Recently, in interim applications decided on 23rd and 24th November, the same single bench of the Delhi High Court granted a limited ad-interim injunction in favour of Karan Bajaj (WhiteHatJr’s CEO) and Byju’s Whitehat Education Technology Private Limited (WhiteHatJr). The major issues in these cases were similar – defamation and trademark infringement. For the purposes of this post, only the IP issues will be looked at.
In the first case, Karan Bajaj v. Pradeep Poonia, the former along with his company has filed a case against the latter for tweets that criticized WhiteHatJr. The grounds for the case are that Poonia using the marks ‘WhiteHatSr’ and ‘WhiteHatPoonia’ on Twitter, and also through the YouTube channel named ‘WhiteHatSr’, had allegedly infringed their trademark, in addition to passing off, dilution and tarnishment. WhitehatJr is the registered proprietor of the word mark and device mark ‘WhiteHatJr’. In the second case, Whitehat Education Technology Pvt. Ltd v. Aniruddha Malpani, the former claimed that certain tweets of the latter had disparaged, diluted, tarnished and infringed on their trademarks. Malpani is the founder of an angel investment firm called Malpani Ventures and has invested in competing edtech start-ups. The Twitter posts by Poonia and Malpani were critiquing WhiteHatJr and its business model. In both the cases, the limited ad-interim injunction ordered the removal of certain tweets and additionally, in Poonia’s case, the injunction also restrained him from using the name ‘WhiteHatSr’ for his YouTube channel. There was a copyright infringement claim brought against Poonia for allegedly sharing WhiteHatJr’s curriculum. It appears that the copyright in the curriculum was recognised by the court, and an injunction was granted in favour of WhiteHatJr, restricting Poonia from circulating material.
The reasoning behind the grant of limited ad-interim injunctions has unfortunately not been provided, thus it is not clear which parts of the injunction relate to trademark or copyright claims, and which parts relate only to the defamation claims. Surprisingly, in both the cases, the application only consists of the facts, claims and then the injunctions. The lack of reasoning in any order where issues of fundamental rights are also present, is especially problematic, and makes the order vulnerable to questioning. The proceedings of the court as tweeted by LiveLaw can be seen here. This post seeks to explore the possible arguments that the court might take into consideration while deciding the trademark contentions raised in these cases and also analyses YouTube’s copyright infringement policy.
Nominative Fair Use
Nominative fair use is an exception to trademark infringement and it safeguards against the use of a mark for the purposes of criticism, parody, news reporting and commentary. Trademark infringement is dealt with under Section 29 of the Trademarks Act, 1999. In 2011, in Tata v. Greenpeace International (Greenpeace), a single bench of the Delhi High Court had held that the use of the TATA mark and ‘T’ within a circle device in the online game ‘Turtle v. Tata’ was ‘denominative’ and refused to grant interim injunction for trademark infringement.(discussed here) In this defamation suit, Greenpeace had created the game in order to draw public’s attention towards the alleged destruction of Olive Ridley turtles’ habitat by construction of Dharma port by Tata. The court went so far as to say, ‘the use of a trademark, as the object of a critical comment, or even attack, does not necessarily result in infringement’. Although, the nominative fair use doctrine was not explicitly applied, the use of the word ‘denominative’ indicates that its essence was applied. In Greenpeace, the use of Tata trademark was parodic, while in the present cases, the WhiteHatJr marks have been used for criticism. On studying Greenpeace, there appear obvious similarities between it and the present cases, and it could be said that criticism, like parody, should also be considered denominative use. In Poonia case, the court has merely stated that the plaintiff distinguishes between the present case and the Greenpeace judgement, but in the absence of any explanation it is difficult to deduce the differences.
In Consim v. Google, the Madras High Court relying on US case laws – New Kids on the Block v. News Am. Publ’g Inc. and Caims v. Franklin Mint Co., held that for a ‘use’ to qualify as a nominative fair use, it should fulfil a three-factor test – first, the product or service should not be readily identifiable without the trademark; second, the mark should only be used to the extent it is necessary for identification of product or service; and third, the user should refrain from doing anything that would indicate endorsement or sponsorship by the trademark holder. The first condition would be fulfilled as it is not possible to criticise an entity without naming it. With regard to the third factor, Poonia and Malpani have engaged in criticising the WhiteHatJr, thus the question of endorsement does not arise. It is difficult to determine the satisfaction of the second factor without a thorough examination of all the posts made by the two on Twitter and YouTube. Explaining the second factor, in New Kids on the Block case it was stated that ‘a soft drink competitor would be entitled to compare its product to Coca-Cola or Coke, but it would not be entitled to use Coca-Cola’s distinctive lettering.’ WhiteHatJr can also claim that the use of the name ‘WhiteHatSnr’ for his Twitter account and the use of the terms ‘WhiteHatSr’ and ‘WhiteHatPoonia’ along with his tweets seems unnecessary.
