Trade Marks Registry Public Notice dated 26.08.2020

On the 26th of August, vide a Public Notice, the Trade Marks registry announced that due to the on-going pandemic, they will be now conducting Show-Cause hearing through Video Conferencing. The hearings, however will be scheduled in only those matters where the Applicant or the Authorised Agent has given their consent and confirmed their participation for the same.

To consent to the video conference hearing, applicants and authorised Agents are required to tlahearing-tmr@gov.in with the Subject “Consent fot Show-Cause Hearing through Video-Conferencing”.

However, only applicants and authorised Agents who have consented on or before 05.09.2020 will be currently scheduled for hearing, while others will be kept in abeyance to schedule hearing in person, whenever that happens.

Further, should the applicants and authorised Agents be absent on the date of hearing, the application will be decided as per law.

For more information, click here.

Comparative Advertisement & Commercial Disparagement

Introduction:

The manufacturers of the product adopt extensive marketing practises to create the demand for the product among the consumers. In order to attract more and more customers, many manufacturers undergo advertising in full swing. The Advertising Standards Council of India defines the term advertisement as a paid-for communication addressed to the public for the purpose of the influencing their opinions. Many a time, some manufacturers engage in unfair practises advertising their products at the cost of the product of their competitors. False claims about the product of the competitor, misleading advertisements, comparing one’s product with the competitor’s product in order to belittle the competitor’s product are a few examples of commercial disparagement.

Meaning of Commercial Disparagement:

Commercial disparagement also called as business disparagement is a civil wrong. The person charged of commercial disparagement has a tortious liability. A person is said to have committed commercial disparagement if he makes any negative statement against the title of an individual to his property or his property in order to prevent other persons from doing business with that person.

Difference between Commercial Disparagement and Comparative Advertising:

There is a fine line of difference between commercial disparagement and comparative advertising. Article 2 (c) of the European Directive concerning Misleading and Comparative Advertising defines comparative advertising as any advertisement which identifies the competitor or his products either explicitly or impliedly. Showcasing one’s product superior to the competitors’ product falls within the ambit of comparative advertising, and the same is allowed. However, where a manufacturer makes any false statement with regard to the product of his competitors in order to make his product superior is known as commercial disparagement.

The laws of India allows the former one i.e. comparative advertising but prohibits the latter, i.e. commercial disparagement. Comparative advertising can turn into commercial disparagement if the manufacturer uses any false claim in respect of the competitor or his product or represents the products of the competitor inferior in comparison to his product.

Essentials of Commercial Disparagement:

In order to file a successful claim of commercial disparagement against the manufacturer, a competitor is required to state the presence of the following essential ingredients-

  • The manufacturer made a completely false statement in the advertisement against the competitor.
  • The intention of the manufacturer behind making such a false statement was to cause financial loss or damage to the competitor.
  • As a result of the concerned advertisement, the competitor suffered actual loss or damages.

Freedom of Speech:

The Supreme Court in the landmark judgment of Tata Press Limited v. Mahanagar Telephone Nigam Ltd[1] held that the comparative advertisement is protected under Article 19(1) (a) of the Constitution as a form of free speech. The restrictions can be placed on the comparative advertisement by the government only in accordance with the provisions of Article 19(2) of the Constitution.[2] Furthermore, the protection of the corporate entity under Article 19(1)(a) of the Constitution was also granted. From this judgment, it can be concluded that the competitors have the freedom of speech to promote their products and compare them with their rival manufacturers.

The ordinary person test:

The ordinary test was employed by the courts in the case of Dabur[3] and Colgate[4]. In the present case, the courts dealt with the impact of such advertisements on the ordinary person with reasonable intelligence. An advertisement will be considered as being disparaged if it creates a sense of bias and inferiority with respect to the competitor’s product in the minds of an ordinary person.

Legal consequences of Disparagement:

The consequences of the commercial disparagement are similar to those ensued in the civil suit. The complainant competitor can file a claim for an injunction of damages against the manufacturer or advertiser of the concerned advertisement.

Exceptions to Disparagement:

  1. True statement or claim is an absolute defence for commercial disparagement.
  2. The statement concerned was a mere opinion and cannot amount to any action.
  3. The conditional or absolute privilege is endowed with the defendant.

The laws and regulations to govern the commercial disparagement is in a very nascent stage in India and is still in the process of development. With the rapid and continuous growth in the business world, there is a need for more specific laws and regulations.

Conclusion:

The laws and regulations to govern the commercial disparagement is in a very nascent stage in India and is still in the process of development. With the rapid and continuous growth in the business world, there is a need for more specific laws and regulations.

