SpicyIP Tidbit: NPPA proposes controlling the price of cancer drugs

Soon on the heels of the DIPP's discussion paper on compulsory licensing, the Business Standard has reported that the National Pharmaceutical Pricing Authority (NPPA) is planning to regulate 'prohibitively expensive oncology medication'. The BS reports that the NPPA is studying the Drug Price Control Order (DPCO) in order to figure out a way in which it can cover even cancer medication which until now has not been regulated by the DPCO. The NPPA's efforts appear to be fuelled by concern over the increasing cost of cancer drugs. Alternatively the BS also reports that the Department of Pharmaceuticals is also trying to figure out a mechanism for negotiating the prices of patented drugs.

The moot issue however is whether the DPCO and the NPPA are actually the best means to control drug prices. It is an open secret that the pharmaceutical industry, generic or otherwise, has mastered the art of evading the DPCO, by exploiting all the loopholes in that legislation. On 30th June, 2010 the NPPA released a 'Statement of Overcharging and Recovery thereof since the inception of NPPA'. As per this statement, of the Rs. 2190.48 crores (Approx. $500 Million USD) that was owed to the NPPA on the account of over-charging, it managed to recover only Rs. 199.84 crores i.e. less than one tenth of what was owed to it. On a summary perusal of the list it appears that the biggest defaulters on the list are Cipla and Okasa Pharma Pvt. Ltd. While I'm not sure, I think Okasa Pharma Pvt. Ltd. is a company owned by the family of Dr. Yusuf Hameid, the Chairman of Cipla. In fact I think Okasa Pharma is one of the holding companies of Cipla. Nevertheless both facts require more research before they can be confirmed. Cipla's annual report for the year 2009-2010, released on 13th July, 2010, adequately confirms that Cipla was served with demand notices of upto Rs. 1157.12 crores (inclusive of interest) under the Drug Price Control Order, 1995. (Cipla's profits for the year 2009-2010 after tax was Rs. 1081 crores) The Annual Report also states that “The Company has been legally advised that based on the directions given by the Supreme Court, there is no probability of the demand becoming payable by the Company. Hence, no provision is considered necessary in respect of the aforesaid amount. However, any unfavourable outcome in these proceedings could have an adverse impact on the Company.” The SC judgment referred to above is in the case of Secretary, Ministry Of Chemicals & Fertilizers Government Of India vs Cipla Ltd. & Ors. decided on the 1st of August, 2003. In its judgment the Supreme Court had set aside an Order of the Delhi High Court against Cipla. The SC had remanded the matter to the Delhi High Court and ordered the petitioners to pay atleast 50% of the amount charged pending disposal of the writs by the Delhi High Court. From the admissions in Cipla's annual report it would appear that the NPPA has failed miserably in recovering this amount.

It is obvious from the above that the NPPA has not been able to sucessfully implement the DPCO. The question therefore, before the Government of India, is whether price-controls are the best way to actually control prices. Instead how about abolishing taxes, customs and excise duty on pharmaceutical drugs? Why should the government seek its pound of flesh at the expense of the lives of its citizens? At one point of time import duties on life-saving drugs was as high as 30%!!!!

It goes without saying that the best way to control drug prices is to ensure cut-throat competition between drug companies. That still leaves the question of patented drugs where the innovators enjoy a statutory monopoly. How do we control the prices of those drugs? Compulsory licensing, maybe?

Guest Post: Requiem for a Dream?

Matthews George, our serial guest blogger from NUJS, has sent in this concise summary on an fantastic, albeit slightly dated Business World story on the state of research and development of new drugs in the Indian Pharmaceutical Industry.

REQUIEM FOR A DREAM?

by,

Mathews George

From the late 1990s right through mid-2000s, research on a series of drugs progressed successfully from preliminary experiments to phase I / phase II of clinical trials (tests on humans). But somewhere along the road, they lost their way. A string of drugs failed while others were abandoned. Today, the Indian pharma is at its crossroads. Disheartened by series of setbacks, the industry is on the course of revising its R&D strategy to that which hinges on steady returns.

The Businessworld article titled 'Death of a Dream' succinctly draws the grim picture in drug research, touching upon its causal factors. The article, however, is silent on the role of the extant legal and policy regime. An analysis from these perspectives would have been better appreciated by the legal fraternity and policy framers.

Course of change in R&D strategy

Back in 1997, heads turned when DRL licensed out a new drug to Danish pharma major Novo Nordisk in a multi-million dollar deal. Everybody expected the industry to repeat the same kind of success in drug discovery. By 2001, DRL had nine molecules in the pipeline, including two in late stages of clinical trials. DRL was termed as “the molecule millionaire” by a leading journal. In 2005, a landmark agreement between DRL, Citigroup Venture and ICICI Venture set up India’s first integrated drug development firm, Perlecan Pharma. However, all the research projects and ventures had to be called off after observing side-effects in later stages. The situation was not different in India’s half a dozen other premier pharmaceutical firms. Further, the Perlecan debacle hampered the prospects of other firms in entering into partnerships for funding their research activities.

The article rightly draws the course of change in R&D strategy of premier pharmaceutical companies - from high-risk, high-reward drug discovery to a strategy hinged on steady returns. For instance, last year, as the bitter after-effect of its 16-year-long futile effort to bring a new drug into the market, Dr. Reddy's Laboratories removed the words, ‘discovery led global pharmaceutical company’ from its grandiose vision statement. The removal sums up the crossroads at which Indian pharmaceutical sector stands today. In essence, the wild optimism which was present in mid-2000s no longer exists.

Fortunately, despite the setbacks, some pharmaceutical companies such as Glenmark, Piramal Healthcare and Lupin remain committed to new drug development. However, it is too early to draw a positive note unless they achieve substantial tangible results.

Reasons for failure in drug research

a) Early failures precluded the pharmaceutical companies from conducting further research on drug development. From a realistic perspective, the industry failed to appreciate the risks associated with new drug discovery. Failure is an inevitable component of the 8-12 year development process.
b) Lack of investment in R&D is another factor for the failure. For instance, Ranbaxy’s R&D budget fell from 9.2 per cent of sales in 2005 to 5.6 per cent in 2008. Firms are estimated to spend only 10-30 % of their R&D budget on new drug development. This further exacerbated research on new drug development.
c) Lack of focus and strategy in drug research
d) Dearth of experienced scientists in drug research.


Policy concerns

The Indian pharmaceutical sector has grown into a $20-billion global industry, flooding international markets with generic drugs and challenging big pharma’s patents. Discovery of a new drug could have placed Indian pharmaceutical industry in an altogether different league. For instance, the sales of US drug giant Pfizer’s top selling drug, Lipitor, is higher than the total sales of the world’s largest generic drug maker, Teva Pharmaceutical Industries. Unfortunately, as I mentioned earlier, the premier Indian pharmaceutical companies are in the course of revising their R&D strategy. Emulation of this strategy by the smaller companies will be the final straw. Thus the situation demands for an exigent policy revisit which will address the lacunae in the extant framework. It is imperative to address the following concerns in this policy revisit:

Does the current legal regime including the patent regime provide incentives for radical innovation? or
Is it lopsided in its approach of promoting only generic research? If yes, is this salubrious from a long term perspective?
Does the extant legal and policy framework maintain a salutary balance between addressing public health concerns and providing incentives for radical innovation?

Copyright Band-its and Public Interest: A Tainted Compulsory Licensing Decision?

Tis the season of compulsory licensing. First, we have a proactive DIPP exploring ways to create a more optimal compulsory licensing regime in India.

