It is that time of the year again when we look back and take stock of all the significant IP developments that India witnessed during the year gone by. While it might be fair to say that this year was quieter for the Indian IP landscape as compared to the last year, there were still a number of important developments that took place.
This year, we have divided these developments into four categories:
The decisions in the first category, i.e., Top 10 IP Cases/Judgments (Topicality/Impact) reflect those that we thought were important from a topical point of view and were covered by the media in some way owing to the importance of parties litigating or the issue being considered or for impact on industry and innovation/creativity ecosystem etc. We’ve tried to represent a diversity of subject matter also in this list, so we have a fair sprinkling of cases dealing with patents, trademarks, competition law etc.
And the decisions in the second category, i.e., Top 10 IP Cases/Judgments (Jurisprudence/Legal Lucidity) reflect those that we thought reflected a fair bit of jurisprudential rigour and/or legal lucidity. However, the two categories are not mutually exclusive.
We have also included a list of other notable IP developments of 2017 here.
Before you read on and check if your top ten matches ours, here’s wishing you all a very happy and prosperous new year. On the eve of this new year, let’s collectively wish that the upcoming year brings us more spicy IP developments!
Top 10 Cases/Judgments (Topicality/Impact)
1. Bayer Corporation v. Union of India : In a very significant development, the Delhi High Court held that ‘export’ of a patented invention for experimental purposes is also covered under Section 107A of the Patents Act, 1970 (India’s Bolar exemption) and thus does not amount to patent infringement. It accordingly allowed Natco to export Bayer’s patented drug ‘Sorafenib Tosylate’ (for which it was granted a compulsory license in 2012) to China for the purpose of conducting development/ clinical studies and trials. However, two months later, the order was stayed by a Division Bench, which asked Natco to file a separate application seeking permission for exporting the drug for experimental purposes and observed that it would be permitted to export only a limited quantity of the drug.
2. Bayer Intellectual Property Gmbh v. Ajanta Pharma Ltd. & Ors. : In an interesting order, the Delhi High Court modified an ad-interim injunction granted against Ajanta, allowing it to manufacture, distribute, offer for sale or sell the impugned products (generic version of Bayer’s patented drug Vardenafil) for purposes of ‘exports’. It held that commercial exports of prima facie infringing products covered by a non-worked Indian patent did not merit injunctive relief on the ground that restraint of such exports would lead to “not only loss of employment but revenue to the State as well”, and would therefore be against ‘public interest’.
3. Biocon Ltd. & Mylan Pharmaceuticals Pvt. Ltd. v. F. Hoffmann-La Roche AG & Ors. : In another significant development, the Competition Commission of India ordered a detailed investigation against pharma major Roche with respect to the cancer drug, Trastuzumab on a prima facie determination that Roche had abused its dominance (in the market for biological drugs based on Trastuzumab, including its biosimilars) and thereby contravened Section 4(2)(c) of the Competition Act, 2002. It observed that the practices adopted by Roche Group to create an impression about the propriety of the approvals granted, the safety and efficacy of biosimilars, the risk associated and the outcome of the on-going court proceedings in the medical fraternity, including doctors, hospitals, tender authorities, institutes etc., when seen collectively, prima facie appeared to be aimed at adversely affecting the penetration of biosimilars in the market. Our three part post on this order can be viewed here, here and here.
4. Patel Field Marshal Agencies Ltd. v. PM Diesels Ltd. & Ors.: In a landmark decision, the Supreme Court conclusively settled an extremely important issue that whether, upon the institution of a suit for infringement under the Trademarks Act, the remedies for rectification of a trademark under Sections 47 and 57 (before the IPAB) are still available to the litigant, in case the plea of validity has been abandoned by the relevant litigant. The Supreme Court took note of the conflicting decisions of the various High Courts, and found that where the question of validity has not been taken up by the court, the statutory authority has the power to decide a rectification claim by the litigant. However, in a case where the court comes to a prima facie conclusion on validity, the only remedy available is an appeal.
5. Toyota Jidosha Kabushiki Kaisha v. M/S Prius Auto Industries Ltd.: In a notable development for Indian trademark law, the Supreme Court reiterated that IP rights are “territorial” and not “global”. The court refused to grant an injunction restraining the defendant from using its registered trademark ‘Prius’ even though Toyota was a prior user of the mark. It reasoned that even though Toyota’s mark was well-known outside India, Toyota could not establish that it enjoyed a reputation in the ‘Indian’ market at the relevant point of time i.e. the year 2001 when the defendant began using the mark in India.
