Delhi High Court imposes costs of Rs. 3 lakhs on Dr. Wobben for withdrawing his appeals

The Delhi High Court while considering applications for withdrawal of 3 of Dr. Wobben’s appeals, granted liberty to withdraw all 3 appeals on the condition that the appellant (Dr. Wobben) pays costs of Rs. 50,000 each, to Enercon India Ltd. and the Government of India in each of the 3 appeals filed by him i.e. Rs. 1 lakh an appeal. The orders can be accessed over here, here and here. Image from here.

We had earlier reported on these appeals (here) and expressed our complete bafflement with the 3 appeals being filed before the Delhi High Court since it is only the Madras High Court which had the jurisdiction to hear the appeals against the orders of the Madras bench of the IPAB. The Delhi High Court had heard extensive arguments on the point of jurisdiction from both Dr. Wobben and Enercon India Ltd. before reserving the matters for judgment. However before the Court could deliver judgment, Dr. Wobben filed these withdrawal application in each of the three appeals. It is not clear why Dr. Wobben has withdrawn these appeals after contesting the matter vigorously.

Justice Gita Mittal justified the costs on the grounds that judicial time had been wasted and that the respondents EIL had demanded costs for the time spent by them to argue the matter. The pertinent part of her order has been reproduced as follows: 'However, it cannot be denied that valuable judicial time has been expended on hearing prolonged arguments on the respondents' preliminary objection which were raised at the first instance with regard to maintainability of the three writ petitions before this court. The prayer of the respondents for award of costs appears to be justified.'

The Delhi High Court has however granted Dr. Wobben leave to re-file the appeals before the Court of competent jurisdiction. It is thus most likely that Dr. Wobben will re-file these 3 appeals before the Madras High Court which is also hearing 9 other appeals filed by Dr. Wobben against the orders of the IPAB revoking 9 of his patents.

A Love Story about Piracy - Movie Review: Partners in Crime

How often do criminals evaluate the pros and cons of their criminal acts? 'Rarely' would be a fairly appropriate answer. But when we are dealing with 'pirates', there seems to be a certain mode of rationalisation that may appear prudent to even the most conservative amongst us.

Take for instance a scene from the film in which a prolific pirate, who has downloaded an exhaustive collection of films, music and videos, when asked whether he understood that what he did was against the law, responds by saying: “These haven’t come easy. I have worked hard to collect them. I know the value of what I have.”

We've discussed the issue of piracy several times on this blog, and we've gone back and forth on the issue in the comments section. But the film Partners in Crime, directed by Paromita Vohra, a documentary film-maker, probes in depth those issues that we've only just fleetingly touched on in the past - Is piracy organised crime or merely a class struggle? How should we perceive artists who treat piracy as a natural part of the game, instead of a force to be reckoned with? How has aggressive copyright protection affected archiving efforts of individuals and perhaps most importantly from a socio-cultural point of view, are individuals who download material for free from the internet merely living out a brand new cultural freedom or are they criminals?

These are questions that those involved in the movie have outlined and successfully explored in the course of the film. Take for instance the segment featuring my favourite Indian rock band Thermal and a Quarter, where the film-makers elicit their opinions on piracy and how its affects them from a commercial point of view. Their response is a welcome departure from the Metallica-esque position of aggressively protecting works, to the extent of suing their own fans for illegally downloading their music. To explain their stand quite simply – they treat their CD's like visiting cards, most often distributing them for free after their shows, in order to draw more people to their live shows. They also allow their songs to be downloaded for free from their website. “Then how do they make money?” one may ask. Some fans buy their CD's anyway. Others buy merchandise like caps, t-shirts and sweatshirts. Their shows are always sold out. I can vouch for that. It's this kind of philosophy that I've always admired and spoken about in this blog previously, the emphasis being that it's not that people are unwilling to pay for good content, it's just that artists need to let go of the idea of copyright as an instrument of protection. The message is straightforward: The money will come, but let that not be the focus or objective of one's creative efforts.

The film gives its viewers an opportunity to understand and contemplate the positions of stakeholders on either side of the copyright debate. Short crisp interviews with those who download movie illegally, a salesman of pirated DVD's, an independent blogger who investigates the gray area between inspiration and plain plagiarism by pursuing Bollywood songs that are 'inspired' by foreign songs, an amateur archivist, and a young entrepreneur who understands how to derive commercial benefits from the complex copyright system set up in the country instead of beating it down.

