Rectification Proceedings- Is a disjointed approach acceptable?

A recent writ petition adjudicated by the Madras High Court, opined its view on certain crucial principles governing proceedings in Trade Marks. 

The judgment of Rhizome Distilleries Pvt.Ltd vs Union Of India, addressed two questions, which can be generalized as:

(i) Whether an entity can claim an exclusive right over an individual element ('IMPERIAL' in this case), when a trade mark consists of several matters ?

(ii) Whether the Intellectual Property Appellate Board has committed any error in allowing the cancellation/rectification application filed by applying the provisions of section 11 of the Trade Marks Act?

While the first question is well settled, the Court reiterated the well established judicial principle of entirety, albeit in its own words.

As far as the second question goes, the Court concluded as below:

“But, all of a sudden, the 4th respondent filed an application under section 57 of the Act for rectification of the registration and the Board by applying the principles embodied under sections 9 and 11 i.e.the grounds for refusing the registration, allowed the application filed by the 4th respondent. … Further, in our considered opinion, the grounds embodied under sections 9 and 11 are available to the persons only at the time when they raise objection for registering the trade mark. The said principles cannot be applied for rectification of the registration”

This extract demand that one thoroughly revisit the statute, in order to adjudge the accuracy of the Hon’ble High Court’s opinion.

To revisit the provisions under a tug here, S. 57 of the Trade Marks Act, 1999 deals with the Power to cancel or vary registration and to rectify the register. Under Sub-section 2 of the provision, reads:

“Any person aggrieved by the absence or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to the Appellate Board or to the Registrar, and the tribunal may make such order for making, expunging or varying the entry as it may think fit.”

This provision, without limitation as to time (in contrast to opposition), allows a third party to have an entry pertaining to a mark rectified. As I read the provision, for removals, all that a third party needs to demosrate is that the mark remains or is entered either:

(a) without sufficient cause; or

(b) wrongly/in error; or

(c) exists a defect in the entry in the register.

With respect to S. 9 and S. 11, the two provisions constitute conditions for Registration. The former provision covers absolute grounds for refusal, while the latter governs relative grounds for refusal.

While these provisions, constitute vital conditions for registration,. How can they not be used to meet the demands of a rectification petition? It is strange, because if these conditions have by error, defect, without sufficient cause or, even deceit been shown to be satisfied, shouldn’t third parties be given an opportunity to challenge them?

Undoubtedly S. 9 and 11 come up as objections during Examination, but the Act, no where restricts these to be considerations to be looked at only during that stage of prosecution. Further, distinctiveness, which is the first consideration under Absolute grounds for refusal, is a volatile c oncept- volatile because a mark which is devoid of distinctiveness to start with, may become so vide extensive use; or, the use of an extremely distinctive mark, can make it generic! 

In light of this, shouldn’t the conditions for registration be given its due, throughout the course of enforcement of one’s rights in a trade mark?

In my view, the reading of the statute by the Hon’ble court is disjointed and fragmented, thus ignoring the basic tenets constituting the very foundations of Trade Mark law. To my eyes, the provision acts as a check, by giving third parties an opportunity beyond opposition, to rectify entries on the Trade Marks Register, after due consideration by the Registrar or the IPAB.

Bayer Compulsory Licensing Order: Are There Any Lessons to Learn?

As expected, the Bayer Compulsory Licensing Order has generated a lot of discussion in the relevant circles. In the last post, the issue of local manufacture was discussed. In this post, I intend to discuss a few other issues which interest me.

The primary defense on the issue of working that Bayer relied upon was that the manufacture of Nexavar by Cipla (against who Bayer has filed a suit for infringement of its patent) had to be treated as working of the patented invention by Bayer. 

On the face of it, this argument may not find favour with most people. But what exactly are the layers in this argument? Can a patentee rely on an alleged infringer’s activities to establish fulfilment of working requirements that the Act expects of a patentee?

To understand the position of the Act on this question, one must look at Section 84(7)(e). The provision reads thus:

84.(7)(e) For the purposes of this chapter, the reasonable requirements of the public shall be deemed not to have been satisfied, .....if the working of the patented invention in the territory of India on a commercial scale is being prevented or hindered by the importation from abroad of the patented article by-

(i) the patentee or persons claiming under him; or

(ii) persons directly or indirectly purchasing from him; or

(iii) other persons against whom the patentee is not taking or has not taken proceedings for infringement.

The presence of Section 84(7)(e) makes one thing very clear- alleged infringement of a patentee’s invention, and the steps taken by a patentee to restrain such infringement is a relevant fact to be taken into account in the grant of a compulsory license.

The Act, in fact, draws an adverse inference against the patentee if he has not taken reasonable steps to prevent hindrance to the working of the invention by “importation of those directly or indirectly purchasing under him” (Could this be an additional point to support my interpretation of Section 107A(b)?)

This means if the patentee has taken reasonable efforts to prevent infringement, and his efforts have not met the kind of success that he would ideally expect, should the fact that continued infringement hinders working of the invention by patentee, not be a relevant argument? After all, the patentee’s argument is-

“How am I expected to sell my patented invention if an infringer sells it at less than half the price and I have not been successful in securing an interim injunction against him? Why should I be penalized if my best efforts to enforce my statutory rights have not been successful?”

The fact that infringement of a patentee right hinders working of the invention is something the Act clearly recognizes in Section 84(7)(e). Therefore, I am surprised at the Controller’s take that the issue of infringement of the patentee’s right has no bearing on relevance on the patentee’s ability to fulfill the reasonable requirements of the public.

