IPRS continues to sue with impunity before Delhi High Court

Despite the raging controversy and official investigation into the happenings at the Indian Performing Rights Society (IPRS), its management has been pushing ahead, with mixed success, several suits of copyright infringement before the Delhi High Court against entities across the country. Starting in January this year, when the Registrar of Copyrights officially initiated an inquiry against IPRS, the copyright society has filed as many as six suits for copyright infringement against alleged infringers ranging from the Tamil Nadu Cricket Association to the TVK Cultural Academy. One would have expected IPRS to tone down its anti-infringement campaigns while being investigated by the Central Government, over extremely serious allegations. To the best of our knowledge the Registrar of Copyrights has not yet suspended the registration of IPRS pending the investigation despite being given the powers to do so under Section 33(5) of the Copyright Act, 1957. This means that IPRS can continue to sue with impunity. If anything this is perhaps one of the many reasons that the Central Government should speed up its probe.

On a separate note, I am absolutely intrigued by the nature of orders being passed by the Delhi High Court. Of the 6 cases that I examined on the website of the Delhi High Court, ex-parte injunctions were granted in 3 three cases on the very first day itself while in the remaining 3 cases the Delhi High Court ordered the issuance of notice on the first day in order to give the defendants to represent themselves before being proceeded against.

It is a little disturbing to note the lack of uniformity within the Delhi High Court itself. While Justice Midha grants ex-parte injunctions to IPRS on the first day itself, Justice V.K. Jain does not grant interim injunctions without giving the defendant an opportunity to be heard.

Even more troubling is the wording of the orders granting interim injunctions. The following is the extract of one of the orders passed in C.S. (OS) No. 1491 of 2011 by Justice Midha against Mayank Sharma Pvt. Ltd.:

“2. The plaintiff has made out a prima facie case for grant of ex- parte ad-interim injunction and therefore, the defendants, its officers, servants, agents and representatives are restrained from performing or communicating to the public the plaintiff’s repertoire comprising of works of all its members and works of its sister societies which it is authorized to administer in India, without obtaining a licence from the plaintiff or doing any other act infringing the plaintiff’s copyrights till the next date of hearing.”

Two questions arise in this backdrop:
(i) Why does the order require the defendant to restrain from infringing not only the works of IPRS but also the works of its ‘sister societies’? What is this sister society? Is it PPL? It’s interesting to note that while IPRS has been filing infringement suits rather liberally, PPL (as per the Delhi HC website) filed its last such suit in December, 2010 – C.S.(O.S) No. 2664 of 2010. Is PPL one of the ‘sister-societies’ referred to in the order? Is PPL therefore subsidizing the cost of its own litigation by using the injunctions granted to IPRS to negotiate its own licences? Is this legally permissible under the Copyright Act, 1957? Or have these alleged infringers taken a licence from PPL but not IPRS? All questions, no answers though.

(ii) The second question pertains to the use of the words “plaintiff’s repertoire comprising of works of all its members”. It’s surprising that the Delhi High Court, often claimed to be the most IP-savvy court, does not use the language prescribed by the statute. In this case the appropriate terminology is not ‘repertoire’ but ‘register of owners’ as defined in Rule 14-I of the Copyright Rules, 1958. The definition which I reproduce in pertinent part in the following: “A register of owners of copyright and other rights to be called the “Register of Owners” in respect of which the copyright society has been authorised by the owners to issue or grant licences. The register shall contain the names of the owners, their addresses, the nature of rights authorised to be administered by the copyright society, date of publication of the work, the date on which the copyright society becomes entitled to and the duration of such right.” From the definition above it is but obvious that IPRS is required to maintain in the register of its owners, the works assigned by them to IPRS, the nature of the rights and the date from which such rights were licenced. However when IPRS submits its information to the Registrar of Copyrights under Rule 14-P it submits only the list of the names of its members, which is NOT the same as the definition of ‘Register of Owners’. The current format of the Register of Owners maintained by IPRS is available over here and here. The entire point of a ‘Register of Owners’ is to ensure a minimum degree of transparency which would enable content users to clarify the exact nature of rights held by IPRS. No ‘Register of Owners’, no transparency. Plain and simble.

Novartis v. Cipla: Cipla wins pre grant opposition (593/CHENP/2005)

Our patent office recently issued a decision in Cipla's (Opponent) favor in a pre-grant opposition proceeding against Novartis (Applicant).  The opposition proceedings were brought under sections (25(1)(e),  (25(1)(f), and  (25(1)(h) of the Patents Act.  The Controller (Dr. Subramaniyan, Chennai office) decided the issue of novelty in favor of the Applicant, and  decided the issues of inventive step and non inventiveness (section 3) in favor of the opponent.  A brief introduction to the grounds is followed by our comments.

Inventive step: The Controller held that "There is no detailed method for the preparation of the dispersible tablet with four phases.....It appears that the applicant is not clear on the phases involved in the method of preparation of the dispersible tablet.  Moreover there are no specific teachings pertaining to process parameters for preparing phase I and adding the phase II onto the phase I provided in the description.  Further all the steps involved in the preparation of dispersible tablet of the present invention are conventional and routine in the pharmaceutical formulation industry, but there are no specific improvements with specific details provided in the description."   Paragraph 17, at page 8.
The Controller held that the dosage of the invention fell within the range as provided in prior art and altering the dose and dosage regimen within the range of the art could not be considered to be inventive.  Additionally,  there was no inventive step in independent claim 1 because the dispersible tablet as one of the choice of medicament and the dosage range was disclosed in the prior art.
The Controller found that the Applicant had failed to disclose: (1) the API and all excipients specifically with proportion in any composition or new drug delivery system for a known drug; and (2) support pertaining to unforeseen effect of the composition or new drug delivery system for the known drug with the closest prior art shall be provided in the specification.
Hence claims 1, 2, 13 and their dependent claims did not involve an inventive step and hence opposition was allowed under section 25(1)(e) of the Act.    
Not an invention under section 3:  While considering the arguments made by the opponent and the applicant, the Controller laid down three specific requirements that the applicant had to follow (Paragraph 28 at page 13):
(1) All the components of the invention shall  be incorporated in the principal claim to make invention novel and inventive.
(2) All the necessary ingredients including the API and excipients shall be incorporated with proportion of each ingredient in the principal claim.
(3) Support relating to unexpected synergistic effect shall be incorporated in the specification.
The Controller in paragraph 29, mentioned that "[E]ven subject matters of claim 1, 2, and 10 have been (sic) combined to form a composition claim, it is still considered to be an admixture, because each of the ingredient present in the composition functioning as per the intended purpose, the total effect is an additive effect."

Hence claims did not involve an inventive step and opposition was allowed u/S 25(1)(f) of the Act.     

Comments:  In this decision, the Controller concluded that the claims were obvious in view of the cited art because the claims read upon the previously disclosed ranges.  Additionally, the claimed composition merely had additive properties (which is expected from a mere admixture) and hence unpatentable under section 3(e) of the Act.  In the section related to section 3(e), the Controller simply reproduced the arguments of both the parties and went on conclude that the claimed composition did not pass the test as laid down under section 3(e).  

