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

  • January 19, 2023
  • Mathews V C

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

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

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

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

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

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

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

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

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

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

Image Credits:

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

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

Related Posts

POST A COMMENT

Registration of GUI as Designs: Existing Provisions and Challenges

  • January 13, 2023
  • Drishti Kardam

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

Introduction

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

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

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

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

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

Lacunae in Legislation

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

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

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

Practice Followed by the Indian Design Office

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

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

Observations made by US Courts

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

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

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

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

European Union’s Position

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

Conclusion

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

References:

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

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

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

[4] US6763497B1

[5] US10915243B2

Image Credits:

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

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

Related Posts

POST A COMMENT

Streamlining the Patent Process in Startups: A Pressing Priority

India has leveraged the startup ecosystem by offering a conducive environment to make them powerhouses of innovation. According to the Economic Survey 2021-22, the number of new recognised start-ups increased to over 14,000 in 2021-22 up from 733 in 2016-17. The survey further emphasized that intellectual property (IP), notably patents, was the key to a robust knowledge-based economy.

Similar to any other business undertaking, startups interact with various stakeholders, including employees, who regularly exchange ideas and develop key IP. Hence, business operations that significantly rely on IP exchange need an optimized and watertight structure of intellectual property rights protection, especially when they aspire to cater to international markets. In line with the growing importance of startups and IP, the government of India has launched the “Start-up India, Stand-up India Scheme” to support early-stage startups.

 

Recognition as a ‘Startup’

 

Entities to qualify as a ‘startup’ need to be recognized by the competent authority under the START-UP INDIA initiative and fulfil all the criteria for the same. For the sake of more clarity, the Department of Promotion of Industry and Internal Trade issued a notification in 2019[1] according to which an entity incorporated as a private limited company, a partnership firm, or a limited liability partnership in India can be considered a startup for up to ten years if its turnover since its incorporation has not exceeded one hundred crore rupees.

Further, such an entity should be actively working towards “innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential for employment generation or wealth creation.” Notably, an entity formed due to restructuring or splitting up an existing business cannot be deemed a startup.

A foreign entity can also be considered a start-up if it fulfils the criteria of turnover and specified period of incorporation/registration and submits a valid declaration to substantiate the requisites as per the provisions of the START-UP INDIA initiative.

 

Minding the IP of Business

 

An important criterion for getting startup registration is that the entity should be working to innovate, develop or improve products, processes or services. To protect technical innovation, patent registration is crucial, especially for startups, where the start-up’s success is tied to the novelty of their product and process. The DPIIT has recognised a total of 69,492 startups to date. In addition, startups have filed a total of 6000+ patent applications.7

A product or process with patent protection helps create a solid business model, enabling them to earn a good market reputation, a return on investment (ROI), and access new opportunities for expansion and generate funds.

To this effect, businesses can undertake the following best practices to optimise their inventions and ideas:

  1. Build an IP culture that drives innovation in the organization. For instance, implementing rewarding ownership strategies, implementing IP incentive schemes, encouraging teams to research and identify areas where valuable IP protection can be secured, etc.
  2. Foster IP awareness within the organization.
  3. Build an IP protection system that is driven by strong policy and practice. Organisations should focus on structuring agile protection strategies that prevent knowledge leaks. Undertaking regular IP audits and compressive risk analysis should be the focus.
  4. Once the IP is protected, its commercialization should be the focus. Additionally, organisations should be aware of their IP infringement and take proactive measures to enforce their rights effectively.

 

Gaining Traction with DPIIT Recognition

 

Benefits from Intellectual Property Rights (IPR)

 

A startup recognised by the DPIIT is eligible for tax breaks on:

  • Prior Turnover
  • Prior Experience
  • Earnest Money Deposit

DPIIT recognised startups can now get listed as sellers on the government e-Marketplace.

Self-certification Under Labour & Environment Laws

  • Startups are allowed to self-certify their compliance with nine labour and three environmental laws for 3 to 5 years from the date of incorporation.
  • In respect of three environmental laws, units operating under 36 white category industries (as published on the website of the Central Pollution Control Board) do not require clearance under three Environment-related Acts for three years. Hence, startups can focus on their core business and keep compliance costs low.

