India witnessed a number of significant IP developments in 2019. Let’s take a look back at these developments that kept the Indian IP landscape action packed throughout out the year.
We have divided these developments into two categories: a) top 10 judgments/orders, and b) top 10 legislative and policy developments. The developments have been chosen owing to their impact on the industry or the stir they created in terms of public perception owing to the importance of parties litigating or the significance of the change they brought about to the Indian IPR regime. 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, copyright, GI, plant variety, biodiversity etc.
A. Top 10 Judgments/Orders
1. Monsanto Technology LLC v. Nuziveedu Seeds Ltd. [Supreme Court]
The year got off to a particularly interesting start for IP enthusiasts as the Supreme Court set aside a Delhi High Court decision which had revoked Monsanto’s patent for Bt.Technology. To retrace briefly, the High Court had, in 2018, decided against Monsanto without the benefit of a trial court’s findings on evidence. This, in turn, was apparently grounded on a waiver by both the parties to have a trial. As Prashant reported, the Supreme Court though held that the High Court had misunderstood the scope of waiver by Monsanto. It held that Monsanto had only consented to a waiver for trial on patent infringement and not patent invalidity. On this ground, it set aside the High Court order and remanded the matter back to the trial court for a decision on merits.
2. UTV Software Communication Ltd. & Ors. v. 1337X.TO & Ors. [Delhi High Court]
In an innovative move, the Delhi High Court fashioned India’s first ‘dynamic injunction’ to tackle online piracy. This remedy enables right holders to avoid the cumbersome process of obtaining a judicial order in order to issue blocking orders to ISPs. Instead, as per this ruling, the plaintiffs have been allowed to approach the Joint Registrar of the Delhi High Court (an administrative position), to extend an injunction order already granted against a website, and similar ‘mirror/redirect/alphanumeric’ website which contains the same content as the original website.
3. Bayer Corporation v. Union Of India & Ors. [Delhi High Court]
In a decision that is likely to have a significant impact on pharmaceutical patents and access to medicines, a Division Bench of the Delhi High Court upheld a Single Judge’s decision and ruled that the ‘export’ of a patented invention for experimental purposes is also covered under Section 107A of the Patents Act, 1970 (India’s Bolar exception), and thus does not amount to patent infringement. Having held that, the Court also took note of the fact that if exports are not regulated, the Bolar exception could be misused to export beyond what is ‘reasonably related’ to the purpose of developing information for obtaining regulatory approval. However, it made it clear that there could be no “iron clad rule” (such as that related to the volume of the patented invention etc.) to determine whether the export is ‘reasonably related’ to the research purpose or not, and each case would have to be determined on its individual facts. It laid down an indicative list of factors for helping with such a determination. It accordingly dismissed Bayer’s appeal and left it to the trial court to decide if the end use and the purpose of export of Bayer’s patented drug ‘Sorafenib Tosylate’ by Natco and Alembic was reasonably related to research, experiment or was for submission of information to regulatory authorities in a foreign country, as permissible under Section 107A (a) of the Act.
4. Tips Industries v. Wynk Music Ltd. & Anr. [Bombay High Court]
In an impactful decision for the music industry, a single judge of the Bombay High Court held that online streaming services are not eligible for statutory licenses for broadcasting under Section 31D of the Copyright Act, 1957. The decision came in the context of a dispute between Tips Industries Ltd., a music label, and Wynk Music Ltd., an online music streaming service. After attempts to renegotiate licensing terms for allowing Wynk to offer downloading and streaming of musical works owned by Tips broke down, Wynk took refuge under Section 31D of the Copyright Act. Section 31D of the Copyright provides for a statutory licensing scheme, as per which any ‘broadcasting organisation’ desirous of ‘communicating to the public’ any sound recording, may obtain a statutory license to do so, provided they pay the royalty rates to the copyright owners, at rates fixed by the IPAB. The Court held that Wynk’s feature of allowing users to download songs and store for unlimited future use constituted ‘sale’ and not ‘communication to the public’, and therefore, did not constitute a ‘broadcast’ for the purpose of Section 31D. Further, Court noted that Section 31D was an exception to copyright, and must be strictly interpreted. Upon a strict reading of the statutory scheme – Section 31D(3), as well as the rules framed under it, – it is clear that statutory licensing was intended to cover only ‘radio’ and ‘television’ broadcasting, and not internet broadcasting. The decision though attracted criticism for its incompleteness in reasoning as well as for its failure to follow the text of the Copyright Act.
