Special 301 Report 2021: Trade Secrets, Patents and Technology Transfer
Nikhil and I continued the discussion on three key aspects in the USTR Special 301 Report 2021: India-specific trade secrets and patents issues, and the general stance on technology transfers. We highlighted that the Report has tightened its stance on India’s trade secret regime, asking for stronger enforcement. Curiously, this contradicts its liberal approach towards compulsory licenses and the TRIPS waiver because a lot of key information on vaccine/drug manufacture is protected as trade secrets. We then discuss issues raised relating to India’s patent regime, that is, the absence of presumption of patent validity, vagueness of interpretation the Patents Act, confidentiality of Form 27 information and the dismantling of IPAB. We further consider how the Report specifically criticizes government measures and policies “that require or pressure technology transfer from U.S. companies,” terming such technology transfers as a denial of opportunities to access foreign markets for US companies. We argue that this is a capitalistic framing of the problem without due regard to the socio-economic circumstances of a given jurisdiction, which demands that a developing world jurisdiction should never be allowed to develop technologically self-sustaining using some protectionist policies and must instead be subjected to exploitation by the US multinationals in the “open” market. In contrast, jurisdictions like the US have previously benefitted significantly with development friendly policies themselves for long enough to protect and develop their domestic industries.
The Dilemma of Employer-Employee Patent Ownership in India
In a guest post, Kartikeya Prakash discussed the lacuna in the Patents Act regarding the ownership of the patents invented by the employee in the course of employment in absence of an assignment agreement with the employer. The Patents Act has no provision that clarifies the ownership of a patent invented by the employee under the aegis of the employer. This necessitates an assignment from the ‘inventor’ who is presumed to be the ‘first owner’ to her employer, creating a lacuna when there is no such assignment agreement in place between the employer and the employee. Patent statutes in UK, Israel and Canada have the concept of ‘duty to invent’, which holds that if the employee has used the facilities, technical know-how and resources of the employer, the employer should not be deprived of the benefits. Similarly, US recongises ‘shop-right’ which is a non-exclusive and non-transferable licence for the employer to use the invention without any payment of royalties, even if there is no agreement for the same and the inventor assigns it to someone else. Kartikeya explains the problems this creates for multinational corporations involved in R&D, when their inventors are Indian employees. He suggests that even without a statutory clarification, a solution could be adopted by courts, like in the US, in order to ensure that R&D in India is not discouraged.
Supreme Court Dismisses a Transfer Petition Filed in a Trademark Dispute
Mathews discussed the Supreme Court’s recent decision in Rajkumar Sabu v. M/S Sabu Trade Private Limited, which involved an infringement and passing off suit followed by the respondent suing the petitioner under Section 103 of Trade Marks Act and Section 420 of IPC in Salem, Tamil Nadu. The petitioner filed a transfer petition contending that the subject of both civil and criminal proceedings are the same, the proceedings are being held in Tamil which he does not understand and that the respondent being influential in Salem, he apprehends an unfair trial. The responded countered that the proceedings are in advanced stages and that there was no credible material to anticipate unfair trial. The SC accepted this and held that language cannot be a factor to grant a transfer petition. Also, the convenience of one of the parties cannot be a ground for invoking Section 406 of IPC. Mathews criticises this, citing earlier SC judgments which have taken convenience of one party into account. He argues that what matters is the degree of convenience and whether it will cause significant prejudice to the party. He also points out that in a previous case, the language spoken by the witnesses and the convenience of the prosecution agency were taken into account. The SC does not offer strong reasoning as on this part either because translation has its limitations.
