The Nuts and Bolts of Foreign Filing Licence (FFL) In India

Like any other IP right, a patent is also a jurisdictional right confined to the jurisdiction where the application is filed, and the rights granted. A patent is also considered a negative right, which enables the patentee to prohibit others from manufacturing, using, selling, and distributing the patented goods and services. If the invention is not protected in a specific jurisdiction, it can be used by any third party without restrictions. Hence, the applicants must choose jurisdictions carefully to safeguard their inventions in those countries.

Given that a patent is a valuable asset that can aid international business expansion, businesses must develop a foreign filing strategy. The strategy could be based on specific parameters like potential markets, manufacturing centres, competitors, emerging markets, and licencing opportunities to decide where to seek protection for their invention.

Apart from the specific parameters outlined above, the applicant must be aware of particular provisions of the Patents Act, 1970, which forbid Indian residents from filing patent applications outside India without first filing in India.

It is pertinent to note that, as an exception, a patent application can be directly filed outside India by an individual (Indian Resident) by seeking prior approval from the Indian Patent Office. This is referred to as a Foreign Filing Licence (FFL), as envisaged under Section 39 of the Indian Patent Act, 1970.

 

What is the objective of providing the option of a Foreign Filing Licence?

The primary objective of FFL is to analyse patent applications for sensitive technological information or subject matter to prevent the unauthorised export of valuable knowledge to foreign countries. The FFL assists the Indian Patent Office/government in determining the patent application’s sensitive subject matter (pertaining to defence or atomic energy). Once it is ascertained that there are no issues with disclosing the details of the invention to a foreign country, the Indian Patent Office usually grants the Foreign Filing Licence within 21 days of receiving the request.

When the applicant is not required to seek a Foreign Filing Licence
  • When the applicant is not a resident of India, and the invention was created outside of the country.
  • If the applicant is a resident of India who filed a patent application in India six weeks before filing a patent application in another jurisdiction.
When the applicant is required to seek a Foreign Filing Licence
  • When the applicant or inventor is a resident of India.
  • When the applicant does not wish to file a patent application in India before filing a patent application outside of India.
  • When the applicant is a resident of India, a patent application has been filed in India, but the six-week term has not yet expired.

It is important to note that if the invention is related to nuclear energy or defence, the Indian Patent Office may not issue the FFL without the prior consent of the Central Government.

 

Statutory provisions governing Foreign Filing Licence in India

Rule 71 of the Patent Rules, 2003 describes the procedure and mandates seeking permission to file a patent application outside India.  

Rule 71: Permission for filing patent applications outside India under section 39.

“(1) The request for permission to submit a patent application outside India shall be made on Form 25.

(2) The Controller must respond to a request made under sub-rule (1) within twenty-one days of the request being filed.

Provided that in the case of inventions relating to defence or atomic energy, the period of twenty-one days shall be counted from the date of receipt of consent from the Central Government.”

 

Requirements for Seeking a Foreign Filing Licence

Since the main objective of FFL is to examine the nature of inventions and technologies in the nation’s best interest, an applicant must sufficiently disclose the invention’s details, including the title, description, and drawings (if any). In addition to the above information, the applicant must submit the following forms with all required data.

Form-25[1]: to request permission to make a patent application outside India. Form 25 must include:

  • Title of the invention
  • Name, address, and nationality of inventors who are “resident in India,”
  • Name and address of the applicant if rights have been assigned to the applicant.
  • Names of foreign countries where the application will be submitted once the Foreign Filing Licence is issued.
  • Reason for making such an application.

Form-26[2]: Power of Attorney (POA) from the inventor(s) or applicant residing in India and appointing a patent agent to represent them.

 

Can a Foreign National Apply for a Patent in India?

As outlined above, an Indian Foreign Filing Licence is not applicable for foreign nationals filing a patent application in India. A foreign national may apply for a patent in India by following one of the two routes mentioned below:

  1. Paris Convention Route: Under the Paris Convention for the Protection of Intellectual Property, a foreign national of a convention country can use the convention route to file a patent application in India. Any invention filed in their home country may also be filed for patent protection in India within 12 months by claiming priority from the earliest filed application in their home country.
  1. Patent Cooperation Treaty (PCT) Route: A foreign national may also file a patent application in India under the PCT route.

However, if they intend to file a patent application directly in India, they must follow their country’s patent law to confirm if there is a similar requirement in their jurisdiction.

Even though FFL enables Indian residents to file patent applications directly in a foreign country without filing the first application in India, inventors and the applicants (who are Indian residents) must strictly comply with the requirements of the FFL discussed above to avoid serious consequences, including imprisonment for a term of up to two years, or a fine, or both.

Even though Foreign Filing Licence (FFL) enables Indian residents to file patent applications directly in a foreign country without filing the first application in India, inventors and the applicants (who are Indian residents) must strictly comply with the requirements of the FFL discussed above to avoid serious consequences, including imprisonment for a term of up to two years, or a fine, or both.

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Anticipation of Invention: Patent and Latent Threats

A patent is representative of a quid pro quo arrangement and on the basis thereof patentees are granted a monopoly over their inventions. However, the process of securing such a monopoly can be complicated by ‘anticipation.’ Any invention anticipated in a prior art is most likely to be invalidated or made ineligible for a patent grant. This is because anticipation signifies a lack of ‘novelty’ in the claimed patent.

The concept of anticipation varies across jurisdictions, generally differing on the offering of the grace period. For instance, in the US a one-year grace period is provided to an individual for filing a disclosure in the event of obtaining the confidential subject matter of the invention directly or indirectly by the inventor or the joint inventor. Here, the principle of relative novelty governs the consideration of anticipation. Whereas in Europe, only a six-month grace period is provided, only in cases where the information is obtained by deceit or has been made public through an official international exhibition.

The law in India has taken an alternative route. The Indian Patent Act, of 1970 has identified conditions in which the grace period is afforded to evaluate anticipation. The Act defines what does not constitute anticipation under sections 29-34.

This article aims to provide the reader with a better understanding of the concept of anticipation under the Indian Patent Act, 1970.

 

What Amounts to Anticipation for Patents in India?

 

As highlighted above, the term anticipation is not defined in the Indian Patent Act,1970 however, the Act specifies what is not considered anticipation under Chapter VI, Section 29-34.

In the case of M. C. Jayasingh vs Mishra Dhatu Nigam Limited,[1] the Madras High Court while examining the provisions pertaining to “Anticipation” under the Indian Patents Act 1970, observed inter alia, “Though Section 13(1) refers repeatedly to “anticipation”, the expression “anticipation” is not defined in the Act. But, Chapter VI, containing Sections 29 to 32, deals with anticipation by previous publication. Here again, there is an element of confusion. Sections 29 to 32 do not stipulate as to what constitutes anticipation by publication. Rather, these sections merely point out what would not constitute anticipation. While Section 29 indicates what is not anticipation by previous publication, Section 30 indicates that a mere communication of the invention to the Government may not constitute anticipation. Similarly, Section 31 indicates when a public display would not constitute anticipation, and Section 32 indicates when the public working of a patent would not constitute anticipation.”

The Court proceeded to observe that a conclusive meaning of anticipation could be deciphered by examining the expression “new invention” under section 2(1)(l). Hence, the anticipation by publication would simply mean “that the subject matter had either fallen into the public domain or had become part of the state of the art.” This understanding of anticipation is further circumscribed by the exclusions mentioned under Sections 29 to 32.

It is pertinent to note that the concept of anticipation does not necessarily prevent an inventor from doing something purely because it would be an obvious/anticipated extension of what had been known in the art before the priority date. It rather demands a deep deliberation and analysis of what would have been obvious or already in use at the priority date to an individual skilled in the art who had access to what was known in the art at that date.

Anticipation by Previous Publication (Section 29)

 

This section provides that any publication of the invention made in India or abroad without the prior consent of the applicant or patentee is not considered anticipation and the ground for rejection of the patent. The patentee must establish that he filed an application for the patent as soon as he found out about the publication. This section does not mention about the time period of filling the application after such a publication.

The law on anticipation by prior publication has been summarised by Sachs LJ in the case of General Tire & Rubber Company v. The Firestone Tyre and Rubber Company Limited And Others,[2] as, “If the prior publication contained a clear description of, or clear instructions to do or make, something that would infringe the patentee’s claim if carried out after grant of the patentee’s patent, the claim would be anticipated. If, on the other hand, the prior publication contained a direction which was capable of being carried out in a manner which would infringe but would be at least as likely to be carried out in a way which would not do so, the patentee’s claim would not be anticipated, although it might fail on the ground of obviousness. To anticipate the claim, the prior publication had to contain clear and unmistakable direction to do what the patentee claimed to have invented.”

 

Anticipation by Previous Communication to the Government (Section 30)

 

Any disclosure of the invention to the government prior to the filing date of a patent application for the purpose of the investigation is not considered anticipation.

Moreover, in Shogun Organics Ltd. Vs. Gaur Hari Guchhait & Ors[3], the Delhi High Court clarified that the language of Section 30 now makes it clear that the disclosure to a government department or to any other authority, not just of the patentee, but by any other person, would not constitute prior publication. The language is person-neutral. It cannot be said from a reading of the provision that only disclosure by the patentee/applicant is covered under Section 30. 

 

Anticipation by Public Display (Section 31)

 

 An invention that has been displayed or published publicly is not eligible to be patented on the account of lacking novelty. However, under certain circumstances, a publicly displayed patent can be considered ‘novel’ in the following cases:

  1. The display or use of invention at an industrial or other exhibition is notified by the Central Government in the Official Gazette;
  2. Publication of any description or portion thereof as a result of the exhibition’s display or use of the invention;
  3. Usage of the invention by anyone, after the aforesaid display in exhibition, other than the inventor or a person deriving title from him; and
  4. Description of the invention in a paper read by the inventor before a learned society.