And now we have a quasi judicial body (the copyright board) deciding an actual compulsory licensing dispute..a decision that has been the subject of a crisp and succinct review in this guest post.

This copyright board decision pegging compulsory licensing (CL) rates for the broadcast of music at 2% of advertisement revenues earned by radio stations has created waves, literally and metaphorically. "Public interest", that magic word that has come to haunt many an IP owner in India, finds mention in several places in this decision.

The CL rates have been pegged "low" (when compared with the rather exorbitant rates that sound recording produces such as T series were demanding), owing to a "public interest" in the broadcast of content by radio stations.

Given the still inconclusive evidence on the nexus between copyright and the rate of creativity...and more importantly, the damning evidence that sound recording companies and collecting societies don't necessarily act in the interests of creative artists', a low rate is not really going to kill the sound recording industry...

However, public interest is a double edged sword. And if radio stations now leverage this concept to their benefit by availing of low CL rates to be dished out to content producers, one hopes that this very same concept will force them to deliver more content of a "public interest" variety as the years go by. The terms and conditions of the license granted to these radio stations clearly specify that they are to encourage and foster local "music" talent (as opposed to merely dishing out Bollywood item numbers). Therefore, the same "public interest" saber may be wielded in future to take them to task, should they fail on this count.

Legal Competence of the Copyright Board?

The question however remains: is this order by the Copyright Board good in law? As Prashant and I have been agitating from day one, any decision by this Board is tainted, as the very constitution of the board is legally flawed. Firstly, it is headed by someone who is not constitutionally competent to occupy the seat of a Chairman. As Prashant's RTI replies have demonstrated, Raghbir Singh, the current Chairman was 66 at the time of his appointment...which means that he was not eligible to appointed as a High Court judge at this mature age (no person above the age of 62 can be appointed as a High Court judge). The Copyright Act stipulates that only a person who is eligible to be appointed as a High Court judge could be elected as the Chairman of the Copyright Board.

Secondly, the Supreme Court had in a recent case (Union of India vs R Gandhi) held that a judicial body must have members that are reasonably independent of the executive. The Copyright board is staffed (in the majority) by law secretaries and the like--folks that, for the most part, act at the behest of the executive.

We detail out some of these objections to the constitutionality of the current copyright board in our submissions to a Parliamentary Standing Committee.

Wasted Resources?

However, where does all this leave us? We've come a good 9 years since the copyright board first began hearing this matter. We've had 18 counsels represent the interests of various parties in this case. And presumably none of these counsels did it for free (for the love of radio) but must have billed by the hour...or the minute as the case may be.

We've had the case yo-yo between the copyright board and the courts.. more times than one. We've had the Supreme Court admonish the Copyright board for arriving at a fanciful needle hour figure, sans any reasoned explanation of how they got there.

And now we finally have a decision by the board, rendered after countless hours of sittings, standings, examinations, cross examinations, arguments, counter arguments, rebuttals, sur-rebuttals and last but not the least, expert witness testimony...that must have cost the moon and various other parts of our wonderful galaxy.

It will be a great tragedy, if the entire process stands vitiated and has to be redone from scratch. Imagine the wasted time and resources ...surely all the money spent on this legal saga could have helped us establish a permanent copyright board..with a couple of branches perhaps, with latest state of art copyright libraries (dare I say digital ones at that), and some competent board members and staff.

And this brings us to the doctrine of necessity. Even if a court were to disband the current copyright board as one that is constitutionally flawed, the decisions of such a board are likely to be preserved under the doctrine of necessity. In other words, the court is not likely to hold the board decision and all of its findings as null and void (in a manner similar to the contractual concept of void ab initio).

However, such a board, once declared legally unfit, cannot sit in and decide future copyright disputes. It is pertinent to note that the government has now constituted a committee to recommend ways to better the composition (and working) of the copyright committee. Interestingly, all members of this committee are lawyers representing various clients in this compulsory licensing dispute, namely Neel Mason, Ameet Datta, Jagdeesh Sagar and Pratibha Singh.

Law vs Fact

What if the copyright board order is appealed (and there is every likelihood that it will be challenged this week itself).

Would the court then hold that no "deference" be given to any fact finding done by the Board? Those in the know of administrative law norms may be familiar with the age old and time tested law vs fact distinction...one that I am still unable to comprehend: aren't all legal propositions really "facts", albeit of a certain specific kind. The distinction becomes particularly problematic when we consider "mixed questions of law and fact", a nebulous category ingeniously invented by lawyers to open up any factual issue that wouldn't warrant interference otherwise.

Anyway, standard admin law norms suggest that courts are to defer to agency expertise when it comes to issues of "fact, and cannot reopen them unless there is a manifest error on the face of the record. However, in so far as issues of law are concerned, courts are free to review them de novo. Given the flawed constitution of the copyright board, woul d the court decide to not grant any deference to issues of "fact" that have been determined at the first instance by the Board? If such facts could be reopened by counsel, would it lead to a re-enactment of the entire saga once again before the courts?

I believe there is a recent case where a TRAI order had been appealed to a court in the first instance. Since this was the first appeal, the court appears to have held that it could review both questions of law and fact afresh. I'm hunting around for this decision and will bring you more on this once I find it. Alternatively, if any of our readers are in the know of this decision, please do let us know.

As to whether or not an appellate court hearing this particular compulsory licensing matter will adopt the above ruling and reopen all issues of fact (and perhaps even remand the case to a freshly instituted copyright board for specific factual determinations) remains to be seen.

Other Parties:

The board decision does not address another tricky legal issue. The only party that can effectively be bound by the current order is PPL. However, the order is worded in broad terms to cover all other music copyright owners. While one may argue that the same terms ought to bind T series as well (i.e 2% of ad revenue to be paid to them), one is not certain if similar terms would bind IPRS which collects on behalf of copyright owners over underlying musical works and lyrics. IPRS was and has never been party to the current proceedings (unlike T series which was a party but which worked out a private deal with one of the radio stations and whose matter was therefore divorced from the main proceeding). More importantly, it represents a different set of copyright interests (that of underlying copyright owners and artists) than sound recording copyright owners. Would the same 2% hold good here as well? Hopefully all these issues would be resolved in the days to come.

In any case, this saga is likely to drag on till 2011 and complete at least a decade of legal trials and tribulations. And is sure to go down in the annals of history as one legal rhapsody that entranced not just a band of lawyers, but the public at large (whether or not this merits categorisation as "public interest" strictu sensu).

ps: many thanks to Vivek Reddy, my co-blogger at LAOT, and an upcoming litigator from Hyderabad, for pointers on the TRAI decision and the standard of review.

Compulsory Licensing of Music: An Analysis of the Copyright Board Decision

We bring you a detailed analysis of the decision in the big ticket copyright compulsory licensing dispute (sound recording companies vs radio stations) by Karthy Nair, a sparkling 4th year student of NUJS. Prashant had already introduced this decision on the blog.

The recent judgment of the Copyright Board in Music Broadcast Pvt. Ltd vs. Phonographic Performance Ltd seems to suggest that the Buggles may have been a tad too hasty in predicting the untimely demise of the radio. In an order that covered nine cases, the Board held in favour of granting compulsory licences under Section 31 (1) (b) of the Copyright Act, 1957 to complainants FM radio providers against music providers such as Phonographic Performance Limited (PPL). Section 31 (1) (b) which was primary section in question reads as follows:

“31. Compulsory licence in works withheld from public. (1) If at any time during the term of copyright in any Indian work which has been published or performed in public, a complaint is made to the Copyright Board that the owner of copyright in the work-

(a)...