This trend of merely reproducing the arguments of both parties and providing a conclusion at the end in cases involving sections 3(d)/3(e) without any in depth analysis reinforces my belief that we need some guidance from the Supreme Court to ensure uniformity in the decisions from the patent office, IPAB, and High Courts.

A copy of the decision is available here.

Do the Bombay & Delhi HCs violate SC guidelines while reviewing IPAB decisions?

One of the peculiarities of the tribunalization process in the Indian legal setup is that all decisions of the tribunals can be reviewed by High Courts despite the fact that tribunals were setup in order to reduce the pendency of cases before High Courts. In all fairness to Parliament it had stated in some of the parents statutes of these tribunals that the jurisdiction of the High Courts would be excluded. However when the constitutionality of these legislations were challenged in the L. Chandra Kumar case, the Supreme Court held that the High Courts would continue to entertain the power of judicial review of all orders passed by these tribunals. The reason for this appears to be a very realist concern of the Supreme Court that the quality of justice before these tribunals was exceptionally poor. Image from here.

While laying down the guidelines for judicial review of orders passed by tribunals, the Supreme Court in its wisdom clearly stated that all such decisions of the IPAB could be reviewed only by a Division Bench of a High Court i.e. a 2 judges-bench. In pertinent part the High Court stated “All decisions of these Tribunals will, however, be subject to scrutiny before a Division Bench of the High Court within whose jurisdiction the concerned Tribunal falls.” There is some logic to this rule because the tribunal is usually headed by a Chairperson who is qualified to be a High Court judge or who has been a High Court judge and it therefore makes no logical sense to have an order of such a tribunal reviewed by yet another single judge of the High Court.

The judgments of the Bombay and Delhi High Court (available over here & here) however reveal that appeals against the orders of the IPAB are being heard by single judges and not Division Benches. The Madras High Court however reviews IPAB decisions only through a Division Bench. Therefore not only are both courts in violation of the Supreme Court guidelines but they are also adding another layer of appeals to the system because a Division Bench can admit appeals against the orders of a Single Judge. It is clearly not the most efficient system.

Delhi HC on remedies pertaining to trademark infringement and passing off

In its judgment in M/S Mahashian Di Hatti Ltd. vs Mr. Raj Niwas, Proprietor of MHS, the Delhi High Court re-affirmed the differential evidentiary standards prescribed for trademark infringement and passing off.

FACTS 

The plaintiff uses the registered logo, MDH within three hexagon device on red colour background, in its business of manufacturing and selling spices & condiments. The aforesaid logo has been in use since 1949 in respect of various products such as "Kashmiri Mirch" and "Kasoori Methi". Registered since 31st May, 1991, the plaintiff attributes its goodwill and reputation to the long and continuous usage of the mark, various publicity programs and quality of products.

In the instant suit, the plaintiff contended that the logo used by the defendant, MHS within hexagen device with red colour background, was similar to its logo. The plaintiff, therefore, sought injunction restraining the defendant who was also engaged in the same business from using the infringing logo MHS or any other trademark identical or deceptively similar to its MDH logo. The defendant inter alia tried to blunt these arguments by contending the phonetic dissimilarity between MDH and MHS.

JUDGMENT

As per Section 29(1) of Trade Marks Act, 1999, a registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.

Relying on Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, Court distinguished the remedies pertaining to trademark infringement and passing off. In an action pertaining to trademark infringement, the statutory right of the owner of the registered trade mark would be infringed when the mark used by the defendant was visually, phonetically or otherwise similar to the registered trade mark of the plaintiff. The plaintiff just had to prove that the trademark adopted by the defendant substantially resembled its trademark on account of extensive use of the main features present in his trademark. Even if the defendant proved that the consumer could distinguish his products from that of the plaintiff, he would still be held liable for infringement of the registered trademark. On the other hand, in case of passing off, if there was a possibility for distinction of goods by the consumer, the defendant would not be held liable.

In the instant case, the Court compared the logos of the plaintiff and the defendant and inter alia discerned the following similarities: a) as in the logo used by the plaintiff, the defendant used three hexagons for framing its logo; b) the letters of both MDH and MHS were written in white colour and (c) As in MDH, the background colour in MHS was red. In the light of above similarities, Court concluded the presence of strong visual similarity in spite of weak phonetic similarity. Further, it was also noted that both the parties were engaged in the same business of manufacturing and selling spices. Thus, the registered trademark of plaintiff was held to be infringed by the defendant. The defendant was, therefore, restrained from manufacturing, selling or marketing any spices or condiments using the impugned logo MHS or any other trademark which was identical or deceptively similar to the registered trademark of the plaintiff.

Significantly, the Court awarded punitive damages amounting to rupees one lakh in the instant case. Citing various case laws, the Court inter alia observed that punitive damages were governed by principles of corrective justice. The Court, further, noted that if punitive damages were not awarded in cases like the instant one, it would encourage unscrupulous individuals / companies to take unfair advantage upon the goodwill and reputation of others.

[ Note – In spite of my best efforts, I couldn’t get hold of MHS logo. If anyone finds it, pls e-mail it to me. ]

Presumption of validity of a (an Indian) patent

Prashant had some time back written about the Indian patent and trademark adjudication process. While reading this post, I revisited the section on patent and TM validity as provided in our patent/TM act and rules. Unsurprisingly, the Indian patent law does not provide for a presumption of validity of a patent, whereas under the TM act, registration of a mark is prima facie evidence of its validity.

Recently, the US Supreme Court issued its decision in Microsoft v. i4i  case and upheld the standard of proof (clear and convincing evidence) while bringing an invalidity action against a granted patent.  Microsoft was arguing that a lower standard (preponderance of evidence) should be used.  In this case, Microsoft essentially was arguing against its own position, an extremely difficult task.   

The US patent law provides very few mechanisms to invalidate a granted patent including re-examinations, and litigation. However, unlike India the US patent law gives deference to agency decisions-a patent is presumed valid because the agency (USPTO) is presumed to have done its job.  

India on the other hand has multiple forums where a patent can be challenged. See Prashant's post. It is however, surprising to note that the decisions of the same agency (our patent office) that grants trademarks are given deference and the act provides for a presumption that a granted trademark is valid.   

Under administrative law, the government usually takes the expert advice of the authorities that are vested with the power to make decisions under its domain.  Examples of such agencies include municipal authorities, education boards, revenue authorities, defense etc.  With the exception of the patent office, there is no other authority whose decisions are inherently suspect or are presumed to be invalid despite it being the subject expert.  To be clear, our patent law/rules and the interpretation in the manual do not specifically state that a patent is presumed to be invalid but it does state that one consequence of a grant of a patent is that it can be challenged under a post grant opposition.  This (absence of a specific statement) is the same as stating that there is no presumption of validity or patents are presumed to be invalid.  

To quote:  "The examination and investigations required under section 12 and this section shall not be deemed in any way to warrant the validity of any patent, and no liability shall be incurred by the Central Government or any officer thereof by reason of, or in connection with, any such examination or investigation or any report or other proceedings consequent thereon." 