5. Raj Rewal v. Union of India & Ors. [Delhi High Court]
In a significant judgment for moral rights’ jurisprudence under Indian copyright law, Delhi High Court held that an architect’s moral rights over a building does not take precedence over the rights of the building owner to destroy or modify the building. The Court was adjudicating a dispute between Raj Rewal, architect of the Hall of Nations Building, and Indian Trade Promotion Organisation, which demolished the structure. The Court framed the issue as a conflict of two distinct rights – the author/architect’s rights under Section 57, and the property or landowner’s rights to their property. Rejecting the architect’s claim, Court held that were the plaintiff allowed to prevent the destruction of the building by the defendant, it would amount to a restriction of the defendant’s constitutional right under Article 300A to deal freely with their property and land.
These two significant judgments from the Delhi High Court deviated from the position laid down by the Madras and Bombay High Courts on what infringement of copyright over a cinematographic film means. In both cases, the plaintiffs had sued on the ground that the defendants had made a substantially similar copy (not a physical copy) of their cinematographic films. Unlike the Madras and Bombay High Courts, which had held that as far as cinematograph films are concerned, the Copyright Act, 1957 only protects the physical recording itself and not the contents of the film, the Delhi HC was of the opinion that making a deceptively similar/unauthorized remake was a violation of the copyright in the cinematograph film itself. Swaroop argued that such an interpretation may not do justice to the text of the Copyright Act.
7. Amway India Enterprises Pvt. Ltd. v. 1MG Technologies Pvt. Ltd. & Anr. [Delhi High Court]
In a blow to e-commerce platforms (Amazon, Flipkart and Snapdeal), the Delhi High Court restrained them from enabling sale of products of ‘direct selling’ companies without their consent. While arriving at the decision, as Eashan notes in his post, the Court returned four findings: (a) the Defendants are in violation of the 2016 Direct Selling Guidelines, (b) the Defendants are liable for trade mark infringement, (c) the Defendants ought to comply with due diligence requirements to sustain access to safe harbour protections under the IT Act, and (d) the Defendants’ actions constitute tortious interference with the Claimants’ contractual relationships with their direct sellers.
8. Mylan Laboratories Ltd. v. Union Of India & Ors. [Delhi High Court]
In a rather curious decision, the Delhi High Court permitted the IPAB to adjudicate “urgent matters relating to Patents, Trade Marks and Copyright”, despite the IPAB lacking the statutorily mandated quorum to hear these disputes. As per Section 84 of the Trade Marks Act, the IPAB requires a quorum of two members, one judicial member and one technical member, the latter being the member appointed for the relevant practice area i.e. patents or trademarks. Currently, the IPAB has only one technical member, appointed under the Plant Varieties Protection & Farmer’s Rights Act to hear matters under that specific legislation. Strangely, the Court invested this “technical member” (for Plant Varieties) with the power to adjudicate upon other IP disputes, over which he/she may possess no special expertise whatsoever. In addition, it has permitted IPAB Chairperson, Justice Manmohan Singh (whose tenure was recently extended for another year by the Supreme Court) to hear these cases just by himself if the technical member for plant varieties is unavailable or recuses for any reason.
In a very welcome development, a Division Bench of the Delhi High Court set aside two interim injunction orders granted by a Single Judge against Natco, for having been passed without the Court forming an opinion on the three elements of the well-settled test for interim injunctions i.e. prima facie case, balance of convenience and irreparable harm. The Court noted that an order in an interim injunction application must necessarily indicate that the court has considered these three elements in arriving at the conclusion as to the grant or non-grant of the injunction. It further emphasised that in case of patent infringement suits, particularly those involving pharma patents, the court must also consider the additional elements that have been discussed in various cases. It accordingly directed the Single Judge to decide both the interim injunction applications afresh, without being affected by the order in Sterlite Technologies case (discussed below) which had been blindly relied upon to grant the injunctions straight away.
10. Rojer Mathew v. South Indian Bank Ltd. & Ors. [Supreme Court] – In a significant decision, the Supreme Court struck down the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 (‘Rules’) framed under the Finance Act, 2017 (‘Act’) to govern the eligibility, appointment, and service conditions of the members of the tribunals merged by the Act, including IPAB. The Court observed that the Rules grant the Government overly broad powers as regards the appointment and service conditions of tribunal members and thus impinge on judicial independence and are contrary to the guidelines laid down in cases like RK Jain and Madras Bar Association. It accordingly directed the Government to frame a fresh set of Rules. In the interim, the appointment to the tribunals and the terms and conditions of appointment shall be in terms of the respective statutes that applied before the enactment of the Act, which is the case of IPAB would be Trade Marks Act. It’s unclear though as to what would be the required qualifications for the Technical Member (Copyright). Also, while it appears that appointments already made would not be affected, there’s no clarity on what happens to the appointments which are underway. As to the validity of the Part XIV of the Act (merging a number of tribunals including the Copyright Board with IPAB), which was challenged for having been passed as a Money Bill despite it containing non-finance/taxation related provisions, the question has now been referred to a larger bench.
