Saturday, July 30, 2011

Patent Hypocrisy: Are We Turning Civil Suits into Criminal Trials?

Sometimes I wonder if it is worth applying for a patent in India. I mean, of what use is a right when you can’t enforce it even when you are supported by the letter of the law? 

Why should anyone apply for a patent in India, when at the end of the day, it is rendered a worthless piece of bauble? Because enforcing it seems to weigh on our conscience thanks to some misplaced sense of righteousness.

Do innovators or creators of wealth or right holders always deserve to be approached with circumspection? If yes, why do we seem to have one approach for the sanctity of copyrights of music composers and lyricists (whose claims sometimes are not even grounded in law), and an entirely different yardstick for the rights of patentees (even when the letter of the law does not advocate perpetual suspicion of patentees)?

I am not denying the absence of presumptive validity nor am I denying that no patent grant can ever be fool-proof. But let’s also realize that if there is a mechanism for grant of rights, it exists under the premise that someone deserves an incentive for his or her efforts. Shouldn’t we acknowledge this when we discuss the dialectics of patent litigation?

The point that I think I am trying to make, is that slowly we are veering towards a trend where undue burden is placed on the patentee, without taking into account the dynamics of the technology industry. Patent litigation, if it remains oblivious to the rate of obsolescence of a certain technology, is not being true to the very intent behind its inception.  

The most critical and fatal real-time consequence of this unhealthy trend is lowering the standard of proof or burden that a defendant is expected to discharge before the Court, combined with an unrealistic and super-herculean burden on the patentee. 

I don’t see how this is different from a criminal trial where the prosecution is expected to prove its case beyond all reasonable doubt, and the accused can afford to stay mum and be acquitted if the prosecution fails to match up to the standard. The patentee is always in the dock despite being the plaintiff and all that the defendant has to do is satisfy the measly burden cast on him in the name of "credible challenge". 

"Credible challenge to the validity of a patent” cannot be morphed into a backdoor solution to deny remedy to a patentee. Even in the absence of presumptive validity, the defendant ought to address the Court on merits, instead of mouthing inanities such as “recentness” or “absence of presumptive validity”, which have now become standard prejudice points and are firmly entrenching themselves in the judicial vein with each passing day.

This unsavoury trend along with the absence of patent courts which are adequately equipped to appreciate the peculiar needs of patent law, and the business of innovation, practically make for decent arguments against applying for a patent in India. 

The system of patents was brought in as an alternative to hoarding knowledge as trade secrets; but if enforceability issues cripple right holders, why should not innovators want to go back to trade secrets as a way of protecting their legitimate interests?

My apologies if this sounds like a rant, but I think someone has to play the Dirty Harry and ask a few politically incorrect questions, and throw hypocritical populism into the wheelie bin. 

Thursday, July 28, 2011

Of Music and Lyrics- Mumbai HC sounds the drum!!!

The much awaited judgment from Mumbai High Court has finally been pronounced-awaited not so much because the issue has national prominence, but more so, because the subject matter concerns one of India’s most widely shared passions...running a close second to Cricket- Film Music!!!

A few months back, many may recall, noted members of the film fraternity came out with their views on their right to royalties, vis-à-vis broadcast of sound recordings consisting of their underlying works, namely lyrics and music. The Mumbai High court has put the matter to some rest, in the Judgment pronounced in Music Broadcast Pvt. Ltd. V. Indian Performing Rights Society (IPRS), on Monday July 25, 2011.

To give a brief overview of the case, the issue centered around whether IPRS was entitled, and Music Broadcast Pvt. Ltd., in turn, obligated to pay royalties to the members of the IPRS, for broadcast of recordings containing their (IPRS members’) underlying works. 

For the uninitiated, Music Broadcast Pvt. Ltd. carries on the business of establishing, operating and maintaining FM Radio broadcasting stations in various cities of India. IPRS, on the other hand, is a non-profit organization, registered as a Copyright Society under Section 33 of the Copyright Act, 1957. 

The Society undertakes to issue Licenses to users of music and collect Royalties from them, for and on behalf of its Members i.e. the Authors, the Composers and the Publishers of Music, and distribute this Royalty amongst them after deducting its administrative costs.

The Court while deciding this case, in my humble opinion, has given Copyright a very holistic approach. While the Court looked at Copyright as how it (again IMHO) must be envisioned, i.e. as a bundle of rights, it made multifarious references to noted international authors, and also commented on the non-applicability of several precedents to the case at hand. 

 In resolving the issue, the Court also pointed out that the Phonographic Performances Ltd., another Copyright Society established under S. 33 of the Copyright Act, is the only body entitled to collect royalties for the broadcast of sound recordings.

To me, the most impactful statement(s) putting the whole controversy to rest were in Para 59, on Pages 72 and 73. The extract I refer to reads:

“Thus, once the author of a lyric or a musical work parts with a portion of his copyright by authorising the producer of a sound recording to make a sound recording in respect of his work and thereby to have his work incorporated or recorded in a sound recording, the producer of the sound recording acquires by virtue of section 14(1)(e) of the Act, a copyright which gives him the exclusive right stipulated in section 14(1)(e) which includes the right to communicate the sound recording to the public. A distinct copyright comes to vest in the sound recording as a whole.”

From the start of the issue, I was of a similar opinion as echoed in the extract - I interpret the judgment to treat copyright as a bundle of rights that may be separated into various strands. Further, as the Court also notes, the manner in which Section 14 of the Copyright Act outlines the various constituents while explaining the “meaning of copyright”, the provision clearly distinguishes rights in a literary work from a musical work, and the two from rights in a sound recording.

Although the judgment does not state, yet to me, it appears that apart from seperability of the various types of works and the rights that constitute the copyright bundle for each of these, the Court somewhere at the back of its mind also had the economic rationale in mind. 

What I intend to state, and as I see (and probably would also advocate), is that while a sound recording is made, one part of their right, has been exhausted - i.e. the right to adapt or make a derivative sound recording of their work.

