Application of Prosecution History Estoppel in Trademark Infringement Proceedings

  • March 17, 2023
  • Drishti Kardam
  • Indiradevi Kollipara

The doctrine of prosecution history estoppel, which was initially prevalent in determining the infringement of patents, also has its uses in trademark infringement proceedings. It prevents individuals from claiming the advantages associated with a right waived on a previous occasion.

When applied to trademarks, the doctrine dissuades applicants from misusing the opportunity bestowed upon them to amend their claims of infringement by relying on the submissions made to the Registry while making the trademark application or during the examination. In this context, it is relevant to understand the estoppel concept, defined under Section 115 of the Indian Evidence Act, 1872. This section states as follows: –

“When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.”

Although judges make infrequent use of the doctrine in disposing of trademark infringement cases, its significance in this domain cannot be understated. For instance, this doctrine was applied by the Delhi High Court in Mankind Pharma Ltd. v. Chandra Mani Tiwari & Anr.[1] Back when the plaintiff had applied for the registration of the mark ‘ATORVAKIND’, the examiner found that it was similar to the marks ‘ATORKIND’ and ‘ATORKIND-F’. In its reply to the examination report, the plaintiff contended that its mark was different from the cited trademarks. The defence proved that the plaintiff’s reply took the publici juris defence for the term ‘KIND’. Subsequently, the court held that the defendant’s use of the mark ‘MERCYKIND’ did not constitute trademark infringement, and accordingly, the plaintiff’s plea for injunction was dismissed.

Here are some instances wherein the doctrine of prosecution history estoppel can be applied, and prosecution history (I.e., history of the proceedings right from application filing to trademark registration) can be relied upon in trademark infringement cases: –

Trademark includes a generic or descriptive term

If an application is made for the registration of a trademark with a generic or descriptive term, subsequently, the claimant cannot assert in the infringement proceedings that the mark used by the defendant is generic or descriptive. This principle also extends to determining the scope of goods and services. If the claimant in the prosecution stage claims the difference in goods or services compared to another mark, then the claimant can be said to have misclassified the goods at the prosecution stage. However, if the claimant has stated that there exists a difference in goods or services amongst rival companies, then infringement suits will backfire against the claimant.

Failure to make disclosures

Claimants must disclose statements given in the prosecution case that are potentially contradictory to the infringement claims posed in the infringement proceedings. And failure to make said disclosure could lead to the claimant’s incrimination. In some cases, the failure of the defendant to challenge the claimant’s trademarks can lead to prosecution history omission, just as in the Dish TV[2] case.

One can conclude that the doctrine of prosecution history estoppel calls for cautious handling of arguments and submissions at every stage of the prosecution of trademark applications. The arguments should be made considering their implications in the future as it unlocks an ambit for approbation and reprobation, which in most cases is used against the proprietor of the IP.

References:

[1] 2018 SCC OnLine Del 9678.

[2] Dish TV India Ltd. v. Prasar Bharti, 2019 SCC OnLine Del 9141.

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The doctrine calls for cautious handling of arguments and submissions at every stage of the prosecution of trademark applications. The arguments should be made considering their implications in the future as it unlocks an ambit for approbation and reprobation, which in most cases is used against the proprietor of the IP.

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Online Gaming: Challenges in Protection of Intellectual Property

  • February 13, 2023
  • Mathews V C

IP protection is a crucial aspect of the gaming industry as it helps game developers in protecting their creations and ensures that they receive appropriate recognition and adequate compensation for their work. However, protecting IP rights can prove difficult in the digital world, especially in countries where IP laws are weak or nonexistent.

Introduction

The gaming industry in India has been growing and evolving rapidly over the past few years. According to estimates, the Indian gaming industry was valued at approximately US$1.1 billion in 2020 and is expected to reach US$2.1 billion by the end of this year. The massive growth in this domain could be attributed to the increase in smartphone use, growing middle-class population, easy access to high-speed internet connections, rise in disposable income, expansion of e-commerce, and extensive use of online modes of payments. These factors enable companies and investors to tap into opportunities offered by the industry.

The mobile gaming segment, which accounts for more than 70% of the total market value, is the largest and fastest-growing segment of the country’s gaming industry. Moreover, the esports market is proliferating, driven by investments and recognition of esports as a competitive sport.

Challenges Faced by Game Developers

The exponential progress in the field of gaming has brought about numerous challenges such as complications involved in the protection of Intellectual Property (IP), game cloning issues, etc. With the rise of digital distribution, it has become easier for rogue companies to copy popular games and market them as their own, thereby infringing on the original game’s IP and reputation.

One of the biggest challenges in protecting IP in online gaming is the issue of game cloning. Game cloning occurs when one company creates a copy of another company’s game and markets it as its own. This not only infringes on the original game’s IP, but it can also harm the reputation of the original game and the company behind it. Game cloning is particularly prevalent in the mobile gaming industry, where the low barriers to entry and the ease of access to development tools make it simple for companies to create a copy of a popular game. Game cloning may confuse consumers or users, resulting in a loss of revenue for the original game’s developers. Such cloning also harms the reputation of the original game. In some cases, game cloning can also lead to negative reviews and decreased ratings for the original game, further impacting its business performance and success.

Another challenge in protecting IP in online gaming is the issue of piracy. With digital games, it is easy for users to obtain and share illegal copies of the game, which can result in lost revenue for the game’s creators. This is particularly problematic for smaller game developers, who may not have the resources to invest in anti-piracy measures. While some companies have attempted to use digital rights management (DRM) technology to prevent piracy, this can also make the game less accessible for legitimate users and can result in technical issues.

Protection of Intellectual Property

To combat the challenges of protecting IP in online gaming, game developers can take several steps. Firstly, they can register their IP, including trademarks and copyrights, to have a more robust legal standing in the event of an infringement. Additionally, game developers can invest in anti-piracy measures, such as DRM technology, to prevent the illegal distribution of their games.

Another way to protect IP in online gaming is by enlisting the help of the gaming community and collaborating with its members. Game developers can work with players to report game cloning and piracy instances, allowing them to take swift action to protect their IP. Additionally, game developers can engage with players to gather feedback and improve their games, creating a loyal and engaged community invested in the game’s success.

Conclusion

Though the challenges of protecting IP in online gaming are complex and multi-faceted, game developers can mitigate these challenges and ensure the success of their games through IP registration, anti-piracy measures, collaborating with members of the gaming community, etc. The gaming industry is constantly evolving, and the challenges of protecting IP in online gaming will continue to change. In this rapidly changing marketplace, game developers must be proactive in protecting their IP to remain competitive and receive the recognition and compensation they deserve.