It is important to note that, an application for a patent can only be granted in the abovementioned circumstances if it is filed within 12 months of such public display/publication.

In Ralph M. Parsons Co (Beavon’s) Application[4], it was observed that learned societies would disseminate the relevant learning without consideration of economic gain. Thus, a learned society would normally be a non-commercial body of people and would not typically be associated with commercial exploitation. For a publication to be regarded as a “transaction” of a learned society, it must be published under the auspices of and finally be the responsibility of the learned society. Therefore, a publication that occurs via a third party, such as a reporter who is present at the conference, would not be regarded as a publication by society. Moreover, the publication by a society of an abstract of a paper is considered to be a publication of a paper.[5]

 

Anticipation by Public Working (Section 32)

 

An invention filed in a patent application is not considered to be anticipated due to the working of the invention in public by the patentee or person deriving title from him or any person authorized by him, subject to the meeting of the following criteria:

  1. The working of the invention should not be public prior to 1 year from the date of filing of the patent application; and
  2. The working of the invention in public is performed for the purpose of reasonable trial.
  3. The nature of the invention needs the invention to be worked in public.

Hence, the 12 months time period mentioned in the provision can be regarded as the ‘grace period’ for the inventor to file an application for the grant of the patent after public use. This is an opportunity for the inventor to apply for the grant of patent in an event of him mistakenly or in good faith using the invention in the public domain.

It is pertinent to note that, the section draws a significant distinction between public use and mere public publication.

In the case of Poysha Industries Ltd v. Deputy Controller of Patents and Designs[6], the Calcutta High Court adjudicated upon the issue of distinction between public use and public knowledge. The issue was whether the invention was publicly used or publicly known in a part of India. The Appellants, in support of their contention, stated that the method used by them to crimp the top portion of the containers did not require special skills or techniques. The said containers had been supplied by the appellants to M/s Zandu Pharmaceuticals and another company since 1960. However, the appellants failed to establish that the invention was publicly used and known, hence the appeal failed.

The same has been further clarified in Monsanto Co v. Coramandal Indag Products (P) Ltd.[7] by the Supreme Court, wherein it was held that, “It is clear from the facts narrated by us that the Herbicide CP 53619 (Butachlor) was publicly known before Patent Number 125381 was granted. Its formula and use had already been made known to the public by the report of the International Rice Research Institute for the year 1968. No one claimed any patent or any other exclusive right in Butachlor. To satisfy the requirement of being publicly known as used in clauses (e) and (f) of [s 64(1)], it is not necessary that it should be widely used to the knowledge of the consumer public. It is sufficient if it is known to the persons who are engaged in the pursuit of knowledge of the patented product or process either as men of science or men of commerce or consumers. The section of the public who, as men of science or men of commerce, were interested in knowing about herbicides which would destroy weeds but not rice, must have been aware of the discovery of Butachlor. There was no secret about the active agent Butachlor as claimed by the plaintiffs since there was no patent for Butachlor, as admitted by the plaintiffs. Emulsification was the well-known and common process by which any herbicide could be used. Neither Butachlor nor the process of emulsification was capable of being claimed by the plaintiff as their exclusive property. The solvent and the emulsifier were not secrets; they were admittedly not secrets and were ordinary market products. From the beginning to the end, there was no secret and there was no invention by the plaintiffs. The ingredients, the active ingredient, the solvent and the emulsifier, were known; the process was known, the product was known, and the use was known. The plaintiffs were merely camouflaging a substance whose discovery was known throughout the world and trying to enfold it in their specification relating to Patent Number 125381. The patent is, therefore, liable to be revoked.

Therefore, for information to be publicly known, it is not essential that it should be used widely or be in the knowledge of the general public only. It would satisfy the legislative purpose if the information was known to individuals engaged in the research of the patented product or operating within the same industry or science.

 

Anticipation by Use and Publication after Provisional Specification (Section 33)

 

The objective of this section is to clarify that the information disclosed in public or the invention worked in public is not considered for anticipation between the filing of:

  1. A patent application with a provisional specification and a complete specification (within 12 months from the provisional filing); or
  2. A priority application in a convention country and a convention application in India.

This means that if the invention is used or published after the provisional application is filed, a complete specification filed later is not deemed to have been anticipated. Therefore, the Controller cannot refuse to grant a patent, revoke or invalidate it by citing that the subject matter of the provisional specification was used or published in India or in another jurisdiction at a time after the filing of said specification.

It is important to note that the provision applies only if the complete specification of the patent is filed within 12 months of the provisional specification.

Further, in cases where the complete specification has been filed in pursuance of a convention application, the Controller cannot reject the grant of patent on the grounds that the subject matter of the application was filed for protection in India within 12 months from the date of priority application filed in the convention country.

This section essentially seeks to safeguard the interests of the inventors between the periods of filing of provisional and complete specifications, and between the periods of filing the priority application in the convention country and the filing of the complete specification in India, in an event where the subject matter of the invention is placed in the public domain.

 

The Doctrine of Inherent Anticipation

 

The doctrine of inherent anticipation refers to a kind of anticipation wherein anticipation is found even in the absence of appropriate disclosure in a prior art reference.

In general, anticipation can be of two types: explicit anticipation and implicit anticipation (i.e., the doctrine of inherent anticipation). The term explicit anticipation refers to anticipation wherein each technical element disclosed in the claim is disclosed in a single prior-art document. According to the explicit anticipation, a claim is rejected by the patent office if all the technical features are found in a single prior art document. According to the doctrine of inherent anticipation (i.e., implicit anticipation), a claim is rejected by the patent office even if all the technical features are not disclosed in a single prior art subject to the presence of the missing technical features inhere in the prior art. 

Generally, there are two accepted tests to appropriately understand the doctrine of inherent anticipation. According to the first test, a check is performed to determine that the inherency of anticipation is not established only based on the probabilities or possibilities. A technical feature is considered to be inherent only if said technical feature is the “natural result flowing from” the invention description and invariably leads to the outcome. According to the second test, a check is performed to determine that an accidental or unintentional outcome, not appreciated as inherent to the claim by a person of ordinary skill in the art, does not constitute anticipation.

The IPAB in Enercon (India) Limited vs. Aloys Wobben[8] held that “patent is invalid for anticipation if a single prior art reference discloses each and every limitation of the claimed invention. The prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating prior art. It is not necessary that inherent anticipation requires that a person of ordinary skill in the art at the time would have recognised the inherent disclosure. But it is necessary that the result be a necessary consequence of what was deliberately intended in the invention.”

 

Overcoming Anticipation Rejection

 

In view of the above, it is always advisable to file a patent application before placing it in the public domain. If the nature of the invention requires the invention to be placed in the public domain or worked in the public domain, the inventor(s) must ensure compliance with the requirements outlined in Section 29-30 in order to maintain the novelty of the invention and avoid patent rejection due to anticipation.

References:

[1] Civil Suit No.562 of 2007

[2] [1972] R.P.C. 457

[3] CS (COMM) 201/2017: (14.08.2019 – DELHC):MANU/DE/2598/2019: 2019 SCC OnLine Del 9653:Delhi High Court

[4] [1978] FSR 226

[5] Ethyl Corporation’s Patent [1963] RPC 155

[6] AIR 1975 Cal 178

[7] AIR 1986 SC 712

[8] ORA/6/2009/PT/CH ,ORDER (No. 18 of 2013)]

 

 

Image Credits: Photo by JESHOOTS.COM on Unsplash

Anticipation can be of two types: explicit anticipation and implicit anticipation (i.e., the doctrine of inherent anticipation). The term explicit anticipation refers to anticipation wherein each technical element disclosed in the claim is disclosed in a single prior-art document. According to the explicit anticipation, a claim is rejected by the patent office if all the technical features are found in a single prior art document. According to the doctrine of inherent anticipation (i.e., implicit anticipation), a claim is rejected by the patent office even if all the technical features are not disclosed in a single prior art subject to the presence of the missing technical features inhere in the prior art. 

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Demystifying the Inventorship Rights of an AI System in India

In this age of technological advancement, Artificial Intelligence (AI) has taken a giant leap from undertaking more straightforward tasks to originating marvellous inventions. Can an AI system be considered an inventor? This question has been beguiling jurisprudence across the globe for a considerable time. However, through the recent decision of Thaler v. Commissioner of Patents, the Australian Federal Court has forced jurisdictions across the world to re-think the inventive capacity and the role of AI in the contemporary ecosystem of innovation.

Through this article, we have tried to determine the implications of the Thaler decision and examine the position of the Indian legislation on the inventorship rights of an AI.

Factual Matrix

Dr. Stephen Thaler designed the Device for Autonomous Bootstrapping of Unified Sentience (DABUS). DABUS is an artificial intelligence system that pioneered the creation of an optimised beverage container and a flashing light for use in emergency circumstances. In the persistence of such a creation, Dr. Thaler filled patent applications worldwide, including in Australia, Canada, China, Europe, Germany, India, Israel, Japan, South Africa, the United Kingdom, and the United States.

“The Deputy Commissioner” rejected Dr. Thaler’s patent application in Australia, which named DABUS as the inventor. The matter was contested and finally, the Federal Court of Australia determined that the AI could be recognised as an inventor under the Australian Patent Act. According to the Court, the patent would be owned by Dr. Thaler, the developer, owner, and controller of DABUS. The Court determined that the legislative intent was to encourage innovation and that nothing in the Patent Act expressly or implicitly forbids AI from being named as an inventor.