Moving on to another example in the film that hit home with me, was the tireless pursuit of an Indian blogger who charts songs that claim to be 'inspired' from foreign tracks. And no, he's not talking about Anu Malik. But he very well could be. While not strictly a piracy issue, his efforts, whether conscious or unconscious, do throw up the question of whether it is permissible to draw inspiration from a song, make slight changes and repackage it to derive commercial gains. While we do have provisions for cover versions of songs under the Indian Copyright Act, 1957 we all know of instances where due credit has not been given to the original artist or musician. Without entering into the murky legal waters of what exactly is legal and what isn't, issues that even the best intellectual lawyers of the country embark upon with floats, the segment captures the essence of a culture in which creativity is borne out of persistently adding to previous works, something which the copyleft movement strongly advocates.

I don't want to give away too much by way of specific illustrations and segments in the film, so I will end by saying that this film portrays a new cultural phenomenon that may be looked at negatively by several sections, but at the same time, must be accepted as a legitimate expression of this generation's aspirations and ideals about creativity and innovation, the ethos that is marked by the phrase 'openness and collaborative production of works', hallmarks of the copyleft movement. While piracy is certainly still a problem that affects content providers, it must be looked at as a phenomenon that has naturally occurred, not having arisen purely out of human greed, but rather one that is a natural outcome of industries being unable to adapt to changes in distribution models and the demands of a generation that resides on the Internet. A 'love story', if there ever was one, between the pirates and the content that they pirate, as the film so poignantly demonstrates.

Replete with fascinating animation pieces and infographics that trace the history of copyright and a beautiful soundtrack to add, Partners in Crime is everything that I hoped a documentary on piracy would be. As an unapologetic supporter of the copyleft movement, I was pleasantly surprised to find perspectives that I was unfamiliar with and stakeholders' views that drive home the point better than any of us have been able to on this blog. Here's hoping we have several such films in the future.

We would like to thank Deepika Sharma for sending us a copy of the film to review and we wish the film-makers great success in their future endeavours.

Patents do not hinder Access?

Recently, Mr. Ranjit Shahani, the president of Organisation of Pharmaceutical Producers of India (OPPI) and vice chairman and managing director of Novartis India, gave an interview to the Financial Express regarding the importance of patents to the pharmaceutical industry and its effects on access to medicines. I’d like to take this chance to react to his statements. I’ll be extracting certain excerpts but the full interview is available here (and it's a quick read). Disclaimer: I’ll be focusing on the parts that I disagree with, or don’t understand. There is also a fair bit that I agree with, but would be redundant to repeat here. [Image taken from here]

“Over 99.5% of the domestic pharmaceutical market in the country comprises cheaper branded generics covering all disease areas. Therefore, any fear that intellectual property rights (IPR) would curtail healthcare access is completely unfounded. Patents have little to do with the ability to access medicines.”…”The US, which is the largest pharmaceutical market in the world, has a robust IPR system in place and is also the largest generics market in the world. Over 72% of all prescriptions in the US are for generics.”

He seems to lead the reader towards the conclusion that patents do not hinder access to medicines. Instead he points to other faults in the healthcare system such as infrastructure, etc. He’s certainly right that there are several problems with the healthcare system in India, but saying that there are other problems does not change the fact that patents do directly affect access via price increase. The very fact that exclusion rights are given is so that pharmaceutical companies can recuperate high R&D costs through such pricing. If one must work within the patent system to innovate drugs, then it’s vitally important to ensure a fair tradeoff between access and innovation through exclusion rights– tilting it, if required, towards a country’s particular needs. India, being a developing country with such a large portion of its population poor and in need of medicines, ought to tilt it in favor of access rather than innovation. 

Looking at his statements again, these first 2 lines seem completely disconnected to me. 99.5% of the market is generics – so patents don’t affect access to medicines? Till very recently, India, which is a predominantly poor country, didn’t allow patents on medicines, so naturally nearly all of the market will be on generics.If anything, this first line goes against his point. If 99.5% of the domestic pharmaceutical market comprises of generic medicines, then most certainly a strong patent system would affect this market as it would lead to the introduction of more patented medicines . He then says the US market, with a 72% generic market, is the largest in the world. I’m assuming this is in terms of sales revenues, since in terms of volume 99.5% of India’s pharma market is surely larger than 72% of USA’s pharma market. This again, points to the fact that generics in USA are much more expensive than generics in India. Probably exponentially so, since by sheer population, India is about 4 times that of USA, while 72% of that smaller (by volume) market is larger than 99.5% of the Indian generic market. This merely points towards a strong IPR system facilitating more expensive generic medicines.

