Rin v. Tide I: What is the Law?

SpicyIP Wishes all its Readers a Safe n Happy Holi! May Rin and Tide become friends this Holi! (Wouldn't it be anti-competitive then?)

(The conclusions originally arrived at in this post have been slightly altered after a bit of deliberation)

In my last post, I had discussed in brief the recent advertisement for Hindustan Unilever’s detergent brand "Rin", in which a rival brand "Tide" figures prominently. Quite a few comments to that post referred to the Horlicks v. Complan judgment of the Delhi High Court. However, a more recent decision of the Delhi HC on the issue of comparative advertisement is available, namely the one delivered in the case of Dabur India v. Colortek Meghalaya (February 2010).

In this judgment, it was the case of the Appellant Dabur that its mosquito repellent brand “Odomos” was disparaged by an ad of the respondent Colortek which owned the rival brand “Good Knight”. The Division Bench of the Delhi High Court affirmed the Single Judge’s decision that there was no disparagement of Odomos in the impugned ad. Consequently, no injunction was granted against the respondent Colortek. To support its decision, the Court referred to a host of Supreme Court decisions on various aspects of the issue.

The Court first discussed the limits of “commercial speech”, as set out by the Supreme Court in Tata Press v. MTNL (1995); according to the Supreme Court, “commercial speech” is guaranteed as part of freedom of speech under Article 19(1)(a) of the Constitution. Although, the Supreme Court in that case did not define “commercial speech”, it was stated that advertisement would fall under one of the species of such speech.

It was observed that dissemination of information about a particular product was necessary since it enabled the public to evaluate its options. The Supreme Court in its turn referred to the US decision of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council (1975) and said that it is almost settled law in the United States that though "commercial speech" is entitled to the First Amendment protection, the Government was completely free to recall “commercial speech" which is false, misleading, unfair, deceptive and which proposes illegal transactions.

In another case of Colgate v. Hindustan Lever (1999), the Court explained that although a seller has the latitude to represent his product in such a manner that he attracts more customers than he normally would have, such latitude would translate into description and “reasonable assertion” of the product, but not to misrepresentation. In other words, factual representations are perfectly legitimate.

The Apex Court went a step further to state that “commendatory expressions” are not dealt with as serious representations of fact. (On SpicyIP, we have dealt with “commendatory expressions” as “puffing”. Mihir’s brilliant post on the relation between commercial disparagement and puffing is a must read)

When the SC says that “commendatory expressions” are not dealt with as serious representations of fact, it does not mean that such representations are untrue or misleading. On the contrary, what it means is that such representations cannot be taken seriously and that there is no obligation on the part of the seller to the customer with regard to the true quality, rather standing of goods merely because the seller has resorted to puffing.

To support this, the Apex Court relied on a rule of civil law, "simplex commendatio non obligat" , which means simple commendation can only be regarded as a mere invitation to a customer without any obligation as regards the quality of goods. In other words, every seller is entitled to call his goods “world’s best”, “Indian’s no.1”, “world-class quality” and so on.

However, the Supreme Court also cautioned that these principles are by no means conclusive since, by and large, cases of puffing are borderline cases, and that there exists a very thin line which separates puffing from falsehood.

In a nutshell, although commercial speech is available under the Indian Constitution to every seller, if the advertisement is false, unfair, misleading or deceptive, the seller is not entitled to seek protection behind “commercial speech”.

Having referred to the SC decisions, the Delhi High Court then referred to its earlier Pepsi v.Cola decision (2003), where it held that although a seller is entitled to glorify his product, in the process, he is not to denigrate or disparage a rival’s product.

The Court further cited Halsbury which states thus:

"It is actionable when the words go beyond a mere puff and constitute untrue statements of fact about a rival’s product."

The Court also cited its decision in a case of comparative advertising involving Dabur and Wipro, where it held as follows:

“It is one thing to say that the defendant's product is better than that of the plaintiff and it is another thing to say that the plaintiff's product is inferior to that of the defendant."

It is probably a corollarial conclusion wherein the seller is entitled to say he is better than the rest of his competition, and therefore, he is entitled to claim that he is better than a particular competitor as well.

Summing up these decisions, the Court laid down the following three-step test:
1. What is the intention behind the advertisement as deciphered from the storyline and the message ostensibly sought to be conveyed
2. Is the manner of advertisement or comparison by and large truthful or does it falsely denigrate or disparage the rival’s product?
3. Finally, does the ad have the overall effect of promoting the seller’s product or showing the rival in poor light?

This particular decision of the Delhi High Court is very comprehensive because not only does it sum up the position of the law citing various sources, but also is progressive in its approach for it recognises the impact of the electronic medium. This is reflected in its observation that since the reach and influence of the medium is phenomenal, the advertiser has to per force walk a tightrope. He has to constantly ask himself if the ad runs the risk of having the effect, intended or unintended, of disparaging the rival’s product.

The Court did not stop here, but went further and said:

“we feel that notwithstanding the impact that a telecast may have, since commercial speech is protected and an advertisement is commercial speech, an advertiser must be given enough room to play around in (the grey areas) in the advertisement brought out by it. A plaintiff (such as the Appellant before us) ought not to be hyper-sensitive as brought out in Dabur India. This is because market forces, the economic climate, the nature and quality of a product would ultimately be the deciding factors for a consumer to make a choice. It is possible that aggressive or catchy advertising may cause a partial or temporary damage to the plaintiff, but ultimately the consumer would be the final adjudicator to decide what is best for him or her.”

This observation in a way balances interests of both the seller and the rival, and is of critical importance since it acknowledges market realities, which is a pleasant change for Indian Courts (One hopes that someday a similar sentiment will be adopted in “hardcore” IP matters).

More importantly, the underpinning of this observation is again the good of the consuming public (somehow “consuming public” sounds more socialist and politically correct than “customer”...).

Applying the above-stated principles to the facts of the Rin v. Tide controversy, one must assess and analyse the Rin advertisement objectively sans the mischievous light in which the media tends to portray such ads (oh yes, my last post too could be accused of it) and the vicarious pleasure we derive as humans in seeing two competitors duke it out in full public glare.

One is unable to take a strong call here on this specific case because the question of “overall effect” of the ad is very subjective and one can never be sure of side-stepping the allegation, rather the minefield of arbitrariness in such cases.

On one hand, we could say that since Rin’s contentions are backed by tests of an independent lab, they are factual. A "balanced" view could say that the ad does not really disparage Tide, it merely has an element of mischief in it. I might even say that all mischief is not necessarily disparagement and I think considering the times we live in, what with reality shows and all, ads can no more be plain Jane representations of facts. Therefore, it could be argued that they are entitled to go beyond that, provided they are within the limits of decorum.

And on the other hand, the reference to Tide and its tagline may be seen as mockery. If, despite Rin's claims being grounded in facts, the primary focus of the advertisement is not facts such as the independent lab's tests, there is a chance that Rin (HUL) could be held liable for disparagement.

In other words, in judging the "overall effect" of the ad, the Court may have to look into the question of what caught or catches the eye or attention of the audience. Is the ticker which mentions independent lab tests prominent enough for the average viewer of imperfect recollection to see and remember? If the answer is a no, it probably establishes disparagement.

Further, Tide could seek to distinguish the Delhi HC's Dabur judgment on factual grounds saying that the reference to the rival brand in that case was not as obvious and as direct as it is in the Rin ad. Consequently, it could be argued that the accommodative view taken by the Court in the Dabur case cannot be the standard applicable for this case.

