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Blog Intellectual Property Law

The Conundrum of Priority Disputes: Isaac Newton versus Gottfried Wilhelm Leibniz

By: Rushika M 

“It is most useful that the true origins of memorable inventions be known, especially of those that were conceived not by accident but by an effort of meditation. The use of this is not merely that history may give everyone his due and others be spurred by the expectation of similar praise, but also that the art of discovery may be promoted and its method become known through brilliant examples.”[1]

-Gottfried Wilhelm Leibniz

One of the oldest and most controversial intellectual property disputes in the world is the peculiar case of Sir Isaac Newton and Gottfried Wilhelm Leibniz. As rightly described by Jason Socrates Bardi in the title of his book ‘Calculus Wars’, the dispute between Newton and Leibniz is the ‘greatest mathematical clash of all time’.[2]

The dispute between Newton and Leibniz was not an uncommon one, especially in the 17th century which has been described by the American science historian D. Meli as the “golden age of the mud-slinging priority disputes.”[3] Both men being great mathematical minds and accomplished intellectuals, claimed priority over the invention of Calculus. For those unaware, Calculus is the branch of mathematics that deals with the finding and properties of derivatives and integrals of functions, by methods originally based on the summation of infinitesimal differences.[4] In short, it is the study of continuous change.[5] Presently, the use of calculus is indispensable in many fields of science and mathematics such as physics, computer science, engineering, statistics, economics, medicine, and demography to name a few. Both, Newton and Leibniz sought to establish the same as their own invention. However, the distinguishing quality of their case is not only the nature and subject-matter of dispute but also the manner in which each sought to establish their priority.

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A brief description of the dispute is as follows. Infinitesimal calculus may be expressed in one of the two forms: (i) as a notation of fluxions or (ii) as a notation of differentials. Newton employed fluxions in his research which can be dated back to as early as 1666. However, he did not publish his work until the year 1693. On the other hand, Leibniz employed the method of using differentials and formulated his own notation which can be dated back to as early as 1675.[6] He also referenced the same in his letter addressed to Newton in the year 1677 and included it in his memoir of 1684.[7] The dispute between the two men arose when Newton claimed that Leibniz was made aware of Newton’s research long before he arrived at his own notation and hence, Newton was the first inventor of calculus, while Leibniz had only formulated another notation based on the principles and work of Newton.[8] Since the prevalent method of establishing priority in the 17th century was not in the form of first publication or registration as it is in the present era and the usual mechanisms were in the form of anagrams, sealed envelopes, correspondences or a private message exchanged between peers, etc., the dispute between Newton and Leibniz could not be effectively resolved on the basis of first publication.

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Primarily, evidence lies in favour of Leibniz’s claim of a notation independent of Newton’s for three reasons: (i) Leibniz, who is presumed to have acted in good faith, always alluded to his discovery being his original work and this claim was undisputed for a few years; (ii) his work was published long before Newton published his method of fluxions; and (iii) in his private papers, Leibniz demonstrated the originality of his derivations and their independence from Newton’s work. However, those contesting Leibniz’s claims questioned his good faith and believed that he had been acquainted with Newton’s work in or before 1675, the reason being that Leibniz frequently corresponded with a Mr. John Collins, who was not only well-acquainted with Newton’s work, but had also received copies of the same from Newtons mentor Isaac Barrow.[9] When, in 1849, C. I. Gerhardt found copies of Newton’s work in Leibniz’s manuscripts, the claims were further substantiated. However, since it is inconclusive as to when Leibniz obtained the copies, the same cannot be considered conclusive evidence in the matter. Doubts were also cast on Leibniz’s testimony when he anonymously published a slanderous review of Newton’s tract on quadrature implying that Newton had borrowed the idea of the fluxional calculus from Leibniz and when he deliberately altered or added to important documents before publishing them, and falsified a date on a manuscript.[10] In any event, the entire dispute was also tainted by a bias favouring Newton who, while serving as the President of the Royal Society, found favour in the committee report of the Society that presided over the dispute. Although the matter came to a temporary end with the death of Leibniz and the modern consensus is that both Newton and Leibniz developed their ideas independently, debates between the supporters of the two persist to this day.

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Upon a brief analysis of the above dispute, two things are evident: (i) that much of the dispute between Newton and Leibniz was caused by assumptions which were often unsubstantiated; and (ii) the evidence presented by the gentlemen was mostly testimonial or by way of hearsay. It was perhaps due to this reason that the dispute remains unresolved to this day. Or perhaps it was the nature of the dispute resolution mechanism at the time that is to blame. Irrespective of the same, what remains consistent to this day is the topical nature of priority disputes, may it be in the field of science and mathematics, or literature, or any other domain, thus resulting in the substantial growth and relevance of intellectual property laws and jurisprudence.

At present, in India, the Indian Patents Act, 1970 is the one comprehensive law that safeguards the interests of inventors or patent holders in India. The Patents Act, 1977 would be the legal authority in the European Union, including the United Kingdom of Great Britain and Northern Ireland. A priority dispute today would be resolved under the dispute resolution mechanisms of these laws and such being the case, the standard of evidence required to prove the claims of either party would be far greater than those evidenced by Newton and Leibniz during the 17th century. It is likely that the dispute would not even have persisted for as long as it did at the time. Regardless, the case of Sir Isaac Newton and Gottfried Wilhelm Leibniz is a memorable one and one of immense significance not only to academicians and scientists, but also to legal practitioners in the field of intellectual property law.

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[1] G. W. Leibniz, The Early Mathematical Manuscripts of Leibniz; Translated and with an Introduction by J. M. Child, The Open Court Publishing Company, 1920. (Reprinted by Dover Publications, 2005.)

[2] BARDI, J. S. (2006). The calculus wars: Newton, Leibniz, and the greatest mathematical clash of all time. New York, Thunder’s Mouth Press.

[3] Hans Gaab and Pierre Leich Simon Marius and His Research, Springer, 2019.

[4] Oxford Languages, Calculus.

https://www.google.com/search?q=calculus+meaning&rlz=1C1CHBF_enIN859IN859&oq=calculus+&aqs=chrome.3.69i59l2j69i57j0i433j46j69i60j69i61j69i60.4602j0j7&sourceid=chrome&ie=UTF-8

[5] Cambridge English Dictionary, Calculus. https://dictionary.cambridge.org/dictionary/english/calculus

[6] Norma B. Goethe, Philip Beeley and David Rabouin, The Interrelations Between Mathematics and Philosophy in Leibniz’s Thought,  http://ndl.ethernet.edu.et/bitstream/123456789/57413/1/19.pdf.pdf#page=119

[7] Blank, B. E. 2009 Review of J. S. Bardi: The Calculus wars. Notices of the AMS 56:602–610.

[8] Sir Isaac Newton, The Correspondence of Isaac Newton, 7 v., edited by H. W. Turnbull, J. F. Scott, A. Rupert Hall, and Laura Tilling, Cambridge University Press, 1959–1977.

[9] Supra, 6.

[10] Ibid.

Categories
Blog Cyber Laws

Landmark Cyber Law cases in India

By:-Muskan Sharma

Introduction

Cyber Law, as the name suggests, deals with statutory provisions that regulate Cyberspace. With the advent of digitalization and AI (Artificial Intelligence), there is a significant rise in Cyber Crimes being registered. Around 44, 546 cases were registered under the Cyber Crime head in 2019 as compared to 27, 248 cases in 2018. Therefore, a spike of 63.5% was observed in Cyber Crimes[1].

The legislative framework concerning Cyber Law in India comprises the Information Technology Act, 2000 (hereinafter referred to as the “IT Act”) and the Rules made thereunder. The IT Act is the parent legislation that provides for various forms of Cyber Crimes, punishments to be inflicted thereby, compliances for intermediaries, and so on.

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However, the IT Act is not exhaustive of the Cyber Law regime that exists in India. There are some judgments that have evolved the Cyber Law regime in India to a great extent. To fully understand the scope of the Cyber Law regime, it is pertinent to refer to the following landmark Cyber Law cases in India:

  1. Shreya Singhal v. UOI[2]

In the instant case, the validity of Section 66A of the IT Act was challenged before the Supreme Court.

Facts: Two women were arrested under Section 66A of the IT Act after they posted allegedly offensive and objectionable comments on Facebook concerning the complete shutdown of Mumbai after the demise of a political leader. Section 66A of the IT Act provides punishment if any person using a computer resource or communication, such information which is offensive, false, or causes annoyance, inconvenience, danger, insult, hatred, injury, or ill will.

The women, in response to the arrest, filed a petition challenging the constitutionality of Section 66A of the IT Act on the ground that it is violative of the freedom of speech and expression.

Decision: The Supreme Court based its decision on three concepts namely: discussion, advocacy, and incitement. It observed that mere discussion or even advocacy of a cause, no matter how unpopular, is at the heart of the freedom of speech and expression. It was found that Section 66A was capable of restricting all forms of communication and it contained no distinction between mere advocacy or discussion on a particular cause which is offensive to some and incitement by such words leading to a causal connection to public disorder, security, health, and so on.

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In response to the question of whether Section 66A attempts to protect individuals from defamation, the Court said that Section 66A condemns offensive statements that may be annoying to an individual but not affecting his reputation.

However, the Court also noted that Section 66A of the IT Act is not violative of Article 14 of the Indian Constitution because there existed an intelligible difference between information communicated through the internet and through other forms of speech. Also, the Apex Court did not even address the challenge of procedural unreasonableness because it is unconstitutional on substantive grounds.

  1. Shamsher Singh Verma v. State of Haryana[3]

In this case, the accused preferred an appeal before the Supreme Court after the High Court rejected the application of the accused to exhibit the Compact Disc filed in defence and to get it proved from the Forensic Science Laboratory.

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The Supreme Court held that a Compact Disc is also a document. It further observed that it is not necessary to obtain admission or denial concerning a document under Section 294 (1) of CrPC personally from the accused, the complainant, or the witness.

  1. Syed Asifuddin and Ors. v. State of Andhra Pradesh and Anr.[4]

Facts: The subscriber purchased a Reliance handset and Reliance mobile services together under the Dhirubhai Ambani Pioneer Scheme. The subscriber was attracted by better tariff plans of other service providers and hence, wanted to shift to other service providers. The petitioners (staff members of TATA Indicom) hacked the Electronic Serial Number (hereinafter referred to as “ESN”). The Mobile Identification Number (MIN) of Reliance handsets were irreversibly integrated with ESN, the reprogramming of ESN made the device would be validated by Petitioner’s service provider and not by Reliance Infocomm.

Questions before the Court: i) Whether a telephone handset is a “Computer” under Section 2(1)(i) of the IT Act?

  1. ii) Whether manipulation of ESN programmed into a mobile handset amounts to an alteration of source code under Section 65 of the IT Act?

Decision: (i) Section 2(1)(i) of the IT Act provides that a “computer” means any electronic, magnetic, optical, or other high-speed data processing device or system which performs logical, arithmetic, and memory functions by manipulations of electronic, magnetic, or optical impulses, and includes all input, output, processing, storage, computer software or communication facilities which are connected or related to the computer in a computer system or computer network. Hence, a telephone handset is covered under the ambit of “computer” as defined under Section 2(1)(i) of the IT Act.