“This [referring to apprehensions that new measures resulting from the India – EU FTA may restrict the production of affordable generic medicines across the world] is a misconception that seems to persist. Regulatory data protection does not delay the launch of generics.”

A generic company would either have to duplicate such protected data at its own cost (thus jacking up the price of the generic drug) which would require large chunks of capital – or – they would have to wait till the period of exclusion rights over this test data expires. Thus, it does delay the launch of generics. The more relevant questions ought to be a) whether exclusionary rights granted via patents aren’t sufficient to make up all the related costs, and b) whether, as a policy matter, India wants to trade this for access. Unfortunately, to determine the sufficiency of patent rights to make up these costs, the books of pharmaceutical companies would have to be looked at, and these are notoriously closed off. 

In his closing paragraph, he finally narrows down to the actual issue of trading off of access rights in the short term so as to ensure continuous long term innovation. However, there is no reason India, or the rest of the world for that matter, should continue to use a faulty drug innovation system simply because it has been the path taken thus far. India is indeed uniquely positioned to become a hub of drug innovation as he points out, but this means India should step forward cautiously, ensuring not to make mistakes which may be very costly in the future, and not run straight into the arms of the much critiqued patent systems of the US, EU and Japan.

Did the pre-Kurian Patent Office grant thousands of patents in violation of procedure?

For the last few years several of us have been astounded by the stunning rate of patent grants by the Indian Patent Offices. Just have a look at the figures: In 2006-07, the patent office granted just 1,911 patents with a staff of 150 examiners and 20 Asst. Controllers. By 2006-07 this climbed to whopping 7,539 patents with a staff of 133 Examiners & 33 Assistant Controllers. In 2008-09 the patent office proceeded to grant 16,061 patents with a reduced staff of 75 patent examiners & 70 Asst. Controllers. Image from here.

Now as per the Patents Act, 1970 only Controllers can grant patents, which effectively means 70 Controllers had to have granted 16,061 patents in 2008-09. The reality however is different. Controllers have not been the only persons granting patents since examiners too have been granting patents on a regular basis until the current Controller General P.H. Kurian took over office. The question is whether this is permissible under the law.

I. The scheme of examination and grant of patents under the Patent Act

On a joint reading of Sections 11A, 11B, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 25 and most importantly, Section 43 it is crystal clear that as per the Patents Act, 1970 patents can be granted only by the Controller.

The scheme of the Act is very simple. It involves a two-tiered system involving a Controller and an Examiner. The request for examination of the published patent application, under S. 11B can be made to only the Controller of Patents who then passes it on to the Examiner of Patents under S. 12, who then carries out a search for anticipation and obviousness under S. 13. The Examiner then submits his Report to the Controller of Patents who considers it and decides on whether or not to grant the patent under S. 14 or S. 15.

From the scheme of the Act it is quite clear that the Examiner is not supposed to have any interaction with the applicant. The advantage of such a setup is that when the Examiner does not have an interaction with the applicant, he or she is likely to be a lot more unbiased in preparing the examiner’s report and hopefully preventing a situation of ‘regulatory capture’.

II. The actual examination process in the Indian Patent Offices
Around six months ago I had blogged about a certain patent granted to Bharat Bhogilal Patel and how the patent had been granted by an examiner of the Mumbai Patent Office and not a Controller. At that time I was not sure as to how prevalent this practice was in other patent offices but given that the patent office has enabled online file inspections I have been able to access the file-wrapper details of other patents being granted by the Delhi and Chennai patent offices and it appears that these patent offices are following the same practices as the Mumbai Patent Office.

The following are the patents that I examined from the various patent offices:
(i) Patent Application No: 3355/DEL/1998 filed and granted to B Braun by the Delhi Patent Office; (available here)
(ii) Patent Application No: 1240/DELNP/2004 filed and granted to Ericcson by the Delhi Patent Office; (available here)
(iii) Patent Application No: IN/PCT/2002/02173/CHE filed and granted to Dr. Wobbens by the Chennai Patent Office; (available here)
(iv) Patent Application No: 161/MAS/2002 filed and granted to Ramkumar by the Chennai Patent Office; (available here)
(v) Patent Application No: 611/MUM/1998 filed and granted to Bharat Bhogilal Patel by the Mumbai Patent Office; (available here)
(vi) Patent Application No: 649/MUM/2002 filed and granted to Bajaj Auto Ltd. (available here)

Unfortunately the Kolkata patent office is not uploading its correspondence with patentees and I’m unable to confirm the practice in the Kolkata patent office.