I realise, that in cases like these, counterpoints are bound to exist and thrive; but the one thing that comes out from such instances is that, as audiences, we still look for our own modern-day versions of the Colosseum and gladiators.

On an entirely unrelated note, if the Supreme Court is willing to acknowledge the existence of “commercial speech” under the Indian Constitution for manufacturers and sellers of products, why should it be any different for service providers, medical and legal? I await a few brickbats...

SpicyIP Tidbits:Bayer Patent Linkage

Updating our readers more on the Bayer patent linkage case ,the Supreme Court on February 26,has refused to stay a Delhi High Court Order ,dated February 10. The said Order had rejected Bayer's attempt to block the Drug Controller General of India from allowing Cipla Ltd. to market its generic version of Nexavar.

A notice has been issued to Cipla and the matter has been listed for further hearing in the third week of April.

We shall keep you updated on this.

INTA’s Annual Meeting

The International Trademark Association is a non-profit membership association. It consists of 5900 trademark owners, professionals and academics, from more than 190 countries. It is dedicated to the support and advancement of trademarks and related intellectual property.

INTA’s 132nd Annual Meeting is the trademark community’s premier event in 2010 for networking, continuing legal education, and committee and client meetings. Skill building workshops, industry breakouts, interactive table topics and trademark law sessions focused on international and U.S topics are being organized. The Meeting will also feature an exhibition hall featuring more than 90 exhibitors debuting new products and services.

Venue: Boston, Massachusetts, USA

Dates: May 22-26

Click here for more details.

Join INTA and stay current on trademark developments and:

· learn best practices to protect trademark rights worldwide
· discover effective strategies for resolving issues from the most respected minds
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· develop new relationships to expand your network of colleagues and clients
· meet face-to-face with clients and associates to advance your business goals
· earn CLE credits and CPD points

Click here for the preliminary programme.

Click here to register for the meeting. Remember, you must first register before you can reserve your hotel room.

Become an INTA member and save US $500 + on Annual Meeting registration. This savings is the difference between the member and non-member registration rate, and when you sign up today you'll immediately gain access to all INTA member benefits, including additional discounted meeting rates that will save your company time and money. Click here for more details.

For more information, contact INTA’s India Representative,
Simran Daryanani at sdaryanani@inta.org or 91-99209 48445

Rin v. Tide: Taking Indian Advertisement to a Different Level... (below the belt?)

“Bold and brash” is in and it’s the new chic(k?). Gone are the days of harmless understated advertisements (Oh I am not complaining at all, maybe I will after a few decades, but not now). If Deepika Chikhalia was the epitome of the “Bharateeya Naari” (thanks to Ramanand Sagar’s “Ramayan”) for “Nirma Super” for what seems like ages ages ago, the new set of female characters in advertisements for detergent powders appear to be scheming conniving “saas-bahu” types straight out of a “K” serial (or “soap”). What’s more, their on-screen children too seem to have inherited their impish traits.

It appears that Rin, that respectable Indian brand, has taken the initiative to alter the rules of the game; if the new Rin advertisement is anything to go by, it certainly seems like Rin or Hindustan Unilever Limited, probably has taken upon itself the responsibility of changing the hitherto "comparatively" demure face of Indian ads. The new ad has got almost everyone I know with salt n pepper hair talking about that mythical ancient time in everybody’s lives (good ‘ol days of course). The ad runs something like this:

There are two women, the first one (let’s call her Woman 1 like they do for extras in movie credits) praises Tide, with a Tide packet featuring prominently. A bus, presumably school bus, arrives with their children. Woman 1’s son steps out of the bus first and his shirt is a dull shade of white. A second boy alights and his shirt is an immaculate white. He moves towards Woman 2 who uses Rin, of course. Woman 2’s son asks Woman 1 “Aunty Kyun Chaunk Gai ?” with the obvious reference to Tide’s caption “Chaunk Gaye !”

Would this ad attract claims of disparagement? The issue of disparagement under Section 36 of the MRTP Act has been discussed earlier on SpicyIP by Kruttika in the context of Britannia successfully restraining Unibic from disparaging its “Good Day” brand of biscuits. In light of this case, Tide seems to have a decent case for trademark infringement unless Rin is able to prove that its depiction was “honest” and based on facts.

Whatever be the case, if these kind of ads are the way of the future, I would like to see how they turn out for certain more interesting products...

We welcome the opinion of our readers on this issue.

For an analysis of the legal position, please read this post.

SpicyIP Tidbits: Bayer appeals to SC in patent linkage case

We have an interesting tibdit via Indu Bhan of the Financial Express:
Bayer has decided to take Cipla to the Supreme the grant of marketing approval under the Drugs and Cosmetics Act (DCA) to Cipla’s drug Sorafenib. A Bench headed by Justice Dalveer Bhandari has posted the matter for hearing today.

You will recall Prakruthi's comprehensive post on the decision of the Division Bench of the Delhi High Court in the matter a fortnight or so ago. The Division Bench had essentially upheld the decision of a Single Judge in the matter, which had ruled in Cipla's favour.

We will keep you posted on developments as and when we hear of them. Meanwhile, I remain surprised that Bayer should persist in their arguments, despite what seems to me to have been a very sound decision the Delhi High Court. For those of you who still haven't had a chance to read the DB judgement, it's available on the High Court website as a download here. More on this in the days to come.

SpicyIP Tidbits: India trendy on IP matters!

Whiling away some time on the internet, I decided to check Google Trends - which ranks countries based on the frequency of the search term entered - for 'patents', 'copyrights', 'ipr', 'intellectual property rights', 'intellectual property laws', etc. To my surprise, I found that, with the exception of one or two search terms, India is far, far ahead of any other country for almost every IP-related search term!
Even for terms where India was not on top, such as 'trademarks', 'innovation', 'invention' - India was within the top few countries where the term has been searched for.

Makes one wonder why there's so much curiousity about IP - relatively and absolutely - in India! Any comments from readers on this?

[Of course, here at Spicy IP, we'd like to believe we've had a role to play ;) ]

Andhaakaanoon: An Obtuse Copyright Exception for the Disabled?

In previous posts, I noted the need for a meaningful copyright exception in favour of the "disabled", a category not necessarily limited to those that are visually impaired, but includes any person unable to enjoy copyrighted works in their "normal" format. Illustratively, legendary scientist Stephen Hawking who suffers from ALP (Amyotrophic Lateral Sclerosis) is unable to read a printed book, but has to have this book digitized and then filtered through special software which reads it out to him.

Many of us had pinned our hopes on the present copyright bill to offer a meaningful exception in this regard--an exception that would set standards for the rest of the world and live upto the vision of our founding fathers (and mothers) for a socially progressive and inclusive India. After having seen the most recent version of the bill, our hopes were shattered.

Better no exception than such an obnoxiously articulated and appallingly onerous provision, craftily engineered for sub-optimal use! I reproduce the provision below so that you may satisfy yourself personally on this facetious drafting effort:

Section 52 (1) (zb): The adaptation, reproduction, issue of copies or communication to the public of any work in a format, including sign language, specially designed only for the use of persons suffering from a visual, aural or other disability that prevents their enjoyment of such work in their normal format.