Additionally, in Standipack Pvt. Ltd. v Oswal Trading Co. Ltd., 1999 (19) PTC 479, it was held that registration of patent does not entitle any presumption of validity in favour of patent in spite of investigation before its registration.    

It flies in the face of reason and logic that complete deference and zero deference is given to the decision of the same agency in patent and trademark cases respectively.  If the logic is that our patent office is comparatively new and hence it needs time to build credibility, the same goes for the trademark office.  It is a different matter that most office actions issued by our patent office cite the same references that have been cited across US, EP, Japan or any other patent office that has already dealt with the application.  In other words, an agency that merely makes a tally of positive office actions (ones that allowed an application) or negative office actions, deserves as much deference as given to an original observer-like the person coming  for conducting census.        

If I were to take a guess, I would state that even though we have moved to the new patent law, the ideology remains rooted in a different era where patents were inherently suspect, and perhaps a hangover of the post colonial, newly independent decades.    

Perhaps it is time that our law makers take a re-look at the section regarding patent validity and one specific suggestion is to codify that "a patent is presumed to be valid unless proven otherwise by a preponderance of evidence."   

While I cannot make an unqualified statement that courts will be happy to strike down such existing provisions or give judge made law, I can however state that they would at least give a decent hearing to a person/body raising such issues.  Image from here.

Tattoos: Can We Copyright That Too?

Those of you who watched The Hangover 2 might have noticed the tattoo on the face of one of the actors, that looked curiously similar to the one Mike Tyson, the famous boxer, has. Interestingly, the tattoo artist responsible for designing Tyson’s tattoo went to the Federal District Court, demanding that the screening of the movie be stopped on grounds of copyright infringement. He claimed that the movie producers didn’t seek his permission before using the same design on the face of Ed Helms, one of the lead actors in the film, and hence were guilty of infringing copyright.

However, it has now emerged that both parties have settled the dispute, with the terms of settlement being undisclosed. What is particularly interesting is the fact that while the concerned judge refused to delay the release of the film, some of her comments are worth reflecting on. Judge Perry was unabashed in her support of the tattoo designer, stating that had a “strong likelihood of prevailing on the merits for copyright infringement” and that most of the arguments put forward by Warner Bros. were “just silly”. However, she ordered the release of the film on the grounds of ‘public interest’ explaining that the harm to the public interest from stopping the release of the movie outweighed the harm to the plaintiff. She did not issue a written ruling but merely made oral observations, referring the matter to an arbitrator for a quick settlement instead.

I will focus on three main issues – (i) copyrightability of the tattoo, (ii) originality in the design and (iii) parody as a fair use defence.

Tattoos as a subject matter of copyright
One of the Judge’s remarks were that “the tattoo itself and the design itself can be copyrighted, and I think it’s entirely consistent with the copyright law.” This is important since it declares that tattoo designs can be the subject matter of copyright protection. One must keep in mind that this is not the first time that a tattoo designer has sought to gain damages on grounds of copyright infringement for a tattoo design. A few years earlier, there was a case of an NBA player being sued by the tattoo artist for ‘displaying’ his tattoo in a Nike ad. Again, this case, like most others, was settled out of court, so there is still no clear judicial pronouncement on this point. Probing a little further we find that noted copyright commentator, David Nimmer believes that the “body, even as augmented, simply is not subject to copyright protection.” Thus, according to him, a tattoo on human flesh, could not be the subject matter of protection. Nimmer was barred from disposing before the court as an expert witness on the plea of the plaintiff’s counsel that he was merely stating what the copyright law position ought to be and hence did not constitute expert evidence. While there may be several infirmities in Nimmer’s arguments, I find it to be an interesting stance since the medium of expression is particularly important in determining copyrightablity, and the medium of expression in this case being the human body, there is certainly scope for further legal treatment on this point.

Originality in the design
Another point that has been raised in subsequent debates on this point is the fact that the design itself is a replication of previously created Maori designs. There have been accusations that the plaintiff stole the design from previous Maori artwork and hence his claim over the design itself is dubious. However, I am not entirely convinced about this. This again brings to the forefront the idea-expression dichotomy and I reckon that the plaintiff’s design is an expression of the overall idea that may have been borrowed from the Maori tribe's earlier designs. If that is the case, then there is no doubt that the plaintiff has the right to claim intellectual property ownership over his design, notwithstanding the fact that his design closely resembles that design forms of the indigenous Maori culture.

Parody as a fair use defence
The other possible argument for the defendants is that the tattoo replication on Ed Helm’s face was a parody and was intended to be so. However, Judge Perry commented on this aspect as well, and in dismissing this argument outright stated that “this was an exact copy. It’s not a parody.” However, I believe that this contention deserves a closer examination. Of course, merely depicting Tyson’s tattoo in a comedy film would not amount to a parody in itself, but there is certainly scope to argue that it amounts to a parody if there is a subtle indication or commentary on the original piece of art, with comedic effect. Just as a song that humorously comments on the voice or mannerisms of the original artist would constitute a parody, I think it is open to the defendants to make a similar claim in this case. For example, I would consider a commentary on the mere absurdity of getting a tattoo on one’s face as parodying the original piece of art. If the film, by means of dialogue or plotline mocks the very fact that Tyson has this particular tattoo, surely it should amount to a parody.

It is quite sad that we still don’t have a judicial pronouncement on this point, and till we do have one, we will have to go by Judge Perry's remarks on the case to glean some understanding on the case at hand.

Roger Bates, Pharma Patents and Contempt of Court?

A recent piece in the DNA by Roger Bates and Suresh Sati advocates for stronger IP protection in India and the signing upto TRIPS plus provisions in the India EU FTA, using interlia the tantalising prospect of significant FDI flows that would resuscitate India from its abysmal poverty statistic.

I was particularly struck by one of the statements in this piece, where the authors note:

"India’s patent office and courts have seemingly bowed to pressure from powerful domestic producers to deny patent protection on several deserving oncology products such as Novartis’ Glivec and Roche’s Tarceva, and HIV products such as Gilead’s Viread."

To me, this statement effectively insinuates that Indian courts and government agencies denied these patents owing to "pressure" from the domestic generic pharma companies and not on "merits".

In other words, the suggestion is that extra judicial considerations clearly permeated these decisions. A suggestion not backed up by the authors, apart from the mere assertion of its veracity. Clearly, a very troubling prospect for these authors, if Indian courts decide to take them to task for contempt and defamation...

IIPS Annual IP Essay Competition, 2011

The Institute of Intellectual Property Studies (IIPS) is conducting a national IP essay competition on “THE ROLE OF THE LEGISLATURE, THE GOVERNMENT, JUDICIARY AND PRIVATE ENTERPRISES IN PROTECTING INTELLECTUAL PROPERTY RIGHTS IN INDIA”. In the context of the roles of any of the specific bodies mentioned above, participants may choose any one of the following topics:

A) Compulsory licensing of Copyrights: Public interest and entertainment industry

B) Is open source policy a competitive alternative to monopoly rights or can the two coexist?

C) Challenges of overlapping IPR protection- Blurred boundaries defeat the distinctiveness of developed IP laws

D) Creating value and employability out of the business of inventing- the economics of IPR protection

E) Protecting traditional arts, handicrafts and community IPRs - India’s approach on Geographical Indications protection

Submission details:

Eligibility: The competition is open to all individuals who have completed their Grade 12.