Having said so, of course, these exceptionally talented people are also sufficiently remunerated at the time they contract for their work to be used in a sound recording. Granted that this may not be a typical work for hire, yet if they desire to be compensated for the future use and benefits accruing from something that involves (or is based on) an underlying work on which they hold a copyright, the same should be a matter for contractual negotiation and not of royalty collection from a copyright society, with whom they do not have the capacity to deal. 

The reason I term them incapacitated to do so, is not their stature, or, standing, but simply because as mere authors of a literary or musical work, they are not holders of copyright in the sound recording.

As I shall read the 108 page decision another time, I am almost certain that many more points, views and contradictions shall come to mind. In the meanwhile, I hope that our readers shall have a lot more to say, rebut and in Sai’s words- refute! Until then… Let the Music Play!!!

Thursday, July 21, 2011

Some reflections- of Harry Potter, Infringement and Fair Use..

Sai’s Harry Potter post and his cursory reference to derivative works, albeit in a different context, brought to my mind instantly Warner Bros. Entertainment Inc v. RDR Books, or the Harry Potter Lexicon case, as we commonly refer to at Law School.

The case, dwelling on derivative works, infringement and the defense of fair use, looks at whether creation of a lexicon for the multifarious terms for the Harry Potter series, amounts to infringement of the right to make derivative works. While the court ruled in favour of J.K. Rowling, it also undertook an extensive fair use analysis.

Talking of derivative works reminds me of a movie called Hari Puttar, that came to the Indian cinemas about two plus years back. Warner Brothers being vigilant watchers of their intellectual property, moved for an injunction. However, they failed before the Indian courts to secure an interim injunction. Warner Bros. Entertainment Inc. v. Harinder Kohli and Ors. (Could someone please throw light on the fate of the proceedings??? I lost track soon after!)

The two right owners, in two different jurisdictions, chose to enforce their rights albeit with different strategies. While the Lexicon case had a pure copyright approach, the Hari Puttar case seemed to take the route of trademark rights being infringed.

As I was thinking about these cases in tandem, to me it seemed like Warner Bros. may have taken up such different arguments on purpose.

Undoubtedly in a copyright infringement case, fair use, a judicially developed doctrine in the US would be argued- and was very vehemently argued in the Lexicon case. The doctrine as many of you would be familiar, involves consideration of:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and
(4) the effect of the use upon the potential market for or value of the copyrighted work.

India, on the other hand, has a statutorily defined framework for “Certain acts not amounting to infringement”, which we consider to be our fair use related provisions. In this view, is it possible that the fact that statutory exclusions are more susceptible to be strictly enforced, have dettered Warner Bros. from instituting a Copyright action in India? Perhaps… and also may be perhaps they wanted to allege only similarity in the titles and not the content of the subject matter itself. In this scenario, a trademark action seems to have better suited their case.

However, the question that ticks in my mind is, will something like S. 52 in the Copyright Act, 1957 always be more strictly interpreted? The answer probably is kind of obvious, however, when I think of this in greater depth, I am reminded of what J. Bhatt has to say in Chancellor Masters and Scholars of the Univ. of Oxford v. Narendra Publishing House and Ors , at Para 33:

Fair use provisions, then must be interpreted so as to strike a balance between the exclusive rights granted to the copyright holder, and the often competing interest of enriching the public domain. Section 52 therefore cannot be interpreted to stifle creativity, and the same time must discourage blatant plagiarism. It, therefore, must receive a liberal construction in harmony with the objectives of copyright law. Section 52 of the Act only details the broad heads, use under which would not amount to infringement. Resort, must, therefore be made to the principles enunciated by the courts to identify fair use."

This to me seems to tilt the coin against towards giving fair use a broader, rather judicially crafted interpretation, as against a pure application of statutory provisions. And to me, it appears rightly so - pertinently with the advent of technology, social media as well as the varied forms of derivative works coming of age.

I welcome the take from our readers on this line of fuzzy thought!!

Wednesday, July 20, 2011

Commercial Disparagement: Harbhajan Singh v. United Breweries

Thanks to an advertisement that’s got the entire country talking, Mahendra Singh Dhoni, the captain of the World Cup-winning Indian team finds himself at the centre of a potential commercial disparagement controversy. The advert is for McDowell Platinum No.1 Soda, a product from the Vijay Mallya-owned United Breweries.

Here’s the link to the original Seagram’s advertisement. Here’s the link to the controversial advertisement which pokes fun at Seagram’s Royal Stag’s caption “Have I made it Large?”. The ad also seems to have drawn flak for making fun of a particular community and for mocking Indian cricket team’s bowling powerhouse Harbhajan Singh.

Harbhajan Singh’s mother has apparently sent a legal notice to Vijay Mallya. The notice demands a public apology from the UB group for hurting the sentiments of the community and for making fun of Harbhajan Singh’s father, who apparently is no more.

On the issue of commercial disparagement, I have written earlier on the Rin v. Tide controversy elsewhere. In this case, I think there are quite a few other issues involved which could obscure commercial disparagement. For instance, the fact that this fracas pits two Indian sporting superstars against each other could hog more print and mind space than the very products they endorse.

Also, the fact that the ad could be construed as hurting the sentiments of a community could give the issue an altogether different twist, which is possibly inflammatory. For all his vaunted reputation of being the iceman, I really don’t know what was going in Mahendra Singh Dhoni’s head when he decided to go ahead with this ad.

Dhoni is known for being an extremely humble and grounded leader who leads by example and insists on team unity. He is the last person one would have expected this ad from. Let’s see where this controversy heads. We’ll keep our readers posted on the issue.

Monday, July 18, 2011

Making Movies Out of Books: Lessons for Technology Litigation

This weekend, I watched the final movie in the Harry Potter franchise, and what a treat that was! The movie buff in me was thoroughly satisfied because the movie was a fitting finale to a decade-long glorious cinematic saga. 

One of my take-aways from the last 4 movies under the stewardship of David Yates is that he has largely managed to satisfy the monumental expectations of ardent, and at times, fanatical lovers of the Harry Potter books. 