This actually raises the larger question of failure to grant interim injunctions and the adverse consequences it has on the ability of a patentee to fulfill critical obligations under the Act.

Also, without commenting on the facts of the Bayer case, I think it must be understood that commercial working of the patented invention is linked to several factors, most importantly to the demand for the patented invention in the market. A combination of circumstances could prevent a patentee from getting the best out of the market for his patented invention.

In such a situation, what do equity and fairness demand? Either that a compulsory license be not granted if the patentee has put his best foot forward, or if the patented invention actually addresses critical issues such as public health, a compulsory license may certainly be granted, but the terms of such license must be fair to the patentee and must adequately compensate him. Critically, any such order granting a compulsory license in the second situation must refrain from making unqualified adverse comments against the patentee.

In the facts of the Nexavar case, what does come as a surprise is the statistic on working of the invention. The patent was applied for in India in 2001 (National Phase Application), and was granted in 2008. Since Section 11A(7) grants “like and privileges” once an application for a patent is published, it is not incorrect to say that the patentee’s efforts to commercialize the patent assume importance after the publication of the application.

In other words, it is not just efforts after grant of the patent that are relevant, but also steps taken prior to grant but after publication of the application. Simply put, the Controller could have asked Bayer to show reasons for insufficient working of the patent since the publication of the Nexavar patent application.

These and other such issues could and ought to have been discussed in the Bayer Order to set out the first principles of compulsory licensing jurisprudence. It is not enough to arrive at conclusions, even if correct, since it is not conclusions, but the reasons of an order that are applied in the future. In the absence of reasons, the scope of an order’s applicability is restricted to the facts of the case in which it was delivered, with no long term value or utility.

Vision and thoroughness must not be sacrificed at the altar of speed, particularly where public interest is at stake.

Bayer Order: Local Working Requirements for Patents

In 2 earlier posts elsewhere, I had wondered if a patentee may cite un-workable circumstances to express his inability to domestically manufacture a patented invention. Also, what would happen if the Controller of patents has to choose between access to a life-saving drug by turning a blind eye to large scale importation of the drug to make it both affordable and available to people in India, and fulfillment of domestic working requirements under the Act? This issue too was broached briefly by several speakers in the Roundtable at NLU Jodhpur.

On the issue of “local manufacture” to satisfy working requirements under the Act, I am inclined to state that, TRIPS-compliance aside, the Patents Act exhorts domestic manufacture to prevent reliance on imports and to promote transfer of technical skills to the local population. After all, the idea is reduce the yawning technological deficit between India and the developed world.

The celebrated Ayyangar Committee report, which is the travaux preparatoires to the 1970 legislation, sheds great light on the wording of Section 83 of the Act with respect to working of a patented invention.

In particular, under Part II of the report titled “The Patent System in India”, Paragraphs 37 and 38 are of importance to the issue of working and compulsory licensing. A few lines from these paragraphs are educative and go a long way in understanding and clarifying the Act’s position on local manufacture:

“37. In the present decade under the impact of the national plans that have been formulated for the economic uplift of the country and the raising of the standard of living of its people, the conservation of foreign exchange is a matter of prime importance. In the context of this need, it would be seen that any increase in the price of the patented products imported into the country must, to that extent, be a disadvantage to the country’s economy..........

38. I have already set out the considerations which are said to constitute the quid pro quo for the grant of the patent monopoly, namely (1) the working of the invention within the country so as to result in the establishment in the country of a new industry or an improvement of an existing industry which would profitably employ the labour and capital of the country and thus increase national wealth, and (2) disclosure to the public of the invention and the manner of its working so that on the expiry of the life of the patent, the public are enabled to work the invention themselves and in competition with each other. 

Where the patentee has no intention of working the invention in this country either because he considers this is not profitable or because he prefers to expand the production in his home country so as to achieve there greater efficiency or more production, or is otherwise not interested in working the invention in India, the grant of the patent might tend to improve the patentee’s home country, but offers little advantage to us. Unless therefore the law provides for measures to compel the patentees to work the invention within the country, and these measures are effective to achieve their purpose, the social cost involved in the grant of the patent is not offset by any benefit to the community....”

Considering the unequivocal crystallisation of objectives sought to be achieved by and using the Patents Act, it could be said that local manufacture is an essential and mandatory requirement under the Act. However, should we make an exception when it comes to life-saving drugs? If yes, does the Act in its current form allow for such an exception?

Section 107A(b) Does Not Refer to International Exhaustion: Proof in Legislative Debates

Finally, I think I have what I need to settle the debate on Section 107A(b). I am still keeping an open mind and I am willing to be convinced otherwise, but this document which I just came across shows that Section 107A(b) does not refer to “international exhaustion” at all. In fact, it refers to “limited parallel import”, something I have argued over and over again in several posts here and elsewhere.

The document I refer to is the “Combined discussion on the Statutory Resolution regarding disapproval of Patents (Amendment) Ordinance, 2004 (No.7 of 2004) and the Patents (Amendment) Bill, 2005”. The title’s pretty much self-explanatory, the document records the legislative debates prior to the passing of the 2005 Amendment to the Patents Act.

I have always insisted on “duly authorized under the law” as being one of the critical pointers to the true meaning of Section 107A(b). I have stated my position of the provision in an ealier post as follows:

“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.”