Section 31B (1): An organization, registered under section 12A of the income tax act, 1961 and working primarily for the benefit of persons with disability, and recognized under chapter X of the persons with disabilities (equal opportunities, protection of rights and full participation) act, 1995, may apply to the Copyright Board, in such form and manner and accompanied by such fee as may be prescribed, for a compulsory license to publish any work in which copyright subsists for the benefit of such persons, in a case to which clause (zb) of subsection (1) of section 52 does not apply, and the Copyright Board shall dispose of such application as expeditiously as possible and endeavor shall be made to dispose off such application within a period of two months from the date of receipt of the application..

(2) The Copyright Board may, upon receiving an application under subsection (1) inquire, or direct such inquiry as it considers necessary, to establish the credentials of the applicant and satisfy itself that the application has been made in good faith.

(3) If the Copyright Board is satisfied, after giving to the owners of rights in the work a reasonable opportunity of being heard and after holding such inquiry as it may deem necessary, that a compulsory license needs to be issued to make the work available to the disabled, it may direct the Registrar of Copyrights to grant to the applicant such a license to publish the work.

(4) Every compulsory license issued under this section shall specify the means and format of publication, the period during which the compulsory license may be exercised and, in the case of issue of copies, the number of copies that may be issued.

Provided that where the Board has issued such a compulsory license, it may on further application and after giving reasonable opportunity to the owner of the rights, extend the period of such compulsory license and allow the issue of more copies as it may deem fit.

(5) The Copyright Board may specify the number of copies that may be published without payment of royalty and the fix the rate of royalty for the remaining copies.

De-coding the Above Provisions:

Essentially, what the above provisions entail is this:

1. Only formats that are specially created to cater to the needs of the disabled (such as Braille) will fall within the section 52 exception.

2. For any other format, one requires a compulsory licence. However, such a licence cannot be applied for by the intended beneficiary, but only by a narrow group of organisations that comply with stringent criteria.

The problems with the above framework may be obvious to anyone sensitive to the present societal structure that disadvantages the disabled at every turn. For one, "special formats" such as Braille cater to a minuscule portion of the total community of those that we chose to label as the "disabled" or the "differently-abled". Even amongst the visually impaired, not every one is familiar with Braille.

Given that we now live in the so called "digital" era, what works best for most of the visually impaired are electronic versions of text that can be read out using a screen reader software (such as Jaws or Orca). Unfortunately, "electronic" versions that are created by scanning printed text will not necessarily qualify as "special formats"..for such electronic versions can be accessed by one and all. Indeed, that precisely is why offerings such as Kindle and Google books are a big commercial hit...for their major market comprises the not so differently-abled.

Article 14 (and 21) of the Indian Constitution and Discrimination

What of those that are not visually impaired, such as Stephen Hawkings, who suffers ALP and cannot access printed formats? An exception in favour of "special formats" will not help him or those that are similarly situated to him in India. Article 14 of our Constitution mandates that the State shall not "discriminate". Isn't this discrimination of the highest order?

Further, the State must appreciate that it has a constitutional duty to provide a decent standard of living to all its citizens; indeed Article 21 has been interpreted several times to include a meaningful right to life. Such a right to life would also include the right to read (particularly re: educational materials) and participate more meaningfully in society.

If an Article 21 action were brought against the State, a progressive court would rule that the State is under a positive mandate to provide "accessible" reading material for the disabled. The State must appreciate that providing a copyright exception to enable the disabled to create accessible works, on their own, will not necessarily comply with the Article 21 mandate. And yet, this is all that the disabled community is asking for now. Viewed in this light, the State's failure to provide for a meaningful copyright exception is an egregious transgression of their constitutional mandate.

An Onerous Compulsory Licensing Provision

The State may of course argue that in respect of "non special" formats, they have doled out a largesse in the form of a compulsory licensing provision. However, a compulsory licensing provision is not as advantageous as a blanket exception in favour of "special formats"..and therefore is no answer to a charge of discrimination. In other words, those that wish to avail of "non special" formats are still disadvantaged compared to their "special format" peers, in that they will have to apply for a compulsory licence, wait for the copyright board to decide and pay royalties as well.

Oops, sorry...they cannot apply for the licence themselves! Rather, only organisations that comply with the following can:

i) An organization, registered under section 12A of the income tax act, 1961 (act 43 of 1961);
ii) Working primarily for the benefit of persons with disability; and
iii) Recognized under chapter X of the persons with disabilities (equal opportunities, protection of rights and full participation) act, 1995 (act 1 of 1996)

Perhaps the total number of Indian organisations that comply with all of the above criteria can be counted at ones finger tips! But the farce does not end here. The body vested with the right to issue compulsory licenses is the Copyright Board, a board that has not done much to merit the confidence of any copyright stakeholder, ever since it began functioning. In fact, it has been dodged with controversy time and again, and most recently with the compulsory licensing wars between radio stations and sound recording majors over royalty rates to be payed by the radio stations.

We blogged on this controversy several times, and even questioned the competence of the current Chairman to head the proceedings. The Board has taken more than 2 years to decide royalty rates in this context...how long will it take to decide the rates per book to be digitized for the disabled, one wonders? And how will long will it take to satisfy itself that the few select organisations that are privileged enough to meet the threshold criteria in section 31 are actually "credible" enough and are submitting the application in "good faith"?

It's a good thing that the time frame for the CL application is capped at 3 months--but don't we all know that all it takes for a de facto extension of this time line is to drag the proceedings to a court of law?

Potential Abuse and Suggested Provision:

The government may perhaps be concerned at the potential abuse of any "disability" related copyright exception, and may have therefore stipulated strict safeguards. But doesn't our law leave the monitoring of infringement to the copyright owner? In much the same way, shouldn't the law also leave the monitoring of any use that allegedly falls outside the scope of the copyright exceptions to the copyright owner? A second best option would be to insist that the service provider who creates "accessible versions" and makes available any copyrighted work for the benefit of the disabled has to take "reasonable measures" to ensure that the intended beneficiary does indeed belong to the disabled community. In any case, even with slip ups and the non detection of uses by folks other than the disabled, how much of a revenue loss to publishers are we really speaking about here?

In a previous post, I suggested a draft provision that had been worked out by a group of us that have come together for this cause as the "Coalition for an Inclusive Society":

Section 52 (1) (za) (i): The making of an accessible version of a copyrighted work or the doing of any other act including reproducing, adapting and making available the copyrighted work or accessible version thereof, with the primary objective of enabling persons with visual, aural or other disabilities to access copyrighted works as flexibly and comfortably as persons without such disabilities.

Provided that if any person wishes to undertake any of the above activities on a for profit basis, it shall pay such remuneration to copyright owners as may be prescribed by the Copyright Board from time to time. For the purpose of determining remuneration, the Copyright Board shall take into consideration the need to ensure that works are accessible and available at prices that are affordable, taking into account disparities of incomes for persons who are disabled.

Provided further that a person doing any of the acts under this section shall take reasonable measures to ensure that the end beneficiary is a person with a disability.

Section 52 (1) (za) (ii): For the purpose of Section 52 (1) (za) (i)"accessible version" means any version or form which gives a disabled person access to the work as flexibly and comfortably as a person without a disability, and shall include, but not be limited to, large print, with different typefaces and sizes all being permitted according to need, Braille, audio recordings, digital copies compatible with screen readers or refreshable Braille and audiovisual works with audio and or text description.

I had also thrown up a more elaborate version of this provision on our collaborative law making platform (CLAM) and received useful inputs from some of you.

Conclusion

Let me end with a question that has been plaguing me for sometime now:

Was the proposed copyright exception in the current Bill craftily engineered for sub optimal use? Was it tailor made to fail? Or like most other special interest influences in IP law making in this country today, does it demonstrate the powerful influence of the publisher lobby? Or is this joke of a provision meant to bring some humour into an otherwise serious statute? Or does it simply reflect a fatal failure to consult the disabled community in a meaningful manner and receive their inputs on whether such a scheme would work for them?

