online and offline) that are less than the price for a product (hotel room) featured on a price comparison website (a hotel booking aggregator).

The German competition authority, the Bundeskartellamt, is critical of “narrow” parity clauses as among other reasons such restrictions allow aggregators to reap incentives that are greater than the risk they undertake (see pages 70-71 here). Indeed, Austria, Belgium and Italy have prohibited any kind of parity clauses altogether. Similarly, the restrictions imposed by app stores allow them profits that appear unjustified against their cost. In these circumstances, gatekeepers can be asked to opt for a more benign business model.

5.2 Exclusionary vis-à-vis competing UPI apps

In CCI’s view, the mandatory use of Google Pay by developers and users may result in the exclusion of other competing UPI apps. Although UPI apps are interoperable, at least for two reasons competitors of Google Pay appear to be at a disadvantage. First, while in principle it is possible to transact through other UPI apps, Google has allegedly made transacting through other UPI apps inconvenient. Likewise, in the EU, Apple has been accused of prohibiting competing payment apps from using the near field communications (NFC) technology that makes possible tap-and-go payments using one’s iPhone. Second, since transactions through UPI are still new and increasing, new users are compelled to download Google Pay. These new users are unlikely to switch to other UPI apps due to the status quo bias.

This theory of harm is tricky and hard to prove, as the restriction of choice is limited only to those users who are downloading or making an IAP. Consumers who are making Person-to-Person fund transfer and Person-to-Merchant payments are free to use (or new users are free to download) other UPI apps. This should, however, be seen in addition to the allegation of pre-installation, which can lead to leverage of Google’s dominant position in the market for licensable mobile OS into the market for UPI apps.

Even if there is a fear that Google may leverage its dominant position to monopolize the UPI app market, it should be assessed against the new NPCI guideline. Recently, the NPCI has capped the market share (by transaction volume) at 30% for any UPI app provider starting Jan 1, 2021.

5.3 Exclusionary vis-à-vis Google’s competitors in app vertical

A presumably high fee of 30% that Google’s competitors in verticals such as music streaming, e-books etc. pay has the potential to raise their cost in comparison to Google’s own apps and therefore can make them unviable. This is a classical ‘raising rivals’ cost scenario.

5.4 Access to competitors’ data

Mandatory use of Google Pay allows Google to access the commercially sensitive data of its competitors that can be used to improve its own services. It remains a strong possibility that a dual-role platform that also competes with its customers in a vertical can gain a significant advantage over its rivals by accessing their non-public data. Last week, the EC formed a preliminary view that Amazon might have abused its dominant position by using the non-public data of independent sellers who use its platform and compete directly with Amazon’s own retail business.  The Informant in the present case, however, will have to adduce evidence to show that Google has misused competitor’s data.

6. The path ahead for digital gatekeepers in India

The present case is the fifth case that the CCI is pursuing against Google. Considering the gatekeeper role that some big-tech firms have acquired, there are bound to be many more such cases against them. Fast-moving technology markets are characterized by network effects, economies of scale and scope, where the market often ‘tips’ before it is subjected to meaningful antitrust enforcement. Additionally, by now, it is clear that even below the level of dominant position, a digital entity can still acquire the role of gatekeeper and hence distort competition. For instance, the Furman Report advocates ex-ante regulation for those firms that hold ‘strategic market status’ –a position where these firms can exercise market power over a gateway or bottleneck in a digital market, where they control others’ market access. Against this backdrop, the EU is introducing a Digital Services Act package that among other provisions also sets out ex-ante rule for gatekeepers in digital markets. India, being one of the prominent stakeholders in digital markets, should follow suit and come up with ex-ante code of conduct for digital gatekeepers to complement its competition law framework.

Topical Highlight

The Antitrust App Store Wars Come to India

In this guest post, Dr Kathuria looks into the latest ‘digital gatekeeping’ controversy that Big Tech has found itself in in India, with the Competition Commission of India having ordered an investigation into Google’s conduct relating to Google Pay and the Play Store. He notes that the CCI has prima facie correctly identified the relevant market. He then notes that even if Google Pay were to be considered in compliance with NPCI guidelines it could still be in violation of competition law. Subsequently, he summarises certain international antitrust cases levied against app stores. He then examines the fairness of a 30% commission charged by Google and Apple Stores and raises concerns against the same, and questions the revenue models of digital gatekeepers. Furthermore, he points out that the mandatory use of Google Pay may result in the exclusion of other competing UPI apps, and the same is to be looked in context of recent NPCI guidelines. Google’s gain through access the commercially sensitive data of its competitors is also to be looked at. Finally, he concludes with the suggestion that India should come with ex-ante code of conduct for digital gatekeepers similar to the EU.

Image from here

As 15 Asia Pacific Countries Sign RCEP, India Chooses to Sit Out

In this post, Praharsh discusses the recent Agreement on Regional Comprehensive Economic Partnership (RCEP) signed by ten south-east Asian countries along with Japan, China, South Korea, Australia and New Zealand. He notes a dedicated chapter on prevention and enforcement of IP rights of the member states under the Agreement. Particularly, he mentions Article 11.8 that expressly declares that the Agreement shall not hinder the utilisation of Article 31bis of the TRIPS Agreement. He then turns to India’s notable last minute withdrawal from the negotiations back in November 2019 due to concerns of opening of vulnerable sectors such as agriculture to imports from countries like Australia and New Zealand. Finally, he points out that while RCEP members have sent a formal statement indicating their willingness to negotiate with India if it accedes to the government, India does not seem much eager towards it any time soon.

Thematic Highlight

Trademark Trolls: Perspectives, Pitfalls and the Way Forward

In this guest post, Manvee analyses the effect of ‘first to use’ and ‘first to file’ regimes on trademark trolling, in light of the attention that the recent Sony PS5 case has drawn. She first differentiate the two regimes with the former granting trademark protection based on use of the mark by the applicant and the latter based on filing irrespective of its use. She then notes the debate in the Indian context where marks can be registered on a ‘proposed to be used’ basis. She notes the decision in the H&M case on trademark trolling and the recent PS5 controversy. She then highlights the three drawbacks in the Indian regime that need to be addressed. First, the option of cancellation on the ground of non-use cannot be invoked before 5 years of registration (and even subsequently the proceedings take time) which should be reduced. Second, the statutory procedure provided for cancellation and rectification before the IPAB is time-consuming. Finally, she argues that the filing fees in India should be revised on a more frequent basis, every 5 years as per her suggestion.

Dapagliflozin Injunction Denied: Of Double-Patenting and Coverage-Disclosure Dichotomy

In this post, Adyasha analyses a Delhi High Court order denying AstraZeneca’s injunction plea for the manufacture of anti-diabetic drug Dapagliflozin. The defendants argued against the injunction on the ground that the species patent in question was already disclosed in the genus patent which expired on 02.10.2020, which was opposed by the plaintiffs claiming disclosure and marketing only taking place through the species patent. The plaintiff further argued the commercial success of the patent and an absence of challenge in its 15+ years of life cycle. The defendants highlighted an “Obviousness-type double patenting” (ODP) objection raised for the same patents in the US where the plaintiffs had filed a terminal disclaimer. They also highlighted another case where manufacture of Dapagliflozin was argued as an infringement of the genus patent. She then discusses the court’s right treatment of an incorrect coverage-disclosure dichotomy. Furthermore, the court took into account public interest highlighting a substantial difference between the selling price of drugs of the two parties and the greater risk to diabetic patients in the pandemic. Finally, the court observed that the plaintiff’s failure in non-disclosure of particulars from its US application including the terminal disclaimer.

Other Posts

Back to the Drawing Board: Indian Courts’ Tryst with Public Interest Principle in Pharmaceutical Patent Infringement

In this guest post, Victor Vaibhav Tandon and Devvrat Joshi look at the public interest element in pharma infringement cases. They note that the Indian courts have posited public interest as a fourth factor in addition to the three-factor test used for granting interim reliefs, thereby not granting it its due autonomous role. They then briefly note the judicial history of the public interest principle starting from the Roche cases to the Novartis and Glenmark decisions. They then argue that public purpose should play a greater role in patent disputes in India, at least in the domain of pharmaceutical patents. They argue that public interest forms a cornerstone of Indian patent law and when a patentee prima facie fails to meet it in the immediate foreseeable future, that in itself should constitute a reason for non-grant of injunction in its favour. Finally, they argue that in adjudicating the public interest principle, the courts should consider factors such as price difference between the patented drug and its generic variant, actual working of the patent in India, the on-ground accessibility, and the conduct of the patentee.

India vs Pakistan: Dispute over Basmati’s GI Registration in the European Union

In this post, Varsha analyses the recent controversy between India and Pakistan on India’s application for protected geographical indication (PGI) status for Basmati before the European Commission. She notes that India has not claimed itself to be the only country growing Basmati and that the application has complied with the requirements for product specification under the EU Regulation. She then notes that Pakistan’s opposition to India’s application might face challenges due to its possible non-grant of GI tag to Basmati as of now and the difficulty in demarcation of area. Subsequently, she discusses the four possible grounds for opposition as provided in Article 10(1) of the Regulation. The only possible ground that Pakistan could viably raise is to demonstrate that the registration would jeopardise the existence of products that ‘have been legally on the market for at least five years preceding the date of the publication’. Finally, she concludes by noting the possible implications of Pakistan’s successful or unsuccessful challenge to India’s application.

Decisions from Indian Courts

• The Controller of patents in Taisho Pharmaceutical Ltd. v. Rohan Chopra & Ors. granted a patent for the compound Luseogliflozin while dismissing four pre-grant oppositions, holding that the claims pertain to a new chemical entity instead of the discovery of a known substance. [November 19, 2020]
• An appeal in the Supreme Court was filed challenging the Telangana High Court’s order in M/S Super Cassettes Industries Pvt. Ltd v. Nandini Chinni Kumar & Ors., restraining the telecast of the movie Jhund, based on the contention that true life events of a real person, already in the public domain may not be subject to copyright protection. The Apex Court refused to grant a stay on the High Court order. [November 18, 2020]
• The Delhi High Court in an interim order in Facebook, Inc. v. Mr Noufel Malol, a trademark infringement suit filed by Facebook, has restrained a bakery from using the mark “FACEBAKE” for its  products. [November 12, 2020]

Other News from Around the Country

• The Ministry of Electronics and IT (MeitY) has shared the backend code of Aarogya Setu on the OpenForge platform as per its policy of sharing all code repositories with developers to encourage sharing and reuse of e-governance application source codes.
• Tamil Nadu’s Authoor betel leaf is seeking a Geographical Indication tag, as per a formal application filed by the Authoor Vattara Vetrilai Viyabarigal Sangam.
• Serum Institute claims that India will get 100 million AstraZeneca’s Covid vaccines next month if the vaccine clears the final stage trial.
• The College of Engineering Trivandrum was granted a patent for its multi-purpose wall climbing robot that allows faster movement with a better load-bearing capacity.
• Indiamart has filed a copyright infringement petition in the Delhi High Court against Just Dial over copyright infringement with respect to website compilations.
• A piece in the Business Standard argues that patent battles could impede access to treatments and vaccines, particularly in developing countries.

News from Around the World

• India and South Africa’s proposal to seek TRIPS exemptions for Covid-19 drugs and vaccines was supported by China and Pakistan and opposed by the US and EU at the WTO.
• Google reported that it had signed “some individual agreements” regarding copyright payments with French news dailies and magazines after months of haggling over sharing revenue that accrues from Google’s display of news in its search results.
• Amazon-owned game-streaming service, Twitch asked users to stop using recorded music on their stream in order to avoid removal of content for copyright violation as per the Digital Millennium Copyright Act, while it apologized to creators for its way of dealing with copyright infringement notifications received by the company.
• The BRICS grouping has called for a “fair, equitable and affordable” distribution of vaccines after India and South Africa moved a proposal to waive patent protections for Covid-19 vaccines in the WTO.
• Pharmaceutical company Pfizer has filed a patent infringement petition in a US court against two Indian drug makers over the cancer drug Ibrance.
• Indian pharmaceutical companies are recalling various products in the US market due to deviation from the current good manufacturing practices.

Image from here

As Nikhil recently noted on the blog, there are currently on-going discussions as to whether the Copyright Act should be amended, with industry associations and law firms being invited to comment on the matter. As he had pointed out then, it is vitally important that industry and their representatives (law firms) not be the only ones sending in these comments, since very few, if any, have reason to focus on the public interest element. In this context, we are very pleased to note that a group of ‘like minded IP teachers’ have come together to prepare a list of recommendations that focus on desirable public interest oriented amendments! The document is available here (till at least 29th November – so do take a look soon) and those who wish to comment or endorse the contents can contact the authors as per the details in the document. We are fortunate to have Prof. (Dr.) N.S. Gopalakrishnan provide us an overview of their recommendations in a guest post below. Prof. Gopalakrishnan is one of India’s foremost authorities on IP, and is currently an Honorary Professor, Inter University Centre for IPR Studies, CUSAT. Some of his contributions to Indian IP law and policy can be seen here. A series of guest posts written by him on India’s problematic plant variety protection (PVP) regime on the blog earlier can be viewed here.

A Copyright Reform Agenda from a Group of Like-minded IP Teachers

Prof. (Dr.) N.S. Gopalakrishnan

The Registrar of Copyright had recently invited comments from industry associations and law firms on desirable amendments to Copyright Act, 1957. As copyright is a subject matter that can affect diverse fundamental rights, it is extremely important to ensure balance within the copyright system. Public interest should receive due attention in any legislative attempts and broader as well as transparent participation of diverse stakeholders are very important for ensuring protection of public interest. Teachers, researchers, and students from across the country, and from across the disciplines, have a very important role to play in the consultation process. In fact, if you recall, the MHRD took an extensive consultation process (2000 – 2010) before introducing the 2010 Copyright Amendment Bill in the Parliament and this resulted in a very balanced set of amendments in 2012. As some of you may be knowing, I was fortunate to be part of the entire exercise and played a constructive role in ensuring that the public interest of access to copyrighted material is adequately reflected in the law without compromising the interests of authors.

In the context of the current consultation, a group of like-minded IP teachers are trying to propose a set of amendments which are relevant in the emerging digital context and also the challenges posed by a pandemic like Covid-19. Some of the suggested provisions, particularly those aiming to facilitate more creativity and access, need urgent attention. The following are the key areas in which we are suggesting amendments:

I. Amendments in Section 52

A. Broadening the fair dealing exception under Section 52(1)(a)

B. Expanding the scope of educational use exceptions to specifically include sharing of copyrighted materials in the online teaching context

C. Broadening the exceptions regarding libraries, archives, etc.

D. Specific exception for text and data mining

E. Broadening the scope of provisions regarding access for people with disabilities

II. Amendments in definitional clause in Section 2

A. Definition of ‘Broadcast’ in relation to broadcast reproduction right

B. Definition of ‘communication to the public’

C. Definition of ‘computer programme’ – Exclusion of APIs

III. Amendments to other provisions

A. Excluding copyright protection over ‘Government works’

B. Infringement – Exhaustion of rights (Parallel imports)

Brief Summary of the Proposals

I. Amendments to Section 52

In our list of potential amendments to section 52, the first proposal is to make the fair dealing clause a more open-ended one. This is to enable the courts to address emerging copyright related challenges in the new technological context. The courts in India have many a times engaged in a purposive construction of Section 52(1)(a) and allowed activities like creation of parodies and guidebooks. By adding them to the list of examples in the clause, and by clarifying that these are only examples and not an exhaustive list of purposes envisaged under the clause, the law will be able to address many of the existing and emerging challenges for users without compromising on the interests of authors.  In the fair dealing clause we also suggest the inclusion of user generated contents, taking note of the fact that many jurisdictions have already made changes in their domestic laws to further the ‘remix culture’.

The second major change we suggest is in the context of online teaching and learning, particularly in the post Covid-19 period. Even though the Delhi University case has positively interpreted the educational use related provisions, more explicit provisions are required for teachers and students to use works in the digital learning process without fear of copyright infringement liability. We propose specific provisions for reproduction and communication of works for the purposes of preparation, teaching, learning, and examination both in the online and in-classroom learning contexts, including distance learning. The current provision for performance and communication of the works to the select audience in the educational institutions also need to be expanded to all the works in any medium. It is a common feature that the educational institutions act as an intermediary to facilitate online platforms for teaching and learning. To exempt them from the liability of intermediaries for storing and transmitting the copyrights works, a provision needs to be added. One of the major hurdles teachers and students face in access to works are the technological protection measures (TPMs) used by the copyright owners. While the Parliament has  been extremely careful in the 2012 amendments to avoid circumvention related liability on anyone engaging in any activity for a purpose not expressly prohibited under the Copyright Act, an  explicit clarification in the context of educational uses can help in avoiding legal uncertainties for all stakeholders in the education sector.

The third proposal is in the context of use of works by libraries, archives, museums, etc. in the digital environment. Some of the current provisions in this regard are outdated and a new set of provisions are suggested to enable smoother functioning of libraries in providing access to the works in the digital context. Here also a provision is added to empower the library to circumvent the TPM if necessary to facilitate the access.

The fourth in the list is an express provision to facilitate text and data mining which is the need of the hour to encourage research and learning by making use of the advancements in computational technologies. We suggest a broad TDM exception keeping in mind the specific needs of Indian researchers. We  also suggest some amendments to update the provisions for the disabled, in tune with the Marrakesh Treaty. Provisions for cross border exchange as well as import and export of accessible format copies by organisations working for the disabled are included in this regard.

