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Contrasting Orders on Statutory Licensing for Broadcasting of Sound Recordings and Underlying Works

The Hon’ble Intellectual Property Appellate Board (“IPAB”), on the 31st of December, 2020, passed a landmark ruling (“IPAB Order”) in a proceeding under section 31D of the Copyright Act, 1957 (“Act”) wherein it fixed separate statutory royalty rates to be payable to owners of sound recordings and underlying works for the radio broadcast of musical works and sound recordings, and underlying works.

However, in less than a week since the IPAB order, the Hon’ble Delhi High Court acted in stark contrast to the above IPAB order, when it disposed-off two long-pending disputes of statutory licensing of sound recording and underlying work i.e., The Indian Performing Right Society Ltd (“IPRS”) vs. Entertainment Network (India) Ltd (“Radio Mirchi”) [CS(OS) 666/2006] AND Phonographic Performance Ltd (“PPL”) & IPRS vs. Cri Events (P) Ltd & Ors [CS(OS) 1996/2009].

The said order ruled that the Act recognizes separate copyright in a sound recording besides the copyright in the literary (lyrics) and musical works (“music notes”) (collectively referred to as the “underlying works”), and when sound recordings are broadcasted, the underlying works are not considered to be utilized independent of the sound recording, therefore, a separate license for communicating the underlying works is not required.

Brief Facts of the Case

IPRS vs Radio Mirchi

Radio Mirchi acquired a license from IPRS to broadcast sound recordings in seven cities, however, apart from the seven cities for which Defendant had acquired a license, it also started broadcasting in three new cities. It was the case of the IPRS that Radio Mirchi infringed the public performance rights of IPRS by broadcasting in three new cities without obtaining a license to do so.

IPRS & PPL vs Cri Events

This was a rather straightforward case, where IPRS and PPL jointly sued Cri Events, an event management company for playing music without obtaining a license from the Plaintiffs.

The contention of the Plaintiff(s)

The primary contention of the IPRS was that it is a registered society for authors, composers, and publishers of Indian literary and musical works, whereas, PPL is a registered society for music companies. Since, both the societies are registered for different categories, and exploitation of the sound recordings also implies exploitation of literary and/or musical works forming part thereof, license for both the work i.e., sound recording as well as the underlying work needs to be acquired.

The Plaintiff also contended that copyright in the underlying work runs parallel to the copyright in a sound recording and hence the exploitation of such sound recording would necessarily invoke the right in the underlying works as well.

Plaintiff also contended that the 2012 Amendment to the Act which granted the right of continuous royalties to the author of underlying works irrespective of the assignment of the sound recording, is retrospective in nature.

Observation of the Court

Underlying works are part and parcel of Sound Recording – Not exploited separately

With respect to the claim that the copyright subsists in the underlying work independent of the sound recording, the Hon’ble Court ruled that the sound recording is not merely a sub-total of lyrics and musical notes alone, and it includes a voice, lyrics, musical notes, arrangement of all three elements in a certain way to sound appealing to the human ear, making the Sound Recording in an entirely new set of works that incorporates many works, including lyrics and musical notes. The Court further held that even the statute under Section 2(z) of the Act recognizes sound recording as the work of joint authorship of multiple authors and the Act recognizes separate copyright in a sound recording besides the copyright in the underlying works.

2012 Amendment to the Copyright Act is merely clarificatory in nature – Section 19 (10) does not change the interpretation and application of the law

The provision of law as existed before the amendment was that once the authors of the underlying work consented to the incorporation of their works in the sound recording and agree to vest separate copyright in a sound recording, no infringement of the underlying work can be claimed for communication of the sound recording to the public. In the view of the Court, this provision remained unchanged even after the amendment of 2012 since the transfer of ownership and economical rights were the very basis of assignment.

At this point, it is necessary to refer to section 19 (10) of the Act which provides that assignment of copyright in any work to make a sound recording that does not form part of any cinematograph film shall not affect the right of the author of the work to claim an equal share of royalties and consideration payable for any utilization of such work in any form.