Font: Times New Roman, size 12, with 1.5 spacing

Number of words: Maximum of 5000 words (excluding bibliography, abstract and footnotes).

Last date of submission: 15th July, 2011

Send your entries to info@iips.ac.in and iips.nmims@gmail.com. The winning essays will be published in IPost, the IIPS ANNUAL IP JOURNAL. For more information, visit www.iips.ac.in. Kindly note that the deadline of 30th June, 2011 (as mentioned in the website) has now been extended by fifteen days.

Patent Agent Viva: Sense, Sensibility and Constitutionality

I've received emails from several candidates who took the patent agent exam earlier on this year, decrying interalia the viva (oral exam) process, its inherent biases and the lack of competent questioning by some examiners.

We did a few earlier posts elaborating on why the viva process is inherently flawed and why it has no reasonable co-relation to the conceptual soundness or otherwise of a proposed patent agent. When you've already addressed complicated patent queries in a written exam and demonstrated your understanding and appreciation for patent jurisprudence and drafting, why on earth should you have to orally explain the same thing to an examiner?

What purpose does it serve? Or are they testing your personality through this viva, given that there have been several complaints in the past that patent agents are terribly geeky and do not have the requisite social skills (I'm kidding of course)..

None of the leading IP jurisdictions (US, UK etc) mandate in person vivas...and by doing so, India, still a"developing" country in several aspects, is simply wasting enormous amounts of money and resources! Money that it can ill afford!

For those aggrieved by the viva (particularly if you passed the written component, but flunked the viva), we would urge you to immediately take this to court. Its not an open and shut case, but is an arguable one nonetheless. All the arguments that you can potentially advance in your favour have been clearly outlined on our CLAM platform.

In any case, bringing it to court will create some noise around this issue and at least force the DIPP to take action on this immediately by amending the rules that mandate the viva. For those not in the know, vivas are mandated by the patent rules: and all that is required is a simple government notification deleting this rule (as opposed to a complicated Parliamentary amendment).

Now that the only sane voice that existed in the patent leadership has been ousted from his office, I doubt very much if the DIPP is going to change this rule, unless there is some external noise, and big noise at that.

I wouldn't bet on letters: I've sent a couple of letters addressed to the DIPP on several policy issues including the patent agent viva, but never so much as received a response. They're clearly saving money on the postage, but wasting it on the pompous vivas that they religiously conduct at all major Indian metros, torturing students into endless waits, and offering examiners (at least some of them) their yearly dose of power play..

ps: Clarification on the use of the word "ousted": PH Kurian's move is no doubt a voluntary one, but anyone following the trials and tribulations of the Indian patent system in the recent past would immediately know that his exit has a lot to do with the kind of love that he received from his government bosses who were not too happy with his reformist policies and popularity...but I'll save that for another day....

Chairman of Raymond Industries under criminal investigation for patent infringement!

One of our regular readers, Irfan Modi, has brought to our attention this news report in the Mumbai Mirror regarding the criminal investigation of Raymond Industries and its Chairperson for alleged infringement of certain patent rights held by Mr. Bharat Bhogilal Patel. We had earlier blogged about Bharat Bhogilal Patel’s patents over here. As per the news that we had with us at that time, Mr. Patel was trying to replicate the Ramkumar saga by enforcing two of his patents under the IPR (Imported Goods) Enforcement Rules, 2007 in a bid to have the Customs Authorities impound all imports allegedly infringing his patents. At that time the Customs Authorities were reportedly reluctant to do so since they had serious doubts about the validity of Mr. Patel’s patents.

Both of Mr. Patel’s patents which are available over here, here and here relate to the use of lasers to carry out etchings, marking and engravings on metallic surfaces by using laser beam technologies. Mr. Patel has allegedly filed cases against more than 50 companies for infringement of his patents. Companies like Raymond have claimed that there is nothing novel about Mr. Patel’s technology and that it is of an early nineties vintage i.e. even before Mr. Patel filed for the present patents.

The curious part of this entire saga is the criminal investigation referred to in the Mumbai Mirror report. Irfan was kind enough to point us to the order of the Bombay High Court referred to in the Mumbai Mirror. The order pertains to a petition filed by Raymond’s seeking quashing of the investigation on the grounds that patent infringement is not a criminal offence under the Patents Act or the Indian Penal Code. The order of the Bombay High Court records the submission of the Public Prosecutor that the investigation is almost complete and that the investigating officer has no intention of arresting any of the accused.

Now while Raymond Industries is right in stating that patent infringement is not a criminal offence under the Patents Act or the IPC, it is a fact that import of patent infringing goods is very sadly a criminal offence under the Customs Act, 1962 which is the parent statute of the IPR (Imported Goods) Enforcement Rules, 2007. The reason for this being the fact that imports infringing patents in India are deemed to be prohibited goods under Section 11 of the Customs Act, 1962 and the import of prohibited goods into India is a criminal offence. Thus once the Customs Department registers a certain patent under the IPR Rules, 2007 and it establishes that the importee is infringing a patent it is required to carry out a criminal investigation because the import would not be classified as a prohibited good under the IPR Import Rules, 2007.

Anyway this is just me guessing the reasons for the criminal investigation against Raymond Industries. The actual grounds could be something else.

‘Mutually Assured Destruction’ through Litigation – Sergi Transformers v. CTR Manufacturing Industries

A recent judgment on the 6th of June, 2011 by the Bombay High Court (available over here and here), in the case of Sergi Transformers v. CTR Manufacturing Industries has finally concluded a series of appeals, counter-appeals plaguing this patent infringement suit at a stage when the Court had not even framed the issues. It is simply terrifying to note that the system allows for so many appeals and revisions at the stage of pleadings itself. This is the perfect recipe to ensure that the matter takes atleast 3-4 years to just reach trial.

CTR Manufacturing, the Plaintiff has sued Sergi Transformers before the District Court of Thane in January, 2010 at which time the District Court granted the Plaintiff an ex-parte injunction restraining the defendants – Sergi – from infringing the patent of the Defendant. Subsequently the trial court and the High Court, on appeal, refused to vacate the ex-parte injunction.

After this there were some more rounds of appeals on various points, a couple of which went up till the Supreme Court. The three principal issues dealt with by the present judgment are as follows:

1. Whether the Counter-Claim for revocation could be allowed even after the statutory period of limitation?

2. The matter then takes a particularly amusing turn with the plaintiffs, CTR Manufacturing alleging that the counter-claim for revocation filed by the Defendants was not even on record because it was not signed by the Defendants. The question therefore being whether the counter-claim was even on record?

3. Another point of contention pertained to whether or not the District Court had the jurisdiction to hear the counter-claim for revocation of the patent. Despite S. 104 being rather candid on the fact that once a counter-claim was filed the matter was required to be transferred to the High Court, the trial court judge had held that he did have the jurisdiction to the matter. This is possibly because the trial court judge was also of the opinion that the counter-claim was not officially on the record of the court because of the lack of signature and also because the Court was of the opinion that the counter-claim was filed after the period of limitation.

