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Development of Cybercrime Law in the United Kingdom

Development of cybercrime law in the United Kingdom

The enactment of computer crime specific legislation or cybercrime law in the United Kingdom can be attributed to a number of cases which highlighted the issue of absence of such legislation and the subsequent acquittal of individuals.

R v. Thompson

Firstly, in R v. Thompson,[1] the appellant in Kuwait, had fraudulently caused a bank to credit certain bank balances in England. The access was authorized, however, such access was used for an unlawful purpose. The Theft Act of 1968 was sought to be applied[2]. The primary issue was that of jurisdiction (Kuwait or England) as well as identifying the victim. The court held that for applying the Theft Act, the identification of a human victim is a prerequisite. However, in the present case, the computer system was deceived, rather than a human mind. This highlighted the inadequacy of the existing legal framework to deal with cases where computer was a victim of a crime, rather than a mere facilitator.

R v. Gold and Schifreen

Secondly, in R v. Gold and Schifreen,[3] certain individuals got access to the files contained in British Telecom Prestel Network by seeing the username and password entered by the authorized person, over his shoulders. The accused were charged under the Forgery and Counterfeiting Act of 1981. However, the court held that the accused cannot be prosecuted under the said Act as the use of recorded electronic information did not fall under the definition of ‘false instrument’[4]. Therefore, the act committed by the accused does not come under the ambit of the Forgery and Counterfeiting Act. The outcome of this case highlighted that new age crimes (cybercrimes) cannot be prosecuted under the traditional criminal laws.

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It is pertinent to note that there were a series of case laws wherein the court adopted a more liberal approach to include the new age crimes within the ambit of traditional laws. In Cox v. Riley,[5] the court held that ‘damage’ implies any injury impairing the value and usefulness. Such injury need not be apparent to the naked eyes. Therefore, deleting program from a computer-controlled machine, which renders it unusable, constitutes ‘damage’ under the Criminal Damages Act, 1971. A similar approach was adopted in R v. Whiteley[6].

The increasing instance of computer crimes, the failure of court to effectively prosecute individuals who committed computer crimes, and the significance of ensuring effective prosecution by broadening the scope of existing laws, had a combined effect which led to the enactment of the Computer Abuse Act of 1990[7] in the United Kingdom.

Originally, the 1990 Act brought within its ambit, three categories of offences-

  1. Unauthorized access to programs or data[8];
  2. Unauthorized access with further criminal intent[9] and
  3. Unauthorized modification of data[10].

In Ellis v. DPP,[11] section 1 of the Act was interpreted, and the court held that unauthorized access, even though in absence of damage, comes under the ambit of the 1990 Act.

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The 1990 Act addressed the issue of jurisdictional challenge in cases of computer crime by making it an offence to use a computer in the home country to commit a crime in another country and to commit a crime in the country from a computer in another country[12].

It is pertinent to note that the 1990 Act was not well equipped to deal with computer crimes per se in a comprehensive manner. The issue with respect to section 2 of the Act was highlighted in R v. Bedworth[13], wherein while proving intent, addiction was recognized as a defense. As a result, the Jury acquitted the accused.

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[1] R v. Thompson, (1984) 79 Cr App R 191.

[2] Theft Act, 1968, § 15.

[3] R v. Gold and Schifreen, CACD [1987] QB 1116.

[4] Forgery and Counterfeiting Act, 1981, s. 8(1)(d).

[5] Cox v. Riley, [1986] QBD.

[6] R v Whiteley, [1991] 93 CAR 25.

[7] Computer Abuse Act, 1990.

[8] Id., § 1.

[9] Supra note 18, § 3.

[10] Supra note 18, § 2.

[11] Ellis v. DPP, [2001] EWHC 362.

[12] Supra note 18, § 4.

[13] R v. Bedworth, 1991.

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Development of Telecommunication Law in British India

The communications system forms the basis of the economic development of a country and plays a key role in every aspect of an individual’s life. The communications system in India has come a long way from the use of telegrams in the 1850s to the extensive use of the Internet in the present times. It is pertinent to note that the foundation of telecommunications in India was laid by the British East India Company (referred to as ‘EIC’ hereafter), and was later developed by the British Government, under the British Crown.