Indian Stance: Inventorship Rights of an AI

In India, recently, the Controller General of Patents recorded objections to recognising an AI as an inventor in the matter of patent application numbered 202017019068, citing the provisions under Section 2 and Section 6 of the Patents Act 1970 (“Act”). The term “inventor” has not been defined under the Act. However, Section 6 states that, among other things, a patent application can be filed by any person claiming to be the true and first inventor of an invention.[1]

A bare reading of the provisions indicates that a natural person is distinguished from others. One can also observe that anyone other than a natural person will be unable to claim inventorship. Consequently, a natural person who is true and first to invent, and who contributes his originality, skill, or technical knowledge to the innovation meets the criteria to be acknowledged as an inventor in India.

In the case of V.B. Mohammed Ibrahim v. Alfred Schafranek, AIR 1960 Mysore 173, it was held that a financing partner cannot be an inventor, nor can a corporation be the sole applicant that claims to be an inventor. The Court, through this decision, emphasised that only a natural person (who is neither a financing partner nor a corporation) who genuinely contributes their skill or technical knowledge towards the invention shall qualify to claim inventorship under the Act.

In the light of this judgement, it can be perceived that an AI can also contribute its skill or technical knowledge to an invention and become an inventor. However, a reference to Som Prakash Rekhi vs Union of India & Anr, AIR 1981 SC 212, clarifies the qualification of a legal ‘person’ under Indian law. The Supreme Court observed that ‘personality’ is the sole attribution of a legal person. Such a ‘personality’ is an entity that has the right to sue or can be sued by another entity. An AI is not capable of using such rights, nor can it perform the required duties of any juristic personality independently. For instance, it cannot enter into an agreement or transfer or acquire patent/patent application rights. It would also be impossible for an AI to oppose or revoke a patent application. Hence, an AI falls short of the standards for being deemed an inventor in India.

Furthermore, the legislative intent behind the Indian Patent Act as found in the Ayyangar Committee report of 1959[2] suggests that inventors are mentioned in a patent application as a matter of right. Whether or not the actual deviser has a proprietary claim on the innovation, he has a moral right to be acknowledged as the inventor. This confers reputation and boosts the economic worth of the inventor. The inventor may give up his ownership interest in a particular patent due to a contract/agreement in law, but he retains his moral right.

An examination of legislative purpose and current public policy reveals a desire to protect the rights of the inventor/natural person who creates IP and can use his moral rights. On the other hand, AI cannot be granted moral rights nor appear to enjoy the benefits intended by legislation or public policy. Given this, designating AI as an inventor/co-inventor under current Indian rules seems impossible until explicit revisions are made.

Role of AI and Economic Growth in India

The Parliamentary Standing Committee “(“Committee“”) constituted under the Dept. of Commerce, analysed the current landscape of the IPR regime in India and observed its contribution to promoting innovation and entrepreneurship in the country in its report titled “Report 161: Review of the Intellectual Property Rights Regime in India” presented in the Rajya Sabha on  July 23rd, 2021. In particular, it examined the challenges that exist in the current legislative structure including the inventorship rights of an AI.

The Committee acknowledged the relevance and utility of AI-based cutting edge technology and machine learning, particularly in current times, significantly affected by the pandemic, in which digital technology proved to be instrumental in responding to the global crisis. Further, the Committee placed reliance on a report released by Accenture titled “How AI Boosts Industry Profits and Innovation” which estimated AI to inject US $ 957 Billion into the Indian Economy by 2035, if used optimally, to understand further the impact and role of AI and technology in the contemporary landscape and its relationship with Intellectual Property. 

Therefore, the Committee recommended a review of the relevant provisions of the Indian Patents Act, 1970 [Section 3(k)] and the Copyrights Act, 1957 on a priority basis to afford inventorship rights to AI in India. The Report also stated that “The Committee recommends the Department that the approach in linking the mathematical methods or algorithms to a tangible technical device or a practical application should be adopted in India for facilitating their patents as being done in the EU and U.S. Hence, the conversion of mathematical methods and algorithms to a process in this way would make it easier to protect them as patents“. Thereby including algorithms and mathematical processes under the ambit of patent law.

The Committee concluded that the legislative framework amendments would protect the works of an AI (either autonomously or with assistance/inputs from a human), incentivize pioneering inventions and R&D in the country, and maintain an enabling ecosystem for the protection of human intelligence innovations. The Committee maintained that the embargo placed on the inventorship rights of an AI would dissuade significant investments in the sector since such AI induced innovations would not be protected in the country.

Conclusion:  A Way Forward for Inventorship Rights of an AI System 

The decision would have a favourable impact on the holder of an AI. However, commentators have expressed concerns regarding the difficulties that may arise due to the extending of patent protection to AI-generated concepts, such as:

  • Impact on the Copyright law: A result of such a decision may lead the courts to re-examine the subject of AI authorship and regard AI as a creator of AI-generated works, which will open a Pandora’s box of judicial conflicts.[3]
  • It could potentially raise the bar for innovation or fundamentally alter the definition of a ‘person skilled in the art,’ making it more difficult for human innovators to obtain patent protection.
  • Accepting inventorship to include AI systems would elevate AI to the status of a legal person, allowing it to hold and exercise property rights.
  • It raises concerns about who has the right to use or own the AI-created product. As the AI system is not a legal body, it cannot enter into agreements allowing it to transfer its inventorship rights.

The ability of an AI to be an inventor under patent law will be determined by the specific language in each jurisdiction’s patent laws. To explicitly incorporate and recognise AI-generated ideas, legislative changes and amendments may be required in nations where plain statutory wording needs an inventor to be a natural person. In places where the statutory language is less explicit, such as Australia, the courts may have additional freedom to consider purposeful statutory interpretation and policy considerations.[4] We anticipate that all IP offices adopt a unified approach to successfully address the emerging difficulties posed by inventions by AI.

References: 

[1] Section 6, the Patents Act, 1970.

[2] Shri Justice N. Rajagopala Ayyangar, Report on the revision of the patents law, 1989.

[3] Rita Matulionyte, Australian court says that AI can be an inventor: what does it mean for authors? Kluwer Copyright Blog (September 2021).

[4] Lam Rui Rong, Can Artificial Intelligence Be an Inventor Under Patent Law? Australian Federal Court Says ‘Yes’ but U.S. District Judge Says ‘No’, SKRINE (September 2021).

Image Credits: Photo by Gerd Altmann from Pixabay 

The ability of an AI to be an inventor under patent law will be determined by the specific language in each jurisdiction’s patent laws. To explicitly incorporate and recognise AI-generated ideas, legislative changes and amendments may be required in nations where plain statutory wording needs an inventor to be a natural person. In places where the statutory language is less explicit, such as Australia, the courts may have additional freedom to consider purposeful statutory interpretation and policy considerations.

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Squaring the Snags of Online Hearings

The Indian Trademarks Registry (“TM Registry”) had always extended the facility of virtual hearings much before the onset of the pandemic. However, not many IP attorneys and Trademark Agents preferred to utilise this resource due to issues surrounding the system and the process.

Recently, the Delhi High Court, in the case of Pawandeep Singh v. The Registrar of Trademarks & Anr., W.P.(C)-IPD 7/2022 & CM 30/2022, pointed out numerous inefficiencies in the virtual hearing system of the Trademarks Registry and instructed the concerned authorities to streamline and optimise the current system.

The petitioner in this matter had filed a writ petition against the orders passed by the Registrar of Trademarks in respect of Application No. 3981639 for the mark “SWISS”. The grouse of the petitioner was that the order was passed without affording a hearing to the petitioner, which violated the principles of natural justice.

The agent who had logged in for the hearing was kept in the virtual waiting room at the time of the hearing and was not admitted. Hence, the petitioners were not allowed to put forth their oral arguments. However, it was officially recorded that submissions were heard. The petitioner informed the Hearing Officer via email regarding the situation, but no response was received. The petitioner was further surprised when he received the refusal order.

The ‘Hon’ble Court, based on the submissions made by both the parties, recorded the following observations:

  1. The cause list for hearings at the Registry is published monthly.
  2. The TM Registry’s virtual platform allows only three people to be present in the hearing at any given time, and the remaining attendees are kept in the waiting room.
  3. An order that the Hearing Officer passes has two parts, the templated portion and the non-templated portion where the Hearing Officer types out the order. The templated piece is not editable and states that the matter was set down for hearing and, eventually, the hearing took place on a particular date.

In this matter, the Hearing Officer did admit that the petitioner in the present case was not heard, and the templated portion of the impugned order is contrary to the fact. The illegality is compounded when the order captures that the hearing took place, whereas the counsel was kept waiting in the waiting room but was not admitted.

The Court remarked and directed that the Controller General of Patents, Designs & Trademarks must devise a proper mechanism for holding show cause hearings by including the following features:

  1. Publication of cause list notices daily.
  2. Utilising a platform with an open link.
  3. Matters should be called serial number-wise for certainty and convenience of the applicants.
  4. Removal of templates from the order statements which may vary on a case-to-case basis.
  5. Some extra space is made available for Senior Examiners to put their brief reasons for allowing or refusing the application.

The Court held that a proposal on behalf of the Controller General of Patents, Designs & Trademarks in respect of holding show cause hearings on the points outlined above should be placed on record within two weeks. It may also consult the IP fraternity and stakeholders if required.

The matter has also brought to the forefront the inefficiencies of the online hearings, which stakeholders have long since been bringing to the attention of the Registry. With online hearings gaining prominence, the suggestions of the Court are the right steps towards a more efficient and transparent system that will stand the test of time.