The Court while interpreting “any form” as any form other than sound recording ruled that the provision does not mean that utilization of the work as embodied in the sound recording also entitles the owner of the copyright in underlying work to demand an equal share of royalties and consideration payable for the sound recording. The Court opined that to interpret the provision otherwise would make other provisions of the Act redundant which authorizes the owner of sound recordings to communicate it with the public without any license and/or permission from the authors of underlying marks. Hence, section 19 (10) of the Act to be read as to mean right to receive royalties for the exploitation of underlying work in any form other than sound recording.

What came to the aid of the Court’s interpretation was that Section 19 (10) of the Act only covers sound recording not being part of a cinematographic film, whereas, the Plaintiff has explicitly submitted that the sound recordings form a major part of the Indian film industry. However, the reasoning doesn’t hold good since similar provision has been added under Section 19 (9) of the Act in relation to cinematographic films.

This interpretation, effectively meant that, in the case of a live performance of songs incorporating the literary and musical works of members of IPRS, even if such songs also have a sound recording, for such live performance, a licence from IPRS will be necessary. Hence, in the case of CS (OS) 1996/2006, Defendant’s act of communicating the underlying work through live performance in the event amounted to infringement of the Plaintiff’s copyright.

Final Order: Right to Receive Royalties made Redundant?

In light of the above reasoning, the Court dismissed the first case in favour of the Defendant and the second case in favour of the Plaintiff by holding that:

  • In case the sound recordings are to be communicated to the public, i.e., play them, or broadcast them, a license from PPL is essential;
  • In case the underlying works are to be communicated to or performed in the public, independently, through an artist, the license of IPRS is essential; and
  • in case there is an event involving performances or communication of works of both kinds to the public, the license or authorization of both, PPL and IPRS is essential;

The Delhi High Court’s Interpretation of Section 19 (10) defeats the purpose of the Amendment

The Hon’ble High Court Order neglect the very basis for which the 2012 Amendments were introduced, which is evident from the ‘Statement of objects and reasons’ appended to the Copyright Act (Amendment) Bill 2010 to be read as:

  1. Clarify that the authors would have rights to receive royalties and the benefits enjoyed through the copyright societies;
  2. Ensure that the authors of the works, in particular, author of the songs included in the cinematograph films or sound recordings, receive royalty for the commercial exploitation of such works; and
  3. introduce a system of statutory licensing to broadcasting organisations to access to literary and musical works and sound recordings without subjecting the owners of copyright works to any disadvantages.

Hence it is within the legislative intent to treat the underlying works and the sound recording independent from one another, and interpreting otherwise will only defeat the purpose of the Amendment.

The Delhi High Court’s Interpretation of Section 19 (10) makes Section 31D Redundant

The provisions of Section 13(4) read with Section 14(a)(iii), 4th proviso to Section 18, Section 19(10) of the Act along with Section 31D clearly mandate the author’s right to receive royalties for the exploitation of underlying work by third parties, irrespective of any assignment. The reading of section 31D (2) of the Act is clear, i.e., The broadcasting organisation… shall pay to the owner of rights in “each work” royalties in the manner and at the rate fixed by the Appellate Board. Even on a plain reading of the heading of Section 31D and the provision of Section 31D (2), we can understand that the sound recording, and the underlying works are treated separately for the purpose of statutory licensing. Hence, again, it is the interpretation of the Hon’ble Delhi High Court, which makes the 2012 Amendment, redundant.

Appropriate to say single License to exploit but separate Royalties payable.

The IPAB in its analysis of Section 19 (10) of the Act held that the amendment resulted in the bifurcation of the underlying works embodied in the sound recording into independent and distinct rights, allowing in rights in sound recording and rights of the authors of the underlying works to operate independently in their own field as per the operation of amended provisions. It follows that while only the Producer can exploit the distinct rights existing in the sound recording, the authors can exploit the underlying work as a shared right.