II. Amendments in definitional clause in Section 2

The second set of amendments are on three definitions – broadcast, communication to public and computer programs – in section 2 of the Act.

The protection of the rights of the broadcasting organisation received a major boost in the 1992 Amendment. But it also substantially sacrificed the rights of the authors resulting in enormous confusion in interpretation of rights by the courts. This was balanced by the 2012 Amendment making it clear that the rights of broadcasting organisations are subject to the rights of authors and specific license is required for broadcasting the works including the enjoyment of the post fixation rights granted to the broadcasting organisation under section 37. Unfortunately, the Parliament did not address the problems associated with the definition of broadcast in the Act. The current definition which is linked to the works was included to recognise the broadcasting right of the authors specifically mentioned in section 14. The amendment to section 14 in 1992 deleted the word broadcast and replaced it by the right of communication to the public, the definition of which covers broadcasting right as well. It is well understood that the independent protection afforded to the broadcasting organisation is for the signals, whether in analog or digital form, it generates to transmit the content and not for the content. To bring in consistency in interpretation, there is a need to clarify the same by amending the definition of broadcast in relation to broadcast reproduction right. We have taken note of the fact that due to the advancements in encryption technology, there is hardly any possibility of unauthorised use of broadcast signal in the digital form. The technology of live streaming of the content using computer networks is totally different from traditional broadcasting and there is no allegation of the unauthorised use of “streams” used for webcasting. If at all there is unauthorised use, it is of the works and not of the digital signals and streams. Unauthorised use of content should be the concern of the author of the work and not the broadcasting organisation or webcasters. Hence it is suggested to expressly exclude the same from the definition. We hope that the amended definition will enable the courts to differentiate the rights of broadcasting organisations from that of the authors and bring out the much desired balance in this area.

India is now witnessing rapid expansion of access to works through the internet using high speed bandwidth. Live streaming of programs is gaining momentum and is going to be a regular feature in the days to come. Since this is a new source of income for the authors of the work, India needs to expressly recognise this right to avoid unauthorised uses of works through streaming. Though the definition of communication to the public has been amended in 2012, the technology specific language used in the definition creates uncertainty as to the coverage of streaming of works. The proposed amendment to the definition of communion to the public is to clarify the same.

Another definition we have touched upon is that of computer programs. This is in the context of the new developments taking place globally in protecting under the copyright law functional elements (non-literal) such as sequences, structure and organization including application program interfaces (APIs). It is an accepted fact that API’s are functional in nature and the protection of the same will hamper research and developments in this area. In the context of this issue resurfacing in many other jurisdictions, particularly in the US, it is imperative that we clarify the same by expressly excluding the same from the definition of computer programs to avoid any legal conflicts in India.

III. Amendments to other provisions

Another area on which we suggested change is the exclusion of government work from copyright protection. Any student of copyright law will appreciate that there is hardly any philosophical or economic justification for providing copyright to government works. In fact major jurisdictions refused copyright protection for government works. We have witnessed unnecessary litigation in this area and it is in public interest that we take away government work from copyright protection and we recommended the same.

You may recall that the 2010 Copyright Amendment Bill had introduced a provision (proviso to section 2(m)) to expressly recognise international exhaustion in the area of copyright and the same was approved by the Standing Committee of the Parliament. Unfortunately the same was not approved by the Parliament and an assurance was given by the Government that the same will be reintroduced after conducting an elaborate study on the economic implications of the same. Based on economic and social considerations, the study sponsored by the Government recommended the introduction of the provision for international exhaustion. Even in countries like the US, which advocate for national exhaustion, the courts have recognised the need for international exhaustion of rights on public interest. In the context of the fast growing online sale of works, exhaustion is important even in sale of soft copies of the work. As access to foreign works is still important in many areas, particularly research and education, a new provision for international exhaustion of rights, including digital exhaustion, is suggested.

The proposed amendments and the detailed rationales for those suggestions can be accessed from this document. While we completely understand that there are many more areas wherein changes can be suggested, we hope that this earnest attempt will inspire more deliberations among the public and persuade more people to actively contribute to the consultation process. If laws are made by the people and for the people in a democracy, the public should play an active role in the lawmaking process and we truly hope that steps would be taken by the Government to ensure that like the 2012 Amendment, the present copyright amendment consultation process will become another model in this regard.

Image from here

We’re pleased to bring to you a guest post by Amit Tailor, analysing whether rejection of claim(s) of a later patent application having ‘similar’ or ‘overlapping’ scope with that of an ‘earlier’ patent application is appropriate under section 46(2) of the Patents Act which provides that a patent can be granted for one invention only.

Amit is working as Manager (Sr. Scientist) at Cadila Healthcare Ltd., handling patent drafting, filing & prosecution, FTO, patentability & invalidity mainly. He has an LL.B. from the Faculty of Law, Maharaja Sayajirao University of Baroda, Vadodara (Gujarat), and is a Registered Patent Agent and M.Pharm fom National Institute of Pharmaceutical Education and Research (NIPER), Mohali. He also frequently writes blogs and short commentaries regarding recent developments in the field of intellectual property, especially patents in pharmaceutical and life sciences domain, on his LinkedIn page, and has recently published two articles on IPWatchdog as well. The views expressed here are personal.

Amit recently wrote another two-part guest post for us discussing the manner in which the appeals to the Patent Office’ decisions at the IPAB are handled and managed. The post can be viewed here and here.

Section 46(2): ‘One Patent Per Invention’ or ‘One Invention Per Patent’?

Amit Tailor

There has been an interesting development recently. I came across an Examination Report (‘FER’, as it is historically known in India) wherein the Patent Office had raised an objection under section 46(2) of the Patents Act, 1970 under the head ‘Other Requirements’, reproduced herein below:

“It is appearing that the subject matter of the present application is similar with another Indian patent application no. XXXXXXXX. However, according to 46(2) “a patent shall be granted for one invention only”. Therefore, one out of these two applications may be allowed.”

The instant application (‘Application 2’) and the cited application (‘Application 1’) are both assigned to the same applicant and were filed about two months apart, wherein the Application 1 claims the earlier priority/filing date over the Application 2. Both applications are stand-alone applications and are not connected with each other – they are not from one ‘family’, the Application 2 does not refer, discuss or cite the Application 1 anywhere in the specification, nor it expressly claims priority from the Application 1. Both the applications are examined by the Kolkata office, albeit, by different Controllers/Examiners and await applicant’s response to outstanding FERs.

I am not sure how frequent is the objection under section 46(2) amongst all the FERs issued from any or all of the four offices, across any or all of the four technical domains; but it is safe to assume that the number would only be a small fraction of that. However, irrespective of the statistics, such a rejection raises an interesting issue – whether rejection of claim(s) of a later application having ‘similar’ or ‘overlapping’ scope with that of an ‘earlier’ patent/application is appropriate under section 46(2)?

The Statutory Provision – Section 46(2)

The rejection for claims in a patent application for having their scope overlapping with that of another patent/application having earlier filing and/or priority date, amounts to rejection for ‘anticipation’, and section 46(2) may not be a proper statutory provision under which such a rejection can be raised. Section 46 reads as follows:

“Section 46: Form, extent and effect of patent

(1) Every patent shall be in the prescribed form and shall have effect throughout India.

(2) A patent shall be granted for one invention only:

Provided that it shall not be competent for any person in a suit or other proceeding to take any objection to a patent on the ground that it has been granted for more than one invention.”

[emphasis supplied]

A plain reading of the language of section 46(2) gives an impression that it is directed towards the concept of ‘unity of invention’. This is evident from the expressions ‘a patent’ and ‘one invention only’ as used therein and further from the language of the proviso that, should ‘more than one invention’ be granted ‘one patent’, the same, shall not be a ground for any objection thereon including in any invalidity challenge. Section 46(2), thus, provides that in an ordinary course of proceedings, only one invention shall be granted one patent, but the language leaves a scope for a discretion for the Controller that more than one invention may also be granted one patent. Nowhere it suggests, expressly or impliedly, that a patent shall not be granted for an invention if the subject matter of claims contained in an application is ‘similar’ with another Indian application.

Appropriate Statutory Provision for ‘One Patent Per Invention’ Rejection

In light of the discussion, it is safe to comment that section 46(2) encourages ‘one invention per patent’ and fails to supply the necessary statutory basis for raising the ‘one patent per invention” rejections under the Act. Instead, clause (b) of subsection (1) of Section 13 can provide the proper statutory basis for the same, the relevant portion of which is reproduced herein below:

“Section 13: Search for anticipation by previous publication and by prior claim.

(1) The examiner to whom an application for a patent is referred under section 12 shall make investigation for the purpose of ascertaining whether the invention so far as claimed in any claim of the complete specification—

….

(b) is claimed in any claim of any other complete specification published on or after the date of filing of the applicant’s complete specification, being a specification filed in pursuance of an application for a patent made in India and dated before or claiming the priority date earlier than that date.”

[Emphasis supplied]

The clause (b) above provides a clear and unambiguous basis for rejection of a claim in an application which is anticipated by prior claiming in a later published patent/application claiming an earlier filing and/or priority date.

The instant FER, though found the subject matter of Application 2 ‘similar’ with that of the Application 1, surprisingly all of the claims of Application 2 were held novel and no objection to novelty (or inventiveness) were raised over the Application 1. And, though the FER for Application 2 cites the Application 1 under section 46(2), the FER issued for the Application 1 does not discuss or cite the Application 2. No response has yet been filed by the applicant on any of the two applications, therefore it would be difficult to comment on what approach would be adopted by the applicant and what stand the Controller would adopt on this issue.

Conclusion

An outcome on merits can be expected only if the applicant continues to have interest in the application and files their response to the two FERs. Otherwise, we may need to find and/or wait for another such section 46(2) rejection. However, irrespective of the fate of the two applications, a claim rejection for ‘anticipation’ is improper when raised under section 46(2). Any rejection u/s 46(2) can be proper when raised for ‘unity’ objections, alone or preferably in combination with Section 10(5). Section 13(1)(b) can be the proper statutory provision for the ‘anticipation’ rejections. Section 46(2) speaks for ‘one invention per patent’ whereas section 13(1)(b)for ‘one patent per invention’.

Image from here

Recently, Allied Blenders and Distillers Pvt Ltd filed a copyright and trademark infringement suit before the Delhi High Court protecting their ‘Officer’s Choice’ mark from the defendant’s ‘Chetak Whisky’. The court granted an ad interim injunction in the plaintiff’s favour. An interesting question that came up before the court was regarding its territorial jurisdiction to grant this relief, discussion of which formed the majority of the order. In this piece, I shall analyse the court’s treatment of the jurisdiction issue.

Grounds

In the instant case, the plaintiff claims jurisdiction of the court on two counts. First, it argues that it has jurisdiction under Section 134(2) of the Trade Marks Act, 1999 and Section 62(2) of the Copyright Act, 1957 that grants jurisdiction to courts where the plaintiff “actually and voluntarily resides or carries on business or personally works for gain”. This is substantiated by two arguments: first that it has its office located in New Delhi, and second, that it carries on business in New Delhi through, inter alia, sales of its products.

The second ground for claiming jurisdiction is under Section 20 of the CPC. For this it argues that the defendant is carrying on business in New Delhi as an address from the city is provided on the contact us page of the defendant’s website. It must, however, be noted at this juncture that a perusal of the contact us page indicates that the defendant has its registered office in Rajasthan and the New Delhi address is mentioned under the head ‘Registrars’. Additionally, it argues that “a substantial and integral part of the cause of action” arose in Delhi. For this it refers to the MoA of defendant that has establishing of business in India as one of its main objects. This leads the plaintiff to argue that the threat of infringement in Delhi is “imminent and real”. Moreover, it argues that the dynamic effect of violation of its rights will be faced in Delhi.

Standard of Scrutiny

Before turning to the analysis of the specific elements of the two grounds claimed by the plaintiff, it is important to turn to the question of level of scrutiny that needs to be made on the question of jurisdiction at this stage. To this end, the decisions in Allied Blenders & Distillers Pvt. Ltd. v. R.K. Distilleries, and Allied Blenders & Distillers Pvt. Ltd. v. Prag Distillery Pvt. Ltd. were referred to by the court. Both decisions were given in the context of applications under Order VII Rule 10 of the CPC concerning return of plaint. In such petitions, these cases note that the application proceeds on a demurrer with the averments in the plaint to be considered as true. However, both these cases noted that such applications need to be distinguished from those seeking interim relief under Order XXXIX Rules 1 & 2, such as the instant case. It noted:

“an application under Order XXXIX Rules 1 & 2, CPC requires the examination of the contentions of the defendants that may be contained in the written statement and / or the reply to the application as also the other material which may be placed by the defendant before the court” (emphasis supplied)

From the use of such broad terminology including any “other material” that the defendant places before court, it appears that the essence of this proposition is that in an Order XXXIX application, the contentions raised by the defendant in any form have to be taken into consideration alongside the plaint, as against mere reliance on the plaint. The rationale behind the same could possibly be the fact that at this stage rights and liabilities of parties would be affected as against a return of plaint application where no rights are decided per se. This is my understanding of the jurisprudence on this issue, could readers who are better informed, let me know if I have gotten it wrong?

In the instant case, however, the court has resorted to a seemingly incorrect interpretation. It held that the above distinction is not applicable at this stage where merely an ad interim relief is being granted but the IA is not being disposed off. This, however, loses note of the fact that such relief also impacts the rights of the parties at least until this order is revised or confirmed at a later stage when the disposal takes place which could take months in its culmination. In any case, the court notes that even until a considerable time after the orders were reserved, the defendants had not brought either the written statement or the response to the IA on record, and thereby the court had to go by only the averments in the plaint (see paras 20 and 24). However, it appears that the court was still in possession of the written submissions of the defendant in some form as can be seen from the engagement with its contents throughout the judgment (paras 22, 34, 36, and 38). In such a situation, an approach ignoring the contents of these submissions for deciding jurisdiction but discussing the same for determining passing off appears problematic. While the court has not explicitly mentioned the arguments in these submissions on jurisdiction, I shall make use of the oral arguments as noted by the court for analysis in this piece.

The two aforementioned Allied Blenders cases also noted that despite succeeding in Order VII Rule 10 jurisdictional challenge, it might fail the same for interim relief if “the plaintiff’s entitlement is itself shaky because the issue of territorial jurisdiction is highly debatable and prima facie not tenable”. The court held that the defendant failed to prove the latter aspect of jurisdiction being prima facie untenable. I shall now analyse the facts to argue that a contrary decision should have been arrived at.

Section 20, CPC

I shall first look at the two CPC grounds invoked by the plaintiffs: that of the defendant carrying out business in Delhi and the cause of action arising in Delhi. On the first count, the relevant ruling to be noted is that of the Supreme Court in Dhodha House v. S.K. Maingi where the court interpreted the expression “carries on business”. One of the conditions noted was that “[t]o constitute ‘carrying on business’ at a certain place, the essential part of the business must take place in that place”. (emphasis supplied) In the instant order, the court took note of the Delhi address given on the contact us page. It noted that a determination whether it satisfies the factors mentioned in Dhodha House such as the business being essential were questions of fact to be decided at a later stage based on evidence. It held that on a prima facie basis it reflected that the defendant had an office in Delhi and it carried on business there. The scenario, however, becomes quite different if the submissions of the defendant are considered. It argued that the Delhi address was merely “of the Registrar, who, in accordance with the provisions of the Depositories Act, 1996, read with the Companies (Prospectors and Allotment of Securities) Rules, 2014, was to be contacted in the case of transfer of shares, etc.” It, further added, that it only conducted business in Rajasthan and had obtained all permits solely for Rajasthan. This clearly indicates that the essential component of the business was being conducted solely in Rajasthan and not in Delhi.

On the count of cause of action, the court noted that the “mere apprehension of the likelihood of the defendant launching the allegedly infringing product” in Delhi would provide jurisdiction to the court. It, however, did not at all touch upon the material placed by the plaintiff to assess whether such likelihood has indeed been proven. If we look at the grounds on which the plaintiff claims cause of action to arise, the shortcoming of this failure appears stark. The plaintiff’s first ground is rooted in a broadly worded MoA which talks of establishing business in India. The same, however, does not in itself substantiates the presence of either “imminent” or “real” threat of infringement in Delhi as the plaintiff claims. There does not appear to be anything on record to show the defendant’s plans of expanding anywhere outside of Rajasthan, where it is currently operating, let alone Delhi. The second ground is even more tenuous in that a “dynamic effect” of plaintiff’s violation was felt in Delhi. There is no clear explanation of what this dynamic effect means apart from possibly indicating that any infringement in the country would lead to losses in Delhi, thereby using it as shorthand for claiming that Delhi should have jurisdiction on all cases of infringement throughout the country. This clearly is not tenable. Thus, it cannot be stated at least prima facie that any part of the cause of action arose in Delhi. The cause of action could instead be said to have arisen only in Rajasthan where the defendant is selling its products.