Image Credits: Photo by Sora Shimazaki from Pexels

With online hearings gaining prominence, the suggestions of the Court are the right steps towards a more efficient and transparent system that will stand the test of time.

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Navigating the Legal Quagmire of Limitations on Trademark Oppositions

Though the pandemic seems to be receding across the world, the problems that it has created seem to be multiplying, and the legal system has been grappling trying to address the issues affecting business. The High Court of Delhi, in a recent judgment, Dr. Reddys Laboratories Limited vs. the Controller General of Patents, Designs and Trademarks, sent shockwaves through the system.

The petitioners had filed writ petitions against the haphazard manner in which the Controller General of Patents, Designs and Trademarks (“CGPDTM”) had handled the filing of Trademark opposition proceedings during the pandemic. The petitioners were aggrieved when they discovered that opposition proceedings couldn’t be initiated on the online portal of the Trademarks Registry post the statutory timelines of four (4) months, as prescribed under Section 21 of the Trademarks Act, 1999. However, the Supreme Court in Suo Moto Writ (Civil) No. 3 of 2020, titled In Re: Cognizance for Extension of Limitation, had extended the statutory time period in India. Additionally, the Trademarks Registry also refused to accept such oppositions when filed manually. Further, the Trademarks Registry went on to issue the Certificates of Registration even though they were aware of the requests to initiate opposition.

The Supreme Court had clearly stated in the aforementioned order that “the time period between March 15, 2020, and February 28, 2022, has to be fully excluded for the purpose of calculating limitation under all enactments and statutes, both before judicial and quasi-judicial bodies.” The CGDPTM had also reaffirmed the above order vide its notice of January 18, 2022. The petitioners argued that the non-acceptance of the oppositions was in contravention of the Supreme Court order, especially as it had been reaffirmed by the CGDPTM as well.

The officials of the CGDPTM also informed the court that more than 4 lakh registration certificates had been granted during this period. Further, vide an affidavit submitted by the CGDPTM, it was affirmed that 113517 oppositions were filed between the periods of March 24, 2020, and February 28, 2022. It was also mentioned that “6,000-7,000 oppositions have been filed during the pandemic period beyond the four-month period of limitation, and the same have also been entertained.” Thus, the CGDPTM has been accepting oppositions in a very haphazard manner, undermining the rights of those who wished to initiate opposition actions and has also issued Certificates of Registration, granting challengeable rights to applicants.

As the limitation period in terms of the orders of the Supreme Court would have been extended for filing oppositions to the said applications until the expiry of 90 days from March 1, 2022, i.e., till May 30, 2022, the High Court of Delhi has instructed as follows:

  • Opponents must send emails expressing their interest in opposing any of the marks until May 30, 2022. On receipt of any such email, even if the mark currently stands as opposed, the CGDPTM is to facilitate the filing of the opposition either through the online platform or by accepting the same manually.
  • If the mark stands registered, and in the absence of any request to oppose the marks by May 30, 2022, the mark will continue to stand registered.
  • For those marks that stand as registered, if the opposition is received by May 30, 2022, the Certificates of Registration shall stand suspended till the opposition is decided upon.

The High Court of Delhi has also gone on to caution the CGDPTM and instructed them to develop a mechanism to dispose of the huge backlog of opposition currently pending at their end.

Right holders, especially those who are in receipt of the Certificates of Registration, will need to keep their fingers crossed that no oppositions are filed by May 30, 2022. Furthermore, infringement proceedings may not be initiated against infringing parties until the May 30, 2022 deadline.

The haphazard handling of the opposition proceedings in this time period has created both a logistic nightmare as well as hampered the rights of numerous applicants. With more skeletons coming out of the closet of the CGDPTM, it remains to be seen how they are handled. The High Court of Delhi needs to be lauded for taking such a sensitive issue and handling it at the earliest.

Exciting times to navigate through the curveballs thrown by the CGDPTM. 

Image Credits: Photo by Markus Winkler on Unsplash

The haphazard handling of the opposition proceedings in this time period has created both a logistic nightmare as well as hampered the rights of numerous applicants. With more skeletons coming out of the closet of the CGDPTM, it remains to be seen how they are handled.

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Marrakesh Treaty: Making Literature Accessible to All

There are over 2.2 billion people blind or visually impaired worldwide, and about 90% of them live in developing or least developed countries. Considering their economic situation and available infrastructure, education and access to the literature are significant issues. Only less than 10% of books published every year are available in a format accessible to them.

Without access to books and magazines, the visually impaired cannot receive the required education or realise their full potential. With a single objective to increase access to books, magazines, and other printed materials for people with print disabilities, the Marrakesh Treaty was adopted by the member states of WIPO in 2013 (the “Treaty”), which also forms part of the body of international copyright treaties administered by WIPO.

 

How did the Marrakesh Treaty Eventuate?

 

In 2006, the WIPO Standing Committee on Copyright and Related Rights’ Study on Copyright Limitations and Exceptions for the Visually Impaired, led by Judith Sullivan, set the ball rolling for copyright exceptions for the benefit of the visually impaired. This move prompted many states to make exceptions to their copyright law.

Following that, a proposal for the Treaty was first tabled before the WIPO by Brazil, Ecuador, and Paraguay for the World Blind Union (WBU) during WIPO’s 18th Standing Committee on Copyright and Related Rights (SCCR) in 2009. The proposed Treaty set forth minimum standards of copyright exceptions and facilitated the cross-border exchange of accessible formats. Consequently, the Forty-Second WIPO General Assembly decided to convene a Diplomatic Conference on limitations and exceptions for visually impaired persons/persons with print disabilities in June 2013.

The Diplomatic Conference to Conclude a Treaty to Facilitate Access to Published Works by Visually Impaired Persons and Persons with Print Disabilities, was held from 17th to 28th June 2013 in Marrakesh, Morocco, which adopted the Treaty on 27th June 2013. The Treaty aligns with the human rights principles in the Universal Declaration of Human Rights (UDHR) and the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD).

India became the first country to ratify the Treaty on 24th July 2014. The Treaty received 79 signatures in the first twelve months that it was open for signatures, and it entered into force on 30th September 2016 currently with 80 Contracting Parties on board.

 

Salient Features of the Marrakesh Treaty

 

Definitions Under the Marrakesh Treaty:

“Works” are defined to mean literary and artistic works within the meaning of Article 2(1) of the Berne Convention for the Protection of Literary and Artistic Works.

“Beneficiary Persons” is defined as someone affected by one or more in a range of disabilities that interfere with the effective reading of printed material. This definition includes visually impaired persons and those with a physical disability that prevents them from holding and manipulating a book.

The definition of “Accessible format copy” is broad and covers any format that permits a person with a visual impairment or other print disability to access the content as feasibly and comfortably as a person without such a disability, including digital formats. The accessible format copy is used exclusively by beneficiary persons. It must respect the integrity of the original work, taking due consideration the changes needed to make the work accessible in the alternative format and the accessibility needs of the beneficiary persons.

“Authorised entity” is defined as an entity authorized or recognized by the government to provide education, instructional training, etc., to beneficiary persons on a non-profit basis. It also includes a government institution or non-profit organization that provides the same services to beneficiary persons as one of its primary activities or institutional obligations.

 

Obligations of the Member Countries Under the Marrakesh Treaty:

 

Article 4 of the Treaty refers to the obligation of the contracting parties to fulfill two primary obligations, i.e.:

  1. Contracting Parties shall provide in their national copyright laws for a limitation or exception to the right of reproduction, the right of distribution, and the right of making available to the public as provided by the WIPO Copyright Treaty (WCT); and
  2. To facilitate the availability of works in accessible format copies for beneficiary persons.

These limitations and exceptions mean that a range of acts is permitted without infringing copyright.

Article 5 highlights the obligation about the Cross-Border Exchange of Accessible Format Copies. As per this article, all contracting Parties shall have a necessary provision in their Statutes wherein if an accessible format copy is made under a limitation or exception or according to the operation of law, that accessible format copy may be distributed or made available by an authorized entity to a beneficiary person or an authorized entity in another Contracting Party.

 

Application of the Marrakesh Treaty in India

 

The Copyright Act (Amendment) Act 2012, which was enacted in India much before the Treaty was adopted, had already incorporated a provision which grants the exception of fair dealing with the reproduction, distribution, and making available of published works in accessible formats for the disabled.

 

The 2012 Amendment of Fair Dealing Exception

 

The Copyright (Amendment) Act, 2012 provides certain exceptions to copyright infringement as fair dealing under Section 52. The provision permits limited use of copyright material without the owner’s authorization.

The Copyright (Amendment) Act, 2012 brought a new provision under Section 52(1) (ZB), which made conversions of work into an accessible format for the exclusive benefit of disabled persons a fair dealing exception to the infringement of copyright. This extends to the adaptation, reproduction, issue of copies, or communication to the public of any work in an accessible format for persons with disabilities, by any person or organisation working for the benefit of the persons with disabilities.

Section [(zb) 52] highlights that the; adaptation, reproduction, issue of copies or communication to the public of any work in an accessible format, by:

(i) any person to facilitate persons with disability to access to works including sharing with any person with disability of such accessible format for private or personal use, educational purpose or research; or

(ii) any organisation working for the benefit of the persons with disabilities in case the standard format prevents the enjoyment of such works by such persons:

Provided that the copies of the works in such accessible format are made available to the persons with disabilities on a non-profit basis but to recover only the cost of production. Provided further, the organization shall ensure that the copies of works in such accessible format are used only by persons with disabilities and take reasonable steps to prevent entry into ordinary business channels.