6. Icon Health and Fitness, Inc. v. Sheriff Usman & Anr. : In an extremely impactful but horrendously reasoned judgment (which is why it didn’t make it to our second category of the top 10 judgments based on jurisprudential rigour and/or legal lucidity), the Delhi High Court held that the presence of the Defendant’s business on online portals such as Amazon or Google Play is sufficient to establish the court’s territorial jurisdiction over the defendant in a suit for passing off. This kind of broad and vague limitation on jurisdiction sets a dangerous precedent as it paves a clear way for unscrupulous litigants to engage in forum shopping, a practice where a plaintiff would approach a jurisdiction not because of any real connection to the dispute, but because of a greater likelihood of success.
7. Metro Tyres Ltd. v. The Advertising Standards Council of India & Anr.: In yet another notable judgment to emerge from the Delhi High Court, it was held that the Advertising Standards Council of India (ASCI) has jurisdiction to adjudicate upon claims of copyright and trademark infringement and passing off. The Court observed that the existence of provisions under the Copyright Act, 1957 and the Trademark Act, 1999 exclusively empowering the district court to adjudicate upon claims of infringement does not operate as an embargo to the ASCI adjudicating upon claims of infringement. The Court grounded its judgment in the desirability of vesting self-regulatory bodies with greater powers in order to enable them to function as efficacious alternative dispute resolution mechanisms.
8. M/s AZ Tech (India) & Anr. v. M/s Intex Technologies (India) Ltd.: In a decision that can have far reaching implications, Supreme Court called out the “disturbing trend” of settling IPR suits through interim orders. Coming down heavily on an interim order passed by the Delhi High Court, the Supreme Court observed that the said order had virtually dealt with the merits of the matter in their entirety, despite being an interim order. The Court went on to direct the Registrar General of the Delhi High Court to report to the Court the following-the total number of IPR suits divided into different categories pending in the Delhi High Court, stage of each suit, and also the period for which injunction/interim orders have been held the field in each of such suits.
9. Bright Enterprises Private Ltd. & Anr. v. MJ Bizcraft LLP & Anr.: In a decision befitting the description ‘landmark’, the Delhi High Court delivered the first ever decision on Summary Judgments provided under Order 13A of the Civil Procedure Code, 1908. A Division Bench of the Court, deciding the appeal filed against the impugned order of Single Judge, held that the court has to mandatorily issue summons to the Defendant even in a summary proceeding under Order 13A and the court does not have the discretion to derogate from this requirement unless the suit was hit by either Order 7 Rule 10 or Rule 11. The Court stressed that the an application for Summary Judgment can only be filed after the summons is served on the Defendant, and before the court frames issues in the suit. In conclusion, the Court notes that the conditions mentioned in Order 13A are to be very strictly followed, to avoid injustice to parties.
10. Monsanto Technology LLC & Ors. v. Nuziveedu Seeds Ltd. & Ors: In the ongoing tussle between the Indian seed companies and Monsanto, a single judge of the Delhi High Court ruled that Monsanto’s termination of the contract with the Indian seed companies was prima facie illegal and allowed Nuziveedu and the others to continue using the Bt. Technology licensed from Monsanto in the interim, provided that the trait fee is paid till the suit is finally disposed off.The Single Judge observed that Monsanto refused to even acknowledge the effect of the State government legislations or notifications on the cotton seed prices and only asserted its right to receive the trait fee as settled “through mutual consent” under the contract. Therefore, Monsanto was duty bound to consider the request of Nuziveedu and others for modification of the terms as to the rate of trait fee payable. Nevertheless, shortly thereafter, a Division Bench stayed the order of the Single Judge and rendered the contracts inoperable, bringing the parties back to status quo.
Top 10 Cases/Judgments (Jurisprudence/Legal Lucidity)
1. Bayer Corporation v. Union of India: In a very significant development, the Delhi High Court held that ‘export’ of a patented invention for experimental purposes is also covered under Section 107A of the Patents Act, 1970 (India’s Bolar exemption) and thus does not amount to patent infringement. It accordingly allowed Natco to export Bayer’s patented drug ‘Sorafenib Tosylate’ (for which it was granted a compulsory license in 2012) to China for the purpose of conducting development/ clinical studies and trials. However, two months later, the order was stayed by a Division Bench which asked Natco to file a separate application seeking permission for exporting the drug for experimental purposes and observed that it would be permitted to export only a limited quantity of the drug.