No wonder Deathly Hallows 2 has already raked in USD 168.6 million over the weekend trumping the weekend earnings of the Dark Knight.

This, for me, is a major achievement because it involves making a clear screenplay out of the book, which captures on screen almost every identifiable aspect of the characters, and the chain of events set out in each instalment of the novel. 

All this needs to be done within a span of 150-160 minutes at best. Making a 2-hour movie out of an eight-hundred page “page turner” is no mean task because this means every page has something important and relevant.

The thought that crossed my mind as I watched the movie was “how different is the business of making a movie out of a voluminous book from technology litigation, specifically patent litigation?”

In patent litigation too, litigators are typically faced with the unenviable task of explaining the novelty and non-obviousness of an invention to a largely technologically-untrained audience in a limited time. Glossing over the nuances of the invention would mean opening oneself to obviousness challenges in the Courtroom, and delving deep into the invention, if at all you have the time, means lulling the audience into a deep slumber! A textbook Catch 22 situation I say!

But then, nothing is impossible and there is a job that needs to be done. So how does one draw lessons from David Yates’ commendable handling of the last four movies? I think the first and foremost thing that Yates must have done is spend several hours trying to understand the characters and their arcs as the story moves from one book to another. In patent litigation, I think this translates to thoroughly understanding the prior art, and the evolution of the technology.

Yates must have spent considerable time talking to Rowling. This means the patent litigator too must spend a lot of time with the inventor.

The next thing that Yates must have done is to identify the most important and integral aspects of each book- basically editing the book to make a legible coherent screenplay out of it. For the patent litigator, this means identifying the inventive step of the invention and culling out those portions of the specification which add meaning to the inventive step as claimed in the claims.

Then Yates must have mulled over presenting the characters and portraying the events in a manner which the audience can relate to in some way or the other. For the patent litigator, this means thinking of simpler examples and illustrations which aid him as he explains the invention to the Court without flooding the arguments with a lot of technical jargon.

Despite the increasing dose of darkness in the books, Yates peppers the screenplay with enough humour to break the tension as the movie moves on the screen. The litigator too must use polite humour, if necessary self-deprecatory humour, wherever possible to avoid giving the impression that he understands the technology much better than anyone in the Courtroom. Self-effacing humour is always seen as a sign of humility (at least outward humility...).

Once the invention has been explained, the antagonist in the story, namely, the defendant, must be introduced. It is important to explain the defendant’s position and motives before establishing infringement because, for the audience to understand the seriousness of the antagonist’s calculated assault, it needs to know the reasons for and benefits from the assault.

Also, if there is a history of treading on people’s rights, that needs to be brought to the Court’s attention. Never under estimate the power of prejudice because we all know how well it works to the detriment of right owners frequently...

Once the antagonist/defendant’s motives have been explained and the stage is set for the deed, the doing of the deed must be explained in vivid detail. This is not for titillation, but to give the audience a peek into the antagonist’s warped thought process and his inner workings. The clearer the explanation of the deed and its motivations, the better is the chance of securing a higher damages figure (of course, this applies only to those jurisdictions where there is a damages culture; India isn’t one of them today).

The climax is what lingers in the audience’s mind once it leaves the hall; the climax is what the audience mulls and sleeps over. The climax is the cinematic “last word” (the “last laugh” of course is the judgment). And in litigation terms, it translates to the rebuttal to the defendant’s counter arguments. The rebuttals must be crisper and pithier than the original submissions, and for this the original submissions themselves must have laid a good foundation to build on.

Basically, the patent litigator must think of himself as someone who is making a movie out of a voluminous book where every page has its relevance. He must know every page of the book like the back of his hand, and must also know the pulse of his audience.

If he is fortunate enough to get a patient hearing from his audience, that’s half the battle won. But in the event the audience isn’t a willing one, he will need all his story-telling skills by his side to engage the audience’s attention throughout the movie. This calls for extensive preparation, and absolute anathema for an invincibility complex.

Anyways, I’ll zip it here because one of the cardinal rules of story-telling is to know when the audience is losing interest.

Sunday, July 17, 2011

Jurisdictional Hues of Comparative Advertising

Watching television and comparing styles, rip offs and advertisements in particular can be pretty amusing. To add, a fantastic Trademark teacher helps build bridges, and rationalize many a time the whys and whats of multifarious issues that involve cultural, legal and market related aspects.

For anyone who has seen a fair amount of US and Indian advertisements, would first realize, how blatantly brands practice comparative advertising in the US. How clearly they name competitors, talk about how they are better and also have such clear disclaimers regarding side effects, possible allergies, side effects and other aspects to “beware” of.

The rule of Buyer BEWARE which governs US Consumer Protection laws extrapolates fairly well to the ambit of comparative advertising as well.

One of the reasons that Comparative advertising in the US is openly comparative, is that the Lanham act sufficiently provides for such a scope. While blatant claims can be made, companies are expected to make only true and scientifically proven claims- lest they be charged of False and Misleading advertising, under the Lanham Act. In addition, while Puffing is acceptable, it is Literal Falsehood that is disallowed!

To add, the reason that the US is very forthcoming in its Comparative advertising practices is that the Federal Trade Commission (FTC) monitors advertising and requires companies to maintain on file, proof for the claims they make. The other pertinent bit to note is that rights to a Trademark are governed by Use in Commerce, which also in certain cases preempts federally registered marks to trump over common law marks.

The EU on the other hand seems to condemn comparative advertisement in toto. If one were to look at similar claims made both in EU and US in case of a certain perfume related advertisement (Chanel I think) the outcome in the two jurisdictions were completely opposite. The EU disallowed such a claim, while the US Courts allowed a claim stating that since the claim was only one of likeness and not a claim to being exactly the same was sufficient to escape liability under §43(a)(1)(B) of the Lanham Act governing False and Misleading advertising.

India seems to have an interesting positioning on the subject - towing a very fine line between the European and US practices- Use of superlatives being allowed, similar trade dress being allowed, but disallowance of the flagarant use of competition’s identity or reference to his claims may be made- the stronger, sharper, faster Horlicks campaign related cases affirming this stance in Indian Jurisprudence.