 

Recommendations of Parliamentary Standing Committee on Commerce

 

The Parliamentary Standing Committee (“Committee”) constituted under the Dept of Commerce, inter alia, examined the challenges faced in ensuring a balance between copyright protection of the publishers and public access to affordable educational study material in its recent report titled “Report 161: Review of the Intellectual Property Rights Regime in India” presented in the Rajya Sabha on 23rd July 2021.

The Committee observed that the fair use exception is having a detrimental impact on the publishing industry and authors who are mainly dependent on royalties. On the other hand, it also observed that protection of copyrights of publishers and authors which encourages enrichment of quality books and public accessibility of such works at an affordable rate counterbalanced to maintain the overall literary culture and image of the country. Hence, in order to overcome this conflict, the Committee made the following recommendation:

  • Section 52(1) of the Copyright Act, 1957 should be amended to facilitate a fair and equitable ecosystem of literary culture in the country by allowing reprographic works in Government-owned educational institutions and storing it in libraries for their easy access to students as well as stipulating limitations to unrestricted commercial grants to copy books and literary works and storage of copied works in digital formats.
  • Libraries should be upgraded to provide easy access to the works of foreign publishers by the students
  • The earliest implementation of National Mission on Libraries (NML), a Government of India initiative to modernize and digitally link close to 9,000 public libraries across the country works.
  • A comprehensive study of the Berne Convention provisions regarding Protection of Literary and Artistic Works to promote a regime of copyright which will be of advantage to both copyright holders and the public.
 

Compulsory License to Reproduce Published Work for the Benefit of Disabled for Profit

 

In addition to the fair dealing exceptions, the Amendment also provides for Compulsory Licensing to any person working for the benefit of the disabled to publish any work on which copyright exists.[1]

Considering the more significant public interest involved in the license proceedings, the Act mandates that Courts shall make necessary endeavors to dispose of such applications within two months from the date of receipt of the application.

 

Reproduction and Cross-border Exchange of Published Works

 

In line with the Treaty’s commitment to make accessible format works available to the beneficiaries across the boundaries, WIPO in June 2014 established the Accessible Books Consortium (“Consortium”). This public-private collaboration brings together all the key players, including the organisers, beneficiaries, publishers, and authors. It is a multiparty collaboration that offers books in an accessible format to blind and prints disabled people across the globe.

As of now, the Consortium holds over six lakhs books in accessible formats in over 80 languages in 93 partnered libraries that are available without legal formalities to the beneficiaries and organisations that assist such people. The Treaty also allows unlocking of Digital Rights Management Amazon Kindle (DRM) book, which can then be reproduced in Braille format and made available to the beneficiaries without the prior consent of the copyright holders.

In India, the Consortium initially covered two states, i.e., Bihar and Madhya Pradesh, by providing support of converting books from standard IX to XII in accessible formats and offering reading assistant devices at a subsidised cost.

The India chapter started with the Daisy Forum of India (“DFI”), which in collaboration with Tata Consultancy Services (TCS), National Institute for Empowerment of Persons with Visual Disabilities (NIEPVD), and the Government of India; launched Sugamya Pustakalaya, India’s first and most significant collection of accessible books hosting over 6.75 lakhs in accessible formats across in as many as 17 languages across DFI libraries.

Since then, multiple NGOs, libraries, Online databases, software programmes have been established. Saksham Trust, a Delhi-based NGO working for the exact cause, is another such organisation.[2] Also, various reading softwares have been developed, such as the INDO-NVDA software, making computers accessible for visually impaired people.

 

Conclusion

 

While India has one of the most progressive copyright exceptions for the benefit of the disabled globally, it is pertinent to note that India hasn’t fully incorporated provisions of the Treaty in her national law. Provisions related to cross-border availability, privacy, and cooperation remain absent. To achieve the objective of the Treaty, it is pertinent that all Contracting Parties comply with their obligations to foster an accessible environment for the disabled.

Image Credits:

Photo by Jaredd Craig on Unsplash

While India has one of the most progressive copyright exceptions for the benefit of the disabled globally, it is pertinent to note that India hasn’t fully incorporated provisions of the Treaty in her national law. Provisions related to cross-border availability, privacy, and cooperation remain absent.

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Intermediary Guidelines and Digital Media Ethics Code: Shifting Paradigm of Social & Digital Media Platforms

It has been just over six months since the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (the “Rules“) have been notified. However, these six months have been nothing short of a roller coaster ride for the (Internet) Intermediaries and Digital Media platforms, especially Social Media platforms who have tried to muddle through the slew of compliance obligations now imposed through these eccentric Rules. Notwithstanding, some of them had to face the wrath of the Government and even Courts for the delay in adherence.

On this topic, we are trying to stitch together a series of articles covering the entire gamut of the Rules, including their objective, applicability, impact, and the key issues around some of the rules being declared unconstitutional, etc.

In our first article, we analyse the timeline, objectives, and applicability of these Rules through some of the definitions provided under the Rules and the IT Act.

Tracing the Roots of the Digital Media Ethics Code 

The initiation of this endeavour can be tracked down to July 26, 2018, when a Calling Attention Motion was introduced in the Rajya Sabha on the misuse of social media and spread of fake news, whereby the Minister of Electronics and Information Technology conveyed the Government’s intent to strengthen the existing legal framework and make social media platforms accountable under the law. Thereafter, the first draft of the proposed amendments to the Intermediary Guidelines, The Information Technology (Intermediary Guidelines (Amendment) Rules) 2018, was published for public comments on December 24, 2018.

In the same year, the Supreme Court in Prajwala v. Union of India[1] directed the Union Government to form necessary guidelines or Statement of Procedures (SOPs) to curb child pornography online. An ad-hoc committee of the Rajya Sabha studied the issue of pornography on social media and its effects on children and the society and laid its report recommending the facilitation of identification of the first originator of such contents in February 2020.

In another matter, the Supreme Court of India on October 15 2020, issued a notice to the Union Government seeking its response on a PIL to regulate OTT Platforms. The Union Government subsequently on November 9 2020, made a notification bringing digital and online media under the ambit of the Ministry of Information and Broadcasting, thereby giving the Ministry the power to regulate OTT Platforms.

On February 25, 2021, the Union Government notified the much-anticipated Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, bringing various digital entities under its purview and imposing new compliances to regulate them.

 

Objectives of the Digital Media Ethics Code

The rising internet and social media penetration in India raises concerns of transparency, disinformation and misuse of such technologies. The Rules address these concerns and bring accountability to social and digital media platforms by mandating the setting up of a grievance redressal mechanism that adheres to statutory timeframes. The Rules also address the legal lacuna surrounding the regulation of OTT platforms and the content available on them and introduces a three-tier content regulation mechanism.

Key definitions and the applicability of the Digital Media Ethics Code

The Rules add on extensively to the 2011 Intermediary Guidelines and also introduce new terms and definitions. To understand the Rules and the compliances thereunder in a holistic manner, it becomes imperative to learn the key terms and definitions. This also addresses concerns of applicability of the Rules to different entities, as they prescribe different sets of compliances to different categories of entities.

Key definitions:

Digital Media as per Rule 2(1)(i) are digitised content that can be transmitted over the internet or computer networks, including content received, stored, transmitted, edited or processed by

  • an intermediary; or
  • a publisher of news and current affairs content or a publisher of online curated content.

This broadly includes every content available online and every content that can be transmitted over the internet.

Grievance as per Rule 2(1)(j) includes any complaint, whether regarding any content, any duties of an intermediary or publisher under the Act, or other matters pertaining to the computer resource of an intermediary or publisher as the case may be.

Intermediary has not been defined in the Rules, but as per S. 2(1)(w) of the IT Act, intermediary, with respect to any particular electronic record, is any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes.

The first part of the definition lays down that an Intermediary with respect to an electronic record, is any person that receives, stores or transmits that electronic record on behalf of another person.

An entity becomes an intermediary for a particular electronic record if that record is received by, stored in or transmitted through the entity on behalf of a third party. However, as the clause does not use the term “collect” with respect to an electronic record, any data that entities may collect, including IP Addresses, device information, etc., do not fall within the definition’s purview. Hence the entities would not be considered as intermediaries for such data.

Moreover, the second part of the definition lays down that those entities that provide any service with respect to an electronic record would be intermediaries. However, what constitutes “service” has been a key point of discussion in prior cases. In Christian Louboutin Sas v. Nakul Bajaj[2], the Court not only held that the nature of the service offered by an entity would determine whether it falls under the ambit of the definition, but also went on to hold that when the involvement of an entity is more than that of merely an intermediary, i.e., it actively takes part in the use of such record, it might lose safe harbour protection under S. 79 of the Act.

The definition also includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places, and cyber cafes as intermediaries. In Satish N v. State of Karnataka[3], it was held that taxi aggregators like Uber are also intermediaries with respect to the data they store. Therefore, Telecom Service Providers like Airtel, Vi, Jio, etc., Network Service Providers like Reliance Jio, BSNL, MTNL, etc., Internet Service Providers like ACT Fibernet, Hathaway, etc., Search Engines like Google, Bing, etc., Online Payment gateways like Razorpay, Billdesk etc., Online Auction Sites like eBay, eAuction India, etc., Online Market Places like Flipkart, Amazon etc. are all considered intermediaries.

Social Media Intermediaries as per Rule 2(1)(w) is an intermediary which primarily or solely enables online interaction between two or more users and allows them to create, upload, share, disseminate, modify or access information using its services. This includes platforms like Tumblr, Flickr, Diaspora, Ello, etc.

Significant Social Media Intermediaries as per Rule 2(1)(v) is a social media intermediary having number of registered users in India above such threshold as notified by the Central Government. Currently, the threshold is 5 million users. Platforms that fall under this category would be Facebook, Twitter, Instagram, YouTube, Snapchat, LinkedIn, WhatsApp, Telegram etc.