This interpretation now receives support in light of the following portions of the legislative debates on Section 107A(b). Following is the statement of Mr.Pawan Kumar Bansal in the discussion held on March 22, 2005, the Minister for Parliamentary Affairs of the UPA regime between 2004-2009 who says thus in response to concerns raised by the Opposition on affordability of medicines:

“The second point, Madam, which has now been incorporated in the present Bill and as also in the Ordinance, is an amendment to Section 107A(b), providing for parallel import.  Here, this amendment says:  “On import of patented commodity from anywhere in the world, the Government reserves the right.”  Despite the fact that a particular medicine may be patented here by any other company, we have the right to import that patented commodity from anywhere in the world, where it is cheaper, even though it is patented here. Earlier however, this required that the foreign exporter was duly authorised by the patentee.  That was the condition earlier.  I may remind my hon. friends on the other side that it has been taken off. Now, the law would be, as it has been included here in the Bill before us now, that ‘no longer do we only need to stick to that condition that the foreign exporter was duly authorised by the patentee to sell and distribute the products.’  The position now would be that ‘the foreign exporter be authorised under the law, thus making the parallel imports easier.’  This mechanism, as you know, would help in price control.”

This statement leaves nothing to imagination since it clearly says that it is the Government of India which has the right to authorize a "foreign exporter" to facilitate imports into India. Simply put, under Section 107A(b), once a foreign entity is authorized to manufacture and sell the product by the Indian Government, importation of the product from the authorized foreign entity would not amount to infringement of the Indian patent. 


In a way, this is the reverse mechanism of Section 92A. Instead of compulsory license being issued for export, this is a license issued to a foreign manufacturer to sell and distribute the product, from whom the product may be imported.

Some might ask, is there a parallel to this provision anywhere in the world? Yes, there is! The amended Section 15C of the Medicines and Related Substances Control Act of South Africa provides for a similar mechanism which reads as follows:

Section 15C: The minister may prescribe conditions for the supply of more affordable medicines in certain circumstances so as to protect the health of the public, and in particular may-

(a) notwithstanding anything to the contrary contained in the Patents Act, 1978 (Act No. 57 of 1978), determine that the rights with regard to any medicine under a patent granted in the Republic shall not extend to acts in respect of such medicine which has been put onto the market by the owner of the medicine, or with his or her consent;

(b) prescribe the conditions on which any medicine which is identical in composition, meets the same quality standard and is intended to have the same proprietary name as that of another medicine already registered in the Republic, but which is imported by a person other than the person who is the holder of the registration certificate of the medicine already registered and which originates from any site of manufacture of the original manufacturer as approved by the council in the prescribed manner, may be imported:

(c) prescribe the registration procedure for, as well as the use of, the medicine referred to in paragraph (b).

I had the opportunity of presenting this very provision in my talk at NLU Jodhpur. Pawan Kumar Bansal also says in his speech that he received calls from South Africa! I had presented this as an alternative to compulsory licensing for price control. This is exactly what Section 107A(b) aims to achieve and this is exactly what I had said in my earlier post on India’s representations to GATT in the Uruguay Round. A paper of mine capturing these arguments will be shortly published.

With this, I fervently hope we stop reaching summary conclusions of “international exhaustion” without giving “due regard” to the wording of the statute. 

I look forward to comments and thoughts from readers.

“Inventive Step” under the Patents Act, 1970: Where Is the Confusion?

The definition of novelty, non- obviousness and industrial applicability criteria, despite conceptual similarities, may differ subtly from one jurisdiction to another. Consequently, it is necessary to keep an open mind when approaching the definitions to avoid unwarranted assumptions which have no basis in the statute.

The definition of “inventive step” is prone to such assumptions because it is assumed that the definition is universally the same. Inventive step under the Act in Section 2(ja) is defined as follows:

“inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art

The abridged and incorrect interpretation of the definition is that inventive step is equated to “a non-obvious technical advance”. This, however, has no basis in the wording of the definition or the legislative policy that is reflected in the definition.

If inventive step were to only mean a “non-obvious technical advance”, it renders nugatory the use of “or having economic significance or both”. The simpler way of understanding the definition is to expand it as follows:

1. Inventive step means a feature of an invention that involves technical advance as compared to the existing knowledge and that (reference is to feature, not "technical advance") makes the invention not obvious to a person skilled in the art

2. Inventive step means a feature of an invention having economic significance and that (reference is to feature, not "technical advance") makes the invention not obvious to a person skilled in the art

3. Inventive step means a feature of an invention having technical advance and economic significance and that (reference is to feature, not "technical advance") makes the invention not obvious to a person skilled in the art.

In other words, inventive step refers to that feature of the invention which satisfies the following twin criteria:

1. The feature involve a technical advance or must have economic significance or both; and

2. The feature must be non-obvious to a person skilled in the art.

Therefore, inventive step does not refer solely to a “non-obvious technical advance”, but in fact refers to a “non-obvious feature” which involves either a technical advance or has economic significance or both.

The corollary is that the definition distinguishes “technical advance” from the requirement of non-obviousness. “Technical advance” is a misnomer owing to the presence of the word “advance”.  Under the definition, a technical advance by itself is not non-obvious, since if that were to be the case a “non-obvious technical advance” would be redundant.

One of the principles of statutory interpretation is that no word or term or phrase used in a statutory provision must be rendered redundant/repetitive. Applying this principle to the definition of inventive step, it bears out that a technical advance simply refers to a feature which is technical in nature, whose qualitative contribution is to be further assessed by the requirement of “that makes the invention not obvious to a person skilled in the art”.