How I see some semblance and parity in the practices is by looking at the jurisprudential rationale governing the various schemes. While all three jurisdictions attach a sufficiently strong Property notion to trademarks in general, their perspective on treatment varies when it comes to comparative advertisements.

The US seems to look at comparative ads from a consumer friendly perspective. The Use in Commerce requirement governing TM practices along with the above cited provisions makes it evident. This is also perhaps why Art 1 Section 8, Clause 8 does not have a place for Trademarks. Even when it comes to Bankruptcy law and treatment of Trademarks and related assets therein- the treatment appears different, owing to consumer interests coming into play.

The EU on the other hand, as I see, seems to have great respect for IP as a pure property, thanks to its constant propagation of the Lockean Labour and Hegelean Personality Justification theory. In my eyes while both of these overlap in their law, it seems that the EU in the multitude of IP regimes comes about enforcing this theory very forcefully.

The Indian law on the other hand in towing a fine line between the two regimes - to me appears to be finding a balancing of interests in an attempt to not adopt an extremist approach. If I were to opine as to what is the correct approach, I am of the each one to itself stand… since each of the jurisdictional practices, at least prima facie, seem to be in tandem with a rationale that each of these countries have adopted.

The take away from this is that as many an amateur would consider “intellectual property” as international property, the same is in fact not. Even the marketing folks working on global ad campaigns will sooner or later need to understand the nuances of trademark law in everything they do. And as lawyers, while we will play Priest, Counsel and Teacher, the roles must be played with utmost caution and consideration to the subject matter and jurisdiction dealt with.

While I appear to be going round and round in circles, I warn our readers that this is what I shall often do, dwelling on aspects which often may appear to be unrelated or even inconsequential to the issues in practice, but continue to intrigue or at times even simply amuse me!!! I welcome the brick bats along the way…

Guest Post: Legitimate Rights of a Copyright (and trade mark) Owner

We bring to you a pithy guest post on Section 62 of the Copyright Act from Sneha Jain, an associate from a leading NCR-based law firm. In this post, it is submitted that Section 62 allows even a non-copyright owner to institute a proceeding for infringement under the Act so long he has an actionable interest. Without further ado, below is Sneha’s take on the issue.

Legitimate Rights of a Copyright (and trade mark) Owner
Why is an IP owner’s cause always a politically incorrect one? Why is any interpretation of the law which protects the legitimate interest of IP owners projected in poor light? Is it probably because we are yet to come out of our socialist mind-set or is it because we think making money is an evil thing?

One of our primary duties as people who encourage public discourse in a niche area such as IP law is to present  honest views, regardless of their political correctness so long as they are supported by legislative intent as reflected in the statute.

My statements above may appear harsh to many but the reason for my harshness is the unending and legislatively unsubstantiated debate on the interpretation of Sec. 62 of the Copyright Act, 1957 (and the identical Sec. 134 of the Trade Marks Act, 1999).

Until now, the raging issue regarding Section 62 was whether the place where the plaintiff “carries on business” should also be the place where the “cause of action” has arisen in order for him to successfully claim jurisdiction under this section. In other words, whether the element of cause of action under the Code of Civil Procedure, 1908 (CPC) should be read into S.62 to avoid it being “misused” by “Money Powers” allegedly resulting in forum shopping?

Thankfully, this controversy has been put to rest by the Supreme Court’s decision in Exphar SA & Anr. v. Eupharma Lab. Ltd. & Anr (2004) where the court categorically held that “S.62 prescribes an additional ground for attracting the jurisdiction of a court over and above the ‘normal’ grounds as laid down in S.20 of the CPC.” 

While the Delhi High Court (Archie Comic Publications Inc. v. Purple Creation) continues to interpret this section without considering the Apex Court's ruling, the Madras High Court (Wipro Ltd. & Anr. v. Oushadha Chandrika Ayurvedic) has put to rest the issue following the Supreme Court’s unequivocal pronouncement of the law of the land.

But now, a new and totally unnecessary controversy seems to have riddled this section – who can institute a suit for copyright infringement under Sec. 62? Some believe that since it is the owner of copyright (which includes the exclusive licensee) who is entitled to remedies as per Sec.55 of the Copyright Act, it is the owner of copyright/exclusive licensee alone who is entitled to institute a suit under Sec. 62. 

According to this school of thought, since the owner of copyright is a foreign entity which has no Indian base, it has no place to “carry on business”, and therefore cannot invoke Section 62.  

Sec. 62 has been held to be a self-contained code so far as the jurisdiction in relation to matters arising under the Copyright Act is concerned (Ritiki Limited v. Pramod Kumar). Consequently, the question of who can claim the benefit of Sec. 62 can be answered by reference to the provision itself. For ease of reference:

62. Jurisdiction of court over matters arising under this Chapter.

(1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction. 

(2) For the purpose of sub-section (1), a "district court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.

A clear, open-eyed, sensible reading of Sec. 62 tells us that it does not refer to the owner of copyright AT ALL! The phrase used is “the person instituting the suit” as opposed to “the owner of copyright”. This implies that Sec. 62 does not restrict the right to institute legal proceedings for copyright infringement to the owner of copyright alone. The “person instituting the suit” may be an agent so authorised by the owner of copyright to institute infringement proceedings.

This interpretation finds support in the case of Phonographic Performance Limited v. Lizard Lounge & Ors.(Delhi HC, 2008) where the rights of a Copyright Society to institute a suit in its own name, for infringement of copyright of its members, was questioned before the Division Bench of the Delhi High Court. 

The Single Judge had concluded that the provisions of Sec. 55 of the Copyright Act confers the right for seeking a remedy against infringement only by the owner of copyright, the expression “owner of copyright” having been defined in Section 54 to include an exclusive licensee. Thus, since a Copyright Society is not an exclusive licensee, it was held not to have a right to institute legal proceedings.