Conclusion: The Puzzle Ahead

The contrasting orders of the Hon’ble Delhi High Court and the IPAB in less than 5 days have unevenly painted the author’s statutory right to receive royalties under section 31 D of the Act. Going forward, the orders will only cause hurdles for Music Companies, Authors, Artists, Copyright Societies, and any other interested parties to such music agreements.

It was ruled in M/s. Shreedhar Milk Foods Pvt. Ltd. vs. Mr. Vikas Tyagi and The Registrar of Trade Marks, 2013 (55) PTC 247 (IPAB) that the IPAB’s powers in relation to its original and appellate jurisdiction are parallel to that of High Court as enshrined by Article 227 of the Constitution of India, 1950. Hence, in principle, neither of the order can prevail over the other, and since the orders are passed by a Single Judge Bench, we await to see if the interpretation of either the order is challenged before a larger bench of the Hon’ble Delhi High Court or even before the Supreme Court in the coming days.

Apart from this, another viable solution shall be a further amendment to the language of Section 19 (10) of the Act either ratifying the interpretation of the Hon’ble Delhi High Court, or confirming its initial intent that the author’s right to receive royalties for the exploitation of underlying works, in any form, including “sound recording” remains unaffected by any assignments.

The contrasting orders of the Hon’ble Delhi High Court and the IPAB in less than 5 days have unevenly painted the author’s statutory right to receive royalties under section 31 D of the Act. Going forward, the orders will only cause hurdles for Music Companies, Authors, Artists, Copyright Societies, and any other interested parties to such music agreements.

Image Credits: Photo by freestocks on Unsplash

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Intellectual Property Appellate Board (IPAB) Amongst Other Tribunals Abolished Through an Ordinance

In a bid to streamline the functioning of tribunals and avoid delay in the dispensation of justice, the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 has been promulgated by the President of India through a gazette notification dated April 04, 2021. A bill to the same effect had been passed in the Lok Sabha in February and was pending in the Rajya Sabha, however, the ordinance was brought in despite assurances that the bill would be sent to a standing committee for a review in light of opposition.

The ordinance is seen as another step in the process of rationalisation of tribunals that began in 2015 . Through the Finance Act, 2017, seven tribunals had been abolished or merged based on functional similarity, however, the Act underwent various legal challenges for being passed as a Money Bill in violation of Articles 107, 110 and 117 of the Constitution Of India and being against the basic tenet of independence of judiciary.

The Finance Act, 2017 had empowered the central government to notify rules on qualifications of members, terms and conditions of their service, and composition of search-cum-selection committees for 19 tribunals (such as Customs, Excise, and Service Tax Appellate Tribunal). The ordinance amends the 2017 Act to include provisions related to the composition of search-cum-selection committees, and term of office of members in the Act itself as directed by the Supreme Court in the Rojer Matthew Case . However, the ordinance limits the term of members to 4 years disregarding the Supreme Court’s decision in the IPAB Case 3, which stipulated a minimum term of 5 years.

The ordinance primarily dissolves existing appellate bodies under 9 statutes including the Intellectual Property Appellate Board (“IPAB” or the “Appellate Board”) and transfers their functioning to the concerned High Courts, Commercial Courts/Commercial Division of High Courts, Registrars, Central Government etc.