On a review of all the correspondence for all of the above patents it is apparent that the Examiner has been in direct contact with the applicant and it is the examiner who has signed all correspondence with the patentee ‘on behalf of the Asst. Controller/Controller’. In effect this means that the Controller is delegated his tasks to the Examiner. This practice of the Examiner corresponding with the patent applicant begins at the stage of the First-Examination Reports (FERs) issued under Rule 24 of the Patent Rules, 2003. Although the rules are silent on which official is required to issue the FER it is quite obvious from a reading of the Act that these FERs can be issued only by the Controller. The Examiner’s only job is to prepare the Examination Report under Section 13 and place it before the Controller.

Included in this correspondence reviewed for the above patent, is a letter signed by the Examiner intimating the applicant of the decision to grant a patent. As per Justice Murlidhar’s judgment in the case of Dr. Snehlata v. Union of India, a patent is considered to have been granted on the day the letter of intimation of grant is dispatched. For all practical purposes therefore if a person is reviewing the above file wrappers it would appear that only Examiners are examining and granting patent applications. If in case Controllers are granting patents, the file has to reflect it through their signatures. It is apparent from the above files that the only the examiners are signing all correspondence. I have heard from some sources that the Examiner actually places the file for approval before the Controller and that in the ‘file notings’ the Controller approves and requires the Examiner to send out the letter. Now, I’ve never ever seen any of these ‘file-notings’ and can therefore not confirm this practice. The more troubling question however is why aren’t Controllers taking responsibility for their decisions by signing the correspondence with patent applicants?

III. Can such patents granted by Examiners be set aside by a writ court?
Yes, most certainly. The argument that would run against the grant of such patents would be quite simple and would be two-fold.

(a) The main question of law involved is whether Controllers can further delegate to Examiners, the powers that have been delegated to them by the Controller General under Section 73 of the Patents Act, 1970.

A fundamental maxim of administrative law is delegates non potest delegare. This basically means 'one to whom power is delegated, cannot himself further delegate that power'. There are several Supreme Court precedents upholding this very fundamental principle.

In the leading case of Sahni Silk Mills (P) Ltd. And Anr. vs Employees' State Insurance Corporation JT 1994 (5) SC 11, the Supreme Court, in pertinent part held the following:

By now it is almost settled that the legislature can permit any statutory authority to delegate its power to any other authority, of course, after the policy has been indicated in the statute itself within the framework of which such delegatee is to exercise the power. The real problem or the controversy arises when there is a sub-delegation. It is said that when Parliament has specifically appointed authority to discharge a function, it cannot be readily presumed that it had intended that its delegate should be free to empower another person or body to act in its place.

It is therefore implied that while delegation of powers under Section 73 by the Controller General of Patents is valid, the same cannot be further delegated by the designated controller to the examiner. This basically means that Examiners cannot sign off on correspondence ‘on behalf of the Controller’.

(b) Examiner corresponding with the Patent Applicant in violation of statutory scheme: As already explained above the scheme of the Act is clear, the examiner is not supposed to be corresponding with the patent applicant. This has clearly been violated by the patent office on multiple occasions.

Patents which have not been granted as per the law are bound to be set aside by a writ court with orders that the Patent Office comply with the provisions of the statute while re-examining the patent. A useful precedent in this regards is the judgment of the Division Bench of the Madras High Court in the case of Indian Network for People living with AIDS/HIV v. Union of India, W.P. No. 24904 of 2008. In this case the Madras High Court had set aside the grant of the patent. In pertinent part it stated:

50. Therefore, when monopoly right of patent is granted in favour of the fourth respondent ignoring the aforesaid procedure, it is clear that it has been granted with some incurable defects in the procedure namely, by non-compliance with the provisions of statute and statutory rule. Such grant is inherently defective, since grant here is grant of right in rem. The prejudice in this case has been pleaded, as stated herein above, and has not been denied in the counter filed by the fourth respondent. Therefore, the decision in Harendra Arora does not help the case of the fourth respondent in any way.