The other important corollary is that the presence of technical advance is not the sole criterion to judge if an invention has an inventive step. Economic significance of a feature which is non-obvious too by itself could help the product or the process satisfy the “inventive step” requirement. Importantly, the criterion of economic significance is equally applicable to products and processes.

It is important to understand that a clearer and surer approach to the law applying time-tested principles of statutory interpretation is the best way to contribute to the shaping of an informed jurisprudence and formulation of policy initiatives. It is not possible to suggest what the law ought to be unless we understand with clarity what the law is. 

Correction in the Last Post

In the last post, the last para had a few errors. The edited Para is as follows:

"Similarly, in the case of the Patents Act, until the suit is transferred under Section 107A, all orders passed by the Court are not irrelevant. However, the Bombay High Court was of the view that all such orders would be treated as ad-interim, and consequently require to be re-heard by the High Court. This position appears to be correct since once the counter-claim is filed, it becomes necessary to assess the challenge to the validity of the patent which has a direct bearing on the sustainability of the ad interim injunction order passed earlier."

Snippet: Bombay High Court on Section 104A

On March 16, 2012, the Bombay High Court delivered an order which relates to Section 104A of the Patents Act, 1970. The said order was passed in a matter between CTR Manufacturing technologies Limited (Plaintiff) and Sergi Transformer Explosion Prevention (Defendant No.1) and 2 other defendants. In this case, the question before the Court was as follows:

When a counter-claim to a suit for infringement of patent is transferred along with the suit from the District Court to the High Court, are orders passed by the District Court prior to the admission of the counter-claim and transfer to the High Court infructuous?

The High Court held that merely because Section 104A requires transfer of a suit for infringement and its counter-claim from a District Court to the High Court, it does not follow that the orders or decisions passed by the District Court prior to the transfer of the case are rendered redundant.

According to the Court, the decision of a Court remains in force until set aside by the same court or reversed by a superior court or overruled by a subsequent legislation. This rule applies even when it is later proved that the Court never had the jurisdiction to entertain the matter.

Similarly, in the case of the Patents Act, until the suit is transferred under Section 107A, all orders passed by the Court are not irrelevant. However, the Bombay High Court was of the view that all such orders would be treated as ad-interim, and consequently require to be re-heard by the High Court. This position appears to be correct since once the counter-claim is filed, it becomes necessary to assess the challenge to the validity of the patent which has a direct bearing on the sustainability of the ad interim injunction order passed earlier.

I thank Sandeep K. Rathod for sharing the order with me!

Summary of the MHRD IP Chair Round Table at NLU Jodhpur

In my last post, I had reported on the pharma and IP Roundtable that was scheduled to be organized by and at NLU Jodhpur under the dynamic and able leadership of Assistant Professor Yogesh Pai, for whose mind and breadth of knowledge I have deep regard and great respect. Thanks to him, I had the opportunity to not just attend, but to also share my views on the subject with an august gathering of thought-leaders from diverse backgrounds.

Since all presentations and podcasts of all the sessions are expected to be available at http://www.nlujodhpur.ac.in/ip_events.php, I shall only capture only the gist of the presentations in this post.

This roundtable was held in almost the immediate aftermath of the Bayer Compulsory Licensing Order. Naturally, the roundtable was abuzz with talk about the order. In fact, this probably was the first roundtable of IP practitioners, academicians and policy analysts to come together after the pronouncement of the CL Order. This is one of the reasons, among several others, that it was a fantastic success.

In the first session on March 17^th, the inaugural presentation was that of Dr.Malathi Lakshmikumaran, who shared her views on patentability of isolated substances from living and non-living organisms. This was followed by a very crisp, engaging and interesting presentation by Essenese Obhan of Obhan and Associates on nature and variety of challenges available against a patent under the Act, and attendant issues. Essenese pointed out, among other things, that the post-grant opposition system is redundant, which I concur with.

Next was a riveting presentation by Adarsh Ramanujan of Lakshmikumaran on Section 3(d) and the Novartis case, where he spoke at length about his take on the provision and whether the Novartis case was the best case for the pharma patent debate.

Prof.Madhukar Sinha of the Centre for WTO Studies of IIFT then presented an extremely interesting point of view on how cost-sharing model may not be the best of alternatives to data exclusivity since it could actually end up spiking transaction costs even in a model with limited complications.

Following this, Prof.Shamnad Basheer of NUJS presented his views on interim injunctions in the pharmaceutical sector, and was of the opinion that expedited trials are a better option in the limited context of pharma patent litigation.

In the afternoon session, Mr.Anand Grover, Senior Advocate and one of the founding members of the Lawyers’ Collective, shared his views on how FTAs, particularly the EU FTA with their TRIPS-plus obligations could have an adverse effect on access to medicines in India.

The last presentation of the day was by Shashank Kumar whose talk revolved around unilateralism in international law, with specific reference to EU Regulation 1383 on cross-border measures and in-transit seizure of goods. He pointed out that the “manufacturing fiction” of the EU regulation on in-transit seizure, despite being interpreted by the ECJ in favour of the consignor of the in-transit goods, is slowly finding its way in other treaties.