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Photo by Ron Lach : https://www.pexels.com/photo/group-of-teenagers-watching-a-man-play-game-on-computer-7849517/

Though the challenges of protecting IP in online gaming are complex and multi-faceted, game developers can mitigate these challenges and ensure the success of their games through IP registration, anti-piracy measures, collaborating with members of the gaming community, etc. The gaming industry is constantly evolving, and the challenges of protecting IP in online gaming will continue to change. In this rapidly changing marketplace, game developers must be proactive in protecting their IP to remain competitive and receive the recognition and compensation they deserve.

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Music on the Block: How Music Artists can Benefit from Blockchain Technology

  • January 19, 2023
  • Mathews V C

All of us make use of music streaming services quite frequently. But have we ever stopped to wonder how the creators or artists get paid for their music? More often than not, music artists are forced to settle with modest royalty earnings. Nevertheless, the advent of blockchain technology has ushered in a new era and this technology has the potential to ensure that music artists get adequate compensation for their efforts and talent.

All have enjoyed music throughout the ages. The music industry has evolved from EP records to Cassettes to CDs to MP3s. Currently, music is enjoyed predominantly via digital streaming platforms such as Spotify, and Apple Music, and closer home services such as Airtel Wynk, Times Music, JioSaavn, etc.

However, the growth in streaming services like Spotify has not benefited individual artists who typically receive very little royalty overall because of slowing album sales. Taylor Swift, a famous musician, went to the extent of removing her music from Spotify due to the low per-stream royalty.

The advent of blockchain technology has set the stage for the music industry to undergo another evolution. With the blockchain, artists can create a token-based economy where the value is derived from an artist’s work. When a token is created, the artists convert their intellectual property into a financial asset that all of us can purchase. All holders of this token receive a portion of the artists’ revenue. Hence the more consumers of the content, the higher the token’s value. An artist thus can raise revenue through the launch of a token.

Tokenization of the asset also assists in the removal of the middleman. Currently, recording labels take away the majority of the gains. Recording labels also act as hindrances many a time for the entry of new artists into the business. A system based on blockchain eliminates the middleman, thus putting the power back into the hands of the creators. Funds are raised by fans rather than the recording label via tokenization. The flip side of this model is the lack of users.

A few platforms exist such as Theta.tv,  the YouTube of Web 3.0, or Audius (which is said to be the equivalent of Spotify or Apple Music). Having used these platforms, it is safe to say that though there is a vast scope, their success and similar platforms will depend on the consumers or users.

Artists can also utilize Non-Fungible Tokens (“NFT”) to create a new vertical of revenue generation from their work. Purchasing music as NFTs holds much value for both the creator and the collector. For one, there is a transfer of ownership.

In a world driven by music streaming, the conundrum arises of why a purchase of the rights in music would be required. The answer, as always, lies in the monetization of the asset. The purchaser sees value in buying the rights and reselling them later for a potential profit. Such music NFTs benefit artists at both the initial sale pricing and the secondary sales. Artists can earn from secondary sales in the form of royalties, especially if the underlying smart contract attached to the music NFT is so that they can earn future royalties on such sales.

Platforms such as Async.art help artists mint NFTs of their musical works, and Catalog Works let music fans bid on digital records. Award-winning artist, Ross Golan who has worked with renowned artists like Ariana Grande and Justin Bieber, and rock bands such as Maroon 5 and Linkin Park, also recently minted The World’s First NFT Musical, The Wrong Man.  

There is still much grey area regarding the synergy between blockchain and music. However, the benefits, as well as the various avenues, are something that cannot be denied. In time, we are confident of innovative music-focused NFT projects, which will hopefully allow the creators or artists to get the compensation they deserve for their craft.

Image Credits:

Photo by Matthias Groeneveld: https://www.pexels.com/photo/set-of-retro-vinyl-records-on-table-4200745/

The advent of blockchain technology has set the stage for the music industry to undergo another evolution. With the blockchain, artists can create a token-based economy where the value is derived from an artist’s work. When a token is created, the artists convert their intellectual property into a financial asset that all of us can purchase. All holders of this token receive a portion of the artists’ revenue. Hence the more consumers of the content, the higher the token’s value. An artist thus can raise revenue through the launch of a token.

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Registration of GUI as Designs: Existing Provisions and Challenges

  • January 13, 2023
  • Drishti Kardam

In this article, an attempt is being made to highlight how GUIs can be protected and to ascertain the challenges faced by applicants in filing design applications for the registration of GUIs.

Introduction

A Graphic User Interface (GUI) which allows users to interact with electronic devices or machines, is widely used in the present digital age. The term was coined in the 1970s to distinguish graphical interfaces from text-based ones, such as command line interfaces (CLI), etc. Apple’s GUI-based operating system – Macintosh, Microsoft’s Windows, Mobile Touch Screens, and other 3D interfaces (Eg. Augmented Reality) are all examples of GUIs.

Protection of GUI: A Look at Locarno Classification and Designs (Amendment) Rules, 2021

Just as trademarks are classified into various classes of goods and services provided for in the internationally accepted NICE classification, Designs also have a classification of articles to which a design can be applied, known as the Locarno Classification.

The Locarno Classification, developed under the Locarno Agreement (1968), is an international classification used for registering industrial designs. India became the 57th member to be a signatory to the Locarno agreement in 2019. The changes were incorporated through the Designs (Amendment) Rules, 2021, thereby bringing the classification of industrial designs at par with the rest of the world as opposed to the previous national classification.

Subsequently, on 25th January 2021, the Ministry of Commerce and Industry notified the Designs (Amendment) Rules, 2021, which substituted Rule 10 of the Design Rules 2001, and incorporated the current edition of the Locarno Classification, which specifically created Class 14 – Recording, telecommunication, or data processing equipment, with a subclass “Class 14-04 – Screen Displays and Icons”, and further provided for Class 32, allowing for two-dimensional graphic designs, graphic symbols, and logos, to be protected under the Designs Act, 2000, provided that these designs satisfy the essentials of an ‘Article’ and a ‘Design’ as defined in Sections 2(a) and 2(d) of the Act.

Lacunae in Legislation

As per the Designs Act, 2000, a design means “only the features of shape, configuration, pattern, ornament, or composition of lines or colours applied to any article, whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate, or combined, …”

Now, this is precisely where the problem arises. Even after the Locarno Classification was introduced and the Designs Rules were amended to deal with confusion and uncertainties in the classification of industrial designs, the lawmakers have failed to amend the definition of ‘Design’ and bring the Designs Act, 2000, along the same lines. Further, the Controllers make conflicting observations and the interpretations provided by them seem to lack uniformity.

A GUI should be protected since its intrinsic purpose is to enhance the visual appeal of the program and thus build on its commercial value. The definition of a design given under the Act is limited and does not expressly provide for graphics and/or software. Due to this lacuna, the definition is open to multiple interpretations.

