Saturday, August 24, 2013

Announcements: The Blog now has a Logo and a Twitter Handle

For over two years of its existence as “The Demanding Mistress” since December 2010 (the blog was previously called “Yukti”), the blog never has had a logo of its own. After being constantly badgered by some of the blog’s well-wishers to create a logo, I requested a very dear friend and confidante to design one for the blog. The result has been splendid to say the least, and for which I am deeply grateful to her!

The logo has the letters “TDM” fused in seriatim with the image of Lady Justice in the background, a cravat at the bottom right corner and the blog's name at the bottom.

Also, my co-blogger Amshula took the initiative of creating a twitter account for the blog. The Twitter handle is @DMistressblawg, where we shall provide constant updates of our posts and legal developments. 

Sunday, August 18, 2013

Does the Designs Act Provide for a Counter-claim for Cancellation of a Registered Design?

A few days ago I was asked if the reference to “defence” of invalidity of a design under Section 22(3) and (4) of the Designs Act, 2000 may be construed as a reference to a counter-claim for cancellation of a design in response to a suit for infringement of the design.

Section 22(3) of the Designs Act states that the grounds for cancellation of a design enumerated in Section 19 of the Act may be raised as defences in a suit for design infringement. In my opinion, Section 22(3) provides for only a “defence” of invalidity, but not a “counter-claim” seeking invalidation of the registered design.

This is because unlike Section 64 of the Patents Act which speaks of both a counterclaim to a suit and a stand-alone petition before the IPAB to revoke a patent, Section 19 of the Designs Act restricts itself to a petition for cancellation of the design before the Controller of designs, but does not provide for a counterclaim.

The framework of the Designs Act, in a way, is similar to the Trademarks Act wherein there is no provision for rectification of a trademark by the Court. Therefore, although it is possible for the defendant in a suit for design infringement to raise the defence of invalidity of the design as part of his written statement, it is not in the nature of a counter-claim. At best, the defence could have the effect of preventing the grant of an injunction, interim or permanent, if the Court comes to the conclusion that the validity of the design is under serious fire. However, the Court does not have the power to revoke/cancel the registered design.

The option of defence of design invalidity provided for under Section 22(3) of the Act is akin to Section 107 of the Patents Act which allows a defendant to raise the defence of patent invalidity by relying on grounds provided for under Section 64 of the Patents Act. In a patent infringement suit too, if only defences under Section 107 are raised and no counterclaim under Section 64 is instituted, the High Court cannot invalidate/revoke the patent.

In an earlier post, I had written on the difference between a “defence” and a “counterclaim” in the context of patents citing the decision of the Allahabad High Court in Fabcon Corporation v. Industrial Engineering Corporation (AIR 1987 All 338). Following is what I had written in that post:

In other words, if the counterclaim of revocation is no more treated as a counterclaim, the suit must be adjudicated by a forum which has the power to do so under Section 104 of the Act, namely the District Court.

To my surprise, there is a short order on this issue that was delivered by the Allahabad High Court in Fabcon Corporation v. Industrial Engineering Corporation (AIR 1987 All 338). In this case, the Plaintiff claimed that since a defence of invalidity of the patent under Section 107 (1) was taken by the Defendant, such a defence must be deemed as a counterclaim under Section 64 of the Act. This meant that the suit for infringement had to be transferred along with the deemed counterclaim to the High Court.

The High Court disagreed with the Plaintiff and took a view, which I fully agree with and have always believed in, that a defence as envisaged under Section 107(1) is not the same as filing a counterclaim of revocation under Section 64 of the Act.”

To me, the mechanism under the Designs Act is a curious mix of options provided in the Patents Act and the Trademarks Act. The Designs Act too envisages transfer of the suit to a High Court when an invalidity defence is raised, which is similar to the Proviso to Section 104 of the Patents Act, with the exception being that the Proviso in the Patents Act mentions the suit, “along with the counter-claim”. The absence of a counter-claim seeking cancellation of the design is similar to the Trademarks Act. And yet, there is no provision for stay of the suit for design infringement during the pendency of the cancellation petition, unlike Section 124 of the Trademarks Act.

What complicates the straight-forward conclusion that the Designs Act does not provide for a counter-claim is Section 23 of the Designs Act. This provision makes Sections 106 (suit for groundless threats of infringement) and 113 (issuance of certificate of validity of a patent) of the Patents Act applicable to Designs Act with incidental changes. Extracted below is Section 113 of the Patents Act:

“(1) If in any proceedings before the Appellate Board or a High Court for the revocation of patent under section 64 and section 104, as the case may be, the validity of any claim of a specification is contested and that claim is found by the Appellate Board or the High Court to be valid, the Appellate Board or the High Court may certify that the validity of that claim was contested in those proceedings and was upheld.”