Reversing this decision, the Division Bench stated –

if we were to accept the reasoning of the learned single Judge, it would imply that the principles of agency as contained under the Indian Contract Act, 1872 have to be given a go-bye. The Copyright Society is an agent appointed under the agreement by the owner of the Copyright and specific powers have been conferred on the agent to institute legal proceedings. The said Act does not contain any provision prohibiting the institution of legal proceedings in derogation to the general law of agency. The author being the first owner of Copyright under Section 17 of the said Act can certainly appoint an agent to institute legal proceedings.

Moreover, S.62 gives absolutely no importance to the geographical location of the owner of copyright while determining jurisdiction.  For the purposes of jurisdiction under Sec. 62, it is the geographical location of “the person instituting the suit or other proceeding” which matters. 

Consequently, even if the owner of copyright is a foreign entity and has no base in India, its geographical location is irrelevant and it is the Indian subsidiary’s place of business (i.e. the place of business of the person instituting the suit) that is essential to determine jurisdiction. 

The Supreme Court in Exphar has clarified this in beautifully articulated words as follows:

The appellant No. 2 (who had a manufacturing contract with appellant No. 1, the owner of copyright) is certainly ‘a person instituting the suit’. The Division Bench went beyond the express words of the statute and negatived the jurisdiction of the Court because it found that the appellant No. 2 had not claimed ownership of the copyright of the trade mark, infringement of which was claimed in the suit. The appellant No. 2 may not be entitled to the relief claimed in the suit but that is no reason for holding that it was not a person who had instituted the suit within the meaning of Section 62(2) of the Act.” (emphasis added)

Thus, it is clear that the Supreme Court has laid to rest, both the controversies surrounding Sec. 62 – (a) Sec. 62 Copyright Act cannot be circumscribed by reference to Sec. 20 CPC, and (b) jurisdiction is to be determined not by reference to the place of business of the owner of copyright, but by reference to the place of business of the “person instituting the suit”.

I thank Sai Deepak for sharing his views on the issue with me.

Saturday, July 16, 2011

New Contributor to the Blog: Divya “Divs” Subramanian

I take immense pleasure in announcing the addition of another contributor to the blog, Divya Subramanian (readers might remember her from her guest post on the blog). 

“Divs”, as she is popularly known, is a product of Campus Law Centre, New Delhi, with 2 years of functional experience behind her with a prominent New Delhi-based IP law firm.

She recently graduated with an LLM from the Franklin Pierce Centre for IP, Concord (University of New Hampshire School of Law). Her primary areas of interest are comparative copyright law and trademark law, having written extensively on these subjects.

I welcome Divs to the blog, and I know her intuitive understanding of the law and reasoned articulation of its dialectics will make the discussions on the blog livelier and much more rounded!

Friday, July 8, 2011

India’s Communication on IPR in the Uruguay Round of GATT

If I had to identify one provision of the law which has been a constant fixation with me, and on which I have written and discussed a lot, it would have to be Section 107A(b) of the Patents act, 1970. In all I must have written over 9 posts on this blog and elsewhere.

The provision reads thus:

107A. Certain acts not to be considered as infringement- For the purposes of this Act-
(b) importation of patented products by any person from a person who is duly authorized under the law to produce and sell or distribute the product,
Shall not be considered as an infringement of patent rights.

It would be extremely repetitive to reiterate all that I have said in those 9-and-odd posts on the interpretation of this provision, but it is important that I briefly state the line of interpretation I have been inclined to take in those posts. In a line, my take on the provision is that contrary to popular assumed conclusion, Section 107A(b) does not seem to talking about, leave alone endorse, international exhaustion remotely.

Section 107A(b) requires due authorization, not for importation, but to produce and sell or distribute the patented product.

In other words, so long as the patented product is imported from a person who’s been “duly authorized under the law” to produce and sell or distribute, importation from such a person would not amount to infringement of the patent. Since the provision uses “duly authorized under the law”, I took the view that the provision probably does not refer to authorization under foreign law to produce and sell or distribute the product, because that would eviscerate the patentee’s rights under the Indian Act; the authorization to produce and sell or distribute must be under Indian law.

Stated otherwise, lawful production of the product outside India does not necessarily legitimize its import into India. Also, “duly authorized under the law” must be taken to mean specific authorization, as opposed to implied consent by way of international exhaustion. Not just that, the provision may not even be referring to international exhaustion because nowhere does it allude to first sale or exhaustion of rights post the first sale.

In the course of a research for another related issue a few days ago, a friend passed on a document to me to examine the document’s take on patents. The document happened to be India’s communication dated July 10, 1989 on standards and principles concerning the availability, scope and use of trade-related intellectual property rights. (Please search for MTN.GNG/NG11/W/37 at this link)

This communication was sent by the Indian Government during the Uruguay round of Multi-trade negotiations within the framework of GATT. Paras 5-29 of this letter spell out the Indian Government’s position with respect to patents.

Paragraph 28 of the communication caught my attention because it seemed to literally restate Section 107A(b). In the process, it makes the intention of the legislature so very clear that it leaves very little doubt about the actual purpose of exemption of infringement under Section 107A(b).

I reproduce Paragraph 28 for ease of reference:

28. As explained earlier, the patent system of developing countries should strike a rational and reasonable balance between the private monopoly interests of the patent owner and the larger public interest of the society. Therefore, where the public interest, and in particular, national security, food production, poverty alleviation, nutrition, health care or the development of other vital sectors of the national economy so requires it, the host country government or any third person designated by it should be free to work and use the patented invention in the country, including the importation of the patented product if necessary, without the consent of the patent owner on such terms and conditions as the host country government may decide.

Please note the underlined portion. It says that the government or any third person designated should be free to work and use the patented invention. Not just that, critically it permits importation of the patented product if necessary, without the consent of the patent owner on such terms and conditions as the government may decide

This supports the line of interpretation that I had explored, namely “duly authorized under the law” in Section 107A(b) means specific authorization from the government. Simply put, in the absence of any specific "designation or authorization under the law", parallel import of the patented invention would amount to infringement of the patent.