  • Development of Telegraph services under the British regime

Research in the field of telegraph started in India way back in 1833 when a 24-year-old assistant surgeon with the East India Company (EIC), Mr. William O’Shaughnessy, started experimenting with electricity.[1] In 1839, he set up a 13.5-mile-long demonstration telegraph system near Calcutta.[2] During the same time, Samuel F.B. Morse was developing his own demonstration system back in the United States.[3] However, O’Shaughnessy was completely unaware of this development, and therefore, used a different code which was indigenously developed. On successful experimentation, he published a pamphlet about his work, but he was unable to catch the attention of the EIC.

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The state of affairs changed in 1847 when Lord Dalhousie was appointed as the Governor-General of India.[4] He showed real interest in developing public works like roads, canals, railways, and postal services in India. He also envisioned the potential of the telegraph invented by O’Shaughnessy and authorized him to build a 30 miles long line near Calcutta. This was the first experimental electric telegraph line in India which started between Calcutta and Diamond Harbour in 1851[5]. The success of this electric telegraph line incentivized Lord Dalhousie to authorize O’Shaughnessy to build telegraph lines across India.[6]

O’Shaughnessy completed the work assigned to him by 1854, and as a result, Calcutta was linked to Agra, Bombay and Madras by the telegraph network.[7] From 1851 till 1854, the telegraph was strictly limited to use by the EIC. In April 1854, first telegram was sent from Mumbai to Pune and electronic telegraph facilities were made open to use by the public[8]. Taking these developments and the subsequent need for legislation to regulate the establishment and management of electronic telegraphs in India into consideration, the Electronic Telegraphs Act of 1854[9] was enacted. The 1854 Act provided exclusive right to establishing telegraph lines in India to the EIC, however, the Governor-General of India in Council was given the power to grant the license to any person or company to establish a line[10]. The Act further established a separate Electric Telegraph Department[11]. The Act penalized the laying down of telegraph lines in contravention of the provisions of the Act.[12] It also penalized the persons who willfully caused interruption to the transmission of signals[13].

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The development of the telegraph system continued and by 1856, 4000 miles of Indian telegraph system was established connecting Calcutta, Agra, Bombay, Peshawar, and Madras.[14] It is believed that the Indian telegraph service played an instrumental role in suppressing the 1857 sepoy mutiny.[15] It proved to be a critical military tool by rapidly providing a reliable system of information which was used by the EIC to mobilize its troops. Owing to the significance of the telegraph network in suppressing the 1857 revolt, a number of Indians tried to destroy the same as an act of vengeance.[16]

The 1857 sepoy mutiny led to a significant change in power in the Indian colony. The Electric Telegraph Act of 1854 was repealed, and the Telegraph Act of 1860[17] was enacted to reflect the shift of power from British EIC to the British Crown. The 1860 Act brought two significant changes to its predecessor. Firstly, it gave the exclusive power previously enjoyed by the EIC to the Governor-General of India in Council[18]. The Governor-General also retained its power to grant licenses to private individuals and companies for establishing the telegraph lines. Secondly, considering the attempts of Indians to destroy the telegraph network post-1857 revolt, the Act of 1860 increased the number of penalties for intruding into the signal room[19] and cutting the line[20].

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The developments in the telegraph system in India were accelerated once submarine cables were completed between India and Britain in 1870.

The next significant step in the evolution of communications services in India was the enactment of the Indian Telegraph Act of 1876[21], which repealed the 1854 Act[22]. The 1876 Act was applicable to the whole of British India as well as British subjects in the Princely States[23]. The Act is considered as the first comprehensive legislation regulating telegraph services in India. It defined the terms like ‘telegraph’, ‘telegraph officer’ and ‘message’[24]. ‘Telegraph’ was defined as an electric or magnetic telegraph[25]. Just like the 1854 Act, the Governor-General retained his power of exclusive privilege and the right to grant a license under the 1876 Act.[26] The Act further increased the penalties for causing destruction to the telegraph network. The most peculiar feature of the 1876 Act was the provision for the deployment of additional police in places where mischief to telegraphs was repeatedly committed[27]. In such a scenario, the inhabitants of such a place were required to bear the cost of such deployment[28].