News & current affairs content as per Rule 2(1)(m) includes newly received or noteworthy content, including analysis, especially about recent events primarily of socio-political, economic or cultural nature, made available over the internet or computer networks, and any digital media shall be news and current affairs content where the context, substance, purpose, import and meaning of such information is in the nature of news and current affairs content. Therefore, news pieces reported by newspapers or news agencies, shared online, on social media, or on digital media platforms are news & current affairs content. This includes contents of such nature created by any person and shared through social media platforms like WhatsApp, Facebook, Twitter etc. Digital content discussing news and the latest happenings will also come under the purview of this definition.

Newspaper as per Rule 2(1)(n) as a periodical of loosely folded sheets usually printed on newsprint and brought out daily or at least once in a week, containing information on current events, public news or comments on public news. Newspapers like The Hindu, Times of India etc. will fall under this category.

News aggregator as per Rule 2(1)(o) is an entity performing a significant role in determining the news and current affairs content being made available, makes available to users a computer resource that enable such users to access such news and current affairs content which is aggregated, curated and presented by such entity. This includes platforms like Inshorts, Dailyhunt etc.

Online curated content as per Rule 2(1)(1) is any curated catalogue of audio-visual content, other than news and current affairs content, which is owned by, licensed to or contracted to be transmitted by a publisher of online curated content, and made available on demand, including but not limited through subscription, over the internet or computer networks, and includes films, audio visual programmes, documentaries, television programmes, serials, podcasts and other such content. This includes movies and shows available on OTT platforms like Netflix, Prime Video, Disney+Hotstar etc.

Publisher of News and Current Affairs Content as per Rule 2(1)(t) includes online paper, news portal, news aggregator, news agency and such other entities, which publishes news and current affairs. This would include websites/apps such as The Wire, The News Minute, Scroll.in, Dkoding.in, The Print, The Citizen, LiveLaw, Inshorts etc.

While the Rules do not include the regular newspapers or replica e-papers of these newspapers, as they come under the Press Council Act, news websites such as Hindustantimes.com, IndianExpress.com, thehindu.com are covered under the Rules, and the Union Government clarified the same on June 10, 2021. The clarification stated that websites of organisations having traditional newspapers and digital news portals/websites of traditional TV Organisations come under the ambit of the Rules.

This does not include news and current affairs reported or posted by laymen or ordinary citizens online, as the scope is limited only to news publishing agencies.

Publisher of Online Curated Content as per Rule 2(1)(u) is a publisher who performs a significant role in determining the online curated content being made available and enables users’ access to such content via internet or computer networks. Such transmission of online currented content shall be in the course of systematic business or commercial activity. This includes all OTT platforms, including Netflix, Prime Video, Voot, Lionsgate, Disney+Hotstar, etc.

The Digital Media Ethics Code Challenged in Court

Part III of the IT Rules has been challenged by many persons in various High Courts. News platforms including The Wire, The Quint, and AltNews moved to the Delhi High Court, alleging that online news platforms do not fall under the purview of Section 87 of the IT Act, under which these Rules are made as the section is only applicable to intermediaries. Section 69A is also limited to intermediaries and government agencies. It is alleged that since such publishers are not intermediaries, they do not fall under the purview of the IT Rules.

A similar petition was moved by LiveLaw, a legal news reporting website before the Kerala High Court, alleging that the Rules violated Articles 13, 14, 19(1)(a), 19(1)(g), and 21 of the Constitution and the IT Act.[4] The petitioners contended that the Rules had brought Digital News Media under the purview of the Press Council of India Act and the Cable Television Networks (Regulation) Act, 1995, without amending either of the two legislations. They also alleged that the rules were undoing the procedural safeguards formed by the Supreme Court in the Shreya Singhal[5] case. In this regard, the Kerala High Court has ordered that no coercive action is to be taken against the petitioner as interim relief.

Recently, the Bombay High Court in Agij Promotion of Nineteenonea v. Union of India[6] delivered an interim order staying Rules 9(1) and 9(3), which provides for publishers’ compliance with the Code of Ethics, and the three tier self-regulation system respectively. The Court found Rule 9(1) prima facie an intrusion of Art. 19(1)(a).

Legality & Enforceability of the Digital Media Ethics Code

Even though six months have passed since the Rules came into force, the legality and enforceability of the Rules are still in question. While most intermediaries, including social media and significant social media intermediaries, have at least partly complied with the Rules, the same cannot be said for publishers of news and current affairs content and online curated content. This will have to wait until the challenges to its legality and constitutionality are settled by Courts.

References:

[1] 2018 SCC OnLine SC 3419.

[2] 2018 (76) PTC 508 (Del).

[3] ILR 2017 KARNATAKA 735.

[4] https://www.livelaw.in/top-stories/kerala-high-court-new-it-rules-orders-no-coercive-action-issues-notice-on-livelaws-plea-170983

[5] (2013) 12 SCC 73.

[6] Agij Promotion of Nineteenonea v. Union of India, WRIT PETITION (L.) NO.14172 of 2021.

Image Credits: 

Photo by Jeremy Bezanger on Unsplash

 

Even though six months have passed since the Rules came into force, the legality and enforceability of the Rules are still in question. While most intermediaries, including social media and significant social media intermediaries, have at least partly complied with the Rules, the same cannot be said for publishers of news and current affairs content and online curated content. This will have to wait until the challenges to its legality and constitutionality are settled by Courts.

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Small Entity Status- Can Foreign Companies Claim It?

The government of India has been aggressively pushing for the development and promotion of entrepreneurship in the country. In the Intellectual Property Domain, various concessions have been made for small and upcoming entities. Organizations claiming a ”small entity” status or a “start-up” status while applying for registration are entitled to some additional benefits pertaining to fees and filing requirements.  Here, we briefly look upon the small entity status as per the Indian patent and design rules. 

Intellectual Property Related Government Initiatives to Encourage Small Entities & Startups

In 2020, the Scheme for Facilitating Start-ups Intellectual Property Protection, was launched as an experimental initiative to encourage start-ups to develop and protect their intellectual property, which was extended for a period of three years (April 1, 2020 – March 31, 2023).

Further, the Patent (Amendment) Rules, 2020[1] were notified on October 19, 2020 to simplify the procedure of submitting priority applications and their translations and filing of working statements under form 27. These changes were introduced in consequence to the Delhi High Court’s order in the case of Shamnd Bashir v UOI[2], that resulted in a stakeholder’s consultation.

On November 4, 2020 the Ministry of commerce and Industry[3], notified Patents (2nd Amendment) Rules, 2020[4], making additional filing and prosecution concessions for start-ups and small entities.  The status of start-ups was discussed critically, extending their life for up to ten years. These amendments are set to make protection of intellectual property affordable to every category and class of business. Finally, the government also notified Design Amendment Rules 2021,[5] which recognized start-ups as applicants. The current Locarno classification system[6] and simplified fee structure were introduced specifically to benefit small entities.

 

Categorization of ‘Entities’

 

1.1 Natural Person

Under the Indian Patent Act, natural person includes an individual human being. In this context, the patent application can be filed in the name of one or a group of individuals. Here, the inventorship and ownership lies solely with the inventor and he is entitled to:

  1. Sell
  2. Transfer
  3. License, or
  4. Commercialize their patent as per their want.

1.2 Small Entity

The Indian Patents Rule, 2003 under Rule 2(fa)[7] define ‘small entity’ as:

  • in case of an enterprise engaged in the manufacture or production of goods, an enterprise where the investment in plant and machinery does not exceed the limit specified for a medium enterprise under clause (a) of sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006); and
  • in case of an enterprise engaged in providing or rendering of services, an enterprise where the investment in equipment is not more than the limit specified for medium enterprises under clause (b) of sub-section (1) of Section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006).

In calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other things as may be specified by notification under the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), shall be excluded.

1.3 Start up:

A start-up is an entity recognized as a ‘startup’ by the competent authority under the Startup India initiative and fulfills all the criteria for the same.

A foreign entity shall fall under the category of start-up if it fulfills the criteria of turnover and specified period of incorporation/registration, and submission of a valid declaration to that effect as per the provisions of Start-up India initiative. (In calculating the turnover, reference rates of foreign currency of Reserve Bank of India shall prevail.)

As per the Notification of Department of Promotion of Industry and Internal Trade[8], an entity is considered a start-up  

  1. Up to a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.
  1. Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore rupees.
  2. Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’.

How to apply for Small Entity Status in India:

 

Any business can apply for the status of small entity under the MSME Development Act, 2006 at udyamregistration.gov.in. Subsequent to a successful registration the business shall be issued a Udyam registration certificate, that can be furnished as proof for availing various government subsidies and benefits. 

A foreign company can also register as an MSME on the same government portal. However, as a preceding step such a company shall register itself as per the provisions of the Companies Act, 2013[9].

Any Indian entity wishing to declare themselves as small entity for the purpose of Patent registration has to furnish the following documents:

  1. Form 28 of the Indian Patent Act:
  2. Proof of Registration Under MSME Act 2006 (Micro, small and medium enterprise development Act, 2006).
  3. Form 1 of the Indian Patent Act (if Fresh Patent Application is being filed).

Any Indian entity wishing to declare themselves as small entity for the purpose of Design registration:

  1. For an Indian entity to claim the status of small entity, it must be registered under the MSME Development Act, 2006.
  2. To file an application as a start-up, the entity should be recognized as startup by a competent authority under the Union government’s Start-up India Initiative.

 

Can a Foreign Company claim Small Entity Status in India?