The amendments introduced by the ordinance across various IP statutes have been detailed below:

Trade Marks Act, 1999

  • The IPAB which was set up under Section 83 of the Trade Marks Act, 1999 to hear appeals against the Trademarks Registrar’s decisions under the Act has been abolished.
  • The ordinance also transfers the powers of the Board to the High Court and transfers the pending cases before IPAB to the respective High Courts under whose jurisdiction the Appeal would have been ordinarily filed.
  • To dismantle the Board, the ordinance has deleted provisions related to the IPAB including the establishment (Section 83) and composition of the Tribunal (Section 84), Qualification (Section 85), Term of Office (Section 86), Salaries (Section 88), Resignation and Removal (Section 89), Procedure and Powers (Section 92) Condition on interim order (Section 95) Chairman’s power to transfer cases from one branch to another from the Act.
  • To transfer the power and function of the Board to the High Court, the ordinance has lifted the bar on the jurisdiction of the court by deleting Section 93 from the Act. It further deletes the definition of Appellate Board, Bench, Chairman, Judicial Member, Member, tribunal, and Vice-Chairman from Section 2 (1) of the Act.
  • The ordinance amends the definition of “prescribed” from “prescribed by rules made under this Act” to “(i) in relation to proceedings before a High Court, prescribed by rules made by the High Court; and (ii) in other cases, prescribed by rules made under this Act.”
  • The ordinance substitutes the term “Tribunal” with “the Registrar or the High Court” and “Appellate Board” with “High Court” wherever they occur in the Act.
  • The ordinance has also carried out amendments identical to the above in the Geographical Indications of Goods (Registration and Protection) Act, 1999 to dismantle the IPAB and transfer the powers and functions to the High Court.

Copyright Act, 1957

  • Appellate Board established under the Copyright Act, 1957, which was empowered, among other things, to hear appeals against the orders of the Registrar of Copyrights has been dismantled and replaced with Commercial Courts, a division of High Courts. To do so, the ordinance has deleted provisions related to the Appellate Board including its definition under Section 2 (aa) of the Act.
  • It defines “Commercial Courts” under Section 2 (fa) of the Act as “Commercial Court, for the purposes of any State, means a Commercial Court constituted under section 3, or the Commercial Division of a High Court constituted under section 4 of the Commercial Courts Act, 2015”. The newly added definition gives “Commercial Courts” the same meaning as it has under Section 4 of the Commercial Courts Act, 2015.
  • It has replaced the term Appellate Board with “Commercial Courts” wherever they occur in the Act, except for Section 50 of the Act in which the term “Appellate Board” has been replaced with “High Court”.
  • The power of the Appellate Board to hear appeals against the orders of the Registrar of Copyrights will now be vested with a Single Judge of the High Court. The Single Judge has also been empowered to refer the case to a larger bench if the Judge deems fit.
  • Since the amendment mandates that any proceeding before the High Court or the Commercial Division of the High Court including proceeding under section 31D of the Act for fixation of royalties shall be as per the rules prescribed by the High Court which in this case shall be Commercial Courts Act, 2015.
  • Since section 14 of the Commercial Courts Act mandates expeditious disposal of appeals, we can expect better management of the backlog of Copyright related commercial disputes in the near future.

Cinematograph Act, 1952

  • The ordinance has abolished the Appellate Tribunal formed under the Cinematograph Act, 1952 by deleting Section 2(h) of the Act.
  • It replaces the term ‘Appellate Tribunal’ under Section 7C of the Act with ‘High Court’. Hence, the power of the Tribunal which was empowered to hear appeals against decisions of the Censor Board has been transferred to the concerned High Court. As a result, such appeals shall now be filed directly before the concerned High Court.

Protection of Plant Varieties and Farmers’ Rights Act, 2001

  • The Plant Varieties Protection Appellate Tribunal formed under Section 54 of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 has been dismantled.
  • The ordinance has removed the provisions related to the Tribunal including the definition of Chairman, Member, Judicial Member, establishment (Section 54), composition (Section 55), the procedure of the Tribunal.
  • The term “Tribunal” has been substituted with “High Court” wherever they appear in the Act.
  • As a result, the power of the Tribunal which was empowered to hear appeals against decisions of the Registrar of Plant Varieties Registry and Protection of Plant Varieties and Farmers’ Rights Authority has been transferred to the concerned High Court.
  • Now all such appeals shall be filed directly before the concerned High Court, and any pending cases shall be transferred to the concerned High Court.