2. Patel Field Marshal Agencies Ltd. v. PM Diesels Ltd. & Ors. : In a landmark decision, the Supreme Court conclusively settled an extremely important issue that whether, upon the institution of a suit for infringement under the Trademarks Act, the remedies for rectification of a trademark under Sections 47 and 57 (before the IPAB) are still available to the litigant, in case the plea of validity has been abandoned by the relevant litigant. The Supreme Court took note of the conflicting decisions of the various High Courts, and found that where the question of validity has not been taken up by the court, the statutory authority has the power to decide a rectification claim by the litigant. However, in a case where the court comes to a prima facieconclusion on validity, the only remedy available is an appeal.
3. Toyota Jidosha Kabushiki Kaisha v. M/S Prius Auto Industries Ltd. : In a notable development for Indian trademark law, the Supreme Court reiterated that IP rights are “territorial” and not “global”. The court refused to grant an injunction restraining the defendant from using its registered trademark ‘Prius’ even though Toyota was a prior user of the mark. It reasoned that even though Toyota’s mark was well-known outside India, Toyota failed to prove that it enjoyed a reputation in the ‘Indian’ market at the relevant point of time i.e. the year 2001 when the defendant began using the mark in India.
4. Kent RO Systems Ltd. & Anr. v. Amit Kotak & Ors : In a welcome development, the Delhi Court ruled that there is no obligation on the intermediaries to screen content alleged to be violative of intellectual property laws before publishing the same (i.e. on an ex-ante basis). It, therefore, refused to direct E-bay to remove listings of water purifiers that allegedly infringed Kent RO’s registered design from its website or to issue a prohibitory injunction preventing E-bay from publishing the same in the future.
5. Thiagarajan Kumararaja v. M/s Capital Film Works and Anr. : The judgment filled up some of the void in the jurisprudence relating to the inter-play between the rights of the producer of a cinematographic film and that of the authors of underlying works. The Madras High Court, deciding on the question whether dubbing of a film into another language would fall foul of the rights of the scriptwriter, held that the producers have the right to replace the sound recording of the original film with a different language. The Court based its finding on an expansive reading of the phrase ‘communication to the public’ under Section 2(ff) and observed that ‘dubbing’ would fall under the said definition. The Court also observed that dubbing is distinct from translation, and the producer’s rights to communicate the film to the public, through dubbing, does not affect the rights of the author of the underlying script. Nevertheless, on the question of whether the right to communicate a film to the public includes the right to remake the film entirely, the Court answered the same in the negative as it felt that this would entail making changes to the underlying script, without the author’s consent.
6. Paramount Surgimed Ltd. v. Paramount Bed India Pvt. Ltd. : In a notable decision on the effect of misrepresentation in a suit, which seeks equitable reliefs, the Delhi High Court held that suppression or misrepresentation of facts in the plaint was fatal to a claim for equitable relief. The bigger takeaway from the decision is that even when the Plaintiff has registered a mark, dishonesty on its part would result in its right to claim equitable relief, including relief in the form of interim injunction, being rendered nugatory.
7. Neetu Singh v. Rajiv Saumitra : The judgment shed light into the relatively unchartered territory of Section 17 (c) of the Copyright Act and clarified that when the ownership of copyright is disputed between an employer and an employee, it is the terms of employment that have to be looked into. The Court went on to even clarify what is to be looked into to determine the terms of employment. For instance, in the case of a Director, it is any subsisting agreement, or the Articles of Association or the Memorandum of Association of the company. Relying on this principle, the Court held that in the instant case although the Plaintiff was working as a Director of the Defendant No. 2 company from 2012 to 2014, it noted that the Defendants had failed to prove that the literary work was authored as part of her duties and obligations as a Director and granted an injunction in favour of the Plaintiff.
8. Dashrath B. Rathod & Ors. v. Fox Star Studios India Pvt. Ltd. & Ors. : In yet another Justice Patel master class, the learned judge came down heavily on the tendency of parties to approach the court at the eleventh hour seeking injunction against impending movie releases. The judgment laid down in no uncertain words that the attempts to snatch last minute injunctions at the cost of putting both the opposite party and the court machinery under undue pressure should in no way be tolerated, especially when not even a prima facie case of copyright infringement was made out by the Plaintiff in the instant case. In a double whammy to the Plaintiff, who sought injunction against the release of the Defendant’s movie Phillauri, Justice Patel, relying on the provisions of the Commercial Courts Act, 2015, imposed a cost of Rs. 5,00,000 lakhs on the Plaintiff.