The first presentation of the second day i.e. March 18^th, was by Prof. Sudip Chaudhuri of IIM Calcutta whose primary thrust was that the initial optimism associated with the Indian pharmaceutical industry’s success is slowly giving way to disappointment, since the Indian industry has not lived up to what was expected of it in terms of indigenous research. Further, Prof.Chaudhuri was of the view that the re-introduction of the product patent regime was responsible for the downturn in the Indian pharma sector’s fortunes and for price-rise. According to him, the product patent regime is taking India back to the pre-1970 product regime days when India depended on pharma imports by originator companies and was characterized by absence of self-reliance in the Indian pharma sector.

Following this, Mr.Dilip Shah, Secretary General of the Indian Pharmaceutical Alliance critiqued the National Pharmaceutical Pricing Policy of 2011 for not adopting an evidence-based approach to fix drug prices. According to him, the NPPA’s policy would lead to a minimum loss of INR300 crores, which according to him, could be invested in boosting indigenous R&D efforts.

After Mr.Shah, I spoke on the interface between IP and Competition Law. The specific topics that were part of my presentation were:

1. Legality of Patent Pools under the Competition Act 2002, specifically under Section 3(3), defenses to presumption of anti-competitiveness of patent pools.

2. Alternatives to the compulsory licensing model to sustain competition between originator drug and generic companies.

The penultimate presentation of the day was by Prof.Amit Shovon Ray of JNU on the importance of public-funded research in critical areas of public interest such as the pharmaceutical sector. He pointed out that as opposed to USD 34 billion invested by private US players in the US pharma sector for research, the National Institutes of Health (NIH) of the US had invested USD 28 billion. This, according to him, is the approach that India must adopt too.

The last presentation was by Mr.M.R.Santhosh of CENTAD on the skewed focus of drug companies on research in non-communicable diseases with waning efforts in the area of bulk drugs for communicable diseases. 

Each of the presentations only added to my understanding of the role of IP, its relevance for innovation and its implications on public health. As mentioned, most or all of them will soon be made available by NLU Jodhpur on its website along with podcasts of the proceedings of the roundtable.

Stacking it up...

Taking cue from the questions that Sai left off at, in one of his earlier posts- “” Does copyright law preclude the possibility of a book with a single-quote being bought and read by people? Also, does “literary work” always mean a “book”?”, ticks off my mind, to think more so in a social networking context.

In a world where many of us live a part of our lives in a virtual world, what is the role that Copyright plays? We all leave status updates, wall posts, tweets etc.- sometimes rattling off statements that are nothing short of brilliant. Would these posts qualify for copyright protection? To be honest, I do not have a clear cut answer.

As I see it, what one may post, may often be an expression of a thought - which perhaps can be construed to be an idea, or at least its equivalent. But would that be construed as a subject matter capable of copyright protection?

Drawing a contrasting analogy (and perhaps even contradicting myself), why is it that we always refer quotes to the people they come from? It definitely is a sort of goodwill gesture, but may be beyond. Additionally the need for accreditation in the academic context, also leaves me confused, since fair dealing clearly covers academic contexts.

Further, what if one wrote a sentence each day to construct a story or poem, say over a couple of months or a year on a social networking platform? A collective reading of these, could at least be treated as a compilation.

Although this reminds me of the Feist case, the differentiator could be that the line by line breakdown of a telephone directory takes us to facts, unlike the hypothetical situation. In this view, with at least a minimum modicum of creativity being met, copyright must vest.

In my mind, the questions are stacking up!!! I eagerly look forward to a court rendering its view, just to clear the air up a bit!

Snippet: Round table on IP Protection for Pharmaceuticals in India at NLU Jodhpur

The Ministry of Human Resource Development (MHRD) IP Chair of National Law University, is organizing a round table symposium on 17^th and 18^th March, 2012 on the topic ‘The Emerging Legal and Policy Landscape of Intellectual Property Protection for Pharmaceuticals in India’. The link to the event is available here.

According to the website of NLU Jodhpur:

“The event is expected to bring academicians, legal experts and policy specialists from across India working on IP law and pharmaceutical policy issues. The aim of the roundtable symposium is to generate a nuanced dialogue on many critical issues concerning intellectual property protection for pharmaceutical inventions in India in the light of the emerging scenario in the Post- TRIPS world.

Fifteen years have passed by since India adhered to certain internationally binding IP obligations through the WTO-TRIPS agreement. And yet, India is still garnering worldwide interest concerning the level of protection provided by its IP laws. The administrative and the judicial thought process on how best to balance competing interests cannot be divorced from this context.

Indeed, much of IP law in its application to the pharmaceutical sector cannot be looked in isolation from the intricate policy issues and general societal interest. While a lot of attention is focused on the pros and cons of IP regimes, there remains an enormous task of calibrating the IP regimes that could best serve the needs of balancing competing interests. The symposium will provide a good forum to exchange valuable information, ideas and experiences in articulating legal and policy issues on IP protection for pharmaceutical inventions in India.”

Some of the speakers who will attend the symposium are:

1. Hon’ble Justice S.Ravindra Bhat of the High Court of Delhi,

2. Mr.Dilip Shah, Secretary General of Indian Pharmaceutical Alliance,

3. Dr.Malathi Lakshmikumaran from the law firm Lakshmikumaran and Sreedharan,

4. Prof.Madhukar Sinha from Centre of WTO Studies of IIFT,

5. Prof. Sudeep Chaudhuri of IIM Calcutta,

6. Mr.Anand Grover, Advocate from the Supreme Court of India,

7. Mr.K.M.Gopakumar, Legal Advisor to Third World Network

8. Prof.Shamnad Basheer of NUJS Kolkata

9. J.Sai Deepak (me), Saikrishna & Associates

I will write a post next week on the deliberations at the round table. It'll be interesting to analyse the tone and tenor of the discussions in light of the recent compulsory licensing order. 

