India Inc. has seen its own swings and rides in terms of Make In India like initiatives and many other global outreach programs. Alongside, the IPR regime of the country has kept the same pace with the global changes as well. The judiciary and recent amendments have set sufficient benchmarks in the recent past. More to come.
Intellectual Property Rights is one of the most contentious issues all over the world. India, of late, has been on the path of formulating a new Intellectual Property Rights Policy. In 2014 the new NDA government constituted an IPR think tank to frame a new policy. Before a final policy could be announced, a leaked version of the final policy was put on the internet by some people in December last year. The government quickly denied that it was the final policy. “Leaked draft is only an input to national IPR policy drafted by the government”, said Amitabh Kant, secretary, Department of Industrial Policy and Promotion (DIPP).
“Policy is not made by the think-tanks, it is made by the government,” he emphasised and promised that the final policy will be in place in next 30 to 45 days. However, it has been reported in the media that final policy may further be delayed.
Prime Minister Narendra Modi commented in April last year that India needed to bring its patent laws on par with global standards to make India a hub for outsourced creative services. This comment created quite a stir and many thought that the new policy would be dictated by the US. The statement was seen as giving in to the US pressure.
However, in an interview, Nirmala Sitharaman in June last year denied any pressure on India on the IPR policy. She said, “On the contrary, in each one of my meetings with the US authorities, I have upfront said we have formed a think-tank, which is forming the IPR policy, every one of the decisions that are being taken is put in the public domain. I myself told the US team, ‘if you are keen to know about our position, please meet up with the think tank’, and they have sent their representative also and have given their views. That’s where it ends.”
The initial draft of the IPR think-tank was put on its website for comments. However, taking note of the leaked final draft, the experts have raised concern that that the policy indicates a preference for the Indian government to introduce a range of new measures to enhance enforcement of IPR that go far beyond government obligations under the TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights) of the World Trade Organization. They also said that it may deter generic competition that is critical to ensuring affordable medicines for all.
However, according to the draft, National IPR policy aims at fostering predictability, clarity and transparency in order to augment research, trade, technology transfer and investment. It wants to protect concerns such as public health, food security and environment, and encourage generation and diffusion of knowledge by laying a roadmap for holistic, effective and balanced development of the Indian IP system. The policy also aims at ensuring that IP rights are not abused and that implementation and enforcement of IP rights do not adversely affect India’s 0developmental objectives.
The experts, basing their opinion on the draft policy, have raised concern in the media. While some have made a scathing attack on the policy stating that it made no attempt to design a balanced IPR policy. The experts have warned that any attempt to draft an IP policy for India in a hurried manner without making proper studies on the impact of existing IP laws on the basic needs of large sections of the Indian population would only help give a wrong impression on India’s ability to carve out a balanced IP policy.
Foreign companies usually look at India as a market where technology and IP can be leveraged. However, foreign companies often worry about the protection of their rights along with the legal remedies available to protect their IP rights in India. Some of the factors that create such apprehensions include frequent instances of IP infringement and issues connected with enforcement of IP rights. So, is safeguarding IP Rights in India really that difficult?
There are well-established statutory, administrative, and judicial frameworks for safeguarding IPRs in India. India has complied with its obligations under the Agreement on Trade Related Intellectual Property Rights (“TRIPS”) by enacting the necessary statutes and amending the existing statues. The experts point out that international trademarks have been afforded protection in India in the past by the Indian courts despite the fact that these trade marks were not registered in India. The say that the computer databases and software programs have been protected under the copyright laws in India and as a result of this software companies have successfully curtailed piracy through judicial intervention. India is a signatory to the many international conventions such as Berne Convention, Universal Copyright Convention, Paris Convention, Convention on Biological Diversity, Patent Cooperation Treaty, Budapest Treaty on the International Recognition of Microorganisms for the Purposes of Patent Procedure 1977. By virtue of such membership, infringement suits can be instituted in India.
Let us briefly look at the IPR regime in India and enforcement provided by the law in India to the IP owners.
Trade and Merchandise Marks Act, 1958 replaced by the Trade Marks Act, 1999
The Copyright Act, 1957
The Patent Act, 1970, amended by the Amendment Acts of 1999 and 2002 and 2005.