Trademarks Act and Copyright Act

As noted earlier, Section 134(2) of the Trade Marks Act and Section 62(2) of the Copyright Act granted additional fora for the plaintiff to institute an infringement suit. It allows the plaintiff to institute a suit in the jurisdiction where it has its office. This, however, has to be supplied with a caveat. As per the Supreme Court’s ruling in IPRS v. Sanjay Dalia and the Delhi High Court’s application of the same in Ultra Home Construction Pvt. Ltd. v. Purushottam Kumar Chaubey, where the plaintiff has a subordinate office at the place where cause of action arises only courts of that area have the territorial jurisdiction to hear the matter and the jurisdiction of other courts is ousted. In the instant case, as highlighted above, the cause of action only arose in Rajasthan. As the defendant pointed out in its arguments, the plaintiff also has a subordinate office in Rajasthan. Hence, applying the above proposition, only the courts of Rajasthan have the jurisdiction under the extraordinary jurisdiction provisions of the two acts.

Conclusion

The present suit highlights the trend of plaintiffs filing infringement suits in Delhi even though they ought to be dealt with other jurisdictions where the claim actually originates. This problem was sought to be addressed partly by the Supreme Court in the decision in IPRS and was discussed extensively on the blog here, here, and here. Despite this the trend continues with Delhi being the favourable forum for any infringement case with the plaintiffs finding any possible distant connection of the suit to Delhi to ensure jurisdiction. The courts must give a strict look on this practice else it becomes particularly difficult for smaller players from far flung areas that might be required to defend suits against them in Delhi.

Topical Highlight

A Copyright Reform Agenda from a Group of Like-Minded IP Teachers

Image from here

In this guest post, Prof. (Dr.) N.S. Gopalakrishnan provides us an overview of the recommendations focussing on desirable public interest oriented amendments to the Copyright Act prepared by a group of ‘like minded IP teachers’. He particularly summarises four broad themes of amendments. The first set of proposed changes deal with Section 52. These include an open-ended fair dealing clause under Section 52(1)(a), expanding educational use exception to cater to the needs of online learning, a specific exception for text and data mining, broader exceptions for libraries, etc., and broader exceptions to ensure access to the disabled. The next set of changes concern the definitions under Section 2. These include amendments to the definitions of ‘broadcast’ to clearly differentiate the rights of broadcasting organisations from that of the authors, ‘communication to the public’ to include live streaming, and ‘computer programs’ to exclude functional elements such as APIs. The third proposal is to exclude government works from copyright protection, and the final amendment proposed is to recognise international exhaustion in the area of copyright including digital exhaustion.

Thematic Highlight

Officer’s Choice v. Chetak Whisky: An Incorrect Choice of Jurisdiction?

Image from here

In this post, I analyse the issue of territorial jurisdiction that was dealt with by the Delhi High Court in a copyright and trademark infringement suit filed by Allied Blenders and Distillers Pvt Ltd for their ‘Officer’s Choice’ products. The court granted an ad interim relief holding that the objection of lack of territorial jurisdiction was not satisfied at this stage. I argue that the court reached at this conclusion by its failure to acknowledge the defendant’s arguments based on a seemingly incorrect interpretation, and relying solely on the averments in the plaint. I then discuss the two provisions based on which jurisdiction was claimed by the plaintiff. In the context of Section 20, CPC, I argue that the defendant could not be said to be carrying on business in Delhi as “the essential part” of the business did not take place there. Similarly, since there was no “imminent” or “real” threat of infringement in Delhi, cause of action could not have been said to arise there. Finally, the long-arm jurisdiction under the Trademarks Act or the Copyrights Act could not be invoked since the plaintiff had its subordinate office in Rajasthan where the cause of action arose.

Other Post

Section 46(2): ‘One Patent Per Invention’ or ‘One Invention Per Patent’?

Image from here

In this guest post, Mr. Amit Tailor analyses whether rejection of claim(s) of a later patent application having ‘similar’ or ‘overlapping’ scope with that of an ‘earlier’ patent application is appropriate under Section 46(2) of the Patents Act which provides that a patent can be granted for one invention only. He highlights that Section 46(2) is directed towards the concept of ‘unity of invention’ with discretion available to the Controller to grant a single patent for multiple inventions. He argues that instead the correct provision under which this challenge could have been brought is Section 13(1)(b) that deals with anticipation of the claim in a prior claim.

Decisions from Indian Courts

• The Delhi High Court in Rb Health (Us) Llc v. Dabur India Limited, refused to grant an interim injunction in favour of the plaintiff in a design infringement and passing off case in relation to the defendant’s soap bars. [November 27, 2020]
• The Delhi High Court in Koninklijke Philips N.V v. Xiaomi Inc, in an application seeking interim injunction restraining the defendant from using UMTS enhancement (HSPA, HSPA+) or LTE technologies due to patent infringement allegations, asked the defendant to maintain an amount of Rs.1000 crores in their bank accounts operated in India till the next hearing. [November 27, 2020]
• The Delhi High Court in Whitehat Education Technology Pvt. Ltd. v. Anirrudha Malpani, in a suit filed on grounds of defamation, infringement of trademark, dilution and tarnishing of trademarks, disparagement, damages, and unfair competition, granted an ad interim injunction restraining the defendant from posting derogatory content against the plaintiff, and directed him to take down certain identified tweets. [November 24, 2020]
• The IPAB in Rajasthan Patrika Private Limited v. Phonographic Performance Limited India, in an intervention application by IPRS seeking fixing of royalties for sound recordings with respect to FM Radio Stations, ordered that IPRS is a necessary party to be heard and final orders will be passed after hearing all parties on merit. [November 23, 2020]
• The Delhi High Court in Karan Bajaj v. Pradeep Poonia, granted an ad interim injunction restraining the defendant from, inter alia, using the name ‘Whitehat Sr’ for his YouTube Channel, and directed him to take down certain identified tweets and YouTube videos. [November 23, 2020]
• The Bombay High Court in Lasa Supergenerics Limited v. Shreegen Pharma Limited, granted an interim injunction restraining the defendants from using the applicant’s patented process under Patent No.326628 or from manufacturing the compound Albendazole by using the process. [November 23, 2020]
• The Delhi High Court in Ufo Contemporary, Inc. v. Creative Kids Wear (India) Pvt. Ltd., granted an interim injunction restraining the defendants from using an identical or deceptively similar mark to the plaintiff’s registered UFO mark for garments. [November 23, 2020]
• The Madras High Court in D. Padmasingh Isaac v. Aachi’s Village Restaurant, granted a permanent injunction restraining the defendant from using marks similar to the plaintiff’s registered marks ‘Aachi’, ‘Aachi Kitchen’, and ‘Aachi Chettinad Restaurant’. [November 23, 2020]
• The Bombay High Court in Franco Indian Pharmaceuticals Pvt. Ltd. v. Faizan Javedbhai Bodla, granted an interim injunction restraining the defendants from using any mark deceptively similar to the plaintiff’s registered marks ‘DIAVIT/DIAVIT PLUS’ for medicinal and pharmaceutical preparations. [November 23, 2020]
• The Kerala High Court in Sirajudheen v. The State of Kerala, while denying a plea by the petitioner to quash a suit instituted against him under Section 51 r/w 63 of the Copyright Act held that the registration of the original work, and arraignment of the Registrar of Copyrights and the owner of the work as witnesses, does not constitute a valid reason to quash the proceedings. [November 19, 2020]
• The Delhi High Court in Astrazeneca Ab v. Micro Labs Limited, declined the plaintiff’s plea of an interim injunction restraining the defendants from manufacturing the compound Dapagliflozin, claiming patent rights over it. [November 18, 2020]
• The Delhi High Court in Allen Career Institute v. Telegram Fz-Llc & Others, restrained the defendants from uploading Plaintiff’s copyrighted study material/lectures, and directed Telegram to take down certain identified channels/ accounts. [November 18, 2020]
• The Meghalaya High Court in Shri Teilang Nongrum v. State of Meghalaya, quashed criminal proceedings commenced under Section 63 of the Copyright Act after the infringer and the copyright owner came to an amicable settlement. [November 16, 2020]

Other News from Around the Country

• The Screenwriters Association of India has applied through the Registrar of Copyrights for registration as a Copyright Society under Section 33 of the Act, in literary and dramatic works. The Copyright Office has invited objections/ comments regarding this application which are to be submitted within 30 days of the publication of this notice.
• The Copyright Office introduced a Non-Tax Receipt Portal in its e-filing portal which is to be used for making online payments.
• In the first half of 2020, Facebook took down 37,16,817 pieces of content based on 6,59,444 copyright reports; 4,04,078 pieces of content based on 1,66,310 trademark reports; and 13,08,834 pieces of content based on 97,186 counterfeit reports.
• In a piece for Newslaundry, Prashant argues for the inclusion of the concerns of news houses and the challenges faced by them from the online media in the discussions concerning amendments to the Copyright Act.
• In an interview with Scroll, KM Gopakumar highlights the importance of treating Covid-19 vaccines as a public good instead of being hoarded by rich countries.
• The Central Government is set to introduce a bill for amending the Competition Act in the upcoming Winter Session with the key changes being vesting the power of appointment of the DG in the Commission itself, and “settlement” and “commitment” procedures for quick case disposal.
• A Bilateral Patent Prosecution Highway (PPH) pilot program has started between the Indian Patent Office (IPO) and the Japan Patent Office, and the IPO will commence Form 5-1 under Chapter 5 of the PPH Guidelines from 7th December 2020.
• A MS University faculty has secured two copyrights from the Copyright Office, for developing a script for the Gujarati folk drama Bhavai, and for a residential layout of a house.
• A team led by the dean of College of Animal Biotechnology, GADVASU, Ludhiana, at the Indian Council of Agricultural Research (ICAR)-Indian Veterinary Research Institute (IVRI) has been granted a patent for a bovine rotavirus diagnosis.

News from Around the World

• The European Union is mulling to take measures to ensure adequate access to drugs including deploying fast track procedures for issuing a compulsory license in case of emergencies and incentivising drug production in the EU.
• Russian drugmaker Pharmasyntez has approached the Russian government to issue a compulsory licence for manufacturing generic versions of Gilead’s drug Remdesivir after its voluntary licensing request was not responded to.
• In an interview with the Business Standard, Carlos Correa discussed the India-South Africa WTO proposal for waiving certain TRIPS provisions to fight the pandemic.
• A piece in The Wire discusses the need to reorient the global pharmaceutical system to make public health a priority over corporate profits.
• The UNESCO and the EU are supporting the Ministry of Culture, Museums and Natural Heritage in South Sudan through a peer-to-peer learning exchange with experts from Tanzania Copyright Office to support the cultural and creative industries sector to develop its own national copyright policy.
• YouTuber PewDiePie lost all revenue from an over 30-minutes long video based on a ContentID claim for an unrecognizable Celine Dion cover.

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

Image from here

We’re pleased to bring to you a guest post by Shivam Kaushik, analysing the patentability of orbital transfer trajectories of spacecrafts in light of the recent patent grant to NASA in the US for ‘a method for transferring a spacecraft from the Geosynchronous Transfer Orbit (GTO) to Lunar Orbit’.

Shivam is a 5th year law student at Banaras Hindu University, Varanasi. He’s previously also written guest posts for us, titled ‘Copyright and Webinars: Ownership, Licensing and Fair Use’ , ‘Govt’s Draft Model Guidelines on Implementation of IPR Policy for Academic Institutions – A Critique‘ and ‘Reengineering of the Requirement of Disclosure of Foreign Applications by the 2019 Patent Manual‘.

Are Orbital Transfer Trajectories Patentable?

Shivam Kaushik

A couple of months ago, it was reported that the US Patent & Trademark Office (USPTO) has granted a patent to NASA for a new route to the moon – a trajectory designed to save lunar bound mission time, fuel and money and thus, making lunar travel cheaper and faster. The patent document claims that the invention is ‘a method for transferring a spacecraft from the Geosynchronous Transfer Orbit (GTO) to Lunar Orbit.’

As a direct shot to the moon is costly, space agencies prefer getting their spacecraft to orbit around the earth to gain some momentum using which it can escape the gravity of earth without using much fuel. Thereafter, the spacecraft is injected into the orbit of the moon. This transition (trajectory) from the earth orbit to the moon orbit is what the NASA patent deals with.

The point worth noting is that the patent given to NASA is not the first of its kind and the USPTO has previously also granted what are popularly known as Spitzer patent (priority 1994) and the Koppel patent (priority 1996). Both these patents were also granted for orbital transfer trajectories (OTT) of spacecrafts from the orbit of earth to the orbit of the moon.

Can a space trajectory be patented?

This is the first question that popped in my mind when I read about the NASA patent. For anything to be patented, it has to satisfy the triple requirement of novelty, non-obviousness, and usefulness. And furthermore, the subject matter of invention must not be an excluded subject. A ‘new’ trajectory can easily satisfy the requirement of novelty and usefulness. Its patentability hinges on the question of obviousness and whether it is an excluded subject matter in itself.

A space trajectory is a creation made by numerical modelling. So fundamentally, it is a mathematical equation. On the question of obviousness, in a paper written in 2017, Koppel argues that in case of an orbital transfer patent, the patent is not on the existence of an orbital trajectory or on a basic law of physics. Instead what is patented is the much complex process of trajectory evolution which includes several ‘unobvious actions’ for getting such specific orbital evolution, like providing the thrust in the right direction at the right locations or actions that are needed to get the expected benefits. It’s a patent on a process to move a spacecraft from one orbit to another by firing rockets at precise timing. Combination of both orbit evolution and actions can make the process patentable.

Koppel’s colleagues in flight dynamics do not acquiesce and contend that nowadays one can obviously find what is claimed in an orbital transfer strategy using simply a computer program. While, in case of Koppel patent or Spitzer patent it can be argued that they had an element of non-obviousness as the first computer optimisation tool could be made only in 1997 but giving patent to a trajectory in 2020 which can be arrived at by computer programme makes no sense.

US law scenario

The US patent statute (35 U.S.C. § 101) states that a patent may be granted to any new and useful ‘process, machine, manufacture or composition of matter’. Since the inventors characterise the orbit transfer trajectories as processes, it at least clears this hurdle easily. The Supreme Court of the US (SCOTUS) has dealt with the question of patentability comprehensively in the landmark cases of Myriad, Mayo and Alice and clearly laid out the categories of inventions that are not patentable: laws of nature, natural phenomena and abstract ideas. Apparently, the category of abstract ideas includes mathematical equations and arithmetic within its sweep.

The status quo of the patent regime in the US, as laid down by the US Court of Appeals in SAP America v. Investpic (2018), is that mathematical formulae and algorithms can qualify for patent  protection if they are involved in the creation or improvement of physical things. Conversely, if what is claimed is a wholly abstract idea or improvement in a mathematical technique itself, then such algorithm cannot be granted a patent. Since, the equations are developed as part of some space mission (like the NASA patented trajectory is meant to be used in DAPPER spacecraft), in terms of the existing requirement it seems that they are not at least excluded from the purview of patentability.

Indian law scenario

While the requirement of novelty, inventive step, and the industrial application are there in India too, India’s Patents Act, by virtue of section 3, is a tad more specific about what cannot be patented, in comparison to its American counterpart. Two clauses that are our concern are: (i) section 3(c) which proscribes patenting a ‘mere’ formulation of an abstract theory, and (ii) section 3(k) which says that a mathematical method or algorithm is not patentable. OTT can jump over the hurdle put forth by clause (c) by contending that they are not a ‘mere’ abstract theory but have practical application and significance in the cosmos. But section 3(k) casts the net too wide for OTT to escape. The Manual for Patent Office Practice and Procedure (page 97) shows that the practice of Indian Patent Office is to interpret the word ‘algorithm’ as “all forms of algorithm including but not limited to procedure or any sequence of steps or any method expressed by way of finite list of defined instructions, whether for solving a problem or otherwise…”

A case at point is Electronic Navigation Research Institute v. Controller General of Patents and Designs decided by the IPAB. In this case, the IPAB held that Indian patent law does not provide for a patent even if the mathematical method includes technical effects. The Board took aid of the landmark decision in Yahoo v. Rediff wherein it was held that inventive step in the form of technical advance must not be related to a feature which is a part of the excluded subject matter itself.

A space patent tragedy

The desirability of handing out patents to OTT is not an academic question as they have led to real world repercussions. One interesting episode related to OTT patents is that of the AMC-14 satellite. The satellite launched in 2008 could not be placed in the intended GTO and was left stranded in a useless orbit. The satellite could have been salvaged by a lunar flyby but incidentally Boeing had a patent relating to lunar flyby manoeuvre. SEC, the owner of the satellite could not secure a license for the same from Boeing and had to eventually abandon the salvage operation. The event created considerable furore with some comparing the incident to a scenario where “a factory caught fire and fire truck could not come because a competing factory had patented the route from the fire house.’” Some blamed the US Court’s standards which according to them are increasingly accommodative towards subject matter patentability, as the manoeuvre in question is just an application of basic physics to spaceflight.

Conclusion

From the survey of the legislative scheme it seems that in India, OTTs cannot be patented due to the interpretation adopted by the IPAB. Under the US patent scheme, the answer is not as straightforward and the fact of the situation is that USPTO is handing out patents for OTT. The present state of things might have been different had SES challenged the patent of Boeing or Boeing had to sue SES had SES used lunar flyby without a license because then a Court would have got to rule on the validity of the patent. But none of this happened and the current state of things is that USPTO is still handing out patents for trajectories to inventors and space agencies. The validity of the patents in question is doubtful because of the obviousness criteria, although it may be said that the essence of all good patents is to find that they were obvious after having found them.

This post was co-authored by Dayaar Singla and myself. Dayaar is a final year student at NALSAR University of Law. He is an editor of the Indian Journal of Intellectual Property Law and the Editor-in-Chief of the Law and Other Things Blog, which Late Prof. Shamnad Basheer was an initial contributor to.