On a plain interpretation of the requirements under the Patent rules and Design rules, it is clear that a foreign enterprise can claim the status of a small entity or a start-up, provided it is registered and incorporated in India and is engaged in the manufacture of goods and services as specified in the first schedule of the 2006 Act.[10]

Under the MSME Development Act, 2006 an enterprise is defined as:

enterprise” means an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (55 of 1951) or engaged in providing or rendering of any service or services;[11]

With an objective to incentivize the incorporation of OPC (One Person Companies), the Ministry of Corporate Affairs amended the Companies (Incorporation) Rules. The move empowers OPCs to grow without any restrictions on paid up capital and turnover, thereby facilitating their conversion into any other type of company at any time. Additionally, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days and also allowing Non-Resident Indians (NRIs) to incorporate OPCs in India has paved the way for foreign entities to enter Indian markets[12] [13].

 

Application Process for Small Entity Status in India? (Foreign Company):

Patent Rules

A foreign applicant seeking the status of ‘small entity’ for the purpose of filing patent in India, has to submit duly filled Form 28[14], along with the requisite documents of proof.

As per the requirements of Form 28, a foreign applicant has to attach evidentiary documents that verify their status as ‘small entity’ for the want of Rule 2 (fa) of the Patent Rules, 2003. For this purpose, the said documents can include a certified copy of financial statement from a Chartered Accountant, that proves that the investment in plant and machinery and the annual turnover of the entity on the date of filing the application does not exceed the limitations specifications under the MSME Development Act, 2006.

Design Rules

For the purpose of recognitions as a start-up the foreign entity should satisfy the following criteria:

  1. The entity must be a private limited company, limited liability partnership, or partnership firm.
  2. Its turnover at any point during the course of its business (from inception) should not exceed INR 100 crores (approximately USD 13.7 million as on date)
  3. The entity would be considered a start-up only for a period of 10 years from the date of incorporation.
  4. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Start-up”

For a foreign entity to claim the benefit of being a start-up, an affidavit (which under Indian practices would need to be notarized, although this has not been explicitly mentioned in the Amendment Rules) along with supporting documents must be submitted at the time of filing the application[15], to be submitted with Form 24[16] of the Designs Rules.

References:

[1] https://pib.gov.in/Pressreleaseshare.aspx?PRID=1668081

[2] writ petition No. WPC- 5590

https://www.scconline.com/blog/post/2020/10/28/patents-amendment-rules-2020-patentee-would-get-flexibility-to-file-a-single-form-27-in-respect-of-a-single-or-multiple-related-patents/

[3] https://ipindia.gov.in/writereaddata/Portal/Images/pdf/Patents__2nd_Amendment__Rules__2020.pdf

[4] https://ipindia.gov.in/writereaddata/Portal/Images/pdf/Patents__2nd_Amendment__Rules__2020.pdf

[5] https://www.foxmandal.in/wp-content/uploads/2021/08/Indian-Designs-Amendment-Rules-2021.pdf

[6] https://www.wipo.int/classifications/locarno/locpub/en/fr/

[7] https://ipindia.gov.in/writereaddata/Portal/IPORule/1_70_1_The_Patents_Rules_2003_-_Updated_till_1st_Dec_2017-_with_all_Forms.pdf

[8] https://dpncindia.com/blog/wp-content/uploads/2019/02/DIPP-Notification-dated-19-Feb-2019.pdf

[9] https://www.indiacode.nic.in/show-data?actid=AC_CEN_22_29_00008_201318_1517807327856&sectionId=185&sectionno=2&orderno=2

[10] https://www.startupindia.gov.in/content/sih/en/bloglist/blogs/How-a-foreign-national-from-China-can-start-and-register-company-in-India.html

[11] https://www.indiacode.nic.in/show-data?actid=AC_CEN_46_77_00002_200627_1517807324919&sectionId=9884&sectionno=2&orderno=2

[12] http://164.100.117.97/WriteReadData/userfiles/Notification%201.pdf

[13] http://164.100.117.97/WriteReadData/userfiles/Notification%202.pdf

[14] https://ipindia.gov.in/writereaddata/Portal/IPOFormUpload/1_40_1/form-28.pdf

[15] https://www.foxmandal.in/wp-content/uploads/2021/08/Indian-Designs-Amendment-Rules-2021.pdf

[16] https://www.ipindia.gov.in/writereaddata/Portal/IPOFormUpload/1_109_1/Form_24.pdf

Image Credits: Photo by Startup Stock Photos from Pexels

 

On a plain interpretation of the requirements under the Patent rules and Design rules, it is clear that a foreign enterprise can claim the status of a small entity or a start-up, provided it incorporates itself under the relevant schemes and statutes and is able to furnish documents for proof to the same effect

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Why filing of Provisional Patent Application keeps you ahead in the Patenting race?

With an additional focus to build an Innovation based entrepreneurial eco system, innovation is happening at the drop of a hat. However, the floodgate of invention around the race does not seem to be limited to an ingenious mind but also requires a go-getter attitude. As we know, Patent protection works on a “first to file” basis and not on “first to invent” which means it is granted to the one who files the Patent application first, subject to fulfilling other patentability criteria.

A Patent application has to be filed along with certain Specifications (details/working of the invention). These specifications are of two types i.e. Provisional and Complete. Therefore, the application can be filed along with the Provisional or Complete Specification. If filed with Provisional, the Complete specification needs to be filed within 12 months.

 

Provisional Specification is very basic in nature and does not require details about the invention, unlike Complete Specification. Perhaps the difference between the two specifications is clear from the preambles of the specifications itself i.e.:

Preamble of the Provisional Application: “The following specification describes the invention”.

Preamble of the Complete Specification: “The following specification describes the invention and the manner in which it is to be performed.”

 

Even though, the Provisional Specification does not require claims, detailed descriptions, drawings etc., however, due care needs to be taken to ensure that the specification is broad enough so the objectives of the invention is covered as Complete Specification cannot be broader than what was disclosed in the Provisional.

 

Many times, during the office action as well as during the infringement or revocation attack, it is the provisional specification, which is first scrutinized to check if the invention was covered clearly. Therefore, even though it is provisional, taking professional guidance while drafting would be advisable to avoid possible mishaps in the future.

 

In order to stay ahead in the competition of technological advancement, R&D companies and other IP sophisticated companies around the globe, work on new inventions and file applications with the bare minimum information to get a priority date for their inventions. This is done before deep diving into specifics such as looking at the prior art or doing the feasibility test for the product/process etc.

 

Ideally, if an inventor comes up with an invention, she should not wait for the invention to be fully developed or for the feasibility test to be done. Needless to mention, millions of researchers around the globe are working on similar subjects and one never knows who might be coming up with similar invention in some part of the world and perhaps may be moving faster to file the patent application to claim priority.

 

Post filing of a Patent Application along with the Provisional Specification, an inventor has 12 months’ time to complete the research and file the Complete Specification. Since this option has been provided under the Patent law, availing it to claim the priority date would be a wise thing to do rather than wait for the research to complete where one would be running the risk of losing everything if someone else files before them. 

 

Ideally these 12 months period are given so one can carry out the patentability/ prior art search, which help the inventors tremendously in working around similar inventions.  Further, the Companies/inventors could also use the (provisional) Patent Application number to discuss the invention with potential investors, partners, licensee, etc. with due caution. 

 

In a situation where the inventor is unable to file the Complete Specification within the due date due to unavoidable circumstances, there is an option to file a request to post-date the application for a maximum period of six months subject to non-disclosure of the invention in the public domain.  

 

Considering these obvious advantages, filing a Patent Application along with a Provisional Specification could and would prevent a genuine effort from being a day late and a dollar short.

 

 

 

Image Credits: Photo by Med Badr Chemmaoui on Unsplash

Post filing of a Patent Application along with the Provisional Specification, an inventor has 12 months’ time to complete the research and file the Complete Specification. Since this option has been provided under the Patent law, availing it to claim the priority date would be a wise thing to do rather than wait for the research to complete where one would be running the risk of losing everything if someone else files before them. 

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Liabilities of Intermediaries In Trademark Infringement Cases In India

The boon and bane of market vis-à-vis consumers has further intensified with the shift of the current generation to e-commerce. The boon has been the ease, economy, and the time efficiency that online trade offers while the bane has been the easy trafficking of counterfeits and threat to customer data. Although efforts are being made by the government to address the issues from a consumer/buyer point of view, not much has been done from a business/seller point of view. One worrying concern for businesses is the constant infringement of their trademarks which is suffering in the lack of necessary legislation or a decisive judicial pronouncement. Most businesses believe that intermediaries must be liable for allowing infringers sell goods on their platform without adequate due diligence, however, liability has not been conclusively attributed in this regard yet.

One prominent case that addressed the liability of online marketplaces in trademark infringement was Christian Louboutin SAS vs Nakul Bajaj & Others[i] decided on 2nd November 2018 by the Hon’ble Delhi High Court. But before we delve into the particular case or understand the liability of intermediaries, let us first understand who falls within the ambit of intermediaries and when is an intermediary exempted from liability.

 

Definition of Intermediaries

 

The term “intermediaries” is defined under section 2(w) of Information Technology Act, 2000 which says

 “Intermediary” – with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes.

 

Exemption from the liability/ Safe Harbour Provision

 

Section 79 of the Information Technology Act provides certain immunities to the intermediaries. That the intermediary shall not be liable for any third-party information, data or communication link made available or hosted by him. Section 79 of the Information Technology Act, 2000 is extracted below:

  • Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link made available or hosted by him.

 

  • The provisions of sub-section (1) shall apply if– (a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or (b) the intermediary does not– (i) initiate the transmission, (ii) select the receiver of the transmission, and (iii) select or modify the information contained in the transmission; (c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf.