Fund of Funds for Startups (FFS)

  • The government has set up a corpus fund of INR 10,000 Cr. INR 5409.45 cr has been committed to 71 VC firms. In total, INR 5811.29 Cr was invested in 443 startups. 

Faster Exit for Startups

  • As per the Govt Notification, startups are now notified as “fast track firms”, enabling them to wind up the operations of their startups in 90 days.

Seed Fund Scheme

  • Grant up to INR 20 lakh to validate proof of concept, prototype development, or product trials.
  • Grant up to INR 50 lakh for market entry, commercialisation, or scaling up.

Tax Relief

  • Recognised startups are exempted from Income Tax for 3 consecutive years out of the 10 years since incorporation.
  • Startups incorporated on or after April 1 2016, but before April 1 2022, can apply for an income tax exemption under Section 80-IAC of the Income Tax Act.

 

Patent Incentives for Start-ups in India

 

Patent Facilitators

 

The government has identified over 226 local patent facilitators[2] to extend their expertise to DPIIT-recognised startups. The government would reimburse these facilitators for their services.

Patent facilitators are responsible for:

  • Providing general advisory services on a pro bono basis
  • Providing pro bono assistance with IPR filings
  • Assisting with the filing and disposal of IP applications at the National IP offices under CGPDTM
  • Drafting specifications (provisional and final)
  • Preparing and filing responses to examination reports and other queries, notices or letters by the IP offices
  • Appearing at hearings as may be scheduled
  • Contesting opposition, if any, by other parties
  • Final disposal of the IP application. 

 

Fee

 

The government has provided 80% rebate on the patent filing fee to make the process more attractive.

 

Expedited patent registration process:

 

Expedited Examination can be made by filing Form 18A accompanied by Form 9 (Publication). A request filed under a Regular Examination request via Form 18 (rule 24B) can be converted to an Expedited Examination by submitting Form 18A and Form 9.

The IPO has significantly reduced the duration of the patent timeline.

  • Publication: Within 1 month from the date of filing of Form 9.
  • Issuance of the First Examination Report (FER) to the Applicant: Within one month, but no more than two months, from the date the patent application is assigned to the Examiner; and within 45 days from the date, the Examiner submits the FER to the Patent Controller.
  • Response to the First Examination Report by Applicant: Within 6 months of receiving the FER from the IPO.
  • Disposal of the First Examination Report (FER) by the Controller: Within 3 months from the receipt of the last reply from the Applicant.

 

Conclusion

 

The objective of innovation and promoting patent filing by startups is simple, i.e., a patent is directly related to innovation and contributes to significant economic growth for a startup. The upsurge of startups has also led to massive employment generation, with over 5,60,000 jobs in 2016-2020. Hence, it is imperative to have an enabling ecosystem where entrepreneurs are encouraged to file more IPs seamlessly. While launching incentivized schemes and actively working towards reducing the compliance burden for new businesses when filing IP applications is a step in the right direction, there is still a pressing need to address the issues of procedural delays and complex patent processes to tap into the intellectual prowess of the country.

References: 

[1] https://dpiit.gov.in/sites/default/files/notification_Definition_StartupIndia_06July2021.pdf

[2] https://www.startupindia.gov.in/content/sih/en/facilitator.html 

 

Image Credits: Photo by Med Badr Chemmaoui on Unsplash

The objective of innovation and promoting patent filing by startups is simple, i.e., a patent is directly related to innovation and contributes to significant economic growth for a startup. The upsurge of startups has also led to massive employment generation, with over 5,60,000 jobs in 2016-2020. Hence, it is imperative to have an enabling ecosystem where entrepreneurs are encouraged to file more IPs seamlessly.

Related Posts

POST A COMMENT

A Shot in the Arm for Innovation and IP: Budget 2022

The past two years have brought to the forefront the paramount importance of technology. The Economic Survey 2021-22 was a precursor to the Union Budget that built a foundation for a wave of innovations by incorporating a tech-forward and futuristic outlook across various relevant sectors. Drone technology, artificial intelligence, blockchain and the issuance of a Central Backed Digital Currency (“CBDC”) were a few of the issues that were highlighted.

The Finance Minister mentioned the word ‘Atma Nirbhar’ approximately six (6) times in her address. The vision of self-reliance, or ‘Atma Nirbhar’, has been a rallying call for the government in the last few years, hence manifesting the importance of this philosophy.

