Indo-American Chamber of Commerce (IACC)


In Uncategorized on November 11, 2010 at 11:21 am

India has been judiciously treading the path of safeguarding, promoting and developing innovative and creative works, balancing its international obl igat ions inc luding under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and its commitment to the growth and progress of the nation. The steady affirmative steps taken by India in developing an Intellectual Property (IP) Regime in sync with the structure and efficiency of the global regime, continues to provide encouragement and incentives for the labour of creative minds.

Key Developments

Though the Indian IP regime is TRIPS compliant, at times the Indian legislature, judiciary and regulatory bodies have traversed beyond the minimum standards set under TRIPS, and have taken proactive steps to develop and strengthen the Indian IP regime.

Some of the initiatives are listed below:

The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 is one such regulation that is beyond the TRIPS mandate, as border control measures vis-à-vis patents is not envisaged by TRIPS. Under the said rules, a right holder is to give a notice in writing to the Commissioner of Customs at the port of import of goods requesting for suspension of clearance of goods suspected to be infringing Intellectual Property Rights (IPRs). Upon the registration of such notice, the import of allegedly infringing goods into India would be deemed as prohibited under the Customs Act.

An interesting twist followed the enactment of these rules. The first case that dealt with the said border protection measures and patent protection involved a challenge to the import of dual SIM mobile phones by Samsung India. The complainant alleged that the said products infringed the patent claims of his products. However, the customs authorities in the various cities in which the complaints were filed adjudicated that the complainant’s claims were vexatious because the impugned goods were covered by prior art.

The aforesaid proceedings before the customs authorities and similar actions have raised various questions including the issue of competency of customs authorities to decide claims of patent infringement. With the reservations expressed by the judiciary on the grant of interim injunctions in patent matters and the importance of leading evidence, it would be interesting to see how the issue of competency of customs authorities to determine such issues would be addressed as and when it is raised in a judicial forum.

Meanwhile, the enactment of the said rules remains a positive and optimistic step as far as IP owners and interest holders are concerned. Anti-piracy initiatives of various individual IP owners and organisations have been instrumental in reducing piracy significantly. In simple terms, anti-piracy initiatives are the independent efforts of IP owners and rights holders whereby they identify various counterfeit products/ works and prosecute the offenders, besides promoting IP awareness. According to a recent Business Software Alliance study, software piracy in India has fallen by more than 3 percent from last year. The judicial support given t o various anti-piracy initiatives are also commendable.

The Indian judiciary has been encouraging prosecution of counterfeiters and has also been active in countering the counterfeit market by coming down heavily on counterfeiters. The courts have been awarding damages in actions against counterfeiters particularly software pirates. Software companies like Microsoft have obtained judgments awarding damages amounting to INR 1,050,000 in a judgement against a successful counterfeiter. The courts have also been fairly liberal in granting Anton Piller (which is a court order that provides the right to ‘search premises and seize evidence without prior warning’) and John Doe orders (which is issued against potential defendants who may be subsequently identified; these orders are known in India as ‘Ashok Kumar Orders’), to assist in the search and seizure of counterfeits.

Alliance Against Copyright Theft, a coalition between Bollywood and Hollywood studios, the International Intellectual Property Alliance, an international lobby group of US media industries and Center for Content Protection, the partnership between Motion Picture Association of America and Singapore’s Media Development Authority are the three prominent bodies engaged in protection and monitoring of content rights of various American entertainment groups. In the recent past, all the three have been actively engaged in monitoring content violations in India. They have been receiving governmental support in their enforcement activities. While delivering the keynote address at the ‘Seminar on Anti-Piracy and Regulation of Content – Legal Issues’ organised by the Society of Indian Law Firms at New Delhi on September 7, 2010 Information and Broadcasting Minister, Ambika Soni reiterated India’s commitment to eradicating piracy and said that the government is in ‘the process of examining a proposal regarding launch of a multimedia campaign involving all stakeholders against the menace of piracy’ and that ‘the Government and the private sector would work in tandem to make the campaign effective’.