Practice Followed by the Indian Design Office

Before 2009, Microsoft was granted registration for some of its designs under Class 14-99, in the ‘Miscellaneous’ category. Thereafter, in the year 2014, Amazon filed a design application under no. 240305 pertaining to a “Graphic user interface for providing supplemental information of a digital work to a display screen”, which was rejected by the Design Office, on the grounds that GUIs do not qualify as designs under Section 2(d) of the Act, they lacked “consistent eye appeal” and were not physically accessible.

Over the years, several new applications for the registration of GUIs have been filed. While a few have been granted[1], most Examiners opine that the GUIs do not fall under the definition of ‘designs’ and hence, cannot be protected. Hence, applicants are wary of filing design applications for registration of GUIs due to the absence of robust precedents.

Observations made by US Courts

In Ex Parte Tayama[2], the Court made the following observations –

  1. Programmed Computer Systems would suffice to be termed as an article of manufacture.
  2. Design (GUI) is an integral part of computer programmes.

Further, the patent battle[3] between Apple and Samsung (2011 – 2018) ended with Apple being awarded $539 million for Samsung’s infringement of its initial design. Apple was all the while contending to protect its “Total User Experience”.

Various Design Patents have been granted by USTPO, such as apparatus for displaying the path of a computer program error as a sequence of hypertext documents in a computer system having display[4], device, method, and graphical user interface for adjusting content selection[5], etc.

European Union’s Position

EU also provides wide protection to designs under EU Directive 98/71/EC on Legal Protection of Designs. GUIs in the EU are generally registered under the Community Design Regulation (Council Regulation No. 6/2002/EC) but may also exist as unregistered Community Designs. The regulation, however, excludes computer programmes.

Conclusion

The current definition of a design is inadequate and does not expressly cover the aspects of graphics/GUIs. Undoubtedly, the various developments in the IT industry have made the world realize the importance of protecting graphics. However, the introducing of international classification (Locarno Classification) and bringing amendments to existing laws are not sufficient. It is imperative to establish new guidelines and provide appropriate training to the Examiners at the Design Office so that a uniform mechanism is in place to facilitate the registration of graphic symbols/GUIs.

References:

[1] Design Application Numbers 274917, 274918, 284680, 276736, 260403

[2] 24 U.S.P.Q.2d (BNA) 1614 (BPAI Apr. 2, 1992)

[3] Apple, Inc. v. Samsung Elecs. Co., 926 F. Supp. 2d 1100 (N.D. Cal. 2013) (partially affirming jury damages award).

[4] US6763497B1

[5] US10915243B2

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Photo by cottonbro studio: https://www.pexels.com/photo/person-using-macbook-3584994/

A GUI should be protected since its intrinsic purpose is to enhance the visual appeal of the program and thus build on its commercial value. The definition of a design given under the Act is limited and does not expressly provide for graphics and/or software. Due to this lacuna, the definition is open to multiple interpretations.

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Rooh Afza has Immense Goodwill: Delhi HC Rules in Trademark Infringement Case

  • January 9, 2023
  • Shreya Chaddha
  • Kanika Birje

The Delhi High Court gave its verdict in the trademark infringement battle between Hamdard National Foundation (India) and Sadar Laboratories Pvt. Ltd., and prohibited the latter company from using the mark “DIL AFZA” thereby protecting the trademark “ROOH AFZA”.

In a suit for trademark infringement by Hamdard National Foundation (India) against Sadar Laboratories Pvt. Ltd., the Delhi High Court held that the trademark “ROOH AFZA” possesses immense goodwill and that competitors must ensure that their marks are not similar to it. A two-judge bench, in its judgment[1] held that since the mark “ROOH AFZA” has been used for over a century, it can be considered a strong mark and, thus, restrained the Respondent from using the mark “DIL AFZA” until the suit is disposed of.

Hamdard National Foundation has filed the present appeal against the order[2] passed by a single judge bench of the Delhi High Court on 6th January 2022, rejecting an application for an interim injunction against Sadar Laboratories Pvt. Ltd. Both the marks are used with respect to sweet beverage concentrate. The Appellants claimed that the Respondents were infringing their marks “HAMDARD” and “ROOH AFZA”, and by selling these products under the mark “DIL AFZA,” they were passing off their products as those of the Appellants.

The Single Judge Bench held that the Appellants have to show that “AFZA” has a secondary meaning to claim exclusivity of their product. Therefore, the Court dismissed the application on the ground that they can claim exclusivity only for the mark “ROOH AFZA” as a whole and not just for “AFZA.”

Aggrieved by the order, the present appeal was filed by Hamdard National Foundation seeking a permanent injunction refraining the respondents from using the mark “SHARBAT DIL AFZA” or “DIL AFZA” on the ground that it is deceptively similar to the mark “ROOH AFZA.” The appellants further claimed that the use of this mark would deceive consumers and amount to passing off and also submitted that this would amount to dilution of the Appellant’s mark.

It was claimed that the marks “HAMDARD” and “ROOH AFZA” have been used for a wide range of products and constitute a well-known mark under Section 2(zg) of the Trademarks Act, 1999 owing to their widespread reputation and has therefore acquired goodwill with respect to the class of products pertaining to sweet beverage concentrates.

The Respondent submitted that by virtue of Section 29 of the Trademarks Act 1999, the allegations of infringement are not maintainable. It was submitted that the Appellants do not have an exclusive right over the word “AFZA” and that their mark has been coined by joining the terms “DIL” and “AFZA” and are not phonetically or visually similar. The Respondent submitted that there was no possibility of confusion between the two marks and every other aspect, such as the design and color scheme of “DIL AFZA” is also materially different from the Appellant’s mark. Therefore, there was no possibility of confusion between the two marks.

The Delhi High Court, after considering the arguments from both sides, stated that “AFZA” is an integral part of both “ROOH AFZA” and “DIL AFZA.” The word is neither descriptive nor normally associated with the product; hence, it is material in determining whether there is an infringement of the trademark. The Court further stated that the use of the word “AFZA” lends a certain degree of similarity, and the trade dress of both products is also similar, making the Respondent’s mark deceptively similar to that of the Appellants.

The Court reiterated that “ROOH AFZA” has been used for over a century and is entitled to protection. The mark is a source identifier with a high degree of goodwill and is susceptible to unfair competitive practices. The Court stated that prima facie, the Respondent’s mark lacks a sufficient degree of dissimilarity and hence set aside the order passed by the Delhi High court and passed an ad interim order restraining the Respondent from manufacturing and selling any product under the mark “DIL AFZA” belonging to Class 32 until the present suit is disposed of.