Your guess is as good as mine.

ps: image from here

Seminar on “Music and Copyright”

The seminar is being organized by the Tech-IPR Cell of ILS Law College, Pune.

Date: 6th March 2010

Time: 9:45 am to 6:45 pm

Venue: Laxmi Building (behind Pavilion), ILS Law College, Law College Road, Pune 411004

Registration: 18 – 28 Febraury 2010

Sessions:
“Musical Works” by Prof. Kedarnath Awati, Professor, Music, Dean of Academics, FTII, Pune.
“Copyright in Musical Works: Development of Law” by Mr. Tehemantan Daruwalla, Advocate and Solicitor, Patent and Trademark Agent.
“Copyright in Musical Works: Infringement and Liability” by Dr. Veerendra Tulzapurkar, Senior Counsel, Bombay High Court.
“Sound Recordings of Musical Works” by Mr. Atul Churamani, Vice President, A & R and Publishing, SaReGaMa
“Cambating Piracy” by Mr. Savio D’ Souza, Secretary General, Indian Music Industry

Fees: Rs 300 for students of any Institution, Rs 700 for others.

Payment: At cash counter in Office of ILS Law College.

Cash: 10 am – 1pm; Demand Draft: 10 am – 3:30 pm
Demand Draft in name of “Principal, ILS Law College” payable at Pune.

E- mail: ilsipseminar@gmail.com

Contact Astha Negi, 9860578138, astha.negi@yahoo.com
Samaksh Goyal, 9326740084, samakshgoyal@gmail.com
Jesal Shah, 9970850614, jesal.ils@gmail.com
for further details.

Reforms at the IP Office

Mint has newly launched a blog titled Vanishing Point which will focus “on intellectual property law to analyse issues that come up at the point where law converges with technology”. Srividhya Raghavan who is a Professor of Law at the University of Oklahoma, College of Law and is specializing in intellectual property and C.H Unnikrishnan, a national writer with Mint who has been consistently covering intellectual property news will be writing on the blog.

The first piece on the blog titled “Fanning winds of change at the IP Office” brought out the influential role of the media in reforming the Intellectual Property Office. The national campaign for transparency was carried out by SpicyIP & Mint. The government appointed a civil servant as the Controller General for the first time. The piece notes the numerous reforms initiated by Mr. Kurian in the IPO after his appointment.

Reforms introduced by Mr. Kurian include the introduction of a fresh system of assigning patent examination to expert groups and revamping the online database of the IPO (Click here for a previous post on the reforms). In addition to this he has also struck down strongly on corruption at the patent office (Click here for a post on the same). The piece concludes by noting that these reforms should be accompanied by the grant of increased financial and operational autonomy to the IPO.

Image from here.

Workshop on "How to Manage Online Identity"

Cyberspace & Intellectual Property Foundation (CIPFO) is organizing a workshop on “How to Manage Online Identity”. The workshop will focus on technical, legal and social aspects of Domains and User Names in Web 2.0 environment including those created on Facebook and Twitter. Well known experts from legal and new media would be sharing their views and experiences.

Date: 26th Feb 2010

Venue: Indian Law Institute, New Delhi, India

Sessions:
• Choosing the right Domain Name
• How to protect your Domain Names
• What’s in a name, A Web 2.0 perspective
• Buying and selling of domains.

Click here to register and for further details.

Registration fee: Rs. 3000 per delegate (2 or more delegates from the same organization can get 10% off)

Image from here.

Montblanc Undertakes to not sell "Gandhi" Pens

A legal dispute over the use of the Gandhiji's imagery on a commemorative Montblanc pen may be seeing closure soon. Montblanc gave an oral undertaking before the Kerala High Court (a bench consisting of the Acting Chief Justice PR Raman and Justice Ramachandran Nair ) today that it would not sell any pens with the image of Gandhiji, till such time as its application for permission is decided by the Central Government.

Under section 3 of the Emblems and Names (Prevention of Improper Use) Act, 1950, the image of Mahatma Gandhi cannot be used without the prior permission of the government. Apparently, Montblanc had requested permission some months back; however the government had responded with a one line letter stating that under the Act, the image of Mahatma could not be used. Montblanc replied stressing that the Act itself vests discretionary power with the government to permit such usage. It therefore asked that the government "review" its earlier decision.

As per an earlier post from Sumathi, there was some talk of a settlement between Montblanc and the Centre for Consumer Education, an NGO that contested the use of Gandhiji's image as illegal and against the spirit of what the Mahatma stood for. Under the settlement, Montblanc was to donate almost 900,000 dollars for charitable causes in India.

However, no settlement was recorded in court today. In nay case, such a settlement could not have excused a purported violation of the Emblems and Names Act. One now waits to see the fate of the "review" application filed by Montblanc before the Central Government.

Montblanc is represented by Pravin Anand, India's leading IP litigator and the NGO contesting the use of Gandhiji's imagery by Santosh Mathew, one of Kerala's leading litigators.

Exploring a New Angle in the TRIPS and Drug Patents Debate

Many of us are familiar with drug patents and its contentious impact on public health.

But how many of us know that more drugs can lead to more patents? I chanced upon the history of the PCR (polymerase chain reaction) patents and found this passage from a documented interview with Mullis, the controversial inventor who believes in aliens and astrology:

In a Q&A interview published in the September, 1994, issue of California Monthly, Mullis said, "Back in the 1960s and early '70s I took plenty of LSD. A lot of people were doing that in Berkeley back then. And I found it to be a mind-opening experience. It was certainly much more important than any courses I ever took."

During a symposium held for centenarian Albert Hofmann, "Hofmann revealed that he was told by Nobel-prize-winning chemist Kary Mullis that LSD had helped him develop the polymerase chain reaction that helps amplify specific DNA sequences."

Replying to his own postulate during an interview for BBC's Psychedelic Science documentary, "What if I had not taken LSD ever; would I have still invented PCR?" He replied, "I don't know. I doubt it. I seriously doubt it."

Talk about (TRIP)ping and Patents!

Patent Job Vacancies in Bangalore

Two excellent positions at a leading law firm in Bangalore as listed below. If you're interested, please drop an email to spicyipjob [at] gmail.com with your CV.

Firm Profile: One of India’s leading law firms

Positions Available: 2

I. Position Title: PATENT ENGINEER (Biotech/Pharma)

Location: Bangalore

Roles and Responsibilities:

i. Carrying out Prior Art, FTO searches
ii. Drafting Patent Specifications including claims for filing in India, US and EU
iii. Coordinating with the inventors, patent officials etc., preparing submission to office action and appearing before the Patent Examiners during the prosecution

Required Qualification:

i. One to two years of experience with patent drafting, preferably in a Law Firm or a Biotech/Pharma Company
ii. Masters in Biotech/Pharma
iii. Good working knowledge of Indian and US patenting system
iv. Excellent communication skills in English, both written and verbal

Salary

Commensurate with the best in the industry

II. Position Title: PATENT ENGINEER (Electronics /Telecom / Computer Science)

Location: Bangalore

Roles and Responsibilities:

i. Carrying out Prior Art, FTO searches
ii. Drafting Patent Specifications, including claims for filing in India, US and EU
iii. Coordinating with the inventors, patent officials etc., preparing submission to office action and appearing before the Patent Examiners during the prosecution

Required Qualification:

i. Three or more years of experience in patent drafting, preferably in a Law Firm or a Company involved in providing Patent related services
ii. Bachelors or masters in Electronics/ Telecom / Computer Science
iii. Working knowledge of patent regimes in India and the US
iv. Excellent communication skills in English, both written and verbal

Salary

Commensurate with the best in the industry

SpicyIP Tidbit: Fee Refund in Patents

It was recently brought to our notice that under Article 11 of the new European Patent Office (EPO) Rules for examination which come into force from April 1, 2010, the examination fee will be refunded:

(i) in full if the European patent application is withdrawn, refused or deemed to be withdrawn before the examining divisions have assumed responsibility; or

(ii) at a rate of 75% if the European patent application is withdrawn, refused or deemed to be withdrawn after the examining divisions have assumed responsibility but before substantive examination has begun.

