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

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

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

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

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

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

Trade Marks Act, 1999

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

Copyright Act, 1957

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

Cinematograph Act, 1952

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

Protection of Plant Varieties and Farmers’ Rights Act, 2001

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

Patents Act, 1970

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

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

CONCLUSION

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

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

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

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

Image Credits: Photo by freestocks on Unsplash

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2020 In Rewind: Trademarks In India

  • 18 February, 2021
  • Archana Bhageerathi

The entrepreneurship space has seen major evolution with conducive policies and enabling technological environment in the past few years. Specifically, the digital landscape has levelled up in traffic and capabilities owing to the pandemic last year and everything moving online. With that, the intellectual property and technology laws are grappling to catch up to the developing situation and adequately protect the rights of the stakeholders in the sector. Until that happens effectively, the courts are taking a pro-active step to align the developments with the legal intentions and business requirements. With this in view, we witnessed some interesting case updates that took place in the field of trademarks and domain name disputes in the past year. Here is a brief of the key trademark-related updates in India that took place in the year 2020.

I.LEGISLATIVE DEVELOPMENTS

There was no significant legislative development in the trademark practice, apart from the Trademark Registry’s decision to go completely virtual with respect to prosecution hearings. The Trademark Registry and the Intellectual Property Appellate Board (IPAB) much like all the judicial and quasi-judicial bodies across the country, for the time being, has done away with the physical mode of hearing, and it is taking up matters via video conference.

II.SIGNIFICANT CASE LAWS

Here is a recap of key cases within the domain:

Amazon Seller Services Pvt. Ltd. & Ors. v. Amway India Enterprises Pvt. Ltd. & Ors. FAO(OS) 133/2019 |31-01-2020

In this case, the division bench of the Delhi High Court had set aside the lower court’s order restraining Amazon from allowing the sale of products of Amway India, a Direct Selling Entity, from its platform. Amway India filed a trademark infringement suit against Amazon on the ground that the e-commerce giant is liable as an intermediary for allowing and continuing to allow Amway India’s products (which it alleged were counterfeited products) to be listed on the former’s website by one of Amway’s direct seller. The lower court found Amazon liable for trademark infringement for non-observance of Direct Selling Guidelines and failing to demonstrate due diligence.   

The Division bench while setting aside the lower court’s order ruled that Direct Selling Guidelines are merely advisory to State Governments and Union Territories and they are not binding laws, and hence, it cannot be enforced against e-commerce intermediary. The Court further refuted the claim of trademark infringement on the ground that India follows the principle of international exhaustion of Trademarks, meaning once a good is lawfully acquired by the Direct Seller, the rights over the said good (including right re-sell) vested in the Direct Seller. Hence, Amazon as well as the seller were saved under the second sale exception to trademark infringement under section 30 (4) of the Trademarks Act, 1999.

Imagine Marketing Pvt. Ltd. V. Exotic Mile (CS(COMM) 519/2019) | 21-01-2020

The Plaintiff, commonly known in the market as “BoAt”, consumer electronics brand, sought an injunction against the Defendants from using the mark “BOULT” for the manufacture and sale of electronic audio gadgets mainly earphone, headphones, etc.

The Delhi High Court (single bench) had passed an interim injunction restraining the Defendant from using the mark “BOULT” ruling that it was deceptively similar to “BoAt” and that even their taglines were similar to each other. However, the Division Bench ordered a stay on the injunction order by stating that “prima facie there is no similarity visually or phonetically between the original Plaintiff and the Defendant.”

The matter is now evenly poised, and we await to see if the Division Bench would have a different take on its opinion after hearing the arguments.

Reckitt Benckiser (India) Pvt. Ltd v. Mohit Petrochemicals Pvt. Ltd. CS(COMM)No.141/2020 & I.A.Nos.4034-37/2020 | 28-05-2020

In an infringement suit filed by Reckitt Benckiser, the Delhi High Court while imposing Rupees One Lakh on Mohit Pharmaceuticals, permanently restrained them from selling hand sanitizers under the brand name “Devtol” which was considered deceptively similar to the Plaintiff’s well-known trademark “Dettol”.

M/s ITC Limited v. Nestle India Limited 2020 SCC OnLine Mad 1158 | 10-06-2020

ITC had launched its Sunfeast Yippie Noodles in two varieties – one of which was “Magic Masala”. Defendant i.e., Nestle had adopted the name “Magical Masala” for one of their instant noodle product. Since Plaintiff had not registered the expression “Magic Masala” as a trademark, it filed a passing-off suit against Defendant. Defendant affirmed that they were using the term “Magical Masala” as a flavour descriptor. The Defendants further contended that “Magic” and “Masala” were the two most common terms that were used in the culinary industry and therefore could not be monopolized.