References:

[1] Hamdard National Foundation (India) & Anr vs Sadar Laboratories Pvt. Ltd. [Case No. FAO(OS) (COMM) 67/2022]

[2] Hamdard National Foundation (India) & Anr vs Sadar Laboratories Pvt. Limited [Case No. CS (COMM) 551/2020]

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Photo by Jessica Lewis: https://unsplash.com/photos/qscDBbXBGiI?utm_source=unsplash&utm_medium=referral&utm_content=creditShareLink

The Delhi High Court, after considering the arguments from both sides, stated that “AFZA” is an integral part of both “ROOH AFZA” and “DIL AFZA.” The word is neither descriptive nor normally associated with the product; hence, it is material in determining whether there is an infringement of the trademark. 

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The Football World Cup: An IP Spectacle

A four-year spectacle, i.e., the FIFA World Cup 2022, which captures the imagination of almost 5 billion people worldwide, kicked off on November 20, 2022. No sport is more globally recognised and played than football, or soccer, as it is known in some parts of the world. Their grandest stage captures the imagination of many a country, with matches being watched with loyal fervour and new demi gods arising out of the tournament whose signing fees for their respective clubs could bankroll a country. But this is the FIFA World Cup at its best.

The tournament does bring about numerous challenges, and one such challenge is the protection of Intellectual Property rights. The tournament has close to 5 billion eyeballs on it; therefore, every brand looks to have a presence due to the tremendous commercial value it provides. FIFA has official partners for broadcasting, hospitality, ticketing, etc., who are recognised as official FIFA rights holders. These right holders make substantial financial investments, and such investments will only be forthcoming if FIFA provides them with the exclusive use of their brands during the tournament.

To ensure the education and protection of intellectual property rights, FIFA has an entire section on its website dedicated to brand protection: https://www.fifa.com/about-fifa/commercial/fifa-marketing/brand-protection. FIFA includes several terms and conditions as well as guidelines to protect the investment and exclusive rights granted to their partners and other licensees of the tournament, which include (among others) monitoring and action plans on counterfeit merchandise, ambush marketing campaigns, and social media activity. The rights are actively enforced to prevent misuse and to protect the prestige and value of such a partnership.

 

The Intellectual Property Guidelines provided by FIFA is an extensive document dealing with numerous aspects of protection. It states that only the official FIFA rights holders can use the official intellectual property rights for commercial purposes. Some of the notable official intellectual property items include the following:

With everyone wanting to celebrate the tournament, there is always a risk of unwanted association with the official intellectual property that may occur. However, the FIFA guidelines show that businesses and the public can use generic football or country-related images and terminology that do not include the official FIFA intellectual property.

 

Additionally, there is also the added problem of ambush marketing. It is a prohibited marketing activity undertaken by brands to unscrupulously take advantage of the event without the authorisation of FIFA. Ambush marketing previously raised its head during the World Cup in Russia. FIFA has sought to prevent such ambush marketing to ensure that the official sponsors are given as much protection as possible.

 

FIFA must be lauded for its efforts to create and enforce intellectual property for a sporting spectacle such as the World Cup, and other sporting event organisers must emulate the measures taken by FIFA to ensure the valuable rights of the sponsors are protected.

 

 

 

FIFA includes several terms and conditions as well as guidelines to protect the investment and exclusive rights granted to their partners and other licensees of the tournament, which include (among others) monitoring and action plans on counterfeit merchandise, ambush marketing campaigns, and social media activity. The rights are actively enforced to prevent misuse and to protect the prestige and value of such a partnership.

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A Perceptive Study of Indian Jurisprudence on the Religious Susceptibility Clause of Trademarks Law

Religion, since time immemorial, has influenced Indian law and society on a political, cultural, and economic level. The country’s rich religious and cultural history has, over the years, been both revered and celebrated around the world.

Our architecture, holy books, epics, symbols, and homonyms all reflect the country’s diverse and rich heritage that encompasses religion. The Indian Constitution further complements this heritage by vesting its citizens with the right to freely profess, practise, and propagate their religion under Articles 25-28,[1] subject to reasonable restrictions.

It is safe to say that religion is deeply intrinsic to Indian society, and inevitably, it has seeped through every facet of the Indian lifestyle, including trade and commerce. Religion, in India, is a sensitive subject, and the use of names of Gods and Goddesses, religious writings, figurines, and scriptures is subject to certain reasonable restrictions under the Indian Constitution as well as other domestic laws, including the trademark law.

Hence, while not entirely forbidden, the proliferation of hypersensitivity with respect to religion and religious scriptures and symbols dictates the jurisprudence around the usage of such marks under the Indian trademark law.

Trademark Law and the Bar of Religion

The use of religious symbols and figurines in commerce and business to draw clients has, over the year, proven to be an effective strategy to encourage growth, considering individuals place a high value on religious symbols and have a solid emotional and spiritual tie to items affiliated with their faith. Such usage, however, is also characterised by the nature of goods and services and the morality or immorality tag duly attached to said goods and services in contemporary society.

Section 9 of the Trademarks Act, 1999 stipulates Absolute Grounds for Refusal of Registration of a trademark.[2] Consequently, Section 9(2)(b)[3] specifically places certain restrictions on the registration of marks that are likely to hurt or insult the religious sensibilities of any class or section of society.

Additionally, the Manual of Trade Marks, Practice and Procedure by the Central Government,[4] in consonance with the provision as has been prescribed under Section 23(1) of the Trademarks Act, 1999,[5] further enumerates a list of notified prohibited trademarks which includes, interalia:

  • Words “Lord Buddha”, “Shree Sai Baba”, “Sri Ramkrishna”, “Swami Vivekananda”, “the Holy Mother alias Sri Sarada Devi”, “Balaji” or their devices and the Emblems of the Ramkrishna Math and Mission or colourable imitation thereof; or
  • Names and pictures of Sikh Gurus, viz. Guru Nanak, Guru Angad, Guru Amar Das, Guru Ram Das, Guru Arjun Dev, Guru Hargobind, Guru Har Raj, Guru Harkrishnan, Guru Tegh Bahadur and Guru Govind Singh;
  • Name and picture of Chhatrapati Shivaji Maharaj;
  • Name and/or picture of the deity of Lord Venkateswara and/or Balaji.

Indian Jurisprudence and the Contours of Religious Susceptibility

The use of names of Gods or Goddesses, religious symbols or figurines per se is not prohibited under the provisions of the Trademarks Act, 1999.[6] In Vishnu Cement v. B.S. Cement Private Ltd.,[7] for instance, the word “VISHNU” was granted registration in the absence of any device of Lord Vishnu, associated with the word mark, by associating the word mark with a personal name, and not a religious sentiment. Again, in Mangalore Ganesh Beedi Works v. District Judge,[8] a relatively liberal approach was taken by the Allahabad High Court in allowing the proprietor to use the trademark ‘GANESHA’ on beedi packets.