Patents Act, 1970

  • The Appellate Board formed under Section 116 of the Patents Act, 1970 which was vested with the power to hear appeals under Section 117A of the Act against orders of the Controller General of Patents, Designs and Trade Marks (“CGPDTM”) or the Central government has been abolished.
  • Much like the above amendments, the ordinance omits provisions related to the Appellate Board such as establishment (Section 116) and composition of the Board (Section 117), Procedure and Powers (Section 117B and 117D).
  • To transfer the power and function of the Board to the High Court, the ordinance has lifted the bar on the jurisdiction of the court by deleting Section 117C from the Act.
  • Prior to the amendment both the High Court and Appellate Board were supposed to function simultaneously, however, now Appellate Board has been omitted from all of those places. Further, wherever only the Appellate Board appeared, it has been substituted with the High Court.

Apart from the amendments to the statutes specified above, a transitional provision has been made to compensate outgoing tribunal members for the premature termination of term and reversion of officers on deputation to parent cadre, Ministry or Department. In addition, any appeal, application or proceeding pending before the Tribunal, Appellate Tribunal or other authorities, other than those pending before the Authority for Advance Rulings under the Income-tax Act, 1961, shall stand transferred to the Court before which it would lie as per the ordinance, and the Court may proceed to deal with such cases from the stage at which it stood before such transfer, or from any earlier stage, or de novo, as the Court may deem fit. Moreover, the balance of all monies received by the abolished authorities and not spent by it as well as properties owned by it shall stand transferred to the Central Government.

CONCLUSION

Few may consider it as a notable change in IP dispute resoltion, others including the Group of Industry Associations on Intellectual Property have opined their dissatisfaction regarding the move. Nevertheless, since the Appellate Boards were formed to fast-track the backlog of cases, and they failed to meet the desired objective, it appears to be a prudent move by the Government. It should be however kept in mind that since the Indian Judiciary is infamous for backlog of cases, mere abolishment of the Appellate Tribunal will be futile unless the special commercial courts/benches are equipped to handle these cases. The substitution of the Appellate Board with the High Courts and Commercial Courts in relation to Copyright disputes also means the cost of instituting the proceedings before the respective judicial bodies will be decided in accordance with the Code of Civil Procedure, 1908 and the Commercial Courts Act, 2015.

The abolition of the Appellate Board poses another problem with respect to the royalty rates that are due to be revisited by the end of this year. The ordinance may have further complicated the entire procedure under Section 31D of the Copyright Act. This means any procedure prescribed under the Copyright Rules, 2013 in relation to the above proceeding gets nullified and we can expect the Central Government to exercise its power under Section 21A of the Commercial Courts Act, 2015 to frame rules akin to Rule 31 of the Copyright Rules, 2013.

The content of this Article does not necessarily reflect the views / position of Fox Mandal but remain solely those of the authors.

“Read about the changes introduced through the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021.”

Image Credits: Photo by freestocks on Unsplash

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Development in Indian Copyrights Law in 2019

With the digital movement coming of age, the scope of copyright protection has expanded in the past year to a notch higher and effective regulations have been launched to deal with the expansion.

Some of the essential legislation and rulings that shaped the Indian Copyrights law in 2019 are stated hereunder:

LEGISLATIVE DEVELOPMENTS

 

  1. Copyright (Amendment) Rules 2019

The Department for Promotion of Industry and Internal Trade (DPIIT) vide its press statement dated May 30, 2019 proposed to introduce the Copyright Amendment Rules, 2019[1].  The draft rules aimed at ensuring smooth and flawless compliance of the Copyright Act in the light of technological advancement in the digital era and to bring them in parity with other relevant legislations. They sought to broaden the scope of issuance of statutory licences under section 31-D of the Act for broadcasting work subject to copyright protection by replacing ‘radio and television broadcast’ with ‘each mode of broadcasting’ under rules 29, 30, 31. This amendment came at the backdrop of  Tips Industries Ltd. vs. Wynk Music Ltd. & Anr.[2], where the need to include streaming under the preview of broadcasting was realised under the statutory licensing scheme. The draft also provided for stricter code of conduct for copyright societies and more. 