The High Court of Madras held that the expressions “Magic” and “Masala” were common terms that were used on a day-to-day basis in the Indian food industry and Indian culinary, therefore the same could not be monopolized by the Plaintiff or the Defendant. The court further opined that even Plaintiff had used the term “Magic Masala” as a flavour descriptor rather than a trademark or a sub-brand. Therefore, the court concluded that ITC had used the term “Magic Masala” in a laudatory manner and the same could not be monopolized.  

Hindustan Unilever v. Endurance Domain and Ors. 2020 SCC Online Bom 809 | 12-06-2020

In this case, Plaintiff approached the Bombay High Court seeking to suspend domain names with Plaintiff’s HUL trademarks which were registered under the authority of Defendant, a domain name registrant. Even though the Court was quick to grant relief to the defendant, it opined that Domain name registrants were neither equipped nor authorized to indefinitely suspend domain names once registered, since there was no human element involved to oversee the legitimacy of domain names.

The Court ruled that deciding what should or should not be suspended (or blocked) is a serious judicial function that could be arrived at only by assessing and balancing rival merits. Moreover, the Court observed that anyone can use a VPN to bypass a proxy server or firewall and have access to such blocked websites by masking the originating country IP of the user, hence, such ‘access blocking’ only offers a hollow and faux sense of safety to the Registrant. Besides, holding the Registrar liable if he is unable to effectively block access would expose the Registrar to the constant threat of contempt proceedings.

International Society for Krishna Consciousness (ISKON) v. Iskon Apparel Pvt. Ltd and Ors. 2020 SCC Online Bom 729 | 26-06-2020

In a trademark infringement and passing off suit instituted against the Defendant’s use of ISKON APPAREL, the Court while restricting Defendant from using the same ruled that ISKON is a well-known mark. This was a follow-up to Plaintiff’s pleading that the trademark “ISKON” be declared a well-known trademark. Plaintiff submitted that it was the first to create the name in the year 1996 in New York and over time it has created a global presence which is inclusive of India and the brand was not restricted to only one particular good or service but was into the diverse range of goods and services. The court after scrutinizing the evidence submitted by Plaintiff ruled that the brand name “ISKON” fell under the ambit of a well-known mark under the Trademark Acts of 1999.

Louis Vuitton Malletier vs Futuretimes Technology India Pvt Ltd CS(COMM) 222/2020 | 03-07-2020

Louis Vuitton had filed a civil suit against the Defendants, an e-commerce platform named Club Factory to restrain the sale of any counterfeit goods comprising their trademark. The Plaintiff prayed that the Defendants be restrained from selling any product with Plaintiff’s trademark, including “LOUIS VUITTON”, “LV Logo”, Toile monogram pattern, Damier pattern and/or LV flower pattern, or any other similar pattern that would constitute an infringement of the Plaintiff’s registered marks. The Delhi High Court, acting on it, issued summon notice to the Defendants. We wait to see if this case takes the same route as the case of Amazon Seller Services Pvt. Ltd. & Ors. v. Amway India Enterprises Pvt. Ltd. & Ors. FAO(OS) 133/2019, to base the outcome on the evidence of counterfeited products or if it holds Club Factory liable in case the Defendant fails to demonstrate the minimum standard of due diligence as required from an intermediary. 

Arudra Engineers Pvt. Ltd. v. Pathanjali Ayurved Ltd. & Anr. 2020 SCC OnLine Mad 1503 | 17-07-2020

Defendant, Patanjali, was restrained from using the word “Coronil” to market its product i.e., immunity booster tablets which Defendant claimed to have passed the test of clinical trials to cure coronavirus. The Court held that since Plaintiff had acquired registration of the trademark ‘CORONIL- 92 B’ in 1993 and had been using the same in relation to Acid inhibitor for industrial cleaning, Defendant’s action amounted to infringement under Section 29(4) of Trademarks Act, 1999. The court also opined that Patanjali’s use of the word ‘Coronil’ could deceive the consumers with respect to the likelihood of curing coronavirus through the tablet. Hence, considering the reputation of Plaintiff’s registered trademark and the larger public interest, the Court restrained Plaintiff from marketing its product under the name “Coronil”.  

Plex, Inc v. Zee Entertainment Enterprises Limited 2020 SCC OnLine Bom 989 | 01-10-2020

The Bombay High Court refused to grant an interim injunction as sought by Plaintiff (Plex) against ZEEPLEX, a pay-per-view service launched by Zee. The Court reasoned that Plaintiff’s case of passing off failed the trinity test since it was unable to establish any reputation, the similarity in services, and anticipated injury due to the adoption and use of ZEEPLEX, while Defendant had a long-standing reputation in India.    

Delhivery Private Ltd. v. Treasure Vase Ventures Private Ltd.  CS (COMM) 217/2020 | 12/10/2020

In an infringement suit by the logistics company “Delhivery” against the user of the mark “Deliver-E” for identical services, Delhi High Court held that Delhivery was a generic name describing the kind of service it provided i.e., delivery, and hence, it did not have the characteristics of an enforceable trademark.