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(ii)  Alteration of ESN makes exclusively used handsets usable by other service providers like TATA Indicomm. Therefore, alteration of ESN is an offence under Section 65 of the IT Act because every service provider has to maintain its own SID code and give its customers a specific number to each instrument used to avail the services provided. Therefore, the offence registered against the petitioners cannot be quashed with regard to Section 65 of the IT Act.

  1. Shankar v. State Rep[5]

Facts: The petitioner approached the Court under Section 482, CrPC to quash the charge sheet filed against him. The petitioner secured unauthorized access to the protected system of the Legal Advisor of Directorate of Vigilance and Anti-Corruption (DVAC) and was charged under Sections 66, 70, and 72 of the IT Act.

Decision: The Court observed that the charge sheet filed against the petitioner cannot be quashed with respect to the law concerning non-granting of sanction of prosecution under Section 72 of the IT Act.

  1. Christian Louboutin SAS v. Nakul Bajaj & Ors.[6]

Facts: The Complainant, a Luxury shoes manufacturer filed a suit seeking an injunction against an e-commerce portal www.darveys.com for indulging in a Trademark violation with the seller of spurious goods.

The question before the Court was whether the defendant’s use of the plaintiff’s mark, logos, and image are protected under Section 79 of the IT Act.

Decision: The Court observed that the defendant is more than an intermediary on the ground that the website has full control over the products being sold via its platform. It first identifies and then promotes third parties to sell their products. The Court further said that active participation by an e-commerce platform would exempt it from the rights provided to intermediaries under Section 79 of the IT Act.

  1. Avnish Bajaj v. State (NCT) of Delhi[7]

Facts: Avnish Bajaj, the CEO of Bazee.com was arrested under Section 67 of the IT Act for the broadcasting of cyber pornography. Someone else had sold copies of a CD containing pornographic material through the bazee.com website.

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Decision: The Court noted that Mr. Bajaj was nowhere involved in the broadcasting of pornographic material. Also, the pornographic material could not be viewed on the Bazee.com website. But Bazee.com receives a commission from the sales and earns revenue for advertisements carried on via its web pages.

The Court further observed that the evidence collected indicates that the offence of cyber pornography cannot be attributed to Bazee.com but to some other person. The Court granted bail to Mr. Bajaj subject to the furnishing of 2 sureties Rs. 1 lakh each. However, the burden lies on the accused that he was merely the service provider and does not provide content.

  1. State of Tamil Nadu v. Suhas Katti[8]

The instant case is a landmark case in the Cyber Law regime for its efficient handling made the conviction possible within 7 months from the date of filing the FIR.

Facts: The accused was a family friend of the victim and wanted to marry her but she married another man which resulted in a Divorce. After her divorce, the accused persuaded her again and on her reluctance to marrying him, he took the course of harassment through the Internet. The accused opened a false e-mail account in the name of the victim and posted defamatory, obscene, and annoying information about the victim.

A charge-sheet was filed against the accused person under Section 67 of the IT Act and Section 469 and 509 of the Indian Penal Code, 1860.

Decision: The Additional Chief Metropolitan Magistrate, Egmore convicted the accused person under Section 469 and 509 of the Indian Penal Code, 1860 and Section 67 of the IT Act. The accused was subjected to the Rigorous Imprisonment of 2 years along with a fine of Rs. 500 under Section 469 of the IPC, Simple Imprisonment of 1 year along with a fine of Rs. 500 under Section 509 of the IPC, and Rigorous Imprisonment of 2 years along with a fine of Rs. 4,000 under Section 67 of the IT Act.

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  1. CBI v. Arif Azim (Sony Sambandh case)

A website called www.sony-sambandh.com enabled NRIs to send Sony products to their Indian friends and relatives after online payment for the same.

In May 2002, someone logged into the website under the name of Barbara Campa and ordered a Sony Colour TV set along with a cordless telephone for one Arif Azim in Noida. She paid through her credit card and the said order was delivered to Arif Azim. However, the credit card agency informed the company that it was an unauthorized payment as the real owner denied any such purchase.

A complaint was therefore lodged with CBI and further, a case under Sections 418, 419, and 420 of the Indian Penal Code, 1860 was registered. The investigations concluded that Arif Azim while working at a call center in Noida, got access to the credit card details of Barbara Campa which he misused.

The Court convicted Arif Azim but being a young boy and a first-time convict, the Court’s approach was lenient towards him. The Court released the convicted person on probation for 1 year. This was one among the landmark cases of Cyber Law because it displayed that the Indian Penal Code, 1860 can be an effective legislation to rely on when the IT Act is not exhaustive.

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  1. Pune Citibank Mphasis Call Center Fraud

Facts: In 2005, US $ 3,50,000 were dishonestly transferred from the Citibank accounts of four US customers through the internet to few bogus accounts. The employees gained the confidence of the customer and obtained their PINs under the impression that they would be a helping hand to those customers to deal with difficult situations. They were not decoding encrypted software or breathing through firewalls, instead, they identified loopholes in the MphasiS system.

Decision: The Court observed that the accused in this case are the ex-employees of the MphasiS call center. The employees there are checked whenever they enter or exit. Therefore, it is clear that the employees must have memorized the numbers. The service that was used to transfer the funds was SWIFT i.e. society for worldwide interbank financial telecommunication. The crime was committed using unauthorized access to the electronic accounts of the customers. Therefore this case falls within the domain of ‘cyber crimes”. The IT Act is broad enough to accommodate these aspects of crimes and any offense under the IPC with the use of electronic documents can be put at the same level as the crimes with written documents.

The court held that section 43(a) of the IT Act, 2000 is applicable because of the presence of the nature of unauthorized access that is involved to commit transactions. The accused were also charged under section 66 of the IT Act, 2000 and section 420 i.e. cheating, 465,467 and 471 of The Indian Penal Code, 1860.

  1. SMC Pneumatics (India) Pvt. Ltd. vs. Jogesh Kwatra[9]

Facts: In this case, Defendant Jogesh Kwatra was an employee of the plaintiff’s company. He started sending derogatory, defamatory, vulgar, abusive, and filthy emails to his employers and to different subsidiaries of the said company all over the world to defame the company and its Managing Director Mr. R K Malhotra. In the investigations, it was found that the email originated from a Cyber Cafe in New Delhi. The Cybercafé attendant identified the defendant during the enquiry. On 11 May 2011, Defendant was terminated of the services by the plaintiff.

Decision: The plaintiffs are not entitled to relief of perpetual injunction as prayed because the court did not qualify as certified evidence under section 65B of the Indian Evidence Act. Due to the absence of direct evidence that it was the defendant who was sending these emails, the court was not in a position to accept even the strongest evidence. The court also restrained the defendant from publishing, transmitting any information in the Cyberspace which is derogatory or abusive of the plaintiffs.

Conclusion

The Cyber Law regime is governed by the IT Act and the Rules made thereunder. Also, one may take recourse to the provisions of the Indian Penal Code, 1860 when the IT Act is unable to provide for any specific type of offence or if it does not contain exhaustive provisions with respect to an offence.

However, the Cyber Law regime is still not competent enough to deal with all sorts of Cyber Crimes that exist at this moment. With the country moving towards the ‘Digital India’ movement, the Cyber Crimes are evolving constantly and new kinds of Cyber Crimes enter the Cyber Law regime each day. The Cyber Law regime in India is weaker than what exists in other nations.

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Hence, the Cyber Law regime in India needs extensive reforms to deal with the huge spike of Cyber Crimes each year.

[1] “Crime in India – 2019” Snapshots (States/UTs), NCRB, available at: https://ncrb.gov.in/sites/default/files/CII%202019%20SNAPSHOTS%20STATES.pdf (Last visited on 25th Feb; 2021)

[2] (2013) 12 SCC 73

[3] 2015 SCC OnLine SC 1242

[4] 2005 CriLJ 4314

[5] Crl. O.P. No. 6628 of 2010

[6] (2018) 253 DLT 728

[7] (2008) 150 DLT 769

[8] CC No. 4680 of 2004

[9] CM APPL. No. 33474 of 2016

Categories
Blog Intellectual Property Law

Theories of Intellectual Property Rights

By: Vallabhi Rastogi

INTRODUCTION

With the introduction and implementation of ‘Digital India’, major segment of the Indian population has shifted to undertaking online transactions and availing the services offered over the internet. This shift is also because the Government has offered additional benefits for online transactions so as to promote digitization. This increased use of internet has largely exposed Intellectual Property to several risks since it has made “illegitimate copying and reproducing quite easier.”[1] According to World Intellectual Property Organization, “Intellectual Property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce”. Intellectual property being intangible needs to be protected by law in the same sense as corporeal property and therefore, copyright, patent, trademark, trade secrets are some mechanisms under intellectual property rights (IPR) that protect novel innovation from being imitated without permission.

IPR is not a recent concept rather it has evolved a lot subsequent to the industrial revolution in Europe when industrial advancement was at its peak. However, codification of laws relating to intellectual property started in the 19th century. Since then, “IPR have been instilling confidence among creators that their intellectual property is protected, thereby encouraging further innovations.”[2]

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IPR has played a significant role in keeping original ideas and technical productions safe from being illegally copied and manipulated and has fostered creativity and innovations. In order to safeguard such intangible property, many industries across the globe have resorted to IP rights. Sports, Information Technology, Fashion industry, Entertainment, Biotechnology, Pharmaceutical industry are some of those sectors that have readily adapted IPR with the view of legally “safeguarding ownership, thereby, providing distinct identity”[3] and encouraging innovators to conceive and create more ideas.

Intellectual Property Rights acts as a motivation by instilling a sense of trust and ownership in the creators as their creations are safe even when available over the internet. Considering the technological advancement and innovative creations in the current times, it has become a necessity to legally protect them and therefore, enforcement of intellectual property rights backs such inventions and artworks.

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THEORIES OF INTELLECTUAL PROPERTY RIGHTS

Intellectual Property and the importance of IPR traces its origin back to and relevance from the theories of renowned philosophers such as John Locke, Immanuel Kant, John Stuart Mill, Jeremy Bentham, Georg Hegel, etc. The ideologies and theories propounded by them act as the supporting pillar of the jurisprudential aspect of intellectual property rights. The theories of IPR that this paper will talk about are

  1. The Natural Rights Theory
  2. Ethic and Reward Theory
  3. Utilitarian or Incentive Theory
  4. Personhood Theory

 

THE NATURAL RIGHTS THEORY

This theory is fundamentally based on John Locke’s concept that an owner possesses a natural right over the things that he produces with the help of his own labor and efforts, either physical or intellectual. Therefore, ownership arises from the labor and innovation of person creating it. Locke believed that “individuals are entitled to control the fruits of their own labor. In his perspective, a person, who cultivates crops by using his own labor or creates a new invention by putting his efforts, naturally obtains property rights,”[4] merely by the virtue of adding his own labor. Similarly, the natural rights theory of intellectual property reflects that an individual naturally acquires ownership of the artwork that he creates or literary work that he authors because he added his own intellectual labor in it.

Locke based his theory on the idea that when a person puts his labor in an unowned object, his labor gets amalgamated with the new object that is then created, which cannot be separated without causing damage to the novel creation thus made. The creator then acquires natural rights over the object in which he applied his intellectual labor. Once the person acquires the property right, his original creation is protected from being used, transferred or manipulated by another person. Any such breach of the intellectual property right of the creator / owner would be against the law.