Relevant Case laws:

Amul vs Kwality[5]

In a judgment given by the single judge of the Bombay High Court, Amul was restrained from broadcasting two particular Television Commercials (“TVCs”) or making any advertisement of a similar nature to denigrate the products of Kwality in any manner. In the concerned advertisements, Amul made a comparison of its ice creams with the frozen desserts. The TVC stated that the products (i.e. ice creams) manufactured by Amul contain 100% milk, whereas frozen desserts manufactured by the competitor are made with vanaspati. Although the TVC did not mention Kwality or contain its trademark, the complainant (i.e. Kwality) contended that the concerned advertisement denigrates frozen desserts in general, the majority of which are manufactured by it.

The complainant also raised the contentions that the frozen desserts are manufactured using edible vegetable oils and not vanaspati and that both frozen desserts and ice-creams contain 90% milk. On the contentions of the complainant, Amul stated that there are at least 30% manufacturers of the frozen desserts in the market who use vanaspati. Therefore, the fact stated in the advertisement was true, which is an absolute defence to disparagement. The court observed that 70% of the manufacturers of the frozen desserts did not use vanaspati, but the advertisement published by the Amul attributes negative qualities to the frozen desserts in general. It was held that the advertisement was based on incorrect facts and was made with an intention to discourage consumers from using frozen desserts, thereby causing disparagement.

Author: Pratiksha Rawat, a 4th-year of Amity Law School Delhi Affiliated to GGSIPU, intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

References:

[1](1995) 5 SCC 139

[2] Tata Press Limited v. Mahanagar Telephone Nigam Ltd (1995) 5 SCC 139.

[3] Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd 2010 SC Online Del 391.

[4]Colgate Palmolive Company & Anr. v. Hindustan Unilever Ltd 2014 (57) PTC 47 [DEL(DB)].

[5]Gujarat Co-Operative Milk Marketing Federation Ltd. v. Hindustan Unilever Ltd and Ors Appeal No. 340 of 2017 dated December 13, 2018.

What Takes Precedence: Right To Reputation Or Right To Freedom Of Speech And Expression?

Introduction

The question of balance between the right to reputation and the right to freedom of speech and expression has grown with the increased number of platforms to express one’s opinions and ideologies. One has multiple ways to express his or her opinion on varied platforms. The clash surfaces when there is a comparison between freedom of speech and expression and right to reputation. Often, when the right to freedom of speech and expression is exercised beyond the prescribed limits, it becomes an infringement of the right to reputation. The right to reputation includes the protection of dignity and preservation of individual respect in society. Commercially, the right to reputation has a different connotation. A product creates its own goodwill in the market through various management methods and such products are generally trademark protected. However, the question remains, are these products immune from dangers such as the harm to reputation? This danger is known as Product Disparagement in legal terms. Matters relating to such issues have frequently come up in courts and different guidelines have been given effect to in pursuance.

Recently, the Bombay High Court was faced with a similar issue related to the extent of freedom of speech and expression through online platforms. Social media content on platforms like Facebook, Instagram and YouTube involve ‘Social Media Influencer’s’ review on various products. In the case of Marico Ltd. v Abhijeet Bhansali, this question has been addressed in meticulous detail.[1] The present article will analyse the right which will take the higher pedestal and the reason behind it.

Marico Ltd. v Abhijeet Bhansali

Facts

The plaintiff is a fast-moving consumer goods company that manufactures products inter alia packaged oil under the trademark name ‘Parachute’. The dispute arose from a video on a prominent social media platform known as YouTube. The impugned video contained a critique regarding the plaintiff’s product. The plaintiffs claim that the product is:

  1. Unrefined;
  2. Unbleached; 
  3. Non-hydrogenated; 
  4. Non-deodorized; 
  5. Without solvents; and 
  6. Retains all its natural nutrients.

Moreover, the product also possesses the all the essential licenses required by the Food Safety and Standards Act, 2006.[2] The defendant has published a critical video regarding the product backed with listed reasons. The plaintiff prayed for injunction against the defendants, restraining them from publishing and broadcasting the video in contention. They also request for restricting the court to restrict the defendants from disparaging any of their products. The infringement of registered trademark is also sought be restricted. 

Trademark Infringement and Product Disparagement

For a liability to exist, the defendant must satisfy all the ingredients to constitute disparagement, slander of goods and malicious falsehood.[3] The constituents of slander of goods/ product disparagement/ malicious falsehood include:

  1. The impugned statements must be false;
  2. There must be a clear intent of causing harm;
  3. There must be damage caused by such impugned statements.[4]

The defendant claims that “This video was only to bring awareness to the general public of the inferior quality of parachute coconut oil.” The defendant also contends that he conducted the tests required before publishing the video along with providing the court with scholarly articles which were referred before the publication of the video.

Held

The court held that the freedom of speech and expression needs to be put on a higher pedestal than that of right to reputation. The reason being, the presence of the Social Contract Theory. The theory propounded that the public surrendered their freedom in return of certain liberties and rights. One of the most important rights among them was the freedom of speech and expression. The freedom of speech and expression has only certain restrictions which include, inter alia, Defamation, Sedition, Morality.

