ISSUE XXIV : IP annual round up: 2012

Introduction

The last year saw several new developments in the sphere of IP. In an attempt to encapsulate the crucial developments, we bring to you this annual round up that attempt to capture the regulatory and jurisprudence advance of IP in the last year. This round up has been divided into two parts; (A) Regulatory Developments and (B) Summary of Important Cases.

A. Regulatory Developments

1. The Copyright (Amendment) Act, 2012 was officially notified and came into effect from 21 June, 2012. The corresponding draft Copyright Rules, 2012 was also released last year. This draft is helpful in understanding the full scope and effect of the amendments. The various aspects covered by the draft includes:

• provisions regarding the licenses for translations of work;
• compulsory licenses for publication, translation and reproduction of compulsory license over an unpublished Indian work;
• granting extension and terminating the compulsory license;
• compulsory license for disabled persons & rules for facilitating organizations;
• broadcasting licenses and cover version licenses along with the provisions related to royalties’ fixation therein;
• qualification requirements for appointment to the Copyright Board, Copyright Societies and Performers’ Society.

• The Department of Industrial Policy & Promotion has notified in the Gazette of India the revocation of the controversial Avesthagen patent under Section 66 of the Patents Act, 1970 because it was “generally prejudicial to the public.” Simultaneously, the Controller General of Patents announced the draft “Guidelines for processing of patent applications relating to traditional knowledge and biological material” and invited comments on the same. The new guidelines provide that the patent office examiners have to conduct an examination of patent applications using the Traditional Knowledge Digital Library. It is mandatory to disclose in Form 1 filings on the source of any biological material used in the invention. The patent applicants should get permission from the National Biological Authority or its counterparts in different states, in order to secure patents before the IPO.

• The Allahabad High Court has passed an order last year in November that all the websites operating in India must adopt the complaint redressal system under Rule 11 of the Information Technology (Intermediaries Guidelines) Rules, 2011 and the Ministry of Information Technology should impose the “complaint redressal mechanism” contemplated under these Rules. The websites in India failed to comply with an earlier order

passed by the same court in Amitab Thakur v. Union of India. Pursuant to this order, the Ministry of Communication and Information Technology had also issued direction to the Internet Service Providers Association of India to comply with the decision.

• A two-judge bench of the Supreme Court (“SC”) in September 2012 made serious remarks on the failure of the central government to finalize the drug policy which has been pending since 2003. Pursuant to this, the Group of Ministers held meetings to consider a retail pricing mechanism for essential drugs and they agreed that the prices of 348 drugs set out in the National List of Essential Medicines will be covered under the drug policy.

B. Summary of Important Cases

1. Samsung Electronics Ltd. v. Kapil Wadhwa:¹ Samsung Electronics alleged infringement of trade marks when Kapil Wadhwa who was an authorized dealer (licensee in India) in Samsung products imported printers manufactured by Samsung without its consent or knowledge and sold them at prices that were much lower than the prevalent market prices, thereby causing loss to Samsung. The Delhi High Court while referring to section 29(1) of the Trade Marks Act, 1994 (“Act”) held that parallel imports includes under its purview importation of both non-genuine and genuine goods; as importation of genuine goods amounted to use of an identical mark and identical goods, resulting in infringement of trade marks. The reasoning was further strengthened by interpreting the legislative intent behind section 29(6) to be contrary to the free movement of goods. The court held that the word “market” mentioned under section 30(3) meant “national market” only. Interpretation of the term market as national markets only has closed the lid on commercial importations by dealers who function without the authorization of the trade mark owner. The judgment has cleared the air on the meaning of parallel imports, which till now were understood to mean importation of non genuine goods only.

1. Prakash Jha Productions v. Bata India Limited:² The Prakash Jha Productions was accused for the unauthorized use of the trade mark of Bata in a song for his feature film that brought a bad name to the good will of Bata. The SC by its order asked the appellant to run a disclaimer for that part of the song, both in audio and video, where the name of the respondent features. The disclaimer is in the following words: “Use of names in the song is merely an example. No injury or disrespect is intended to any particular person or brand.” The SC by its order disposed the case in record time keeping in view the money involved in the feature film of the production house. However, the grey area, whether trade mark infringement was based only on unauthorized use or on disrepute brought in through unauthorized use, was not looked into by the court.

1. Consim India Pvt. Limited v. Google India Pvt. Limited:³ Consim alleged infringement of trade mark “Bharat Matrimony” thereby tarnishing and diluting the distinctive character of the trade mark registered in its name. The cause of action arose when

on typing the keywords of the trade mark name on the search option provided on the website of Google, trade marks/trade names of the competitors also appeared in the “ad words” column. The SC based its rationale on the case of Interflora v. Marks & Spencer⁴ and held that every owner of a trade mark is entitled to prevent its competitor from advertising, if the latter uses a term identical or similar to the trade mark in an internet referencing service, without the consent of the trade mark owner. Such an action by the competitor results in dilution of the distinctive character of the trade mark and may also result in tarnish. The SC through this decision has brought infringement of trade mark on the internet within the purview of the Act. However, it should be noted that in absence of any international order under the Act, analogous to International Copyright Order under the Indian Copyright Act, 1957 (“Copyright Act”), the protection is only limited to entities incorporated or based in India. For e.g.: if a competitor although providing similar/same services in a different country, selects without authorization a term similar/same to that of the owner of the trade mark on the internet resulting in same consequences as mentioned in the facts, the trade mark owner will have no protection under the Act.