Breaking News: Compulsory Licence Granted to NATCO for Bayer’s Nexavar

We had earlier blogged on applications for compulsory licenses filed by NATCO and Cipla. Thanks to a dear friend, we now have news of a 62-page order delivered on March 9, 2012, P.H.Kurian granting a compulsory license to Hyderabad-based NATCO Pharma in respect of Bayer’s patented drug “Sorafenib Tosylate” which is sold as Nexavar and is protected by the patent no. 215758.

Nexavar is used to treat advanced kidney and liver cancer. The drug prevents growth of new blood vessels and targets other important cellular growth factors. The order treats the drug as “life-extending” drug and not as a “life-saving” drug, which extends the life of kidney cancer patients by 4-5 years, and of liver cancer patients by 6-8 months.

The cost of the therapy using the patented drug is INR 2,80,428 per month and costs approximately INR33.65 lakhs a year. NATCO, on the other hand, proposed a price of INR8800 for a pack of 120 tablets.

The Controller used GLOBOCAN data to peg the number of liver cancer patients as 20,000 and the number of kidney cancer patients as 8900. The Statement of Working filed by Bayer revealed that approximately 200 bottles of the drug were imported in 2009, with no figures for the years 2008 and 2010. The Controller noted that besides being “exorbitantly priced”, the drug was available only in metropolitan cities, and even there, it was out of stock in most pharmacies.

It was also observed that the patentee had reaped revenues in the millions in sales of the drug outside India, whereas the availability of the drug in India left much to be desired. Besides, the patentee imported the drug into India, with there being no evidence of domestic manufacture.

We will discuss the merits of the order in greater detail in a later post. For now, the terms of the compulsory license are as under:

a. The price of the drug covered by the Patent, sold by the licensee shall not exceed Rs.8880 for a pack of 120 tablets, required for one month's treatment.

b. The licensee shall maintain accounts of sale etc. in a proper manner and shall report the details of sales to the Controller as well as the Licensor on a quarterly basis, on or before fifteenth day of the succeeding month.

c. The licensee shall have the right to manufacture the drug covered by the Patent only at his own manufacturing facility and shall not in any whatsoever outsource the production.

d. The license is non-exclusive.

e. The license is non-assignable.

f. The licensee shall pay royalty at the rate of 6% of the net sales of the drug on a quarterly basis and such payment shall be affected on or before fifteenth day of the succeeding month.

g. The license is granted solely for the purpose of making, using, offering to sell and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the Territory of India.

h. The licensee shall supply the drug covered by the Patent to atleast 600 needy and deserving patients per year free of cost. The licensee shall annually submit in the form of an affidavit the details of such patients, i.e. name, address and the name of the treating oncologist, to the Office of the Controller of Patents and such report shall be submitted on or before 31st January of the year, in respect of the preceding year.

i. The licensee shall not have the right to import the drug covered by the Patent.

j. The license is for the balance term of the patent.

k. The license does not include any right to represent publicly or privately that the Licensee's product is the same as the Licensor's or that the Licensor is in any way associated with the Licensee's product. The Licensee's product must be visibly distinct from the Licensor's product (e.g. in color and / or shape); the trade name must be distinct, and the packaging must be distinct. The Licensor will provide no legal, regulatory, medical, technical, manufacturing, sales, marketing, or any other support of any kind to the Licensee.

I. The Licensee is solely and exclusively responsible for its product and for all associated product liability. The Licensor, its Directors, Officers, Employees, Agents, and affiliates shall not be held liable in any manner whatsoever for any action of the licensee.

m. The Licensor is free to do whatever it wishes with its residual patent rights subject to the non-exclusive license to the Licensee, and is free to compete with the Licensee and to grant licenses to third parties to compete with the Licensee. 

Stale News: Custom Laws to Shift towards Trust-based Self-assessment Model

The Business Line on February 27, 2012 reported that the Customs department is considering shifting to a “trust-based” self-assessment model.  As it stands today, the duty and onus of verifying the compliance of importers and exporters with Customs laws is on the Customs department, although disclosures are made by the importers and exporters in the documents submitted by them to the Customs department.

However, it appears that the authorities are considering shifting to a model where, in the words of the Business Line, “businesses are expected to discharge their Customs duty liability, with no or minimal involvement of authorities at the port”. This effectively translates to an onus on businesses to comply with customs laws.

The proposed model envisages a compliance audit by the Customs authorities at a later point in time.

One wonders how would this “trust-based” self-assessment model, work with the IPR border measures under the IPR enforcement customs Rules. On one hand, the IP Rules vest the customs authorities with suo motu powers to check for IP infringement, and on the other hand the proposed systemic overhaul seems to encourage a laissez faire approach with minimal intervention from authorities.

Would a “trust-based” model encourage counterfeiting?

It might be argued that most customs regimes across the world have already adopted or are gravitating towards a trust-based model to avoid clogging of the customs conduit. But the question is, do Indian conditions justify adoption of the model?

It could be argued that a shift to a trust-based system enhances the onus on businesses, including counterfeiters, to be truthful to the authorities. This might translate to a presumption of fraud or willful non-compliance if IP infringement is established at a later stage.

This issue needs to be debated, and we look forward to hearing from our readers on their thoughts on it. 

Substantiality- Where Does one Draw The Line?