However, such usage in relation to certain goods or services may offend the religious sentiments of certain sections of society. In these situations, such marks would fall within the ambit of marks not eligible for registration. For instance, a trademark carrying the name and image of Goddess Meenakshi regarding fertilisers and manure was revoked under the erstwhile 1958 Act.[9] Similarly, in Amritpal Singh v. Lal Babu Priyadarshi[10] the mark RAMAYANA was found incapable of registration. The case acted as the first instance of a blanket restriction being imposed on the registration of the name of a religious book by interpreting the provisions under Section 9(2)(b) of the Trademarks Act, 1999, stricto sensu.

Interestingly, in all these cases, the courts have cited the need to prevent the monopolisation of names of gods and religious symbols and figurines, adding that these words lack enough distinctiveness and merely qualify as common words, which should not be allowed for registration. The Bombay High Court recently refused registration to the word “LAXMI,” citing the aforementioned, on the grounds that it was a common name and thus lacked any distinctiveness to merit registration.[11]   

It is pertinent to note from the aforesaid that the courts have refrained from defining strictly measurable thresholds when it comes to dealing with marks that might have a religious connotation, which is fair and understandable to an extent, considering the sensitive nature of such cases. However, the lack of consistency in the reasoning cited behind these decisions has raised some eyebrows, and the conflicting decisions have left much to be desired.

More recently, the Kerela High Court granted the Attukal Bhagawathy Temple Trust the registration of the “picture of Attukal Deity” and the title “Sabarimala of Women” under Class 42 – a residuary clause (for temple services, social services, welfare services, and cultural activities), citing the need to “prevent unauthorised use of the deity’s picture and title.”[12] The case stands as one of a kind, where a temple trust has been granted registration for carrying out services corresponding to the temple and in the name of a particular religion and goddess, thereby risking the exclusion of an entire sect of devotees from using the picture and title of their beloved deity.

While the grant of such a registration might be in contravention of Article 25 of the Indian Constitution, the decision also sets out a dangerous precedent, risking the monopolisation and commercialisation of services and other activities carried out in the name of faith, which is in stark contrast to the general position portrayed under the Trademarks Act, 1999, and the spirit of secularism as a whole.

 

Conclusion

While the intention behind the courts not defining a straight-jacket formula while dealing with marks that might have a religious connotation is laudable, considering the sensitive nature of such cases, the inconsistency behind the reasoning cited in some of these cases leaves a lot to be desired.

The use of names of Gods, Goddesses, religious writings, figurines, and scriptures is generally publici juris,[13] and registration of the aforesaid should be allowed only in exceptional cases where the prima facie evidence in favour of the usage by the proprietor is so strong in the public mind that the mark could be deemed to have garnered secondary distinctiveness, to the exclusion of all other parties, bar the proprietor.

No doubt, commercial interest forms the cornerstone of business in the contemporary world, but it’s important to remember that religion and business often don’t go hand in hand, and such commercial interest shouldn’t come at the cost of compromising the religious sentiments of the masses.

References:

[1] India Const. Arts. 25-28.

[2] The Trade Marks Act, No. 47 of 1999. India Code, § 9.

[3] The Trade Marks Act, No. 47 of 1999. India Code, § 9(2)(b).

[4] Manual of Trade Marks, Practice and Procedure by the Central Government, accessible at:  https://ipindia.gov.in/writereaddata/Portal/IPOGuidelinesManuals/1_32_1_tmr-draft-manual.pdf.

[5] The Trade Marks Act, No. 47 of 1999. India Code, § 23(1).

[6] S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1 (India). See also, Registrar of Trade Marks v. Ashok Chandra Rakhit Ltd., AIR 1955 SC 555 (India).

[7] Vishnu Cement v. B.S. Cement Private Ltd., 1998 (18) PTC 130 (India).

[8] Mangalore Ganesh Beedi Works v. Union of India, (1974) 4 SCC 43 (India).

[9] Sri Meenakshi Tamil Nadu Appl. 1976 IPLR 144 (India).

[10] Amritpal Singh v. Lal Babu Priyadarshi, (2015) 16 SCC 795 (India).

[11] Freudenberg Gala Household Product Pvt. Ltd. v. GEBI Products, MANU/MH/1859/2017 (India). See also, OM Logistics Ltd. v. Mahendra Pandey, 2022 SCC OnLine Del 757 (India) [Registration for the term ‘OM’, was refused] & Shree Ganesh Besan Mills v. Ganesh Grains Ltd., 2021 SCC OnLine Cal 3068 (India) [Registration for the term ‘GANESH’, was refused].

[12] Suo motu Proceedings v. Controller General of Patents, Design and Trademarks, 2013 SCC OnLine Ker 24367 (India).

[13] Bhole Baba Milk Food Industries Ltd. v. Parul Food Specialities Pvt. Ltd., CS (OS) No. 107/2010 (India). 

It is safe to say that religion is deeply intrinsic to Indian society, and inevitably, it has seeped through every facet of the Indian lifestyle, including trade and commerce. Religion, in India, is a sensitive subject, and the use of names of Gods and Goddesses, religious writings, figurines, and scriptures is subject to certain reasonable restrictions under the Indian Constitution as well as other domestic laws, including the trademark law.

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Art Meets Law: The Uneasy Tussle of Street Art and Intellectual Property Law

Art-making in public spaces is a 2000-year-old tradition in India. The oldest evidence of painting in communal places can be traced to the Buddhist cave paintings in Ajanta, Maharashtra. The mode of expression and manifestation of these art forms has been unique. For example, folk art on the exterior walls of homes, hand-painted Bollywood posters on walls, truck art, slogans, and many more. Street art is a combination of all of these. Street art is a broad term that encompasses spray painting graffiti, political graffiti murals, (un)sanctioned wall art, and other art forms. Despite concurrent pronouncements on the legal status of graffiti and other art forms, several concerns have arisen about their commercial use and protection under Intellectual Property law.

The medium of expression for a street artist is more often someone else’s property without the permission or knowledge of the owner. In its most unadulterated form, street art opposes authority and the law. On either private or public property, it is usually art made without permission and in violation of the law. Street art embraces metropolitan walls and streets, gifting the public with innovative visual imagery that becomes a part of the city as much as the wall it rests on. Perhaps one of the most rapidly expanding artistic movements is graffiti. Though India has not been much into this, the new era is for something different.

There has been a gradual increase in the number of street artists in India, namely, Yantra and Leena Kejriwal, and internationally there is Banksy and Manu Invisible. Graffiti art has evolved over the past several years from being disregarded as a nuisance and equated with vandalism. Even after the many surrounding conjectures, it has been gauged to be a legitimate form of art and a sought-after commodity among art collectors and enthusiasts. Since graffiti is on the verge of becoming the next big art market, it is grappling with questions of intellectual property protection on creation, unauthorised copying, and destruction.