Thankfully the Bombay High Court has put an end to this entire mess by pointing out that procedure is merely the handmaiden of justice and that the entire picture has to be looked into. By taking cognizance of the counter-claim and invoking the proviso of Section 104 to transfer the entire suit to itself, the Bombay High Court will now frame issues and conduct the trial in both the infringement suit and the counter-claim for revocation.

Guest Post on the Tasini et. al. lawsuit against Huffington Post

Sai Vinod Nayani, a fourth year student of NUJS has sent us this incsive post on the lawsuit filed by Tasini et. al. against the Huffington post.

HUFFERS CRISIS! Claim for Equitable Compensation for Enriching the HuffPost
by Sai Vinod Nayani

This past April, a class action suit was instituted against Ariana Huffington and the Huffington Post by one of their blogger and labour activist, Jonathan Tasini, demanding a share in the $315 million sale of the latter to AOL accusing them for having “unjustly enriched by luring carefully vetted contributors to provide valuable content while reaping the entirety of the financial gain delivered from such content”. Contributions from bloggers, the complaint alleges, drew large volumes of traffic to the news portal and at the same time ensured minimal costs in content production. Furthermore, publishing content provided by bloggers has generated revenues and has contributed to the goodwill of HuffPost. Also, by retaining the benefits from the content, the associated downside risks were unfairly thrust upon contributors. On the other hand, the HuffPost promised visibility, promotion and distribution of their content. Remuneration, however, was never on the cards, a fact admitted by the complainant. Claim for compensation for the content and the incidental contribution to the value of the enterprise is the subject matter of the suit.

WHO HAS THE RIGHTS OVER THE CONTENT?

The terms and conditions of the HuffPost confers to itself all rights subsisting in the content published and with respect to voluntary contributions, specifically, it enjoys publishing and distribution rights. Valuation of the HuffPost would ideally factor voluntary contributions to the overall goodwill of the organization in addition to the content itself. After processing the content provided by few selected bloggers by the editorial team, the content was to be published. Complainant cries injustice in allowing them to benefit despite being in such dominant position. The assignment of rights, however, entails the HuffPost to make use of the content even for ‘promotional and marketing purposes’. Hence, the HuffPost attempts to reach out to wider audiences and simultaneously building credibility seem to fall well within its contractual rights.

It has been mistakenly argued elsewhere that the bloggers are entitled to seek takedown of their content post the sale since the rights were assigned to HuffPost and not AOL. This is, however, incorrect because the sale meant transfer of ownership from Ariana to AOL and the HuffPost is still a legal person in the eyes of the law. Similarly, claim for an exclusive right over benefits from goodwill is unfounded and also render the assigned rights meaningless. The reputation acquired by the HuffPost is merely incidental to exercising its legitimate rights over the content. It is unfounded because the author has copyrights only with respect to the work and does not extend to the effect created by assigning his rights over the work or all other works combined. For instance, Reebok might place advertisements because of the sports related content in a blog, but this has no relation to the assigned rights. Moreover, recognizing another distinct right will eat into the commercial aspect of other bundle of rights under a copyright. For instance, when Penguin Group bids for publishing rights of a book, it would account not only for the volume of sales but also to protect and enhance the reputation of publishing quality books. Accruing goodwill, therefore, is implicit in these rights.

Tasini, in a similar dispute, had previously sued the New York Times and succeeded in getting compensation for selling his articles to electronic databases such as LexisNexis. The US Supreme Court ruled that the rights assigned by the freelancers to NYT as a ‘collective work’ in their periodical, distinct from other exclusive rights, and hence he privilege extends only to sale as a ‘collective work’. Because, the sale through electronic databases is capable of isolating individual article from the ‘collective work’ as published in the print version, unassigned exclusive copyrights of the author under the US Copyright Act were infringed. Here, unlike the agreed terms with the HuffPost, the assignment of rights was specific and this meant that the authors retained other exclusive rights over the work by implication.

WHAT IS SO ‘UNJUST’ ABOUT THE WHOLE DEAL?

The HuffPost business model in not unique and in fact it is identical to video libraries such as the Youtube where the service provider promotes content provided by users in ways to enrich themselves. Same is the case with Op-Eds in newspapers or opinions in trade magazines generally. On most occasions, however, waiver of rights is a precondition for publication and therefore rights and obligations are pre-determined. Even in the absence of any such contract, claim for compensation on grounds of unjust enrichment, as pleaded by bloggers in the present case, is unlikely to succeed.

This is so because, theoretically, a claim for unjust enrichment presupposes absence of any contractual relationship between parties. The whole idea is to prevent injustice caused by benefiting from ones services without being duly compensated. For a successful claim, the bloggers have to establish that (a) the HuffPost was enriched due to their contributions and (b) in equity and good conscience they should be remunerated and (c) there is an expectation of remuneration for the contributions. Nonetheless, satisfying these requirements is a daunting task for the bloggers. Firstly, the content was voluntarily provided by bloggers at their will and the publisher does not exercise any control over the output such as the subject matter of the post, timelines and the like. Secondly, there is neither a promise for remuneration from the publisher nor any monetary expectation by contributors. This is adequate to eliminate any employment relationship between them. Thirdly, it is definitely equitable that the HuffPost compensate bloggers from their gains, however, the compensation need not necessarily be in monetary terms. The promise of ‘visibility, promotion and distribution’ of one’s views on their web portal could very well be a valid consideration. Lastly, on the count of expectation too, it would be hard for bloggers to rebut the traditional view that blogging is primarily an avenue to exhibit ones opinions voluntarily and accessible freely.

CONCLUDING REMARKS
So, can Amitabh Bachchan sue Anil Ambani for his contribution to the goodwill of Bigadda in an event of sale? Unless there is an agreement to the contrary, the claim is unlikely to succeed because the blog is seen predominantly an opportunity to connect to his fans and does not intend to make any money out of it. Huffers will have hard time claiming an equitable right over and above the terms of the contract and not to mention of multitude of other problems concerning certification of the class.

Reforming the patents & trademarks adjudication mechanism in India – Why does the Indian IP Bar continue to sleep?

One of the major pitfalls of the current patents & trademarks adjudication mechanism in India is the multiplicity of forums which can revoke both patents and trademarks. Image from here.

The Patents Act, 1970 currently provides for three forums before which a patent can be revoked. Under Section 25(2) the Patent Office can revoke a patent under a post-grant opposition. Under Section 64 both the High Court and the Intellectual Property Appellate Board (IPAB) can revoke patents during the course of infringement proceedings and even independently in the latter’s case. Now the problem with a multiplicity of such forums is that each forum follows a different procedure and is staffed with differently qualified people sitting as judges.

For example the post-grant opposition is decided by a Controller who is assisted by an Opposition Board consisting of examiners. The Controller is usually an examiner who has been promoted which means that the only qualification that was required of him was a degree in science. The IPAB on the other hand is staffed by a judicial member and a technical member. The judicial member can be either a former High Court judge or a bureaucrat while the technical member is required to be a former Controller. The revocations before a High Court however are heard by a Single Judge who is basically an advocate with atleast 10 years of practice and does not require any experience in the sciences. Instead Section 115 of the Patents Act allows the High Court to appoint scientific advisors to advice the Court on the technical issues.