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ETHIC AND REWARD THEORY

An owner or creator is legally protected under IPR for his novel creations by granting him exclusive rights over the work he produces. These exclusive rights include the right to enjoy the property, exclude others from enjoying it and to dispose the property in any manner he likes. The creator is rewarded for contributing to the welfare of the society by producing his work, however, when an ethical or moral perspective is involved while rewarding it falls under this theory of intellectual property rights. This theory emanates from the concept that granting exclusive rights on an original work are “an expression of gratitude to an author for doing more than the society expects or feels that they are obliged to do.”[5] It implies that other than the profit or remuneration for his production, if any, the individual should also be granted exclusive legal rights over the property so produced since he contributed for the betterment of community.

Ethic and Reward Theory suggests that for producing the original work, the creator might have been given some reward in form of royalty or otherwise, and then the creator should be rewarded again with exclusive legal rights over his novel production since he contributed something for ‘social utility’ that would benefit the society at large. The thinkers supporting this theory believe that the individual who put his intellectual labor for social good must be fairly compensated with his contribution being respected and this can be done by granting him exclusive rights. These exclusive rights act as moral and ethical rewards since the creator would be legally protected under IPR.

Critiques against this theory have contended that just like a person is not punished twice for doing something offensive that causes displeasure to the people similarly, a person who has contributed to the society should also not be rewarded twice.

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UTILITARIAN OR INCENTIVE THEORY

Utilitarianism is “greatest good for the greatest number” which basically implies happiness of the maximum number of people. Therefore, the conduct which causes happiness of a large number of people should be appreciated and promoted whereas the conduct which causes displeasure to the society should be avoided or discouraged. Propounded by Jeremy Bentham and John S. Mill, the concept of utilitarianism helps in socio-cultural and economical progress. Likewise, while inferring it in intellectual property utilitarian concept plays a significant role.

As and when a person creates a product or there is technological innovation within a community, the society benefits from the advancement and progress. Since this progress benefits and causes happiness of the society at large, such innovation and creations are to be promoted and encouraged.  Such encouragement can be done by granting exclusive rights to the creator as he has worked hard to empower the society and cause pleasure to the maximum number of people. This will not only create a sense of motivation to put in more efforts but would also make him believe that he and his work are rightfully respected and recognized. Therefore, the authorities or administration are expected to grant such rights and recognize their efforts.

However, while creating and designing the work, the cost of production might be too high. So, the incentive given to the creator might not be sufficient enough to cover the costs incurred. This might discourage the creator as well, thus, preventing him to further experiment and produce.

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PERSONHOOD THEORY

This jurisprudential theory was propounded by famous thinkers like Immanuel Kant and Georg Hegel. Personhood theory of intellectual property rights states that while applying labor to produce some work, a person also incorporates some part of his personality in the creation. An “individual’s personality growth is inherent”[6] and thereby, constitutes an integral part of the creative works. Since exclusive property rights are granted over the creative works and original productions, the creator also gains rights over the personality that is developed during the process. This right to “protect the development of personality extends to material things”[7] as well.

These rights emphasize more on preserving and safeguarding interests related to personality rather than merely protecting the monetary interests. Other than the right to fiscal advantage, the maker should also be given the right to safeguard his personality infused with the creation. Intellectual Property Rights should include protection of both creativity and every other thing incorporated in it.

There exists a loophole in this theory if we consider the fact that once the original work is produced, it is distinct from the creator. As the work becomes available to the public, it is up to them as how they receive and treat it. Therefore, it is not dependent on the person creating it.

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CONCLUSION

It is a well-established fact that Intellectual Property Rights have been quite effective and successful in protecting the novel creations that have facilitated in the upliftment and growth of any nation. They have bolstered and encouraged the society to produce more. It is quite evident that in this age of technological development and increased creation of artworks, competitiveness has found its way. As a result, people might indulge in unfair practices to manipulate or copy other’s creations or use them illegitimately to create something new. To mitigate such incidences, intellectual property rights through patents, trademarks, copyrights and trade secrets have found a permanent place. It ensures that there is no unhealthy competition or any kind of unfair practices. Intellectual Property rights acts as incentives to the individuals who are in the field of research and experimentation. Such encouragements give them a feeling of recognition. These rights not only provide ownership right but also recognize and reward them for their efforts and labor. It protects the economic interests of creators as well.

Each theory has its own approach and perspective of inferring intellectual property rights. There is no specific right or wrong with regards to a theory. Different individuals might relate and favor different theories.

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There has been a recent surge in the requirement and use of IPR laws in India. Indian Courts of Law have been reasonably strict in regulating intellectual property rights and awarding punitive damages to deter further infringement. “Prioritizing IPR has become necessary for socio-economic development.”[8]

Based on these theories there are some loopholes and incongruities which need to be looked into. Moreover, with changing times and continuous advancement, there can be several challenges which the existing IPR laws might have to cope with. The coming years would be very essential to evaluate the progress and improvisation of domestic IPR laws in comparison with the international ones. It would be interesting to see how IPR laws unfold in the upcoming years.

[1] The Effects of the Internet on Intellectual Property Rights, SACRAMENTO INTELLECTUAL PROPERTY LAW BLOG (Mar 27, 2017). https://www.petersonwatts.com/blog/2017/03/the-effects-of-the-internet-on-intellectual-propertyrights/#:~:text=Patents%2C%20trademarks%20and%20copyrights%20are,protected%20to %20the%20fullest%20extent.

[2] Varun Sharma & Gautam Kumar, Patent Litigation – Trend and Development, CHAMBERS AND PARTNERS, (2020).https://practiceguides.chambers.com/practice-guides/patent-litigation-2020/india/trends-and-developments.

[3]Singh and Associates, India: Role of IPR in Sports, MONDAQ (May 22, 2019). https://www.mondaq.com/india/sport/808132/role-of-ipr-in-sports

[4] Adam Moore & Ken Himma, Intellectual Property, Stanford Encyclopedia of Philosophy (Oct 10, 2018) https://plato.stanford.edu/entries/intellectual-property/.

[5] L. BENTLY & B. SHERMAN, INTELLECTUAL PROPERTY LAW 36 (3RD ED. 2008).

[6] Jane Secker, Considering Theories of Intellectual Property on World IP Day, UK COPYRIGHT LITERACY, (2018), https://copyrightliteracy.org/2018/04/26/considering-theories-of-intellectual-property-on-world-ip-day/.

[7] Mikhalien du Bois, Justificatory Theories for Intellectual Property Viewed Through the Constitutional Prism, PER/PELJ (2018). http://www.scielo.org.za/pdf/pelj/v21n1/19.pdf.

[8] Varun Sharma & Gautam Kumar, Patent Litigation – Trend and Development, CHAMBERS AND PARTNERS, (2020).https://practiceguides.chambers.com/practice-guides/patent-litigation-2020/india/trends-and-developments.

Categories
Criminal Law

Plea Bargaining in India and USA -A Comparative Study

By: Muskan Sharma

Concept of Plea Bargaining

Plea Bargaining is a process where the accused is asked to plead guilty in exchange of the judge acting lenient while awarding punishment or considering the seriousness of the offence. It is derived from the Latin phrase ‘Nolo Contendere’ which means ‘I do not wish to contend’ i.e. a plea of ‘No contest’. Plea Bargaining is a situation where the accused admits that the charges levelled against him are true and that he will not contend a query to the Court to decide over his guilt.

The concept of Plea Bargaining was not originally introduced into the Indian legal system but into USA. However, the Law Commission’s efforts promoted the insertion of the provisions concerning Plea Bargaining via its 142nd, 154th, and 177th reports. A new chapter on ‘Plea Bargaining’ was introduced into the Criminal Procedure Code based on the recommendations of the Law Commission for certain offences.

There are three types of Plea Bargaining namely, Sentence Bargaining, Charge Bargaining, and Fact Bargaining.

The concept of ‘Plea Bargaining’ is operative in both India and USA but the practice is not identical. However, it is pertinent to know about the concept of Plea Bargaining and landmark cases associated to it in both legal systems separately for a fruitful comparison between the two.

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Plea Bargaining in USA

In USA, the accused can put forward one of the three pleas i.e. Guilty, Not Guilty, and Nolo Contendere. Under the doctrine of Nolo Contendere, the plea is treated as an implied confession of guilt or that the Court will decide on the point of his guilt.

However, the Court is not bound to accept such a plea of the accused. It is the discretionary power of the Court to either accept or reject such plea, considering the facts and circumstances of each case presented to it. The Court is supposed to ensure that the plea should be put forward voluntarily by the accused and absence of duress and coercion. The accused must receive the protection of secrecy. Plea Bargaining gained momentum due to the overcrowding in prisons of USA.

Landmark Cases in USA

  • State exrel Clark Adams[1]

In the instant case, the Court explained the doctrine of ‘Nolo Contendere’. The Court held that the plea of ‘Nolo Contendere’ also known as ‘Plea of Nolvut’ means the accused does not wish to contend.

  • United States Risfield[2]

The Court observed that in a criminal action in which an application for Plea Bargaining has been made, the adjudication by the Court in relation to the plea of guilty is not necessary. However, the Court may impose sentence on the accused person immediately.

  • Lott United States[3]

The Court held that the plea being tantamount to an admission of guilt, is not conviction but merely a determination of guilt.

  • Bordenkircher Haynes[4]

In this case, the US Supreme Court upheld the constitutionality of Plea Bargaining while awarding life imprisonment to the accused person who rejected to plead guilty for imprisonment for a term of five years. The Supreme Court observed a slight possibility that the accused person may be coerced to choose among the lesser of the two punishments.

The Supreme Court further observed that there is no probability of coercion or duress if the accused person is free to either accept or reject the offer made by the prosecutor during the negotiation process for Plea Bargaining.

  • Brady United States[5]

In the instant case, the Supreme Court held that the consensus reached out of fear that the trial will result into death penalty will not make the process of Plea Bargaining illegitimate. If the process of Plea Bargaining has been properly conducted and controlled, it is legitimate.

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Plea Bargaining in India

Section 265A to 265L (Chapter XXI A) of the Criminal Procedure Code, 1973 (hereinafter referred to as “CrPC”) contain provisions concerning ‘Plea Bargaining’.

Section 265A of CrPC provides who is eligible to take benefit of Plea Bargaining. According to the provisions of Section 265A, any accused may take the course of Plea Bargaining except the accused charged with offences that are punishable with death or life imprisonment or imprisonment for a term more than seven years. Also, an accused charged with an offence against a woman or a child below fourteen years of age or affecting the socio-economic conditions of the country, is also not allowed to take the course of Plea Bargaining.

Section 265B provides for the procedure to file an application for Plea Bargaining. The application must contain all details of the case accompanied by a sworn affidavit. Afterwards, the Court may examine the accused to satisfy itself of the fact that the accused has filed such application voluntarily. If the accused satisfies the Court of the voluntariness, the Court provides some time for the mutual satisfactory disposition of the case. If in case, the accused fails to satisfy the Court that he has filed the application voluntarily or that he has been convicted with the same offence previously, the Court may proceed from the stage the application has been filed before it.