 

Copyright in Street Art

 

In all its forms, street art has recently gained enormous popularity and is typically not seen as a nuisance to the property. It has instead developed into a highly marketable commodity throughout the world. To clarify a few supplementary terms, “street art” is an umbrella term for artwork produced in a public area.[1] On the other hand, graffiti describes the application of spray paint to surfaces to produce images or different designs. Despite being used in many commercial endeavours, such as fashion brands and advertising campaigns, the law has not recognised it as art. So, the question remains whether it may be extended to copyright protection.

For a work to be qualified for copyright protection, it must be original, reduced to material form, and showcase creativity. Graffiti meets these criteria since it is artistic and fixed in a physical medium of expression. Technically, copyright exists as soon as it is created, so there shouldn’t be any formal requirement for the aforementioned conditions to be met. Other exclusive rights are solely available to the author of the work. For instance, they can publish or authorise the publication of their work, reproduce or authorise the replication of their work, and include or authorise the inclusion of their work in a cinematographic film or T.V. broadcast.

In the Indian scenario, any street art will fall under section 2(y) of the Copyright Act, 1957 (“Act”). Furthermore, as per section 2(c) of the Act, these street arts will also fall under the purview of artistic work. As stated above, copyright protection to subsist in work primarily needs to be original. There is no definition of “original” in the Act, but in the trade, it is assumed that an idea cannot be copyrighted until it has been expressed and is unique in its truest sense. The courts have tried to ascertain originality through various judgements, the most important being University of London Press Ltd. v. Tutorial Press Ltd.[2] In this case, the Court relied on the ‘Sweat of the Brow’ doctrine and observed that the work need not be original in a revolutionary way. However, it should not be of a trivial nature either. Certain efforts must be made to ascertain whether it is original. Further, the “Modicum of Creativity” test stipulates that the work must involve minimal originality to be authentic and copyrightable.

It has often been observed that street art is often plagiarised without permission, taking advantage of the loophole, i.e., the lack of clarity in the law that extends to the protection of such work. It is imperative to understand that whatever the medium, the artist employs skill and labour. The art depicts artistic value and creativity, with the medium typically being a fixed, tangible building surface. Thus, street art should fall under the protection of copyright law.

 

Street Art- Neither Illegal nor Immoral

 

Copyright has two conditions, as indicated above: the work must be unique and created on a specific tangible medium. However, there is a significant flaw because the rules do not address the type of artistic production that may be immoral or in conflict with the law. This raises the question of what would happen if someone stole a pen and drew a captivating portrait on paper or stole a camera and took a stunning photo. The apparent query is whether A and B can both request copyright protection. But the fundamental question is: given that their work is the result of theft, should such stolen works be entitled to protection? In theory, the response should be affirmative. Yes, the portrait and the image should be covered by copyright protection.

Although, in reality, graffiti art is inherently in conflict with the law, through a particular style or identifying tags, the creator of that artwork is easily identifiable. The Copyright Act of 1957 does not specify any requirements relating to the substance of a work other than originality for copyright to exist in the work. Graffiti is a stationary original artistic work of authorship that should be eligible for protection under “painting, graphic, drawing, and sculptural works”, according to a straightforward interpretation of sections 2(y) and 13 taken together. The Trade Marks Act of 1999 and the Patents Act of 1970, which forbid the protection of marks or inventions based on standards like obscenity and morality, contrast this. Therefore, it is abundantly evident what the legislative objective was, and the denial of copyright protection for illegal works was not intended.

There have been theories that graffiti should be excluded from copyright protection because they stand on the fact that the law should not impede social justice and that these artworks are immoral. Contrarily, the author holds that what is immoral does not necessarily mean it is illegal. Graffiti always depicts an idea or message that is legal and should not in any way be considered criminal. It is pertinent to notice the intent behind such an artwork and how it proves instrumental in benefiting society.

 

Protection from (Mis)Appropriation

 

The graffiti movement in India is in a very nascent stage and has not seen many judicial precedents. There have been instances where artwork has been done on the wall of a property, or original artwork has been appropriated, but these cases have not come up for adjudication by the courts. We shall understand appropriation art through the same case-moot points of copyright protection.

Let’s say that X noticed some graffiti on the side of a building and decided to take it as his own. The graffiti artist Y accuses X of violating his copyright. In Court, X asserts that Y violated property law and tort law by defacing the property, causing vandalism, and engaging in trespass while creating the unauthorised art. However, X will be a violator if the Court decides that the graffiti work was copyrighted. It is the doctrine of equitable defence. The party to a litigation who has acted reasonably and honestly can avail itself of defence in equity. And the person guilty of violating or infringing on someone’s right cannot be supported by it. In Tekla Corporations & Anr v. Survo Ghosh & Anr,[3] the Court considered whether an equitable defence is available to a copyright infringer. X, who violated Y’s right, may claim there was a violation. However, Y is not entitled to act against him because Y defaced the property wall and violated another law. The Delhi High Court decided in the negative. Therefore, the defence of unclean hands would fail if the graffiti is found copyrightable and the defendant is observed to be infringing the copyright.

The incentive-based theory is recognised as the primary defence of copyright by the Indian I.P. regime. The Indian Copyright Law’s immediate result is to ensure a just reward for the author’s labour. Still, its goal is to foster artistic creativity for the benefit of all people by providing this incentive. For instance, the United States Supreme Court stated that copyright’s monopoly privileges are “intended to encourage the creative work of authors as well as inventors by the provision of a special reward” in Sony Corp. of America v. Universal City Studios, Inc. According to the incentive-based argument, authors will stop producing new works if free riders are permitted to appropriate others’ works. Copyright protection is required, as it relates to the graffiti movement, to motivate artists to produce more graffiti without the free-riders.

The U.S. Court of Appeals for the Second Circuit recently affirmed this claim in the case of Castillo v. G&M Realty L.P., noting that street art has developed into much more than spray-painted tags and quickly disappearing bits adorned by rebellious urbanites, which is entitled to copyright protection.

Conclusion

Though the street artwork movement in India is at a snail’s pace, we must follow the covenants of international treaties to answer any dissecting viewpoints. The purpose of copyright should be the promotion of art, the free flow of creativity, and, consequently, the progress of society. These principles are primarily upheld by the Berne Convention and the TRIPS Agreement. It mandates that copyright protection be established upon the creation of the work with no need for formalities (such as registration), thus excluding any room for scrutiny of the work and/or evaluation of whether its content or creation process deserves copyright protection. Moreover, the Guide to the Berne Convention states that the work’s value, merit, or purpose is irrelevant to the enjoyment and exercise of copyright and emphasises the all-embracing copyright protection of all works, regardless of the manner or form of their expression.