In this post we look at recent changes to the creation of People’s Biodiversity Registers (PBRs) as well as the draft Environmental Impact Assessment (EIA) 2020 notification to analyse the problems in both which stand in the way of using PBRs as a people’s tool to democratise the EIA process. 

Image from here

The Biological Diversity Act, 2002 (the Act) has long been infamous for its lack of implementation (see here, here). On the aspect of constitution of Biodiversity Management Committees (BMCs), which are local committees under the Act, and maintenance of People’s Biodiversity Registers (PBRs), meant to document local biodiversity and traditional knowledge by BMCs, wheels finally started moving due to the National Green Tribunal’s orders in Chandra Bhal Singh v. Union of India. In other news, many of us have also been concerned by the issuance of the Draft Environmental Impact Assessment Notification (EIA 2020), which seeks to dilute the public participation process. Bahar Dutt recently noted that one way to democratise the Environmental Impact Assessment (EIA) process could be via the use of PBRs, thereby providing greater room for participation to affected communities. This is because PBRs are a legal document which can be used to assert the presence of biodiversity that might be harmed by any proposed project. However as she notes, PBR formation has become a bureaucratic, non-community driven process of late as a result of the haste in meeting compliance requirements under Chandra Bhal. In this post, we argue that in light of inadequate PBRs and the impediments within the EIA 2020, such democratization may be a farfetched dream. This is so, even as the effective use of PBRs against faulty EIAs becomes all the more important due to the reduced scope for public consultation under EIA 2020. 

Background

Image from here

Not only does a PBR serve as an important resource to ensure that community knowledge and resources are preserved and recorded, it is also a useful document for conservation efforts. Madhav Gadgil has recently argued that PBRs created under the BDA should not be limited to mechanical documentation exercises, and have the potential to be used for recording and communicating experiences of environmental degradation to the public. As there is no other record of biological diversity, PBRs can serve as an important resource to provide data for Environmental Impact Assessments (EIAs) which are undertaken when there is any important ‘developmental’ project to be commissioned to assess its impact on degradation of environment and to confirm that it does not lead to any irreparable damage. EIAs are generally commissioned for projects for mining, dams, thermal power plants, sea ports, airports, etc.

While the EIAs are meant to assess long-term impact of any such projects, they generally have a weak understanding of biodiversity of specific regions which may not have been studied previously. The lack of documentation of biodiversity resources within a particular area generally allows the EIAs to wash over any such claims as they are prepared by the consultant hired and paid by the project proponent.  

Analysis

The documentation facilitated by PBRs can and should be utilised for opposition to development projects where EIAs would otherwise invalidate a community’s oral claims. For example- the State of Arunachal Pradesh commissioned the North Eastern Hill University, Shillong to conduct a cumulative impact study for environmental clearance of the Nyanjang Chhu hydroelectric project when it was proposed.

However, as the project proponent had to fund the EIA, the company building the Project did not cooperate with the university researchers until winter. In winter, the black-necked cranes, a species revered by the local Buddhist Monpa tribes as a reincarnation of the Dalai Lama,  and protected under India’s Wildlife (Protection) Act, 1972, had already flown back. As a result, the company sponsored EIA made no mention of the cranes and despite protests by the tribe, the State’s Power Department completely denied the claim of these birds being found on the river bank. It was only after three years that in December 2015, post-arrival of the birds once again, that the Monpa community could produce incontrovertible photographic evidence in front of the NGT.  Such information could have been produced through the use of PBRs which would have recorded the existence of the birds as they have to be prepared in consultation with local communities. 

The potential to wield PBRs as a people’s tool within the EIA process is sobered by the manner in which PBRs have been created of late. The NGT order in the Chandra Bhal petition in 2016, directed the constitution of BMCs and creation of PBRs by January 31, 2020, with non-compliance inviting a fine of Rs. 10 lakhs from February 1, 2020. While four years of continuous pressure by the NGT have finally led to compliance on paper as shown in Table 1, Bahar Dutt’s investigative report shows that in the frenzy to meet this deadline, PBR creation was outsourced to expert consultants or NGOs, and indigenous communities were left out of what was intended to be a decentralised process that included them.

Table 1

Source: Order dt. 18/03/2020 and Final Compliance Report dt. 14/09/2020 in Chandra Bhal Singh v. UoI

Now, Clause 14 of the draft EIA 2020 notification (2020 notification) read with the procedure provided under Appendix 1, truncates the notice period for consultations from 30 to 20 days. This reduction in time enhances the crucial evidentiary role that PBRs can play in the EIA process. However, because the PBRs have been prepared by NGOs and consultants, it becomes difficult for local communities to understand their contents and use them to point any flaws in the EIA Reports which themselves are riddled with technical jargon. This is because the draft EIA Reports and their summaries are written in a technical manner, and are often too lengthy (running into 1000s of pages) or incomplete. In the past, the NGT has found that the draft EIA report prepared for the approval of a thermal power plant in Tamil Nadu contained “significant omissions.” The unavailability of the final EIA report to the public, according to the NGT allowed for “all mischief to be done by the project proponent.” Therefore, outsourced PBRs coupled with technical, lengthy EIAs and truncated as well as ineffective public consultations make a perfect recipe for a disaster, both metaphorically as well as literally, considering the ecological harm brought by these projects in cases of flawed EIAs. 

Another provision that is present in both the 2006 and 2020 notification [Clause 14(9)] requires only the Summaries of EIA Reports to be made available online. Surprisingly, Clause 14(3) does not require the project proponent to submit a soft copy of the summaries of the EIA Report but only 10 hard copies. On the other hand, the Draft EIA Report, for which the soft copy has to be submitted will not be made available online but be made available only upon written request for inspection at a notified place during office hours! This restricts the ability of the NGOs and consultants who have prepared PBRs, and are not situated locally to study these reports in detail. It has already been documented through research on 34 EIA Reports, that their executive summaries are inadequate, incomplete and far from robust. There is no justification for not making the entire report available online. If community participation in governance of their land and biodiversity is a matter of right, these processes make its exercise arduous without any rhyme or reason. This needless complexity limits the participation of affected communities to the benefit of project proponents.

Clause 22 of the 2020 notification allows for post facto approvals where industries operating without clearances will only be fined limited to the bank guarantees provided by them and be permitted to continue their operations. Despite serious objections to this provision of the draft, the Union environment ministry is reported to have refused to reconsider it, stating that industries’ employees and investors had to be protected and closure of these industries would be disproportionate. In this context, the purpose for creating PBRs to provide for conservation, sustainable use, and fair and equitable sharing of the benefits arising out of the use of biological resources, is rendered subservient to industry and investors’ interests. In effect, this reduces the recording of resources in PBRs to a mechanical exercise of extracting the value of sovereign resources at a capped price, and completely disregards cultural sensitivity, conservation or sustainable use of biological resources which is central to the welfare and needs of local communities. This militates against the objective of the Biological Diversity Act, as recognised by the Uttarakhand High Court in Divya Pharmacy v. Union of India, which calls for focusing on biodiversity beyond just the state’s property to regard it as “also the property, in a manner of speaking, of the indigenous and local communities who have conserved it through centuries.” As per Clause 22(1) of the 2020 notification only the project proponent, any Government Authority, Appraisal Committee or Regulatory Authority can report a violation. This completely excludes aggrieved stakeholders and communities at the site, media or civil society members who have reported violations in the past from doing so, and thereby significantly dilutes public participation. 

Conclusion

Thus, there is a need to not just make the PBRs more representative for them to be used for EIA purposes, but also to rethink EIA provisions to actively enable the use of public consultations and PBRs in order to make the assessment process effective. The Draft EIA 2020 Notification was published by the Union government in the official gazette on April 11, 2020. As per statute, there was a 60-day period inviting objections till June 11, 2020. The Ministry of Environment, Forest and Climate Change decided to extend this notice period by 60 more days on June 8, 2020. This would have been August 11, 2020. However, the cut-off date was incorrectly set as June 30, 2020, which was extended to August 11 by the Delhi High Court in its order to rectify this discrepancy.

Image from here

Recently, in interim applications decided on 23^rd and 24^th November, the same single bench of the Delhi High Court granted a limited ad-interim injunction in favour of Karan Bajaj (WhiteHatJr’s CEO) and Byju’s Whitehat Education Technology Private Limited (WhiteHatJr). The major issues in these cases were similar – defamation and trademark infringement. For the purposes of this post, only the IP issues will be looked at.

In the first case, Karan Bajaj v. Pradeep Poonia, the former along with his company has filed a case against the latter for tweets that criticized WhiteHatJr. The grounds for the case are that Poonia using the marks ‘WhiteHatSr’ and ‘WhiteHatPoonia’ on Twitter, and also through the YouTube channel named ‘WhiteHatSr’, had allegedly infringed their trademark, in addition to passing off, dilution and tarnishment. WhitehatJr is the registered proprietor of the word mark and device mark ‘WhiteHatJr’. In the second case, Whitehat Education Technology Pvt. Ltd v. Aniruddha Malpani, the former claimed that certain tweets of the latter had disparaged, diluted, tarnished and infringed on their trademarks. Malpani is the founder of an angel investment firm called Malpani Ventures and has invested in competing edtech start-ups. The Twitter posts by Poonia and Malpani were critiquing WhiteHatJr and its business model. In both the cases, the limited ad-interim injunction ordered the removal of certain tweets and additionally, in Poonia’s case, the injunction also restrained him from using the name ‘WhiteHatSr’ for his YouTube channel. There was a copyright infringement claim brought against Poonia for allegedly sharing WhiteHatJr’s curriculum. It appears that the copyright in the curriculum was recognised by the court, and an injunction was granted in favour of WhiteHatJr, restricting Poonia from circulating material.

The reasoning behind the grant of limited ad-interim injunctions has unfortunately not been provided, thus it is not clear which parts of the injunction relate to trademark or copyright claims, and which parts relate only to the defamation claims. Surprisingly, in both the cases, the application only consists of the facts, claims and then the injunctions. The lack of reasoning in any order where issues of fundamental rights are also present, is especially problematic, and makes the order vulnerable to questioning. The proceedings of the court as tweeted by LiveLaw can be seen here. This post seeks to explore the possible arguments that the court might take into consideration while deciding the trademark contentions raised in these cases and also analyses YouTube’s copyright infringement policy.

Nominative Fair Use

Nominative fair use is an exception to trademark infringement and it safeguards against the use of a mark for the purposes of criticism, parody, news reporting and commentary. Trademark infringement is dealt with under Section 29 of the Trademarks Act, 1999. In 2011, in Tata v. Greenpeace International (Greenpeace), a single bench of the Delhi High Court had held that the use of the TATA mark and ‘T’ within a circle device in the online game ‘Turtle v. Tata’ was ‘denominative’ and refused to grant interim injunction for trademark infringement.(discussed here) In this defamation suit, Greenpeace had created the game in order to draw public’s attention towards the alleged destruction of Olive Ridley turtles’ habitat by construction of Dharma port by Tata. The court went so far as to say, ‘the use of a trademark, as the object of a critical comment, or even attack, does not necessarily result in infringement’. Although, the nominative fair use doctrine was not explicitly applied, the use of the word ‘denominative’ indicates that its essence was applied. In Greenpeace, the use of Tata trademark was parodic, while in the present cases, the WhiteHatJr marks have been used for criticism. On studying Greenpeace, there appear obvious similarities between it and the present cases, and it could be said that criticism, like parody, should also be considered denominative use. In Poonia case, the court has merely stated that the plaintiff distinguishes between the present case and the Greenpeace judgement, but in the absence of any explanation it is difficult to deduce the differences.

In Consim v. Google, the Madras High Court relying on US case laws – New Kids on the Block v. News Am. Publ’g Inc. and Caims v. Franklin Mint Co., held that for a ‘use’ to qualify as a nominative fair use, it should fulfil a three-factor test – first, the product or service should not be readily identifiable without the trademark; second, the mark should only be used to the extent it is necessary for identification of product or service; and third, the user should refrain from doing anything that would indicate endorsement or sponsorship by the trademark holder. The first condition would be fulfilled as it is not possible to criticise an entity without naming it. With regard to the third factor, Poonia and Malpani have engaged in criticising the WhiteHatJr, thus the question of endorsement does not arise. It is difficult to determine the satisfaction of the second factor without a thorough examination of all the posts made by the two on Twitter and YouTube. Explaining the second factor, in New Kids on the Block case it was stated that ‘a soft drink competitor would be entitled to compare its product to Coca-Cola or Coke, but it would not be entitled to use Coca-Cola’s distinctive lettering.’ WhiteHatJr can also claim that the use of the name ‘WhiteHatSnr’ for his Twitter account and the use of the terms ‘WhiteHatSr’ and ‘WhiteHatPoonia’ along with his tweets seems unnecessary.

Trademark Infringement

In the present cases, WhiteHatJr’s registered trademarks seem to have been used by Poonia and Malpani for the purpose of criticising the company on Twitter and YouTube. Section 29(4) of the Trademarks Act, 1999 deals with infringement and states that ‘A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade…’. The relevant parts here are ‘uses’ and ‘in the course of trade’. The term ‘uses’ has been defined in Section 29(6) and the use of a trademark for criticism does not seem to fall under any of the clauses. It can be inferred from the phrase ‘uses in the course of trade’, that the application of section 29(4) is limited to commercial usage. Based on a quick perusal of Poonia’s Instagram, WordPress and Twitter handles, he does not seem to be promoting any other edtech platforms. Except in one post where he has shared a meme, criticising Byju and WhiteHatJr, and advocating for supporting free and quality education from Coursera, Edx, NPTEL, Khan Academy, Udemy etc. This probably would not amount to commercial use, as he is generally giving an example of websites that provide free education and is not gaining monetarily from it. If he had named a for-profit company as an alternative, it might have amounted to commercial use, as the court could consider it to be an endorsement even when he was not actually been paid by any company. Thus, the usage of the WhiteHatJr’s trademarks by Poonia and Malpani appears to be non-commercial, meaning it cannot be brought under the ambit of Section 29(4).

The lack of precedents regarding the use of trademarks for criticism of a company necessitates reference to foreign judgements. In Aviva USA Corp. v. Vazirani, an independent insurance broker with a competing business created a website ‘avivauncovered.com’ for the sole purpose of criticising Aviva. The District Court of Arizona, United States, found the website to be non-commercial, as there was no mention of Vazirani’s commercial website on it and protected his use of Aviva’s mark as nominative fair use. Unlike Vazirani who is engaged in a competing business, Malpani is merely an investor in competing edtech start-ups. When criticising the plaintiffs, prima facie, Malpani does not seem to have endorsed the start-ups he has invested in. If Malpani has not endorsed the start-ups funded by him, as an alternative to WhiteHatJr or in general, then, even if his start-ups have benefited from Malpani’s actions, it would still probably not amount to commercial use. It would be interesting to know what conclusion the court reaches after proper examination of evidence.

In Bosley Medical v. Kremer, the 9th Circuit court, United States, held that Kremer’s website with the domain name ‘BosleyMedical.com’ was non-commercial. In this case, Kremer was aggrieved by Bosley Medical’s actions and had purchased the above domain name and used it to criticising for them. Kremer earned no revenue from this website, did not provide links to Bosley’s competitors and it was not an extortion scheme. Both Bosley and Aviva dealt with websites and not social media platforms, but the findings in these cases could be applied to the present situation. If applied, it seems that Poonia’s use of the name ‘WhiteHatSr’ for his YouTube channel should fall under nominative fair use. A claim for dilution and tarnishment cannot be successful, until it is proved that section 29(4) is applicable to the present situation. For establishing a claim of disparagement, it is required that the facts should be clear, which is not the case at present. 

Can Criticism Amount to Copyright Infringement?

A Forbes article states that certain YouTube videos criticising WhiteHatJr have been taken down on the ground of copyright infringement. Not having watched the videos, the author refrains from commenting on their content. However, this instance brings to mind a major flaw present in YouTube’s working. YouTube follows a three strikes policy for creators in pursuance of the provisions of the Digital Millennium Copyright Act, 1998 (DMCA). If any copyright holder claims infringement in any video uploaded on YouTube, he has two options – either to allow the video to remain and monetise it, or to file a complaint in order for the video to be taken down. If a complaint is filed and the video is taken down, that amounts to one strike and if a creator gets three strikes, their account is taken down. In the past, YouTube creators have also been extorted by third parties, who threatened them with three strikes.

Interestingly, a video uploaded by NYU School of Law was flagged by YouTube for copyright infringement, regarding which the law school sure fell within the bounds of fair use. NYU found the dispute resolution process to be opaque and to prevent their account from being removed, they had to use their personal contacts for removal of claims. This incident demonstrates how challenging the situation would be for average creators when even people with legal experience found it difficult to contend and win against false copyright infringement claims. There are many shortcomings in the YouTube copyright infringement policy that allows copyright holders and even members of the public without any copyright claim in a work, to make complaints against videos that fall well within the scope of fair use.

Conclusion

In the present cases, WhiteHatJr has only included the Twitter posts made by Poonia and Malpani, and the YouTube videos uploaded by Poonia on the channel ‘WhiteHatSr’, however he has also put up posts on other platforms (such as Instagram, WordPress) which the edtech company could have included in its claims. These kinds of cases tend to have a Streisand effect and it can be clearly observed in this instance. The defamation suits appear to have been filed in an attempt to censor criticism and instead of curbing it, they have drawn more attention to the issue. In the past week, since the Delhi High Court decisions, almost all media outlets seem to have covered the dispute.