  1. Cinematograph (Amendment) Act, 2019

The Ministry of Information and Broadcasting on Feb 12, 2019 introduced Cinematograph (Amendment) Bill 2019[3] which aims to curb film piracy and imposes stricter penalties and punishments in this accord. The scope of unauthorised use of audio-visual recordings has been widened to include unauthorised camcording and transmission thereof. Strict deterrence can be traced in the proposed bill as intense penal provisions are attracted in the case of making and transmitting copies of a cinematograph film or audio-visual recording without acquiring approval from the owner of such work.

Notable Case Laws

Some of the noteworthy copyright cases for the year 2019 would be:

1.      Roger Mathew v. South Indian Bank Limited[4]

The Supreme Court of India struck down the Tribunal, Appellate Tribunal, and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017 framed under the Finance Act, 2017 on the ground that it gave excessive and discretionary powers to the government as to the appointment of service persons to the tribunal and it also affected the judicial independence of the Tribunals. The dilution and encroachment on the judicial domain through the appointment of technical and other members, devoid of either adjudicatory experience or legal knowledge, to the IPAB after the merger of Copyright Board and IPAB was a matter of great concern. However, since this development could not be implemented retrospectively, the appointment already made remained unaffected. 

2.      UTV Software Communication Ltd. & Ors. v. 1337X.TO & Ors[5]

The Delhi High Court introduced a dynamic injunction into Indian jurisdiction to curb online piracy. Through this, Plaintiff could get the order executed against mirror/redirect/alphanumeric websites hosting the same infringing content as those already blocked.

  1. Sajeev Pillai v. Venu Kunnapalli & Anr[6]

It was the case of Plaintiff that the storyline of the defendant’s movie titled Mamankam was the result of the extensive research work done by Plaintiff. Plaintiff had assigned his work which included the story, script, screenplay, and dialogue to the defendant. The Kerala High Court held that the author has a legitimate right to claim authorship even after assignment and the later act does not exhaust the moral right of the author within the meaning of section 57(1) of the Copyright Act, 1957. However, since the movie is the distorted version of the plaintiff’s work due to the mutilation and modification of the original script, the court took a balanced view and allowed the movie to be released without crediting anyone as the author thereof till the final disposal of the suit. 

  1. Tips Industries Ltd. vs. Wynk Music Ltd. & Anr[7]

The Hon’ble Bombay High court interpreted section 31D of the Copyright Act, 1957 as an exception to the copyright laws. It is further stated that statutory licensing extends to only radio and television broadcasting and is exclusive of internet broadcasting. Therefore, online streaming services don’t fall within the ambit of statutory licensing. The flaw could, however, be fixed via the new “Copyright Amendment Rules 2019” stated the Hon’ble court. In the instant case, the defendant’s feature to allow its consumers to download music and store the same for unlimited usage amounted to sale thereby not constituting broadcast stated in 31D of the Copyright act. Therefore, the defendant was not required to avail of a statutory license.

  1. Yash Raj Films v. Sri Sai Ganesh Productions[8]

The plaintiff (Yash Raj) instituted a copyright infringement suit against the defendant for the reproduction of the copyrighted work subsisting in the plaintiff’s movie titled “Band Baja Baraat” through a Telugu remake titled “Jabardasth” without taking prior permission of the plaintiff.    

The Hon’ble High court was of the view that “to make a copy of the film‟ did not mean just to make a physical copy of the film by a process of duplication, but it also referred to another film which substantially, fundamentally, essentially, and materially resembled/reproduced the original film. The defendants had blatantly copied the fundamental, essential and distinctive features as well as forms and expression of the plaintiff’s film on purpose and consequently, infringed the plaintiff’s copyright.