This is an interesting development in light of Rule 7(4) of Indian Patent Rules, 2003 which states that “Fees once paid in respect of any proceeding shall not ordinarily be refunded irrespective of whether the proceeding has taken place or not”.

Should we too have a provision for refund of fees?

Patents and Innovation: Part II

This article pointed out to the SpicyIP team, led to what Swaraj and I jokingly referred to in one of our conversations as the "blogger wars".

While Swaraj's post deals with the economics of the entire patenting system, I thought I would present my point of view on the matter a little more conceptually.

First off, how has this entire discussion come about? The article, which was the focus of the posts needs to be read a little more carefully- without judging it by its title. The article points out the need of the patent system in terms of providing incentives, but does not agree with the functioning of the USPTO at present, in terms of the grant of frivolous patents.

Now a conceptual understanding into the Intellectual Property Regime will reveal that the need for the existence of the regime in the first place, is pretty much the same as the need for a legal system to be put into place to protect tangible property.

Very simply put, if X creates A, then X owns A. Owning Object A would mean that X would be allowed to use Object A in whichever manner he pleased, to the exclusion of all others. However, the nature of intangible property is such that the use of the Object A to the exclusion of all others cannot be for an indefinite period. Thus, a balance was sought to be struck by ensuring a period of use by the inventor/creator X as a publicly recognised monopoly, with the exchange made here for such information to be made available in public- to help further innovation/ invention in their chosen area of study.

A proverb in Sanskrit, of which I can only spout a vague translation off the top of my head, has taught us that Knowledge grows when shared. And that is exactly the basis for the manner in which Intellectual Property Rights are accorded protection.

The argument of the article in The Economist, and even those made by Swaraj, are all well taken. Certainly in theory it is possible for us to understand that there have been "frivolous patents" that have been granted in favour of inventors, and if looked at in the long run, the contribution of the inventors possibly do exceed their marginal social returns.

But practically, this is not an argument that I would say could be held valid or , better worded, is an argument that may be shaky for several reasons:

(A) Who is to say what inventions are frivolous? The article quotes Amazon's one click patent and the "name-your-price" auction patent granted in favour of Priceline.com- a narrow view in my opinion. (This is the exact same line of thinking as our Patent Office when they read Section 3 (d) down to mean efficacy meant only therapeutic efficacy.) The author of the article fails to recognise that in a competitive world- where globalisation ensures that information does travel at the speed of light- a particular person/(s) spent a great deal of time and money in coming up with a solution to a problem, or a more effective manner in which his business can function. This may not be a the most useful invention universally, but so long as it furthers the functioning of a particular sphere (take the case of auction site or online booking), there can be no claim that the same is in fact frivolous.

For just that reason, a monopoly right being granted in their favour, cannot be viewed negatively.

(B) With regard to Swaraj's argument on the ineffectiveness of the patent regime in light of the marginal social returns, a line from the television series Big Bang Theory comes to mind. When one character asks another, "What's new in physics?", the other replies, "Nothing". It seems like most areas have hit that period of stagnation. At this point, if there is an invention that does make that one extra leap, what we refer to as the 'inventive step', in my opinion, according the same protection would not be considered unreasonable or undeserved, even from the point of view of an economist.

The problem in my opinion, that lies with the perception of the patent regime, or even all of the IPR regime in totality, is that people always view monopoly negatively. A fixed term for a period of use by a person who is undoubtedly the author/creator/inventor of the said object/process is in my opinion rational. This is especially because, the period of monopoly also grants competitors the opportunity to:

(A) License and/or seek assignment
(B) Use information from the patent granted as a base to probably improve or arrive at a new invention
(C) As already mentioned by Swaraj, economically it may be more efficient for a company, say pharmaceutical in nature, to come up with a "me too" drug.

But economically or otherwise, there are still several amongst us that have spent years of their lives trying to arrive at one conclusion or one invention that could change the world or the manner in which it functions at least, and in that context a regime that incentivises such creativity or innovation cannot be done away with.

For all those who have sat and read through my rambling, hearty congratulations and apologies!

Scope of Section 15

In 2 earlier posts, I had discussed the Delhi High Court’s judgment on maintainability of pre-grant decision appeals before the IPAB. In those 2 posts, the focal point was to underline the fact that the rejection of a patent application in a pre-grant opposition (let’s call this “PGO” rejection for short) is no different from its rejection under Section 15 of the Patents Act, 1970 in the normal course of examination.

Before the pronouncement of this judgment, I was searching for judicial guidance in understanding the scope of Section 15 and fortunately, I came across this 1999 decision of the Calcutta High Court in Danieli A C Officine Maccaniche SPA v. Controller of Patents. Although, even in the absence of this decision, one doesn’t need a lot of convincing to understand the said provision, it is important to have precedents to convince those who may not be as familiar as practitioners with the structure of the Act and the flow of patent prosecution process.

Before I discuss this 7-page decision, it is important to understand why is this decision relevant. Thus far, the stand of the IPAB in PGO rejections of patents has been that the order of rejection was one given under Section 25(1), and not Section 15. Consequently, according to the IPAB, since Section 25(1) did not find mention in Section 117A, which speaks of IPAB Appeals, the order of rejection in a PGO was not appealable before the IPAB.

In light of this specific objection to maintainability, the decision of the Calcutta High Court helps us understand the scope of Section 15. This decision was passed at a time (before the 2005 Amendment Act), when appeals were governed by Section 116 of the Act and IPAB had not yet been notified to take up patent appeals. Section 116, as it existed then, is as follows:

Section 116 (Before 2005 amendment): Appeals:

(2) Save as otherwise expressly provided in sub-section (1), an appeal shall lie to a High Court from any decision, order or direction of the Controller under any of the following provisions, that is to say, section 15, section 16, section 17, section 18, section 19, section 20,section 25, section 27, section 28, section 51, section 54, section 57, section 60, section 61, section 63, sub-section (3) of section 69, section 78, section 84, section 86, section 88(3), section 89, section 93, section 96 and section 97.

The Appellant in this case was a patent applicant who had earlier filed for a patent grant in Italy on March 31, 1994. Italy had been declared a convention country vis-a-vis India on January 3, 1995. A corresponding Indian patent application was filed under Sections 133 and 135 of the Act on March 15, 1995 which claimed the benefit of priority from the Italian application. Office action dated December 10, 1997 was issued by the Controller asking the applicant to rectify certain defects in the application.

The Controller’s objection to the application was that it could not be treated as a convention application since it was filed before Italy was declared a convention country. He dismissed the application, observing however that if the applicant applied as an ordinary applicant, the application would proceed.