In the present cases, WhiteHatJr’s registered trademarks seem to have been used by Poonia and Malpani for the purpose of criticising the company on Twitter and YouTube. Section 29(4) of the Trademarks Act, 1999 deals with infringement and states that ‘A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade…’. The relevant parts here are ‘uses’ and ‘in the course of trade’. The term ‘uses’ has been defined in Section 29(6) and the use of a trademark for criticism does not seem to fall under any of the clauses. It can be inferred from the phrase ‘uses in the course of trade’, that the application of section 29(4) is limited to commercial usage. Based on a quick perusal of Poonia’s Instagram, WordPress and Twitter handles, he does not seem to be promoting any other edtech platforms. Except in one post where he has shared a meme, criticising Byju and WhiteHatJr, and advocating for supporting free and quality education from Coursera, Edx, NPTEL, Khan Academy, Udemy etc. This probably would not amount to commercial use, as he is generally giving an example of websites that provide free education and is not gaining monetarily from it. If he had named a for-profit company as an alternative, it might have amounted to commercial use, as the court could consider it to be an endorsement even when he was not actually been paid by any company. Thus, the usage of the WhiteHatJr’s trademarks by Poonia and Malpani appears to be non-commercial, meaning it cannot be brought under the ambit of Section 29(4).
The lack of precedents regarding the use of trademarks for criticism of a company necessitates reference to foreign judgements. In Aviva USA Corp. v. Vazirani, an independent insurance broker with a competing business created a website ‘avivauncovered.com’ for the sole purpose of criticising Aviva. The District Court of Arizona, United States, found the website to be non-commercial, as there was no mention of Vazirani’s commercial website on it and protected his use of Aviva’s mark as nominative fair use. Unlike Vazirani who is engaged in a competing business, Malpani is merely an investor in competing edtech start-ups. When criticising the plaintiffs, prima facie, Malpani does not seem to have endorsed the start-ups he has invested in. If Malpani has not endorsed the start-ups funded by him, as an alternative to WhiteHatJr or in general, then, even if his start-ups have benefited from Malpani’s actions, it would still probably not amount to commercial use. It would be interesting to know what conclusion the court reaches after proper examination of evidence.
In Bosley Medical v. Kremer, the 9th Circuit court, United States, held that Kremer’s website with the domain name ‘BosleyMedical.com’ was non-commercial. In this case, Kremer was aggrieved by Bosley Medical’s actions and had purchased the above domain name and used it for criticising them. Kremer earned no revenue from this website, did not provide links to Bosley’s competitors and it was not an extortion scheme. Both Bosley and Aviva dealt with websites and not social media platforms, but the findings in these cases could be applied to the present situation. If applied, it seems that Poonia’s use of the name ‘WhiteHatSr’ for his YouTube channel should fall under nominative fair use. A claim for dilution and tarnishment cannot be successful, until it is proved that section 29(4) is applicable to the present situation. For establishing a claim of disparagement, it is required that the facts should be clear, which is not the case at present.
Can Criticism Amount to Copyright Infringement?
A Forbes article states that certain YouTube videos criticising WhiteHatJr have been taken down on the ground of copyright infringement. Not having watched the videos, the author refrains from commenting on their content. However, this instance brings to mind a major flaw present in YouTube’s working. YouTube follows a three strikes policy for creators in pursuance of the provisions of the Digital Millennium Copyright Act, 1998 (DMCA). If any copyright holder claims infringement in any video uploaded on YouTube, he has two options – either to allow the video to remain and monetise it, or to file a complaint in order for the video to be taken down. If a complaint is filed and the video is taken down, that amounts to one strike and if a creator gets three strikes, their account is taken down. In the past, YouTube creators have also been extorted by third parties, who threatened them with three strikes.
Interestingly, a video uploaded by NYU School of Law was flagged by YouTube for copyright infringement, regarding which the law school sure fell within the bounds of fair use. NYU found the dispute resolution process to be opaque and to prevent their account from being removed, they had to use their personal contacts for removal of claims. This incident demonstrates how challenging the situation would be for average creators when even people with legal experience found it difficult to contend and win against false copyright infringement claims. There are many shortcomings in the YouTube copyright infringement policy that allows copyright holders and even members of the public without any copyright claim in a work, to make complaints against videos that fall well within the scope of fair use.
In the present cases, WhiteHatJr has only included the Twitter posts made by Poonia and Malpani, and the YouTube videos uploaded by Poonia on the channel ‘WhiteHatSr’, however he has also put up posts on other platforms (such as Instagram, WordPress) which the edtech company could have included in its claims. These kinds of cases tend to have a Streisand effect and it can be clearly observed in this instance. The defamation suits appear to have been filed in an attempt to censor criticism and instead of curbing it, they have drawn more attention to the issue. In the past week, since the Delhi High Court decisions, almost all media outlets seem to have covered the dispute.