51. There is another age old principle which enjoins when statutes provides for doing something in a certain manner, it has to be done in that manner alone, all other modes of performance are necessarily forbidden. Following the said principle in the instant case it is clear that the grant of patent to the fourth respondent has been made in blatant violation of statutory procedure by the statutory authority, which is acting in a quasi-judicial capacity. Such a grant is not legally sustainable.

Since in all of the above cases it is obvious that the examiner and not the Controller has granted the patent it is quite likely that any writ court would set aside all of the above patents with directions that they patent office re-examine all such patents as per the procedure established by law. I've heard that this practice of Examiners signing on behalf of Controllers was stopped by the present Controller General Mr. P.H. Kurian after he took office.

Bollywood Wars: Multiplex Owners v. Film Producer/Distributors

In this post, I will cover the recent order of the Competition Commission of India concerning the dispute between the film producers and multiplex owners in India, with a focus on the intellectual property issues that have escaped mainstream attention.

Background to the Order

In early 2009, a dispute arose between multiple Bollywood film producers/distributors and multiplex owners, with the former stopping the release of several of their films till their demands were met. The dispute hinged on the producers' demands for a greater share in the revenue collections made by the multiplexes. The multiplex owners on the other hand claimed that the producers' and their lobbyists were ganging up against them unfairly, stirring apparent antitrust issues.

The Earlier Practice

A tabular representation of the box office collection sharing arrangement between the multiplex owners and producers prior to the dispute in 2009 is given below:

While this was the general practice, independent arrangements were also secured by big producers from time to time, on a variety of considerations – cast, location, potential of the film, budget etc.

Cartel Like Conduct

One of the main grounds of contention was the allegation that the film producers and distributors colluded together and decided not to offer their films to the multiplexes, creating pressure on the latter, in an effort to seek a compromise. The owners advanced evidence that the producers were limiting supply of their movies, with the objective of effecting higher prices for their goods and services (the right to display their films, essentially) constituting cartel like conduct. They also claimed losses arising from lost food and beverage sales. The order contains instances of such conduct under 3.4.4.1.

The New Arrangements

As a result of the joint pressure generated by them, the revenue sharing, in terms of the new settlement was fixed at 50%, 42.5%, 37.5% & 30% for the 1st, 2nd, 3rd and 4th week respectively. It can be seen that the new revenue sharing ratio in favour of producers/distributors has been enhanced by a minimum of 2% from the first week and is also higher for the subsequent weeks. The full details of the new arrangement can be found in 3.4.5 of the order.

Order of the Commission

The Commission found the 27 producers/distributors guilty of violation the provisions of S.3(1) of the Competition Act, 2002 which prohibits “enterprises or associations of enterprises or any person or association of persons from entering into an agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India.”

It imposed a penalty of Rs. 1,00,000 on each of the parties involved, and ordered them to refrain from indulging in such anti-competitive practices in the future.

The Copyright Angle

Some of the arguments advanced by the producers/distributors relied on the Indian Copyright Act, 1957 heavily. They declared that:

• All feature films are a subject matter of copyright ('cinematographic film”)

• Section 14 of the Act permits copyright owners to exploit their works in any manner as he or she deems fit.

• It is entirely up to the copyright owner (in this case, the producers) to determine how to communicate his or her film to the public.

• Alternate compulsory licensing mechanisms are provided under the Copyright Act already so the Competition Commission does not hav jurisdiction.

• It is not for the multiplex owners to demand that the film be released in its theatre or dictate the commercial terms on which the film must be released.

They also argued on the basis of provisions contained in the Competition Act, 2002 dealing with intellectual property rights, specifically that:

• Section 3(3) of the Act acknowledges the copyright owners’ rights and hence there is no legal prohibition in this provision against them.

• They also argued that since Section 3(5) of the Act contains a non obstante clause stating that nothing shall prevent persons from imposing reasonable restrictions in order to protect their rights conferred under the Copyright Act, 1957, their actions are perfectly legal.

• They sought to reject the observations of the DG that if in exercising rights conferred under the Copyright Act, unfair trade practices were observed, they should be assailed under competition law, on the basis of S.3(5) again.

• Each feature film is nothing but a bundle of copyrights and hence is not “goods” or “services” as defined in the Competition Act.

Observations of the Commission on the Copyright Issues

In respect of the arguments advanced by the producers and distributors that their actions were permitted in view of the rights conferred by the Copyright Act, 1957 and the exemption created in the Competition Act, 2002 for copyright owners to impose reasonable conditions to protect their rights, the Commission in rejecting the same, made the following observations:

• Copyright is a statutory right subject to the provisions of the Copyright Act, 1957 and as such, is not an absolute right.