In the first post on this topic, I had posed a few questions based on the use of popular quotes in Ashwin Sanghi’s book “Chanakya’s Chant”. Divya posted her thoughts on the questions posed. In this post, I would like to continue the discussion and delve deeper into the thought-provoking points raised by Divya.

In a series of posts earlier elsewhere, I had discussed the issue of vestation of copyright in characters of literary works. During the course of discussing the issue, the question that I had raised was as follows- when a literary work is vested with copyright, does the copyright vest in the work alone, or could portions of the work enjoy stand-alone copyright as well?

In other words, do parts of the whole enjoy a copyright besides the copyright in the whole? The answer to this question was, to a certain extent, found in the Irish Rose case and subsequently in the Sam Spade case. In both these cases, the line of approach that was taken by US Courts with respect to copyright in characters was that, if the characters are merely vehicles for the story, there is no stand-alone copyright in the characters. Here, it is only possible to claim copyright infringement of the story by association of the characters to the story.

However, if the story revolves around the characters and the story is a vehicle to extol the virtues or vices of the characters, the characters could be treated as enjoying stand-alone copyright. For instance, the characters from the movie Rocky were treated by US Courts as falling within the latter category, and it was held that the characters themselves enjoy copyright protection because they stand out from the common stock of characters.

Simply put, the thumb rule appears to be that if the characters lead to association with the work, it is the copyright in the work that would be infringed if the characters are used by third parties. Whereas if the characters themselves enjoy popular acceptance regardless of the setting in which they were used in the work, the copyright in the characters would be infringed if they are used by third parties.

The same rule could be applied to quotes as follows:

Situation 1: If the quotes lead to association with a particular work or character in a work, it could be said that the copyright in the work is infringed. After all, if the intention is to prevent third parties from using the quotes, a creative plaintiff need not claim copyright in the quote, he could simply allege that the use of the quote infringes the work in which the quote was originally used.

The first objection could be- what cannot be done directly cannot be achieved indirectly as well. In other words, if a quote cannot be protected directly, it cannot be protectly indirectly using the work as a facade.

The second objection could be that association is a trademark-like argument, which I mentioned in the first post.

The third objection could be that lines like “I’ll make an offer he can’t refuse” are actually normal statements, but it is the association of these lines with a particular character that gives it a “secondary significance” and makes them “quotes/dialogues”. The question that now arises is, should association of such otherwise unremarkable lines with popular characters, deprive third parties the right to use the lines?

There are again two ways of looking at this issue- On one hand, if the line has not been used in the same manner as it was used in the original work, copyright infringement would be difficult to claim or establish. For instance, if the character who mouths the line “I’ll make an offer he can’t refuse” is not a mafiosi, but happens to be a character like “Holly Golightly” from “Breakfast at Tiffany’s”, the setting is entirely different (although the use of the line is apt for her character...).

On the other hand, if the line has indeed been used by a gangster, whose character arc is similar to that of the character in the original work, it might be arguably possible to assert exclusive rights over the quote through the character/story.

Situation 2: If however the quote is unique in itself, the author could claim a stand-alone copyright in it. The issue with this is the use of quality as a relevant factor to vest a work with copyright. The burden on the copyright owner would be to show that the quote is not a “commonly used line”, but was a “quote” in the strict sense of the term. Again here, his attempts would veer towards establishing the popularity of the quote to prove uniqueness. This too brings in the trademark/association angle.

Turning to the issue of criticism, regardless of the tone being positive or negative, criticism is “about” the work. I am not sure if a work in itself can be called a critique of another if it does not comment on the earlier work. Chanakya’s chant, in that sense, is not a critique of any work.

As for fair dealing, fair dealing is a stricter approach to exceptions to infringement than fair use. Under fair dealing, limited situations are envisaged whose metes are bounds are almost clear. Therefore, use of fair use principles to broaden the scope of such limited situations may not be permissible.

Section 52 of our Copyright Act uses fair dealing for a few instances and fair use for a few other. When it comes to literary works:

A. Section 52 (a) permits “fair dealing” for private use and criticism,

B. 52(b) permits “fair dealing” for the purposes of reporting,

C. 52(c) permits reproduction in a judicial proceeding,

D. 52(d) permits reproduction or publication for Legislative purposes,

E. 52(e) permits reproduction for the purposes of a certified copy,

F. 52(f) permits only reading and recitation of a reasonable extract,

G. 52(g) permits publication in a collection of essentially non-copyright matter for use in “educational institutions”

H. 52(h) permits reproduction during the course of instruction or in examinations

I. 52(i) permits performance in the activities of an educational institution

J. 52(j) permits making sound recording of the work with the license or consent of the owner of the work

K. 52(l) permits performance in an amateur club to a non-paying audience, or in a religious institution

L. 52(o) permits making of three copies for a library if the book is not sold in India

There are a few other provisions besides the above, but none of the provisions seems broad enough to employ “fair use” principles propounded in the US. This is because “fair dealing” provisions in most jurisdictions appear to be restrictively worded and are treated as such too.

Now, given that Sanghi’s use of the quotes does not fall under any of these “fair dealing” exceptions, and if one were to prove that the use of the quotes infringes either the copyright in the original works, or copyrights in the quotes themselves, what possible defense could Sanghi have?

The big picture argument could be- does a “quote/line” qualify as “literary work”? The counter-question is “why can’t I write and sell a one-quote book?” Does copyright law preclude the possibility of a book with a single-quote being bought and read by people? Also, does “literary work” always mean a “book”? 