Section 265C contains guidelines for mutually satisfactory disposition of the case. It states that the Court shall issue notice to the public prosecutor, if the case instituted on a police report, the accused, and the victim to participate in a meeting to reach at a satisfactory disposition of the case. However, the Court must ensure that the process be completed voluntarily and the accused may participate with his pleader, if he desires so.

Section 265D to Section 265I contain provisions concerning the report of mutually satisfactory disposition, disposal of the case, judgment of the Court, finality of the judgment, power of the Court in plea bargaining, and period of detention already undergone by the accused be set off against the sentence of imprisonment.

Landmark Cases in India

  • Murlidhar Meghraj Loya State of Maharashtra[6]

In the instant case, J. Krishna Iyer criticized the practice of Plea Bargaining. He observed that the Trial Magistrate is burdened with cases and hence, approves the secret dealings of Plea Bargaining. He further observed, “The businessman culprit, confronted by a sure prospect of the agony and ignominy of tenancy of a prison cell, ‘trades out‘ of the situation, the bargain being a plea of guilt, coupled with a promise of ‘no jail‘. These advance arrangements please everyone except the distant victim, the silent society…”

  • Kachhia Patel Shantilal Koderlal State of Gujarat and Anr.[7]

In this case as well, the Supreme Court criticized the concept of Plea Bargaining. The Court held that Plea Bargaining is an unconstitutional process as it encourages corruption and pollutes the concept of justice.

  • State of Uttar Pradesh Chandrika[8]

The Supreme Court held that it is a settled law that a criminal case cannot be disposed off merely on the basis of Plea Bargaining. It was further observed that it is the constitutional duty of the Court to consider the merits of the case and award appropriate sentence despite the confession of the guilt by the accused person.  Mere confession of the guilt by the accused person cannot be a reason for awarding lesser punishment.

However, there has been a shift in the judicial thinking with the passage of time.

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  • State of Gujarat Natwar Harchandji Thakor[9]

In the instant case, the Gujarat High Court favoured the process of Plea Bargaining and held that the object is to provide easy, cheap, and expeditious resolution of disputes including the trial in criminal cases and that it prevents the pendency and delay in disposal of the administration of justice.

  • Vijay Moses Das CBI[10]

In the instant case, a person was accused of supplying of sub-standardized material to ONGC at a wrong port and thereby, causing ONGC to suffer huge losses. CBI completed the investigation and started prosecution against the accused person under Section 420, 468, and 471 of the Indian Penal Code, 1860. The accused person took the course of Plea Bargaining. But the Trial Court rejected the application of Plea Bargaining on the ground that it was not accompanied by an affidavit as stipulated under Section 265B and no compensation was fixed. However, the Uttarakhand High Court directed the Trial Court to accept the application of Plea Bargaining.

  • Thippaswamy State of Karnataka[11]

In the instant case, the Supreme Court held that inducing an accused person to plead guilty under any assurance or promise is unconstitutional for being violative of Article 21 of the Indian Constitution. It further observed that in such cases, the Court must set aside the conviction and direct the case to the Trial Court to give accused person the right to defend himself and if found guilty, the Trial Court may award appropriate punishment to him.

Plea Bargaining in India and USA: Comparative Analysis

Though the concept of ‘Plea Bargaining’ as adopted into the Indian legal system has been borrowed from USA, it is still distinguishable from the operation of ‘Plea Bargaining’ in USA. Following are some of the major differences that exist between the concept of ‘Plea Bargaining’ as operative in India and USA:

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  1. Nature of Offence

In USA, there is no provision as to the prohibition on plea bargaining in certain offences. An accused person charged with any offence may take the course of Plea Bargaining. However, in India, there are exceptions as contained in Section 265A. Following categories of accused persons cannot take the course of Plea Bargaining in India:

  1. Accused person charged with an offence punishable with death
  2. Accused person charged with an offence punishable with life imprisonment
  3. Accused person charged with an offence punishable with imprisonment of more than seven years
  4. Accused person charged with an offence against women
  5. Accused person charged with an offence against a child below fourteen years of age
  6. Accused person charged with an offence that affects socio-economic conditions of the country
  7. Role of Victim in Proceedings

In Indian Law, the victim has an important role in the proceedings of Plea Bargaining. The victim has the power to refuse or veto if unable to reach a mutually satisfactory disposition. However, in USA, the victim does not have an active role to play in the proceedings of Plea Bargaining.

  1. Mechanisms available for enforceability

In USA, an application for Plea Bargaining is filed only after the negotiation process between the accused person and the prosecutor is complete. However, in India, the negotiation process with the accused person does not even start before the filing of the application of the Plea Bargaining to ensure that the application of Plea Bargaining is filed voluntarily by the accused. Therefore, there is less chance of the accused being coerced or secret dealings for filing an application for Plea Bargaining.

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  1. Discretion of the Judge

In USA, the judge does not exercise discretionary power while accepting an application for Plea Bargaining. However, in Indian legal system, the judge has discretionary powers to either reject or accept an application for Plea Bargaining filed by the accused person.

  1. Finality

Under the Indian legal system, if the Court thinks the punishment awarded in any case of Plea Bargaining is insufficient or is guarded by unfair circumstances, it may be set aside either by an SLP under Article 136 or a writ petition under Articles 226 and 227 of the Indian Constitution. However, in USA, it reaches its finality.

 

Conclusion

The conviction rate via Plea Bargaining in the USA is as high as nearly 90% whereas in India, it is not even close to 10% of the criminal cases. This disparity exists due to the differences that exist between the concept of Plea Bargaining as practiced in USA and India.

Though the conviction rate in India is way too low as compared to the conviction rate in USA, it is effective in ensuring that the application of Plea Bargaining has been filed voluntarily. Justice may be delayed but must not be denied. In India, an accused person does not take the course of Plea Bargaining to choose the lesser among the punishments but is a voluntary action. Hence, it is high probability that an innocent person will not be awarded punishment in India by way of Plea Bargaining.

However, speedy disposal of cases is the need of the hour. Hence, the legislature must go for reforms and provide adequate infrastructure to the judiciary to reduce the number of undertrial prisoners.

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[1] 363 US 807

[2] 340 US 914

[3] 367 US 421

[4] 434 US 357 (1978)

[5] 397 US 742 (1970)

[6] AIR 1976 SC 1929

[7] 1980 Cr LJ 553

[8] 2000 Cr LJ 384

[9] (2005) Cr LJ 2957

[10] Crl. (Misc.) Application No. 1037/2006

[11] (1983) 1 SCC 194

Categories
Blog

Trademark and Competition Law

By: Ishika Gautam

COMPETITION LAW
The Indian Government in pursuit of increasing the economic efficiency of our country acknowledged the Liberalization, Privatization, and globalization era by liberalizing the country’s economy and reducing governmental control. Currently, the Indian economy is facing aggressive competition in every field. Fair competition has proven to be an effective mechanism which enhances the efficiency of the economy. Therefore the primary purpose of implementing the competition law was to control monopolies and encourage competition.
The objective behind the formulation of competition law, Intellectual property laws is to protect the research and development inventions which are carried out by the inventor firm from being used by other companies producing the same kind of products and making a profit from the same. Therefore, on the one hand, IP laws work towards creating monopolistic rights, whereas, on the other hand, competition law battles with it. From this, there seems to be a clash between the objectives of both these laws.
The competition laws involve the formulation of policies that promote competition in the local markets and aim to prevent anti-competitive business practices and unwanted interference of Government. The competition law seeks to eliminate monopolization of the production process so that new firms can enter the market. The maximization of consumer welfare and increased production value are a few primary objectives of competition law. On the other hand, IP Laws are monopolistic legal rights granted to owners resulting from human intellectual creativity.

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Case law-
Arun Chopra v. Kaka-Ka Dhaba Pvt. Ltd. and Ors.
The famous restaurant named Kake Da Hotel has now attained it’s secured rights in its name and trademarks against another Nashik-based food outlets namely ‘Kaka-ka Dhaba’, ‘Kaka-Ka Restaurant ‘Kaka-Ka Garden’. The Court has observed that even though there isn’t a doubt that the user is long and extensive. The question arises whether the word ‘Kaka’ or ‘Kake’ can be a monopoly of any party and could be adjudicated on trial. Till now, the interim order is granted in favour of the plaintiff and the defendants are prohibited from using words ‘Kaka-ka’ with any new outlet during the period, it has allowed that the defendants can continue to use the names Kaka-ka Dhaba’, ‘Kaka-Ka Restaurant’ and ‘Kaka-Ka Garden’.

Under the Competition law of IPR, the market’s unavailability can establish some dominance in markets. Similarly, the comparison of market shares between a dominant firm and its competitors is advantageous in determining the power and monopoly. It seems complicated to decide on the minimum percentage of market share that could attain dominance or monopoly of a particular firm in the market. Various judgments dominance cannot establish a minimum rate that points to the firm’s authority.

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The anti-competition laws to tackle the monopolies of IPR often include two measures: compulsory licensing and parallel imports. The compulsory license is when the state has authorized an IPR holder to surrender their exclusive rights over intellectual property, under article 31 of Trade-Related aspects of Intellectual Property Rights. The compulsory licenses are granted only under specific circumstance such as the interest of public health, in national emergencies, in nil or inadequate exploitation of any patent in any country, and also for the overall national interest. On the other hand, Parallel imports include all goods brought in the country without authorization of an appropriate IP holder and are placed legitimately into the market.

In addition to all these provisions, provisions like Section 3 of the new Competition Act, 2002, deals with more anti-competitive agreements that cannot be used by the IPR holders as they conflict with competition policies. Firstly, the patent pooling is a restrictive practice where the firms of particular manufacturing industry decide, to pool their patents and then agree to not grant the licenses to third parties, then simultaneously fix quotas and prices. Secondly, one more clause that restricts the competition concerning research and development or prohibits a licensee from using other rival technology is considered to be anti-competitive under this law. Thirdly, the licensor under this law is not permitted to fix the price at which the licensee would sell his goods.

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The above examples are not exhaustive, but a few examples demonstrate the anti-competitive provisions applicable to the IPR under this Act. Moreover, under Section 27 of this Act, India’s Competition Commission had the authority to penalize the IPR holders who abuse their dominant position. Furthermore, under Section 4 of this Act, the Commission is authorized to punish the parties of an anti-competitive agreement, it is in the contradiction of this section.

TRADEMARK LAW
Search
To search for a mark before filling the application is the most fundamental part of applying for a trademark. Even though it is not a procedural pre-requisite for the application, it finds its utmost importance in the fact that acceptance of a mark for registration as a trade mark relies on the vividness of the mark. It is a crucial step to carry a detailed search in the Trade Marks Registry, to check for the mark’s uniqueness and deduct all possibilities of duplication. It also needs to be checked that the proposed mark is not the same or even similar to any other existing mark registered or pending for registration. A detailed prior search is also a proof of honesty and good faith in accepting the mark, during opposition and the infringement proceedings.

Classification
The application for the trademark needs to be specified by the appropriate class or classes of the goods or services, concerning which the application is filed. The applicant for trademark needs to be extremely careful in ascertaining the type of goods or services in their application as the tester needs to be convinced about the proper use of goods and services from a particular class or across all classes to the application, and a broad declaration can also prolong the process of the examination.