Image from here

The race to develop vaccines for COVID-19 has edged closer to its finishing line with at least three candidates announcing positive results from their vaccine trials. While this may appear to be the light at the end of the tunnel, the focus now shifts towards equally challenging issues of availability, accessibility, and affordability of vaccines. In this post, I discuss the vaccines developed by Moderna, Pfizer-BioNTech and AstraZeneca-Oxford, the complex ownership status of their intellectual property, the bilateral pre-purchase deals struck with higher-income countries and their implications on the Global South.

[Long Post Ahead]

The Leading Candidates

On 9th November, US Pharma giant Pfizer and German biotech firm BioNTech became the first to announce that ‘BNT162b2,’ the vaccine developed through their collaborative efforts, had shown over 90% effectiveness after the conclusion of Phase III trials. They will be supplying 50 million doses of one of the first ever messenger RNA-based vaccines by the end of 2020 and 1.3 billion doses by 2021. While no safety hazards have been noted, the vaccines will require ultra-cold storage at below -70 degree Celsius temperature and will only survive 24 hours at refrigerator temperature (2-8 degrees Celsius). It is priced at a hefty $39 (nearly INR 3000). On 2nd December, UK gave an emergency approval to this vaccine.

A week later, US-based Moderna declared that its mRNA-1273, another mRNA-based vaccine, had shown 95% effectiveness. It is set to be priced between $25-37 (approx. INR 1900-2800) per dose depending on quantities purchased. Similar to Pfizer-BioNTech, this vaccine will have to be stored frozen at -20 degrees Celsius. However, it may be kept at refrigerator temperature for a month making downstream transportation relatively easier.

The highly anticipated AstraZeneca-Oxford vaccine, AZD1222, claims 70% efficacy as per interim data, a figure that is estimated to increase to 90% if the dosage is altered. Unlike the other two vaccines, this one utilizes a genetically modified common-cold virus. What makes the Oxford vaccine an attractive candidate is its price, which, following a no-profit pledge by AstraZeneca, is to be capped at $3 per dose (approx. INR 222). It is also capable of storage at normal refrigerator temperature giving it a logistical edge over the other two.

A few other candidates are Russia’s Sputnik V and vaccines being developed by Sanofi-GlaxoSmithKlien, J&J, and Novavax.

This will go down in history as one of science and medical research’s greatest achievements. Perhaps the most impressive.
I put together a preliminary timeline of some key milestones to show how several years of work were compressed into months. pic.twitter.com/BPcaZwDFkl

— Eric Topol (@EricTopol) November 28, 2020

Public Funding and the Complex Web of Patent Ownership

Previous experiences such as the HIV epidemic in Africa have shown that patent ownership can drastically influence global access to healthcare. Since the beginning of the COVID-19 pandemic, concerns have been raised regarding the implications of enforcement of patents held over potential COVID-19 treatments. This has brought the patent landscape of the vaccine-manufacturing companies under scrutiny.

Public Citizen has identified 13 patents claimed by BioNTech on its vaccine technology. However, the status of rights over the vaccine is complicated. While the development of most vaccines has been significantly funded by governments, Pfizer has claimed that they have taken no money, neither from the US government nor from anyone else (perhaps as an explanation behind why it has not made any no-profit or non-patent enforcement pledges like other developers). Although this is true on the face of it, it is not to be forgotten that their Mainz-based partner BioNTech, who supplied the mRNA technology, received EUR 375 million from the German government and another EUR 100 million in loan from the European Investment Bank. More importantly, BNT162b2 was created using ‘spike protein technology,’ reportedly developed by scientists from the US government’s National Institute of Health (NIH). US Vice President Mike Pence went so far as to call the vaccine a ‘public-private partnership.’ If this is correct, in future, the ‘March-in rights’ under the Bayh-Dole Act could technically allow the US government to stake claim on what is being called taxpayer-funded technology (see the licensing arrangements here). Aside from this, Pfizer and BioNTech have been sued for patent infringement by San Diego-based Allele Biotech for using the latter’s mNeonGreen fluorescent protein in developing the vaccine. As the companies stand poised to make $13 billion from their vaccine by next year, these multiple claims over the ownership of the technology can lead to complicated battles between the public and private players involved. (Knowledge Ecology International maintains this page containing copies of the US government’s contracts with pharmaceutical companies for COVID-19 related technologies.)

Moderna, which has received huge sums from the US government, has so far published seven US patents it claims protect its vaccine. In October, Moderna pledged to not enforce its COVID-19 vaccine patents while the pandemic lasts, and to willingly license the same afterwards. While this is a responsible step indeed, Moderna is embroiled in its own set of patent-ownership controversies. The company has been accused of failing to disclose vast amount of funds received from US Defense Advanced Research Projects Agency (DARPA) for its vaccine patent filings. Moreover, Moderna too has utilized US government’s NIH protein in its vaccine. It is also presently embroiled in patent disputes with other third parties such as Arbutus Biopharma over the sub-licensing of platform technology which has been utilized to develop the new vaccine. The company though, has emphatically declared that it is not aware of ‘any significant intellectual property impediments’, in commercializing mRNA-1273 with regard to Arbutus.

The developers of the Oxford vaccine, which has relied on the UK government’s funds and other donations, had been lauded initially for suggesting a possible open licensing framework. In April, Oxford entered into an exclusive licensing agreement with AstraZeneca. While they too have pledged to sell the vaccine at cost price till the pandemic lasts, AstraZeneca’s definition of “pandemic” has recently been called into question (see below).

Issues of Transparency

Several of the dealings relating to these vaccines have been shrouded in secrecy. The Oxford vaccine, which has received millions of dollars worth funding from the US and UK governments (see breakdown here), had originally disclosed little of its licensing agreement with AstraZeneca. It wasn’t until multiple civil society groups wrote to the developers urging them to observe greater transparency that it was revealed, among other details, that the license was exclusive. A major part of the deal still remains unknown to public. A recent Financial Times article also reveals that AstraZeneca has retained with itself the power to declare the pandemic over as early as July 2021. This means that the no-profit pledge is rather misleading as the widely celebrated price of $3 can expire long before the promised 3 billion doses are delivered by the end 2021. Further, the terms allowing the company to add up to 20% of manufacturing costs to cover additional expenses incurred had also been kept secret till October.

Oxford’s vaccine has also given rise to confusion over its clinical trial data. The study consists of two groups with the first group administered two full doses, and the second, one full and another half dose. The results show 62% and 90% effectiveness respectively, an aggregate of which clocks the figure at 70%. Oxford has clarified that the second group trial began as an error in measuring doses but they subsequently decided to continue with the two different sets. Not only is this process strange, the results themselves have raised eyebrows on multiple accounts. The fact that a lower dosage showed better results is seen as puzzling. Data has also shown that the more successful group was a much smaller one and consisted only of people below 55 years of age, leaving space for the possibility of a naturally stronger immune system response to coronavirus in younger people. Experts have also questioned the 70% figure obtained from two groups administered separate dosage.

Lack of transparency in the time of pandemic can be extremely harmful as it shakes public faith over the vaccines. Without adequate information on companies’ dealings or clinical trial data, it becomes very hard for the public, healthcare providers, and governments, especially those in the lower and middle income countries with limited resources, to make effective purchase decisions.

No Vaccines for the Global South?

The equitable distribution of vaccines depends largely on the availability of vaccines in sufficient quantities. The past few months have seen frenzied attempts at vaccine stockpiling by higher-income countries through numerous bilateral pre-purchase agreements. According to Global Justice Now, 82% of the Pfizer’s 1.35 billion vaccine stocks to be made available till the end of 2021 have been pre-booked by the UK (40 million), US (100 + 500 million), EU (200 million), Japan, and Canada, which represent only 14% of world population. Moderna is not far behind, with 78% of its vaccines sold to (largely the same) countries representing 12% of the people. AstraZeneca too has committed 100 million doses to the UK. This aggressive buyout strategy triggered by ‘vaccine nationalism’ is propelling the world towards exactly the kind of medicine trade war that experts feared when US bought up nearly all of the world’s remdesivir supply earlier this year (discussed here). High efficacy rates and no-patent enforcement pledges would be of no benefit to countries in the Global South if they are forced to scramble over leftover supplies after rich countries have hoarded up their buffer stocks.

The logistical challenge is an even greater one. Several countries across the Global South have ill-equipped healthcare systems that lack the level of electrification needed to sustain vaccine storage at ultra-cold temperatures. Also, cross-country cold storage transportation requires timely infusions of dry ice to maintain temperature, which is all the more difficult to ensure in tropical regions with torrid climates. This risks spoilage of expensive vaccines which are already limited in number.

The Need for Technology Sharing

As the physical procurement of vaccines clearly presents a multilayered challenge, an alternative way of ensuring wider, equitable distribution is by sharing technological know-how with local manufacturers across the world to pump up total supply. Earlier, an attempt by WHO to facilitate a COVID-19 Technology Access Pool for the sharing of know-how and IP in order to allow companies to manufacture vaccines and treatments had fizzled out with only 40 countries (excluding India) joining the Solidarity Call for Action – most of which were lower income countries. In October, when India and South Africa made a proposal to the WTO to allow the suspension of patents linked to Covid-19 treatment till global immunity is achieved (explained in detail by Praharsh here), this proposal was widely supported by other lower and middle income countries, WHO, and leading UN experts. At the same time, the higher income countries, which have reportedly already pre-booked 51% of the world’s vaccine supply, refused to concede. (Interestingly, Moderna’s non-enforcement pledge came merely days after this proposal, but what good is a time-barred pledge when the company does not share its technology?).

It is worth noting that AstraZeneca has signed local manufacturing agreements with some of the worst affected countries such as Mexico and Argentina, who shall be sharing the produced vaccines to other Latin American countries. Brazil too has its independent agreement with the company. Similarly, Serum Institute India (SII) has signed a licensing agreement with AstraZeneca to manufacture 1 billion doses of the latter’s vaccine for lower and middle income countries including India.

COVAX: A Solution?

Countries in the Global South are now looking to (or are only left with?) another initiative called COVAX, which is a global collaboration spearheaded by CEPI, GAVI and WHO. COVAX has developed a fair allocation mechanism that supports building of manufacturing capabilities and procurement of timely supply so that 2 billion doses can be fairly distributed across its 172 member countries by the end of 2021. This will be done by pooling participants’ buying power and investing in vaccine production at scale in order to subsidize costs for lower and middle income countries. There shall be a proportional allocation of vaccines till all countries have received enough to immunize 20% of their populations and end the acute phase of the pandemic. So far, COVAX has been successful in raising funds from UK, EU, Italy, Spain, France, India, South Korea, Canada as well as non-governmental donors such as the Gates Foundation.  Sanofi-GSK has committed 200 million doses of its vaccine to COVAX, and AstraZeneca has promised another 300 million.

Despite immense promise shown by COVAX, their plan has flaws. To begin with, its vaccine allocation scheme aims at immunizing only 20% of national populations, followed by a need-based weighted approach (read more on this here). If successful, this will not alleviate national inequities but leave a large number of helpless people in lower income countries whose healthcare systems are much weaker. On the other hand, rich countries that are infrastructurally and financially better equipped to handle the crisis have the additional option of turning to supplies from bilateral deals.

COVAX is also heavily funded and controlled by the Gates Foundation, which has been criticized for constantly siding with Big Pharma in the IP rights suspension debate. This New York Times article explains how the Foundation played a role in Oxford backtracking from its non-exclusive, royalty-free vaccine license promise to join hands with AstraZeneca. The Foundation has also faced criticism for directing resources into pharma companies allowing corporate control over vaccine supply rather than strengthening fragile healthcare systems which would help governments handle the crisis better from the grassroots. While COVAX remains, as of now, the Global South’s best hope to combat COVID-19, this corporate-oriented approach casts doubts regarding COVAX’s ability to cater to the pressing needs of these countries in later stages of the pandemic.

With these concerns persisting, more and more countries are joining the call for suspension of patent rights which have not only allowed pharma companies to make profits by free-riding on largely public-funded vaccine research, but also pose a serious impediment in achieving the goal of equitable access.

Please click here to view other COVID-19 related posts on SpicyIP and leave a comment.

Topical Highlight

COVID-19 Vaccines: Patent Ownership and the Barriers to Equitable Access

Image from here

In this post, Adyasha conducts a thorough analysis of the vaccines developed by Moderna, Pfizer-BioNTech and AstraZeneca-Oxford, the complex ownership status of their intellectual property, the bilateral pre-purchase deals struck with higher-income countries and their implications on the Global South. She first notes the importance of public funding for the fruition of the three vaccines upon which patent protection is being claimed by their respective owners. She then highlights the lack of transparency with respect to the Oxford vaccine in terms of its licensing agreement with AstraZeneca and its clinical trial data. She then notes the difficulties for the Global South in securing adequate access to vaccine dosages due to stockpiling by higher-income countries and the logistical challenges. She then emphasises on the necessity of technology sharing for tackling the pandemic. She concludes by noting that the countries in the Global South are looking forward to the COVAX initiative as a solution, and the challenges surrounding the same.

Thematic Highlight

Enabling the Use of People’s Biodiversity Registers within Environmental Impact Assessments

Image from here

In this post, Anupriya and Dayaar look at recent changes to the creation of People’s Biodiversity Registers (PBRs) as well as the draft Environmental Impact Assessment (EIA) 2020 notification to analyse the problems in both which stand in the way of using PBRs as a people’s tool to democratise the EIA process. They first highlight the importance of PBRs in preserving community knowledge and resources. They then point out that while a 2016 NGT order directed creation of PBRs within four years, with fines for non-compliance, the process has excluded indigenous communities. It has been outsourced to expert consultants or NGOs, leaving out the affected groups that this decentralisation was supposed to aid. Moreover, with the consultation period being reduced to 20 days as per the draft EIA, the importance of PBRs becomes even more. However, due to outsourced PBRs and complex technical EIA reports, the local communities are left out from consultation process. This is exacerbated by the absence of online availability of complete copies of project proposals or EIA reports, post facto approvals, and exclusion of aggrieved stakeholders from reporting violations.

Other Posts

What’s Happening with WhiteHatJr?: A Look at the IP Issues

Image from here

In this post, Varsha looks at ad-interim injunctions granted in two cases in favour of WhiteHatJr. The first case concerns criticism of WhiteHatJr by Pradeep Poonia and the use of the marks ‘WhiteHatSr’ and ‘WhiteHatPoonia’, and the second concerns allegations of dilution, disparagement, and infringement of plaintiff’s marks through certain tweets by Malpani. Varsha first argues that the two cases can claim the defence of denominative use but WhiteHatJr might claim that the use of ‘WhiteHatSr’ and ‘WhiteHatPoonia’ was not justified even for making criticism. She then argues that the two cases cannot even be brought within the ambit of Section 29(4) as the use of the marks was non-commercial, only for making criticism. Finally, she analyses YouTube’s copyright infringement policy and highlights how it allows for videos that are completely within the bounds of fair use to be flagged for copyright infringement.

Are Orbital Transfer Trajectories Patentable?

Image from here

In this guest post, Shivam analyses the patentability of orbital transfer trajectories of spacecrafts in light of the recent patent grant to NASA in the US for ‘a method for transferring a spacecraft from the Geosynchronous Transfer Orbit (GTO) to Lunar Orbit’. He notes that it would not be difficult for such inventions to satisfy novelty or usefulness, the question thus hinges on the question of obviousness and whether it is an excluded subject matter in itself. He further notes that as in the modern day orbital transfer strategies can be figured out using computer programs, it does not generally make sense to grant patent to it given the non-obviousness requirement. He then discusses the US position and notes that it only excludes abstract ideas from patentability, mathematical equations and algorithms can be protected if they are involved in the creation or improvement of physical things, thus covering orbital transfer trajectories. The Indian position, on the other hand, would possibly not permit such patents in light of Section 3(k) completely excluding mathematical methods or algorithms from protection. He then notes a space tragedy that had occurred due to Boeing’s patent over a lunar flyby manoeuvre, and concludes on the note that while USPTO is granting patents to orbital trajectories their validity might be questionable.