Proof of Right for Filing a Patent Application: Analysing IPAB’s Decision in DOW Agrosciences Case
In a guest post, Idhika Agarwal analysed the IPAB decision issued in DOW Agrosciences LLC v. Controller of Patents pertaining to proof of right for filing a patent application. She explains the Patent Cooperation Treaty which facilitates a multi-jurisdictional patent registration through a single application and discusses the framework in India’s Patent Act that provides for PCT applications. In case of assignments, the statutory mandate of ‘Proof of Right’ acts as an agreement for transfer of certain rights and obligations from the true owner to the applicant of the patent. The issue for adjudication was whether the PCT-Declaration under Rule 4.17(ii) can be accepted as a valid ‘Proof of Right’. Idhika explains who can file a patent application in India, with reference to the National Treatment principle. If the appellant has submitted a declaration of assignment, it constitutes a valid ‘Proof of Right’ under the PCT. She argues that declaration in abidance of the PCT Rules, via Form 1, shall be sufficient ‘Proof of Right’ when an assignee is filing for an International Application from a different home country and denying the same is incorrect. She concludes that the applicant had submitted a valid declaration and such erroneous interpretations by the Controller unnecessarily burden the tribunal system.
Decisions from Indian Courts
- Delhi High Court in Zee Entertainment Enterprises v. Tejendra Modi And Ors restrained the defendants till the next date of hearing, from unauthorisedly storing, reproducing, communicating, disseminating, circulating, copying, selling, offering for sale or making available copies of the Order dated 12th May, 2021 in C.S.(COMM) No.191 of 2021 the film or any other portion thereof, through WhatsApp or any other means or modes, that may infringe the Plaintiff’s copyright in the film. Whatsapp accounts used for this purpose were directed to be suspended as [20 May 2021].
- Delhi High Court in Vikas Gupta & Anr v. Amit Jain noted in an infringement suit for the trademarks, ‘NEHAL’ and ‘SNEHA’, that the defendant had made false statements before the Court on 18th February, 2021 and therefore, notice was issued to the defendant to show cause as to why proceedings for contempt be not initiated against him [18 May 2021].
Delhi High Court in Red Bull Ag v. Bakewell Biscuits Private Ltd restrained the defendant from unauthorizedly using theplaintiff’s ‘RED HORSE’ marks or any other deceptively or confusingly similar mark with respect to any goods including candy and confectionery items [18 May 2021].
- Delhi High Court in V Guard Industries Limited v. Butterfly Gandhimathi Appliances restrained the defendant by an ex-parte injunction from manufacturing, selling, offering for sale, advertising, directly or indirectly or in any manner dealing with the products using the impugned mark ‘PEBBLE’ or any other trade mark, which is identical or deceptively similar to the plaintiff’s registered trademark ‘PEBBLE’ [13 May 2021].
- The TRIPS Waiver proposal originally submitted to the WTO by India and South Africa has been revised, specifying a three year term and is now co-sponsored by 62 nations.
- EU parliament has extended its support to India-South Africa’s TRIPS waiver proposal to enable large-scale production of Covid-19 medication.
Natco Pharma has signed an agreement with Eli Lilly and Co, for the manufacture and commercialization of the drug Baricitinib for Covid-19 indication in India, and has thus withdrawn its compulsory licensing application before the IPO [Swaraj has discussed the application here].
- Delhi High Court restrained social networking platforms WhatsApp and Telegram and certain individuals from allegedly illegally circulating e-papers of Bennett, Coleman and Company Ltd on their respective platforms.
- Natco Pharma has started Phase III trials of the new COVID drug molnupiravir, previously used to treat flu.
- Panacea Biotec has reportedly filed a suit before the Delhi High Court seeking to restrain Sanofi Healthcare India from marketing a fully liquid hexavalent vaccine ‘EasySix’, used to vaccinate against Diphtheria, Tetanus, Whooping Cough, Hepatitis B, Haemophilus influenza Type B and Inactivated Polio.
- About Over 100 Republican lawmakers wrote to US President Joe Biden against the TRIPS waiver, saying that the move would “serve as a massive giveaway” to countries like China, Russia and India.
- The Reagan Foundation, a non-partisan organization in the US supporting the legacy of former President Ronald Reagan demanded that the owner of the so-called ‘Trump Train’ remove an image of Reagan from its bus.