However, in the present case, the impugned video contains only opinion regarding the product. There has been no infringement of right to reputation. In the first place, there is no presence of any false information as the review is only an opinion by one person.The court suggested that the ‘social media influencers’ ought to have a check on the objectionability of the content. They must ensure that their content does not harm the reputation of any product which may result in loss of market share.

Discussion as to Objectionable Content

Further, the court also suggested that the parties must sit across a table and discuss the amount of objectionable content. If the parties agree on taking down certain parts of the impugned video, they may do so as a result of the deliberation.

Conclusion

The freedom of speech and expression, being one of the most important rights, must always take precedence. The courts have begun to support freedom of speech and expression over any other right and that is a positive step towards having a country which provides its citizens, the practical right to free speech and not just, theoretical ones that are never implemented.

Author: Avni Sharma, a student of B.B.A. L.L.B (Hons.) – National Law University Odisha, intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

Reference:

[1]Marico Ltd. v Abhijeet Bhansali MANU/MH/0081/2020.

[2] Food Safety and Standards Act, 2006.

[3] Halsbury’s Laws of England Volume 8, Paras 274, 275, and 277 at pages 137, 138 and 140.

[4] Dabur India Limited v M/S Colortek Meghalaya Private CS(OS) No. 2029/2009.

[5] Free speech takes precedence over reputation: HC on video, <https://www.business-standard.com/article/pti-stories/free-speech-takes-precedence-over-reputation-hc-on-video-120012801228_1.html> as accessed on 8th February 2020.

[6] Freedom of Speech On A Higher Pedestal Than Reputation; Bombay HC Asks Vlogger and Marico to Sit Across The Table<https://www.livelaw.in/news-updates/freedom-of-speech-on-a-higher-pedestal-than-reputation-bombay-hc-asks-vlogger-and-marico-to-sit-across-the-table-152106?infinitescroll=1> as accessed on 7th February 2020.

Pros And Cons Of Decriminalisation Of Dishonour Of Cheque

The COVID 19 pandemic has pushed the economy towards the brink of collapse. With India’s GDP growth going into negative for the first time since 1979, the finance ministry has come up with many schemes and policies to make business transactions more efficient and prevent the economy from collapsing.

One such proposal was passed via circular dated 8th June[1] to fulfill the objective of SabkaSaath, SabkaVikas and SabkaVishwas by decriminalizing Dishonour of Cheque along with 38 other petty economic offenses. The objective is to ease the path of business transactions because imprisonment for such offense can have a deterrent impact on business and investments.

This reason for such proposal can be drawn from the Makwana case. In March 2020, the Hon’ble Supreme Court in the case of Makwana Mangaldas Tulsidas v State of Gujarat, noted that over 35 lakh cases of dishonour of cheque were pending and registered a suo motu case to devise a mechanism to dispose off such cases.

Thus, decriminalization would result in a reduction of clogged cases.

WHAT IS SECTION 138, NEGOTIABLE INSTRUMENTS ACT, 1881?

Chapter XVII (Sections 138 to 147) of the Negotiable Instrument Act, 1881 states Penalties in Case of Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts. This Chapter was inserted by the Act 66 of 1988 effective from 1st April, 1989. The objective was to make business transactions more efficient and add credibility to cheque payment.

The Hon’ble Supreme Court in the case of Kusum Ingots And Alloys Ltd vs Pennar Peterson Securities Ltd[2] has laid out the ingredients of section 138 as:

(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;

(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;

(iii) that cheque is returned by the bank unpaid. Either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;

(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice

LIABILITY OF DISHONOUR OF CHEQUE

1. Civil liability

  • A Fine twice the amount of dishonoured cheque under section 138, Negotiable Instruments Act, 1881.
  • Under order 37, Civil Procedure Code, 1908, amount as directed by the court.

2. Criminal liability

Section 138 provides imprisonment of 2 years or fine or both and drawer will be prosecuted under section 417 and 420 of Indian Penal Code.

Pros of decriminalization

1. As per 213th Report of Law Commission of India, over 38 lakh cases of dishonour of cheque were pending in courts and out of them over 7.6 lakh cases were pending in criminal courts in Delhi at magistrate level alone.

2. Due to the huge backlog of these cases, trial of other cases are also sidelined giving poor name to our criminal justice system.

3. Dishonour of cheque can be penalized under sec 420 IPC, therefore there is no need for another provision for the same purpose.

4. Its criminality has also been substantially decreased by making it a compoundable offense, which shows the intention of legislature towards reducing the backlog of such case.

Cons of decriminalization
1. The purpose of section 138 is to enhance the credibility of cheques thus making business transactions more safe and efficient. Decriminalising it might create hindrance towards accepting cheques. This can lead to distrust in trade practices.

2. The alternate remedy of civil court is time-consuming and costly. Many payees belong to economically weaker section and cannot afford the expense of civil litigation.