1. Three-N-Products Pvt. Ltd. v. Alex Resorts and Hotels Pvt. Ltd:⁵ The case deals with an appeal filed before the Intellectual Property Appellate Board (“IPAB”) against the grant of trade mark “Ayurtheeram,” for carrying out the services of Ayurveda Hotels and Resorts, subject to confining the services in the states of Kerala and Karnataka. The appellant claimed that granting such a trade mark would result in the dilution of the distinctive character of its registered trade mark “Ayur.” IPAB being guided by the decision of the Calcutta High Court⁶ held that “Ayur” denotes “Ayurveda,” the former being a generic word on which no one could claim an exclusive right. It further held that the registered mark of the respondents “Ayurtheeram” owing to its use had attained a distinctive character and could not be confused with “Ayur”. This decision has yet again drawn the line between generic marks and invented marks, thereby reminding trade mark owners to employ a mark for their business after ensuring that the same is not a generic term. In case of choosing a generic mark, not only the mark will not get registered, but owing to its inherent generic character a case of passing off shall also not be maintainable in any court of law.

• Eastern Book Company (“EBC”) v. Reed Elsevier India Pvt Ltd:⁷ EBC filed a copyright infringement suit against Reed before the district court, Lucknow alleging that the editorial notes of Reed’s legal research website & products LexisNexis India, Butterworths, Lexis India, etc. are identical to the editorial notes published by EBC’s SC Cases (“SCC”) journals. EBC’s copyright over its SCC journals had already been acknowledged by the SC in the case law Eastern Book Company v. D.B Madak, 2008 1 SCC. In view of the same, the court passed an ex-parte injunction restraining Reed from infringing EBC’s copyright in SCC and from selling, distributing or publishing the allegedly copyright violating texts in any other form online or offline, while the suit for infringement was pending. Copyright does not subsist for reproducing the identical raw text of court judgments/decisions. However, if the author has exercised a considerable amount of skill and labor to the published judgment, then the copyright subsists for those works. In the aforementioned case, the EBC had prepared the head notes and added various inputs to the judgments published in SCC which is different from the raw judgment received from court registry which requires exercise of skill and labor, therefore the copyright subsists in favor of EBC.

• Super Cassettes Industries Ltd. v. Music Broadcast Pvt. Ltd.:⁸ Super Cassettes filed an appeal before the SC against the order of the Delhi High Court wherein it was held that Copyright Board has power to grant interim compulsory licenses under section 31 of Copyright Act. The SC overturned the High Court order and held in favor of Super Cassettes by categorically stating that the Copyright Board does not have the right to grant any interim relief as there is no express provision in the Copyright Act bestowing such power to Copyright Board. In view of the same, the SC held that the Copyright Board shall not be permitted to grant any interim relief unless there is any express provision provided to the contrary in the Copyright Act. Though the SC has curtailed the powers of Copyright Board by prohibiting from issuing any interim relief, the recent Copyright Amendment Bill, 2012 has introduced section 33A wherein the Copyright Board has been given authority to fix interim tariff in any dispute over the tariff scheme notified by Copyright society. However, the said amendment is restricted to tariff disputes determined by Copyright Society and will not have any effect over any other tariff disputes between the companies or individuals.

• Delhi University – Photocopying Case: Cambridge and Oxford University press along with Francis and Taylor have filed a copyright infringement suit against the M/s Rameshwari Photocopy Shop and Delhi University alleging that they have photocopied several books to prepare the course materials for Delhi University students violating their copyrights. Delhi High Court issued an order in favor of the Copyright owners, restraining Delhi University from making or selling course packs till the final disposal of the said application. A bare reading of the legislation under section 52 (1) (i) of the Copyright Act clearly exempts the reproduction of any work for the purpose of personal use or research from the purview of copyright infringement.

Compiled by:

Neeraj Dubey
Krishnakanth Balasubramani
Onkar
Jaya Moorjani

1 C.S. (OS). No.1155/2011(Del)

2 SLP 32998/2012

3 SLP 30064-30065/2012

4 Case C-323/09(European Court of Justice)

5 M.P. No. 32/2010 in OA/15/2010/TM/CH and OA/15/2010/TM/CH

6 Three-N-Products Pvt. Ltd. v. Emami Ltd., 2007 (34) 515 (Cal)

7 RS No 134/ 2012- In the Court of District Judge, Lucknow

8  AIR 2012 SC 2144, MANU/SC/0408/2012