  1. Raj Rewal v. Union of India & Ors[9]

The Hon’ble Delhi High court in the instant case dealt with a significant question of copyright law i.e., whether an author’s (architect’s) rights foreshadow the rights of the property owner. It was answered in the negative, i.e. the property owner’s right as per constitutional right under Article 300A shall be held more vital and that he/she can choose to destruct or modify the building on his/her property. Therefore, the Owner’s right shall precede the Author’s right under Sec 57 of the Copyright Act.

  1. Thiagarajan Kumararaja v. M/s Capital Film Works and Anr[10]

The Hon’ble Madras High Court for the first time deliberated a ruling on rights of the producer qua the author of the script with regard to the dubbing of the film and held that the producer of the film has the right to dub the film in any other language provided there isn’t any agreement to the contrary. Under Section 2(d)(v) in relation to a cinematograph film, the producer is the author and since they had taken the initiative and the responsibility for making the work i.e., cinematograph film, they had the right to dub the same. Accordingly, the infringement suit for dubbing the film in another language was dismissed and decided in favour of the producer.

 

CONCLUSION

From defending the right of the producer to dub in other languages, to continuance of the moral right of the author even after the assignment of work, it can be said that the year 2019 has been a busy year for the music and film industry. The introduction of the dynamic injunction against rogue websites was a much-needed change for the empowerment of lawful owners of copyrighted work to battle piracy. Further, the online copyright application system has progressively become filer-friendly in the past year[11]. In addition, increased transparency and stakeholder participation has created a protective environment for enhanced copyright preservation.

References 

[1] Available at http://copyright.gov.in/Documents/pdfgazette.pdf

[2] Commercial Suit IP (L) No. 114 of 2018

[3] https://prsindia.org/sites/default/files/bill_files/Cinematograph%20%28A%29%20Bill%2C%202019.pdf

[4]  Civil Appeal No. 8588 of 2019, SLP No. No.15804 of 2017

[5] CS(COMM) 724/2017

[6] FAO.No.191 OF 2019

[7] Commercial Suit IP (L) No. 114 of 2018

[8] CS (COMM) 1329/2016

[9] CS (Comm) No. 3 of 2018

[10] Original Side Appeal No. 22 of 2017

[11] http://www.ipindia.nic.in/writereaddata/Portal/IPOAnnualReport/1_110_1_Annual_Report_2017-18_English.pd


Image Credits: Noor Younis on Unsplash

From defending the right of the producer to dub in other languages, to continuance of the moral right of the author even after the assignment of work, it can be said that the year 2019 has been a busy year for the music and film industry. The introduction of the dynamic injunction against rogue websites was a much-needed change for the empowerment of lawful owners of copyrighted work to battle piracy.

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Development in Indian Trademark Law in 2019

India moved up one spot up in terms of trademark filings from its previous year’s ranking according to the World Intellectual Property Indicators published in October 2019. The report also pointed out a large increase in trademark filing activity in India i.e. more than 20.9% with resident filing activity overwhelmingly contributing to the double-digit growth. Having remained below 100,000 until 2006, India’s trademark annual filings now exceed 320,000.

The year also saw some judicial and policy development enabling efficient functioning of the trademark laws in the said context. Legislations have also tried to catch up with the ever-increasing activity in the digital space. Some of the essential enactments and pronouncements are stated hereunder:

 

LEGISLATIVE & POLICY DEVELOPMENTS

 

  1. National E-Commerce Policy [Draft]

The Department for Promotion of Industry and Internal Trade (DPIIT) on February 23, 2019 released the National E-commerce Policy[1] to prepare and enable stakeholders to fully benefit from the opportunities that would arise from progressive digitalization of the domestic digital economy. The draft policy laid special emphasis on the compulsory adoption of anti-counterfeiting and anti-piracy mechanisms by E-commerce platforms. Such adoption would not only curb piracy and counterfeiting but would further make the transactions explicit for the sellers, trademark owners and consumers enabling the system to work transparently.