(b) has refused to allow communication to the public by broadcast, of such work or in the case of a sound recording the work recorded in such sound recording, on terms which the complainant considers reasonable, the Copyright Board, after giving to the owner of the copyright in the work a reasonable opportunity of being heard and after holding such inquiry as it may deem necessary, may, if it is satisfied that the grounds for such refusal are not reasonable, direct the Registrar of Copyrights to grant to the complainant a licence to re-publish the work, perform the work in public or communicate the work to the public by broadcast, as the case may be, subject to payment to the owner of the copyright of such compensation and subject to such other terms and conditions as the Copyright Board may determine; and thereupon the Registrar of Copyrights shall grant the licence to the complainant in accordance with the directions of Copyright Board, on payment of such fee as may be prescribed."

[the above clause will likely make it to the Guinness book as the worlds' longest sentence]...

Thus Section 31(1) (b) confers on the Board the power to grant compulsory licenses in works if it is satisfied that the copyright owners has refused to allow communication to the public of the work and such refusal is not reasonable. The licensee then will have to pay compensation and follow such terms and conditions as determined by the Board and pay fees to the licensor as prescribed.

In this case, the issue in question was that whether the FM radio industry could claim compulsory licensing on music owned by music providers such as PPL. This was based on the argument that the latter were being unreasonable in charging exorbitant royalties of FM radio channel providers for music owned by the latter which in turn was affecting public interest at large.

The argument regarding public interest was drawn up by pouring over government’s policy regarding the involvement of private sector in FM radio broadcasting over the years since the launch of the First Phase of privatisation in 1999. It was seen that the government has wanted to help develop the private FM radio broadcasting as a tool of engineering social development by which information, education as well as entertainment could be disseminated to the remotest corners of India. Interestingly, the Board concluded that FM radio broadcasters, though organized as business enterprises, thus now owe a social obligation towards nation building. With a view to promote the industry, the government itself had shifted from the burdensome fixed licence fee system to a revenue sharing model wherein 4% of the gross revenue was to be given to the government.

The fact that the radio stations broadcast were of public interest being established, the issue of whether the royalties charged by the music providers was reasonable came into question. In considering the issue, the Board reviewed and subsequently rejected many of the respondent music providers’ arguments. The Board firstly held that comparing the cost of content for radio service providers and TV Broadcasters was erroneous. While the former was bound by government directive to be a ‘free to air’ service (wherein It cannot charge any subscription from the public), the latter could and did charge the viewers. Also there were many other restrictions regarding content aired on radio broadcast as opposed to the television which again made comparing the incomes and costs over these two different mediums, as the respondents had wanted to do, difficult.

Furthermore, comparing the royalties charged on All India Radio (AIR), a state owned enterprise and private sector FM radio providers was again held to be wholly flawed. AIR had for decades enjoyed a virtual monopoly in the radio industry and could afford to make the royalty payments. The nascent FM industry, on the other hand, already running in loss, was hard pressed to cough up the high royalty payments demanded by the music providers of 14%-15% especially since its main content had to be music as it had too many restrictions on the type of content it aired unlike AIR.

It was also strenuously sought to be advocated by the music providers that playing their content over the radios was damaging their sale of music in physical formats such as CDs and cassettes. However the Board rightly pointed out that the respondents had not sought to assess how much of the loss was a result of newer digital formats such as IPODs, mobile phones, TVs etc and even piracy. In fact the counter argument raised by the complainants seemed to suggest that the popularization of music by the radio stations would only boost the music industry.

Given the fact that the radio service providers are running in losses, and have due to restrictions few income generating avenues - the fixed royalty system of the music providers, the Board found, would result in diminishing access of the work to the public. Using a ‘needle per hour’ concept wherein the prize of the license is fixed irrespective of the size of the radio service providers and its reach (listeners and advertisers) was ineffective and unreasonable. The Board concluded that the ability of the licensee to pay should be assessed on the advertisement revenue that it generated.

The Board held that keeping in mind the fact the radio service providers, though private commercial ventures, worked within the social development plan of the government, the only reasonable license fee model was wherein the music providers charge a fixed percentage of the net advertisement revenue. In fact the Board reasons that this would generate far more income for music providers as more broadcasters would be willing to come into the foray throughout the country which would generate further income. Based on the reasoning provided above the Board developed a set of terms and conditions under which it directed the Registrar of Copyrights to grant licenses to the complainants based on a revenue sharing model wherein 2% of the net advertisement earnings of each FM radio station would be set apart to pay the music providers.

Though the judgment is a definite positive for the FM radio industry, there still remains the question of whether it will help serve the very purpose on which the judgment hinged – that of public interest. Sure the average city dweller will be able to get his regular dose of ‘top ten 90s singles’ on his way to work, but it remains to be seen as to whether it would really help incentivise greater expansion of the private radio industry in tribal or remote areas wherein the revenue earned is likely to be less.

Justice Bhat and Controller General Kurian make it to MIP's list of 50 most influential people in IP

MIP has come out with its annual list of 50 most influential people in IP throughout the world. According to Managing IP “there are many types of influence that are brought to bear on the IP system:Political, Social, Economic.” On the basis of recommendations and research, Managing IPs journalists in London, Hong Kong, and New York decided the final 50 people among politicians, administrators of IP system, advocates for consumer and patent rights, innovative in-house counsel, out-spoken academics, company bosses and representatives from the digital and online revolution that is renovating the IP industry.

The two Indians who make it to this list of heavy weights, which includes the U.S. Vice President Joe Biden, WIPO's Francis Gurry and CAFC's Justice Rader, arethe Controller General of Patents, Trademarks and Designs Mr. P.H Kurian and Honourable Mr. Justice Ravindra S Bhat of the Delhi High Court.

PH Kurian, the Controller General of Patents, Designs and Trademarks, was also on last years list. MIP lists as his achievements all the new orders and regulations passed by him to stimulate India’s IP offices. For example he has passed an order hat all correspondence between a patent applicant and the Office during prosecution should be publicly available. As far as Trade Mark office is concerned, he is recruiting examiners, in preparation for India’s accession to the Madrid Protocol. His decision to move staff between the four main offices (New Delhi, Mumbai, Kolkata and Chennai) of India, in order to ensure that there was a full range of expertise in every office and also to break up 'cosy' relationships with applicants and their advisers.

Justice Ravindra S Bhat of the Delhi High Court, a new entrant on MIP's list, who has taken on more than his share of the most important IP cases, which has made him the most eventful judge amongst all IP judges at Delhi High Court. In the Roche v Cipla case, he ruled that public interest could be a factor when deciding not to grant an injunction for medicine. In Bayer v. Cipla, he ruled against an attempt to link the drug controller's office with the patent office. By deciding a trademark related case between ITC and Philip Morris, Justice Bhat’s influence widened beyond patents. Further, copyright owners are waiting to know his verdict regarding IPRS v Synergy Media Entertainment which is about the rights of copyright societies to collect royalties.

We congratulate Justice Bhat, Mr. Kurian and all those who have made the list.

Guest Post: FAQs on India and the Madrid Protocol

Prashant's excellent post some days ago covered in comprehensive fashion the build-up to the trademark amendment bill 2009, and the poor strategic calls that India may have made in pushing this bill through. Readers may also, in this context, recall a previous, equally insightful guest post on the challenges of the amendment bill, and implementation concerns that India ought to have looked at. There's little point in speculating over lost opportunities, though.