Green India

 
There has been increased awareness of both the ill effects of climate change as well as the various pollutants that are damaging the environment. The Union Budget took note of this with announcements for the implementation of Energy Service Models (ESCO) as well as the development of business models for batteries or energy as a service. The Finance Ministers’ mention of a battery swapping policy as well as interoperability standards for charging electric vehicles indicates an urgency for innovation in this space to reduce the carbon footprint. With an increased focus on electronic vehicles, the future is indeed bright for battery makers to bring forth further innovation to reduce costs for battery replacement as well as tackle the inadequacy of public charging infrastructure. Such innovation will lead to an increase in patented technology in the field of green energy. In addition, the impetus given through the additional allocation towards solar equipment manufacturing and the issuance of green bonds for boosting green infrastructure are big steps towards a green economy driven by technological enablement.


The 5G connection

 

The much-anticipated 5G spectrum auctions are set to be conducted in 2022 to facilitate the rollout of 5G mobile services. As a part of the PLI Scheme, a designed-led manufacturing framework is proposed to be launched to build a strong 5G ecosystem in the country. The technology will be a catalyst to innovation in several sectors such as healthcare, automotive, research, defence, manufacturing etc. Additionally, 5G and R&D shall prove to be a stepping stone into the new era of businesses being more appreciative of the complexities and importance of the IP regime to gain maximum benefits amidst a growing tech-friendly and driven market.

Wearables

 

With the announcement of a graded rate structure of the customs duty rates, the focus on ‘Atma Nirbhar Bharat’ is very much prevalent to facilitate further domestic manufacturing of wearables. This can be an impetus for further innovation from both existing domestic companies as well as the genesis of newer ones. Wearables have garnered a lot of attention in recent times and there is a lot of scope for newer players in this field with unique trademarks whose innovations will give rise to numerous patents.

Eye in the Sky

 

Climate change has adversely impacted the farming sector and the need of the hour is sustainable land management and a change is required in the manner of farming. The announcement of the ‘Drone Shakti’ scheme as well as the use of drones to assist in spraying of insecticides and nutrients and for crop assessment heralds the advent of e-agriculture which is important for an agriculture-based country like India. A drone can assist farmers with crop production, early warning systems and disaster risk reduction. Additionally, the drones–as–a–service (DRaaS) model will act as a fillip for startups in this nascent sphere of activity and increase innovation and adoption of drone technology for e-agriculture in the coming years.

Blockchain Technology

 

Months of uncertainty ended with the announcement of the CBDC, which will act as an impetus to the digital economy. The CBDC will be based on blockchain technology, thus also welcoming the use of blockchain technology in the future as a building block for the digital economy. The introduction of the digital yuan in China heralded the incorporation of new mechanisms to adopt CBDC’s among apps and providers of payment solutions. The government intends to launch the digital rupee from 2022- 2023 and therefore, this year will be a watershed moment for the adoption of blockchain technology.

The advent of the blockchain will increase its utility in various other sectors as well such as sports, NFT’s, smart contracts, etc.

 

Edtech

 

Education has moved from the erstwhile hallowed classrooms to the living room in the last two years. Classrooms became virtual and education too was touched by the Digital India initiatives. Into this space came EdTech companies with tie-ups and a range of courses to upskill not only students but professionals as well. The Union Budget proposed the launch of a digital university to enable access to education to all at one’s doorstep. Additionally, the Budget announced a skill-development initiative in a digital ecosystem called the DESH stack e portal. The use of technology in the education sector will not only increase, but we will see further innovation in both the medium of dissemination of information as well as the advent of artificial intelligence-based learning tools and the issuance of certificates via the use of blockchain technology to name a few changes one could see. With each platform wanting to garner the largest consumer base, the protection of intellectual property will be at the forefront of this sector.

HealthTech

 

The pandemic has not just intensified the need for health-related technological innovation, but the digital support offered by AI and automation during the crucial period has also punctuated the future of HealthTech with burgeoning prospects. This has been acknowledged in the budget with the introduction of an open platform for the National Digital Health Ecosystem consisting of digital registries of health providers and health facilities, a unique health identity, consent framework, and universal access to health facilities. This would legitimize, increase access as well as boost consumer confidence in the sector’s offerings, thus leading to more investment and more innovation. Moreover, the recognition of mental health issues, as well as the support system, proposed to be established to address them in the form of a ‘National Tele Mental Health Programme’ and Tele-mental health centres of excellence makes this discipline, which was hitherto marred by discomfiture, lucrative.