3. The fear of criminal prosecution ensures that the cheques are honoured by the drawer, decriminalization will remove this fear.

4. A cheque is mainly used as means of credit in the form of ‘post-dated cheque’, Decriminalising it would strip away the credibility which can cause decline to economic activity.

5. It will over-burden the civil courts.

CONCLUSION

It is important to decriminalize petty offenses and especially ones whose civil remedy is available to decrease the burden on the criminal justice system. But at the same time it cannot be ignored that the backbone of business transaction in this country is cheque. Cheque is still the most common and most reliable mode of payment and this is only because of the criminal aspect of section 138. Decriminalising it especially during the time of COVID can do more harm than good. It can increase the number of cheques bounce cases and can burden the judicial system at a time where most physical courts are closed and conversion from physical to online court is still not very efficient.

Thus, the proposal can be unnecessary and could further cause economic downfall.

Author: Charul Tripathi a student of B.Com LLB (Hons.)- University Institute of Legal Studies, intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

References:

[1]https://www.livelaw.in/pdf_upload/pdf_upload-376169.pdf

[2] (2002) 2 SCC 745

Historical Development Of Law Of Copyright

Copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings.[1]

EVOLUTION OF COPYRIGHT LAW IN UK

The history of copyright protection began to emerge with the invention of the printing machine which made it possible to duplicate literary works by a mechanical process. The printing press was invented by Johannes Gutenberg in Germany around 1440.

In 1483, Gutenberg’s invention reached England, and the then Monarch King Richard III lifted the ban on import of manuscripts and books. As a result, authors started sending their books in England for printing. They enjoyed a royal license and dueto proliferation of books, England soon became the Centre of printing across the length and breadth of Europe.

In 1529, King Henry VII constituted a system of privilege, thus making printing business a monopoly of the crown. It was during this time that all the people who were earlier involved in writing manuscripts and making copies came together to form the Stationer’s Guild.

In 1516, the stationer’s guild constituted into a company. The members of the company had exclusive right to reprint works in perpetuity in the name of other members of the company who had sole right to publish the work. The registered members had the right to both print and publish the books.

In 1533, King Henry banned the imports of books and stationery under the pretense of growth and development of England’s publishers and printers.

In 1557, the Stationer’s Company received a royal charter and was granted the privilege of regulating the book trade. The company was necessary for three reasons-

  1. Protect trade quality
  2.  Minimize unprofessional practices
  3. Limit Competition

LICENSING ACT

Act of 1661

In 1661, the first licensing act was passed. The right of members of the stationary company to publish was later referred to as copyright. However, the members did not have the status of an owner of the book they published. The right was given to them as part of a commercial deal.

Act of 1662

The licensing act of 1662 empowered the company to take action against the infringement of their right. A register of licensed books was maintained, and certain designated members had the right to conduct search and seizure of unlicensed books. This was the first act to check piracy.

The Licensing Act could however didn’t survive the test of time. As system weakened overtime, the ban on unlicensed printing was removed; as a result, independent printers entered the market. The Licensing Act could not distinguish between mechanical and intellectual piracy. It was eventually repealed in 1681.

STATUTE OF ANNE

 The statute of Anne came into force on 10th April 1710. This act caused a paradigm shift in the copyright world. It acknowledged the rights of authors of published work. This came to be known world’s first copyright law. The purpose of the act was twofold:

  1. To promote learning
  2. To give the author protection against piracy

Main rules of the Act

  1. Author of a book not yet printed shall have the sole right of printing for 14 years and if after 14 years he is alive then additional 14 years.
  2. Infringers would forfeit the infringing books found in their custody and shall pay half amount of the fine to the crown and the other half to the plaintiff.
  3. No book shall be bought for infringement unless the title of the book has been entered before publication in the ‘Register Book’ of Stationer’s Company.

THE COPYRIGHT ACT, 1911

Before the act of 1911, the books and literary works were protectedunder the statute of Anne and other art such as music, painting or photographs were protected under legislation such as the Engraving Copyright Act 1734 and the Fine Arts Copyright Act 1862

The 1911 act consolidated all the acts into one and implemented the Berne Convention. Major features of this act are:

  1. Extension of term of copyright to life and 50 years.
  2. No need for prior registry in ‘Register of Stationers’ to receive protection under the act.
  3. Unpublished work is also entitled to protection
  4. Summary remedies in suits of infringement
  5. The act to include all form of arts such as literature, painting, music, photography etc.

EVOLUTION OF COPYRIGHT LAW IN INDIA

Pre-Independence Copyright law in India

The Copyright Law of India was enacted by the British colony and like most of the acts of that time; it was an imitation of the English law.