Moreover the procedures followed by each one of these forums are completely different. The procedure before the Patent Office is governed by the Patent Rules, 2003; the procedure before the IPAB is governed by its own rules and the procedure before the High Court is governed either by its own rules or the Code of Civil Procedure.

The situation with trademarks is no better. Infringement suits are decided by civil courts while rectifications are decided by either the Registrar of Trademark or the IPAB, depending on the situation.

How can anyone expect any uniformity in the quality and consistency of the decision making process when the procedure differs so widely between each one of these forums? Just look at the Enercon dispute: 23 revocation petitions before the IPAB, 6 before the Delhi High Court and atleast 2 post-grant oppositions before the patent office that I am aware of. Does anybody seriously expect even a minimum degree of consistency in the judgments rendered by these various forums?

Two questions arise in this context:

The first pertains to the constitutionality of having multiple forums to decide the same right. In my opinion the current setup falls foul of Article 14 of the Indian Constitution which requires Parliament to ensure the ‘equal protection’ of laws to all. ‘Equal protection’ basically allows the state to treat different classes of persons differently as long as the State can establish that the classification has a reasonable basis and that such classification bears a rational nexus to the aims and objectives of the statute. In the case of patents and trademarks revocations there is absolutely no reasonable basis for revoking the very same right through multiple procedures and forums. The Patents Act cannot therefore classify the very same patent right into three different categories of revocation. The same stands true for the trademark revocation procedure. Moreover what could possibly be the reasonable basis for splitting patent and trademark trials into infringement proceedings and revocation proceedings and have the High Court decide the former while the IPAB decides the latter? If the High Court has been deemed fit enough to decide an infringement matter it can also definitely decide a revocation matter. In short there is no reasonable basis for these arbitrary classifications. In short I think any High Court would be more than happy to strike down these provisions as unconstitutional and violative of Article 14 of the Constitution of India.

The second question that I would like to ask is about the IP Bar i.e. the various IP lawyers and law firms practising in India. Why exactly is the IP Bar sleeping over such utter chaos for so long? Normally it is the Bar which is the first to attack such arbitrary legislations. For example the Debt Recovery Tribunals, the National Company Law Tribunal, the National Tax Tribunal were all challenged from the Delhi High Court to the Madras High Court by the Bar Associations. The IP space in India is populated by multiple IP bodies all of which are named with fancy sounding acronyms. However apart from the Asian Patent Attorney’s Association (APAA) which filed a petition against the DIPP over the lack of appointments to the IPAB, I am completely unaware of the remaining organizations doing anything remotely useful apart from the run of the mill networking conferences.

It is all well to bemoan the lack of governance or reform by the DIPP but why is it that the IP Bar has been marked by such high levels of impotence when it comes to protecting their areas of practice from the arbitrary actions of the State?

P.H. Kurian - the Patent Office's 'Knight in Shining Armour' - resigns as the Controller General

As most of you may have already heard, the Controller General of Patents, Trademarks & Designs Mr. P.H. Kurian has resigned from his post despite completing only half of his five year term. The new Congress led State Government at Kerala has requested him to join it as the Principal Secretary – an extremely important post in any State Government. This comes as no surprise given the acute shortage of honest AND efficient bureaucrats in this country. Image of Mr. P.H.Kurian from here.

Mr. Kurian was the first officer from the Indian Administrative Service (IAS) cadre to be appointed as the Controller General of Patents. Shamnad had blogged about his appointment over here and fortunately his optimism about the possible virtues of Mr. Kurian’s appointment did come true during his tenure. Mr. Kurian was literally the 'Knight in Shining Armour' that the much ignored patents and trademark office so deperately required.

C.H. Unnikrishnan of the Mint has done a detailed story over here on the circumstances of Kurian’s appointment and his subsequent departure from the patent office. As rightly noted by Unni some of his biggest achievements relate to his efforts to greatly increase the transparency of the patent office. He achieved this by not only digitization of the patent and trademark office records but also streamlining the various procedures for the grant of both patents and trademarks. Apart from this Mr. Kurian also substantially revamped the patent agent examination to greatly increase the quality of patent agents. His continued efforts in dealing with the severe resource crunch at the patent office finally led to the DIPP hiring over 200 new examiners. It would be safe to say that Mr. Kurian has left an indelible mark on the patent office.

His most important achievement in my opinion was his ability to rein in the galloping number of patents being granted by the patent office. As we had pointed out in an earlier post “In 2004-05, the patent office granted just 1,911 patents with a staff of 150 examiners and 20 Asst. Controllers. By 2006-07 this climbed to a 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. The Annual Report for the year 2009-2010 shows that grants have fallen to a more believable 6168 patents with no great change in the numbers of examiners and controllers.” As discussed earlier, there is no way any patent office in the world could have granted 16,061 good patents with a staff of just 75 examiners and 70 Controllers. Bringing down this number to a slightly more believable 6168 patents, at the risk of being judged as inefficient, is something which must have required more than the prescribed limit of courage for an IAS officer. Luckily for this country Mr. Kurian had that courage of vision which is otherwise so rare in today’s short-sighted governance.

I am sure that some of our readers have many more platitudes for Mr. Kurian’s fantastic term at the patent office and I invite you to share your experiences in the comments sections below. The only reward for honest men like Mr. Kurian is the appreciation of those whose lives they have touched. So don’t be stingy with your comments!

Should the Registrar of Copyrights be investigating even PPL?

One of the recurring themes of the last 5 posts on the IPRS controversy is the degree to which PPL seems to have taken over the functions of IPRS. Most pertinently the IPRS management has admitted to signing atleast one MoU with PPL authorizing the latter to commission an agent to issue ‘single window’ licences to T.V. channels. Secondly PPL’s own Annual Reports have claimed that it has been collecting ringtone royalties on behalf of IPRS.

The question is whether PPL can administer the rights of works belonging to the IPRS repertoire?

As per the registration certification granted to PPL (available over here), by the Copyright Office recognizing it as a Copyright Society, PPL can carry on its copyright business only with regards to ‘sound recordings’. The Registration Certificate also makes it clear that this registration may be cancelled if in case the Copyright Society is not complying with the terms of the Copyright Act or the Copyright Rules or if the information provided by the Copyright Society is misleading or false.

As per the registration certificate of IPRS (available over here), it is authorized to administer the copyright business in “musical works and any words or any other action intended to be sung, spoken or performed with the music”.

The areas of operation of both IPRS and PPL have therefore been clearly demarcated. Given the fact that Section 33 allows for owners of copyright to only licence and not assign their copyrights to IPRS, it is questionable as to whether IPRS had the right to further licence away the rights of its owners to PPL. My guess would be that IPRS would not have had any right to further licence its works to PPL.

However even presuming that IPRS did have a right to licence away such rights, the pertinent question to ask is whether PPL could legally administer such rights. Given that PPL was a government recognized monopoly it had a special burden to ensure that it operated within the specific boundaries of the terms of its registration. Government recognized monopolies are a rarity, especially in today’s free market economy and any such monopolies have to be extraordinarily careful that they do not breach the law. As discussed above, the terms of PPL’s registration required it to administer only ‘sound recordings’. Therefore for PPL to administer even IPRS rights pertaining to the underlying works could be construed as a violation of the terms of its registration.