If this provision is to be applied with incidental changes to the Designs Act, how would it read? One possible reading could be as follows:

“(1) If in any proceedings before the Controller or the High Court for the cancellation of a design under section 19(1) and section 19(2), as the case may be, the validity of any registered design  is contested and that design is found by the Controller or the High Court to be valid, the Controller or the High Court may certify that the validity of that design was contested in those proceedings and was upheld.”

Another possible reading could be as follows:

“(1) If in any proceedings before the Controller or the High Court for the cancellation of a design under section 19(1) and section 22(3), as the case may be, the validity of any registered design  is contested and that design is found by the Controller or the High Court to be valid, the Controller or the High Court may certify that the validity of that design was contested in those proceedings and was upheld.”

The second possibility gives the impression that Section 22(3) provides for a counterclaim to revoke the design. However, it could again be argued that when a defence of design invalidity is raised, the Court has the power to declare and uphold the validity of the design, but does not have the power to invalidate the design since the Designs Act does not provide for a counterclaim.

I look forward to the opinions of our readers on the issue.

Thursday, August 15, 2013

Moving Past the “isms” and Stereotypes in the Indian IP Discourse

For quite some time now, the Indian IP discourse has been fraught with unrestrained stereotyping. Either one is dubbed “pro-patentee/pro-right holder” or “pro-public interest”, as if these are always entirely mutually exclusive, besides giving the false impression that opinions necessarily stem from ideological proclivities and can never be issue or fact-based.

I am not going to wax eloquent on the virtues of a “middle path”. Instead, I wish to deal head-on with stereotyping, motivated or otherwise, because if this trend is not resisted and nipped in the bud, any and every alternative or dissenting view will be silenced by slotting commentators in mutually exclusive and opposing factions.

One of the primary reasons that I want to deal with this trend is because it is a serious impediment to constructive ideation in the realm of Indian IP jurisprudence and policy. Instead of investing one’s creative energies in creating a consensus and forging practical/reasoned solutions which strike a balance between incentivising innovation and preserving the realm of commons, precious time is wasted in fending off biases which are encouraged and perpetuated for multiple reasons. The most prominent reason typically is an insatiable hunger to remain the loudest and the most popular voice in a discussion. This is truly the worst possible reason any person could have for taking a shrill tone or an extreme stance on an issue of manifest public interest. And to put it mildly, this need to be heard the most is symptomatic of an exhibitionistic streak, which I think needs professional help.

It doesn’t take an IQ of 200 to realize that the consequence of this trend is that the issue/subject takes a back seat, and individual egos come to the fore. It is certainly possible and perfectly acceptable that two people may never see eye-to-eye on any aspect of any issue, but then the genuine way in true academic tradition to address the ideological chasm is to debate and disprove, or to agree to disagree, instead of promoting a whisper campaign that only results in turning the chasm to a schism.

For instance, my PIL against the customs notification on Section 107A(b) of the Patents Act, which was dismissed on grounds of lack of locus standi, has been sought to be portrayed as part of some fictitious campaign to undermine international exhaustion in the context of patents in India. The larger perception that is being pushed by those who give motivated fodder to such a sentiment is that I am supposedly an active pro-patentee commentator. Nothing could really be further from the truth. Critically, I do not and I repeat, I do not think it is hara-kiri to take a pro-patentee stance. After all, every debate needs diversity of thought, and I have a right to hold an opinion.  Importantly, thus far, I can safely state that my opinions have been guided by reason, rigorous legal research and experience.

My stance on Section 107A(b) is not driven by any ideology. It was and remains an exercise in legal research which I undertook at a point when I felt that a particular line of thought was being accepted unquestioningly without exploring the possibility of an alternative view (here’s a detailed article I wrote on Section 107A(b) in the IJIPL). In fact, I have absolutely no issues in considering the possibility of my interpretation of the provision being wrong. But then, that is not the point.

The point is this- analysing a provision in a certain way must not be or become politically incorrect merely because patentees could benefit from it. After all, some of the stated objects of our Patents Act, as reflected in Section 83, are as follows:

(a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay;

(c) that the protection and enforcement of patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations;

Besides, examples abound where in the course of my analysis of a particular case or decision, I have come to conclusions which the patentees in those cases may not agree with. For instance, I wrote two fairly detailed posts on the violation of Section 8 by the patentee in Roche v. Cipla. In that case, I took the clear view that having arrived at the conclusion of violation of Section 8, the Court ought to have revoked the patent on Erlotinib. This was not based on any prejudice or bias. Instead, it was an opinion based on the need for logical consistency and proper statutory interpretation. Again, I agreed with the critical findings of the Supreme Court in the Novartis case.