And so, instead we have what I like to term a 'forward-looking' note -- in the form of a quick and brief guest note from one of our readers, Tasneem Shariff, on the procedural formalities that will likely crop up in trademark practice, as and when the amended legislation is implemented. Tasneem presently works with Nagarjuna Fertilizers & Chemicals Limited, Hyderabad, and is a lawyer and a Company Secretary, who has, among other things, completed a Post graduate diploma in IPR from National Law School, Bangalore.

While this is not a commentary on the amendment in any way, it is hoped it will serve as a useful resource for practitioners, and will also help stakeholders speculate on possible changes that need to made on the regulatory front, in keeping with a recent call for suggestions for amendments to the TM Rules by the Controller General of the IPO.

Guest post: FAQs on India and the Madrid Protocol

The Trademarks (Amendment) Bill 2009 that allows any person or enterprise to seek registration of trademark in any of the 84 member countries of Madrid Protocol through a single application was passed by the Lok Sabha (House of People) in December 2009. The bill was passed by Rajya Sabha (House of States) on 10th August 2010.

The bill amending Trademarks Act to bring into force Madrid Protocol in India is yet to be implemented i.e. the effective date for the amendment bill to come into force has not yet been notified. The rules have to be amended to enable filing of Madrid applications in India. The Ministry of Industries have assured the Parliament that the infrastructure in Trademarks Registry would be upgraded to ensure that Madrid Protocol is implemented in India in appropriate manner.

What is the Madrid System?
The Madrid system facilitates registration of Marks in the International Register administered by the International Bureau of the World Intellectual Property Organization (WIPO). This extends protection to all the designated member countries, which is equivalent to territorial registration in nature.

What is the procedure for an application under the Madrid Protocol?

• Upon India being a signatory to the Madrid Protocol, applicant while making an application to National Office may select from the list of the member countries where he seeks protection of mark.
• The National Office in the country of origin examines whether the international application corresponds to the basic application and complies with home state requirements.
• On the National Office being satisfied, it forwards the application to WIPO. WIPO examines the application and the International Bureau places the mark in the International Register of Trade Marks.
• The International Bureau advertises the mark and passes on the details of the application to the designated countries listed in the application for their consideration, consequent approval and granting of registration.
• Member States designated in the application have twelve months to notify WIPO of any objections, but under special provision United Kingdom has eighteen months.
• If any Member State stated in the application does not send any objection within the prescribed period time limit it is deemed to be accepted by the Member State.

What is the life of a mark under the Madrid Protocol?
Registration under the Protocol lasts for 10 years, but can be renewed subsequently for periods of ten years. Any regional registration can be made an international registration, upon satisfying the conditions and requirements under the Madrid Protocol. The renewal rights in other countries designated in the application can be done under a single transaction.

What is the process for objecting to an application under the Madrid Protocol?
Besides individual oppositions before the National Offices of the designated Member States stated in the application, there is also a provision for a “Central Attack” under the Madrid Protocol. Under this if any application to the WIPO under the Madrid Protocol is rejected in the country of origin itself, at the discretion of the National Office or on the basis of an opposition, the application is then treated as rejected by all Member States designated in the application, in which the applicant seeks protection.

What are the advantages of the Madrid Protocol?

• The Madrid Protocol enables applications to other 85 member countries. The list of members can be viewed here.
• International filing of applications can be accomplished without the appointment of a local agent in the designated countries.
• A single application at the origin country can be made either in English or French language.
• A single filing fee is payable in the applicant’s home currency. This eliminates the need to process multiple bills from different countries.

The extent of international protection desired by an applicant is left to their discretion. The Madrid Protocol allows applicants to choose exactly the countries in which they seek protection. There is also the option of filing in all Member States of the Madrid Protocol, thereby obtaining wide spread international protection of their mark.

This is particularly relevant to Indian companies having foreign interests, as it removes several procedural barriers in obtaining effective international protection of marks, and reduces considerably the cost and effort in such applications.

Commercialize University Research - Sir William Wakeham

Delivering a lecture titled " From University Research to Economic and Social Benefit"  at IISc, Sir William Wakeham, former Vice-Chancellor of Southampton University stressed on the need for adoption of a commercial approach to university research, as ToI reported here.

Sir William noted that "for the proper exploitation of academic research, many universities in the UK have tried to come out with a model where the industry and educational institutions work closely to take research to the level of making it commercially applicable and also look beyond intellectual property rights issues" 

He further added that "the universities need to undergo a cultural change  to ensure that university research leads to applications that bring economic and social benefits. Universities are not generally flexible considering that they have the structure of committees. Most industrial organizations have no patience for dealing with such structure, which makes the change important. There is a need to exploit intellectual property, attract venture funding, get the most out of incubators, science parks and business managers, even while we do academics. A lot of universities could be conservative about the connection with business, but we need to break that and ensure successful commercial spin-offs"

As ToI reports,Sir Wakeham is credited for taking the value of university spin-outs at Southampton to an all-time high next only to the Stanford University. Speaking on these lines, he added :

"The approach to spin-outs has to be focused on small number of business opportunities that easily attract funds from venture capitalists or private funding agencies."

He cited the example of Imperial Innovations, a private company that was set up by the UK's Imperial College primarily responsible for transfer of technology; incubating companies and venture capital. He also cited the Southampton University's effort towards providing an entirely different model of employment to the local community for regenerating the port city of Southampton. This was done by utilising the university's niche expertise in areas such as oceanography and photonics.

While concluding he noted that " increasing innovation impact of the research base is key economic and political issue for UK. I am sure, India too is on the same path and some of these issues have a resonance with this country. The UK experience has to be examined to see how it can be applied in the Indian situation."

This lecture series was organized by IISc and Royal Commission of UK for commemorating the centenary celebrations. The lecture was delivered at IISc Bangalore, Pune, IIT Kharagpur and Jadavpur University  from August 9-13, 2010.

TM reclassification - IPO issues fresh notification

In response to what has presumably been a never-ending series of complaints from practitioners, the Controller General of the Intellectual Property Office has issued a notice to supercede all previous notifications on the reclassification of services in the TM Schedule front, which we have covered here before.

Following a meeting with stakeholders on 21 August 2010, the CGPTDM issued this notice (downloadable file), which suggests that the Trademarks Registry has seriously been rethinking about its previous advice to TM registrants, applicants, and practitioners.

The present notice, dated 23 August 2010, makes some critical observations on pre-existing registrations and advertised marks in class 42,. I summarise what I understand from the notification below --

1. Marks already registered in class 42 as on date will remain registered in class 42, irrespective of which services their classes now fall in.
2. However, this will not preclude proprietors in class 42 to voluntarily apply for conversion into separate classes under Rule 101 of the TM Rules.
3. Renewal of such registered marks (in class 42) will also be made in the same class.
4. Marks already advertised in the journal in class 42 shall proceed to be registered in the same class, and upon registration, shall be treated in the same manner for the purpose of registration, classification and renewal, as the existing registered trademarks.

In re pending applications, the notice makes the following observations –

1. With regards those marks awaiting examination, the Examiner is expected to inform the applicant of the appropriate class/es into which their goods fall, and make amendments or restrictions accordingly.
2. Where the application is to be split into multiple classes, the priority date of the application shall stay.
3. Where applications have been examined and responded to already, there will be a reexamination to check for classification of services, which the Examiner will inform the applicant about.

In addition, the notice also informs about pending oppositions to marks in class 42, which will remain valid. New applications in classes 43 to 45 will now be examined with respect to class 42 as well.

Arguably, this appears to be a much more rational/reasoned notice than the one issued previously, and keeps in mind particularly the concerns of applicants as also the workload of those at the Registry.