The first copyright act of India was enacted in 1847, during the regime of East India Company. As per the act, the term of copyright was either, for the lifetime of author plus 7 years or 42 years. The government had the power to grant the publishing license after the death of the author if the owner of the copyright refused permission. All suits and infringement related to copyright came under the jurisdiction of the highest local civil court. The act was replaced by the copyright act of 1914.

The act of 1914 was the first ‘modern’ copyright law of India. It was the first law to include all works of art and literature under the ambit of copyright. It was a replica of the English law of 1911. It was done by the British to ease the passage of literature over colonial subcontinent.

Post-Independence Copyright law in India

The Copyright Act of 1957 came into force on the 21st of January, 1958 replacing the 1911 act. The act besides amending the copyright law also introduced milestone changes such as provisions for setting up copyright office under the control of Registrar of copyright for registration of books and other works of art. It also established a copyright board to deal with the disputes relating to copyright.

CONCLUSION

 The history of copyright law is a long and complicated one. Even after more than 100 years, it is in developing stage. This is because technology is changing faster than ever. With new techniques, the old law seems to be falling behind, especially in the case of non-literal work. It is often difficult to tell what is similar to the extent of copyright infringement as it is a very subjective question. Thus, we need more specific laws to lessen the subjectivity.

Author: Charul Tripathi a student of B.Com LLB (Hons.)- University Institute of Legal Studies, intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

References:

[1]https://www.wipo.int/copyright/en/

The Impact of VIVO’s Exit From IPL 2020

With the novel Corona Virus bringing all sporting activities to standstill, there was little hope for Indian Premier League (IPL) 2020 to get a green signal, especially after missing the usual spring deadline. However, consequent to the postponement of ICC Cricket T-20 World Cup, which was scheduled in September, the IPL Governing Council acted quickly to secure the September date for IPL 2020 and after getting a go ahead from the Central Government, it was finalized that IPL 2020 was to begin on the 19th of September, only this time not in India, but UAE.

The decision to host the IPL 2020 in UAE was a big financial set-back for the franchises, sponsors, broadcasters and the BCCI itself. But, not all hopes were lost. With the lucrative sponsorship and broadcasting deals from Vivo and Sony respectively, there was still scope for a good amount of profit. This hope was, however, only until the recent tension between India and China in the Galwan valley, which created a huge nationalism cry to boycott Chinese goods and as it happens, numerous Chinese products/investors contributed towards the sponsorship of IPL including the IPL title sponsors, Vivo.  Vivo, the Chinese Smartphone maker, had secured the title sponsorship rights for IPL (Indian Premier League) in 2017 in a five year deal (2018-2022) with a bid of INR 2200 crore, which was touted to be more than 40% of what was expected. As per this deal, BCCI were being paid around 440 crore every year, which was divided in a 50-50 ratio between the BCCI and the combined eight franchises in the IPL.

Now, given the political tensions between India and China, and the frequent call for boycotting Chinese products, Vivo India and BCCI (Board of Control for Cricket in India) amicably decided that it was in the best interest for both parties to pause the deal for this year. This development came right after the IPL’s Governing Council meeting, that had decided to stick with Vivo as the title sponsors and faced a backlash soon after. It was a tough, but necessary call for both parties since none of them would appreciate the negative publicity and face the nationalism wrath.

The financial tremors of Vivo’s exit will not just be felt by the BCCI and the IPL but the franchises as well since the huge sponsorship money was also one of the primary sources of income for the franchises. The franchises, who were supposed to get around 28 crore per team per year, from the title sponsorship deal, will now have to find another way to make up for the lost amount. Any new title sponsors for the season, if any, shall not be expected to provide this amount of money, especially at a time where the economy is hugely dented by the pandemic. Moreover, the franchises are also set to lose a lot of money from gate revenues since it is speculated that the IPL would be held behind closed doors. Each Franchise normally earns around 3-4 crore from ticket sales on every home game, but under these circumstances, the losses to the franchises only from gate revenue would come approximately around 20-25 crore. Further, if the BCCI fails to get a decent title sponsor on board, the overall loss for each franchise is expected to be around 50 crore this season.

This loss in revenue might not be worrying for the big teams, since it was expected to be below par this season, but the less popular teams with the lack of enough associate sponsors and partners would face difficulty in generating profit as their steady source of income has been paused. To make things worse, the franchises shall also have to bear the additional expenses of creating a bio-bubble that would include travel, security and accommodation in the UAE, which would be around a 40-50 percent jump from a regular home season. In the light of these circumstances, it would be a great achievement for the franchises to just break even this season.  

Apart from the franchises and BCCI, the broadcasters (Star India) are also expected to take a hit of around 15-20 percent in their advertisement revenues. Vivo, alongside a few other Chinese smartphone companies spend heavily on television advertisements, which is rumored to be around 500 crore. The backlash against Chinese products might make these brands call off their advertising deals with Star India during IPL 2020 that would considerably hurt Star India and see them fall well below INR 2000 crore mark, which is their normal expectation from advertisement revenue.