As obscure or far-fetched as the example may be, I am not sure the answer is either obvious or settled. 

Stale News: Intermediary Rules under the Information Technology Act Challenged

An advocate from Kerala Mr.Shojan Jacob has filed a writ petition challenging the Information Technology (Intermediary Guidelines) Rules, 2011.

Bar and Bench has reported this development, which was brought to my attention by Mr.Aditya Arun Kutty, Advocate before the High Court of Delhi.

Reportedly, Rule 4 of the Intermediary Guidelines and Rules 8 and 16 of the Information Technology (Procedure and Safeguard for Blocking of Access to Information by Public) Rules, 2009 have been challenged as being illegal, arbitrary and unreasonable. It has also been alleged in the petition that the Rules curtail fundamental freedoms of speech and expression.  Rule 4 of Guideline Rules is as follows:

(4) The intermediary, on whose computer system the information is stored or hosted or published, upon obtaining knowledge by itself or been brought to actual knowledge by an affected person in writing or through email signed with electronic signature about any such information as mentioned in sub-rule (2) above, shall act within thirty six hours and where applicable, work with user or owner of such information to disable such information that is in contravention of sub-rule (2). Further the intermediary shall preserve such information and associated records for at least ninety days for investigation purposes.

The requirement of taking down the content within 36 hours of being apprised of the content could be accused of not affording the intermediary sufficient time to apply his mind to the content, and decide if at all there is an infraction of a third party’s legitimate interests. On the other hand, it could be said that given the lightning speed with which the medium is capable of creating a multiplier effect if the content is indeed damaging, 36 hours could be justified on the grounds of “intelligible discrimination” when compared to other media.

In other words, the basic question that ought to be asked is- why should take down rules apply against an intermediary when it comes to the internet, when the norm applied to print medium is different? It would be interesting to see how the issue is dealt with by the Kerala High Court.

Among the reliefs sought in the petition are guidelines to the Centre from the court to the effect that owners of content, which is sought to be taken down, must be given prior notice before the content is banned. Also, after the content is taken down, a reasoned order must follow clearly stating the objections and the basis for the objections to the content.

In short, the petition seeks infusion of principles of natural justice in the Rules. Not an unreasonable petition, but given the wind blowing these days, this petition may draw the ire of the establishment for raising genuine concerns. 

Evaluating Substantiality

Sai indeed has raised an interesting question in his post- what is substantial enough to make a case for copyright infringement?

I will attempt to answer this question, in the context of Chanakya’s Chant. Am sure readers will appreciate that it is often easier to answer questions, when one uses a live example!). For starters, I agree the book is an awesome read. However, I would like to take a look at the situation from a somewhat different perspective..

As I see, the prolific use of quotes in the book, can be compared to a sort of compilation. One has learnt from the US Supreme Court decision in Feist, that the modicum of creativity required in a work of authorship, to be copyright eligible, is minimal. 

In other words, what I am attempting to say is that it is possible to look at what Sanghi did, to be in fact a weave/compilation of perhaps, his favourite quotes, into an altogether different historical setting, an attempt, which (in my humble opinion) is extremely creative in fashion.

I am not sure if what I say above holds good. Let me try to substantiate that by layering it with another line of thought.

We all know that copyright is an exclusive right over the expression of an idea. In other words, the expression describes the idea. If a known expression is picked up (say Oh My God! From FRIENDS) and used in a distinct set up, with a different plot, I think the expression, would be inextricably linked to the new idea. 

In such a scenario, if a couple of lines commonly used, were to be taken and looked at, they perhaps, would be associated with multiple scripts. Just because they have been used again in a different context, may not necessarily mean that they are infringing the copyright subsisting in the previous work. This in my view, is especially true, since copyright subsists in a work, and not in an “extract” from a work.

Coming to the point on fair dealing, the test of fair dealing under S. 52 must be applied before determining Infringement. As Sai rightly pointed out, “criticism” is covered as an exception there under.

But, to answer his question, I believe that praise would also be included under the ambit of “criticism”, especially because,criticism is not merely understood to be a negative opinion, but is in fact an opinion rendered by someone with knowledge or expertise in the field, and whose opinion on a particular work, may give rise to a positive or negative opinion about it. With this in mind, I think an ode or tribute would definitely qualify as fair dealing.

Further, to answer the question of substantiality of the work, I think the Folsom v. Marsh test used to determine fair use proves useful. The four factor test, which has been incorporated in the Indian jurisprudence, takes the following into account:

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.

Let me attempt applying these to the Chanakya’s Chant case:

1. Yes, Chanakya’s Chant is a work for commercial gains. The purpose and character could perhaps be said to be descriptive of a character’s response.

2. The nature of the copyrighted work is literary

3. The amount and substantiality of the portion in relation to the original work, is miniscule- few dialogues, as compared to the whole book

4. Effect on the commercial value of the copyrighted work –negligible. I don’t think the sales of any of the works whose dialogues/quotes have been referenced would be affected by Sanghi’s use.

If at all any, the only cause of action that the authors have against Sanghi's use, is one of “violation of moral rights”. Under S. 57 dealing in Author's Special Rights, they would have to make out a case showing that either (a) there is a distortion, mutilation or other modification of the said work; or (b) that an action prejudicial to his honour or reputation has been taken.

Having said all of this, mostly on impulse, I think Sanghi played it safe by giving due credit to the authors of the quotes. Whether his use is decided to be fair or not, he at least cannot be accused of blatant plagiarism!