Other than these ten developments, there are three other Delhi High Court decisions which, in our readers’ opinion, deserve to be included on this list :
(a) Ferid Allani v. Union of India & Ors. on patentability of computer programmes under Section 3(k) of the Patents Act (which we’ll soon be bringing you a post on),
(b) Pharmacyclics LLC v. Union of India & Ors. on general principles to followed for post-grant opposition of patents, and
(a) Communication Components Antenna Inc. v. Ace Technologies Corp & Ors. on transborder prosecution history estoppel in patent litigation (which was covered on the blog here).
B. Top 10 Legislative and Policy Developments
The Government introduced the Cinematograph (Amendment) Bill, 2019 in the Rajya Sabha with the stated objective of countering film piracy. The Bill proposes to criminalise unauthorised use of an audio-visual recording device for making or transmitting a copy of a film or any part of it, with a punishment of three years of imprisonment or a fine of 10 lakh rupees or both. It proposes to mandate the same punishment for even attempting or abetting the same. As argued by Divij in his post, the proposed amendment is disproportionate and stifles fair use rights under the Copyright Act. An anti-piracy measure should ideally be aimed to prevent abuse of rights at a commercial scale but the amendment disproportionately criminalises the mere act of making a copy of a film or any part thereof, which would include even making a short clip of a film on your phone for any purpose. Even when it comes to transmission, it does not provide any exception, thereby criminalizing even benign acts such as that of sending a short clip to a friend over WhatsApp. By overriding the provisions of the Copyright Act, the amendment fails to consider users’ rights under Section 52 of the Copyright Act, which permits unauthorised use of copyrighted works for certain purposes, such as for private use, criticism or review.
The Government released the Draft National E-Commerce Policy which, inter alia, recommends that e-commerce platforms (intermediaries) be mandated to undertake certain anti-counterfeiting and anti-piracy measures. While many of the anti-counterfeiting measures are well-balanced and promote transparency of e-commerce platforms towards their sellers as well as towards trademark owners who choose to register on such marketplaces, some anti-counterfeiting measures and the anti-piracy measures are very concerning. Some of these proposals include: (a) obligation on platforms to take TM owners’ permission for high value goods (b) directly liability to refund customers and delist ‘counterfeit goods’ upon receiving complaints from individuals (c) return to the notice and takedown approach for copyrighted content (d) allowing an ‘industry body’ to identify so-called ‘rogue websites’ which host pirated content, and forward such a list to intermediaries including ISPs, search engines and payment gateways, which will have a legal obligation to block access to such websites.
Pursuant to the Delhi High Court’s direction in the patent working PIL filed by Prof. Basheer in 2015, the Government published a draft Form 27 proposal for comments under the Draft Patent (Amendment) Rules, 2019 in May, although it was meant to have done it before September, 2018 as per its undertaking before the Court. While the proposed Form does contain some improvements over the current one, these are pale in comparison to the other changes proposed that really damage the core essence of the patent working requirement and the Form 27 format. While the current Form calls for extensive information on working from patentees and their licensees, the proposed one dispenses with a lot of this information, including quantum of the patented product manufactured in India or imported into India, country wise details of the value and quantum of the patented product imported into India, steps being taken towards working (if patent has not been worked), the licenses and sub-licenses granted during the year, statement on whether public requirement has been met at a reasonable price. The revised Form also sets an arbitrary word limit of 500 words for the statement on justification for not working the patent. The proposed amendment to the Form was, however, dropped from the final Patent (Amendment) Rules, 2019 which were notified in September and the Government is yet to finalise the revisions to the Form, after taking into account the comments submitted/representations made to it on the draft revisions.
The Government notified the Draft Copyright (Amendment) Rules, 2019 with the said aim of ensuring “smooth and flawless compliance of Copyright Act in the light of technological advancement in digital era and to bring them in parity with other relevant legislations.” The Amendment Rules, inter alia, propose substitution of any reference to radio and television broadcasting in Copyright Rules, 2013 with ‘each mode of broadcast’. As discussed above, in Tips v. Wynk, the Bombay High Court held that the statutory licensing scheme under Section 31D of the Copyright Act does not apply to internet broadcasting. In Court’s opinion, its view is supported by Rules 29 and 31 of the Copyright Rules which contemplate issuance of notice and determination of royalties (respectively) only in respect of radio and television broadcasting. The proposed amendment is seen as a clarification by the Government that the statutory licensing scheme under Section 31D applies to all types of broadcasting including internet broadcasting and is not restricted to only radio and internet broadcasting.