Decisions from Indian Courts

• The IPAB in Sassoon FAB International Pvt. Ltd. v. Sanjay Garg, stayed the operation of registration by the Respondent of the “N95” mark in class 10, considering it to be a generic and descriptive mark, until the rectification petition is finally decided. [December 4, 2020]
• The Supreme Court in S.D. Containers Indore v. Mold Tek Packaging, set aside the Madhya Pradesh High Court order that held that the Commercial Court at Indore had the jurisdiction to hear an application for cancellation of registration of a design, in light of Section 22(4) of the Designs Act. [December 1, 2020]
• The Delhi High Court in Sap Se v. Anoop Tech, granted an ex-parte ad-interim injunction restraining the defendant from uploading any content infringing plaintiff’s copyright and its registered ‘SAP’ mark and to remove advertisements of SAP. [December 1, 2020]
• The Delhi High Court in Anil Mohan Bhardwaj v. Ravi Pocket Books, restrained the defendants from publishing or re-publishing plaintiff’s novels, changing the prices of these novels, and making audio books from these novels without plaintiff’s consent.
• The Delhi High Court in Sony Pictures Network India Pvt. Ltd. v. WWW.B1.MYLIVECRICKET.BIZ, restrained several rogue websites, Multiple Service Operators, and Local Cable Operators, from broadcasting/ telecasting the India-Australia cricket series without authorisation. [November 24, 2020]
• The Delhi High Court in Akshay Kumar v. Union of India, dismissed a writ petition seeking implementation of the Modified Flexible Complementing Scheme as not maintainable with the liberty to approach the Central Administrative Tribunal. [November 24, 2020]

  Image from here

• The Orissa High Court in Subhranshu Rout @ Gugul v. State of Odisha, in a bail application in a case involving forcible sexual intercourse and uploading the recording of the same on a fake Facebook profile, emphasised the need for the recognition of a ‘right to be forgotten’ in India and noted that the victim may seek appropriate orders to get the said content removed in light of her individual right to privacy. [November 23, 2020]
• The Delhi High Court in Reckitt Benckiser (India) Pvt Ltd v. Alok Jain, granted an ex-parte ad-interim injunction restraining the defendant from infringing the plaintiff’s registered ‘DETTOL’, ‘HARPIC’, and ‘COLIN’ marks and the copyright of the plaintiff in its design, colour combination and trade dress, etc. [November 11, 2020]

Other News from Around the Country

• India and USA have inked a ten year MoU for intellectual property examination and protection, and for strengthening the IP systems of both countries. The remarks of the USPTO Director on the signing are available here.
• IPAB issued a public notice inviting comments till December 27, 2020, on the application of the IPRS seeking fixing of royalties for sound recordings with respect to FM Radio Stations.
• In a paper for the Journal of Indian Law Institute, Dr. Gogoi analyses the conflict of copyright in a cinematographic film between the producer and other contributors.
• A woman claimed that MP Chief Minister Shivraj Singh Chouhan wrongly passed off a poem written by her as one written by the minister’s wife.
• The Tamil Nadu Agricultural University has obtained a patent for the technology for protein extraction for seed treatment and foliar spray application.

News from Around the World

• [Edit: In the wake of Covid-19, CUTS’ World Competition Day celebrations raises questions on whether strong IPR has helped innovation or not. The video recording of the webinar is available at https://youtu.be/HnfNyVUPvzs.]
• Clive Barker, the writer-director of the 1987 horror movie Hellraiser, recaptured the American rights to the film from the production company, Park Avenue Entertainment, in a settlement.

  Image from here

• An essay in the Stanford Law Review analyses the impact of copyright law and patent law on access to information amidst the COVID 19 pandemic, as well as regulations and regulatory structures for approvals of medical products, and vaccines in particular.
• The solar manufacturer, REC, has filed a patent infringement suit against Hanwha Q Cells in a US court for its split cell (half-cut) and junction box technology.
• A piece in Lexology summarised the recently released report of the Beijing Intellectual Property Court on patent infringement cases tried by it between November 2014 and March 2020.
• The WTO launched the second edition of “A Handbook on the WTO TRIPS Agreement”.

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

We’re pleased to bring you an in-depth two-part guest post by Akshat Agrawal looking into the ‘incentive/compensation’ structure actually in place for artists in India, its consequences, and a suggested amendment in the copyright law to deal with these issues. Akshat Agrawal is a law graduate from Jindal Global Law School, Sonipat and is currently working as a law researcher cum judicial clerk at the Delhi High Court. He has previously also written two guest posts for us, ‘Masakali 2.0: Unconsented Song Remakes and Ownership of Copyright‘ and ‘The Sensory Copyright Conundrum: An Analysis of the CJEU’s Decision With Respect to Copyright in the Taste of Cheese‘.

Who Gets Paid for the Music You Listen to?: Revamping Music and Copyright in India (Part I)

Akshat Agrawal

Many readers may have noticed the plethora of ‘2020 Wrapped’ social media shares, wherein Spotify listeners are given details of their music listening habits over the year. The shares include their most streamed artists, and those streams, across genres and artists are pretty high in number. But what does this translate to for the artists?

Image from tweet here

First off, Spotify does not pay per stream. Although, if calculated, the per-stream value on an average (assuming variances for freemium, premium, etc),is approximately Rs. 0.28-0.29, meaning 1000 streams result in Rs 280 (around 4 dollars?!). Spotify, however, pays on a ‘pro rata’ basis which basically depends on how much an artist’s music contributes to Spotify’s revenues. This further gets apportioned between sound recording ‘neighboring rights’ as well as authors rights.

This article on Soundcharts does a great job at breaking down these numbers. Riding off of their explanation – as a hypothetical, consider an artist ‘x’ whose music contributes Rs. 100 to Spotify’s overall revenue (depending on their number of streams – freemium and premium). Spotify keeps 30%, that is Rs. 30 (globally negotiated cut, see here and here) out of this. The pie leaves open Rs. 70. This amount DOES NOT go to the artist. A part of this amount goes in turn for sound recording royalties (to the owner of neighboring rights) and the remaining part in favor of the copyright owner. I am told that the industry practice is 70% of this amount towards the former and the remaining 30% in the hands of the copyright owners. Nonetheless, assuming more ‘fair’ negotiations and that the division is 50-50 for now, then of the Rs 70, Rs 35 goes to the music labels and Rs. 35 to the copyright society which holds the capacity to collect on behalf of the copyright owner. This second portion (Rs. 35), further gets divided amongst publishers and artists in an equal basis, rendering Rs. 17.5 in the hands of the publisher and Rs. 17.5 in the hand of the authors (in turn divided equally between the musician and the lyricist). Ideally, publishing royalties on the underlying works are supposed to go straight to the artist, however in India – publishing is taken up by labels themselves. In fact, even in IPRS, the publishers (who collect royalties on behalf of authors) are these labels themselves – leaving little scope to negotiate division of percentages, because well, one cannot negotiate with themselves (the board of directors of IPRS have representatives from Times Music, Saregama, Universal Music as well as Sony Music). Barely Rs. 17.5 out of this 100, goes back to the authors, and more specifically, merely Rs. 8.75 in the hands of the composer and the lyricist each. Another contentious question is with regard to the royalties to performers of these works (singers, musicians etc.), given the definition of ‘live’ performance has been interpreted to be expansive enough to include recorded performances.

Is this the only way? No, though nearly 85% of the content on Spotify is via the Big 4 labels there are distributors like Distrokid and CD Baby, who instead charge a nominal flat fee of Rs 800-1000 annually, without transfer of ownership or stake. However, such distributors also tend to either not do much promotion, or not be very successful at it. Spotify’s new policy of paid promotion will not help matters either. The pro-rata model means that music with the highest visibility get the most amount of revenue. And the larger labels have a far greater economic capability to invest in promotion, as against individual non-label-based artists. This label-based promotion – effectively renders artists who aren’t backed by labels (aka those who defy sacrificing ownership of their rights) remaining obscure, and not getting any money anyway. On the other hand, those who do get this visibility make a compromise. They transfer their capability to earn through their streams, as all their exclusive rights in exchange for (non-guaranteed) visibility and popularity. No wonder the Big labels (and their various national affiliates) have been earning vaguely 19 million dollars per day, off Spotify revenues- with barely anything going back to the artists. This current modus not only erases the ability of independent/ non- mainstream artists to generate streaming revenue, but in fact enables a “payola” kind of a system where even platforms favor major label backed artists in its editorial as well as algorithmic playlists – as they earn them more revenue. Spotify even has a history of ousting non-label backed artists from its platform, due to lack of flow of revenue of them (see more here).

As far as claims against Spotify are concerned, there are various nuances and counter-arguments, focusing on a larger payout share, along Bandcamp’s model, given Spotify’s annual profit share currently at vaguely $ 2 million. There have been claims as to lack of transparency with respect to Spotify’s streaming data and payments mechanics as well, however, the problem is not (just) a Spotify one.

Source: https://www.statista.com/chart/13407/music-streaming-who-pays-best/

There is a deeper problem. The problem lies with the structure and the control on visibility, dominated by the few, which shall, in spite of these changes- never let artists get a fair share of sustainable income over their works. Even if payouts are increased, mind you, ‘artists’ are not going to make more. Further, in the current state, it does not make sense for artists to not give away their ownership rights on their works (often in positions of unfair bargaining power), in return of an effective access to an audience – given that if they don’t, they shall stay obscure, as someone else will. This choice is illusory. The problem is not with artists assigning away their copyright – thus empowering labels and industries to drive narratives – but rather, with the power dynamics involved, as well as the monologic discourse around commodification- which enables these industries to capitalize on their monetary privilege and not only deprive authors of survival-based remuneration, but also drive a mainstream and dominant narrative around culture, and its commodification.

Examining Ownership of Copyright

The narrative of copyright as “authors’ rights” is a cloak and a cooked-up story, as copyright barely recoups anything for authors and artists struggling for survival, due to the lack of live shows during the pandemic is just the latest version of the problem.

As Prof. William Patry recognizes (at page 107), media/publishing industries have created a fascinating story – which puts authors in the forefront, hence bulging policy makers in support. These rights, to the contrary, realistically work towards corporate profit-making interests, among others, due to the tool of ‘assignability’ at their disposal.

Realistically, few authors have made money through copyright. Various studies and anecdotes have helped substantiate this over time (see here, here – page 16, here, here, here). In fact, vaguely 10% of the revenue through copyright, has been argued to be disseminated amongst 90% of the creators, with the rest in the hands of certain ‘superstars’

(who make mainstream content) as well as these industries themselves, which are  gold mines. Prof. Shamnad in a hard-hitting piece, which dates back to 2010, had emphasized upon this rhetoric, highlighting the plight of creators.

In India, a majority of music, in effective circulation, is still produced within the Film Industry (Bollywood) and its conglomerate structure, which although does foster a collaborative dialogue around creation, yet revolves around a mainstream narrative, merely including few artists who are signed to the labels – which are often employed by film producers for music in their films. The 2012 copyright amendments did substantially try to ensure equitable royalties to the creators of such works (under the proviso to section 18), however these have barely reduced the plight of creators, or the problem of diversity therein. Neither do these amendments resolve the issue of unfair bargaining power, with respect to these transfers, nor weaken the control of these labels – who keep a substantial share of the revenue inspite of merely being a disseminating intermediary. The amendments further do not address the impact of digitization and streaming culture on the continued economic rights for master producers, and whether their justifications still hold valid.

No wonder, various alternate remuneration models for artists and their sustenance are being proposed and even practiced in various jurisdictions including a cultural flat rate levy on stream access, cultural fee on internet subscription, tipping (voluntary payments model) and crowd funding-based models apart from the widely practiced merchandising and live-show oriented models, which have in fact proved to be quite effective, although currently being hit by the pandemic.

Copyright’s prime and perceived narrative (from the Act as well as the SC) revolves around authors, their efforts and their incentives/remuneration. However, as reflected above, copyright has not fulfilled this purpose.

The Control on Narratives

An argument is often made that copyright facilitates the entertainment business in India which produces the highest number of films in a year, thereby increasing the quantitative public store of creativity. However, when only the wealthy control dissemination, the content disseminated often has a tendency of reflecting the views and the interests of a concentrated group – to synergize on the wealth enhancing portfolio value (read Neil Netanels fascinating analysis on this here, especially at pages 1881-1882). The Indian Entertainment industry clearly reflects this in the thematic bend of the kind of content which is majorly disseminated, across regions and languages (see here, here, here, here , here, here, here,  here, here and here, for pieces and data questioning diversity in Indian entertainment, in the context of structural and economic representation).

Tools of financing cultural production have direct effects on the range of discourses in circulation. Even Chomsky has argued that the cultural mass media serves as a system of inculcating codes of behavior institutionally, which is often run by dominant large businesses who operate in profit enhancing bubbles. This further renders money and power as a tool to drive the narrative around what is desirable culture and what is not – as against actual democratic culture (watch here, if interested in this aspect of mass media propaganda).

Is copyright meant to facilitate more (homogeneous) works, or more and diverse/ representative expressions, in furtherance of a dialogic society? In Part II of this post, I shall be discussing the provisions of the Copyright Act, which facilitate this exploitative model of cultural regulation. Thereon, in light of the recent call for amendments, I shall go on to propose a few solutions, which could help remedy these existing flaws – to allow for a democratic dialogue around culture as well as fair remuneration to authors.

Part II of this two-part post can be viewed here.

We’re pleased to bring you Part II of a two-part guest post by Akshat Agrawal on the ‘incentive/compensation’ structure actually in place for artists in India, its consequences, and a suggested amendment in the law to deal with these issues. Part I of this post can be viewed here.

Akshat Agrawal is a law graduate from Jindal Global Law School, Sonipat and is currently working as a law researcher cum judicial clerk at the Delhi High Court. He has previously also written two guest posts for us, ‘Masakali 2.0: Unconsented Song Remakes and Ownership of Copyright‘ and ‘The Sensory Copyright Conundrum: An Analysis of the CJEU’s Decision With Respect to Copyright in the Taste of Cheese‘.

Who Gets Paid for the Music You Listen to? Revamping Music and Copyright in India (Part II)

Akshat Agrawal

Revamping Music and Copyright in India

Image from here

In Part I of the post, I had discussed the revenue flow within the music industry, to expose as to how – the dialogue around copyright as ‘author’s rights’ is a cloak to cover up for concentrated industrial practices.

In this part, I shall be discussing the primary provisions within the Copyright Act which facilitate this and its implications. Further I attempt to propose a few imperative amendments to the law – to radically remedy existing flaws in the music and copyright system.

Tools of Action

Copyright industries often rely on a few statutory tools, without which, their whole business would be rendered otiose. The primary tool which enables these industries to strip creators of their remuneration rights – using the bait of visibility and distribution, is in fact embedded within two sections of the Copyright Act. These sections, now more than ever (dare I say that), need to be re-visited, and if I radically may say so, abolished.

Firstly, section 17 of the Act, allows for corporate industries to be the first owners of copyrighted works created by their employees, and privilege them with an automatic transfer of all the rights which are ideally vested with the creator in the Act. Modeled after the ‘work-for-hire’ provision in US copyright law, this provision facilitates corporate ownership of copyright, as against ownership in the hands of the creator, as an individual. I have already discussed the pitfalls of such a provision in a previous piece for the blog and elsewhere, arguing for its application to be completely ignorant of the purpose and public perception, of the Copyright Act in the first place. Hence to avoid repetition, I shall be focusing upon, the second provision i.e., section 18, which allows for authors to transfer their copyright, entirely, in favor of corporates/ publishers.

Section 18, which allows for copyright to be transferred, is a godsend for media industries to capitalize and build vast content-based monopolies. Copyright intermediaries (media companies) have too many opportunities to exploit and take advantage of creators, especially those seeking to enter the realm of effective dissemination. They hold an unequal bargaining power (also documented and argued here, here, here in context of India and here, here, here and here in the context of other jurisdictions) due to their control over access and visibility. These contracts are often unconscionable, and unreasonably skewed as the weaker party is in a position where they can obtain goods, services or means of livelihood realistically, only upon agreeing to the terms imposed by the stronger party. An agreement between an entrant author and a giant economically capable publishing house often reeks of such contractual realities, exposing the author to various vulnerabilities in terms of giving away their ownership for an effective access to an audience. Authors, may have a moral claim to the fruits of their labour, but often have a hard time holding on to them, specifically when visibility is dominated by the monetary ability of these industries. Here, it is essential to note that the right or freedom to contract cannot be looked at in a vacuum, completely in ignorance of the prevalent power dynamics in the relationships involved. An argument to uphold the sanctity of the freedom to contract, can never be oblivious to its potential illusoriness.

It is a lose-lose situation for artists, downstream creators as well as the public, as these intermediaries, who own the copyright by virtue of assignments, exploit these rights in a way that will maximize their revenues no whatever what – unreasonably hindering access as well as shrinking artist payouts.

So, what is the solution?

“Disintermediation” – Abolishing Assignment of Copyright

At least one option involves rethinking assignment of copyright. Treating something as (physical) property, makes it easier to sell, and in fact encourages transfer, irrespective of the contractual power dynamics involved while entering into such agreements.

An argument to forbid assignments of copyright in favor of media/ publishing companies, in effect limiting contractual freedom, is not a novel argument even in the Indian context. Prof. Shamnad had argued for it in the past and had even made an anecdotal case for it. Further, while making recommendations for the Copyright Amendment Bill, 2010, a case to forbid assignments of copyright (apart from in favor of legal heirs), along the lines of the approach followed by Germany (section 29(1)) and Austria (section 23 UrGH), was argued, however it seems to have been missed by policy makers, without expending any rationale or reason.

With recent calls for amendments, given the need to adapt the copyright statute with growing digitization and streaming culture, and the continued plight of authors and artists, there is an imperative need to discuss and question the “author-like” rights in the hands of corporate industries.

Digital technology and networks have dramatically reduced the costs of reach and wide dissemination, enabling authors to be independent and not rely on publishers. This in fact opens up possibilities to do much more with the works, (remakes, reuses etc.), if these authors are not constrained by the copyright that they’ve had to hand over. Further, even within the pie-sharing approach, a larger share of sound recording royalties needs to be rethought. The high rates of mechanical royalties (for producing sound recordings) were relevant in the pre-internet era when multiple copies of works were produced and sold, individually as independent goods. With the advent of internet streaming – charging the same fee for making each copy, regardless of how many copies are there, is unjustifiable – as it is effectively only one recording and one copy, which everyone accesses. The need for continued royalties/income (for recording companies) out of exploitation of “works” based on the premise of production of copies is otiose.