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After the 1876 Act came into force, in 1880, two private telephone companies namely Oriental Telephone Company Ltd. and The Anglo-Indian Telephone Company Ltd. approached the Governor-General of India to propose establishing telephone exchanges in India.[29] They were denied permission on the ground that the introduction of telephones was a Government monopoly and hence the Government itself would commence the work.[30] However, in 1881, the decision was reversed and Oriental Telephone Company Ltd. was granted a license for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad. The telephone came to India a little later in 1882.[31]

In 1883, the telegraph services were combined with postal services.[32] In the meanwhile, a Bill proposing the repeal of the 1876 Act was tabled to the Council. The Bill suggested modification of the definition of ‘telegraph’ to be in consonance with the developments in Britain. It also suggested the creation of a new category of penalties. This led to the enactment of the Telegraph Act of 1885[33]. The Act broadened the definition of ‘telegraph’ to include “appliances and apparatus for transmitting or making telegraphic, telephonic or other communications by means of electricity, galvanism or magnetism”[34]. The Act also created a Telegraph Authority, which meant the Director-General of Telegraphs and included any officer empowered by him[35]. Just like its 1860 and 1876 predecessors, the Governor-General enjoyed the exclusive privilege and the right to grant a license under the 1885 Act as well. The Act further granted the power to Government to take possession of licensed telegraphs to intercept messages[36].

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In 1888, overseas communications were merged with the Director-General of the Indian Telegraph Department.[37]

The next significant development took place in 1902 when cable telegraphs were changed to wireless telegraphs.[38] Therefore, in 1902, the Indian telegraph services went wireless. Furthermore, in 1914, a big administrative change happened. The Postal Department and the Telegraph Department were amalgamated under a single Director-General by amending the definition of ‘telegraph authority under the 1885 Act[39].

The 1885 Act underwent a number of changes in the years 1914, 1930 and 1937. As per the amendment of section 4 in 1914, the Government was given the power to establish and maintain wireless telegraphs on ships within Indian territorial waters and telegraphs other than wireless telegraphs[40]. This provision was further amended in 1930 to include the use of wireless telegraphy on aircraft[41].

  • Development of Radio broadcasting services under the British regime

Respect to radio broadcasting, broadcasting was introduced as a private venture through radio clubs in Calcutta, Madras, Bombay and Lahore in 1923 and 1924.[42] In June 1923, the Radio Club of Bombay made the first-ever broadcast in India. In 1927, Calcutta Radio Club was established. During this time period, there was a daily broadcast of 2-3 hours of music and talks. However, most of these stations faced liquidation within three years of their establishment due to insufficient finances.[43]

The year 1927 also witnessed an agreement between the Government and a private company named Indian Broadcasting Company Ltd. (IBC).[44] This agreement led to the setting up of the Broadcasting Service which began broadcasting in 1927 on an experimental basis in Bombay and later in Calcutta. However, IBC faced liquidation within 3 years of its establishment.[45] The government acquired its assets and established the Indian Broadcasting Service under the Department of Labour and Industries.[46] Since then, broadcasting has remained under the control of the Government in India.

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Following the establishment of the Indian Broadcasting Service, in 1935, Lionel Fielden was appointed the first Controller of Broadcasting.[47] In the same year, a private radio station, Akashvani Mysore, was set up.[48] In 1936, a radio station was commissioned in Delhi.

The next significant step in the development of radio broadcasting services in India was the renaming of the Indian State Broadcasting Service as ‘All India Radio’, or AIR in June 1936.[49] A new signature tune was added to AIR. The Delhi radio station, established in the same year, became the nucleus of broadcasting at the national level. In 1937, AIR was brought under the Department of Communications and in 1941, under the Department of Information and Broadcasting. The Department of Information and Broadcasting was again changed to the Department of Information and Broadcasting (I&B) on 10th September 1946.[50]

Radio broadcasting underwent considerable developments during World War II. By 1939, the entire country was covered by short-wave service. Taking into account the outbreak of World War, the programme structure of radio underwent a change to meet wartime contingencies. News and political commentaries were introduced and special broadcasts were made for the people on the strategic north-eastern and north-western borders.