• Any action for the benefit of multiplex owners to claim as a matter of right that the producers should exhibit the film through them will tantamount to compulsory licensing of the film and, therefore, the Commission would not have the jurisdiction over such issues.

• However, since there was no question of infringement of copyright in this case, there can be no reliance placed on the imposition of 'reasonable conditions' (as set out in S.3(5) of the Act) as being permissible.

• The producers/distributors, based on evidence, colluded together to determine revenue sharing ratios with multiplex owners and controlled supply of films to them, amounting to a violation of S.(3)(a) and (b) of the Act.

• The multiplex owners were merely facilitating the exercise of rights vested in the producers and not arrogating or infringing them in any way.

• Finally, they stressed on the fact that intellectual property laws have no overriding effect over competition law, despite such a reading of S.3(5) of the Competition Act by the producers.

• Most importantly, the producers failed to establish that their actions were 'reasonable' and hence no reliance could be placed on the exemption provided in S.3(5)

Thus, it is seen that the order harmonises the provisions in the Competition Act, 2002 and the Copyright Act, 1957 to arrive at an order that emphasises that the acts of the producers/distributors amounted to unfair trade practices and was violative of the Act. While the copyright issues have been addressed in sufficient detail in the order, the bigger question has to be the ultimate effect of the order itself and the utility in going through such an elaborate legal process for a very marginal result.

Tidbit: Patent Office announces the results of the Patent Agent Examination 2011

Our Patent Office announced the results of the Patent Agent examination held in January 2011 today. The results are available on the website of the Patent Office here.  Unlike last time, Individual lists for each city have not been released.

The overall pass percentage for the exam is approximately 18.45%.  Out of 1089 candidates who appeared for viva and written examination, only 201 have passed and the result seems to be similar to that of the 2010 examination. 

Our hearty congratulations to those who have cleared the exam!!

The virtues of notarization & the lack of it in the Patent Rules, 2003

Going through some of the file wrappers of Dr. Wobben’s patents (currently under challenge by Enercon India) I came across the Power of Attorney that Dr. Aloys Wobben had made out in the name of his Indian patent agents empowering them to take all steps to prosecute the patent applications before the patent office. The PoA can be accessed over here. Very interestingly below his signature, there was a statement stating that there was no requirement of notarization of the said power of attorney. How then do we know that the real Dr. Wobben actually signed that document? Image from here.

The statement on the PoA that notarization is not required is technically true because surprisingly the Patent Rules, 2003 governing procedure to be followed before the Patent Office does not require patent applicants to supply any notarized documents save for assignment deeds or affidavits. This is pretty shocking because when the Patent Office is handing out million dollar property rights it should at the very least require applicants to notarize some basic documents such as the Power of Attorney, the Proof of Inventor-ship etc.

Notarization basically requires a person to present himself before a public notary (who is vested with such powers by the Central Government) who will stamp the document will his seal after verifying that the person signing the particular document is indeed the person whom he claims to be. The notarization of PoAs are usually compulsory for large financial transactions such as land deals etc. After all the government needs to authenticate the identity of persons and notarization is the best way of authenticating the identity of a person.

Although the Patent Rules, 2003 and the Power of Attorney Act, 1882 do not require notarization of the PoAs being submitted to the patent office, the lack of notarization is bound to become an issue in any future litigation. The reason for this can be found in Section 85 of the Evidence Act, 1872 which states that any power of attorney so authenticated before a public notary is presumed to be genuine. A presumption in favour of the document saves the patentee the trouble of proving it as the onus is on the opposite party to disprove it. At the most the patentee may need to get in a rebuttal witness.

My advice - if you are a patentee get your PoAs notarized.

Bombay HC on passing off & shape of Vodka bottle

The Bombay High Court recently delivered an interesting judgment pertaining to passing off / trademark law. The dispute was over the shape adopted by the defendant for its Vodka bottle.

Gorbatschow Wodka Kg v. John Distilleries Limited

Facts

The plaintiff which owned one of the top fifteen premium Vodka brands in the world – “Gorbatschow Wodka”, marketed it in a bottle which was quite distinctive in shape. The shape was registered in various jurisdictions. In India, claiming use since December, 1999, the plaintiff applied for registration in January 2008 under Class 33 of the Trade Marks Act, 1999. The application is still pending.