For distribution charges, there can still be a revenue sharing arrangement (fee-based model), where an author and a publisher (if chosen) could share revenues on broad dissemination and other services, however the transfer of ownership (and specially on such unfair terms) is not required, nor serving any practical purpose anymore. Rather, having it leads to additional societal losses such as creating a conglomerate-based dominant narrative around culture and information.

Artists have been grossly affected due to the current model. Even the deserving royalties are often not paid to musicians and lyricists (see here, here and here). Disintermediation merely changes the flow of revenue and the holder of control. This change, although, has a huge impact on how the industry works – and can help re-balance various power dynamics) for creators. In this change, the control over exploitation of the work shall rest with the author, with certain service-based permissions granted to the publisher. The revenue shall firstly flow to the author, through Collecting societies (author-based organizations), and thereafter, as a fee, to the publisher – as against the status quo – which is the other way around. Even a change in the “right to royalty” could be explored, wherein, a royalty percentage to the distributors could be allotted (out of the primary revenue “received by creators”) in lieu of their valuable services, rather than the current – opposite schema of distributors providing royalties to creators on their own creations, which they unfortunately don’t own anymore. Further, there is also a possibility of termination of such agreements, upon non-performance, as against assignment agreements, which cannot be terminated in India.

Claim to Diversity

Disintermediation allows the eradication of this concept of ‘financiers copyright’ (page 176), disabling constrained creativity –– and allowing for diversity in the kind of expressions that exist in circulation. Concentration of culture and knowledge-based resources in corporate hands has been argued by many authors to have become a post-modern meta-colonial force, that influences individuals and the whole society. It restricts actual freedom and autonomy in expressions as well as expressive reach –thereby impeding democratic, deliberative and dialogic development. Monopolization of content in the hands of few conglomerate publishers has often played a huge role in limiting the diversity of perspectives that exist, solely focusing on creations that can render the largest number of profits (governed by structurally elite interests). Further, these industries have a huge role in defining narratives and public discourse, and frame social identities, to some extent. Disintermediation can largely, help remedy these flaws – by potentially democratizing content dissemination and equally involving authors with multiple diverse perspectives, bereft of corporate patronage.

Essential to note: I do not seek to romanticize authors here, in fact I have argued elsewhere as to how, authorship in itself is a privileged accreditation. Further, this solution may not work in context of works which require high amount of investment for production, like cinematographic films, where such neighboring investment-based rights make sense. However, in the current state of the statute, dispersing incentives could be more beneficial that concentrating them, especially for diversity in deliberation and content- as well as for a more access-oriented narrative around culture to prosper.

Another reason to consider abolishing assignments of copyright, is for it to likely benefit downstream creators, to use and access existing works effectively. Artists/suthors are, more often than not, not as profit oriented as corporates, and are rarely as restraining when it comes to a downstream creator using existing works for dialogic indulgence – like sampling, remixing, quoting, and other similar derivative uses. There are many artists who in fact encourage cover versions and often share it on their social media, irrespective of it being commercial use or not.

Conclusion

Summarizing the benefits of disintermediation, and the need to revamp section 18 – to abolish assignments of copyright – the reasons are that it (potentially) allows for:

1. Copyright to effectively remunerate authors and protect their interests in the works created – effectively balancing the power dynamics involved.
2. Effective existence of both commercial as well as non-commercial cultural speech in circulation – allowing for expressive diversity and dialogic as well as inclusive culture.
3. Restricting constraints on creativity – in terms of its imperative requirement to be commercially oriented – for actual circulation and access (fulfilling the aesthetic judgment of publishers for effective circulation)
4. Better right for downstream creators to use existing works more freely, in alternate creations.
5. Better balance between incentive and access, when it comes to exceptions for imperative uses like education.

On a side note, another imperative change, for the Copyright Act, to actually align with the perception of copyright, is for an amendment in Section 13 and 14. This amendment shall specifically provide for a new head called: “Neighboring rights”, in lieu of the protection of sound recording and cinematographic works, as against “copyright” – as these works are accorded limited rights and are rights for investors – as against creators. These rights do not entail the requirement of originality and are specifically present to protect the interests of those who invest, financially, in providing for these works. Therefore, to avoid conflating these rights with the conception of copyright – as primarily being rights of authors- it is imperative to specify that these rights are not copyright, but rather “neighboring” sui generis rights, and these works are not copyrightable works – which require originality as a pre-requisite for protection.

By conflating authors interests with those of investors, we tend to overlook the most important difference between them – the relevance of the “created expression” in Copyright. These changes shall ensure that Copyright does not serve the purpose of being a “financiers right” and rather helps incentivize authors (in the sense remunerate authors, to the extent required to continue creative endeavors, rather than shifting to marginal sources of revenue) in order to serve the end i.e. the public-interest oriented goal of “more and diverse expressions”. This call for amendments provides us a chance to remedy these flaws – and make copyright enable, rather than restrict, a wide public store of diverse knowledge and culture, for a deliberative, perspective-based, participative and inclusive society.

Author’s note: I would like to thank Swaraj Barooah for the immeasurable amount of guidance received while curating these posts.

We’re pleased to inform you that MHRD IPR Chair, NUJS, in association with the IPThink – Tank is organising an international webinar on ‘Trade Secret as a Momentous Asset’ on 12th December at 2:30 PM IST (10 AM CET). For further details, please see the announcement below:

NUJS International Webinar on Trade Secret as a Momentous Asset

December 12 | 2:30 PM (IST) 10 AM (CET)

Trade secrets are a very important part of any IP portfolio. It is no exaggeration to say that virtually every business possesses trade secrets, regardless of whether the business is small medium or large.

Trade secrets are important, but oftentimes an invisible component of a company’s IP portfolio of assets. However, trade secrets can also be the crown jewels within the portfolio.

The laws governing trade secrets have been enhanced in many key jurisdictions in recent times. The numbers of trade secret disputes are increasing. There is growing interest in intangible assets including trade secrets by the tax authorities. Collaborative or open forms of innovation by their very nature involve the sharing of IP, and in many instances this IP is in the form of valuable business confidential information (i.e. trade secrets).

Registration details

• Limited number of seats.
• Registration will be on the first come first serve basis.
• Certificates will be provided, only on the verification of presence in the seminar.
• Registration link: https://www.ipthink-tank.com/internationalwebinarontradesecret

Agenda

Introducing the panel

Mr. Donal O’Connell

Donal O’Connell is the Managing Director of Chawton Innovation Services Limited. Donal had a long career at Nokia of 21 years and has a wide and varied experience in the wireless telecoms industry, having worked for periods in The Netherlands, UK, USA, Finland, and HK.

Donal is a former VP of R&D and Director of IP at Nokia. In the US, he was manager of Nokia R&D in Texas from 1997 to 2003, developing the site from scratch by recruiting and grooming more than 600 engineers byinitiating and launching many successful products.  More recently, from 2003 to 2009, Donal was a Director of IP at Nokia and was the leader of Nokia’s Patent Creation team.  During this time period, he successfully managed a number of major change projects. He authored two books which are in the name of “Inside the Patent Factory” and most recently “Harvesting External Innovation” on the subject of collaborative innovation and IP, published by Gower in June 2011.

Mr. Adarsh Ramanujan

Adarsh is an independent counsel with offices in Delhi and Chennai. Before starting his own practice he spent considerable time with Lakshmikumaran & Sridharan at New Delhi and Geneva offices. He obtained his B.Sc. LL.B. (Hons.) degree (Gold Medalist) from National Law University, Jodhpur and LL.M. degree from University of California, Berkeley. He is a qualified Patent Agent in India. A major portion of his time is spent practicing in the areas of IP & Technology Laws as well as in International Trade Law. He has however branched out into doing commercial litigation and arbitration work. His expertise also extends to regulatory laws such as environmental laws, biodiversity laws and cyber laws. Adarsh has taught patent law in NLU, Delhi, and NLU, Jodhpur and also at the CEIPI Institute (University of Strasbourg). He has authored as well as co-authored close to 30 publications on diverse topics, including on IP, WTO, constitutional law and international tax.

Mr. Subhadip Sarkar

Subhadip is currently in the post of an Assistant Vice President, in Cognizant Technology Solutions and has more than 20 years of experience working in diverse industries with successful record of leadership accomplishment in both products and services industries in multiple technology domains. In his current role, Subhadip provides spearheads and manages operational and advisory oversight on various Corporate Affairs processes, including Intellectual Property and Technology licensing/commercialization, operations and governance, strategy and India Government and external Affairs. He works closely with executive management and Board members on providing advisory on various matters relating to operations and governance, HR and employment, IP licensing, risk and compliance, policy formation, external affairs to drive Company’s growth and mitigate risks etc. Subhadip is also the Board Member of Asia Pacific entities and is also part of various strategic committees for the Company to drive special corporate programs. Subhadip’s previous experiences include technology development, client acquisition and sales, incubating new business practices and large scale project management.

Mr. Dinesh Jotwani

Dinesh Jotwani has nearly 25 years of experience and deep understanding of policy, law, technology, litigation and government relations, especially in software, trade, IPRs, internet law and Cyber Crimes. Some of his career/ professional highlights are that Dinesh has been an in-house Counsel, Partner in Law Firms and has also been an Independent Consultant to several technology companies. Some of the noted names include, NCR Corporation, Techorneys LLP, Microsoft Corporation, Symantec and Cisco. He also holds two US Patents (7831544 & 8380687) on e-discovery processes used in litigation/ investigations and has authored a book “Interface between Competition Law and IPRs: A global perspective”, published by TILF (2012). He regularly appears in Supreme Court of India and Delhi High Court. He argues matters related to Corporate, IPR, Civil, Criminal and Public Interest.

Dr. Jayanta Ghosh

Dr. Jayanta Ghosh is presently holding position as Research Fellow at Centre for Regulatory Studies, Governance and Public Policy, The W.B National University of Juridical Sciences, India. He is an alumnus of Rajiv Gandhi School of Intellectual Property Law, Indian Institute of Technology Kharagpur, India. He has an extensive research experience of a decade. Dr. Ghosh specialized in Intellectual Property law and technology, informational privacy, data protection and security law issues. He has testified before numerous congressional committees and continues to works frequently on law and technology. He was awarded three most prestigious fellowships like DAAD Fellowship, Max Planck Scholarship and Indo-Canadian Shastri Institute Fellowship. Dr. Ghosh is the founder and managing partner (honorary) of The IPThink-Tank, to facilitate and spreading awareness of Intellectual Property Rights for the betterment of society. He is an academic committee member of International Trademark Association (INTA) committee. He is also visiting faculty of Techno India University for the subject of Intellectual Property Laws.

Dr. Pinaki Ghosh

Dr. Pinaki Ghosh was a researcher the 1st half (1997 to 2002) in GE and filed 26 patents and 20 papers in. Before GE, he had a stint at DRDO missile division, Hyderabad immediately after his Masters in Mathematics from IIT KGP and PH.D in “Image Processing” from ISI Calcutta. He used to regularly visit National Law School of India University, Bangalore and RGSOIPL, IIT Kharagpur to conduct lectures on IPR. He is also a member of the CII National Committee on Technology and IPR and National Committee of Intellectual Property Owners. He is the core committee member of IP of CII, FICCI and ASSOCHAM. Currently he is pursuing his 2nd PhD in Law.

We’re pleased to inform you that The Centre for Communication Governance (CCG) at National Law University, Delhi is calling for applications for the DIGITAL (Digital Rights and Inclusive Technology for All) Fellowship 2021. For details of the Fellowship, please read the announcement below:

Digital Fellowship 2021 

The Centre for Communication Governance at National Law University, Delhi (CCG), is calling for applications for the DIGITAL (Digital Rights and Inclusive Technology for All) Fellowship, to be offered to successful candidates for a period of 10 months on a full-time basis. The Fellows will be placed in a civil society organisation/litigation chambers that engages in digital rights litigation, and will also develop related legal and policy research under the guidance of CCG.

About CCG

 The Centre for Communication Governance at National Law University Delhi is the only academic research centre dedicated to working on information law and policy in India and is a leading centre on information policy in Asia.

CCG seeks to embed constitutional rights and good governance within information law and policy and examine the evolution of existing rights frameworks to accommodate new media and emerging technology. It aims to protect and expand the rights to dignity and equality, freedom of speech, right to assembly and association, and the right to privacy in the digital age, through rigorous academic research, policy intervention, capacity building, and litigation support.

The Centre routinely works with a range of international academic institutions and policy organisations. These include the Berkman Klein Center at Harvard University, the Programme in Comparative Media Law and Policy at the University of Oxford, the Center for Internet and Society at Stanford Law School, Hans Bredow Institute at the University of Hamburg and the Global Network of Interdisciplinary Internet & Society Research Centers. We regularly engage with government institutions and ministries such as the Law Commission of India, Ministry of Electronics & IT, Ministry of External Affairs, the Ministry of Law & Justice and the International Telecommunications Union. We work actively to provide the executive and judiciary with useful research in the course of their decision making on issues relating to civil liberties and technology.

About the Fellowship

With increasing internet penetration and the rapid increase of internet users in the country, digital rights have become a core focus within the ambit of the protection of civil liberties. In the last few years, there have been several important judicial pronouncements stemming from digital rights litigation, whether it was the landmark Puttaswamy I judgement upholding the fundamental right to privacy in the Indian Constitution, or the more recent Anuradha Bhasin judgement which clarified that the right to freedom of expression online was a fundamental right.

However, several vital questions relating to freedom of expression and privacy in the digital age are yet to be clarified by the courts. Currently, Indian courts are grappling with questions on intermediary liability, the legality of provisions in Indian laws enabling surveillance, website content blocking and internet shutdown orders, to name a few.

These cases and others like them will define India’s digital rights landscape for at least the next decade, if not longer. However, digital rights litigation in India is currently facing significant challenges including resource constraints in terms of research and domain expertise, and also inadequate collaboration among the different lawyers engaged in cases in this space and civil society organisations working on these issues.

To address these issues and give further impetus to this essential work, CCG is excited to announce the DIGITAL Fellowship 2021.

The Fellowship has the following objectives –

• Supporting the development and advancement of digital rights by providing high quality legal and research support and effectively intervening in cases relating to digital rights, including freedom of expression and privacy.
• Engaging in and produce legal and policy research around the theme of digital rights.
• Building an inclusive and mutually supportive digital rights and technology litigation community in India with a long term vision for shaping the development of law and policy in this domain in India.

 Eligibility

Applicants for the Fellowship must –

• Be born on or after January 1, 1988;
•    Be registered and enrolled with their State Bar Council;
• Demonstrate a strong interest in and commitment to the development of digital rights;
• Have excellent legal writing, drafting and oral advocacy skills.

Preference will be given to applicants with a minimum of two years’ experience in litigation.

Fellowship Amount

A monthly, non-negotiable stipend of INR 50,000 /- will be provided to each Fellow. The Fellowship will commence in January 2021.

How to Apply

Interested applicants must submit –

• A signed and completed DIGITAL Fellowship Application Form.
• A two-page Curriculum Vitae;
• A writing sample (published or unpublished article, essay, blog) between 1000-2000 words on a topic related to the Fellowship.
• Names and contact details of two professional or academic referees who can be contacted for an oral or a short written reference (to be filled in the form).

Please combine the CV and writing samples in a single PDF file labelled with “Your name – DIGITAL Fellowship”. The PDF should be uploaded on the link provided in the application form.

Deadline

All applications must be submitted by December 22, 2020, 11:59 PM IST.

Contact Info

Queries regarding the DIGITAL Fellowship 2021 can be emailed to ccg@nludelhi.ac.in

Official Links

Access the full call for applications at https://bit.ly/3mv6XIh.

Please do let us know if there are any clarifications.

Thematic Highlight

Image from tweet here

Who Gets Paid for the Music You Listen to?: Revamping Music and Copyright in India (Part I)

In Part I of this 2-part guest post, Akshat Agarwal analyses the ‘incentive/compensation’ structure actually in place for artists in India as well as its consequences. He lucidly explains that artists receive only a small proportion of revenue earned by music streaming services. He then highlights a deeper issue that enables a few oligopolistic players to capitalize on their monetary privilege and not only deprive authors of survival-based remuneration, but also drive a mainstream and dominant narrative around culture, and its commodification.

He highlights the rhetorical dishonesty of publishing industries that marshal policymakers’ support for stronger rights in the name of compensation to artists only to further their own corporate profit-making interests due to the tool of ‘assignability’ at their disposal. He argues that the Indian entertainment industry reflects the grave consequences of this for the diversity of words in circulation, wherein the wealthy control dissemination. Thus, he argues the content disseminated reflects the interests of a concentrated elite group.

Image from here

Who Gets Paid for the Music You Listen to?: Revamping Music and Copyright in India (Part II)

In Part II, Akshat notes that Section 17 and 18 in the Copyright Act, facilitate an exploitative model of cultural regulation. He argues that section 17 of the Act, allows for corporate industries to be the first owners of copyrighted works created by their employees, and privilege them with an automatic transfer of all the rights which should ideally be vested with the creator in the Act. Section 18, allows for copyright to be transferred via standard form contracts containing unreasonable terms. He argues that this is a godsend for media industries to capitalize and build vast content-based monopolies. In the context of this power differential between artists and giant publishing houses, he urges for disintermediation, i.e. abolishing the assignment of copyright. He argues for alternative revenue sharing arrangements wherein the revenue shall firstly flow to the author, and thereafter, as a fee, to the publisher. He notes that this is more aligned with the reduced costs of dissemination in the digital space.  He highlights how this is more suited to the public interest goal of more and diverse expressions. He also argues that the recent amendments should recognise “neighbouring rights” under a separate head by amending section 13 and 14 in order to prevent the conflation of copyright with the financiers’ right.