The Designs Act of 1911, completely replaced by the Designs Act of 2000.
The Geographical Indications of Goods (Registration and protection) Act, 1999
The Semiconductor Integrated Circuits Layout- Design Act, 2000
The Protection of Plants & Varieties and Farmers Rights Act, 2001
The Biological Diversity Act, 2002
Enforcement of Intellectual Property Rights is the most crucial part of every IPR regime. The Trips agreements mandate some minimum requirement for the implementation of the intellectual property law. It demands civil remedies by way of injunctions and damages in case of infringement of intellectual property. The civil remedies are governed by the Code of Civil Procedure and Indian Penal Code provides the penal remedies.
In India, trademarks law dates back to early 1860. However, there was no official trademark law in India before 1940 and the cases of infringement were solved by application of Section 54 of the Specific Relief Act of 1877. At present Trade marks are protected both under statutory law and common law. The Trade and Merchandise Marks Act, 1940 was replaced later by the TM Act, 1958. The Trade Marks Act, 1999 which has replaced the TM Act, 1958 came into effect on September 15, 2003 and is in compliance with the TRIPS obligations. Trademark under the law means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours. In Gorbatschow Vodka Vs John Distilliries Ltd, The Bomaby High Court observed under the Trade Mark Act 1999 the shape of goods is now statutorily recognized as being constituent element of a trademark.
Registration of a trademark is a prerequisite for initiating an infringement action. There are many essential conditions that must exist for initiation of an infringement action. It includes allegedly infringing mark must be either identical or deceptively similar to the registered trademark. Section 29 of the Act states the provisions in respect of registered trademarks. In Infosys Technologies Ltd. V. Adinath Infosys Pvt. Ltd., the court held that use of the expression Infosys by the defendant while offering IT related services constituted infringement within the meaning of Section 29(2) of the Trademarks Act 1999. The courts in India have recognized the transborder reputation of foreign trademarks and trade names and the importance of their protection. The ruling of the Supreme Court of India in N. R. Dongre and Others v. Whirlpool Corporation and Another was perhaps the first Indian case to recognize the concept of trans-border reputation of trademarks.
The user of an unregistered trademark is barred from instituting an infringement action. However, if the mark in question has become well known in India, the user of such a trademark is not without recourse and may seek a remedy by means of a passing off action. The purpose of this tort is to protect commercial goodwill and to ensure that one’s business reputation is not exploited. Since business goodwill is an asset and therefore a species of property, the law protects it against encroachment as such. In a passing off action, the plaintiff must establish that the mark, is distinctive and that his goods are identified in the market by a particular mark or symbol.
The relief in suits for infringement include injunction restraining further use, damages on account of profits. Injunction may be Anton Piller Order, Mareva injunction, interlocutory injunctions and perpetual or final injunction. An Anton Piller Order is an exceptional court order which provides for the right to search premises and search evidence without prior warning. Mareva injunction is freezing injunction, while interlocutory injunction is an interim injunction to maintain the status quo until the final hearing. So, Trade Marks Act contains stringent criminal provisions relating to offenses and penalties. There are two kinds of pecuniary remedy; one damages; and an account of profits available in the case of infringement of a trade mark or passing off injunction
The Copyright Act, 1957, supported by the Copyright Rules, 1958, is the governing law for copyright protection in India. Substantial amendments were carried out to the Copyright Act, in early 2012. The copyright comprises two main sets of rights –one the economic rights and the other the moral rights.
The Copyright Act provides that a copyright subsists in an original literary, dramatic, musical or artistic work, cinematograph films, and sound recordings. However, no copyright subsists in a cinematograph film if a substantial part of the film is an infringement of the copyright in any other work or in a sound recording, if in making the sound recording of a literary, dramatic or musical work, copyright in such work is infringed. The term of copyright, as per Article 7(1) of the Berne Convention is, in most cases, the lifetime of the author plus 50 years thereafter. But in India, according to Copyrights Act, it is the lifetime of the author and sixty years after his death. Under the Copyright Act, registration is not a prerequisite for acquiring a copyright in a work. A copyright in a work is created when the work is created and given a material form, provided it is original. The Copyright Act provides for a copyright registration procedure. However, unlike the U.S. law, the Indian law registration does not confer any special rights or privileges with respect to the registered copyrighted work. In infringement suits and criminal proceedings, when time is of essence to obtain urgent orders, registration is of tremendous help.