Other than Vivo, there are various other associate sponsors of IPL with Chinese connections as well. For example, Swiggy is backed by Chinese investment, Paytm is funded by Alibaba group which is again a Chinese investor and Dream 11, the official fantasy league app of IPL also has a majority of Chinese investement. Although less likely, a possibility of these sponsors getting the axe cannot be ruled out, especially in these circumstances.

On the legal front, there is no trouble expected since it was an amicable decision between BCCI and Vivo, in their best interest. However, it would be interesting to see if Vivo comes back for the 2021 season and if they do, then whether BCCI offers them a year’s contract extension for making up this season’s loss. It is fair to say that Vivo walks out as happier party from this agreement, since they are spared from the unnecessary negative publicity and most importantly, they do not have to shell out 440 crore in a year in which the economy has taken a major hit, worldwide.   

All that being said, the show must go on. There are a number of reasons for this season’s IPL to be as successful or more. In terms of viewership, this season might be the biggest ever with more than 500 million expected to watch the leading domestic cricket league. The audience, locked up at their homes, has been deprived of entertainment and patiently waiting for a long time for their favourite sport, or any live sport for that matter, to get going. It is the perfect opportunity for the broadcasters and viewer engagement team to come up with innovative ideas so that the audience does not miss watching and cheering for their favourite team in stadiums. Moreover, the timing couldn’t have been right for this season to kick-off. With IPL being considered as India’s festival, it is the perfect occasion to liven up the festive months and provide much needed entertainment, at these times of despair.

Author: Sudhansu Sahoo, Legal Associate, at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at sudhanshu@khuranaandkhurana.com.

Intellectual Property As Security

Introduction

The evolution of Intellectual Property laws and standards are all in the direction of maximizing private rights and not give importance to public interests.[1] There is always an inconsistency between the valuation of a company as a whole and the law protects as intellectual property. The technical and managerial knowledge and skills which are used by the company are valuable but in a legal sense it is difficult to be termed as ‘property’.[2] Copyright, patents, trademarks, and designs all our intellectual property but each one of them is protected to a different standard.

Most precisely the Intellectual Property is the borrower’s to give in security.[3] IP rights can increase a company’s asset value, and valuing these assets will help top management to make informed investment and marketing decisions.[4] There are majorly three ways by which we can undertake the security over Intellectual Property. 

  1. The lender takes ownership and then licenses it to the borrower. 
  2. The borrower retains ownership but simultaneously grants an interest of the IP to the lender.
  3. The revenue received from the intellectual property can be used by borrowers as security on a loan.[5]

On the contrary, there are several ways in which security can be affected by IP rights but initially for this too the lender must have determined the value in taking security over IP rights.[6]

The UNCITRAL legislative guide observed that the security rights over IP may be created by written agreement between the grantor and secured creditor. Because the written document shows conduct between the parties and also evidences between the parties to create a security right.[7]The United Nations Commission on International Trade Law (UNCITRAL) in 2007 also established a Working Group to address security rights which also covers IP financing. This Working Group was recommended to develop an efficient legal regime for security rights in goods and also to identify the issues, form of the instrument and the exact scope of assets that could serve as security.[8] A security interest in intellectual property and ascertaining that the debtor has clear and complete title to the property are some areas clouded with unresolved legal issues.[9]

Legal Aspects

Securitization of IP is different from the securitization of other kinds of traditional assets like mortgages and credit cards because IPRs are the form of a personal property that can be bought, sold, licensed, or traded in the same way as any other form of property.[10] In litigation IP rights are governed by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). This act covers that the expression property specifically includes intangible assets[11] and also defines “security interest”[12] as a right.[13]

At least nine international investment arbitration proceedings that are related to IPR have been initiated in the past decade. Intellectual property becomes worthless as security if it cannot be separated from the underlying business of the company, then in such a scenario, it is impossible to evaluate also. Currently, there is still a great amount of uncertainty about the correct way to the valuation of intellectual property. The major problem is the separability of the intellectual property, intangible nature of IP assets, and the limited number of market transactions in intellectual property.[14]

There are so many challenges faced by authorities regarding the Securitization of IP; Firstly, there is some inconsistency with laws that prevail. In other words, intellectual property can be governed either by the intellectual property laws or by secured transactions laws. Moreover, in some places, they are governed by both and this creates some uncertainty between the two regimes. Secondly, the recognition of security rights is important and some jurisdictions do not recognize the security rights e.g. types of IP assets as a trade secret, databases, etc. Thirdly, there is a limitation regarding the transferability of IP or in other words, some specific rules of law limit the ability of an owner, licensor or licensee to create a security right in certain types of intellectual property.