  • Regulation of Wireless Telegraphy in the British regime

Wireless telegraphy in India developed in line with the development of radio services. One of the major sources of revenue for the Indian State Broadcasting Service was revenue from the licence fee for working of wireless apparatus under the Indian Telegraph Act, 1885. Owing to the lack of legislation dealing with the unlicensed use of wireless apparatus, the Indian State Broadcasting Service faced substantial revenue losses. To deal with the unlawful possession of wireless telegraphy apparatus, the Indian Wireless Telegraphy Act of 1933[51] was enacted.

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The 1933 Act defined terms like ‘wireless communication’ and ‘wireless telegraphy apparatus.[52] The Act prohibited the possession of wireless telegraphy apparatus without a license under section 4. The telegraph authority under the Indian Telegraph Act of 1885 was given the power to issue licenses to possess wireless telegraphy apparatus under the Act[53]. The act of possession of wireless telegraphy apparatus without a license was made a punishable offence[54].

  • The relevance of Communication Laws enacted in the British regime after the coming into force of the Constitution of India in 1950

When India became independent, there were over 7000 telegraph offices and about 300 state-owned telephone services, across the country. Furthermore, there were 6 AIR stations at Delhi, Bombay, Calcutta, Madras, Lucknow and Tiruchirapalli, with 18 transmitters, among which six were on the medium wave and the remaining were on short wave.

The legal regime governing the telecommunications sector in India developed to a considerable extent after independence owing to technological changes, however, it is pertinent to note that the government decided to adopt certain key legislation relating to the telecommunications sector which was in force during the British regime. The most significant adoption was the exclusive privilege over the telegraph service and right to grant a license, enjoyed by the Government over the telecommunications sector in the British regime. This status was adopted in the Constitution of India by virtue of Entry 31 of List I in Schedule 7 which puts ‘posts and telegraphs, telephones, wireless, broadcasting, and other like forms of communications’ in the exclusive domain of the Union List[55]. The then Prime Minister of India, Jawaharlal Nehru, was also of the opinion that the telecommunication sector should be retained by the Central Government owing to its criticality to the development of India.

The Telegraph Act of 1885 was amended in the year 1948 to substitute the word ‘Provinces’ with ‘India’[56]. Although the definition of ‘telegraph’ has been amended in the subsequent years to ensure that technological development does not leave out certain services from being regulated by the state, however, the basic premise of the 1885 Act has remained intact over the years.

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The Wireless Telegraphy Act, 1933 too is still in existence and retains most of the provisions of the original Act.

With respect to radio broadcasting services, All India Radio is in existence even today, under the control of the Ministry of Information and Broadcasting.

Therefore, the British regime did not only help India in laying the infrastructural foundations of communications, it also helped to develop a legal regime governing the same. This legal regime is still operational, with certain amendments aimed at adopting the dynamic nature of technology.

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[1] John H. Lienhard, Indian Telegraph, https://www.uh.edu/engines/epi1380.htm (last visited Apr. 20 2021).

[2] Id.

[3] Indian telegraph Service, INDIAN PHILATELY, http://www.indianphilately.net/indiantelegraph.html (last visited Apr. 20 2021).

[4] Lienhard, Supra note 1.

[5] Development of posts and telegraph during the British rule, https://madhyapradesh.pscnotes.com/modern-history/development-of-posts-and-telegraph-during-the-british-rule/ (last visited Apr. 20 2021).

[6] Lienhard, Supra note 1.

[7] Supra note 3.

[8] Maninder Dabas, Today in 1854, first telegrpoh was sent in India, INDIA TIMES (Apr, 27, 2017, 4:15 PM), https://www.indiatimes.com/news/today-in-1854-first-telegram-was-sent-in-india-between-mumbai-and-pune-here-is-all-about-the-telegraph-service-that-ende.