India has passed the International Copyright Order, 1958. According to this Order, any work first published in any country – which is a member of any of the above conventions – is granted the same treatment as if it was first published in India.
The copyright Act 1957 in its Section 51 defines the varieties of acts which infringe copyrights and the other rights of the owner. A copyright is infringed if a person without an appropriate license does anything that the owner of the copyright has an exclusive right to do. However, there are certain exceptions to the above rule such as fair dealing. The Copyright Act provides for civil, criminal and administrating rights remedies for copyright infringement. Section 55 of the Copyright Act provides that where copyright in any work has been infringed, the owner of the copyright will be entitled to all such remedies by way of injunction, damages, accounts and otherwise as are or may be conferred by law for the infringement of a right. When an infringement is proved, the copyright owner is entitled to remedies by way of injunction, damages, and order for seizure and destruction of infringing articles. The Amendment Act of of 1994 inserted section 63-A which makes use of infringing copy of a computer programme an offence. Section 63 of the Act prescribes imprisonment for infringement of the copyright. The Act under section 53 provides an administrative remedy to prevent the importation into India of a copyrighted work made outside India which if made in India would infringe the copyright.
The first legislation in India relating to patent was the Act VI of 1856. It was subsequently changed many times and finally Indian Patents and Designs Act 1911 replaced all the previous Acts. However, after independence, India constituted a Committee under the Chairmanship of Justice Dr Bakshi Tek Chand, a retired Judge of Lahore High Court, in 1949 to review the patent law. Based on the recommendation, the Act was amended and later on in 1957 the government appointed
Ayyangar Committee to review the patent law and subsequently the Patents Act 1970 was passed. In its continued efforts to comply with it’s commitment under TRIPS, the Patents Act has been amended thrice since 1995, by the Patents (Amendment) Act, 1999 (“First Amendment”), the Patents (Amendment) Act, 2002 (“Second Amendment”) and Patents (Amendment) Act, 2005 (“Third Amendment”). Prior to the Third Amendment, the President of India had promulgated Patents (Amendment) Ordinance, 2004 (“Ordinance”), which was later replaced by the Third Amendment. The legislation is supported by the Patents Rule, 2003 .
Not all innovations are inventions within the definition of the Patents Act. The term invention is defined under Section 2(1) (j) of the Patents Act as “a new product or process involving an inventive step and capable of industrial application.” Thus, the traditional aspects of novelty, nonobviousness, and utility have been specifically included in the definition of the term invention. Section 3(d) as amended by the Third Amendment clarifies that mere discovery of a new form of a known substance, which does not result in the enhancement of the known efficacy of that substance is not an invention and therefore not patentable.
In the case of a product patent making, using, offering for sale, selling, or importing for these purposes, the product in India without the permission of the patentee. In the case of a process patent, the following would amount to infringement: using, offering for sale, selling, or importing for these purposes the product obtained directly by that process in India without the permission of the patentee, amount to amount to infringement.
In the case of infringement of the Indian patent, the patentee can file a suit in the appropriate court, which may be a District Court or a High Court. In case a patent infringement suit is filed in a district court and counter claim is filed by a defendant, the patent infringement suit is transferred to a High Court. Section 104 of the Act provides that a suit for infringement shall not be instituted in any court inferior to District Court having jurisdiction to try the suit.
Section 108 of the Act provides that the relief which a court may grant in any suit for infringement include injunction and either damages or an account of profits. Furthur the court may also order that goods which are found to be infringing and the materials and implement, the predominate use of which is in the creation of the infringing goods be seized, forfeited or destroyed without payment of any compensation.
Section 118-124 of the Patents Act deal with the offences and penalties. The penalties under these sections include imprisonment. The objective of the Indian patent law is to encourage scientific research, new technology and industrial progress. The fundamental principle of patent law is that patent is granted only for invention which must be new and useful. Recognizing the importance patents the courts in India have also adjudicated disputes keeping the objective and international obligations in mind Similarly, India has also enacted Designs Act 2000 which incorporates the minimum standards for the protection of industrial designs, in accordance with the TRIPS agreement. The Designs Act provides for civil remedies in cases of infringement of copyright in a design, but does not provide for criminal actions. The civil remedies available in such cases are injunctions, damages, compensation, or delivery-up of the infringing articles.