Could this paragraph be referring to compulsory licensing provisions? NO. Why? Because Paragraphs 11-13 of the communication clearly refer to compulsory licensing scheme, so there is no way it can be said that Para 28 refers to compulsory licensing provisions under the Act.

Could this paragraph be referring to the Government’s acquisition of patents under Section 102 of the Act? Again NO. Why? Because Paragraph 28 refers to use and import of the patented provision, but not to the acquisition of the patent from the patentee.

Also, in this communication, the Indian Government clearly states that with respect to trademarks, it follows international exhaustion, but it never says so in relation to patents. After all, this being an important issue, the position would have been clarified and not left to imagination.

Therefore, although I am not foreclosing any other interpretation, I find it a tad bit difficult to treat Section 107A(b) as referring to international exhaustion. In fact, it now appears India endorses territorial exhaustion....I am sure naysayers will still be shaking their heads, but I would like to know what would it take turn the shake to a nod.

Opinions and Corrections are welcome!

Thursday, July 7, 2011

Stale News: BitTorrent Sued for US Patent Infringement

The popular P2P sharing entity has been sued for infringement of the US patent 7301944 by Tranz-Send Broadcasting Network. The patent is titled “Media File Distribution with Adaptive Transmission Tools”.  

I am yet to go through the patent claims and the pleadings in the suit, but BitTorrent is not new to IP litigation although this seems to be the first suit in which patent infringement has been alleged against it.

We’ll follow the proceedings in the suit and keep our readers posted.

Wednesday, July 6, 2011

Copyrights and Industrial Design: Where is the Confusion?

In 2009, I had blogged elsewhere on the Microfibres v. Giridhar judgment of the Division bench of the Delhi High Court. The central issue in this case was the effect of Section 15(2) of the Copyright Act, 1957 on unregistered designs. 

I don’t intend to discuss the case again here, but it appears that the effect of the combined interpretation of Section 15 of the Copyright Act, 1957 and the definition of “design” under the Designs Act, 2000 is still misunderstood.

I’ll try to keep this discussion as lucid as possible. Let me first reproduce the relevant provisions for ease of reference. Section 2(d) of the Designs Act defines “design” as follows:

“design” means only the features of shape, configuration, pattern, ornament or composition of lines or colours, applied to any article, whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are solely judged by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 (43 of 1958) or property mark as defined in Section 479 of the Indian Penal Code (45 of 1860) or any artistic work as defined in clause (c) of Section 2 of the Copyright Act, 1957 (14 of 1957)

Section 2(c) of the Copyright Act, 1957 defines an “artistic work” as follows:

“artistic work” means-
(i) a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality.
(ii) a work of architecture and
(iii) any other work of artistic craftsmanship.

Section 15 of the Copyright Act, 1957 reads as follows:

15. Special provision regarding copyright in designs registered or capable of being registered under the Designs Act, 1911- (1) Copyright shall not subsist under this Act in any design which is registered under the Designs Act, 1911.

(2) Copyright in any design, which is capable of being registered under the Designs Act, 1911 (2 of 1911), but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or with his licenses, by any other person.

What is it that I intend to submit in this post? My stance is basically as follows:

1. Under the current regime, an artistic work within the meaning of the Copyright Act is excluded from the definition of design altogether. Therefore, an artistic work can never be a design and vice versa. If a feature has to be treated as a design, it cannot be an artistic work, and therefore cannot enjoy copyright protection.

2. If a feature which falls within the definition of design remains unregistered, under the law today it cannot claim the benefit of Section 15 of the Copyright Act. i.e. there is no  copyright (under the Copyright Act, 1957) subsisting in the design regardless of the number of times it may be industrially applied to an article. Why? Because it flows from point 1 that for the design to enjoy copyright protection, it has to be treated as an artistic work, but if it were an artistic work, it can never be considered for design protection in the first place.

3. Section 15 of the Copyright Act applies only to designs under the Designs Act, 1911, it has no application today. Also, thanks to the amendment to the definition of design in the Designs Act, 2000, Section 15 of the Copyright is a vestigial provision in so far as new designs are concerned.

Let me elaborate on these points a bit more. The protection under the Designs Act, 2000 is different from the copyright protection available under the Copyright Act, 1957. The former is a strict statutory monopoly, whereas the latter is a codified common law right, whose vestation is governed by the statute. That said, copyright is not granted, it comes into being. This is in stark contrast to a design right.

Naturally, the difference in the right and its mode of grant tell us something about the nature of the right, and the subject-matter of the right.

As regards the subject-matter of a design right, namely a design, the visual appeal of the design is judged upon its application to an article, and not in isolation. This explains the registration of a design in a particular class of goods. In contrast, the subject-matter of copyright protection is judged on its own steam.

The interplay between copyright and design right may be explained better as follows:

1. An industrial product can have two aspects to it- the first may be protected by copyright and the second may be protected by a design right. The latter must necessarily be a non-functional ornamental aspect. Although the product has two aspects, each of which is protected by two different rights, none of these aspects can be protected by both the rights simultaneously. Specifically, the aesthetic aspect is protected by the design right alone.

2. For instance, an engineering drawing representing a car is protected by a copyright. However, the non-functional aesthetic features of the car which are added over and above the basic engineering drawing are protected by design right and design right alone provided the design is registered. If the design is unregistered, then no protection of any nature or form is available to the design.

3. Therefore, if a third party apes the car without consent, and if the aesthetic features are not protected by a “registered design right” (which is as redundant as a “granted patent”), then the plaintiff may claim infringement of the copyright in the engineering drawing alone sans the aesthetic features. No copyright infringement can be alleged with respect to the aesthetic features since they are not protected by any right at all.

Also, the requirements of the Designs Act, 2000 can be broadly divided into 2 – “design eligibility” and “design registrability”. (The corresponding analogies from the Patents Act could be "patent eligibility" under Section 3 of the Patents Act and "patentability" on grounds of novelty, non-obviousness and industrial applicability)

Design eligibility is dictated by the definition of design, whereas registrability of the design is governed by Section 4 which spells out the grounds for prohibition of designs such as absence of novelty or originality, and other such grounds. In other words, for a design to be registrable, it must first of all be a “design”, but not all designs are registrable since they must satisfy the criteria of novelty and originality for them to be deemed registrable.