[9] Electronic Telegraphs Act, 1854, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in116en.pdf.

[10] Id, § 1.

[11] Supra note 9, § 7.

[12] Supra note 9, § 2.

[13] Supra note 9, § 9.

[14] Lienhard, Supra note 1.

[15] Michael Mann, The deep digital divide: The telephone in British India, 35(1) HISTORICAL SOCIAL RESEARCH 188, 200 (2010).

[16] Id.

[17] Telegraph Act, 1860, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in117en.pdf.

[18] Id, § 2.

[19] Supra note 17, § 9.

[20] Supra note 17, § 10.

[21] Indian Telegraph Act, 1876, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in118en.pdf.

[22] Id, § 2.

[23] Supra note 21, § 1.

[24] Supra note 21, § 3.

[25] Id.

[26] Supra note 21, § 4.

[27] Supra note 21, § 16.

[28] Id.

[29] Gopika G G, Growth and development of telecom sector in India- An overview, 16(9) IOSR-JBM 25, 26 (2014).

[30] Id.

[31] Id.

[32] Id.

[33] Telegraph Act, 1885, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in119en.pdf.

[34] Id, § 3(1).

[35] Supra note 33, § 3(6).

[36] Supra note 33, § 5.

[37] Id.

[38] Gopika G G, Growth and development of telecom sector in India- An overview, 16(9) IOSR-JBM 25, 33 (2014).

[39] Supra note 33, § 3(6).

[40] Act 7 of 1914.

[41] Act 27 of 1930.

[42] Growth and development, PRASAR BHARTI, https://prasarbharati.gov.in/growth-development-air/ (last visited 20 Apr. 2021).

[43] Id.

[44] Alasdair Pinkerton, Radio and the Raj: Broadcasting in British India (1920-1940), 18(2) JOURNAL OF THE ROYAL ASIATIC SOCIETY 167, (2008).

[45] Id. at 175.

[46] Id.

[47] Id.

[48] Supra note 42.

[49] K.C. Archana, 80 years of AIR: Remembering the golden days of All India Radio, INDIA TODAY (June 8, 2016, 3:51 PM), https://www.indiatoday.in/fyi/story/80-years-of-air-remembering-the-golden-days-of-all-india-radio-12987-2016-06-08.

[50] Id.

[51] Indian Wireless Telegraphy Act, 1933, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in037en.pdf.

[52] Id. § 2.

[53] Supra note 51, § 5.

[54] Supra note 51, § 6.

[55] Constitution of India, 1950, Schedule VII, List I, Entry 31.

[56] Act 45 of 1948.

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Development of Cybercrime Law in the European Union

At the European Union level, although the possibility of having a comprehensive legal framework dealing with cyber crimes was not a far stretched idea owing to the cooperation at the Union level, however, this idea was not considered until the late 1990s.

Taking into account the growing incidents of cyber crimes, their peculiar nature, and the essential element of international cooperation in this regard, a series of initiatives were taken at the EU level in the form of recommendations and Council conclusions. This was followed by the first legislative proposal by the Commission in early 1998 to deal with certain aspects of computer crimes, i.e. credit card frauds and forgery of non-cash means of payment. However, it was only in May 2001 that the Framework Decision on Combating Fraud and Counterfeiting of Non-Cash Means of Payment was adopted.[1]

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During the same time, the Council of Europe was taking a number of steps and engaging in negotiations, in collaboration with the G8 countries, USA, Canada, Japan, United Kingdom, Germany, France, Italy, and Russia, with respect to judicial cooperation in this field.  As a result, an agreement was reached in 1997 pertaining to an action plan to combat high-tech and computer-related crimes. One of the action plan’s initiatives is the 24/7 network of law enforcement contact points to combat cybercrime, which is now a part of the current legal framework at the EU level. This network furthers the objective of international cooperation, specifically with respect to the investigation of cybercrimes.