In order to encourage the promotion and marketing of Indian GI products, the Government launched a common GI logo and tagline which could be used as a certifying mark on all Indian GI products registered in India or abroad. This is aimed to make it easier for consumers to identify authentic GI products and thereby protect the interests of genuine GI producers. In order to ensure correct usage of this logo and tagline, the Government published Draft Guidelines for stakeholder comments. The Guidelines lay down certain terms and conditions for the use of the logo and tagline, the categories who are allowed to use them without permission, activities for which they could be allowed to use with prior approval of DPIIT, procedure for grant of permission and the application format. Although this is a welcome step in promotion of the Indian GI products, there are a few issues with the Guidelines such as non-specification of a time limit within which the permission must be granted, lack of an effective grievance redressal mechanism (both against misuse of logo/tagline and denial/withdrawal of permission), prohibition on use on undefined highly subjective grounds such as usage against ‘public interest’ and in a ‘derogatory fashion’, disconnect with GI Act and Rules and lack of legal force. One hopes that these issues are addressed in the final Guidelines.
The Trade Marks Registry (TMR) issued a public notice requesting suggestions from stakeholders on its proposal to classify documents displayed on its website into two categories: (a)
one that will consist of documents that will be fully accessible and can be viewed / downloaded by the public, and (b) the other that will contain only the name of the document but viewing / downloading will be restricted. This proposal appears to be based on representations received from stakeholders raising concerns regarding the display of confidential information, proprietary information and personal information on the website. The notice also clarifies that the Registry does not require applicants / opponents to submit bank account details, PAN or Aadhar numbers. As argued by Aparajita in her post, the categorization proposed appeared to be artificial, having the potential to impact the prosecution process, increase the workload of TMR and against the spirit of the RTI Act.
The Patent Office released a list of 37 newly enrolled/ retained scientific advisors, who the courts have the power to appoint for assisting them in any proceedings, or report upon any questions of fact or opinion (not involving a question of interpretation of law). It is strange that when the Patent Rules, 2003 mandate the Patent Office to not only maintain a roll of scientific advisers but also update it annually, an update to the 2010 list was published only in 2019 i.e. 9 years later. Further, the list includes two Patent Agents in the list but interestingly it doesn’t specify if a particular advisor is a Patent Agent, which also is a potential violation of Rules as they require the list to include their designations and their technical and practical experience. It is welcome though that their number has been limited to just 2 in contrast to around 6 in the 2010 list as there might be a conflict of interest for them to appear on such a list. Furthermore, the list also does not contain the advisors’ specimen signatures and photographs as required by the Rules.
In a step forward for Patent Prosecution in India, the Government approved the proposal for Bilateral Patent Prosecution Highway (PPH) program between Indian Patent Office and Patent Offices of other interested countries/regions. PPH refers to bilateral arrangement between patent offices that aims to: a) promote work-sharing and b) enable accelerated processing of patent applications. The maiden initiative under the PPH was mooted in association with Japanese Patent Office (JPO) on a pilot basis for three years. As per the official notification, PPH is expected to bring about “reduction in disposal time and pendency of patent applications, consistency in quality of granted patents and an opportunity for Indian inventors including MSMEs and Start-ups of India to get accelerated examination of their patent applications in Japan”. Similarly, the notification claims that the “Japanese inventors seeking patent protection in India will now be able to take the benefits of expedited examination in India under the pilot programme on PPH”.
In a move towards updating the 2014 guidelines for the sharing of benefits arising from the access and use of genetic/biological resources, the National Biodiversity Board (NBA) has proposed the draft Access and Benefit Sharing Guidelines (ABS Guidelines) in April 2019. These are proposed as regulations under the Biological Diversity Act, 2002. The draft mostly borrows from the existing ABS Guidelines 2014 as far as the options of monetary and non-monetary benefits are concerned. However, as summarized here and here, the draft attempts to go beyond the statute in several instances, such as issuing binding directions to State Biodiversity Boards on benefit sharing and in defining what is exempt by “conventional breeding”. Such extravagant provisions are likely to render the draft ultra vires if and when implemented.
The Registrar General under the PPV&FR Act, 2001 issued a public notice under Sections 7 and 28 thereof, purportedly to clarify the extent and scope of rights/power under the Act. Among others, as per this Notice, the power of price fixation of seeds of registered varieties as well as fixation of license fee/royalty for technology that may go into such registered varieties, vests in the Plant Variety Authority; the general legislations of Seeds Act and Essential Commodities Act would only cater to varieties not registered under the PPV&FR Act.
Further, in a clearly ultra vires move, the Registrar General also issued a public notice under Section 20(1), placing new restrictions on registration of hybrid varieties. Among others, the public notice restricted the type of hybrids that can be registered, tied the grant criteria between hybrids and parents, and declared the term of the rights conferred on such hybrids to be co-terminus with that of the parental lines. A writ challenging the same has already been filed challenging this before the Delhi High Court and a limited interim protection has been granted.