This is not to say that I have never taken a stance which is beneficial to patentees. However, these opinions were an exhortation to strike a balance in the way our Courts enforce patents. Having handled IP matters in the High Court and the IPAB, I have enough experience and conviction to back my opinions on the manner and quality of IP enforcement in India. Therefore, one finds it unfair and a tad bit unscrupulous when genuine opinions are silenced through a sub-radar campaign.

I have tried my best to observe restraint in ignoring these motivated voices by focusing on the subject, but now it has come to a point where it is important to speak out lest silence is mistaken for weakness or lack of conviction . I think it would help to bear in mind that the primary reasons for writing on IP issues on informal fora like blogs are to increase one’s own conceptual clarity, to contribute to IP awareness and to engage members of the public in a discussion on an issue which is bound to affect them. It appears that this initial spirit of idealism has slowly given way to an atmosphere of one-upmanship and avoidable negativity.

One sincerely hopes that this is a passing phase, and that gradually the spotlight will be back on the subject.

Saturday, August 10, 2013

Pepsodent v. Colgate: Comparative Advertising War

After fighting a bitter war on comparative advertising under the erstwhile Monopolies and Restrictive Trade Practice Act, 1969 between 1997 and 2003 which was settled, leading toothpaste brands Pepsodent (of Hindustan Unilever Limited) and Colgate (of Colgate-Palmolive) are at it again.

The last time around Pepsodent had claimed that its toothpaste was "102% better than the leading toothpaste" in germ-fighting capabilities. In its latest advertisement, Pepsodent has directly named Colgate claiming that its toothpaste Pepsodent Germicheck is 130% better than Colgate's product.

It remains to be seen if Colgate will treat this as commercial disparagement besides bringing it within the meaning of infringement under Section 29(8) of the Trademarks Act, 1999. 

After the Rin v. Tide campaign of HUL, this is yet another instance in recent times of HUL resorting to comparative advertising. Writing elsewhere on the Rin v. Tide campaign in February 2010, following is what I had stated on the position of the law on comparative advertising:

In my last post, I had discussed in brief the recent advertisement for Hindustan Unilever’s detergent brand "Rin", in which a rival brand "Tide" figures prominently. Quite a few comments to that post referred to the Horlicks v. Complan judgment of the Delhi High Court. However, a more recent decision of the Delhi HC on the issue of comparative advertisement is available, namely the one delivered in the case of Dabur India v. Colortek Meghalaya (February 2010).

In this judgment, it was the case of the Appellant Dabur that its mosquito repellent brand “Odomos” was disparaged by an ad of the respondent Colortek which owned the rival brand “Good Knight”. The Division Bench of the Delhi High Court affirmed the Single Judge’s decision that there was no disparagement of Odomos in the impugned ad. Consequently, no injunction was granted against the respondent Colortek. To support its decision, the Court referred to a host of Supreme Court decisions on various aspects of the issue.

The Court first discussed the limits of “commercial speech”, as set out by the Supreme Court in Tata Press v. MTNL (1995); according to the Supreme Court, “commercial speech” is guaranteed as part of freedom of speech under Article 19(1)(a) of the Constitution. Although, the Supreme Court in that case did not define “commercial speech”, it was stated that advertisement would fall under one of the species of such speech.

It was observed that dissemination of information about a particular product was necessary since it enabled the public to evaluate its options. The Supreme Court in its turn referred to the US decision of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council (1975) and said that it is almost settled law in the United States that though "commercial speech" is entitled to the First Amendment protection, the Government was completely free to recall “commercial speech" which is false, misleading, unfair, deceptive and which proposes illegal transactions.

In another case of Colgate v. Hindustan Lever (1999), the Court explained that although a seller has the latitude to represent his product in such a manner that he attracts more customers than he normally would have, such latitude would translate into description and “reasonable assertion” of the product, but not to misrepresentation. In other words, factual representations are perfectly legitimate.

The Apex Court went a step further to state that “commendatory expressions” are not dealt with as serious representations of fact.

When the SC says that “commendatory expressions” are not dealt with as serious representations of fact, it does not mean that such representations are untrue or misleading. On the contrary, what it means is that such representations cannot be taken seriously and that there is no obligation on the part of the seller to the customer with regard to the true quality, rather standing of goods merely because the seller has resorted to puffing.

To support this, the Apex Court relied on a rule of civil law, "simplex commendatio non obligat" , which means simple commendation can only be regarded as a mere invitation to a customer without any obligation as regards the quality of goods. In other words, every seller is entitled to call his goods “world’s best”, “Indian’s no.1”, “world-class quality” and so on.