The ‘Original Sin’ of recognizing IPRS as a Copyright Society

The last consignment of RTI information that we had received from the Copyright Office had included a copy of the official ‘file notings’ pertaining to IPRS’s original application to be registered as a Copyright Society, in 1996, under the 1994 amendment to the Copyright Act, 1957. These file notings have now been uploaded on our website and are accessible over here.

As explained above these file notings reveal the internal discussions and objections of the Copyright Office to the original application for registration received from IPRS. In the process of vetting this application the Copyright Office was checking whether the Articles of Association and Memorandum of IPRS were in compliance with the requirements of the Copyright Act & Rules. Ideally the Copyright Office should not have approved the application until each and every requirement of the law had been fulfilled by IPRS. To the credit of the officer in charge, he has conducted a remarkable thorough study of some of the discrepancies in the articles of IPRS. However for reasons not clear he has missed the most obvious flaw in the original articles of IPRS, which is the fact that its articles did not require the company to be solely in the control of the ‘owners of copyrights’.

Sections 34 & 35 of the Copyright Act, 1957 both require the Copyright Society to be in complete control of the owners of the Society. However the old Articles of IPRS i.e. before they were amended in 2008, which are available over here and here (1991 amendment available over here), did not require IPRS to be in control of only the owners of copyrights. We have explained the old governing structure of IPRS in an earlier post accessible over here. To put it very briefly the old articles of IPRS, of 1969 vintage, required it to be in control of a mixture of authors, composers and owners. For example the qualifying criteria of ‘full members’, who were the only persons who had voting rights at AGMs, was basically any author or composer who had their musical works published in atleast 12 cinematograph works. Clearly this criteria does not ensure that the Society is solely under the control of the owners. It appears that the Copyright Office did not catch this distinction between ‘owners’ and ‘author' when it proceeded to register IPRS as a Copyright Society.

The interesting part of this entire fiasco is that in 2008 IPRS amended its articles to ensure that only owners were in complete control of the Society. Surprisingly they did this through a ‘title suit’ before the Civil Judge, Senior Division at Barasat instead of filing a writ petition before a High Court. Now although the new articles, prima facie seem to be in compliance with the Articles of IPRS two questions arise:

(i) When the original registration of IPRS itself was illegal, can the subsequent amendments be valid?
(ii) When the entire character of IPRS was altered through the 2008 amendments was it not necessary for IPRS to resubmit an application to be registered as a copyright society in order to ensure that the new articles were in compliance with the requirements of the law?

My best guess is that any writ petition challenging the original registration of IPRS as a copyright society back in 1996 will be successful before any High Court of this country. The Registrar of Copyrights in 1996 clearly failed to apply her mind to the application in question and the High Court will therefore be more than pleased to quash the original registration of IPRS in 1996 with directions to re-examine the application. In fact even the present Registrar of Copyrights can easily derecognize IPRS as a Copyright Society. Having said that let me be clear that any copyright society which is registered as per the law will in all probability consist of only music companies and not individual authors or composers. The reason for this is that most authors and composers have assigned away their copyrights to these musical companies. For all the criticism of the Supreme Court’s 1977 judgment in Eastern Motion Pictures the fact of the matter remains that authors and composers could have retained the copyrights in their works by inserting a clause to that effect in their contracts. The Supreme Court judgment did keep this option open. The fact that they did not do so demonstrates the failure of the original IPRS (before the music companies took over) to educate its members on the nuances of copyright law.

Patent litigation and standards of injunctions

Patent law litigation is comparatively new in the High Courts and the Supreme Court of India.  When hearing patent law disputes, Judges mostly follow the usual steps for grant or denial of an injunction.  This approach of applying the usual standards for grant/denial of an injunction in patent law cases is fraught with danger.  It is dangerous because patent litigation even though a part of regular litigation, is different from other Order (O) XXXIX litigation relating to injunctions. 

This post proposes that barring an exceptionally few cases (discussed below), NO injunction-leave alone ex parte injunctions, should be issued in a patent litigation case without first conducting a claim construction type hearing.  One exception is discussed in detail while the other(s) are left for a later post.

The exception(s) first:  1. Products that rely upon a standard infringe the patents encompassing the standard;    2.  Where infringement has been proven elsewhere (other Courts including courts elsewhere), injunction is appropriate. 

The first exception relates to standard creating bodies and products that conform to the standard.  The standard here is not that of a quality benchmark (CE or ISI) but that of interoperability.  Examples of such interoperability standards include those of IEEE 802.11 (versions a,b,g and the most recent n) or more commonly known as WiFi.  The US CAFC while deciding on a matter concerning interoperability and standards in Fujitsu v. Netgear held:

[A] district court may rely on an industry standard in analyzing infringement.  If a district court construes the claims and finds that the reach of the claims includes any device that practices a standard, then this can be sufficient for a finding of infringement. We agree that claims should be compared to the accused product to determine infringement.  However, if an accused product operates in accordance with a standard, then comparing the claims to that standard is the same as comparing the claims to the accused product....An accused infringer is free to either prove that the claims do not cover all implementations of the standard or to prove that it does not practice the standard.  Emphasis added.

 In the Fujitsu case, Philips, the patent holder, contended that any product that complied with certain sections of the IEEE 802.11 standard infringed the asserted claims, and that by complying with the standard Netgear indirectly infringed the patent (perhaps by offering it for sale/selling the product). 

Similarly, by applying the context of this case to the Indian procedural system, there can be no doubt that an injunction should issue in similar circumstances because there is no doubt as to the infringement of a valid patent.  Note the use of the words, “valid patent.”  Critics may argue that under our patent system, unlike the US, there is no presumption of validity.  However, given the fact that a standard based product takes about 5-6 years from patent disclosure to the time to market , is enough to state that the patent is not recent and has had sufficient opportunity to withstand rigorous examination and pre or post-grant  oppositions.

In all other cases, claim construction and validity analysis should be the norm rather than grant of an injunction.  

Consider the TenXC patent litigation currently underway at the DHC.  A single judge had initially granted an ex-parte injunction (in 2010) to the patentee.  The defendants after approaching the Supreme Court and getting directions for expeditious disposal are still arguing the matter at the DHC.  Amongst other defenses, the defendants base their defense on the grounds that: the patent is very recent; that there is a serious question regarding the validity of the patent because of the unfavorable reports from the USPTO, the EPO and the preliminary IPRP; and improper examination and grant at our IPO.

   

The defendants cited the case of Niki Tasha India Pvt. Ltd. vs Faridabad Gas Gadgets Pvt. Ltd. which cited the principles governing the grant of injunction in patent litigation.   In Niki Tasha, the Court was satisfied that there is a "serious question to be tried".  Then the Court looked at the balance of convenience and held:

“[T]o grant an injunction will be to cut off for good the road to commercial success of a business competitor. In the event of the plaintiffs success damages will be an adequate remedy.  And the defendants' financial position to pay damages has not been questioned before us. They are prepared to give an undertaking. The balance of convenience lies in favor of refusing the interlocutory relief that is sought.”