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Selection
The selection of a mark is an important part of any application. The mark selected needs to meet the qualifications that are enlisted in the Trade Mark Act, and it has to fall within the parameters of its presence as a device, brand, a heading, label, a ticket, name, signature, word, letter, a numeral, shape of goods, packaging or any combination of colours, or any combination of these distinct elements that are capable of being ‘graphically represented’ and indicates a trade connection with the proprietor. Now, it essentially needs to have a proper distinctive character capable of constructively distinguishing all the applicant’s goods and services from others. The denial of the presence of uniqueness of the mark may result in the refusal of the application.

Filing of Application
The application for the mark can be filed by a person or his respective IP Lawyer or any other person who is authorized in this respect at the designated Head office (at Mumbai) or any branch offices (at Ahmedabad, Chennai, Delhi, Kolkata) of Registry by a delivery at the front office either personally or by post, it can also be submitted electronically through the gateway being provided at ipindia.nic.in. The application for this has to be generally filed at the office which is within the territorial jurisdiction of the principal place of business of that applicant in India is situated. There are many applications which need to be filed directly at Head Office.
Special care needs to be taken of the fees, and as non-payment results in regarding the application as not-filed.

Numbering and Examination of Application
On receipt of the application, it is appropriately dated and numbered. A copy of it is returned to the applicant/attorney—a number assigned to the mark, which is the registration number post-registration. The proprietor is only allowed to use the trademark symbol after their application has been completed and numbered. The application is adequately examined for accuracy of the class in which the mark has been filed, all the necessary documents that need to be attached depending on the type of application- registration of the mark for goods or services being included in one class/different classes/with priority claim etc., details of the applicant and the proprietor.

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Hearing
After the proper completion of the examination, the Trademarks Registry sends an “Official Examination Report” to that applicant. The applicant may sometimes be required to reply to the objections raised by the Examiner under Section 9 and Section 11 of Trade Marks Act and the clarifications regarding the content of the application. The reply being insufficient to satisfy the Examiner, the applicant is then granted a hearing to overcome his objections.

Publication in the Trade Mark Journal
The mark’s application is then published in the “Trade Marks Journal,” after a proper post-examination hearing with the applicant. The journal is also published by the Trademarks Registry and is a publication by the Government of India. The application is then granted registration if it stands being unopposed after the proper publication in the journal for a stipulated period of four months.
If the publication is challenged in any case, then the opposition proceedings commence, and the registration is granted freely only if the proceedings conclude in favour of the applicant.

Opposition Proceedings
Anyone can file a notice of opposition against any application published in the journal, within that period of four months from the date of that mark being published in the journal. Any supporting evidence can accompany the notice for the opposition.
An application can then be opposed to the primary grounds that are provided in the Trade Mark Act. This is the Registrar’s task to serve a copy of the opposition to the applicant, inside two months of receipt of resistance. The applicant must then reply within two months; failure to do so will result in the applicant’s application being treated as abandoned. The counter-statement is given to the opponent, and usually, the parties are being heard along with the consideration of proper evidence provided by both parties.
The Registrar is given the authority to decide the acceptance of trademark application based on the hearing’s judgment. The aggrieved party is given the right to challenge the ruling by filing an appeal in front of the Intellectual Property Appellate Board.

Registration
The mark’s application is registered if it has been accepted and not opposed, or opposed but has been decided in favour of the applicant. The applicant is also issued the Certificate of Registration and is further allowed to use the symbol R and the registered trademark. The registered trademark given is valid for the next ten years from the date of that application is received for the mark.

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Renewal
A registered trademark can be renewed after every ten years for an unlimited period on payment of that particular renewal fee. The renewal request should ideally be filed in the Trade Marks Registry within only six months before the expiry of the trademark. The application can also be filed up to six months after the trademark expiry, with the payment of the late renewal fees being prescribed.

Litigation
1) To obtain John Doe Orders and ex parte injunctions.
2) To accept search and seizure orders.
3) To conduct market raids.
4) To check for the accounts of the infringer.
5) To medicate for amicable settlement of disputes.
6) Do Arbitration and also Conciliation.

Enforcement through constructions
The Customs Act of 1962, enables Commissioner of Customs, on behalf of Central Government, prohibits importing the goods on absolute or conditional terms, used for the protection of patents, trademarks, and copyrights. In contrast to this, the authorities came up with Intellectual Property Rights (Imported Goods) Enforcement Rules in 2007 which correctly specifies the process of protection of these intellectual property rights (Copyright, Trade Mark, Patent, Design and Geographical Indication) from getting violated in the course of these import into the country.

Licensing of Trademarks
The trademark’s license is an agreement between a registered proprietor of the trademark (licenser) and another person (licensee), giving authority to the licensee to use the trademark in the course of trade, against a particular payment of royalty to the licenser. The word here used “license” is not mentioned anywhere in the Trade Marks Act, 1999. The Act says about the words “registered user” and “permitted use.”

Revocation of Trade Mark
An application for the cancellation or rectification of a trademark registration can be made only by the aggrieved person. Such type of application must be filed with Registrar of Trade Marks or the Appellate Board.
Some of the grounds on which the registration can be removed or cancelled:
The trademark being registered was done without any bona fide intention, and there was no bona fide use of the trademark for the time up to date of three months before the date of the application for removal.
Three months before the application for removal, a regular period of five years from the date on which the trademark has entered on the register or longer has elapsed during which brand was registered and in which no bona fide use.
Trademark was registered without any sufficient cause.

 

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Categories
Blog

E- Sports Player Contracts and the Clauses Covered Under It

By: Manohar Samal

  1. Introduction 

Electronic sports (e- sports) involves playing computer or other games for profit where fans view the gaming and place wagers depending upon the skills of the players indulged in such games.[1] Not only wagers but, e- sports generate revenues through live streaming of players as well.[2] Reportedly, 380 million people worldwide were indulged in watching some or other form of e- sports making it a billion dollar industry.[3] The growth and evolution of e- sports into a money- making industry has resulted in exploration of new possibilities in the legal field such as its operation with legal endorsements, intellectual property and contracts.[4]

Contract law plays an extremely central role in e- sports and contracts for teams, players, tournament leaders and leagues should be well- drafted in place. This is mainly because during the initial years of e- sports turning into a profitable industry, exploitation and late payment of consideration were common occurrences.[5] One of the most vital contracts in e- sports is the endorsement contract as many players have faced difficulties in such forms of contracts in the past.[6]

Albeit the fact that the e- sports sector has colossally grown within the past decade worldwide and in India, the regulatory system seems to be lackadaisical in this field.[7] India does not have any law on regulating e- sports and only a Private Member Bill titled Sports (Online Gaming and Prevention of Fraud) Bill has been introduced before the Lok Sabha till date.[8]

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  1. E- Sports Player Contracts and the Clauses Covered Under It 

Traditional sports have well- regulated systems with contractual stability.[9] However, the same thing cannot be said about e- sports. Since there is no principal legislation or effective regulation, contract based relationships govern the entire e- sports industry.[10] Therefore, it would not be wrong to infer that contract law plays a pivotal and colossal role in the e- sports industry. Due to the various difficulties faced by players in the past, it is important that certain contract clauses work in their favor and towards the interest of the e- sports game at large. This would naturally mean that e- sports player contracts will have to contain some indispensable content and clauses and these clauses have been enlisted below:[11]

  1. Definitions Clause- The definitions clause is an indispensable clause in any contract. This would also include e- sports player contracts since a definition clause helps in explaining the exact meaning of the terminology or nomenclature used in the contract which can result in reduced risk of future litigation in interpretation related matters as all ambiguities are eliminated after looking at the definitions clause.
  2. Player Services Clause- All the services which are going to be provided by the player have to be clearly specified in the e- sports player contract. This would include all services provided by the player in addition to participating and playing in competitions, leagues or tournaments such as social media promotion and creation and promotion of video content (vlogging). This clause would also have to cover the hours of engagement which is agreed upon by the player and the respective contractor.
  3. Player Obligations Clause- E- sports player contract needs to contain an exhaustive list of obligations which the player is expected to carry out. This would include details in respect of tournaments which the player will participate in, the teams which will accompany and instruct the player, the amount of promotion required to be done by the player in sponsor events, the apparel and accessories to be worn by the player and the hours of training in which the player is expected to indulge. The player obligations clause is pivotal because it results in clear indication of the players obligations preventing any form of exploitation.
  4. Player Restrictions Clause- The player restrictions clause is responsible for explicating the restrictions and limitations which the player has to adhere to. This clause includes factors and concomitants such as restriction from playing in tournaments without the team or the contractor’s permission, restriction to promote competitors’ or their sponsors and for specifying a code of conduct for players to observe during the tenure of the contract.
  5. Non- Disparagement Clause- A non- disparagement clause offers protection to teams and sponsors from defamatory remarks made by a player and is an indispensable part of an e- sports player contract.
  6. Remuneration and Allowances Clause- Details of the remuneration paid or going to be paid to the player has to be specified under this clause. Moreover, all benefits, allowances and bonuses arising in the course of the contract will also have to be specified under this clause.

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  1. Image Rights Clause- This clause covers a unique aspect known as image rights. An image right is the right associated with the player due to his or her skills which a team or the contractor can use during the course of contract.[12] Such image rights include name, appearance, voice, in- game avatar or gamer tag. This clause is paramount since it could lead to the player being additionally compensated or paid for allowing exploitation and utilisation of his or her image rights.
  2. Equipment Clause- The equipment going to be supplied, types and forms, restrictions and permissions to use and similar connected matters have to be covered under the equipment clause. This is mainly because the equipment has a great role to play in the player’s success while participating in a tournament or league or competition.
  3. Revenue Sharing Clause- The revenue sharing clauses contains facts about the amount of extra revenue which will be shared with the players from the sale of merchandise, sale of in- game items, revenue generated out of streaming and prize money earned. Since revenue sharing from additional sources has been a controversy leading to litigation and conflict amongst the team and the players, it is vital that this clause is drafted properly where clear specifications about percentage of revenue sharing is stipulated.
  4. Roster Management Clause- Roster management clause is a key clause in an e- sports player contract. This is mainly because roster management strategy of the team can directly affect a player’s career. Roster management is a process which involves strategising the use of player resources by the team.[13] Therefore, it would contain information such as players going to initiate playing during the tournament, league or competition and the number of substitute players. The time duration after which each substitute will be allowed to play is also covered under the roster management clause of an e- sports player contract.

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  1. Termination and Renewal Clause– The termination and renewal clause is an indispensable clause in an e- sports player contract. This clause contains aspects of compensation in case pre- termination of contract takes place and quantification of value of the remaining contract period of a player in proportion to the investments made by the contractor in such player. Post- termination obligations and duties are also covered under this clause such as deletion of data, return of equipment and non- disparagement. Non- compete and non- acceptance of any other team or contractor’s offer is also covered under this clause. Renewal related aspects are also covered under this clause. This is an important clause to keep the player’s conduct in check and also helps the player in understanding his or her restrictions. Such clauses are also known as buyout clauses.[14]
  2. Loans Clause- Unlike the common meaning assigned to the term “loan”, in an e- sports contract, loans are not even remotely related to bank loans and instead refer to loaning of members to other teams. It may arise that teams may enter into arrangements for exchange and loaning of players. This is why it is important that the loans clause is drafted properly so that any form of legal dispute between teams does not arise. The loans clause contains information such as the duration of loans, functions to be performed by the loaned player, restrictions and permissions to the loanee team and other assignment details.
  3. Governing Law and Disputes Resolution Clause- The governing law and disputes resolution clause affirms the jurisdiction whose law will govern the contract[15] and the court, tribunal or forum which will be preferred in case any sort of dispute arises between the team, sponsors or players. The location of such preferred court, tribunal or forum is also specified under the governing law and disputes resolution clause.
  1. Confidentiality Clause- The confidentiality clause is a pivotal clause in any contract. Similarly, confidentiality clauses have significance in e- sports player contracts as well. This is because aspects such as team plans, resources and strategy are delicate information which could lead to the success or loss of teams in e- sports. Therefore, it is important to protect it through a confidentiality or non- disclosure clause. The scope of confidentiality, permissible disclosure and related aspects are covered under the confidentiality clause of an e- sports player contract.