Intellectual property potentially has no bounds. In reality, intellectual property rights are bounded by the repelling of challenges only. So the key mechanism or solution for the same is policing and protection of the copying, use, and exploitation of intellectual property rights in a society so that demarcation would become possible in business interest.[15]  IP securitization seems an appropriate method for making money on products or services in terms of funding or financing industries because IP securitization captures additional value.[16] Earlier IP rights were limited as an increase in the goodwill of the borrower only but not available as security.[17] Despite the economic value of intellectual property, in recent times it has become an important source of collateral in secured transactions.

Conclusion & Suggestions

Intellectual property recently emerged as a valuable commodity and is being used as collateral in secured transactions with increasing frequency.[18] Legal protection must be given to Intellectual Property Rights moreover they must be able to separate from the business of the borrower and should properly value so that it can be used as security for corporate debt also. Intellectual property cannot be seen by the naked eye so the registration of real rights of security in intellectual property is essential. As mentioned above valuation of intellectual property is hampered by conflicting valuation methods, problems of separability, and the small number of market transactions. An accountancy issue is the fourth issue which also faced by authorities but accountants should note that the method and effectiveness of valuation will affect the willingness of lenders to take intellectual property as security.

IP rights, as the term suggests are meant to be rights to thoughts, ideas, and information it also covers new inventions and processes. The stated purpose of such a right is to enhance industrial innovation and growth, by offering higher returns in the market. With globalization in recent times, the protection and security of such rights are a crucial concern for IP holders. Because the protection of new technologies is no more limited to the industrialized nations now. India is a member of the WTO and a signatory to the TRIPs Agreement too [19] and all the signatory States are required to provide protection to a range of Intellectual Property Rights. So for the protection of the same, securitization of IP rights is the best solution for all.

Author:  Rachi Gupta, a 4th Year – B.B.A. L.L.B. (Hons.) student of  Vivekananda Institute of Professional Studies, GGSIPU,  intern at Global Patent Filing. In case of any queries please contact/write back to us at support@globalpatentfiling.com.

References:

[1] S. Sell and C. May, “Moments in Law: Contestation and Settlement in the History of Intellectual Property’, Review of International Political Economy, 8/3 (Sept. 2001): 467-500.

[2] Eszter Kontor & Judy Day ‘Corporate Lending in an Intangibles Economy Approaches and Challenges’ 2002 Journal of Iternational Business Law 125 at 126.

[3] Natania Locke, The Use of Intellectual Property as Security for Corporate Debt, 16 S. Afr. Mercantile L.J. 716 (2004).

[4] Intellectual Property and Access to Finance for High Growth SMEs, European Commission Directorate-General for Enterprise and Industry, Discussion Paper, Brussels, November 14, 2006.

[5] Peter Ackerman, “Using intellectual property as security for business financing”, Available at –https://www.innovation-asset.com/blog/using-intellectual-property-as-security-for-business-financing.

[6] Fieldfisher,“Taking Seccurity Over IP”, available at – (Feb 2015)

https://res.cloudinary.com/fieldfisher/image/upload/v1574345726/PDF-Files/PDFs%20from%20old%20website/Taking-Security-over-IP_ni8znv.pdf.

[7] Law of Mongolia on Secured Transaction of Movable and Intangible Property (2016), Article 8.

[8] Official Records of the General Assembly, Fifty-sixth Session, Supplement No. 17 (A/56/17), para. 346 ff.

[9] For a consideration of the state of the law on the topic in 1981, see Bramson, Intellectual Property as Collateral – Patents. Trade Secrets, Trademarks and Copyrights, 36 Bus. Law. 1567(1981).

[10] Tosato, A. (2010) ‘Security interests over intellectual property’, Journal of Intellectual Property Law & Practice, 6(2), pp. 93–104.

[11] Section 2(1) (t) of the SARFAESI Act 2002.

[12] Section 2(1) (zf) of the SARFAESI Act, 2002.

[13]The Economic Times, Why Intellectual Property Rights as security for loans is correct in legal terms, Available at-

  https://economictimes.indiatimes.com/news/economy/finance/why-intellectual-property-rights-as-security-for-loans-is-correct-in-legal-terms/articleshow/64657067.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst (Last Updated: Jun 20, 2018, 07.15 AM IST).

[14] Frederic Rosenberg and Jonathan T. Weiss of Weil ,( 2003) “Securitisation of Intellectual Property Assets: Music and Film Copyright Royalties.”, Gotshal & Manges, LLP.

[15] “Intellectual Property Rights and the Media.” Media Rights and Intellectual Property, by Richard Haynes, Edinburgh University Press, Edinburgh, 2005, pp. 12–30. JSTOR, http://www.jstor.org/stable/10.3366/j.ctt1r28zj.5. (Accessed 23 Apr. 2020).

[16] Kramer, W. J., & Patel, C. B. Securitization of intellectual property assets in the US market.

[17] John White, Intellectual property rights as primary security, 7 Int’l Insolvency Rev. 193 (1998).