With reclassification of pre-existing registrations no longer appearing to be mandatory, costs for applicants will be lower or nil. There remains some work for the Examiner though, who will have to examine each application in any of the new classes in light of registrations in class 42 as well.

Patent Auction- Now in India

On a day when we just reported a bad rating for IPR protection for India, the news of India's first patent auction rolled in.

Tech Transfer 2010,a one day patent technology showcase will be held on August 28,2010 at Ahemdabad where patented pharma products will go in for an auction. This is being organized by Foundation for MSME Cluster in alliance with Skyquest Technology Consulting, a private company engaged in facilitating buying and selling of patents in India.

As ET reports,a major attraction at the auction would be Gefitinib (Iressa), a drug which is used in treatment of non-small cell lung cancer. AstraZenaca holds the patent on the same since 1994. As per 2009 annual report of AstraZenaca, Gefitinib  is one of the fastest growing products globally.  Natco Pharma also manufactures it using a different process method, while Intas Biopharma markets generic version of Gefitinib, after acquiring rights from other company, which also has a different process method.

This auction will be showcasing another non-infringing process of production of Gefitinib, a cost and time effective method which increases the yield of Gefitinib production in less synthetic steps.

Other lucrative options at the auction include a herbal drink that tastes like beer, a bio-insecticide product that attracts and kills mosquitoes using bird feather, a transdermal patch for contraceptives drug delivery and a technology that can make a snake venom into analgesic that can help cure neuropathic pain.

Shriya Damani, co-founder & CEO of Skyquest Technology said that  "this is probably the first of its kind patent showcase that has been organised in the country, where patent holders (sellers) and companies (potential buyers) will come face-to-face on the same platform to discuss, negotiate and strike a deal. There is a huge potential for developing business in patent auctioning as the economy grows, companies need more products to add to their existing portfolio and with patented products the companies can create niche market for themselves."

 The lack of any platform for the effective commercialisation of patented products in India have been lamented over by many. Consulatants are of the opinion that the only few methods usually used for commercialisation are online and therefore tracking them becomes a difficult task in itself. 

Abhisekh Pandurangi of Closer2Patents, a patent consultancy firm notes :

"My professional experience and observation says that there are quite a few patent commercialisation deals taking place at college and individual levels, facilitated by local law firms/patent consultancy firms."

Ms. Damani further adds :

"Its hard to give a figure to the global market size of patent commercialisation. For instance, Stanford University and UCSF have earned over $250 million over its lifetime from Cohen-Boyer gene-splicing patent, which expired in 1997.US based universities have turned their research into revenue generating models, making them self-contained. The same can be replicated in India, as the country has a large pool of university and individual research."

A US magazine had conducted a survey in 2006 and had listed five universities who have converted their research into gold mines.These are New York University (researched related income $157 million), Wake Forest University ($ 60.5 million), Stevens Institute of Technology ($4.56 million), Ohio University ($3.26 million) and Brigham Young University ($3.07 million).

Reports suggest that Ocean Tomo LLC was reponsible for world's first live patent auction in 2006. Ocean Tomo has been able to extend the use of a live auction as a mechanism for IP transfer. Ocean Tomo has been able to reduce the cost to many sellers of marketing their IP. Such auctions have also facilitated faster transactions as opposed to traditional royalty negotiations which are often time consuming and go on for years. These auctions also facilitate anononymous dealings as prospective patent purchasers want to keep their identities confidential as the purchase of a patent can be very valuable competitive intelligence.

As of now Yeda Research and Development Company, an Israel based company, and US-based Startel and Intellectual Ventures are the big players in the field of commercializing patents. One of the most successful patent auction till date has been last year's Shanghai Patent Auction which is held as a part of the China Patent Week. The patents auctioned included patents related to bio-medical technologies, environmental protection and energy saving technologies.

Patent auctions therefore do hold a lot of promise for a country like India as an effective way of commercializing patents and a emerging business venture. The outcome of this patent auction at Ahmedabad will surely provide valuable cues to assess the market of commercialization of patents in India.

India fares badly in IPR Protection Report by PERC

In a report titled " A review of  intellectual property rights risk in Asia" by Hong Kong-based Political and Economic Risk Consultancy (PERC), India has been rated to be pretty bad in terms of protecting intellectual property rights. On a scale of 10, India has been given a 6.5, where zero is the best possible score.

Indonesia tops the chart of weakest IPR protection and has been given a 8.5!

Indonesia has passed new laws aimed at improving  protection of intellectual property, but the rules are not enforced effectively at all, and piracy levels in Indonesia remain among the highest in the world.

AFP reports that "the rankings largely reflect studies by the global software industry, which is alarmed by the easy availability of pirated movies and software in Asian cities despite governments' pledges to crack down."

The scores of other countries are as follows:

Singapore -1.5 

Japan - 2.1

Hong Kong- 2.8

Taiwan  -3.8

South Korea-  4.1

Vietnam - 8.4

China- 7.9

Philippines- 6.84

Thailand -6.17 

Malaysia- 5.8.

PERC conducted the survey  of 1,285 expatriate managers  between June and mid-August this year. The Report however is not available for open access.

SpicyIP Guest Post: From “Hire” to “Commercial Rental” Scope, Inadequacies, Implications & Recommendations

Sai Vinod Nayani, a third year student at the National University of Juridical Sciences, Kolkotta has sent us this very interesting guest post on the proposed amendment in the Copyright Amendment Bill, 2010 inserting the term 'commercial rental'.

From “Hire” to “Commercial Rental” Scope, Inadequacies, Implications & Recommendations

by,

Sai Vinod Nayani

The Copyright (Amendment) Bill, 2010 proposes to replace the word “hire” with “commercial rental” in Sections 14(d)(ii), (e)(ii) and 37(3)(e) dealing with the meaning of copyright. The authors of Cinematographic works and sound recording have the exclusive right to give on hire offer to give on hire copies of their work. Now, the Amendment proposes to replace “hire” with “commercial rental”. The Amendment also inserts a definition for commercial rental. Unfortunately “Commercial rental” is defined in a fairly expansive terms leading to uncertainty. In my opinion a narrow definition should be adopted vis-à-vis the holders of the rights to make the provision fair.

Commercial rental is not something new to the Copyright Act, 1957. The 1999 amendment to the Act authorized the author of a computer programme, right to give on “commercial rental”, instead of “hire”, copies of their work. The Amendment, as claimed in the Statement of Objects and Reasons of the bill, is predominantly intended to make the Act in compliance with the two WIPO Internet treaties. The WIPO Copyright Treaty (WCT) confers on authors of Computer programme, cinematographic work and works embodied in phonograms exclusive right to give on “Commercial Rental” to the public copies of their work. The WIPO Performances and Phonograms Treaty (WPPT), also confers to performers and producers of Phonograms exclusive right to give on “Commercial Rental” to the public original and copies of their work. Even the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) as part of Rental Rights gives the authors the Right to authorize “Commercial Rental” copies of their work. However, not many countries have preferred to use “commercial rental”. Also, there are no notable laws around which use “hire” either.

Scope of “Commercial Rental”
The Amendment inserts a definition to “Commercial Rental” which reads as follows:
“(fa) “Commercial rental” does not include the rental, lease or lending of a lawfully acquired copy of a computer programme, sound recording, visual recording or cinematographic film for non-profit purposes by a non-profit library or non-profit educational institution.”
The proposed definition is more like an exception to copyright infringement. Instead of explaining and ascertaining the ambit of “Commercial rental” it excludes giving on rent, lease or lending of the work by non-profit library and non-profit educational institution for non-profit purposes. However, certain inferences relating to its scope can be drawn from the above definition:
(i)Legislative Intent: The exclusion of giving copies of Copyrighted work on rent, lease or lending by non-profit libraries and educational institutions, is a step forward towards encouraging research and scholarship. The “commercial” preceding rent implicitly takes “non-commercial” or “non-profit” renting out of its scope.