The Competition Commission of India (CCI) is presently hearing a matter between the film producers and multiplex owners, wherein the multiplex owners have claimed that coordinated nonrelease of films by producers is in violation of Section 3 of the Competition Act, 2002. However, the film producers have put forth the argument that the distribution/ licensing of their film(s) is an exploitation of their individual “copyright”, which is statutorily recognised and that the said statute further provides for compulsory licensing by the Copyright Board in the manner set out therein.

It is also interesting to note the recognition of unconventional IPRs by the Indian trademarks registry. The Delhi branch of the trademarks registry granted India’s first “sound mark” registration to yahoo’s three-note yodel, in the year 2008. This encouraged other applicants, including Finnish mobile phone maker, Nokia and Germany’s Allianz among others to seek registration of their signature musical notations. Allianz has also successfully registered its sound mark and the prosecution of Nokia’s sound mark is pending with the trademarks registry, Mumbai branch. In the absence of specific guidelines, India seems to be following the American approach of graphical representation of sound marks i.e. musical notations as the representation of the mark, accompanied by an audio recording of the sound clip.

This trend by the Indian trademarks registry seems to be in tune with the present day needs as experienced by the marketing and advertising industry. It has certainly set a positive note on the significance and recognition of nonconventional marks, and it might not be too far from now that we will be hearing about registration of other unconventional marks like olfactory and gustatory ones.

As can be seen from above, the Indian IP regime seems to be attaining the perfect mélange of effective legislation with government commitment, committed IP offices and a pro-active judiciary. Some of the other notable strides made by the Indian judiciary include (i) recognition of law of dilution under Indian Trademark law, as amended in 1999, in the matter involving American automaker, Ford Motor Company; and (ii) the determination of protection granted to TV formats and concept notes in the Swayamvar case and Barbara Taylor Bradford case, two notable matters of the last decade that dealt extensively with TV format and concept notes respectively.

Last but not least, the year 2009 also saw the Supreme Court of India addressing the malady of delay in prosecution, a concern plaguing Indian IP enforcement scene. It issued a directive, in the matter of Bajaj Auto Limited v. TVS Motor Company, fixing a time frame for conclusion of IP matters pending before the courts. It opined that IP matters are to proceed on a day-to-day basis and that ideally final judgment should be given within four months from the date of the filing of the suit.

The end of last year also saw the Indian government removing all restrictions with respect to overseas remittance under technical collaboration agreements. Earlier, payments of royalty exceeding 5 percent on annual local sales, 8 percent on yearly exports and lump sum payment exceeding US$ 2 million alone required approval from the Ministry of Industry and Commerce.

Some Proposed Developments

The recent invigoration and revamping of Indian IP offices to increase efficiency and effectiveness are praiseworthy. Some of the noteworthy changes include digitisation of Indian patents and trademarks database, including publication of the examination reports on the Indian IP office website. Public health and general public good remains one of the driving factors behind development of the Indian IP regime. In light of this, it is only fitting that the Indian Government is contemplating greater regulatory control on branding of drugs. A reputed Indian financial newspaper carried a report on October 21, 2010 on a proposed move by the Indian Government to make registration of drug brands mandatory. The said report quoted the Indian Minister of State for Chemicals and Fertilizers on the apprehended dangers of having the same brand names for medicines and the need to regulate the same.

Meanwhile, India is also moving ahead with its commitment to having an IP structure in consonance with the international regime, by voluntarily taking on TRIPS plus IP commitments. India acceded to the Madrid Protocol in 2007, which provides for international filing of trademark applications and is slated to sign the Madrid Protocol treaty later this year. The trademark amendment bill incorporating amendments to Indian trademark law in light of the same has already received assent of both houses of Indian parliament.

India has also been dynamic in addressing the challenges posed by the digital age. In 2009, India has made far reaching amendments to its information technology law. The Indian Government now proposes to bring the copyright law in conformity with the World Intellectual Property Organization (WIPO) Internet Treaties, namely WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty which have set international standards in these spheres, by introducing the concept of digital rights management in India.

Author: Anand Desai, Managing Partner, DSK Legal

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