The applicant filed an appeal before the Calcutta High Court (since the IPAB hadn’t come into being). The first issue before the Court was if the order of rejection of application was appealable as a decision given under Section 15.

The respondent i.e. the Controller contended that the order was one under Sections 133 and 135 of the Act, and not under Section 15. To this the Court categorically held that the Controller’s argument was unacceptable, since these provisions were merely relied upon to reject the application, and such order must be deemed as an order given under Section 15.

This is abundantly clear from Section 15 which gives the Controller power to reject applications, if in his opinion, any requirement of the Act has not been complied with. Although any non-compliance with any requirement would necessarily have to be related to a relevant provision of the Act, such as Section 133 in this case, the refusal of the patent application itself would be one under Section 15.

On these grounds, the Court held the appeal maintainable. From 2005 on, these appeals have been transferred to the IPAB under Section 117G.

As I had stated in my last post, “A provision of appeal from an order of refusal under Section 15 has been provided in Section 117A to provide the applicant with a forum which has the authority to reverse any unreasonable order of the Controller which violates principles of natural justice or which reflects non-application of mind by the Controller or which contravenes the provisions of the Act.”

One may ask, what else would lie within the scope of Section 15. Off the cuff, an order of refusal of the application for non-compliance with requirements for International applications spelt out in Rule 20 read with Rule 22 too would be an order under Section 15. There could be several such instances, which in my opinion, is how Section 15 has to be construed.

We welcome the opinion of our well-informed readers on the interpretation of this provision.

Internship Opportunities at FICCI's IPR Division

The IPR Division of the Federation of Indian Chambers of Commerce and Industry (FICCI) is inviting applications for internships from law students.

Apart from serving as a platform for continuous interaction between the industries and different government agencies, FICCI's IPR Division also provides feedback to the Government on various policy issues. The Division is also responsible for the preparation of research reports on various IPR issues debated at National/International forums.

Interns will have the opportunity to work on policy issues covering the whole gamut of IP law including patents, copyrights, trade marks, geographical indications, etc. The internship can vary between 15 days to 2 months.

All those interested may write to FICCI IPR Division at hr@ficci.com or to Sheetal Chopra, Deputy Director and Team Leader, IPR Division at sheetal.chopra@ficci.com.

Aamir Khan vs Javed Akhtar: India's Revolutionary Copyright Provision

The media is abuzz with rumours of a clash between noted lyricist Javed Akhtar and leading cine star Aamir Khan over the recent copyright bill.

It all began with the Hon'ble Minister for Human Resource Development (HRD), Kapil Sibal constituting a committee to review the provisions of the new copyright bill which will soon be introduced in Parliament, with Akhtar and Khan as members. During the very first committee meeting, Khan is rumoured to have remarked that lyricists do not deserve as much protection, as songs are really made popular by actors.

I can't imagine that the socially sensitive Khan would ever make such a remark; but amidst our quick byte media culture, we'll have to wait for the actual truth to "out". As an aside, Khan's rashee obviously predicts a significant copyright nexus this year, with him already having locked copyright horns with noted author Bhagat over "3 Idiots", a raging box office hit just under a month back.

Unfortunately, despite all this controversy, no one seems sure of the actual "text" of the provisions in dispute. Given that our mandate is to increase transparency, we've procured the actual text for our readers and highlight it below:

Section 19(9) of the proposed bill protects the creators of underlying works in Bollywood flicks (lyric writers, script writers, music composers etc) from ruthless contractual exploitation by stipulating that such creators can demand a share in royalties, if their works are exploited by producers in new "mediums" or "contexts".

It reads thus:

"No assignment of copyright in any world to make a cinematograph film or sound recording shall affect the right of the author of the work to claim royalties in case of utilization of the work in any form other than as part of cinematograph film or sound."

This provision is revolutionary in the sense, that the current Bollywood practice of catch all clauses where lyricists, composers and script writers typically assign away all rights in any medium of exploitation (whether now known or hereinafter invented) will no longer hold good. Rather, if the producer of the film exploits the film in any new medium (eg, the music as a ringtone), the music composer can claim a share in the royalties in that mode of exploitation, notwithstanding an absolute upfront assignment.

Some may argue that this violation of contractual freedom will lead to less moneys being paid upfront by Bollywood production houses to artists. However, if history is anything to go by, this curbing of contractual freedom in favour of "fairness" may not be such a bad move.

The old 1914 Copyright Act (which mirrored the UK copyright act of 1911) had a clause which stated that after 25 years of the death of the author, any right that was assigned could be made to revert to the heirs of the author. Apparently, some producers claimed that this clause prevented them from paying higher sums to poor artists, since the rights could revert after 25 years after the said artists' death. Therefore, in 1957, this "reversionary" right was deleted. I'm not entirely sure that this deletion did anything to improve the lot of artists, many of whom died in penury.

In any case, the proposed clause in the current copyright Bill does not cause any reversion of rights back to the artist. Rather, it merely provides that any windfall from mediums of exploitation other than the primary one contracted for must be shared with the authors. Seems like a "fair" clause to me. Should India enact such a socially progressive clause, it will not be alone, for European countries such as France and Germany already have similar provisions.

Apparently, the introduction of this clause had much to do with some heavy duty lobbying by Javed Akhtar. And though a "fair" clause, as I'd mentioned earlier, one cannot but take issue with the way in which it was sneaked in, without a public consultation of any sort. This clause was sneaked in only in 2009 and was never part of the 2005 draft that was open for public consultation!

This lack of consultation has come back to sting the government..and one can only guess that counter pressures from the Bollywood lobby have now forced it to constitute this committee.

One can see some broad parallels with the Indian Bayh Dole bill, where owing to the lack of effective public consultation, a Parliamentary Standing Committee, has (perhaps for the first time in Indian legislative history), asked the government to reconsider some of the provisions of the Bill.

Anyway, for those interested, apart from the above provision ensuring that authors get a fair shot at windfalls from new mediums of exploitation, there are other interesting clauses that are likely to impact Bollywood copyrights in significant ways. For one, the author of a movie shall now be both the producer and the director (as opposed to the earlier position, where it was only the producer). The text of the provisions are reproduced below:

"Section 17 (f): in the case of cinematograph film produced on or after the coming into force of this clause, the producer and the principal director shall be treated jointly as the first owner of copyright.

(g) in case of cinematograph film produced before the commencement of clause (f) the principal director shall enjoy the copyright for a period of 10 years after the expiry of the duration of copyright in the cinematograph film subject to the principal director entering into a written agreement with the owner of the copyright in the film during the subsistence of copyright.

Provided further that such an agreement is not needed in case where the owner and principal director on the film is the same person.

Section 18: Provided further that no such assignment shall be applied to any medium or mode of exploitation of the work which did not exist or was not in commercial use at the time in the assignment was made, unless the assignment specifically referred to such medium or mode.

Provided further that the author of the literary or musical work included in cinematograph film or sound recording shall not assign the right to receive royalties from the utilization of such work in any other form other than as part of cinematograph film or sound recording except to the legal heirs to a copyright society for collection and distribution and any contract to contrary shall be void."

We'll bring you more on other relevant copyright bill provisions in future posts. In particular, the Bill does a pathetic job of carving out an exception in favour of the visually impaired and other disabled groups. To say that the government has paid lip service to their concerns is an understatement. The relevant provisions are utterly shameful and it is as good as not having an exception at all! I'll save this issue for a future post.

Recent IP Official Appointment and Increasing Respect for IP

In a previous post, we reported the recent appointment of V Bhaskar to the DIPP, the nodal agency in charge of IP.