(ii)With the proposed definition it can be inferred that “commercial rental” means giving on rent or lease or lending of a lawfully acquired copy of the work. It is unlikely that it would encompass something more and would not permit such organizations from distributing in such ways.

United Kingdom
The UK Copyright, Designs and Patents Act, 1988 grants owner of the Copyright, the exclusive right to rent or lend the work to the public. The act further qualifies “rental” as making a copy of the work available for use, on terms that it will or may be returned, for direct or indirect economic or commercial advantage and “lending” as making a copy of the work available for use, on terms that it will or may be returned, otherwise than for direct or indirect economic or commercial advantage, through an establishment which is accessible to the public. Irrespective of nature of the work, i.e. literary or dramatic or sound recording or computer programme or cinematographic, rental and lending rights are granted to authors of the work.

United States
Title 17 of the United States Code grants the owner of Copyright the exclusive right to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease or lending. The US law also does not use the word “Commercial Rental”.
It is noted that both UK and US legislations does not restrict rental rights to computer programmes, sound recordings and cinematographic films as in India (with the Amendment). Similar rights are given to authors of literary, dramatic and artistic works. The UK law doesn’t include right to give on “lease”. It can be safely concluded that Commercial Rental includes least rent, lease or lending of the work.

(iii)The “Commercial rental” exemption is permitted only for non-profit purposes and to non-profit library or educational institution alone. The scope of rental rights has been decreased as this exception was earlier not present. On a stricter interpretation of this might entail lending or renting of personal copy of a work as infringing of copyright.

Inadequacies
The proposal is laudable to the extent that it permits non-profit libraries and educational institutions to rent, lend and lease copyrighted works. However, the provision does not adequately address the following concerns:
(a)Non-commercial Lending: The present terminology suggests that lending of the work other than by non-profit libraries and educational institutions would amount to infringement of the right of the holder. Lending need not always involve “profiteering”; hence, by this definition lending of a personal copy without any consideration is not permitted. Such non-profit lending lacks the “commercial” element and any prohibition would be unjust.

(b)For Non-profit Purposes: If any non-profit library purchases a cinematographic works for Rs. 1000/- and rents it for Rs. 100/-, after ten such transactions it would recover the cost and any subsequent transaction would entail profit. The purpose of the provision is thus defeated given that the definition permits renting solely for non-profit purposes.

(c)Non-Profit Libraries: The scope of the term ‘non-profit libraries’ is ambiguous. For instance, on a strict interpretation of ‘library’, the lending of a work from a personal library without any consideration could amount to copyright infringement. This might be because the personal library under consideration may not fulfill the necessary criteria for being legally classified as a non-profit library. On the contrary, a liberal construction would permit the lending of such work by interpreting ‘non-profit libraries’ as places which has a collection of books and other materials.

Implications

a.Commercial rental exception to libraries or educational institutions was earlier not permitted to computer programmes. Now, with the proposed definition this exception is extended to computer programmes along with cinematographic works and sound recordings.

b.Recognition of Exhaustion of Rights in a Limited Sense: The deletion of the words “regardless of whether the copy has been sold or given on hire on earlier occasions” from Section 14 and amendment to the definition of “infringing copy” has been viewed as application of exhaustion of rights. However, such is exhaustion is not complete as renting or lending or leasing of a legally acquired copy is not permitted without a license.

c.Performance & Rental Rights Exception: Section 52(1)(i) permits communication of cinematographic films and sound recordings in the course of activities of an educational institution. Playing a sound recording in public without profit as per Section 52(1)(k) is permitted. With the additional rental exception the scope of rights of the holder is further reduced.

Recommendations
The rental exception should not just be restricted to non-profit libraries and educational institutions alone. Instead the exception should be extended to all non-profit purposes as lending is not always intended for profit. The UK legislation defines renting and lending of work. The definition of the latter clearly lacks the “commercial” character. According to the definition lending for commercial purpose is nothing but giving on rent. The purpose of the proposed definition would be self defeating if a similar meaning is attached. Hence, it is recommended that the words “by a non-profit library or non-profit educational institution” in the definition be deleted. However, it is reminded that copies made out of the legally acquired copy for non-commercial personal use, for instance in Section 52(1)(ad)1, would not be permitted to give on rent or hire or lend for any purposes as this exception is applicable only to legally acquired copy. In addition, in order to maintain consistency in the scheme of the Copyright Act it would be appropriate to have this provision under Section 52 dealing exceptions to copyright infringement rather than under definitional clause.

Apart from the above, the following changes need to be brought in so as to eliminate ambiguity:

a.Rent and lease can be for a period which can exceed the term of copyright. Hence, it is suggested to have an explanation to clarify the same.
b.Section 51 of the Act makes unauthorized hiring of copy of the work as infringement of Copyright. This has to be replaced with “Commercial Rental” so as to ensure uniformity in the Act.

Conducting a 'Due Diligence' on an Indian Patent before it goes to Litigation

Given the fact that most patent litigation before High Courts is usually handled by lawyers who are normally not involved at the stage of patent prosecution, I thought it would be interesting to start of a discussion on how best to conduct a 'due-diligence' on a patent before taking the decision to take it to litigation. The contents of this post are absolutely basic and chances are that most practicing lawyers already know about it. Part of the contents of this post are based on case-law that has developed so far and part of it on my experience on the defendant's side.

1. Get the file-wrapper and the extract from the patent register: The first step is to ensure that as the lawyer handling the case you have a complete and up-to-date copy of the file wrapper of the patent. A file-wrapper is basically a fancy name for the entire patent file starting with the application for a patent to the final patent itself. A file-wrapper will also contain all necessary correspondence. Ideally your client or in-house counsel should already have the file-wrappers. Applying to the patent office and expecting to receive the same can take frightfully long and you probably don't want to waste your time on this when you have a litigation on your hands. However if you are on the defendant's side you probably have not other choice. Also from what I've seen the patent office very often does not even hand over the entire file wrappers and it is difficult to judge whether they've missed out on anything since the papers in the patent office file do not always seem to be consecutively numbered like they would have been in the case of a suit filed in a court of law. The 'extract from the patent register' basically refers to the relevant entry in the patents register that is maintained by the patent office. This register contains details of the patent such as ownership, licencing, renewal of the patent term on a yearly basis. If a patent is not renewed on a yearly basis it is not enforcable and in order to prove that a patent is in force a patentee is required to file an extract of the patent register. The patent office is supposed to list these details on its website under the new IPAIRs system. However this feature of IPAIRs has never functioned when I tried to use it. The most important component of a file-wrapper is the correspondence between the patent office and the applicant since this correspondence often narrates its very own tale in regards the level of scrutiny that a patent application undergoes.

2. Assignment deeds: The golden rule of any litigation involving property rights is to first establish the title to the property. In the case of a patent there could be upto three different assignment deeds involved at three different stages. Each category of assignment deeds has been elaborated on below:

(i) Proof title (Section 7): As per Section 7 of the Act and the corresponding Rule 10 of the Rules all applicants are required to establish proof of right to file the patent application. This basically means that the applicant has to prove that the inventor has assigned him the right to file a patent application for his invention. Ideally the 'best' proof of title that one can file is the assignment deed between the inventor and the patent applicant. In the existence of any contractual dispute between the inventor and the patent applicant make sure to go through the fine-print and if possible interview the witnesses to the 'assignment deed'.