 

  • The provisions of sub-section (1) shall not apply if– (a) the intermediary has conspired or abetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act; (b) upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner.

Section 79 of the Act elaborates on the exemption from liabilities of intermediaries and Section 79(2)(c) mentions that intermediaries must observe due diligence while discharging their duties and observe such other guidelines as prescribed by the Central Government. Accordingly, Information Technology (Intermediary Guidelines) Rules, 2011 were notified on 11th April 2011.

Though the Indian Courts have reviewed Section 79 of IT Act, 2000 (Safe Harbour Provisions) on various facts and situation including in the cases of protecting online free speech (Shreya Singhal V. Union of India[ii]), uploading content and copyright violations (My Space Inc Vs. Super Cassettes Industries Limited[iii]) and design infringement (Kent Ro Systems Limited & Anr Vs. Amit Kotak and Ors[iv])etc, the position that is considered by Indian courts on violation of trademarks rights by e-commerce platforms and the extent of protection awarded to them was unclear till recent past.  

The landmark judgment passed by the Hon’ble Delhi Court in Christian Louboutin SAS vs Nakul Bajaj & Others tried to establish the liability of intermediaries on trademark infringement cases and the same is discussed below:

 

Christian Louboutin SAS vs Nakul Bajaj & Others

 

The Plaintiffs (Christian Louboutin), manufacturer of luxury shoes well known for their red soles filed a trademark infringement suit against an e-commerce website www.darveys.com (Defendants). The Plaintiffs had also obtained trademark registration for the word mark, device mark CHRISTIAN LOUBOUTIN and also for their red sole mark in India. The Plaintiffs claimed that their products were sold only through an authorized network of exclusive distributors.

The Defendants were selling various luxury products on their website including the Plaintiff’s products by claiming that they were 100% authentic. The Plaintiffs alleged that apart from selling and offering counterfeit products on the Defendants website, the image of the founder of the Plaintiff and the names Christian and Louboutin were used as meta tags. Further, the Defendants’ website gave an impression that it was in some manner sponsored, affiliated and approved for sale of variety of luxury products bearing the mark Christian Louboutin and this resulted in infringement of trademark rights and violation of personality rights of Mr. Christian Louboutin.

On perusal of the pleadings the Hon’ble Court observed that no factual issues arose in the determination of the case as the Defendants had not disputed the proprietary rights of the Plaintiff over their brand Christian Louboutin. The only defence put forth by the Defendants was the safe harbour provision under Section 79 of the Information Technology Act, 2000 that they were mere intermediary who enabled booking of products from any of the 287 boutiques/sellers across the globe using their online platform.  The Defendants contended that the products sold through their website was genuine, however, they were not providing after sales warranty or services.

The only aspect to be decided was whether the Defendants’ use of the Plaintiffs’ mark, logo was justified under Section 79 of the Information Act, 2000 or not.

The Hon’ble court perused the Defendants’ website and observed that customers were required to pay a membership fee in order to shop from the Defendants’ website and the said website also provided an authenticity guarantee to return twice the money if the products turned out to be fake or not of expected quality. Furthermore, in the terms and conditions, the Defendants claimed that they facilitated the purchase of original products and the prices of the products were maintained and changed at the discretion of the Defendants. Quality checks of the products were carried out by a third-party team who examined the precise details of the products that were shipped to the customers. The invoices generated were those of the website (defendant) company.  

In order to determine whether an online marketplace or e-commerce website is an intermediary, the Hon’ble Court elaborately examined the nature of services (provided a detailed list of 26 possible services that could be performed by intermediary) that would fall within the ambit of service contemplated in the definition of intermediary. Accordingly, entities that performed tasks such as identification of the seller, providing transport for seller, employing delivery personnel for delivering the product, accepting cash for sale etc and the measures taken by the online platforms  to ensure that unlawful acts were not committed by the sellers were taken into consideration for determining the role of the online marketplace. Considering the services played by the Defendant in the case, the Hon’ble Court was convinced that the Defendant exercised complete control over their sale of products and they were much more than just an intermediary.

The Hon’ble Court further noted that the e-commerce website and online marketplaces were required to operate with caution if they wished to enjoy the immunity provided to the intermediaries under Section 79 of the IT Act. When an e-commerce website is involved in or conducts its business in such a manner which would see presence of large number of elements (services and measures taken by sellers referred above), it could cross the line from being an intermediary to active participant. In such cases, online marketplace could be liable for infringement in view of its active participation.  The conduct of intermediaries in failing to observe due diligence with respect to IPR could amount to conspiring or abetting, aiding or inducing unlawful conduct and may lose the exemption to which intermediaries are entitled. When an e-commerce company claims exemption under Section 79 of IT Act, it ought to ensure that it does not have active participation in the selling process. The presence of any elements which indicates active participation could deprive intermediaries of the exception.

Finally, the Hon’ble Court ascertained whether there was any falsification of Plaintiff’s trademark under Section 2(2)(c), 101 and 102 of the Trademarks Act, 1999.  These provisions were being looked at to ascertain what constituted conspiring, abetting, aiding, or inducing, the commission of an unlawful act, in the context of trademarks rights. The Hon’ble Court concluded that the use of Plaintiffs’ mark in respect of genuine goods would not be infringement and in respect of counterfeit goods, it could constitute infringement. Thus, any online marketplace or e-commerce website which allows storing of counterfeit goods would be falsifying the mark.

In view of the above, the Hon’ble Court noted that the Defendant was not entitled to protection under Section 79 of the Information Technology Act. Further, the use of the Plaintiffs’ mark, the name and photograph of the founder without permission and the sale of products without ensuring genuineness constituted violation of the Plaintiffs rights. Pertaining to the contention of meta tagging, the Court held that Defendants’ use of the meta tagging would constitute infringement as upheld by the Delhi Court in another case (Kapil Wadhawa v. Samsung Electronics[v]).

In the above circumstance, the suit was decreed directing the Defendant to disclose the details of all its sellers, their addressee, contact details on the website, and prior to uploading a product bearing Plaintiffs’ mark, Defendant was required to obtain concurrence before offering for sale on its platform.

It is apparent that the legislative intent is to protect genuine intermediaries and it cannot be extended to those persons who are not intermediaries and are an active participants in the unlawful act.

 

Post Louboutin Case

 

The test laid down in Christian Louboutin case containing the detailed list of 26 possible tasks/services that could be performed by intermediaries were applied to various other cases such as Loreal v. Brandworld and Another[vi] and in Skull Candy Inc v. Shri Shyam Telecom and Others[vii] to ascertain the liability of intermediaries in online marketplace or e-commerce website.  

In this regard, it is pertinent to note the case of Amway India Enterprises Private Limited v. 1Mg Technologies Private Limited and Another[viii] where a single bench of the Delhi High Court passed an order restraining numerous e-commerce platforms such as Amazon, flipkart, snapdeal etc from the sale of direct selling products without the consent of direct selling entities. This decision of the single bench was set aside by the Division bench of Delhi High Court on 31st January 2020 and with this again the position of law pertaining to the intermediary liabilities in trademark infringement cases remains unclear. However, it is observed from various intellectual property rights cases that courts have placed higher responsibility to take down the contents that infringes the IP rights and is titling towards making these e-commerce platforms more responsible for their content.

Now that the Information Technology (Intermediary Guidelines Amendment) Rules, 2018 framed to make social media platforms accountable for their contents is on the verge of being notified, it is apparent that internet intermediaries won’t be able to  take shelter under the safe harbour protection of the IT Act, 2000 effortlessly.  The new rules intend to tighten the noose by filtering out information that threaten public health or safety. The rules make it mandatory for intermediaries to provide information or assistance to government agencies within 72 hours of formal communication,  enable tracing out of originator of information on its platform by deploying technology based automated tools for proactively identifying and removing or disabling public access to unlawful information and by removing access to unlawful content within 24 hours upon receiving a court order or being notified. It also requires intermediaries to incorporate a company if they have more than 5 lakh users in India and to have a permanent registered office in India as well as appoint a nodal person for contact with law enforcement.  

From an IP perspective, the roles and responsibilities of intermediaries are likely to become more crucial in IPR infringement cases. The safe harbour protection must be granted to intermediaries only if they play the role of a facilitator.  Since e-commerce has flourished like a green bay tree in the massive Indian market, the government is mooting the idea of having a separate regulatory body and a separate e-commerce law that provides for periodic audit, storage of data,  consumer protection,  export promotion and other provisions for promotion of e-commerce. The new law supposedly proposes to impose joint liability for counterfeit products on e-commerce entity as well as sellers. If approved, this would substantially address the trademark concerns and ensure fair competition.

 

 

References

[i] CS (COMM) 344/2018, I.As. 19124/2014, 20912/2014, 23749/2014 & 9106/2015

[ii] AIR 2015 SC 1523

[iii] 236 (2017) DLT 478

[iv] 2017 (69) PTC 551 (DEL)

[v] FAO(OS) 93/2012

[vi] CS(COMM) 980/2016 & I.A. 24186/2014

[vii] CS(COMM) 979/2016 & I.A. 24578/2014

[viii] CS (OS) 410/2018

 

Image Credits: Photo by Mark König on Unsplash

From an IP perspective, the roles and responsibilities of intermediaries are likely to become more crucial in IPR infringement cases. The safe harbour protection must be granted to intermediaries only if they play the role of a facilitator.  Since e-commerce has flourished like a green bay tree in the massive Indian market, the government is mooting the idea of having a separate regulatory body and a separate e-commerce law that provides for periodic audit, storage of data,  consumer protection,  export promotion, and other provisions for promotion of e-commerce.

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