The important conclusion that must be drawn is that any design, registrable or not, can never be an artistic work (thanks to the definition of “design”), and can hence never enjoy copyright protection if it remains unregistered.

Opinions and corrections are welcome! 

Tuesday, July 5, 2011

Delhi Belly: Aamir Khan Puts “Bose DK” Trademark Controversy to Bed

Delhi Belly’s on its way to becoming a cult hit, and for good reason, which I can vouch for after cackling like a wild goose in the cinema hall today! It’s a trend-setter no doubt, let’s hope this doesn’t end up spawning another set of formulaic movies.

The controversial chartbuster from Delhi Belly, “Bhaag DK Bose”, was recently objected to by Jiten Thukral and Sumir Tagra who claimed that the phrase 'Bose DK' was originally their idea (I doubt that because this was an old joke at my alma mater IIT Kharagpur, where a certain professor T.K.Bose was addressed as “Prof.Bose T.K.” by the students). 

Thukral and Tagra say “Bose DK” was the title of their first exhibition at Gallery Nature Morte in 2005, apparently they have a registered trademark too.

Aamir Khan was in New Delhi 2 days ago to clarify that he had no intentions of claiming any rights over “Bose DK”. The matter was settled once Aamir acknowledged the rights of the trademark owners. 

Looks like Aamir’s learnt a lot about IP rights after his alleged fracas with Lyricist Javed Akhtar on amendments to the Copyright Act...but when will the mainstream media learn? The Economic Times calls it a “copyright issue”. The opening line of the article reads thus:

“'Bhaag DK Bose', the popular song from Aamir Khan's latest production 'Delhi Belly' accidentally infringed copyrights of an artist duo who have a registered trademark of a similar name, but the actor has now amicably resolved the issue


Saturday, July 2, 2011

Patent Agent Qualifying Examination: Ideas from the Singaporean Model

A couple of weeks ago, a friend and I were having a discussion on potential areas of rationalization in India’s patent law. One area that we, as ardent followers of patent law, discussed was the need to test candidates thoroughly before they are registered as patent agents. (We have earlier discussed issues relating to the practice of patent agents in a few posts)

To qualify in the examination, particularly the drafting part, one requires practice. I don’t think I am the first person to say that the art of patent drafting cannot be divinely acquired at the time of the examination; it needs consistent practice.

This being so, wouldn’t it help to have a mandatory provision in the law where a candidate who applies for the patent agent examination must have worked under a registered patent agent for at least a year or so?

This proposal isn’t new or radical; the Singaporean Patent law already envisages this. Rule 6 of the Patents (Patent Agents) Rules 2001 spells out the entitlements for registration as patent agent in Singapore. The said provision reads as follows:

6.  Subject to rules 7 and 8, an individual is entitled to be registered as a patent agent if he —
(a)  is resident in Singapore;
(b)  holds a university degree or equivalent qualification approved by the Registrar;
(c)  has passed the course specified in Part I of the Third Schedule;
(d)  has passed the examination specified in Part II of the Third Schedule; and
 (e)  has completed internship in patent agency work under the supervision of a registered patent agent, or an individual registered as a patent agent or its equivalent in a country or territory, or by a patent office, specified in the Fourth Schedule, for —
(i)  a continuous period of at least 12 months; or
(ii)  a total period of at least 12 months within a continuous period of 24 months.

The course referred to in clause (c) is the Graduate Certificate in Intellectual Property Law course conducted by the Faculty of Law, National University of Singapore. The examination referred to in clause (d) is the Patent Agents Qualifying Examinations conducted by the Registrar comprising 4 Papers. Clause (e) requires at least 12 months of continuous internship under a registered patent agent.

What is to be noted is that clause (e) also recognizes an internship in foreign jurisdictions which have been identified in the Fourth Schedule to the Rules. Having said this, I must admit I was surprised to find subjective exemptions to Rule 6 in Rule 8.

Under Rule 8, the Registrar may exempt an applicant from the requirement of Rule 6(c) if he is satisfied that an applicant for registration as a patent agent is sufficiently proficient in IP law. Similar exemptions are provided from requirements of Rules 6(d) and (e). This means the applicant need not even appear for the qualifying examination provided he furnishes evidence to the Registrar for him to satisfy himself of the proficiency of the applicant.

I am not sure if such exemptions would work in India given the numbers, and also because one can never be sure of the transparency of the Indian process. That said, what we could certainly take a leaf out of is the requirement of an internship. This way, we would know that a registered patent agent is not raw, but is at least semi-finished to handle patent applications and to advice clients with some degree of confidence, which is borne out of experience.

The other point to be noted is that there is no provision for a Viva Voce. The examination basically has 4 papers, the first relates to specification drafting, the second to amendment of a specification, the third relates to claim construction to determine validity and infringement and the fourth relates to knowledge of patent law and practice in Singapore.

Even the European Patent Office does not envisage a viva voce in the European Qualifying Examination. Of course, the exam is held over a marathon duration of 20.5 hours, which I think is a fairly rigorous way of filtering candidates!

Viva voce may or may not be an important issue, but the larger point in the big picture is that the quality of candidates who qualify for practice must not be sub-par. Ultimately, patent jurisprudence is applied every time a claim or a specification is drafted, therefore it is imperative to ensure quality at the most fundamental level before we start asking for specialized IP benches. 

Farhang v. IIT Kharagpur- Was there a Valid Oral Contract on the Joint Venture?

I have received mails and calls from IIT alumni asking me as to why the IP dispute involving IIT Kgp was largely under wraps until it was reported in the mainstream media recently.

I honestly have no idea, but I think the issue was reported in major newspapers in 2008 when the controversy first broke out. But after that, the proceedings haven’t been followed and analysed much.