The Future

 

With path-breaking changes in both the technology at use as well as the improvements in the current technology at use, we will see a huge number of intellectual properties being created. The renewed focus on ‘Atma Nirbhar’ will encourage startups to push forward with innovation in varied fields that will optimise a market ecosystem that deploys the use of drones, e-agriculture, EdTech, blockchain etc.

There has always been a direct correlation between innovation and the protection of intellectual property. The views of John Locke through the Labour Theory and Hegel through the Personality Theory are of utmost relevance considering this forward-looking union budget. Intellectual Property and its protection will not only reward the creator for their work, but will also protect their personality in the work, resulting in continued innovation.

With the stage set for some landmark innovations in the upcoming years, and various actors waiting in the wings, intellectual property and the challenges of enforcement will take centre stage.

References:

Image Credits: Photo by kiquebg from Pixabay 

There has always been a direct correlation between innovation and the protection of intellectual property. With the stage set for some landmark innovations in the upcoming years, and various actors waiting in the wings, intellectual property and the challenges of enforcement will take centre stage.

Related Posts

POST A COMMENT

The Orphan Treatment of Orphan Drugs

  • 10 March, 2020
  • Rohit Kumar

“Orphan drugs” are pharmaceutical products used for the diagnosis, prevention or treatment of rare diseases. The definition of rare diseases varies from country to country. e.g. in the United States, a rare disease is defined as a condition that affects fewer than 200,000 people whereas in Europe it is less than one person per 2,000. Nevertheless, it is generally accepted that a disease having fewer than 100 patients per 100,000 population is a rare disease. It is assessed that internationally, around 6000 to 8000 rare diseases are in existence with new ones being discovered quite regularly. Moreover, it is estimated that there are approx. 4000-5000 rare diseases for which there are no treatments available.

In India, the rare disease and disorder population is between 72 to 96 million and up to 450 rare diseases have been recognized[i]. Because rare diseases affect a very small population of individuals and the profit potential is poor, pharmaceutical companies often do not take much interest in developing molecules for the treatment of these diseases. The shelving of these molecules and ignorance of the small patient pool gave rise to the concept of ‘pharmaceutical orphans.’

Orphan drugs and policies in India

In India, almost all orphan drugs are imported. The primary reason being lack of infrastructure, high cost and time, no cost of return, and no clear policy on orphan drugs and rare diseases. Although the disquiet around the development of orphan drugs resulted in an Orphan Drugs Act as early as 1983 in the United States, India has lagged behind for decades with the first ‘National Policy on Treatment of Rare Diseases’ coming out as late as 2017. Further, there are no epidemiological data, no figures on the burden of rare diseases and morbidity and mortality associated with them. In fact, until last year, India did not even have a definition of ‘orphan drugs.’ The new Drugs & Clinical Trial Rules 2019 finally defined it as “a drug intended to treat a condition which affects not more than five lakh persons in India”.

Drugs and Clinical Trials Rules, 2019:

In March 2019 Central Drugs Standard Control Organization (CDSCO) released New Drugs and Clinical Trials Rules, 2019. As per these new guidelines, local clinical trials (data) may not be required for orphan drugs permitted to be imported for sale or distribution. Further, the Expeditious Review Process could be sought for approval of a new drug after clinical development (applicable for Orphan Drugs). Furthermore, no fee shall be chargeable in respect of an application for conduct of clinical trial for orphan drugs.

New Drug Exemption Rule, 2019:

Further encouragement for orphan drug development could be seen in the New Drug Exemption rule released in January 2019. Under this rule, all new drugs patented in India were to be exempted from price control for five years. The five-year window starts from the date when the manufacturer starts commercial marketing in India. The Government has also exempted such drugs from price control that are used for the treatment of a disease that qualifies as Orphan Disease in the opinion of the Ministry of Health and Family Welfare (“Orphan Drug Exemption”). However, these rules are not devoid of shortcomings which may bring about issues during implementation. The requirement of the use of the exemption for five years from the “date of commencement of commercial marketing by the manufacturer in the country” is ambiguous as there is no legal definition of what amounts to ‘commercial or business marketing’ in India. The second issue that needs clarification is the exemption from price control available to ‘manufacturers’ of the patented new drug rather than the ‘drug’ itself. As a result, multiple manufacturers, importers, marketers of the same drug would seek to benefit from the exemption which could pose a challenge when the date of commercial marketing of different manufacturers would vary from each other. The third most important issue with absolute market exclusivity is that cost of orphan drugs per treatment episode could be extremely high.