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  1. Conclusion

 Hence, the above discussions pristinely explicate the role of an e- sports player contract in the smooth conduct and success of e- sports games along with showcasing the clauses which are covered under such forms of contract.

[1] USC Gould School of Law. “eSPorts Law Growth”. USC Gould Online Blog. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://onlinellm.usc.edu/blog/esports-law-growth/>.

[2] Willingham, AJ. “What is eSports? A Look at an Expensive Billion Dollar Industry”. CNN Edition. (27 August 2018). [online]. [last accessed on 15 August 2020]. Available from: <https://edition.cnn.com/2018/08/27/us/esports-what-is-video-game-professional-league-madden-trnd/index.html>.

[3] Ibid.

[4] Ibid 1.

[5] Ibid 1.

[6] Ibid 1.

[7] Verma, Bhumesh and Srivastava Stuti. “Regulating E- Sports- An Opportunity and a Challenge”. RGNUL Student Research Review. (05 July 2019). [online]. [last accessed on 15 August 2020]. Available from: <http://rsrr.in/2019/07/05/regulating-e-sports-an-opportunity-and-a-challenge/>.

[8] Ibid.

[9] Rastogi, Anirudh and Ranjit, Vishakh. “E- Sports Player Contracts: Common Clauses and Potential Legal Issues in India”. Mondaq. (18 June 2020). [online]. [last accessed on 15 August 2020]. Available from: <https://www.mondaq.com/india/gaming/955392/e-sports-player-contracts-common-clauses-and-potential-legal-issues-in-india>.

[10] Ibid.

[11] Ibid.

[12] Vrey, Rogier and Wilms, Tim. “eSports and Image Rights”. CMS Law. (17 August 2017). [online]. [last accessed on 15 August 2020]. Available from: <https://cms.law/en/nld/publication/esports-and-image-rights>.

[13] Roundhill Investments. “E- Sports Glossary”. Roundhill Investments. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://www.roundhillinvestments.com/esports-glossary>.

[14] Lewin, Pete. “Why Every Esports PLayer Needs a Contract”. The ESports Observer. (21 November 2016). [online] [last accessed on 15 August 2020]. Available from: <https://esportsobserver.com/every-esports-player-needs-contract/>.  

[15] Contractbook. “Electronic Sports (eSports) Player Contract (EU)”. Contractbook. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://contractbook.com/templates/electronic-sports-esports-player-information-eu>.

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Star India Private Limited v. Leo Burnett

– By Apoorva Mishra

The plaintiffs entered into an Agreement dated 9th April, 2000 with Balaji Telefilms Pvt. Ltd., in order to create, compose and produce 262 episodes of a television serial entitled “KYUNKI SAAS BHI KABHI BAHU THI”.  Since then Balaji has produced episodes of the serial and their services were engaged by way of contract of service and as such the plaintiffs are the first copyright owners under Section 17 of the Copyright Act. Balaji has devised the original artistic work depicting inter alia the logo and the title in a peculiar stylized font and containing as its essential features the words “KYUN KI SAAS BHI KABHI BAHU THI” and as per the agreement plaintiffs have become the owner of the said artistic work. The serial had acquired immense goodwill and reputation so much so that the public associate the said serial with plaintiffs and plaintiffs alone. Plaintiffs started endorsing the serial and the characters in form of products and services for a fee. In February 2002, the defendants came up with the commercial for a consumer product “TIDE DETERGENT” telecasting it with a title, “KYONKI BAHU BHI KABHI SAAS BANEGI” and characters of a grandmother, mother-in-law and daughter-in-law, similar to the characters of J.D., Savita, Tulsi as in the serial of the plaintiff. The plaintiffs contended that there has been an infringement of copyright because an average viewer will have an impression that the plaintiffs are endorsing the defendant’s product and there is a connection between plaintiffs in the said serial and the defendants and their product. It is contended that the defendants are not entitled to do so without obtaining the prior consent and/or the permission from the plaintiffs and they have misrepresented the public at large and on account of this plaintiffs have suffered loss due to continuous act of infringement of copyright and passing off of the copy to the defendants.  The matter was brought before the Hon’ble Bombay High Court raising several issues:

First, Have the defendants by making the commercial film, violated and/or infringed the plaintiffs’ copyright in the T.V. serial “KYUN KI SAAS BHI KABHI BAHU THI”?

The court ruled that anything which is not a substantial copy of the film shall not be held liable for copyright infringement. Therefore, defendants by making the commercial film have not violated and/or infringed the plaintiffs’ copyright.

The court has rightly dealt with the above issue, for the second film to infringe the copyright of the first film it has to be the exact copy of that film which is not the case here. The plaintiff’s film is a work of 262 episodes whereas defendant’s advertisement is a work of 30 seconds in which only for 8 to 10 seconds the characters appear as a prelude to the tide detergent. The major and substantial part consists of tide detergent. Nothing is common between the two scripts. The defendants have put in their own independent skill and labour in making of the advertisement whole sole purpose is to promote the Tide detergent. The models are same in both the film. These models are professional and free to contract. There cannot be, therefore, any act which would amount to infringement by using the same models. Even if the idea is borrowed there, can be no copyright in the idea.

Second, Have the plaintiffs’ proved the defendants have infringed the plaintiffs’ artistic work?

The court denying the contentions of the plaintiffs coined the term Originality. Originality merely means effort expanded or that it involves skill, labour and judgment in its creation. Under Section 17 of the Copyright Act, the Author of a work is the owner of the copyright therein. The defendants have contended that the logo consisting of the two hands is a symbol in common use and in the public domain and open to anyone to use. The holding hands well known form of representing the handing over of something from one to another and are a commonly used symbol and they denied on the fact that the plaintiffs have put any skill, labour or some sort of judgement in its creation but has merely taken the lettering style from a source easily available in public domain. Hence, there is no originality, therefore no copyright.

Third, Have the plaintiff’s proved that the defendants are guilty of passing off their reputation and goodwill in the T.V. serial?

The court held that the defendants are not guilty of passing off as they do not satisfy the essentials of passing off per se. Plaintiffs’ serial is shown on Star Plus Channel which is not owned by the plaintiffs. Goodwill does not accrue to the plaintiffs. The plaintiffs have no goodwill or reputation. It is the case of the plaintiffs that their serial/film is associated exclusively with the Star Plus Channel by the public and public is well aware that it can be seen only on Star Plus. Also, the T.V. commercial will not cause any harm to the plaintiffs’ serial or their reputation because the field which the plaintiffs’ serial occupies as a film/soap opera is different from the field of defendants’ commercial that of an advertisement of detergent Tide. Even the activity area is also not in common, therefore there is no misrepresentation.

On the facts of this case, there is no fictional character involved like ‘Superman’, ‘Shaktiman’ Teletubbies’. In the serial there are ordinary people in common life who plays the role of some character or the other. At least from the material on record there is nothing special in any, of the characters of which it can be said that they have gained any public recognition for itself with an independent life outside the serial. This, the plaintiffs have failed to establish. It is also not a case of one film against another film and further the defendants are not merchandising any character from the serial by means of their T.V. commercial. There should be in actual character merchandising and not mere potential of character merchandising.

The court, after analysis the entire case, rightly pronounced the judgement in favour the defendants. The defendants are just promoting their consumer product “Tide” via a T.V. commercial which in no way is connected. The field of activity of the plaintiff and defendant are totally different. No likelihood of damage has been caused to the plaintiff. The characters of which the plaintiff claims to be copied are simple general roles of our Indian society and the defendants are simply targeting the audiences of India who will relate easily to these household roles and nothing special that the plaintiffs have done with these characters for which they claim a copyright on them. This isn’t a case of misrepresentation or fraud and no real damage has been caused. No prudent person will confuse the advertisement with plaintiffs’ serial. Moreover, for character merchandising the plaintiffs should prove that the public would look at the character and consider it to represent the plaintiffs or to consider the product in relation in which it is used as has been made with the plaintiffs’ approval. But the plaintiffs have failed to establish this. In my opinion, the defendants have rightly pleaded that they are a major consumer goods Company, well known in their own right and their products including Tide have their own reputation amongst the public; Tide will be associated with the defendants and not with the plaintiffs.

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Compulsory Licensing of Patents

– By Apoorva Mishra

Compulsory licensing is an involuntary licensing where the licensor is unwilling to grant the license to the willing licensee, but this entire agreement of compulsory licensing is enforced by the state, by which the licensor has to transfer the rightful authorization of the patent to the licensee, against all his wishes. Government is basically the protector and acts as a guardian for the public at large. Therefore, for the benefit of nation, it has the right to grant the patent and next moment take away the patent and patentee’s monopoly over it. The requirements of the society at large supersedes against the rights of the patent holder to answer the pressing public requirements. Following situations may attract compulsory licensing where IP holder:

  • Charges unfair and discriminatory prices; or
  • Limits production of goods and services; or
  • Restricts technical or scientific development of goods and services; or
  • Desecrates consumer welfare.

Internationally, compulsory licensing has been supported saying that it helps in catering to the needs of the public at large and development of developing and underdeveloped countries. Compulsory Licensing has been mandated by several agreements like WIPO (World Intellectual Property Organization), Paris Convention for the promotion of industrial property. TRIPS has envisaged several conditions for issuance of compulsory licensing:

  1. The person or company should apply for licensing after 3 years to the grant of patent.
  2. Before applying for compulsory licensing, the person or company should make an attempt for voluntary licensing.
  3. The person or company then should apply to the board for compulsory licensing if the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time.

In India, we have seen a growth of many foreign companies reason being they hold knowledge and they rule the terms.  Therefore, there exists a chance that these companies can abuse their positions. Compulsory licensing of IPRs in cases of such abuses would be an apt remedy that will deter these companies from abusing their dominant positions. Keeping in mind Indian conditions compulsory licensing will spur growth and development in Indian industrial sectors. Keeping in mind the size of Indian market the incentive for innovation will not erode to the extent that might deter companies from entering in to innovative endeavours as courts have granted reasonable royalties in cases where compulsory licensing has been awarded. Compulsory licensing will make the products more accessible to public and it will be beneficial for public welfare.

The developing and the under developed countries are not much concerned about protection of patent laws as much as developed countries are because they don’t have resources to spend on development of costly mechanism to ensure protection of patents.

There are few reasons behind this:

  • by allowing piracy, developing and underdeveloped countries can ensure availability of needed goods and services to their citizens at affordable prices
  • The local industries which produce counterfeit goods employee thousands of workers and therefore reduce unemployment.
  • In order to advance in science and technology, they need maximum access to intellectual property of advanced nations.

