SpicyIP Weekly Review (December 25-January 1)

First off, here’s wishing a very happy, scintillating and spicy new year to all our readers!

Now onto wrapping up the last week of 2016:

In our most important development this week, Pankhuri has painstakingly compiled a list of the top 10 IP decisions and developments as well as other notable IP developments from 2016.

Our topical highlight for this week is Balu’s take on the groundbreaking decision where a division bench (DB) of the Delhi High Court held that intermediaries are immune from liability for copyright infringement caused by third party content without proof of their “actual knowledge”. This decision has reversed Justice Manmohan Singh’s previous judgment wherein he found that online intermediaries cannot take recourse to immunity under Section 79 of the IT, placing the onus of conducting a preliminary check, on all content, on the intermediaries before such material was transmitted to the public. Balu splits his analysis into two issues, dealing first with the fact of knowledge on part of MySpace and then discusses whether intermediaries can peruse the safe harbor under Section 81 of the IT Act.  He notes that the DB absolved MySpace from liability for secondary infringement because mere general awareness of the possibility of infringement is not enough; with the disclaimer that the actual level of MySpace’s control of over the content will only be ascertained at the stage of trial. He emphasizes on the working of Section 79 as the DB held that private copyright owners can still demand action against intermediaries who may themselves post infringing content.

For our thematic highlight, Shamnad Sir wished us all a Happy New Year with a very special post where infuses the essence of Disney’s blockbuster film Frozen in the narrative of the current state of IP debates in the world. More particularly, he appeals to the IP fraternity to ‘unfreeze our icy IP debates and rescript the narrative. Much like the movie, we need to let it go! And find the love within. For without it, how do we thaw the frozen IP hearts on either side of the ideological divide?’ Let’s hope that we can all exert our grey matter and take inspiration from his thought and to transcend the IP narrative to the next level in 2017.

First, we have Rahul’s post on the Delhi High Court’s decision to strike down Section 24(5) of the Protection of Plant Varieties and Farmers’ Rights Act. The erstwhile provision empowered the registrar to pass an interim in order to protect the interests of a breeder against any abusive act committed by any third party during the period between the filing of an application for registration of a variety and the authority making its decision on such an application. In this Christmas delight, Rahul provides compelling analysis to support the Delhi HC’s findings on grounds that Section 24(5) provided broad and sweeping’ powers to the Registrar and that the term ‘abusive act’ is open to unreasonably wide interpretation.

For the week’s third and fourth posts, Mathews analyzed two Delhi HC judgments. In the first, the Plaintiff contended that the Defendant was exploiting its copyright outside the scope of their assignment since an electronic mode was not contemplated in it. Mathews notes that the Court did not grant the injunction since the Defendant agreed to deposit a sum agreed upon by the Plaintiff. In the second, the Court reaffirmed that TATA is a well-known mark since it has been used by various Tata companies for a considerable period of time on a plethora of products and services.

In the next post, Balu analyzed the Delhi HC’s decision to restrain the infamous Indian Performing Rights Society (IPRS), PPL and Novex Communications from granting any copyright licenses until the next date of hearing (i.e. 24/04/17) since none of them are registered copyright societies as is required under Section 33 of the Copyright Act.  On the arraignment of Union of India and the Copyright Office, the UOI responded that a Respondents 3 and 4 are already facing an inquiry and that the DIPP has issued a notification informing the public that the said respondents are no longer registered copyright societies. However, Balu promptly notes that the inquiry report against IPRS has been overdue for too long even when IPRS faces serious charges such as money laundering and wrongfully withholding royalties from artists.  Lastly, Balu aptly recognizes that the Delhi HC has saved revelers and organizers from being exploited and ripped off by copyright societies like IPRS.

This was followed by Rahul’s hard-hitting critique of the Delhi HC’s decision to quash a ban on 344 fixed-dose combination drugs under Section 26A of the Drugs and Cosmetics Act.  Before going on to his analysis, Rahul first tells us what FDCs are and why they are likely to be harmful for consumption. Next, he traces the facts leading up to the ban and then notes that it was quashed by the Court primarily for lack of the Government’s prior consultation with the Drugs Technical Advisory Board (DTAB) and the Drugs Consultative Committee (DCC). Rahul believes that the Court has used specious reasoning to arrive at a fallacious conclusion. He states that the Court has read into the statute even when the language is unambiguous to the effect that consultation with the DTAB and DCC is not mandatory under Section 26A. Lastly, he also argues that the Court has erred on the question of a prior hearing/show cause since Section 26A does not require either.

Next, Inika brought us her analysis of the Delhi HC’s negative treatment of the findings of the Authority for Advance Ruling (AAR) that inter alia that consideration for ‘incidental use’ of trademarks was taxable as royalty. The Court held that since the primary object of the agreement in question to facilitating the entire event, i.e. the Formula One Grand Prix, in India, the trademark use by Jaypee was only incidental and the consideration for the entire agreement should not be considered as IP royalty. Inika notes that the amount was not taxable since Jaypee’s use of the F1 trademarks was restricted, limited and necessary for publicizing the Grand Prix. Lastly, she also notes that a very significant order is on the question of ‘permanent establishment’. The Court held that as long as the taxpayer was in a physically defined geographical area, permanence in such a fixed place could be relative with respect to the nature of business.

Lastly, Rahul brought us his take on the Delhi HC’s decision wherein it permanently restrained the misuse of trade-dress of the ‘MOTHER DAIRY’ trademark on grounds that it is well-known in India.

International Developments:

  1. Amazon receives a patent for flying warehouse, adding to its drone delivery system.
  2. Facebook begins working on a tool to hunt for copyright infringing content.
  3. Disney wins a huge lawsuit against makers of ‘CARS’ rip-offs in China.
  4. Taiwanese local artists to hold an art exhibition to showcase the national government’s attention to intellectual property rights.
  5. Louis Vuitton loses TM dilution claim against My Other Bag’s tongue in cheek use of LV’s famous handbag pattern.


Ritvik M Kulkarni

Ritvik Kulkarni is a final year student at ILS Law College, Pune. He is the Student Coordinator of the ILS Intellectual Property Rights Cell and Student Editor at the ILS Abhivyakti Law Journal since 2014-15. Ritvik first learnt of IP while preparing for his first moot; and has been regularly taking his weekly IP fix ever since. Additionally, he takes interest in learning the law and practice of domestic and international dispute settlement. Speaking of disputes, he's an ardent follower and jabra fan of Game of Thrones. You can get in touch with him at [email protected]; and dont worry he loves F.R.I.E.N.D.S too.

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