The defendant was set to launch its Vodka under the trademark “Salute”. According to plaintiff, the shape of the bottle of the defendant was deceptively similar to that of plaintiff. The Court initially granted (ex-parte) ad interim relief subjected to the condition that defendants could market and sell its goods under the trademark “Salute” in a bottle of different shape and packaging. In the instant judgment, the Court considered the merit of  rival submissions of the defendant.

Arguments of defendant

 The defendant contended that its bottles of Vodka - coupled with a distinctive trademark "Salute" and a differently coloured, distinctive label, could not be confused by the general public with the bottles of the plaintiff. The product of the plaintiff was a premium Indian Manufactured Foreign Liquor (IMFL) sold at a price band of Rs.650/ to Rs.750/ per 750 ml bottle. The target consumer was, according to the defendant, highly educated, rich and discerning. It was unlike a situation where a product would be purchased by a consumer of average intelligence and imperfect recollection. Therefore, the test of passing off had to be differentially applied. The design of defendant which was registered in 2008 under the Designs Act, 2000, was granted after an extensive search for similar designs. As the registration of the design was prior to the first use of the plaintiff in India, the duty casted upon the defendant to make a reasonable enquiry was duly discharged. Further, relying inter alia on non-registration of goodwill, defendant argued that the goodwill of the plaintiff could not be ascertained at the interlocutory stage.

Arguments of plaintiff

The plaintiff asserted that the shape of its Vodka bottles was distinctive and formed an intrinsic part of its goodwill and reputation. It was contended that the conduct of the defendant would result in dilution of a) distinctive shape of plaintiff's vodka bottles and b) goodwill and reputation in relation to the distinctive shape of the bottle and therefore, constituted passing off. If the defendant succeeded in launching the product, it would confuse the consumers. Further, registration under the Designs Act, 2000 was not a defence to an action for passing off. Therefore, the plaintiff sought for an injunction restraining the defendant from using the objectionable bottle and / or any other shape identical / deceptively similar to the plaintiff's mark.

Judgment

The Court held that the plaintiff prima facie established its trans border reputation as well as reputation in Indian market. The Court noted that the plaintiff adopted the instant shape capriciously, purely to give the article a distinctive appearance. It did not have a functional character. The shape of plaintiff's bottle was based on the architecture of Russian Orthodox Church - a bulbous structure. The shape of defendant’s bottle relied primarily on the same bulbous structure. The defendant could not give a bona fide explanation for adopting the impugned shape for its bottle.

If the defendant was allowed to dilute the distinctivenss and exclusivity of the mark of the plaintiff, it would embolden other infringers to invade upon the proprietary right of the plaintiff. The Court categorically blunted the argument of the defendant that the consumers of Vodka being affluent and educated, were less likely to be deceived. The Court drew the fallacy of the assumption underlying that argument viz., while those who were educated or affluent had the ability to discern, consumers who did not belong to the aforesaid category were more likely to be deceived. Stretched to its logical conclusion, the submission of the defendant would lead to a situation where the remedy of passing off would become available only in respect of goods which the average consumer purchased for the daily necessities of life. If that argument was accepted, that would render the remedy of passing off illusory. The class of purchasers was undoubtedly a relevant consideration. But all other relevant circumstances should also be weighed. Further, even if one proceeded on the argument of the defendant, it per se did not disposit the issue of whether the conduct of the defendant amounted to passing off or not. Further, the fact that defendant had obtained registration under the Designs Act, 2000 did not impinge the right of plaintiff to move an action for passing off.

For the reasons above, it was held that the plaintiff made out a strong prima facie case for the grant of  injunction. The balance of convenience weighed in favour of the plaintiff which had an established reputation. If the defendant was allowed to launch its product, it would cause irreparable injury to the established goodwill and reputation of the plaintiff. Accepting the arguments of the plaintiff, the Court restrained the defendant from using the objectionable bottle and / or any other shape identical / deceptively similar to the plaintiff's mark in relation to its products/business in any manner whatsoever.

Note : The judgment discussed various case laws which recognised the significance of shape of package / carton / container in trademarks / passing off [ paragraphs 19 - 24 ].

For our earlier post on shape and trademark law, see here. 