Rare diseases as a public health issue

When a person contracts a rare disease, it not only puts an emotional strain on him/her, it also puts a heavy financial strain on his family. In addition to this, the unavailability of proper treatment remains a big challenge. Internationally, there are very few pharmaceutical companies, which are actively working on orphan drugs or rare diseases. And in India, the problem is more worrisome because there are hardly any pharmaceutical companies engaged in the development of these drugs. In addition, lack of awareness among the medical fraternity, lack of epidemiological data, lack of dedicated healthcare policies, schemes, and diagnostic facilities are some of the major hurdles that Indian pharmaceutical companies have to deal with.

The new drug exemption policy along with the CDSCO released new Drugs and Clinical Trials Rules, 2019 could provide the necessary impetus to the research and development of orphan drugs in India. However, there are still major strides that could be taken in line with other international governments which provide incentives ranging from tax credits to priority review vouchers in addition to fast track approvals by regulatory agencies, market exclusivity, fee reductions for regulatory approvals. Nevertheless, incentives should be balanced so as not to encourage pharmaceutical companies to exploit them to manufacture drugs for sub-categories of existing diseases to maximize profits by making existing drugs outrageously costly and inaccessible.

Hence, a more robust policy is imperative to devise a multipronged and multisectoral approach to build India’s capacity to tackle rare diseases comprehensively. Particularly, in areas of – obtaining requisite funding, creation of an extensive database, for cost estimation of the treatment; research and development for the treatment and diagnostic modalities, including through international/regional collaborations; training of health care providers; awareness generation; creating a conducive environment for drug development and measures for ensuring affordability of treatment, etc. With the necessary government action, hopefully, the orphan treatment of orphan drugs will minimize to give some respite to the patients.

References

[i] https://mohfw.gov.in/sites/default/files/Rare%20Diseases%20Policy%20FINAL.pdf 

Image Credits: freestocks on Unsplash

A more robust policy is imperative to devise a multipronged and multisectoral approach to build India’s capacity to tackle rare diseases comprehensively. 

Related Posts

POST A COMMENT

Developments in the Indian Patent Law in 2019

As per the latest WIPO report, India has emerged as one of the top 10 countries in the ranking of filings of intellectual property applications while showing an increase of 7.5% in the number of patent applications.

The year 2019 saw some drastic widening of the scope and horizons of the patent laws. Various rulings and legislations were laid down making the sector more efficient in its functioning. The Patent Law has been liberalised to a great extent thereby providing a conducive atmosphere for start-ups and other small entities to hit the ground running. Also, the offer of 450 patents for free access to industries by DRDO for commercial exploitation was a shot in the arm.

The legislative developments together with the policies and significant case studies instrumental in widening the ambit of the patent laws are listed hereunder:

LEGISLATIVE AND POLICY DEVELOPMENTS

 

  • Publication of A New List of Scientific Advisors by the Patent Office[i]

 As per the Patent Rules, 2003, a list of Scientific Advisors must be released and updated annually. The list was last updated in 2010 and after nearly a decade, the list was issued in 2019 with 37 new enrolments. The list includes 2 Patent Agents. The duty of these advisors broadly includes guiding the Court and providing reports on questions involving technical substance.

 

  • Bilateral Patent Prosecution Programme[ii]

The Government approved the Bilateral Patent Prosecution Highway Programme between India and Japan. This programme enables accelerated examination of applications as it cuts down on duplication of work. Once a patent is granted in one country, the process of approval gets easier when filed in another country as it is assumed that the application must have gone through the rigorous process of exhaustive searches and technicalities in the previous country thereby enabling speedy disposal of applications. The process becomes much simpler, quicker and economical.