More than 80% patents in developing and underdeveloped countries are owned by citizens of technologically advanced countries. Consequently, their governments are not willing to spend huge amounts in developing effective administrative mechanism to enforce IPRs of citizens of advanced states.

The Government will, however, pay royalty to the patent holder for using his patent without his permission, but this will in turn discourage the patent holder from making any further inventions or innovations. The discouraged Research & Development shall lead to deteriorating economic growth. The developing or under-developed countries shall refrain from investing in R & D, indirectly affecting the economy, and will settle for generic goods. This might increase the risk of goods turning into inferior quality. Ultimately, as a result of weak intellectual property regime, a country becomes less competitive, and brain drain is an obvious result.

Compulsory licensing becomes inevitable to deal with the situations of “patent suppression”. By incorporating an effective mechanism of compulsory licensing, governments of developing countries may pressurize the patent holders to work the patent to maximum national advantage. The threat of non-voluntary licensing may be helpful in negotiating a reasonable price of the needed drug acceptable to both the patent owner and the government. Compulsory licensing might be necessary in situations where its refusal may prevent utilization of another important invention which can be significant for technological advancement or economic growth.

Compulsory licensing ensures that a good number of producers or manufacturers are there to cater to the needs of society; it spurs competition and consumer welfare. Those who argue against it saying that it leads to erosion in incentive for innovation forget that a right is always accompanied by a corresponding duty, and failure to perform that duty might have its implications in law.

The abuse of patents is a very likely to occur where the patentee has its rights protected under Patent laws. The patent holder has monopoly rights but they are more likely to abuse. The patent holders are often tempted to indulge in to anti-competitive practices and they try to extend their monopoly into areas where they do not have rights protected by IPRs. Software companies like Microsoft, several pharmaceutical companies, as discussed above, are protected under the patent laws and most of the time they are the sole manufacturer. So this gives them an opportunity where they can dictate their terms over the entire market which might lead to exploitation of others right in the market. In such a scenario, compulsory licensing comes into play, which acts as a remedy to abuse of patents, where government intervention leads to increase in the versatility of the market leading to a monopolistic market rather than a monopoly, the consumers have a choice and the product will be easily available, where the opponents have argued that compulsory licensing will lead to discouragement for innovations, but this also true that this will lead to a heated competition, which will in return lead to a peer pressure over the patent holder to work more over his product, get distributers, improve his research and product and make it available to the public at large. This will lead to an increase in the economy. There are reasonable apprehensions that FDI may dry up if compulsory licensing is granted as a remedy, to that essential facility doctrine must be adopted, so that only what is essential and necessary should prevail.

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Case study on Bayer Corporation v. Union Of India

– By Apoorva Mishra

FACTS

  • The writ petitioner in the case was Bayer Corporation. The second respondent in the case was the DCGI and the third respondent was Cipla.
  • The Indian Patent Office had granted the petitioner, patent number 215758 on 3 March 2008. Therefore, by virtue of Section 48 (rights of a patentee) of the Patents Act, Bayer got the exclusive right to prevent third parties, from the acts of making, using, offering for sale, selling or importing the patented product in India, without its consent.
  • Cipla then introduced a drug “Soranib” which was a substitute of its patented drug. Subsequently, on 31st July 2008 Bayer wrote to the DCGI requesting that marketing approval be not granted to Cipla for its drug “Soranib” as Bayer had the exclusive right to market the drug.
  • It urged the DCGI to reject the representation of Cipla for grant of marketing approval for spurious adaptation of its patented drug “Sorafenib Tosylate”, as the same would contravene DCA.
  • Also, Bayer wrote to Cipla asking it to confirm whether it had filed an application before DCGI for grant of marketing approval for a drug covering “sorafenib tosylate” but received no reply.
  • Bayer filed the petition seeking directions to, inter alia, restrain grant of drug license in regard to an application by the third respondent for the license to manufacture, sell and distribute its drug ‘Soranib’. The petitioner claimed that the said drug was an imitation of, or substitute for, its patented drug.

ARGUMENTS BY BAYER

  • The Petitioner contends that in the absence of an overriding provision in the Drugs Act, reinforces the intention of the legislature that its provisions of the Drugs Act are to be read in addition to the Patent laws and not to the contrary. Therefore, Section 2 of the Drugs Act have to be read in conformity with the Section 48 of the Patents Act which establishes a concept of “Patent Linkage” which imposes a burden on the Drug Controller to make sure that any of his decisions of granting market approval for a drug do not violate any law for the time being in force.

 

  • The petitioner relies on Section 18 and Form 44 of the Drugs Act, which talks about mentioning of patent status of the drug. While making an application before the Drug Controller, CIPLA ought to have mentioned the subject Patent of Bayer. Therefore, by a mere reading of Form 44, and also by virtue of publication of grant of the subject patent, it would be well within the knowledge of the Drug Controller that the subject patent exists in relation to the product for which CIPLA has applied for consequently, if the marketing approval is granted, it will contravene the provisions of Section 17B of the Drugs Act, as well as the provisions of Section 48 of the Patent Act.
  • The petitioner contends that the application of Cipla is for the license to manufacture, sell and distribute its drug “Soranib” which is an imitation of the Petitioners’ patented drug. The drug “Soranib”, being “spurious drug” as defined in Section 17B of the Drugs Act, the DCGI would not only be exceeding his jurisdiction but also give a decision which would be ultra vires Chapter IV of the Drugs Act.

ARGUMENTS BY CIPLA

  • Cipla contends that Bayer’s claim for patent linkage, based on an interpretation of Section 2 of the Drugs Act is misleading, because the grant of drug regulatory approval by the DCGI cannot, by itself amount to a patent infringement.
  • The existence of patent infringement cannot be assumed merely because the patentee states so, but has to be clearly established before a court of law in accordance with the infringement provisions mentioned under the Patents Act, 1970. Such an assessment is beyond the statutory powers of the DCGI, which is institutionally incapable of dealing with complex issues of patent scope, validity and infringement.
  • Cipla states that Section 107A of the Patents Act, clearly exempts from patent infringement any of acts of making, using or even selling a patented invention, in so far as such acts are necessary to obtain information for the filing of a drug regulatory application before the DCGI.
  • Cipla relied on the concept of “Bolar Provision” under Section 107A of the Patents Act which permits any drug manufacturer to experiment with any patented drug and is aimed at speeding up generic entry into the market and the availability of low cost drugs to the consumer.
  • Cipla states that Section 19 of the Patents Act provides limited powers to the Controller. It may at its best only direct that a reference to the earlier patent be inserted but does not authorise the controller to deny the grant of the patent itself to the applicant. Hence, DCGI cannot assess the possibility of patent infringement and dent drug regulatory approval on such grounds.
  • Cipla argued that the terms ‘limitation’ and ‘substitute’ in Section 17 B (b) cannot be read in isolation to the remainder of the sub-clause. The words ‘substitute for’ were to be read along with ‘in a manner likely to deceive’. The text of the said sub clause reveals that the same covers a situation where an individual is passing off his drug as that of another by way of using deceptive marks get-up or packaging and this did not include patents.

 

ISSUES RAISED

(1) Whether a combined reading of the Drugs Act and the Patents Act lead to the conclusion that no marketing approval can be granted to applicants for drugs or formulations, of which others are patent owners, by reason of Section 2 of the Drugs Act, read with Sections 48 and 156 of the Patents Act?

(2) Whether drugs or formulations which infringe patents are “spurious drugs” under the Drugs Act?

APPLICATION AND ANALYSIS

ISSUE 1 : Whether a combined reading of the Drugs Act and the Patents Act lead to the conclusion that no marketing approval can be granted to applicants for drugs or formulations, of which others are patent owners, by reason of Section 2 of the Drugs Act, read with Sections 48 and 156 of the Patents Act?

What is Patent Linkage?

Patent linkage is the practice of linking drug marketing approval to the patent status of the originator’s product and not allowing the grant of marketing approval to any third party prior to the expiration of the patent term, unless consented to by the patent owner. This creates a duty in favour of the Drugs Controller to ensure that marketing approval is not granted to generic manufacturers in cases where the drug is already covered by an existing patent.

Difference between the objectives of the Statutes

The Drugs Act is a public regulatory measure, prescribing standards of safety and good manufacture practices which are to be followed by every pharmaceutical industry, or which are to be satisfied by the importer of a drug, to assure that what are marketed are safe. The provisions of the Act manifest Parliamentary concern with public health in ensuring standard practices, and that people do not fall prey to adulterated or spurious drugs. There is a general public policy interest in such regulation.[1]

The Patents Act on the other hand, puts in place a regime containing standards for conferring private monopoly rights in favour of inventors. It requires that processes or products, to claim patents, should involve steps that are “technical advance as compared to the existing knowledge or having economic significance or which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the date of filing of the patent application.

Authority of the DCGI

The Controller of Patents and other officers are experts at judging whether claimed products or processes are patentable. This expertise is not only in respect of pharmaceutical products, but other specialized areas as well.

This expertise depends upon adjudging, on an objective basis, whether a product or process is novel, or contains an inventive step. Such expertise does not necessarily exist in the case of officials under the Drugs Act, who are required to test the safety of the product, and ensure that it conforms to the therapeutic claim put forward. Whether it involves an inventive step, or is novel, is not within the domain of the Drugs Act authorities and officials.

The existence of patent linkage standards in express legislation, in other parts of the world underscores that courts, in the absence of a Parliament mandated regime, should not blaze into an obviously legislative path. No doubt, courts can, through interpretive devices such as purposive interpretation, or for avoiding absurd results, at times “fill in” statutory gaps.[2]

Bayer relies on Section 2 of the Drugs Act and Section 156 (of the Patents Act) to contend that statutory intention is clear that Drugs authorities are bound by patents, granted under the Patent Act, by virtue of Section 156 and therefore, they cannot, by conferring drug or marketing approval permit violation of patents validly granted. However, Section 156 is a clarification, that the Government, and its officials, as grantors, are bound by the patents. This means that they have to respect patents, and cannot infringe them.

Patent Linkage in Grant of Market Authorisation

One of the important reasons to inferring Drug agencies role in patent policing or enforcement is unacceptable, is that some developed countries, and the European Union cautioned against patent linkages. [3]

The EU Directorate General for Competition noted that “Patent linkage refers to the practice of linking the granting of MA (market authorization), the pricing and reimbursement status or any regulatory approval for a generic medicinal product, to the status of a patent (application) for the originator reference product. Under EU law, it is not allowed to link marketing authorisation to the patent status of the originator reference product. Since the status of a patent (application) is not included in the grounds set out in the Regulation and in the Directive, it cannot be used as an argument for refusing, suspending or revoking Marketing approval (MA).[4]

The court also rejected the Bayer’s argument that Rule 122 B(1) (b) of the Drugs Rules, read with Form 44 and the data required (Appendix 1 to Schedule Y), gave an insight that patent linkage is intended by Parliament. The court stated a known principle of statutory construction, which said that the Parliament or the concerned legislature is deemed to be aware of existing laws when it enacts new legislative measures.[5]

Therefore, there is no patent linkage in the country and what the Petitioner wants to do is to legislate it through the interpretations, which is impermissible. The court should avoid from making any policy choices which are to be made by executive and then made by the law. The concept of patent linkage is controversial in nature, since:

(1) It clothes regulatory authorities, which are executive bodies solely concerned with scientific quality, efficacy and safety issues, with completely new powers, and into areas lack in expertise, i.e. patent rights policing.