However, the Supreme Court also cautioned that these principles are by no means conclusive since, by and large, cases of puffing are borderline cases, and that there exists a very thin line which separates puffing from falsehood.

In a nutshell, although commercial speech is available under the Indian Constitution to every seller, if the advertisement is false, unfair, misleading or deceptive, the seller is not entitled to seek protection behind “commercial speech”.

Having referred to the SC decisions, the Delhi High Court then referred to its earlier Pepsi v.Cola decision (2003), where it held that although a seller is entitled to glorify his product, in the process, he is not to denigrate or disparage a rival’s product.

The Court further cited Halsbury which states thus:

"It is actionable when the words go beyond a mere puff and constitute untrue statements of fact about a rival’s product."

The Court also cited its decision in a case of comparative advertising involving Dabur and Wipro, where it held as follows:

“It is one thing to say that the defendant's product is better than that of the plaintiff and it is another thing to say that the plaintiff's product is inferior to that of the defendant."

It is probably a corollarial conclusion wherein the seller is entitled to say he is better than the rest of his competition, and therefore, he is entitled to claim that he is better than a particular competitor as well.

Summing up these decisions, the Court laid down the following three-step test:

1. What is the intention behind the advertisement as deciphered from the storyline and the message ostensibly sought to be conveyed?

2. Is the manner of advertisement or comparison by and large truthful or does it falsely denigrate or disparage the rival’s product?

3. Finally, does the ad have the overall effect of promoting the seller’s product or showing the rival in poor light?

This particular decision of the Delhi High Court is very comprehensive because not only does it sum up the position of the law citing various sources, but also is progressive in its approach for it recognises the impact of the electronic medium. This is reflected in its observation that since the reach and influence of the medium is phenomenal, the advertiser has to per force walk a tightrope. He has to constantly ask himself if the ad runs the risk of having the effect, intended or unintended, of disparaging the rival’s product.

The Court did not stop here, but went further and said:

“we feel that notwithstanding the impact that a telecast may have, since commercial speech is protected and an advertisement is commercial speech, an advertiser must be given enough room to play around in (the grey areas) in the advertisement brought out by it. A plaintiff (such as the Appellant before us) ought not to be hyper-sensitive as brought out in Dabur India. This is because market forces, the economic climate, the nature and quality of a product would ultimately be the deciding factors for a consumer to make a choice. It is possible that aggressive or catchy advertising may cause a partial or temporary damage to the plaintiff, but ultimately the consumer would be the final adjudicator to decide what is best for him or her.”

This observation in a way balances interests of both the seller and the rival, and is of critical importance since it acknowledges market realities, which is a pleasant change for Indian Courts (One hopes that someday a similar sentiment will be adopted in “hardcore” IP matters).

More importantly, the underpinning of this observation is again the good of the consuming public.

Applying the above-stated principles to the facts of the Rin v. Tide controversy, one must assess and analyse the Rin advertisement objectively sans the mischievous light in which the media tends to portray such ads and the vicarious pleasure we derive as humans in seeing two competitors duke it out in full public glare.

One is unable to take a strong call here on this specific case because the question of “overall effect” of the ad is very subjective and one can never be sure of side-stepping the allegation, rather the minefield of arbitrariness in such cases.

On one hand, we could say that since Rin’s contentions are backed by tests of an independent lab, they are factual. A "balanced" view could say that the ad does not really disparage Tide, it merely has an element of mischief in it. I might even say that all mischief is not necessarily disparagement and I think considering the times we live in, what with reality shows and all, ads can no more be plain Jane representations of facts. Therefore, it could be argued that they are entitled to go beyond that, provided they are within the limits of decorum.

And on the other hand, the reference to Tide and its tagline may be seen as mockery. If, despite Rin's claims being grounded in facts, the primary focus of the advertisement is not facts such as the independent lab's tests, there is a chance that Rin (HUL) could be held liable for disparagement.

In other words, in judging the "overall effect" of the ad, the Court may have to look into the question of what caught or catches the eye or attention of the audience. Is the ticker which mentions independent lab tests prominent enough for the average viewer of imperfect recollection to see and remember? If the answer is a no, it probably establishes disparagement.

Further, Tide could seek to distinguish the Delhi HC's Dabur judgment on factual grounds saying that the reference to the rival brand in that case was not as obvious and as direct as it is in the Rin ad. Consequently, it could be argued that the accommodative view taken by the Court in the Dabur case cannot be the standard applicable for this case.

I realise, that in cases like these, counterpoints are bound to exist and thrive; but the one thing that comes out from such instances is that, as audiences, we still look for our own modern-day versions of the Colosseum and gladiators.”