SpicyIP Open Government Project: Draft TK Rules 2009

Around 31 years ago somewhere across the T.V. airwaves, Minister for Administrative Affairs Mr. James George Hacker had tried to implement an ‘Open Government’ project which was unfortunately sabotaged by Permanent Secretary Sir Humphrey Appleby. However in the words of he who I cannot remember, “you can never kill an idea”. Image from here.

Anyway getting down to the point of it all, we hope to kick off our own ‘Open Government’ project. The very simple, unambitious objective of our little endeavour is to start putting out on in the public domain entire government files pertaining to intellectual property legislations, both parliamentary and delegated. The idea is basically to trace the development of the legislation up until it became a law.

The reasons for this project are two-fold:

(i) As a researcher I have personally faced a hellish problem in obtaining either primary or secondary material on Indian intellectual property legislations. Hopefully with primary material from the Government that we intend to put out we may just be able to help other researchers in better understanding such legislations.

(ii) As a people, we Indians have no idea how the Government actually makes legislations. Once we have access to actual government files and most importantly ‘file notings’ we will begin to understand the degree of competence or incompetence with which our governments make law. As we are about to discover it is but clear that most government legislation is outsourced to private persons or firms. This is in keeping with the transparency mandate of our blog.

As a part of our first project we are putting up the entire file pertaining to the Draft Traditional Knowledge Rules, 2009 released by the National Biological Authority last year. We had covered those rules over here. It is available in the following four parts:
(i) Part I
(ii) Part II
(iii) Part III
(iv) Part IV

Hopefully we should have all IP legislations up on the website in atleast one year, that is, if the government co-operates with us. If not we could be looking at a pretty long haul. Of course if any of our readers in Delhi could pick up and scan some of the files we would be much obliged.

Condolence: Demise of the longest serving Controller

This comes very late in the day, but is a condolence message that had to be written.

Last year, we lost one of India's leading IP figures, Shri Rajendra A Acharya, who passed away at his residence in Pune on the 18th of July 2010.

Acharya-ji has the distinction of serving as India's Controller General of Patents for a good 12 years (a term that traversed the '80's and the early 90's). My guess is that this makes him the longest serving Controller General in India.

Post retirement, he continued to remain active in the IP space by serving as a senior attorney and consultant at Bhate & Ponkshe, a Pune based IP firm.

After completing his masters in chemistry, Acharya-ji went on to do law. Not content with a bachelors, he went on to finish a Masters in Comparative Law from the George Washington University, USA. Somewhere along the way, he was elected as a member of the Institution of Chemists as well.

I had the good fortune of being with him on a committee that conceptualised and set the paper for the patent agent exam in March 2010. His wealth of experience contributed significantly to the quality of the paper. I was particularly impressed by his energy and clarity of thought. Despite his age, never once did he complain as we traversed 10 hour marathon sessions each day whilst finalising the patent agent exam paper.

On learning of his death, the George Washington University sent us the below message:

"The George Washington University Law School was saddened to learn of the death of our distinguished alumnus Mr. R.A. Acharya, the former Controller General of Patents, Design and Trademarks, Government of India. Mr. Acharya was awarded the Master of Comparative Law (MCL) degree in 1976 with a focus in Intellectual Property Law.

We were honored to have educated Mr. Acharya in the field of IP Law, which served him well throughout his career. He represented the best of our graduates in terms of commitment to public service and a devotion to professional excellence. Our thoughts and prayers are with his family and friends and also with his fellow lawyers and scientists in India who had the good fortune to have worked with and learn from him."

Similarly, Prabuddha Ganguly, a leading Indian IP expert (who was also part of the patent exam drafting committee) reminisces as below:

"I have known Acharayaji since 1991 as I stepped into the field of patents from my long standing career as a scientist and technologist.

He was then the Controller General of Patents, Designs and Trademarks. I remember him as a soft spoken gentleman who firmly held the principles of sincerity, hard work and integrety......a set of qualities he has held onto till the last day of his life.

Having also worked with him in several committees during his long standing career, I have had the privilege of interacting closely with him and gaining from his immense maturity and experience. He has always found a way to resolve disputes, promote differences in opinions and facilitate a discussion towards the most acceptable solutions.

We pray that his soul rests in peace. He with his usual silence and spirit will continue to guide the Course of IPR in India."

Mr NK Anand, founder partner of Anand and Anand and a doyen of Indian IP, remembers him as a very humble Controller, never hesitating to bring tea and water for any guest that walked into his office, without necessarily calling on his office staff for help.

Please join us in commiserating this sad loss for the Indian IP community.