On the recent design in this case the plaintiffs cannot be granted an injunction when there is a serious question to be tried in the suit. If there is any real dispute on the questions as to infringement or validity of the registered design the court will, as a general rule, refuse an interim injunction. Damages will afford a sufficient remedy. The defendants are prepared to give an undertaking as to damages.

It is expected that the remaining arguments of the defense would be in line of the above mentioned grounds.  The patentee, when their turn comes, may argue that even though the initial report was unfavorable, a subsequent report on patentability (PCT) was in their favour and hence the second officer considered the initial unfavorable report; the Indian patent office did examine the patent application properly because the Examiner agreed with the second report on patentability.  

In an earlier post, I had  discussed that the patent at issue in the TenXC patent litigation case is not an essential patent – and it is not part of an industry standard.  Therefore, in my opinion the DHC should not have granted an (ex-parte) injunction at all and the case should have proceeded for a complete trial. 

IGNOU and Rainmaker's MIPL Program gears up for Intake

(Image taken from here)
Given the increasing degree of attention that IP is getting these days in India, as the readers of this blog must be aware of, it is not surprising that developing knowledge-driven sectors like Information technology, pharmaceuticals and media related industries are vying for the professionals well-versed in the language of IP. The latter enjoys quite an obvious edge over their counterparts, who, unable to ascertain the nuances of IP, often find themselves at a disadvantage with respect to relevance, competition and career progression.

It is to increase the number of such IP-trained professionals from diverse backgrounds, by way of facilitating access to in-depth knowledge about the Indian IP scenario, that the School of Law, The Indira Gandhi National Open University (IGNOU) in partnership with the Queensland University of Technology, (QUT) and Rainmaker had announced the commencement of the 2-year Master’s Degree Program in Intellectual Property Law (MIPL) some time back.

Admissions are going on right now for the batch of July, 2011 of MIPL. This is the fourth batch of the M.I.P.L. As per sources, the previous batches had met with considerable success, having attracted high interest from professionals from engineering, information technology, applied sciences, and legal backgrounds.

The programme is currently being undertaken by candidates from over 90 cities across India and includes executives from companies like Infosys, Ranbaxy, Wipro, TCS, and more. While professionals from both legal and non-legal backgrounds will be benefitted from such a program, lawyers have an added option of completing their LL.M. from Q.U.T., Australia in 6 months, following enrolment in this programme.

The last date of admission in the MIPL this year is July 31, 2011. In order to get further details, readers are requested to send their queries at mipl@rainmaker.co.in, or call the organizers of MIPL at 011-32928063 or checkout the website at www.ignouonline.ac.in.

Who is scamming the hundreds of crores in ringtone royalties: IPRS or PPL?

In February we had carried a post on how PPL’s revenue from mobile ringtones shot up by a record 1857% in a period of just 6 years from Rs. 7 crores to over Rs. 137 crores. In a subsequent post we had pointed out, in considerable detail, how this remarkable rise in PPL’s fortune from licensing mobile ringtones had been accompanied by a remarkable dip in IPRS’s fortunes in the same segment. We had explained in that post how IPRS was collecting mobile ringtones revenues of about Rs. 3.65 crores until 2003-04 after which IPRS just stopped collecting revenues from ringtones. At that time we had concluded that there was some sought of arrangement between PPL & IPRS to collect revenues jointly because the Annual Reports of PPL (p.18) had clearly stated that licences for mobile ringtones had been issued through a single window on behalf of IPRS. However the reply from the Chairperson of IPRS – Mr. Hasan Kamal - to the Registrar of Copyright’s questionnaire, on the issues raised by Akhtar & Co., seriously contradicts the claims made by PPL.

(i) The Registrar’s line of questioning: In his notice to IPRS the Registrar of Copyrights had informed IPRS that he had proof that IPRS had stopped collecting royalties from mobile ringtones and demanded to know the details of the decision to stop the collection of such royalties. The proof referred to by the Registrar of Copyrights were two letters, annexed to Akhtar’s complaint, written to Universal Power Systems & Phoneytunes.com informing them that the members of IPRS did not want ringtones administered through IPRS any longer. The letter then refers the addressee to contact IMI, which is basically a sister organization of PPL, for further negotiations on licences for ringtone royalties. These letters can be accessed on the last two pages over here.

(ii) IPRS’s reply contradicts the statements made by PPL in its Annual Report: Mr. Hasan Kamal in his explanation on behalf of IPRS explains that the governing council had passed a resolution in December, 2003 for administering ringtones. He further explains that this approval was subsequently withdrawn in 2004 but does not cite any resolution authorizing the same. In response to the Registrar’s question of whether IPRS had authorized any other organization to collect royalties for ringtones, Mr. Kamal specifically states in his letter that “IPRS has not assigned any of the said rights under reference to any other society.” But what then of PPL’s claim in its Annual Reports that it is collecting ringtone royalties on behalf of IPRS through a ‘single window scheme’. In pertinent part PPL in its Annual Report (p. 18) states “Mobile Polyphonic Ringtones – Indian repertoire: “Tariff same as last year – 25% of end-user-price, subject to a minimum of Rs.2.50 per tone (inclusive of performance royalty to IPRS Society, as this licenced as single window).” Ideally the management of IPRS cannot be held liable for statements made for another organization except in this case the member-ship of the Board of Directors of IPRS and PPL is virtually identical. We had blogged about this similarity over here.

So the question essentially is who exactly is lying? IPRS or PPL? Was there an MoU between IPRS & PPL covering even mobile ringtone royalties? What are the terms of this MoU?

(iii) Would music companies benefit by IPRS not collecting ringtone royalties:

Between 2004 and 2010 PPL collected Rs. 360 crores from licensing music for mobile ringtones. For all these years, PPL has claimed that it has been collecting ringtones on behalf of IPRS under a ‘single window’ scheme. Presuming that the royalties were split equally between IPRS and PPL, it would have meant that the former should have received Rs. 180 crores from PPL. Now if that Rs. 180 crores actually reached IPRS (which it never did) it would have been split between composers, authors & producers in a ratio of 30:20:50 as per Rule 4(e) of the IPRS Rules. This would mean that the composers would have got Rs. 54 crores, authors would have got Rs. 36 crores and the music companies would have got Rs. 90 crores. The share of music companies would have thus been the Rs. 180 crores, that were received by virtue of their membership in PPL (PPL has exclusive membership of only music companies) plus the Rs. 90 crores received by virtue of their membership of IPRS i.e. Rs. 270 crores in total. However if the Rs. 90 crores due to authors and composers was never given to IPRS, then PPL’s members would illegally gain the Rs. 90 crores which should have gone to composers and lyricists/authors in IPRS and instead of Making Rs. 270 crores they would now make Rs. 360 crores, only.

Clearly there was no reason for IPRS to give up such a lucrative source of royalties and the only reason this probably happened was because representatives of music companies were the directors controlling the Governing Council of IPRS. Otherwise why would IPRS not take steps to recover these monies from PPL?