The Geographical Indications of Goods (Registration and Protection) Act, 1999 came into effect on September 15, 2003. The Act was passed to provide protection, as a GI, to any agricultural, natural, or manufactured goods, or to any goods of handicraft or industry, including foodstuff. Section 9 of the Act enlist certain GIs which are prohibited from registration. The registration of GI is evidence of validity, as per the section 23 of the GI Act.Section 22 of the Act envisages those circumstances when a registered GI in infringed and provides for infringement and passing off actions. A GI is also infringed by any use that constitutes an act of unfair competition. If the false GI is established, the available relief include injunctions, discovery of documents, damages or accounts of profits, delivery-up of the infringing labels, and indications for destruction or erasure.
India also enacted the Protection of Plant and Varieties and Farmers Rights Act, 2001 to give effect to Article 27.3(b)79 of the TRIPs Agreement relating to protection of plant varieties. The Act includes protection of varieties developed through public and private sector research, protection of varieties developed and conserved by farmers and traditional communities, providing them with legal rights to save, use, sow, resow, exchange, share, or sell their farm seed.
India is a member of the Convention on Biological Diversity which came into force in December 1993. To comply with its obligation under this convention, India has enacted Biological Diversity Act in 2002. This Act aims to ensure the conservation of biological diversity in India, sustainable use of its components and fair and equitable sharing of the benefits arising out of the use of biological resources.
According to experts, the IPR rights for their effectiveness depend upon the speed with which they can be enforced by the courts. Recourse to Court by law is a well recognized concept world over and firmly entrenched in the Constitutional and other laws of India. Therefore, any person can claim a statutorily or customarily recognized right to property. They also maintain that in case of infringement of a legally recognized right recourse to law cannot be denied and the rule of law enshrined in Article 14 of the Constitution will enable any person including a non citizen to approach the legal forum of the country for redressal of his grievances. India has a highly developed judicial system with the Supreme Court having plenary powers (Article 142) to make any order for doing complete justice in any cause or matter. The scope of Writ Jurisdiction of the High Courts (Article 226) is wide and the judiciary is separate and independent of the executive to ensure impartiality in administration of justice. In the field of intellectual property stringent punishments are prescribed in respect of the offences of infringement. The courts in India, in recent times, have given judgment upholding the rights of the IP owners. Most recently, in November last year, the Delhi High Court held Indian company Cipla guilty of infringing Roche’s anticancer drug patent. Earlie also Courts in India have recognised the rights of the IP owners. In its judgment in Coca-Cola Company Vs. Bisleri International Pvt. Ltd , the Delhi High Court granted an interim injunction against the defendant even when there was a question of jurisdiction and the court held that if the threat of infringement exists, then this court would certainly have jurisdiction to entertain the suit. More recently, in Novartis v. Union of India, the court looked beyond the technicalities and into the attempts of the companies to ‘evergreen’ their patents and making them inaccessible at nominal rates and rejected the patent claims of Novartis, which was not inventive or had a superior efficacy.
India recognizes the importance of Intellectual Property Rights and it is committed to defending the rights of IP owners. It has made legislation which recognizes the value of IP and importance of granting protection to IP owners. Intellectual Property is linked to economic prosperity. Therefore, country like India, which is on the path of economic and social progress, endorses the fact that the IP must be encouraged for the growth of civilisation. India is a signatory to various IP treaties and conventions which has helped India to enforce IP protection more fiercely. In India, infringement and passing off actions can be instituted by filing a suit in the appropriate court. After filing the suit, the plaintiffs can seek ad interim and interim relief, including injunctions, Mareva Injunctions, an appointment of the commissioner or the court receiver, Anton Piller orders, John Doe orders, and other orders, such as discovery and inspection, or orders for interrogatories. India has shown through its adjudication of the disputes by its court as well as amending at regular interval its laws governing IPR that India’s intellectual property regime has kept pace with the global changes in IPR law and governance.
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