It was rumoured that all IP issues would be consolidated under his charge. It now turns out that he will only be in charge of "WIPO" related issues. This being so, perhaps the first issue he might need to fix is the rather serious allegation mounted by one of the stalwarts in the Indian pharma industry, Dilip Shah that India sacrificed its sovereignty by signing a rather loosely worded MOU with WIPO, where WIPO has some sort of a stake in structuring and implementing India's national IP policy.

He will also need to shape up India's approach to the WIPO development agenda.

V Bhaskar Joins DIPP, the nodal IP agency in India

The Department of Industrial Policy and Promotion (DIPP), the nodal agency in charge of Indian intellectual property, has been blessed with a new face, namely that of V Bhaskar, an IAS officer from the Andhra Cadre (1981 batch). He joins at the rank of a Joint Secretary (JS).

There are whispers that all IP matters would be consolidated under the control of V Bhaskar (barring copyrights, which continues under the Ministry of HRD). Currently, IP at the DIPP is split up into Designs (looked after by Joint Secretary, Ms Anjali Prasad, wife of current Chef De Cabinet to WIPO DG, NN Prasad) and Patents, Trademarks and GI on the other (looked after by yet another Joint Secretary, Mr Gopalakrishnan).

If this consolidation does happen, it heralds a bright future for Indian IP policy, as Mr Bhaskar has an impressive track record. He has worked with international institutions such as IMF in the past. He has also worked with stalwarts such as Vijay Kelkar, with whom he has co-authored some interesting papers.

In any case, the fact that 3 Joint Secretaries have now joined the DIPP signifies the growing importance of IP policy in India.

SpicyIP Is Looking for New Bloggers

SpicyIP is in dire need of some fresh thinking on Indian IP, enthusiasm and of course, spice. If you're interested in joining the team, would you please email me at shamnad [at] gmail.com?

Please apply only if you are able to consistently devote time to the blog over a longish span, and able to write about 2 posts or so a week.

Needless to say, age, sex, experience (or lack thereof) do not constitute bars of any sort. All you need is an ability to analyse Indian IP issues (or global IP issues that impact India in some way) and write about it coherently and consistently on the blog. The more your thinking challenges conventional wisdom, the better!

You are of course free to write on any Indian IP issue of your choice and what you write will not be attributed to your organisation or other members of the blog (and vice versa).

Editorial control will be exercised only to the extent of ensuring that you make logically coherent, intelligible and grammatically correct arguments.

In particular, we welcome folks that can cover the so-called "soft IP" issues (copyrights, trademarks), the newer forms of IP (plant varieties, GI's, traditional knowledge) and innovation and creativity issues more generally.

Google Book Search and Indian Copyright Law: An Inflammatory Idea?

Those of you tracking the latest copyright news might have noted that the Indian Reprographic Rights Organisation (IRRO), a book publishers association, has strongly protested the ongoing Google Book Search (GBS) settlement terms in the US. Indeed, we're not far from the day when the IRRO will take on Google before Indian courts. And when they do so, they are likely to win, as the Indian "fair use" is worryingly narrower than the US version.

I highlight this controversy in a recent editorial in the Indian Express (IE). In particular, I stress the importance of crafting creative solutions to foster Google's far sighted project and the promise of a knowledge revolution, albeit with appropriate controls to check any potential abuses by Google. Below is the text of the IE editorial:

"The creation of gigantic knowledge repositories has proved challenging since time immemorial. The fabled library of Alexandria sought to capture the entirety of documented human knowledge, but was unfortunately set ablaze in the first century BC. Closer home, Nalanda’s ancient library met the same fate with “smoke from the burning manuscripts hanging for days like a dark pall over the low hills.”

The latest entrant in this game is quite different, a private corporation, and one that does not fear physical fires. For Google’s information is stored in a medium that fires cannot singe. However, what the search company has come to fear are metaphysical fires stoked by copyright laws.

The Google Book Search (GBS) project seeks to digitise all books that are currently available in the world. Unfortunately, in 2005, Google was sued by a bunch of angry publishers. A settlement is being brokered by a US court — albeit a highly controversial one, owing to a rule that authors have to expressly “opt” out, if they do not wish their books to be part of Google’s mammoth online library.

Since such a settlement is also likely to bind Indian authors qua their copyrights in the US, UK, Canada and Australia, the Indian Reprographic Rights Organisation (IRRO), which represents Indian publishers, recently filed their objections to the settlement terms.

IRRO is also expected to sue Google in India, and if it does so, it is likely to win.

It must be stated at the outset that Google faces no liability for books whose copyrights have expired. However, for copyrighted books, Google is forced to contend with legal issues over three distinct kinds of works: copyright works that are in print, those that are out of print, and those whose authors cannot be identified (popularly referred to as orphan works). Thus far, Google has been scanning such books, converting them to text and indexing them so that contextual information from the book is displayed in response to search queries.

Were one to look for an equivalent in the physical world, one might think of a giant library or bookstore where one could not only browse books but also ask the librarian or store manager a specific query and be referred to the book in reply. In the physical world, the activity would easily qualify as non-infringing, particularly so in India, where libraries do not need to pay any fees to copyright owners, once they have legitimately purchased copies of the books.

However, in the online world, all of this changes owing to the simple act of “reproduction” that occurs whilst scanning the book. Copyright laws prohibit the reproduction of any work without the consent of the copyright owner, barring limited circumstances. One such circumstance is what is commonly referred to as “fair use”.

Under this doctrine, Google could claim that since it provides mere “query”-related snippets from the book and not its entire content, its activities are unlikely to harm the sales of the books. If at all anything, it will lead to increased sales.

Paradoxically enough, India, which often nears the top of the US’ notorious “special 301” list for failing to maintain robust intellectual property protection norms, encapsulates a stricter version of the fair use doctrine and promotes greater rent extraction by copyright owners. The Indian section requires that apart from being “fair”, the activity has to be performed by the user only for his/her private or personal use, including research. It would seem that Google cannot make any personal claims to the noble endeavour of “research”; it merely facilitates this activity by users.

The reason Google is pursuing a settlement despite having a fair shot at the “fair use” exception in the US is that it desires much more access to the copyrighted works than currently permissible under law. In particular, it wishes to provide libraries with full-text access to all of its digitised books — on commercial terms, with the authors sharing in the proceeds received.

As with any other project, the GBS has its fair share of aye-sayers and nay-sayers. Many are concerned, and rightly so, about the concentration of all this knowledge and power in one private corporation. Others hail this as nothing short of a knowledge revolution. Indeed, with all of the worlds’ wisdom a mere mouse-click away, dusty libraries and sweaty afternoons would soon become a thing of the past.

Other benefits include the fact that authors are more easily located and are likely to benefit from greater sales of their books. Perhaps the greatest beneficiaries are the visually impaired, who will gain access to many more digital (audio-enabled) titles, enabling them to participate more effectively in our knowledge economy.

Therefore, courts must find creative ways to ensure that copyright flames sparked by Google’s revolutionary project do not singe, but are stoked in a balanced manner."

A Comment on the Vires of 'The Protection, Conservation and Effective Management of Traditional Knowledge relating to Biological Diversity Rules, 2009

Earlier this year the National Biological Authority, had invited comments on - The Protection, Conservation and Effective Management of Traditional Knowledge relating to Biological Diversity Rules, 2009 (TK Rules, 2009). The rules have been drafted by the NBA under Section 36(5) & 62 of the Biological Diversity Act, 2002.