IIT Kharagpur being one of India’s elite institutions of higher education, I think it is important to know the facts, lest rumour mills start working overtime and tarnish the reputation of this great institution. Precisely for this reason and to prevent a ripple effect on the reputation of other Indian academic institutions, we will be covering the dispute as much as possible.

Further, since there is a growing pressure on Indian universities to commercially harness their research, this dispute may have important pointers for them before they actively involve themselves in commercialization of technology.

Thus far, 3 posts have been written on the dispute, with the last 2 focussing on the June 1, 2010 order of the Californian Court. In the last post, we had written on how the proposed terms of the JV were modified, which modification was sought to be used by IIT as a defense against Farhang’s claim of breach of the JV agreement; the Court ultimately rejected the defense.

A detailed reading of the order informs us that there was no written Joint Venture agreement. In fact, Farhang claimed that there was a binding oral contract on the joint venture, and that IIT had breached the terms of the oral contract. If there was no written agreement, then how was the choice of the forum decided? Where did the parties agree that any disputes arising from the contract would be governed by Californian law?

From the order, it appears that IIT, in certain portions in its pleadings, had claimed that Indian law governed the oral contract on the joint venture, and in certain other places it claimed that Californian law was the applicable law.

Farhang naturally claimed that the contract was governed by Californian law. Since both parties had said so in one place or the other, the Court concluded that Californian law applied and also observed that Indian law and Californian law were substantially similar on contracts.

But there’s something intriguing here. On one hand, IIT contended that the applicable law was Indian law, and on the other, it contested the very existence of a valid oral contract. I am not saying that IIT couldnt have resorted to "alternate pleadings" (i.e. either there was no oral contract, but if there was one, Indian law applied to it), but I think there's a thin line that separates "alternate pleadings" from "irreconcilable/inconsistent pleadings". I make this point because one of IIT's defenses against Farhang's claim of breach of NDA, was that the JV had superseded the NDA.

Having taken this stance, I am unclear as to how did IIT persist with its contention that there was no binding and enforceable oral contract on the joint venture.  What were IIT’s grounds to support its stance that there wasn’t an oral contract in the first place?

IIT’s primary ground was that there was no formal written agreement which had been signed by both parties. The second ground was that the essential terms of the contract were not clear, and hence IIT couldn’t be reasonably expected to assume that there was a valid oral contract in place.

On the first ground, it appears that IIT had represented to Farhang that a joint venture was already in place, regardless of a formal written document not having been drawn up and signed. The Court cited this representation to hold that there was a binding oral contract in place.

On the second ground, following were IIT’s claims and the Court’s findings:

A. No clear terms on profit and loss sharing- The Court found that a total of 28% of the profits had been earmarked for IIT. In the absence of terms on loss-sharing, the general rule was that each party would bear its own losses in a situation where there are no compensations/salaries to be paid. Hence, profit and loss sharing terms were clear.

B. No clarity on decision-making and control- The Court found that Farhang would control the disclosure of confidential IP, whereas IIT would play the role of the technology expert, with Prof. Partha Pratim Chakrabarti of IIT acting as the CTO. Also, IIT would determine the pace of interaction with potential customers such as the Indian Railways. Therefore, decision-making and control too had been adequately chalked out.

C. The terms were not reasonably certain- The Court observed that all minutiae need not have been worked out between the parties for an oral contract to come into being. Since the essential rights and obligations had been determined, the terms of the contract were reasonably certain.

On the basis of these conclusions, the Court held that since there was a valid oral contract, the issue of breach was a plausible one and therefore must be duly adjudicated.

Fraud and Breach of Fiduciary Duty
Farhang alleged fraud and breach of fiduciary duty by IIT with respect to the confidential information that IIT was entrusted with. On this point, the Court dismissed these claims since Californian law disallows common law claims of fraud and breach of fiduciary duty, when relief for misappropriation of trade secrets had already been claimed.

In other words, since the facts underlying all these claims were the same, and since Farhang had already alleged misappropriation of trade secrets, she could not again agitate the issue of fraud and breach of duty.

Misappropriation of Trade Secrets
On the issue of ownership of trade secrets, which was raised by IIT, the Court observed that there were inconsistencies in the original statement of claims filed by Farhang and the amended one which was being considered at the time of the order. In the original claim, Farhang had said that the core technology was owned by her and TNR Holdings. However, in the amended claim, Farhang stated that she had transferred her sole title to MA Mobile.

The Court directed her to clarify the facts on ownership, but held that since trade secrets in the case included business models and plans, the claim of misappropriation of trade secrets could not be dismissed altogether.

As to whether Farhang had adequately identified the trade secrets in her claim in order for IIT to respond to the issue properly, the Court held that although the patent application which contained the core technology had been identified, the business models and plans which too comprise the trade secrets had not been spelt out with sufficient particularity.

Also, the Court held that there weren’t sufficient factual allegations to support the broad claim of misappropriation of trade secrets.

Directions 1, 4, 5 and 6 of the Court in its June 1, 2010 order finally read as follows:
1. Denies IIT's motion to stay this action;

4. Dismisses plaintiffs' claim for breach of the Non-Disclosure and Non-Use Provisions of the NDA with leave to amend within 20 days;

5. Dismisses plaintiffs' claims for fraud and breach of fiduciary duty with prejudice; and

6. Dismisses plaintiffs' trade secret misappropriation claim with leave to amend within 20 days.

A Side Note
The core technology in this case is the enablement of fluid mobile access to data on handheld devices, including dynamic real-time access and parsing of data that is not dependent upon continuous wireless data connection. As discussed, the Court treated the technology claimed in Farhang’s patent application as a trade secret.

I am assuming this was an unpublished patent application at the relevant period of the claim in the suit...because I don’t think a published patent application constitutes a trade secret since the decision to file for a patent constitutes a choice between keeping the technology a secret and disclosing it in a patent in return for monopoly. However, until such time the application is published, it retains its character as a trade secret. Corrections are welcome!

We’ll discuss the US Court's other orders in the case in the coming days.