“The defendant’s acts of taking material acquired by the skill, organisation and money of the complainant and appropriating it and selling it as its own, is trying to reap where it has not sown and would thus constitute unfair competition. The underlying principle behind the tort of unfair competition is that he who has fairly paid the price should have the beneficial use of the property.”
Let me recapture the facts of this interesting case from an earlier post on this issue:
Star India (the plaintiff) was given an exclusive right to broadcast matches organized by the Board of Control for Cricket in India (BCCI). In particular, it was given a 72 hour monopoly over all media rights, including the right to all information emanating from the event such as real time scores etc. In return, Star paid BCCI a magnificent sum of money to BCCI.
The defendants (essentially telecom service providers) captured the scores on a real time basis and updated their subscribers through text messages (SMSes). Star TV sued, based on the “hot news” doctrine and the tort of unfair competition/unjust enrichment claiming that their exclusive rights under the agreement with BCCI were rendered redundant and that the defendants should not be allowed to “misappropriate” this quasi property right in real time “information” pertaining to the matches.
Single Judge and Remand:
Quasi Property Rights and Unfair Competition:
The judge endorsed a quasi property right in the real time “scores”, given the huge investments in the match and the fact that Star TV paid enormous sums of money to BCCI for securing these rights.
It is important to note that in an earlier ruling involving similar facts (the Marksman case), the Madras High Court appears to have endorsed the tort of unfair competition and supported the creation of quasi property rights in real time scores. In pertinent part, the court relied upon the NBA case in the US and held:
“The right of providing scores, alerts and updates is the result of expenditure of skill, labour and money of the organisers and so the same is saleable only by them. The sending of score updates and match alerts via SMS amounts to interference with the normal operation of the Organisers business. The defendant‟s act of appropriating facts and information from the match telecast and selling the same is nothing but endeavoring to reap where the defendants have not sown.”
Implications of the Ruling:
Here are some of the quick implications of this ruling:
1. With the earlier Madras decision and now with the Delhi High Court crystallising it even further, we have a new IP category to contend with, namely the tort of unfair competition (unless the appellate courts reverse). The last I counted, we had 10 IP categories in India (patents, copyrights, trademarks, designs, trade secrets, semiconductors, GI’s, plant variety protection, publicity rights, biodiversity protection (in a remote way no doubt). We now have 11, the same number as a cricket team!
Common Law vs Statute?
2. Creative lawyers will no doubt squeeze in many more alleged “wrongs” into this new IP box. This is potentially problematic, given that any new creation invariably takes away from what might have been the “public domain” and principles of free competition. The key question for discussion is: do we need a separate tort of unfair competition at all? Could one argue that existing IP regimes balance out competing interests appropriately and carve out what can be cleaved off as “private” property? To the extent that a new right needs to be created, is it not a “policy” call that ought to be taken by legislators after balancing out all competing concerns? Will not such an open ended common law tort open the floodgates for the adoption of “data exclusivity” norms in the pharmaceutical context, a distinct form of IP right that the Indian government has, time and again, refrained from legislating on.
Justice Mehta himself quotes with approval the cautionary note struck by Justice Holmes who dissented from the majority view in IMS and thought that this was an issue better left to legislators:
“…the creation or recognition by courts, of a new private right, may work serious injury to the general public, unless the boundaries of the right are definitely established and wisely guarded. In order to reconcile the new private right with the public interest, it may be necessary to prescribe limitation and rules for its enjoyment; and also to provide administrative machinery for enforcing the rules. It is largely for this reason that, in the effort to meet the many new demands for justice, incident to a rapid changing civilization, resort to legislation has latterly been had with increasing frequency.”
3. I am given to believe that industry associations have begun lobbying for a separate statute on unfair competition law. In which case, the above point I raise becomes even more important: should we expressly legislate principles of unfair competition or leave it open ended for the courts to keep populating as newer categories of alleged IP harms emerge?
4. With this ruling (as with many others in the IP space), it is clear that intellectual property is more about “investment” and less about “intellect”. But then, most of us already knew this, didn’t we? My PhD thesis calls for an explicit investment protection regime in the context of pharmaceutical investments. I argue that we must call a spade a spade and stop pretending that we’re predicating protection on some form of “intellect”.