Other Posts

NLU-D’s DIGITAL (Digital Rights and Inclusive Technology for All) Fellowship 2021 [Apply by December 22]

We recently informed our readers regarding a call for applications by the Centre for Communication Governance (CCG) at National Law University, Delhi for its DIGITAL (Digital Rights and Inclusive Technology for All) Fellowship 2021. The Fellows will be placed in a civil society organisation/litigation chambers that engages in digital rights litigation, and will also develop related legal and policy research under the guidance of CCG. More details regarding CCG’s work, the Fellowship and eligibility for applications can be found here.

NUJS International Webinar on Trade Secret as a Momentous Asset [December 12]

We also recently informed our readers regarding an international webinar on ‘Trade Secret as a Momentous Asset’ on 12th December, organised by the MHRD IPR Chair, NUJS, in association with the IPThink – Tank. The Webinar Agenda and bios of speakers can be found here.

Decisions from Indian Courts

• A civil Court in Maharashtra issued notice to the Serum Institute of India (SII) in a suit alleging passing off which seeks to restrain SII from using the trademark “COVISHIELD” or “COVID-SHIELD”, which a Nanded-based pharmaceutical company “Cutis Biotech” claims to be the “lawful and prior user” of. [December 11, 2020]
• The Madras High Court in Principal Commissioner of Income Tax, Chennai v. M/s. Redington (India) Ltd., allowed the Tax Case Appeals and decided the substantial questions of law in favour of the Revenue. It held on the issue of payment of Trademark/license fee for using the trademark, REDINGTON, that the Income Tax Appellate Tribunal’s finding was erroneous, reaffirming the factual finding by the Transfer Pricing Officer that the assessee had no reason for payment of such fee to a wholly owned subsidiary when it had been using the trademark since 1993, registration for which was deemed to have been granted in its favour from the date of application, i.e. from 2000. [December 10, 2020]
• The Bombay High Court in Chutraram Nemaram Gehlot v. Rajaram Magharam Tak, granted ad-interim relief in the form of a temporary injunction in favour of the plaintiff alleging violation of its registered trademark, PREM DULHAN by the use of the defendant’s mark DABANG DULHAN. The defendant was restrained from infringing the mark and the Court Receiver was authorized to seize and take charge, possession and control of the impugned products. [December 10, 2020]
• The Bombay High Court in Bisleri International Pvt. Ltd. v. Laxmikanta Nayak, granted ad-interim relief restraining the defendants from using the impugned pirated artwork of NATURAL AQUA ) bearing a colour scheme, get-up, layout, representation, style, trade dress or any other artwork which is identical with or substantially similar to the Plaintiff’s original artistic label of BISLERI. The Court also authorized the Court Receiver to search, seize and take charge, possession and control of the impugned products. [December 10, 2020]
• The Delhi High Court in Atul Paper Pvt. Ltd. v. Sri Balaji Sales Corporation, held that the impugned mark, ODDY was not descriptive or generic but a coined and adopted mark for which the plaintiff had registration in classes 16 and 35, making the defendant’s use of the exactly same mark for school bags—use for allied goods. The Court granted an ad-interim injunction, noting that failure to do so would cause irreparable loss to the plaintiff, who had made out a prima facie case in its favour, and on whose side the balance of convenience lay. [December 9, 2020]
• The Delhi High Court passed an order in T.V. Today Network Ltd. & Anr. v. Bennett Coleman & Co. Ltd. wherein defendant was, for the moment, directed as agreed to remove the photograph of the interviewee, Ms. Rhea Chakraborty from its website and all other social media platforms administered by it, and given three weeks to file a written statement and reply to the application. The defendant had emphasised that the plaintiff’s copyrighted work was used on a minimalistic basis to report a current event, and hence, was covered as fair dealing under section 52 of the Copyright Act. [December 9, 2020]
• The Bombay High Court in Ajanta Pharma Ltd. v. Saphnix Life Science, granted ad-interim relief restraining the defendant from infringing the plaintiff’s trade mark ARTEFAN in respect of pharmaceutical and medicinal preparations. [December 8, 2020]
• The IPAB in Hettich-Oni GmbH & Co. v. Controller of Patents and Design, Chennai, set aside the impugned order by the Controller and directed it to grant the patent on the basis of the claims on record, strictly within 2 weeks from the issuance of the order. The IPAB decried the practice of the Patent Office to reject orders in haste without hearing the other side, which it held constitutes not only a violation of set procedure but also implied bias on part of the Controller. [December 8, 2020]
• The Delhi High Court in Gujarat Cooperative Milk Marketing Federation v. Nitin Jain, refused to grant ad-interim injunction and gave the defendant the opportunity to file the reply. The defendant had argued that the allegedly infringing videos were in the public domain and protected under Section 29 of the Trade Marks Act since they did not make use of the plaintiff’s mark for commercial purposes. [December 7, 2020]
• A Delhi District Court in M/S Blue Heaven Cosmetics Pvt. Ltd. v. Khempal Singh Bhatia Trading, held that the defendant admittedly stopped using the mark ‘Roop Heaven’ after being aware of the plaintiff’s registration of ‘Blue Heaven’ whereas the plaintiff neither opposed the application under Order XIIIA CPC nor brought any material to show its entitlement for the relief of rendition of accounts, delivery up and damages or paid any court fee for the same. Hence, the court did not grant the relief of rendition of accounts, delivery up and damages while decreeing the suit qua relief of permanent injunction passed in favour of plaintiff vide order dated 17.07.2019. [December 4, 2020]
• The IPAB in Huawei Technologies Co., Ltd. v. Controller of Patents and Designs, Mumbai, allowed the appeal and declared the order of the Controller erroneous It also noted that the Controller did not provide adequate explanation and remanded the matter back to the Patent Office with a direction to assign a different controller to hear the case again as per Section  73(4) of the Patents Act, 1970. [December 4, 2020]

Other News from around the Country

• laboratory

  India sought leeway to take policy decisions imposing export restrictions and higher tariffs in light of the Covid-19 pandemic, argued that the World Trade Organisation (WTO) obligations disparately affect developing countries’ abilities to provide large stimulus packages.

• In a reply to queries put forth under the Right to Information (RTI) Act, the Indian Space Research Organsation (ISRO) stated that it is the producer of the launch broadcast and hence owns the copyright therein, whereas the launch is merely telecast by Doordarshan, its social media handles and official website.
• Indian Union Commerce Minister, Piyush Goyal, sought Switzerland’s support for the joint proposal by India and South Africa seeking the waiver of obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in light of Covid -19.
• An article in The Times of India stated that sharing PDF copies of e-newspapers amounts to copyright infringement and is thus illegal. A post written by our former blogger Balu Nair on the blog earlier this year argued that “it is contingent on the terms attached to the specific e-paper as well as the existence of an implied license.” The ToI article also stated that circulation of these copies in Whatsapp groups could invite legal action against admins of such Whatsapp groups and members. Divij, in another post ealier this year had argued that “there cannot be an automatic assumption of liability for administrators or other members of a specific group” and it is the role of the administrator that will have to be considered.
• In an article for the Business Standard, Achal Prabhala, Arjun Jayadev & Dean Baker argue against the US, U.K. and EU blocking a WTO proposal which would make more vaccines and treatments available to the entire world.
• In an article for LiveLaw, T. Prashant Reddy reviewed Adarsh Ramanujan’s recent commentary on Indian Patent Law titled, ‘Patent Law: Cases & Materials – A Synthesis For India’ published by Wolters Kluwer.
• The State of Himachal Pradesh seeks to obtain Geographical Indication (GI) for five of its products: Karsog Kulth, Chamba Metal Crafts, Thangi of Pangi, Rajmah of Bharmour, and Chamba Chukh.
• A fake copyright infringement notice was circulated on Instagram as part of a phishing scam.

News from around the World

• The Shenzhen Intermediate People’s Court, China in a unanimous decision by a panel consisting of seven judges, dismissed a Japanese company Sharp’s jurisdiction challenge in a lawsuit concerning standard essential patents, including Sharp’s Chinese and non-Chinese patents covered by wireless fidelity (Wifi), 3G, and 4G standards.
• The International Chamber of Commerce (ICC) released the 14^thedition of the ICC Intellectual Property Roadmap, which constitutes a comprehensive reference guide to intellectual property issues from the perspective of the global business community.
• Music streaming app, Spotify patented a “Plagiarism Risk Detector and Interface” which aims to use Artificial Intelligence to detect unoriginal music on its platform.
• Nobel Prize-winning songwriter, Bob Dylan sold the publishing rights to his catalogue of over 600 songs to the Universal Music Publishing Group.
• Singer Neil Young ended his lawsuit against Donald Trump’s campaign alleging copyright infringement for unauthorizedly playing two of his songs.

Recently, in a Special Leave Petition, the Supreme Court dealt with certain pertinent issues such as the separation between revocation of registration – in infringement suits and in cancellation actions and cause of action and interpretation of the term ‘High Court’ under the Designs Act, 2000. In S.D. Containers Indore v. Mold Tek Packaging, a division bench of the apex court provides clarity that ‘High Court’ under Section 22(4) includes a High Court that does not have ordinary original civil jurisdiction. The court stated that in case of infringement suits under Section 22(4), the cause of action arises in the state where the suit had been initially filed and not the state where the designs are registered. This post seeks to summarise the judgement and analyse it with reference to precedents.

Court’s Decision

Mold Tek had originally filed a suit against S.D. Containers before the Commercial Court (District Court at Indore), seeking a permanent injunction to restrain the appellant from copying, using or enabling others to use the respondent’s registered designs of a container and lid. The appellant filed a counter-claim seeking cancellation of the registered designs and an application under Section 22(4) read with Section 19(2) of the Designs Act, 2000 for the transfer of the suit to the Madhya Pradesh High Court, Indore Bench. The Commercial Court, Indore ordered the transfer of the suit to the Calcutta High Court, as the designs had been registered in Kolkata. Mold Tek filed a writ petition before the MP High Court under Article 227 challenging the Commercial Court’s order. The MP High Court set aside the order and found the Commercial Court, Indore to be the competent court for adjudication in terms of the Commercial Courts Act, 2015. The present petition was filed before the Supreme Court challenging MP High Court’s above order.

Section 19(1) provides for grounds for cancellation of a design registration through a petition before the Controller. Section 19(2) states that: ‘An appeal shall lie from any order of the Controller under this section to the High Court’. Section 22(4) provides that ‘where any ground on which the registration of a design may be cancelled under section 19 has been availed of as a ground of defence under sub-section (3) in any suit or other proceeding for relief under sub-section (2), the suit or such other proceeding shall be transferred by the court, in which the suit or such other proceeding is pending, to the High Court for decision.’ (emphasis added)

From the above sections, it is clear that the case should have been transferred to the High Court. However, the transfer is also governed by the Commercial Courts Act, 2015 and the second proviso under Section 7 of the 2015 Act provides that ‘all suits and applications transferred to the High Court by virtue of sub-section (4) of section 22 of the Designs Act, 2000…shall be heard and disposed of by the Commercial Division of the High Court in all the areas over which the High Court exercises ordinary original civil jurisdiction.’ (emphasis added) The MP High Court does not have ordinary original civil jurisdiction and  courts which do not have such jurisdiction are required to constitute Commercial Courts at the District level under Section 3. High courts with such jurisdiction are required under Section 4 to constitute Commercial Division at the High Court level. Only five high courts in India have such jurisdiction, they are Madras, Calcutta, Delhi, Mumbai and Himachal Pradesh. It appears that as MP High Court did not have a Commercial Division, it interpreted the term ‘High Court’ in Section 22(4) to mean a commercial court at the district judge level.

After perusal of Section 7 of the 2015 Act, the Supreme Court found that it only deals with High Courts having ordinary original civil jurisdiction and there is ‘no provision in the 2015 Act either prohibiting or permitting the transfer of proceedings under the 2000 Act to High Courts which do not have ordinary original civil  jurisdiction.’ The court stated if there is a counter-claim for cancellation of registration, then even if the High Court does not have such jurisdiction, the transfer of the suit to the High Court is mandatory and a ‘ministerial act’. The court also differentiated between revocation action – before the Controller and in an infringement suit, stating that they are ‘independent provisions giving rise to different and distinct causes of action’. The Apex Court stated that since the cause of action had arisen in MP, the suit should be transferred to MP High Court, Indore Bench.

Analysis

The judgement seems well-reasoned and brings clarity regarding certain important issues. The court relied on different high court judgements in the deciding the commercial court jurisdiction issue. If MP High Court’s decision had not been petitioned for appeal and the Supreme Court had not adjudicated on it, the decision would have created conflicting precedents. In the present case, the court stated that there are two options for revocation of registration – first, with the Controller, which can be appealed before the High Court and second, in an infringement suit before a civil court. By stating that the Section 19(2) and 22(4) are independent provisions, the court essentially separated prosecution and litigation actions. While stating that the MP High Court had wrongly relied on the Godrej Sara Lee v. Reckitt Benckiser (Godrej Sara Lee)(discussed here), the court distinguished the situation from the present case. In Godrej Sara Lee, an application for cancellation under Section 19 had been filed and it was held that the High Court had jurisdiction only in case of appeal. Thus, it dealt with Section 19(2), while the present suit deals with action under Section 22(4). Bombay High Court’s decision in Whirlpool v. Videocon was heavily relied on by the court and a portion of the judgement was quoted which stated that section 19 and 22 operate in their own spheres. A question arises that whether ‘independent’ means that the two provisions can operate simultaneously.

The Commercial Court, Indore had originally transferred the present suit to Calcutta, as the designs were registered there. The court relying on Godrej Sara Lee held that jurisdiction lies with the high court where the cause of action arises. Since the suit had been filed in Indore and no part of the cause of action had arisen in Kolkata, the Supreme Court transferred the suit to MP High Court, Indore Bench. However, as discussed in the above para, Godrej Sara Lee dealt with a cancellation action under Section 19. In Godrej Sara Lee, the Supreme court had stated that as the cause of action was the cancellation of registration that happened in Kolkata, the Calcutta High Court had jurisdiction. Thus it can be fairly concluded that above judgements are consistent, as in case of a cancellation action under Section 19, the jurisdiction lies with the High Court where the cancellation action has been taken. And in case of a counter-claim in an infringement suit, the cause of action arises where the suit has been initially filed by the Plaintiff.

In case of trademarks, Section 124 of the Trademarks Act, 1999 states that if an infringement suit has been filed and ‘the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff’s or defendant’s trade mark is prima facie tenable’, the suit will be adjourned to give the opposing party time for applying to IPAB for rectification of register. In Patel Field Marshal v. P.M. Diesels, the Supreme Court stated that the reason for this ‘prima facie tenable’ test is ‘to further the cause of justice by elimination of false, frivolous and untenable claims of invalidity that may be raised in the suit’. This preliminary assessment helps in avoidance of wastage of time. A similar standard could be considered for assessing design infringement claims before transferring it to the High Court under Section 22(4). Hopefully, in the future a similar provision could be added in the Designs Act, 2000. The Supreme Court’s decision in the present case seems to be sound in law and a step in the right direction.

We’re pleased to inform you that NUJS IP & Technology Laws Society (IPTLS) at NUJS, Kolkata is organising an online lecture by Prof. David Nimmer on the Google v. Oracle case, in the memory of our Founder Prof. (Dr.) Shamnad Basheer. The lecture is scheduled to be held next week on 23rd December at 10:30 AM IST.  For registration and other details, please see the announcement below.

For a background of the case, you may refer to our previous posts – ‘And we thought Java API’s were open?‘ and ‘Oracle v Google – US Court of Appeals Rules Against Google’s ‘Fair Use’ of Oracle’s Java APIs‘ – discussing the decisions handed down by the US Court of Appeals for the Federal Circuit in 2014 and 2018 respectively.

In memory of Prof. Shamnad Basheer 

Lecture by Prof. David Nimmer on the Google v Oracle Case 

December 23 | 10:30 AM (IST) 

The Intellectual Property and Technology Laws Society (IPTLS) of NUJS is honoured to host the renowned lawyer and copyright scholar, Prof. David Nimmer for an online lecture on the  keenly observed ongoing case of Google v Oracle. The lecture will be dedicated to the memory of our beloved former NUJS professor and legal scholar late Prof. (Dr.) Shamnad Basheer. The event is on 23 December at 10:30 AM IST.

Prof. Nimmer is a distinguished scholar, widely recognized as a foremost expert in copyright law. He has authored and updated Nimmer on Copyright, the standard reference treatise in the field, first published in 1963 by his late father, Professor Melville B. Nimmer. the treatise is known to everyone associated with intellectual property laws, and has been cited at various levels of courts in the US and across the globe. Currently, he serves as a Professor from Practice at UCLA School of Law and is of counsel to Irell & Manella LLP in Los Angeles, California.

He would be speaking on the ongoing US case of Google v Oracle which deals with the copyrightability of application programming interfaces (APIs) and the standard of fair use.

Registration details 

Limited seats available. Please register here.

The meeting link will be sent through email, day or two prior to the event.

Contact details

For any queries, please contact us at iptls@nujs.edu .

Follow us on Facebook and Linkedin for updates.

Please click here to view other IP related opportunities published on the blog.