(ii)Substitution of Applicants (Section 20): As per Section 20 an existing patent applicant may either transfer his patent application to another party or alternatively to share his existing title with another party who can be a co-applicant. However any such attempt to substitute applicants requires permission from the Controller. Therefore in case there has been a substitution of applicants at the pre-grant stage it is necessary to ensure that all assignment deeds and orders of substitution under Section 20 are ready to be filed so as to ensure that the defendant does not make this an issue. Any irregularity at this stage could jeopardize the entire case since ownership is pretty much the jugular vein of any property dispute.

(iii)Assignment of a granted patent (Section 68): As per Section 68 and 69 of the Patents Act all assignment deeds, assigning a patent, must be in writing, duly executed and registered in the Patent Register. For a more detailed understanding of the terms 'duly executed' in Section 68 I would like to refer you to Sai's post over here. Ensuring that the assignment deed is indeed entered into the Register is of paramount importance since the failure to do so would render the assignment deed null and void since Section 69(5) is clear on the point that a non-registered agreement will be inadmissible in a Court of Law. As a result the exclusive licencee or the assignee will not have the standing to sue for patent infringement. The scary consequences of not getting a patent assignment deed registered are best-captured in the case of NRDC v. ABS Plastics Ltd.

(iv) Stamp Duty: While I cannot claim to be an expert on the Stamp Act I think it would safe to say that the Government does expect its pound of flesh from any patent assignment deed that creates an interest in India. Failure to pay the appropriate stamp duty on a patent assignment deed will lead to the deed being impounded by the court, which will also not enforce the assignee's statutory rights until such time that the stamp duty has been paid. Once the document is impounded it will be sent to the Stamp Commissioner to determine the stamp duty payable to the revenue Therefore it is unlikely that the assignee will be able to get an injunction in his favour without having paid the necessary stamp duty. Given the complexity of patent assignment deeds, especially global assignment/licensing deeds, it would bode well to take competent professional legal advice on the computation of such stamp duty.

3. Section 8: The lethal Section 8 promises to be one of the most potent threats against the enforcement of patents in India. Section 8 requires all patentees to have filed, at the pre-grant stage, details of all corresponding patent applications filed by the patentee in all other countries. In the Chemtura judgment last year the Delhi High Court refused the grant of an interim injunction on the grounds that the patentee had not revealed to the Indian Patent Office adverse office action reports from the USPTO. The fact of the matter is that Chemtura is not an isolated case and it is possible that there are several thousand patents granted without the corresponding information of foreign filings even being filed. It is upto individual lawyers to evaluate the nature of these non-disclosures while evaluating the strength of their patents. If particularly damaging information from foreign filings has indeed been suppressed you may want to formulate a Plan B in order to save your client the expenses of a full-blown litigation.

4. Statement of working (S.146): Given the fact that adequately working a patent has been an issue in the grant of interim injunctions it would bode well to ensure that the file wrapper contains statement of workings; that are required to be filed with the Patent Office under Section 146 of the Patents Act. While it maybe possible to file other information, it would always be easier to convince a Judge with information that has already been supplied to the patent office in consequence of the Controller's demand for such information under Section 146. Further, if in case the product is being imported by the patentee, special care must be taken to devise strategies to counter any possible apprehensions of the product not being made available in adequate quantity in India and whether the requirement of local working will actually raise the costs of the product in India. Affidavits of expert witnesses in this regard may help the patentee.

5. Disclosure of Prior Art in the Patent Specification (S.10(4): Section 10(4) of the Patents Act states the requirements of a complete specification. In pertinent part the patent specification requires the patentee to fully disclose the invention and the best method to operate it. The IPAB in it Glivec judgment has however read in a lot more into its requirement. In pertinent part the IPAB stated “ We agree with the Appellant that the furnishing of prior art is not mandatorily required under the Act unlike in the EPO- Rule 26 requires “… indicate the background art which, as far as known to the applicant, can be regarded as useful for understanding the invention, for drawing up the European search report and for the examination, and, preferably, cite the documents reflecting such art”. But to establish novelty, anticipation, inventive step and to overcome objection under section 3 particularly 3(d) and even to avoid opposition and future litigations it becomes absolutely necessary for an applicant for patent to disclose the relevant prior art where applicable including the closest one, to his knowledge and distinguish its alleged invention over the same. However, still, Indian law requires (section 8 of the Act and rule 12 of the Rules ) information relating to objection, if any, in respect of novelty and patentability of the invention and any other particulars as the Controller may require. To our view, unless the relevant prior art including the closest one is disclosed the patent applicant can not be said to have discharged its duty or obligation of disclosing the invention under section 10(4) of the Act. In the present age almost every invention is made by way of some improvements of existing technology as a further solution of some existing technical problem in a given field.” While patent applications filed by foreign companies usually have some minimal reference to prior art, especially prior patents, there are several patent applications filed by Indian companies, that I've reviewed, which have virtually no reference to any prior art whatsoever. Going by the IPAB's purposive interpretation of Section 10(4) a patentee would be well advised to review his existing patents and formulate strategies to counter such an argument that may crop up at the time of litigation.

Conclusion: The above are only few of the points that should crop up during a due diligence. In case your company has patents of considerable strategic value I would urge you to conduct a due diligence and sort out any possible problems even before you send out your first legal notice to the opposite side. If need be employ a law firm to carry out such a due diligence. However in order to eliminate any possibility of a conflict of interest the due diligence task should be assigned to a law firm which is not the law firm that handled the successfull prosecution of the patent. A proper due diligence would save a company from venturing into high-risk unwinnable litigation.

Off Topic : Call for Papers : NLIU Law Review

About the Law Review 

The NLIU Law Review is an endeavour on the part of the student body of the National Law Institute University, Bhopal to encourage and inculcate in the students a spirit of legal research and develop their interest further in unexplored areas of the law. It is the first of its kind in the University which has entirely been the effort of the Student Body. This exclusively student-run journal is a bi-annual, peer-reviewed law journal which seeks to focus on the burning issues in the legal scenario and promote interest in the same. The first issue of the journal was a success and we look forward to an increasingly positive response to carry forward the journal and ensure a heightened level of enthusiasm in the legal fraternity regarding the same. 

Call for Papers 

The journal invite seeks to invite Articles, Essays, Case Notes and Comments from a wide range of legal sub-disciplines and a variety of topics of legal and contemporary relevance from law universities in India and abroad. Our aim is to broaden the horizons and ensure increased communication and better understanding between various members of our legal community. The first issue of the journal was a success, containing articles on an assortment of legal issues like Environmental Law, Family Law, and Criminal Law etc. The submissions to the Journal are selected for publication on the basis of a peer-review mechanism conducted through an external Article Review Board consisting of academicians and experts in the field of the respective areas of law. The Journal is edited by an Editorial Board consisting of students from the National Law Institute University selected on an annual basis through a selection process that tests them on their editing skills and knowledge in the concerned areas of law. 

The NLIU Law Review is now accepting submission for the forthcoming issue. The deadline for the submission of Manuscripts is 4^th October, 2010. 

Submission Guidelines

• The submissions must conform to the guidelines specified and should be sent with a declaration of originality (which can be obtained by a request via e-mail) in the specified format by 4^th October, 2010. Submissions received thereafter shall be considered for publication in the next issue.
• Submission should be accompanied with a covering letter including author’s name, email ID, mobile number and college name.
• Submissions must be in electronic form sent via email.
• Papers submitted must not be written by more than 2 authors.