  1. Trade Mark Registry’s Proposal to Restrict Access to Certain Documents

The Ministry of Commerce & Industries on September 06, 2019, issued a public notice[2] inviting suggestions on the categorization of documents put up on their official website as :

  1. Full access documents which can be viewed and downloaded by the general public.
  2. Documents with description but viewing and downloading restricted.

Several confidential, personal and exclusive information was being put up via documents that needed to be protected and access to them had to be duly regulated. Hence the proposal.

 

NOTABLE CASE LAWS

Some of the noteworthy trademark cases for the year 2019 would be:

1.      Crocs Inc Usa v. Bata India Ltd & Ors[3]

The plaintiff (Crocs) after an unsuccessful attempt in the lower court to sue the Defendant (Bata) for design infringement, approached the Delhi High Court pressing for an injunction on the ground of passing-off action under common law. The High Court considered the legislative intent of the Design Act of providing monopoly over the design vide registration only for a limited period, thereby making it available for public use after the tenure of the registered design. This objective would be lost if the design was allowed to be used as a trademark since the exclusive rights would then last till perpetuity. However, the court clarified that if there was an additional feature that had been extensively used as a trademark other than what has been protected as design, and goodwill had accrued in relation to the use of such feature as a trademark, it is only those features which could be protected as a trademark.

2.      Amway India Enterprises Pvt. Ltd. v. 1MG Technologies Pvt. Ltd. & Anr.[4]

In another important case, the plaintiff (Amway) sought a mandatory and perpetual injunction restraining the defendant from using the plaintiff’s trademark and selling products online without the plaintiff’s consent. The Delhi High Court restrained e-commerce platforms from selling products falling under the direct selling category without the consent of the proprietor of the registered trademark. The court held such an act enabling the sale of the product on the defendant’s website as not only infringement of the plaintiff’s trademark leading to dilution, passing-off and misrepresentation but also ultra vires the “direct selling guidelines 2016”. The court further observed that the intermediaries (e-commerce marketplace) should fulfil the due diligence requirements in order to avail the safe harbour protection.

  1. Amrish Agarwal v/s Venus Home Appliances Pvt Ltd[5]

It was ruled that in cases alleging trademark infringement, a legal proceedings certificate (LPC) ought to be mandatorily filed along with the plaint. In the said case, the LPC was filed at the stage of final arguments. It was objected on the ground that LPC filed in the last leg of the case ought to be disallowed. The said objection was counter-argued stating that a renewal certificate was brought on record and duly exhibited. In this regard, the Court held that in a trademark infringement case, the Court must be able to see the mark, and therefore an LPC or the certificate of registration along with the journal extract ought to be submitted at the initial stage itself.

 

The increased trademark filing activity illustrates an increased awareness among emerging entities regarding their intellectual property rights and the necessity to protect them as early as possible. With increased competition, the availment of trademark registration is also becoming a tough nut to crack. Further, the fluid nature of the digital environment poses a continuous challenge to the IP domain. Conducive policy changes and judicial decisions in the past year have dealt with some of these threats but for adequately serving the public interest implementation challenges have to be appropriately addressed

 

References 

[1] Available at https://dipp.gov.in/sites/default/files/DraftNational_e-commerce_Policy_23February2019.pdf

[2] http://ipindia.nic.in/writereaddata/Portal/Images/pdf/Catergorization_of_Docs.pdf

[3]CS(COMM) 569/2017

[4] CS (OS) 410/2018, 453/2018, 480/2018, 531/2018, 550/2018, 75/2019 & 91/2019

[5] CM (M) 1059/2018

 

 

Image Credits: Lukas Blazek on Unsplash 

Conducive policy changes and judicial decisions in the past year have dealt with some of the threats but for adequately serving the public interest implementation challenges have to be appropriately addressed.

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