Under this pilot programme, Indian Patent Office can receive patent applications in certain specified technical fields only, like electrical, electronics, computer science, information technology, physics, civil, mechanical, textiles, automobiles and metallurgy, however, Japan Patent Office can receive applications in all fields of technology. This programme is initially restricted to a period of 3 years. If there are no major implemental gaps, this will be highly beneficial to Indian inventors including start-ups and MSMEs.

 Accelerated / expedited examination process

The amended rules include additional categories of applicants who can avail of expedited examination of their patent application. Such categories being small entities/MSME’s, Women applicants, Departments of Government, Institutions owned or controlled by the Government, Institutions wholly or substantially financed by the Government, Government companies; and Applicants of those countries whose patent offices are in an agreement / arrangement with the Indian Patent Office.

Fees and documents for start-ups and small entities

The second proviso to sub-rule (1) of Rule 7 has been substituted to clarify that start- ups and small entities must submit Form 28 along with the documents requiring a discount on the official fee. However, this amendment was merely expository in nature as, in practice, the Patent Office had already mandated the filing of the said form.

Medium of transmission of documents by patent agents

Rule 6(1A) was substituted and now provides that patent agents will have to file duly authenticated documents only via electronic medium. However, any document that is specifically asked to be reported/submitted in original by the Patent Office should be filed within 15 days of such request.

Transmittal and certified copy fee no longer applicable

In order to encourage electronic filing of PCT application, the Rules have been amended by deleting transmittal fees which the applicants were required to pay to the Indian Patent Office earlier. However, if the applications are filed physically then the same transmission fee as prescribed under the principal Patent Rule shall be applicable.

SIGNIFICANT CASE LAWS

  • Nuziveedu Seeds Ltd. And Ors. Vs Monsanto Technology LLC and Ors[iv]

The Hon’ble Supreme Court held that cases involving technical and scientific questions about patentability and exclusion of a patent were to be duly considered and examined at the stage of the final hearing. Expert advice and extensive inputs on technical aspects of a patent were purely unnecessary for granting injunctive relief. In the instant case highly complex question regarding the technical aspects of a patent was involved along with the compliance of a sub-licensing agreement between the plaintiff and the defendant. The patentee had terminated the agreement abruptly and filed for injunction restraining the defendants from using the patent as per the agreement. The single judge bench ordered compliance with the agreement and did not allow injunction. On appeal, the Division bench investigated the technicalities and ruled in favour of the plaintiffs. However, when appealed to the Supreme Court, it held that the judgement by the learned Single judge bench was in order and did not merit any interference.

  • Bayer Corporation v. Union Of India & Ors[v]

The Delhi High Court held that export of patented invention is also included under section 107(A) of the Patents Act, 1970 i.e., Bolar exception (rights granted to a patentee-making, using, constructing, selling and importing of their patented invention). However, the inclusion of ‘export’ needs to be duly regulated through the reasonably related test which shall differ from case to case to ensure that such exception is not misused. The ‘export’ should be reasonably related to research, development and submission of the information for obtaining regulatory approval from the authorities. In the present case, the issue was whether export of patented products for the purpose of research and development amounted to infringement and whether the export fell within the Bolar exception. The concept of patent linkage was extensively discussed. The case was decided in favour of the Respondents and exporting of the patented product for R&D was interpreted to be well within the Bolar exception under Sec 107(A).

  • Natco Pharma Limited v. Bristol Myers Squibb Holdings Ireland Unlimited Company and Others[vi]

The Hon’ble Delhi High Court reiterated the importance of considering the three-element test for the grant of an interim injunction (Prima facie case, the balance of convenience, irreparable injury). Such reiteration was considered essential to regulate the grant of injunction orders, especially in cases of pharmaceutical patent infringement. In the present case the respondents filed a suit seeking an interim injunction restraining the appellants from commercialising and initiating the sale of the appellant’s patented product. The Single Judge bench ordered interim injunction but on appeal, the Hon’ble High Court declared that interim injunction could not be granted merely on peripheral consideration of facts without applying the three-element test of interim injunction.