9. Anil Kapoor Film Co. Pvt. Ltd. v. Make My Day Entertainment & Anr. – In a very well-reasoned interim order, the Bombay High Court refused to grant an ad-interim injunction in a claim of passing off by the makers of the film ‘Veere Ki Wedding’ (under production) against the makers of the film ‘Veere Di Wedding’ (then soon to be released). The court noted that not only was the title (“Veere Di Wedding” translating into “My best friend’s wedding”) extremely common, the plaintiff needed to prove reputation through consumer recognition – i.e. the title should be associated with the public mind as referring only to the plaintiff’s work, which according to it was next to impossible in this case because the movie was not even in existence. It also rejected the argument on misrepresentation, clarifying that just by virtue of having a made a film with a similar title, the defendant cannot be said to have attempted to deceive the public.
10. Krishna Plastic Industries v. Controller of Patents and Designs & Anuradha Doval v. The Controller Of Patents And Designs & Ors. : In appeals against two orders of the Controller of Designs, the Calcutta High Court clarified some important aspects of the Designs Act, 2000, namely, the scope of ‘new and original design’ and the responsibility of the Controller in issuing orders.
Top 10 Legislative and Policy Related Developments
The Trademark Rules, 2002 were replaced by the Trademark Rules, 2017. The new rules, inter alia, provide for fewer forms for applications, incentivise e-filing as against physical filing, extend concessions to start-ups and individuals and lay down a process for determination of well-known marks.
In a dubious move, the Finance Act, 2017 was passed by the Parliament, by way of which, inter alia, the Copyright Board was merged with the Intellectual Property Appellate Board. The propriety of transferring the functions of Copyright Board to the IPAB through the backdoor mechanism of a money bill raised many eyebrows and was seen as a way to circumvent opposition from the Rajya Sabha. The Finance Act also provided for the promulgation of Rules, which laid down conditions related to the appointment and service terms of the members of various tribunals including the IPAB and the same in turn were notified on June 1, 2017. Immediately thereafter, the constitutionality of the Finance Act as well as the Rules were challenged in the Madras High Court, which ruled that all appointments to the 19 odd tribunals (under the purview of the impugned Finance Act and Rules) would be subject to the final order in the said challenge.
The Indian Patent Office, in their umpteenth flip-flop, revised the guidelines relating to Computer Related Inventions. The most notable revision was the omission of the requirement that patents for software could only be claimed in conjunction with novel hardware.
The PPVFR Authority did away with the long-standing requirement of breeders having to produce a ‘No-Objection-Certificate’ from the patentee of a particular GM trait, which is used by breeders while developing a new plant variety and which variety they seek to register under the PVPFRA.
The Government, in order to check if its removal of restrictions on royalty payments by Indian companies to foreign collaborators is being misused by the foreign parent companies, formed an inter-ministerial group to examine the issue.
The Office of the Controller General of Patents, Designs and Trade Marks issued an Office Memorandum directing its officers to desist from taking their personal grievances on other platforms like Ministry, grievance cell or using any other tool like RTI etc., without availing proper administrative remedy.
In an RTI reply, the Ministry of Finance re-iterated that the Modified Flexible Complementing Scheme is not applicable to patent office employees.
Department of Industrial Policy and Promotion (DIPP) signed a deal with the World Intellectual Property Organisation to establish Technology and Innovation Support Centres (TISC) in India.
9. Initiatives Taken by the Office of the Controller General of Patents, Designs & Trademarks:
- Weekly Release of FER Data, Co-operation Agreement with WIPO on Data Sharing; and
- Issuance of Bilingual FERs and Automation of Process of Issuing Certificates
10. Initiatives Taken by the Copyright Office:
- Monthly Publication of List of Copyright Registration Applications Received and List of All Register Entries Made; and
- Publication of List of Applications in Respect of Which Submission of the Work/Documents Is Awaited
Top 10 Other IP Developments
1. Indian Performing Rights Society Re-registered as Copyright Society: In a welcome development, the IPRS was re-registered as Copyright Society by the Registrar of Copyrights on November 28, 2017. The re-registration followed the unending turf wars between authors and music labels over the control of copyright societies as well as the requirement introduced by the Copyright (Amendment) Act, 2012 to re-register all copyright societies with the Registrar of Copyrights. Earlier this year, in another significant development, the IPRS management was revamped with Mr. Javed Akhtar, noted poet and lyricist, being appointed as the Chairman and Mr. Achille Forler, a copyright administrator, being brought in as a Permanent Advisor to the Board.