It is crucial to understand that, even though it is not explicitly stated, the jurisprudence surrounding copyright is largely based on the theory of personality rights, which includes the author’s moral rights as stated in the Berne Convention as well as acknowledged by Indian copyright law. Since India is a signatory, if a case of similar stature arises, these treaties’ reasoning and analytical viewpoint will serve well in the Indian copyright context.

References: 

[1] Graffiti: At The Edge Of Copyright By Jonathan Bailey March 15, 2018 https://www.plagiarismtoday.com/2018/03/15/graffiti-at-the-edge-of-copyright/

[2] [1916] 2 Ch. 601

[3] CS(OS) 2414/2011

Image Credits: Photo by Samuel Regan-Asante on Unsplash

Though the street artwork movement in India is at a snail’s pace, we must follow the covenants of international treaties to answer any dissecting viewpoints. The purpose of copyright should be the promotion of art, the free flow of creativity, and, consequently, the progress of society. These principles are primarily upheld by the Berne Convention and the TRIPS Agreement. It mandates that copyright protection be established upon the creation of the work with no need for formalities (such as registration), thus excluding any room for scrutiny of the work and/or evaluation of whether its content or creation process deserves copyright protection.

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Fluid Trademarks- A Brand’s Alter Identity

Recently in September, 2022 Amul- the most prominent dairy brand in India released a doodle, featuring the famous “Amul girl” celebrating the return of eight Cheetahs in the Kuno National Park, Madhya Pradesh. Over the years, the Brand has managed to position Amul Butter as a household staple through its alternate identity- Amul Girl. The Mascot regularly makes clever puns on the day-to-day political and policy developments while communicating their product’s “utterly butterly deliciousness”.

Fluid Trademarks- A Brand’s Alter Identity

                                                                        Fig: The recent Amul Doodle[1]

Creativity involves breaking expected patterns to look at things differently. The notion of being creative and deploying “out of the box” marketing strategies to drive brand and consumer growth is not a new concept. The ever-increasing competition and the digital revolution have forced brands to go out of their way to stay afresh and ahead of the competition while maintaining their brand identity.

Fluid Trademarks are a relatively new, up-and-coming category of marks that businesses are increasingly using to differentiate their brands and products from the competition. The Morehouse defence[2] (along with Section 43(a) of the Lanham Act)[3]  defines fluid trademarks as marks that change over time (with respect to the original or registered mark) to increase customer engagement. Albeit not explicitly defined, the defence serves as an equitable doctrine that applies when an applicant owns a prior registration “for essentially the same (or substantially similar) mark and goods or services, and for which registration has not been challenged.”

 

What are Fluid Marks?

 

Fluid Trademarks essentially serve as an expansion of the base marks, which are registered and known to the public. What makes these marks “fluid” is the interplay between different iterations of the base mark, which is characterised by the use of creative yet diverse graphical and visual components while maintaining the core features of the base mark.

Many brands frequently deploy such marks to commemorate certain special occasions or landmark happenings, enabling them to keep in touch with the ongoing trends and strengthen brand awareness by promoting interaction with the consumers.

For instance, Google’s ‘Doodle’ could be termed the quintessential fluid trademark, where different variants of the Google logo have been used over the years to mark or memorialise national/international events and festivities. Absolut Vodka is another brand that has been commercialising various iterations of its mark by launching special edition bottles to commemorate events. Some other examples of Fluid Marks being deployed by renowned brands in their marketing strategy include Nike’s ‘Just Don’t Do It’ Swoosh, BMW’s spaced logo citing ‘thanks for keeping distance’ during Covid-19, and Starbucks’ ‘Masked Mermaid’.[4]

While it is appreciable that brands are deploying newer strategies to connect with their consumers, the use of Fluid Trademarks presents some pertinent roadblocks when it comes to IP protection that these brands need to take note of.

 

Protection of Fluid Marks

 

Although there are no explicit provisions or synonymous precedents citing protection for fluid trademarks in India, registering each iteration of the base mark, which would just be deployed occasionally by these brands, would not make much business sense since it would not be cost-effective in the long run.

Section 15 of the Trademarks Act,[5] 1999 accords protection for a series of trademarks, but it is pertinent to highlight here that the section is effective only when all the variants of the base mark could be anticipated in advance,[6] which is not the case with Fluid Trademarks because of their dynamic nature.

Existing commercial identity and recognition of the base mark do accord common law protection to Fluid Marks. Still, it is pertinent for brand proprietors to consider the following essentials while endeavouring for the protection of Fluid Trademarks:

  • Protection for Unregistered Marks: Regardless of whether the brands have moved towards protecting their ‘fluid’ marks or not, the common law still subjects these marks to some sort of protection. In Proctor and Gamble v. Joy Creators,the Delhi High Court held that explicit resemblance need not be a ground to constitute an infringement of the trademark. Substantial resemblance to the primary features of the mark in question might be enough criterion to accord protection to the primary mark.
  • The Degree of Variation: The degree of variation of the base mark should be such that the mark retains its source-identifying features while simultaneously being different enough to command distinguished protection. The public should be able to identify the brand owner based on such iterations of their marks.
  • Likelihood of Confusion: Multiplicity of the base mark to an extent, such that it loses its source-identifying features, might expose the base mark to losing its distinctiveness, thereby putting the base mark at risk of not being synonymous with the proprietor anymore. Hence, the source-identifying features of the base mark should remain intact in the fluid mark to enable the public and trade to associate the fluid mark and the base mark with the proprietor.
  • Copyright Protection: Newer and fundamentally distinct iterations of the base mark may be afforded special protection under the Copyright law since the brands would be subjected to certain rights for their marks even if they are not registered. However, in establishing whether the proprietors would be entitled to a copyright on the mark, the burden of proof shall lie entirely on the proprietors themselves, and hence it would be advisable to maintain a record of the entire creative process, artwork and other resources, that went into the creation of the mark, to establish ownership.
  • Continuing Commercial Use and Identity: The base mark should be subject to constant and uninterrupted commercial use, and there should be no demonstration of abandonment of the base mark. While the base mark should be distinctive and recognised across the market, the unregistered ‘fluid mark’ should also be inherently distinctive and have acquired a secondary meaning within the public.[7]

The importance of having the base mark registered for the fluid mark to have any chance of protection was highlighted in the recent case of McGurr v. North Face Apparel Corp.[8], where the US-based artist, Futura, was denied protection for his recognisable, signature stylised atom design because the base mark, i.e., the shape of an atom, was not registered. The District Court for the Central District of California noted that legally recognising fluid trademarks “would give new meaning to federal trademark law with far-reaching consequences.” The court rather recognised copyright law as a more robust source of protection for entities facing similar situations.