Anil Rathi v. Shri Sharma Steeltech CS(COMM) 654/2019 | 23-10-2020

The Delhi High Court ruled that the use of the personal name, surname, or family name under Section 35 of Trademarks Act, 1999 was limited to personal use only and such rights did not extend to granting licenses to third parties for commercial use. In the instant case, Plaintiff had approached the Delhi High Court seeking an injunction against the use of the surname “RATHI” as a trademark by Defendant. The Court observed that there was a family arrangement in place which regulated the use of the family mark, and the act of Defendant of licensing the mark to third parties was in clear violation of the said arrangement, making Defendant liable for trademark infringement.

The PS5 Case Trademark Squatting Case: TM Opposition by Sony Interactive Entertainment Inc [Opposition No. 1040632] against TM Application PS5 [Application No. 4332863] filed in Class 28 by Hitesh Aswani

Sony’s launch of its latest edition of gaming console Play Station 5 of PS5 in India was halted when it discovered that an infamous trademark squatter named Hitesh Aswani had surreptitiously filed a trademark application for “PS5” on October 29, 2020, for the identical specification of goods that were covered under Sony’s PS4 trademark registration bearing application no. 2481440. Sony, understandably, filed an opposition against the said trademark, and the Applicant withdrew his application.

Sony filed its earliest trademark application for the mark “PS5” in Jamaica before Hitesh Aswani on October 03, 2019. Sony used the Jamaican application as the basic application to file international registration through the Madrid Protocol, claiming priority of October 03, 2019.

This was a textbook case of trademark squatting. Sony had priority over the squatter, and it is a settled position of law that priority trumps everything else as per law in India. Further, the mala fide intention of the squatter was evident from the almost verbatim replication of the specification of goods covered under Sony’s PS4 trademark registration.

This case reached its logical conclusion when Hitesh Aswani withdrew his application as well as the opposition which paved the way for Sony to register its mark in India and proceed to launch the product in India.

Sassoon Fab International Pvt Ltd. v. Sanjay Garg & Ors. [IPAB] ORA/171/2020/TM/DEL | 04-12-2020

In one of the most noteworthy cases that came up before the Intellectual Property Appellate Board (IPAB), the registration of the mark ‘N95’ bearing App No. 4487559 registered in Class 10 in favour of Mr. Sanjay Garg was stayed. IPAB observed that the N95 was prima facie a generic term that was used to provide the quality of the masks hence it was hit by Section 9 of the Act. Since Plaintiff had filed a rectification petition against the registration of the said mark before filing the instant petition, IPAB deemed it necessary to stay the operation of the Registration until the Rectification Application was finally decided and disposed of.     

Gujarat Cooperative Milk Marketing Federation Ltd. & Anr vs. Amul Franchise.in & Ors CS(Comm) 350/2020

This case concerned fraudulent registration of multiple websites with the term “AMUL” as prefix/suffix. In this case, the Delhi High Court directed the Registrar of Domains to suspend/block domain names containing the term “Amul”. The Court also restrained the Registrar from the further offering for sale of such domain names so ordered to be blocked.

The Delhi High Court rejected the Registrar’s contention that due to lack of adequate technology it cannot ensure that these websites containing ‘AMUL’ therein would not be made available for sale and suggested that the Registrar could utilize the same filter it employs to ensure that websites under obscene and/or words denoting illegality are not available for sale. This decision is in stark contrast with an earlier single judge bench order of the Bombay High Court dated June 12, 2020 – Hindustan Unilever Limited v. Endurance Domains Technology LLP, 2020 SCC OnLine Bom 809, wherein it held that Domain name registrants are neither equipped nor authorized to indefinitely suspend domain names once registered, since there is no human element involved to oversee the legitimacy of domain names.

CONCLUSION

Despite the majority of the judicial pronouncements being related to COVID-19 and lockdowns, 2020 will be the year that the Trademark Authority tightened its grip on trademark squatting, a way to curb the sales of counterfeit products on e-commerce platforms. Also, the IPAB’s order to put a stay on the registration of “N95” for medical equipment and apparatus exhibited the dismal examination standards at the Trademarks Registry since the term ‘N95’ is generic to medical products and no amount of use can justify the registration. We witnessed a handful of contrasting rulings in the year 2020 and a couple of disputes are lined up to be adjudicated in the year 2021. These are a few topics that are revisited time and again to not only protect the proprietors of the registered trademarks but also make sure that no defendant is being harassed unnecessarily by registered proprietors.  

 

Image Credits: Photo by Riccardo Annandale on Unsplash

Despite the majority of the judicial pronouncements being related to COVID-19 and lockdowns, 2020 will be the year that the Trademark Authority tightened its grip on trademark squatting, a way to curb the sales of counterfeit products on e-commerce platforms. 

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