2. West Bengal Granted GI Tag for ‘Banglar Rasogolla’: West Bengal was granted the GI tag for the ‘Banglar Rasogolla’ on November 14, 2017, two years after the West Bengal State Food Processing and Horticulture Development Corporation Limited (WSFPHDCL) applied for the same, citing interests of “entrepreneurs and artesian in sweet making industry of the state“. The grant of the GI tag immediately set off heated debates, including on the locus standi of the WSFPHDCL to make the GI application.
3. Taj Mahal Palace Hotel Became the First Building to Receive Trademark in India: The Indian Hotels Company Limited (IHCL) obtained a trademark or an image mark for the Taj Mahal Palace Hotel on June 19, 2017, making it the first building in India to be accorded such status. The trademark was registered for the image of the sea-facing facade of the Taj Mahal Palace and Tower Wing Exterior – for “services providing food and drink; temporary accommodation” giving it trade dress protection and identification of source. However, the grant of rights raised issues of domestic heritage rights and interplay of the same with copyright law.
4. Screenwriters Rights Association of India Applied for Registration as a Copyright Society : The Screenwriters Rights Association of India applied to the Registrar of Copyrights for registration as a copyright society under Section 33 of the Copyright Act, 1957. Following the application, public comments and objections to the application were invited by the Copyright Office.
5. Justice (Retd.) Manmohan Singh Proposed to Be Appointment as IPAB Chairman: Justice (Retd.) Manmohan Singh, formerly of the Delhi High Court, was proposed to be appointed as the IPAB Chairman following the retirement of Justice (Retd.) K.N. Basha from the post on May 13, 2016. The proposal came in the aftermath of the post remaining vacant for more than a year. Despite the proposed appointment of the Chairman, the other vacancies in the IPAB are yet to be filled.
6. Asst. Registrar Filed Criminal Complaint(s) against False Representation of Marks as ‘Registered’: In October 2017, the Assistant Registrar of Trademarks, Chennai filed criminal complaints under s. 115(1) of Trademarks Act, 1999, for false representation of registration and non-registration of the represented marks against four different proprietors over two common trademarks — Kidsfun and Tofo — before the JMFC, Telangana. This marked a rare instance of recourse being taken to criminal remedies provided under trademark law.
7. OUP and Other Publishers Withdrew Copyright Infringement Suit against Delhi University and Photocopier (DU photocopy case) : In a stunning development, OUP, CUP and Taylor & Francis withdrew the copyright infringement suit filed against the Delhi University and Rameshwari photocopy shop in 2012 for creation and distribution of course packs containing excerpts from their copyrighted books. The withdrawal marked the end of the most hotly contested IP battles ever, pitting as it did multinational publishers against academics and students. Post withdrawal, the Indian Reprographic Rights Organisation (IRRO) had filed a Special Leave Petition before the Supreme Court challenging the judgment passed by the Division Bench of the Delhi High Court on December 9, 2016. The court, however, refused to admit the appeal given that the original suit filed before the Delhi high court had been withdrawn by the publishers and IRRO was merely an intervenor in the lower court proceedings.
8. Enforcement Directorate Raided Top Music Companies In Relation to Misappropriation of Artists’ Royalties : Enforcement Directorate conducted searches in the premises of five music companies, including YRF Music, Saregama, T-Series, Sony and Universal Music in connection with allegations of misappropriation of artists’ royalties.
9. Kerala Police Embarked on a Massive Anti-Piracy Drive: The Anti-Piracy Cell of the Kerala police carried out a series of anti-piracy drives across the state, with one of the crackdowns resulting in the arrest of two mobile phone traders and seizure of pirated copies of certain Malayalam movies.
10. India ranked 43rd among 45 countries on the GIPC International IP Index 2017 and 60th among 127 countries on the Global Innovation Index 2017: Keeping in line with the experience of previous years, India was ranked 43rd out of 45 countries featuring on the international IP Index released by the Global Intellectual Property Centre (GIPC). India fared relatively better in in the Global Innovation Index, a report generated by WIPO, Cornell University and INSEAD that attempts to measure and rank the innovation capacity and potential of participant countries, where India was ranked 60th out of 127 countries. The saving grace was that India was identified as the leader in the Central and Southern Asia Region.
Image from here