In October 1999, the G8 met again as a follow-up measure of the action plan. This follow-up concluded that the biggest roadblock in combating computer crimes is the identification and tracking of criminals in cyberspace. To overcome this roadblock, many principles were adopted to ensure transnational access to data, simplified mutual assistance, and general permission to access publicly available material in another state without express permission. These principles now form the basis of the current legal regime at the EU level[2].

Meanwhile, the European Committee on Crime Problems[3] (CDPC) decided to set up a committee of experts to deal with cyber-crime in November 1996. Subsequently, the Report submitted by Professor H.W.K. Kaspersen concluded that “it should be looked to another legal instrument with more engagement than a Recommendation, such as a Convention. Such a Convention should not only deal with criminal substantive law matters but also with criminal procedural questions as well as with international criminal law procedures and agreements”.[4]

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Taking into account the Report submitted to the CDPC, the Council of Europe was successful in formulating the Convention on Cybercrime[5], with an aim to bring minimum harmonization in the acts termed as ‘cybercrime’ in the Member States of the EU.

The Explanatory Report of the Cybercrime Convention highlights the changing nature of crimes and the subsequent need to develop a legal framework to prosecute such crimes exclusively. It states that-

The technological developments have given rise to unprecedented economic and social changes, but they also have a dark side: the emergence of new types of crime as well as the commission of traditional crimes by means of new technologies.[6] Criminals are increasingly located in places other than where their acts produce their effects. However, domestic laws are generally confined to a specific territory. Thus, solutions to the problems posed must be addressed by international law, necessitating the adoption of adequate international legal instruments”.[7]

The Convention on Cybercrime adopts a holistic approach in dealing with both substantive and procedural aspects[8] of cybercrimes at the EU level. Section 1 of Chapter II covers both criminalization provisions and other connected provisions in the area of computer or computer-related crime by defining nine offences (illegal access, illegal interception, data interference, system interference, misuse of devices, computer-related forgery, computer-related fraud, offences related to child pornography and offences related to copyright and neighbouring rights) grouped into four different categories (offences against the confidentiality, integrity and availability of computer data and systems, computer-related offences, content-related offences and offences related to copyright and neighbouring rights)[9]. It further deals with ancillary liability and sanctions[10].

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Furthermore, the Convention also contains provisions for traditional as well as computer crime-related mutual assistance and extradition.[11] It also provides for transborder access to stored computer data without mutual assistance, either with consent or without consent, in the case of publicly available data. It also provides for the setting up of a 24/7 network to ensure speedy assistance among the Parties.

Lastly, at the Union level, to address the issue of cooperation at, the Union level, the European Network and Information Security Agency (ENISA) was established in 2004. ENISA was given the responsibility to develop expertise to enhance cooperation between public and private sectors and provide assistance to the Commission and Member States of the EU in their dialogue with industry for the purpose of addressing security-related problems in hardware and software products. It was also required to promote risk assessment activities as well as interoperable risk management routines.[12]

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[1] EUR-Lex, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32001F0413 (last visited May 3, 2021).

[2] These principles can now also be found in the Cybercrime Convention.

[3] Decision CDPC/103/211196.

[4] Salaheddin J. Juneidi, Council of Europe Convention on Cyber Crime, IPICS (2002).

[5] The Cybercrime Convention.

[6] Explanatory Report to the Cybercrime Convention, part I(5).

[7] Explanatory Report to the Cybercrime Convention, part I(6).

[8] Supra note 29, chapter II, § 2.

[9] Supra note 29, chapter II, § 1.

[10] Supra note 29, chapter II, §1, title 5.

[11] Supra note 29, art. 25.

[12] ENISA, https://www.enisa.europa.eu/ (last visited May 6, 2021).