Image: Preamble to the Constitution of India - From here.
Section 36(5) is an interesting provision which allows the Central Government to facilitate the registration of traditional knowledge in relation to biological diversity and also initiate any other measures of protection including a sui generis system. The NBA has therefore sought to create a sui generis system to protect Traditional Knowledge through these rules.

A glance at these rules reveals the conceptualization of of an elaborate and equitable legal regime to protect traditional knowledge. If implemented, these rules will fulfill the long-felt need of a sui generis legislation to protect traditional knowledge in India.

The question however is whether or not these Rules are within the scope of the Biological Diversity Act, 2002 as it stands now, without any amendments. To put it simply the question that needs to be examined is whether or not Parliament has delegated to the NBA the power to make such rules.

The rules of delegated legislation are relatively simple. Given the complexity of modern day governance Parliament usually lays down only the broad policy outline and delegates the job of working out the finer nuances to the Executive i.e. the government. The Executive i.e. NBA has to then draft rules and regulations to execute the policy laid down by Parliament through the governing legislation, which in this case is the Biological Diversity Act, 2002.

There are however a few fundamental principles on the delegation of legislation to statutory bodies:

(i)The statutory authority shall confine itself to the parent statute and not exceed the same;
(ii)The statutory authority shall not frame rules contrary to the intent or provisions of the statute;
(iii)Parliament shall not delegate to the statutory authority an essential legislative function. This means that the statutory authority shall not attempt to frame policy but instead limit itself to procedure.

I tried searching for accompanying amendments to the Biological Diversity Act, 2002 but was unable to find any on the website of the NBA. If this is a valid presumption then in that case I have serious doubts over the constitutionality of some of the clauses in these Rules. I've attempted to carry out a largely superficial analysis of the same below:

The vires of the Rules

(i) Definition of Traditional Knowledge: Rule 2 (v) of the Act defines “Traditional Knowledge” as the collective knowledge of a traditional community including of a group of families, on a particular subject or a skill and passed down from generation to generation, either orally or in written form, relating to properties, uses and characteristics of plant and animal genetic resources; agricultural and healthcare practices, food preservation and processing techniques and devices developed from traditional materials; cultural expressions, products and practices such as weaving patterns, colors, dyes, pottery, painting, poetry, folklore, dance and music; and all other products or processes discovered through a community process including by a member of the community individually but for the common use of the community;

The Bio-Diversity Act, 2002 which is the parent legislation in this domain is a legislation which was drafted mainly to implement India's obligations under the United Nations Convention on Biological Diversity. The main aim of the legislation as can be ascertained from the Preamble of the legislation was to provide for conservation, sustainable utilization and equitable sharing of benefits arising out of utilization of genetic resources and also to give effect to the said Convention.

It would therefore be difficult to justify the inclusion of 'cultural expressions' such as poetry, weaving, painting etc. in the definition of the TK Rules, 2009 since the same would not have a rational, reasonable nexus to the aims and objectives of the Act which in itself seems to be aimed at protecting the biological/genetic diveristy of the Country. The definition of 'Traditional Knowledge' if therefore clearly ultra vires the Act.

(ii) The Traditional Knowledge Fund: Rule 3(7) of the TK Rules, 2009 states the following: The National Biodiversity Authority shall set up a fund called the Traditional Knowledge Fund under Section 27 of the Act and there shall be credited thereto all charges, fees, royalties and all sums received by the National Biodiversity Authority in the administration of these Rules.

Section 27 of the Biological Diversity Act provides for the Constitution of the National Biodiversity Fund. As per the Section all charges and royalties received by the National Biodiversity Authority under the Act are supported to be deposited in this Fund and then channelled to the benefit claimers apart from the purposes of conservation and promotion of biological resources. This section does not provide for any delegation of powers. Similarly even Sections 36(5) and Section 62 are silent on the power of the NBA to create its own fund.

It is my understanding that the National Biodiversity Authority, a statutory authority cannot, in matters of the treasury and revenue, attempt to create its own funds and structures which overlap or blatantly undermine those created Acts by Parliament.

(iii) Access to traditional knowledge and Prior Informed Consent: Rule 5 of the TK Rules 2009 sets down a procedure for any person to access traditional knowledge in the country. The basic requirement of this rule is that the community holding the TK should give its prior informed consent for the same. The definition of 'accessor' in the Rules covers any person who seeks to access the traditional knowledge for purposes of either commercial utilization or for the purposes of research.

Although I have to agree that this is the more equitable than the procedure prescribed by the Act I will also have to point out that this is absolutely the problem with the rules – it is not the procedure prescribed by the Act.

(a) Firstly the Bio-Diversity Act diffrentiates between foreign citizens and Indian citizens. Under Sections 3 and 19 all foreign citizens and companies will have to seek the 'approval' of the NBA before accesssing biological resources in India. Indian citizens and companies on the other hand however are only required, by Section 7, to 'Intimate' the State Biological Diversity Board before obtaining biological resources. Therefore under the Act there is a clear difference in standards for Indians and foreigners. The TK Rules, 2009 however fail to make this distinction and in the process impinge the rights of Indian citizens under Section 7 of the Act.

(b) Secondly the Bio-Diveristy Act, as it stands now, does not require the prior-informed consent of the community holding the traditional knowledge. At the very best under Section 21 of the Act the NBA is required to ensure that there is equitable benefit sharing on 'mutually agreed terms'. It is debatable whether or not this is equivalent to 'prior-informed consent'. In my opinion this is not equivalent to 'prior informed consent'. Under Rule 5 (6) of the TK Rules, 2009 a community holding the traditional knowledge now has the right to deny acccess by turning down the applicant's request for 'prior informed consent'. These Rules have clearly changed the rules of the game.

The requirement of prior-informed consent may therefore be beyond the scope of the Bio-Diversity Act, 2002 as it exists.

(iv) Offences & Penalties: Rule 18 of the TK Rules, 2009 prescribe a prison term of 5 years and a fine of Rs. 10 lakhs for any violation and contravention of the TK Rules, 2009. This provision is much more severe than the equivalent Section 56 of the Act which provides only for monetary fines for violation of Orders of the Biodiversity Boards.

The fundamental problem with Rule 18 is that it is brazenly unconstitutional to deprive a person of his life or liberty through rules and regulations drafted by the Executive and not the Parliament. God Forbid the day a bureucrat gets to decide when a citizens is deprived of his liberties!

Rule 18 therefore has to be undoubtedly deleted from the TK Rules, 2009.

Conclusion: As per Section 62(3) of the Biological Diversity Act, 2002 any rules and regulations made under the Act will have to be laid before Parliament for a period of 30 days before the same can have the force of law. The Rules are then approved through a negative process i.e. if in 30 days if Parliament does not propose any modifications the rules are deemed to have passed. Given the rarity of sittings and the workload of Parliament it is very rare for rules to ever be put up for a debate. Therefore in all probability if the TK Rules, 2009 are introduced into Parliament this budget session they will sail through by the end of March or April.

My own personal comments on the Rules are that it is much more equitable and much better drafted than the Biological Diversity Act, 2002. However these rules represent a clear attempt at a backdoor entry. Given the need for a sui generis system to protect traditional knowledge it makes enormous sense to replace the word 'Rules' in the title-clause with 'Bill' and introduce the same through the frontdoor of Parliament. In fact if I didn't know better I would have to say that the TK Rules, 2009 were actually drafted with the intention of introducing it in Parliament as a Bill.