  • Ferid Allaniv Union of India And Ors[vii]

In this case the Petitioner had filed a patent application for a computer-related invention and the same was rejected. On appeal to the IPAB, the application was again rejected on the grounds of lack of novelty and lack of technological advancement or technical effect. The petitioner further appealed to the High Court of Delhi where the scope of Section 3(k) of The Indian Patent Act, 1970 and the term ‘technical effect’ was examined. The Court held that there existed no absolute bar on the patentability of computer-related inventions. However, it was subject to technical effect and advancement derived via such invention. The court directed for a re-examination of the patent application in accordance with the law.

  • Communication Components Antenna Inc. v. Ace Technologies Corp and Ors.[viii]

This landmark judgement emphasised on the necessity of a wide claim. It was further clarified that claims granted in India would take precedence over claims granted in a foreign jurisdiction while determining an infringement suit. In the present case the plaintiff sought permanent injunction claiming infringement of one of its patents that he had acquired in India. The product was granted a corresponding patent in the US. When a conflict over infringement of the Indian claim came up, the High court strictly stated that an infringement in such claim would be strictly confined and viewed in accordance with the claims granted in India and not the foreign claims although they might persist.

  • Pharmacyclics LLC v. Union of India & Ors.[ix]

In this landmark case, the Delhi High Court issued wide guidelines on post grant opposition. In this instance, the court allowed evidence to be produced considering the dates for the final hearing were fixed and evidence was filed prior to the hearing which was eventually adjourned at the request of the party. Further, there existed a reasonable time for the parties to respond to the filings previously made. The Hon’ble court while disposing of the matter laid down certain guidelines to be duly complied with in cases dealing with post grant oppositions. These included the filing of initial pleadings by the parties by relying on various documents and expert testimonies. Moreover, Rule 59 was to be strictly adhered to. Further evidence was not permissible once the material was transmitted to the opposition board. In addition, further evidence would only be entertained prior to the issuance of hearing under Rule 60. Moreover, publicly available documents can be provided 5 days prior to the hearing by highlighting the relevant portions. Also, the authenticity of the document is important.

 

 

References 

[i] http://ipindia.nic.in/writereaddata/Portal/Images/pdf/List_of_Scientific_Advisers_as_on_6Sept2019.pdf

[ii] https://dipp.gov.in/sites/default/files/PressBrief_Japan_21November2019.pdf

[iii] http://www.ipindia.nic.in/writereaddata/Portal/News/569_1_The_Patent_Amendment_Rules_2019_.pdf

[iv] CIVIL APPEAL NOS.4616¬4617 OF 2018

[v] LPA No.359/2017, CM Nos.17922/2017, 20160/2017, 33383-84/2017, 47167/2017 & 660/2018

[vi] FAO(OS) (COMM) 160/2019 and C.M.No.31063/2019

[vii] W.P.(C) 7/2014 & CM APPL. 40736/2019

[viii] CS (Comm) No. 1222/2018

[ix] CM APPL.54097/2019

 

 

Image Credits: Paul Skorupskas on Unsplash

The year 2019 saw some drastic widening of the scope and horizons of the patent laws. Various rulings and legislations were laid down making the sector more efficient in its functioning. The Patent Law has been liberalised to a great extent thereby providing a conducive atmosphere for start-ups and other small entities to hit the ground running.

Related Posts

POST A COMMENT

Development in Indian Copyrights Law in 2019

  • February 19, 2020
  • Avilash Kumbhar

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

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

LEGISLATIVE DEVELOPMENTS

 

  1. Copyright (Amendment) Rules 2019

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

  1. Cinematograph (Amendment) Act, 2019

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

Notable Case Laws

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

CONCLUSION

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

References 

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

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

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

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

[5] CS(COMM) 724/2017

[6] FAO.No.191 OF 2019

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

[8] CS (COMM) 1329/2016

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

[10] Original Side Appeal No. 22 of 2017

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


Image Credits: Noor Younis on Unsplash

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

Related Posts

POST A COMMENT

Development in Indian Trademark Law in 2019

  • February 18, 2020
  • Avilash Kumbhar

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

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

 

LEGISLATIVE & POLICY DEVELOPMENTS

 

  1. National E-Commerce Policy [Draft]

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

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

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

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

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

 

NOTABLE CASE LAWS

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

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

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

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

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

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

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

 

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

 

References 

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

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

[3]CS(COMM) 569/2017

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

[5] CM (M) 1059/2018

 

 

Image Credits: Lukas Blazek on Unsplash 

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

Related Posts

POST A COMMENT