Style guidelines

• The word limits for the same are as follows: Articles: [6000-10000 words], Case Notes:[2000-5000 words], Legislative Comments:[1000-3000 words], Book Reviews:[1000-3000 words].
• All submissions must be in (.doc) format. It must word processed and compatible with Microsoft Word 2003 and 2007.
• Papers must include an abstract of 250-300 words inclusive in the word limit.
• The text for the Main Body must be in Times New Roman, 11 points, 1.15 line spacing, justified, 1 inch margins on all sides. For the Footnotes it must be Times New Roman, 9 points, 1 line spacing, Justified.
• Citations must conform to standards laid down in The Bluebook: A Uniform System of Citation (18th ed. 2005).
• Submissions must use only footnotes as a form of citation. Substantive footnoting is permissible.

Nature of Submissions 

Articles must be of 6000-10000 words wherein the author must apply theoretical and/or research findings to topics of legal and contemporary relevance, or formulate his/her own ideas and  theory regarding the same. It should contain a comprehensive study of the theme indicating the lacunae in the existing framework with suggestions and recommendations.   

Case Notes must be of 2000-5000 words and should focus on analysis of a landmark judgment where the author has critically dealt with the case and put forward her/his remarks on the issues dealt within. It must also include an overview of the case history, relevant facts and legal findings based upon the same. 

Legislative Comments must be of 1000-3000 words. It should include a concrete analysis and critique on new legislations, pending or otherwise of contemporary relevance along with the author’s views and propositions relating to the issue. 

Book Reviews must be of 1000-3000 words. It is an overall critique of the book and must include the author’s observations, arguments, or criticisms regarding the subject matter of the book being reviewed.   

For further clarifications regarding the submission guidelines or any other subject matter, please contact nliu.lawreview@gmail.com.

Guest Post: The Drama in the Definition of 'dramatic works'

Shreya Aren, a 4th year student at the National Law School of India University has sent in this excellent guest post on the definition of 'dramatic works' in the Copyright Act, 1957. Clearly blessed with a sharper vision than most of us, she points out to how the Supreme Court may have actually quoted the wrong definition of 'dramatic works' in one of its judgments.

The Drama in the Definition of 'dramatic works'

By,

Shreya Aren

The search for the correct definition of “dramatic work” is a task in itself. There is a conflict amongst the bare acts – Universal defines it as including “any piece of recitation, choreographic work or entertainment in dumb show, the scenic arrangement or acting, form of which is fixed in writing or otherwise but does not include a cinematograph film” while Professional omits the comma after acting. The Supreme Court in Manipal v. B. Malini Mallya, which is discussed later, has quoted the former definition. The correct definition as on the website of the Ministry differs from the draft given out by the government when the Copyright Act, 1957, first came into force. The definition on the website of the Copyright Office reads, “[A]ny piece for recitation, choreographic work or entertainment in dumb show, the scenic arrangement or acting (no comma here) form of which is fixed in writing or otherwise but does not include a cinematograph work”.

An important question arises as to inclusion of a piece for recitation in dramatic work. If this includes a written work, say a play, then it would largely be redundant since S. 14 of the Copyright Act, 1957, provides the same rights in a copyright for a literary work and a dramatic work. At the same time, the phrase “fixed in writing or otherwise” seems equally bewildering. Fixation is an important requirement under copyright law. However, the meaning of the phrase is not easily discernible. Is it to cover mere written or literary works under the definition of dramatic work? Or is the intention to provide protection to a dramatic performance, say stage performance of a play, whose expression, i.e. script, has been fixed in writing? In the leading case on this point, Norowzian v. Arks Ltd. [[2000] E.C.D.R. 205], the court interpreted S. 3(2) of the U.K. Copyright, Designs and Patents Act, 1988, which reads “Copyright does not subsist in a literary, dramatic or musical work unless and until it is recorded, in writing or otherwise…” to mean that copyright would not would be available for a stage performance for which there is no script.

In the case of Academy of General Education, Manipal v. B. Malini Mallya [AIR 2009 SC 1982], an argument was raised that literary work is different from dramatic work. The court observed that the difference between the two rests on the fact that a literary work allows itself to be read while a dramatic work “forms the text upon which the performance of the plays rests”. The court went on to say that the Copyright Act, 1957 makes a distinction between a ‘literary work’ and a ‘dramatic work’. A dance performance will not be covered under literary work but will be covered under dramatic work. The decision of the court rested on a will, which had bequeathed all rights in literary works to the respondent and also, named her as the residuary legatee. The question related to copyright in respect of a form of dance ballet, which had been developed by the testator. The court held that such rights (rights to seven verses of the ballet as well as its theatrical or dramatic form) went to the respondent by virtue of her being the residuary legatee. Therefore, the court impliedly differentiated between literary and dramatic works. It is interesting, although probably inconsequential, to note that the Supreme Court also quoted the incorrect definition of dramatic work.

The position of the law still remains unclear, with the seven verses also, arguably, having been regarded as dramatic work. A plausible solution is to allow for copyright of literary work in any written piece. This is protected from infringement since an adaptation to a dramatic work is also the sole right of the copyright holder. Dramatic works would be performances (pieces for recitation, choreographic work, entertainment in dumb show.) These might have a literary work as their basis. In such a situation, the incorrect ‘piece of recitation’ would perhaps be more befitting.

Copyright Board Delivers Judgment in Mega-Compulsory Licensing Dispute; Fixes Royalty at 2%

The long running compulsory licensing dispute between radio stations and copyright societies has finally concluded, with the Copyright Board fixing the royalty at “2% of net advertisement earnings of each FM radio station accruing from the radio business only for that radio station shall be set apart by each complainant for pro rata distribution of compensation to all music providers”. Para 25.13 of the Order states that the current published tariff of PPL is Rs. 2400 per needle hour or 20% of the net advertising revenue, whichever is higher. Apparently even PPL's expert witness, Prof. Laroyia stated in his cross-examination that the rate of Rs. 2400 per needle hour was “exorbitant and unreasonable”. The Order of the Copyright Board has been loaded on the SpicyIP website over here.

This dispute has had a long, troubled history with litigation before the Bombay High Court, the Delhi High Court and eventually the Supreme Court of India. An earlier Order of the Copyright Board, which is available on the fabulous India Kanoon site, was set aside by the Supreme Court due to irregularities in recording evidence. In pertinent part the Supreme Court stated “However, we do not approve the manner in which the Board has dealt with the matter. It has refused to examine the witnesses. It took up the matter on a day for hearing which was fixed for production of witnesses. We, therefore, are of the opinion that the order of the Board should be set aside and the matter be remitted to the Board again for the consideration of the matter afresh on merit.” The panel hearing the dispute was thereafter re-constituted and this time the Copyright Board allowed both parties to carry out extensive cross-examination of all expert witnesses, albeit after a slight nudging from the Delhi High Court.

Section 72 of the Copyright Act, 1957 provides a statutory right of appeal to the High Court against the Order of the Copyright Board. Given the stakes involved in this dispute it is almost certain that the copyright societies will appeal this decision to the High Court of Delhi. However given the damaging admissions by PPL's expert witness it is very likely that PPL will file a writ petition seeking to get the entire proceedings quashed on the grounds that the Chairperson of the Copyright Board is not qualified to be Chairperson. This would give PPL a chance to redo its evidence. PPL could also challenge the very constitutionality of the Copyright Board itself. We had blogged about these possibilities over here and here.

In either situation this dispute promises to be a pot-boiler and we'll keep you posted on any further updates.