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Rule Of Law in Globalising World

The concept of rule of law finds its origin in the rulings of Chief Justice Sir Edward Coke[1] wherein he emphasised the significance of the King being under the law. However, it was only later that A. V. Dicey in his book: Introduction to the study of the Law of the Constitution, 1885[2], tried developing the concept further. He identified three components of the rule of law[3]

  1. The supremacy of law
  2. Equality before law
  • Constitution as a result of ordinary law of the land (signifying the relevance of judge-made laws in England)

These components ensured that the rule of law acted as a constraint on the arbitrary exercise of power by the sovereign over its subjects. Therefore, his primary focus was on the way in which the law was made, applied, and enforced (process-focused approach), rather than the actual content of the law (end-focussed approach). This creates a lot of confusion with respect to the applicability of the rule of law. Modern democracies are founded on this principle, however, there are contrasting convictions about what ‘law’ is/should be.

Previously, the concept of rule of law was limited in its application to the sovereign territory of the state as the interactions were primarily intranational. However, over a period of time, with the advent of technology and the movement of people, goods and services across borders, such interaction became international, leading to cross-border disputes. Through the process of globalization, “political, economic, and technological changes have had globalizing ramifications that penetrate state borders in ways that transformed the core rule of law values in the international legal order and have created a shift away from the previously prevailing state-centric system.”[4]

With respect to the applicability of rule of law at the international level, globalisation has made the world one single market where individual and state entities interact with other individuals and entities on a daily basis. Therefore, such interaction cannot be left unchecked with respect to the foundation principle of the legal system i.e. the rule of law. Hence, there is a need to transpose the principle of rule of law, internationally, in light of the globalized world. The significance of rule of law at the international level in the era of globalisation has been pointed out a number of times[5].

However, this transposition is easier said than done. There are some inherent issues in applying the principle globally. Firstly, with respect to whether such a principle, which was originally developed to be applicable to the national legal system, can be applied to the international legal system, in the absence of a central sovereign authority. Secondly, if the answer to the first issue is affirmative, does such international application require a reconceptualization of the original concept of rule of law in order to adapt it to the legal issues arising at the international level. Thirdly, should the international rule of law be limited in its application with respect to the relationship of different sovereign nation-states, or should it also be applied to the relationship of different individuals who are subjects of such nation-states?

The first roadblock towards the applicability of the principle of rule of law in the globalised world today encompasses the fact that there is no common sovereign power in the international arena. There is United Nations, however, the international law establishing such an institution, is a soft law in itself. Besides, it is left to the discretion of the nation-states to decide whether they wish to be a part of the U.N. Since there is no common sovereign, it is often contented by scholars that the rule of law cannot meaningfully exist in the international arena.[6] This further entails the difficulty in ascertaining what constitutes “law” in the international context since there is no “one” sovereign, and no “one” law regulating the conduct of individual nation-states.

Secondly, the Dicean concept of rule of law highlights a very narrow and process-focused approach. Such a framework will not satisfy the end objective of rule of law at the international level, with respect to acting as a constraint against the gross violation of the fundamental human rights of the individuals by the sovereign states. Therefore, the rule of law, when transposed to the international level, should not only be process-oriented but also end-oriented.

However, the nation-states, in light of the growing interaction in the globalized world and the common aim to attain international peace and order, have taken the necessary steps to address these roadblocks in the applicability of the principle internationally[7]. Globalization has a significant contribution to the development of both domestic and international legal frameworks governing and regulating transnational transactions and activities. This has led to the development of international institutions tasked with the implementation of international law to secure peace, order and respect for basic human rights in the international community.

In today’s world, however, the significance of the rule of law stretches far beyond its application to traditional inter-state relations. The second aspect of the rule of law at the international level is the increasing attention of the international community on the impact of the international rule of law on individuals, with respect to the need to protect the inalienable human rights of the individuals. The international humanitarian law and human rights law has ensured that the basic human rights of the “individuals” are brought at the centre stage[8], and that every nation-state is obligated to protect them. These developments have placed legal constraints on the conduct of sovereign states in the international community and prescribed international standards which ensure that substantive aspects of justice are also catered to, at the global level.

However, this individual-focused approach to rule of law at the international level is being implemented at the domestic level, by making the domestic legal system in line with the international standards. In light of this, it is important to keep a check on the discretion provided to the national legal system regarding the substantive rules as rule of law cannot be considered effective in its true essence if the laws are unjust and oppressive.

 

[1] LTJ, http://lawtimesjournal.in/rule-of-law/ (last visited Feb. 1, 2021).