 

Conclusion

 

Fluid Trademarks might be the future of brand building. They have indeed emerged as an excellent tool for businesses across the globe to engage and interact with their customers while simultaneously allowing them to keep in touch with ongoing trends. But as long as the legislature or the judiciary steps up and develops a robust set of guidelines for their protection, it would be feasible to work with an experienced IP attorney who could assist applicants to come up with a smarter plan of action for the protection of their dynamic and ‘fluid’ marks.

References:

[1] https://indianexpress.com/article/trending/trending-in-india/amuls-latest-topical-celebrates-arrival-of-big-cats-in-india-8158728/

[2]  Morehouse Manufacturing Corp. v. J. Strickland and Co., 407 F.2d 881, 160 USPQ 715, 717 (CCPA 1969) (United States).

[3] The Lanham Act, 1946, § 43(a), 15 U.S.C. §§ 1051-1141 (2006).

[4] These famous logos have been remade for the Coronavirus Age, Media Marketing, Accessible at: https://www.media-marketing.com/en/news/famous-logos-remade-coronavirus-age/

[5] The Trade Marks Act, No. 47 of 1999. India Code, § 15.

[6] Draft Manual of Trademarks, 2015. Accessible at: https://ipindia.gov.in/writereaddata/Portal/IPOGuidelinesManuals/1_32_1_tmr-draft-manual.pdf

[7] Louis Vuitton Malletier v. Dooney & Burke, Inc, 454 F.3d 108 (2d Cir. 2006) (United States).

[8] McGurr v. N. Face Apparel Corp., 2021 U.S. Dist. LEXIS 196568 (United States).

Image Credit: Photo by Eva Bronzini

Fluid Trademarks essentially serve as an expansion of the base marks, which are registered and known to the public. What makes these marks “fluid” is the interplay between different iterations of the base mark, which is characterised by the use of creative yet diverse graphical and visual components while maintaining the core features of the base mark.

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The Next Play- Block Chain, Sports and Tourism

The excitement and intrigue surrounding cryptocurrency might have fizzled out, but alternate use cases of the blockchain have found roots for varied purposes, such as electronic health records, land records, farm insurance, digital certificates, etc., across as many as thirteen states in the country. 

 

In partnership with a platform called Yunometa, the State of Tamil Nadu recently launched the Women’s Chennai Open in the world of Metaverse and NFTs on September 10, 2022 (https://chennaiopen.co/). With this launch, the synergies between sports and technology are being explored further. Sports enthusiasts will now be able to view the Chennai Open (women) in the metaverse and watch it live. 

The Chennai Open Metaverse will have a tennis court where visitors can choose their avatars, including their favourite players, and play a match. There is also a media section where they can visit and get regular updates on the events’ matches. The metaverse will further have two more sections, i.e., an NFT museum section to display tourism and culture for the State of Tamil Nadu and a section for virtual tours of Tamil Nadu’s most well-known tourist destinations, such as Fort St. George, Meenakshi Temple, and Mahabalipuram Temple, amongst others. 

It seems to be a great initiative not only to enjoy sports in a new way but also to showcase the culture of Tamil Nadu, which may have a ripple effect on the tourism industry.

According to a recent study by Finder, released in 2022, India is ranked first in NFT gaming adoption. As per the report, around 34% of the Indian population has played P2E games[1], while 11% have shown a willingness to play them in the future.[2] Further, the size of the Indian eSports industry is expected to grow to INR 11 billion by FY2025 and potentially generate an economic impact of INR 100 billion between FY2021 and FY2025.[3]

While the statistics paint an impressive picture of the industry’s potential, it would be imperative to note that the legal landscape is definitely ‘glitching’ while trying to adopt a legislative pathway that would foster yet effectively regulate the sector.

At present, the policy focus of the government pertains to taxation only. However, with the increase in the participation of gamers, it is also prudent to address user safety issues by creating guidelines and standards for privacy, fraud prevention, structuring appropriate KYC procedures and payment mechanisms, and ensuring overall ease of doing business, regulatory certainty, and taxes.

The policy initiatives undertaken by the government in the recent past, including the Online Gaming (Regulation) Bill, 2022, which failed to address key concerns such as privacy, age-verification of players, defining casual online gaming, and money-based gaming, have shown a lack of a comprehensive approach to resolving the crucial issues. Similarly, the Inter-ministerial Panel on Online Gaming formed in May 2022 has, till now, only issued a slew of suggestions ranging from issuing a cap on deposit and withdrawal limits on the game winnings to recommending forming a regulatory body to distinguish between “games of skill” and “games of chance,” differential GST treatment, blocking prohibited gaming formats, and issuing a stricter stance on gambling websites.

In addition, the Animation, Visual Effects, Gaming, and Comics Task Force (AVGC) was set up in April this year and commissioned to formulate a national AVGC policy to attract foreign direct investment in the sector and to recommend a national curriculum framework, facilitate skilling initiatives, and boost employment opportunities within the sector has yet to submit its first action plan.

The Draft Virtual Online Sports Regulation Bill released by the Rajasthan government in May 2022[4] seems encouraging since it envisages structuring a licensing regime and establishing a Rajasthan Virtual Online Gaming Commission that shall be tasked with recommending conditions for licences, recognising “self-regulatory organisations,” and issuing advisories, caution notices, and recommendations to self-regulatory organisations. However, the Bill only applies to “esports competitions, fantasy sports, and derivative formats as provided by the sports engagement platforms” and leaves poker, rummy, ludo, and other such games of skill outside its purview.

It is safe to conclude that, at present, the central and the respective state governments have fallen short of formulating a cohesive set of legislation on online gaming. Further, with the integration of blockchain with gaming, it would also be crucial for the government to finally take a stand on laws regulating cryptocurrency in the country.

Shaping a comprehensive regulation on blockchain gaming would also necessitate the concerted deliberation and collaboration of various stakeholders in the industry, as current laws largely fail to address important concerns such as privacy, fraud, user safety, and so on.

References:

[1] Games that require cryptoassets and NFTs for gameplays.

[2] https://economictimes.indiatimes.com/markets/cryptocurrency/india-leads-in-crypto-based-p2e-games-can-it-retain-the-throne/articleshow/92129288.cms?from=mdr

[3] https://www.ey.com/en_in/media-entertainment/the-dawn-of-esports-in-india

[4] https://finance.rajasthan.gov.in/PDFDOCS/REVENUE/10746.pdf

 

Image Credits: Photo by Gerd Altmann from Pixabay 

It is safe to conclude that, at present, the central and the respective state governments have fallen short of formulating a cohesive set of legislation on online gaming. Further, with the integration of blockchain with gaming, it would also be crucial for the government to finally take a stand on laws regulating cryptocurrency in the country.

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