(2) It transforms patent rights which are private property rights, that depend on the owners’ promptitude and desire to enforce them, into public rights, whose enforcement is dependent on statutory authorities, who are publicly funded.

(3) Such linkage potentially undermines the “Bolar/Early Working” exception that encourage quick access to the post patent markets for generic medicines. This is a major public policy consideration in India, which faces a host of public health challenges.

The Hon’ble High Court rightly decreed the issue in favour of the Respondents, because Whenever there is a complaint on infringement it has to be challenged before the Intellectual Property Board and suits in the High Court. Before each such body, the patentee has to establish and prove infringement, wherever alleged, and may, in some cases, face challenges to the grant of its patent. Such crucial provisions, conceived in public interest, would be rendered a dead letter, if the Drugs authorities, on a representation of the patentee were to refuse licenses or approval, to applicants who otherwise satisfy the requirement of the Drugs Act and its provisions, or even be precluded from examining such applications, on assumed infringement. Also, under the Patents Act, infringement of a patent is not considered a criminal offence. On the other hand, under the Drugs Act, violation of any of its provisions constitutes a criminal offence. If patent linkage is directed, an act of infringement which is not an offence would indirectly be alleged to be an offence.

 

ISSUE 2: Whether drugs or formulations which infringe patents are “spurious drugs” under the Drugs Act?

Section 17-B of the Drugs Act defines spurious drugs as follows:

(a) if it is manufactured under a name which belongs to another drug; or

(b) if it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive or bears upon it or upon its label or container the name of another drug unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug; or

(c) if the label or container bears the name of an individual or company purporting to be the manufacturer of the drug, which individual or company is fictitious or does not exist; or

(d) if it has been substituted wholly or in part by another drug or substance; or

(e) if it purports to be the product of a manufacturer of whom it is not truly a product.

Bayer states that Cipla’s generic version of Sorafanib, which, it is contended, is sold under the brand name “Soranib” would amount to a “spurious drug”. If Bayer’s contention were to prevail, every generic drug would ipso facto amount to a “spurious drug”, since they are deemed substitutes of originator (patented) drugs. Such interpretation is facially untenable and contrary to the intent of the Drugs Act. The key elements of “spuriousness” are deception, in the manner of presentation of the drug concerned, in the sense that they imitate or represent themselves to be something that they are not.

The definition of “spurious drugs’ was introduced because of the problems of adulteration of drugs and production of spurious and sub-standard drugs, as posing a serious threat to the health of the community. A declaration by the drug agency entrusted with the task of deciding applications seeking marketing approval that someone not holding a patent is attempting to get clearance for a “spurious drug” would be pre-emptive, and would negate the provisions requiring that enforcers should follow certain mandatory procedures, and prosecute potential offenders.

When a pharmaceutical company first markets a drug, it is usually under a patent that allows only the pharmaceutical company that developed the drug to sell it. Generic drugs can only be legally produced for drugs which are free of patent protection. After the patent on a drug expires, any pharmaceutical company can manufacture and sell that drug for a fraction of the original cost of testing and developing that particular drug; in essence, says Bayer, this is a “generic” product.

 

Therefore it was rightly held by the court in favour of CIPLA because if Bayer’s contentions were accepted then every drug would be considered as spurious drug and generic drugs are nothing but the substitutes of patented drug, whereas the key element of determining the spurious drug is deception, in a manner, that they imitated themselves as something which they were not.

CONCLUSION

The court rightly dismissed the writ petition and pronounced the judgement in favour of the Respondents. Patent Linkage forces the regulatory authorities to perform a function which is completely in different domain altogether leading to changing the nature of patent right from a private right to a public right. If at all, patent linkage has to be adopted it should make sure that it does not come in the way of Compulsory Licensing. Even though such measures are good for the benefit of investing into Research and Development, but it still discourages generic competition in the market, leading to large monopoly of pharmaceutical company due to which the accessibility of the drug is difficult and if at all the drug is made available, it is at a very higher price which is unaffordable almost by the majority section of the people. Hence, whenever there is a need and it is in the benefit of public, market approval should be granted so that the drug can cater to the public, if the situation demands then, the generic drug manufacturer can be asked to pay royalty to the patent holder. This will also discourage monopoly of foreign pharmaceutical companies in the Indian market leading to rise in Indian economy as well.

 

[1] Robert  Galantucci,  Data  Protection  in  a  US-Malaysia free trade  agreement:  New  barriers  to  market  access  for generic  drug  manufacturers, Fordham  Intellectual  Property,  Media and Entertainment Law Journal, 17 (2007), 1083.

[2] Orange Book: Approved Drug Products with Therapeutic Equivalence Evaluations, Available at: http://www.accessdata.fda.gov/scripts/cder/ob/default.cfm

 

[3] European  Generic  Medicines  Association,  New  strategy  on patent  linkage  is  contrary  to  EU  law  and  threatens access  to competitive generic medicines, 2 February 2006, http://www.egagenerics.com/pr-2006-02-02.htm

[4] European  Union  –  DG  Competition,  Pharmaceutical  Sector Enquiry:     Preliminary     Report,     28    November     2008,  http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf

[5] Syndicate Bank v  Prabha D Naik AIR 2001 SC 1968.

 

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Case study on Star India Private Limited V. Leo Burnett

– By Apoorva Mishra

The plaintiffs entered into an Agreement dated 9th April, 2000 with Balaji Telefilms Pvt. Ltd., in order to create, compose and produce 262 episodes of a television serial entitled “KYUNKI SAAS BHI KABHI BAHU THI”.  Since then Balaji has produced episodes of the serial and their services were engaged by way of contract of service and as such the plaintiffs are the first copyright owners under Section 17 of the Copyright Act. Balaji has devised the original artistic work depicting inter alia the logo and the title in a peculiar stylized font and containing as its essential features the words “KYUN KI SAAS BHI KABHI BAHU THI” and as per the agreement plaintiffs have become the owner of the said artistic work. The serial had acquired immense goodwill and reputation so much so that the public associate the said serial with plaintiffs and plaintiffs alone. Plaintiffs started endorsing the serial and the characters in form of products and services for a fee. In February 2002, the defendants came up with the commercial for a consumer product “TIDE DETERGENT” telecasting it with a title, “KYONKI BAHU BHI KABHI SAAS BANEGI” and characters of a grandmother, mother-in-law and daughter-in-law, similar to the characters of J.D., Savita, Tulsi as in the serial of the plaintiff. The plaintiffs contended that there has been an infringement of copyright because an average viewer will have an impression that the plaintiffs are endorsing the defendant’s product and there is a connection between plaintiffs in the said serial and the defendants and their product. It is contended that the defendants are not entitled to do so without obtaining the prior consent and/or the permission from the plaintiffs and they have misrepresented the public at large and on account of this plaintiffs have suffered loss due to continuous act of infringement of copyright and passing off of the copy to the defendants.  The matter was brought before the Hon’ble Bombay High Court raising several issues:

First, Have the defendants by making the commercial film, violated and/or infringed the plaintiffs’ copyright in the T.V. serial “KYUN KI SAAS BHI KABHI BAHU THI”?

The court ruled that anything which is not a substantial copy of the film shall not be held liable for copyright infringement. Therefore, defendants by making the commercial film have not violated and/or infringed the plaintiffs’ copyright.

The court has rightly dealt with the above issue, for the second film to infringe the copyright of the first film it has to be the exact copy of that film which is not the case here. The plaintiff’s film is a work of 262 episodes whereas defendant’s advertisement is a work of 30 seconds in which only for 8 to 10 seconds the characters appear as a prelude to the tide detergent. The major and substantial part consists of tide detergent. Nothing is common between the two scripts. The defendants have put in their own independent skill and labour in making of the advertisement whole sole purpose is to promote the Tide detergent. The models are same in both the film. These models are professional and free to contract. There cannot be, therefore, any act which would amount to infringement by using the same models. Even if the idea is borrowed there, can be no copyright in the idea.

Second, Have the plaintiffs’ proved the defendants have infringed the plaintiffs’ artistic work?

The court denying the contentions of the plaintiffs coined the term Originality. Originality merely means effort expanded or that it involves skill, labour and judgment in its creation. Under Section 17 of the Copyright Act, the Author of a work is the owner of the copyright therein. The defendants have contended that the logo consisting of the two hands is a symbol in common use and in the public domain and open to anyone to use. The holding hands well known form of representing the handing over of something from one to another and are a commonly used symbol and they denied on the fact that the plaintiffs have put any skill, labour or some sort of judgement in its creation but has merely taken the lettering style from a source easily available in public domain. Hence, there is no originality, therefore no copyright.

Third, Have the plaintiff’s proved that the defendants are guilty of passing off their reputation and goodwill in the T.V. serial?

The court held that the defendants are not guilty of passing off as they do not satisfy the essentials of passing off per se. Plaintiffs’ serial is shown on Star Plus Channel which is not owned by the plaintiffs. Goodwill does not accrue to the plaintiffs. The plaintiffs have no goodwill or reputation. It is the case of the plaintiffs that their serial/film is associated exclusively with the Star Plus Channel by the public and public is well aware that it can be seen only on Star Plus. Also, the T.V. commercial will not cause any harm to the plaintiffs’ serial or their reputation because the field which the plaintiffs’ serial occupies as a film/soap opera is different from the field of defendants’ commercial that of an advertisement of detergent Tide. Even the activity area is also not in common, therefore there is no misrepresentation.

On the facts of this case, there is no fictional character involved like ‘Superman’, ‘Shaktiman’ Teletubbies’. In the serial there are ordinary people in common life who plays the role of some character or the other. At least from the material on record there is nothing special in any, of the characters of which it can be said that they have gained any public recognition for itself with an independent life outside the serial. This, the plaintiffs have failed to establish. It is also not a case of one film against another film and further the defendants are not merchandising any character from the serial by means of their T.V. commercial. There should be in actual character merchandising and not mere potential of character merchandising.

The court, after analysis the entire case, rightly pronounced the judgement in favour the defendants. The defendants are just promoting their consumer product “Tide” via a T.V. commercial which in no way is connected. The field of activity of the plaintiff and defendant are totally different. No likelihood of damage has been caused to the plaintiff. The characters of which the plaintiff claims to be copied are simple general roles of our Indian society and the defendants are simply targeting the audiences of India who will relate easily to these household roles and nothing special that the plaintiffs have done with these characters for which they claim a copyright on them. This isn’t a case of misrepresentation or fraud and no real damage has been caused. No prudent person will confuse the advertisement with plaintiffs’ serial. Moreover, for character merchandising the plaintiffs should prove that the public would look at the character and consider it to represent the plaintiffs or to consider the product in relation in which it is used as has been made with the plaintiffs’ approval. But the plaintiffs have failed to establish this. In my opinion, the defendants have rightly pleaded that they are a major consumer goods Company, well known in their own right and their products including Tide have their own reputation amongst the public; Tide will be associated with the defendants and not with the plaintiffs.

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