[2] A V DICEY, INTRODUCTION TO THE STUDY OF THE LAW OF THE CONSTITUTION (1885).

[3] Id.

[4] Ruti G. Teitel, Humanity’s Law: Rule of Law for the New Global Politics, 35 CORNELL INT’L L.J. 355, 357 (2002).

[5] The Rio +20 Conference on Sustainable Development Outcome Document, 2012; UN Millennium Development Goals etc.

[6] Charles Sampford, Reconceiving the Rule of Law for a Globalizing World, GLOBALISATION AND THE RULE OF LAW 9, 10 (2005).

[7] UDHR, ICCPR, ICESCR, Convention against Terrorism, Human Trafficking etc.

[8] United Nations Human Rights Committee, the International Criminal Tribunals (ICTY, ICTR), and the International Criminal Court (ICC) etc.

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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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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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Censorship and Media

– By Apoorva Mishra

Censorship the control of the information and ideas circulated within a society — has been a hallmark of dictatorships throughout history. In the 20th Century, censorship was achieved through the examination of books, plays, films, television and radio programs, news reports, and other forms of communication for the purpose of altering or suppressing ideas found to be objectionable or offensive. The rationales for censorship have varied, with some censors targeting material deemed to be indecent or obscene; heretical or blasphemous; or seditious or treasonous. Thus, ideas have been suppressed under the guise of protecting three basic social institutions: the family, the church, and the state.

Censorship is a global phenomenon. Time and again, there have emerged news of something getting banned somewhere in the world for reasons that seem unreasonable to many while a necessity to the rest. In India, specially, censorship exists in mass abundance. While each country and each culture censors the media in one way or the other, the amount of censorship or the cut-off level which defines what to show and what not, differs.

There are also different types of censorship. One of the most common criteria behind censorship is the age limits for viewing different media. Sometimes the censorship can be a blanket ban on a certain taboo topics and the definition of a taboo topic would be defined according to the governing authority in the country. So, while the levels of media censorship exist, people are still calling for absolute removal of all types of censorship. Then again, there are proponents who think that its use creates a balance in what ought to be said and written, which again, the opponents criticize on the basis of the threat it poses to the right of speech.

Advantages and Disadvantage of censorship

It is true that media is responsible for spreading information about current events all around the world, the need of the hour is balance of information given. Certain times violent speeches and derogatory comments given by people towards a particular race and religion. While the act in itself can be condemned, there is no need of repeated air-time given to the incident. This can only incite the masses against the said person or the organization he/she is associated with. Such media tactics are often used by political parties for selfish means while ignoring the greater good of the society. This can only bring unrest among the masses and disrupt the peace in the society. Some people may try to spread nonsensical propaganda through unsuspecting media. Censorship will prevent the public display of disrespect to any particular individual or community and promote political correctness.

However, Censoring of information may lead to a wrong image perceived by the public. It gives rise to and hides abuse of human rights. If the news coming from a war zone does not show the true nature of the damage inflicted, how can a person be aware of the real situation of the war? If to say that the real death toll and associated imagery should be censored, it will be equivalent to denying even the presence of war. Death is real and people affected in a war zone pay for it with their lives and we owe it to them to know their real stories. Don’t censor the media; rather tackle the issues leading to a situation that might need to be censored. Hiding the complete picture doesn’t erase its presence, merely gives a false perception.

Conclusion

Although the right to freedom of expression does not require an absolute ban on prior censorship, this should be a highly exceptional measure, taken only when a publication threatens grave harm, such as loss of life or serious harm to health, safety or the environment. An article deemed defamatory, blasphemous, obscene or overly critical of the government would rarely if ever meet this threshold. Moreover, a system whereby media content must be officially cleared before it can be released would be unacceptable; its harm to freedom of expression would plainly far outweigh the benefit to its goals. An absence of censorship might not be a perfect notion, as it can cause chaos. But it also doesn’t mean that the government uses it for its own personal gain by suppressing dissent. Ours is a democratic nation, yet has more censorship than most nations.

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