[18] Thomas L. Bahrick, Security Interests in Intellectual Property, 15 AIPLA Q. J. 30 (1987).

Trade Secret Vs Patents

Intellectual Property Rights (IPRs) are the intangible assets created by the human mind. The governments have taken immense steps by creating legal frameworks to protect these assets through various means intended for the benefit of the innovator for disclosing his / her invention. This includes the offering of monopoly to the innovator.

[Image Credit: Shutterstock]

The widely accepted and known IPRs are patents, trademarks, copyrights, and geographical indications, which are protected through statutory laws. This blog discusses the relatively lesser-known IPR, “Trade secret” and how it differs from the Patents.

Trade Secrets:

The main aim of the IPR laws is to promote new technologies, artistic expressions, and inventions while advancing economic growth. However, it is always not feasible to protect the company’s inventions / intellectual assets through patents alone. Trade Secrets are of great value in these circumstances and offer to protect confidential information, which is classified as a secret having high commercial viability. Examples of trade secrets include secret formulae / recipes like KFC, Coca-Cola, etc.

Since no registration or filing requirements are in place for trade secret protection, there are high risks associated with the trade secrets, particularly when the secret in divulged to a third party. Unauthorized copying and duplicate products/processes are the major impact factors that would also result in a severe economic impact on the actual owner of the Trade secret. Therefore, the company has to take greater measures on its own to protect the confidential information to maintain the secrecy to the fullest extent possible.

Trade secrets offer the profitable option for protection since it does not have to fulfil the governmental regulations like applications or registrations. Further, they also offer the companies many advantages like perpetual monopoly until the secret is divulged to a third party. However, they are considered to be the weakest of the IPR protections since it may lose its protection when there is a failure in the face of the company to take appropriate/reasonable measures to maintain the secrecy.

Patents:

Patents on the other-hand offer protection through monopoly for a limited period i.e., normally 20 years for the disclosure of the information to the public. Since, competitors have access to the products, manufacturing processes and / or formula after a patent request is filed, it promotes healthy innovation competition and would result not only in the economic significance but also results in technological advancements.

However, the monopoly for a period of 20 years offers to exclude the others from making, using, selling the invention without the consent of the patent owners. Any violation of the above would ensue in infringement of the protected inventions and would result in the costly litigations that might result in injunctions, royalties, damages, etc. Hence, companies would always take necessary legal steps like licensing, assignments, etc. before practicing the protected inventions. These will ensure the protection of the economic interests and growth of the innovator companies. Further, patent protection enables the innovator to gain larger market shares, control competition, etc.

Additionally, patenting involves regulatory processes like filing and registration with stricter norms; they offer the highest protection to the inventions by stricter enforced under the law.

Author: Govindhaswamy Srinivasan, a Principal Associate – Patents at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at support@ipandlegalfilings.com

“ISKCON” Declared a Well-Known Trademark”

In a suit for trademark infringement filed by the religious organisation, ISCKON (International Society for Krishna Consciousness), The Bombay High Court declared that “ISCKON” is a well-known trademark under the definition given in Section 2(1)(zg) of the Trade Marks Act, 1999. The suit was filed against Isckon Apparel Pvt Ltd for using the mark “ISKCON” in respect of various goods and services. On March 6, the Court had already granted an ad-interim injunction against the defendant company. The permanent injunction was granted on Friday.
[image source]

Representing the plaintiff, Advocate Hiren Kamod submitted that the acts of infringement by the defendant company came to the knowledge of the plaintiff during February. It was further submitted by Kamod that repeated summons was served by the plaintiff to the company which went unanswered. Thus, the plaintiff approached the High Court to seek a permanent injunction against the defendant from using the said mark.

Director of the defendant company, Roshan Baid submitted to the Court that the company had changed its name from “Iskcon Apparel Pvt. Ltd.” to “Alcis Sports Pvt. Ltd.” and thus, “Isckon Apparel’ did not even exist as of then. He further submitted that he had already given an undertaking stating that the defendant company will refrain from using the said trademark in any manner whatsoever.

Referring to the religious organisation, Kamod stated that ISKCON was established in 1966 in New York and ever since had gained international recognition and repute which was not restricted to any particular goods, services, or activities. On the contrary, Kamod added, the organisation’s trademark enjoyed a diverse personality that was even beyond the scope of products and services rendered under the mark. Kamod further argued that in view of the averments made and the evidence submitted, in addition to the reliefs sought in the prayer, the plaintiff was also entitled to the declaration of “ISKCON” being a well-known trademark.

The single-judge bench constituted by Justice B.P. Colabawalla noted that the claim of well-known trademark by the plaintiff was not disputed by the plaintiff. He further stated that “ISKCON’ was a coined term which meant that it did not exist before its use by the plaintiff. The Court held that on account of the documents and evidence proving the “immense and long-standing reputation and goodwill throughout India and abroad”, the trademark “ISKCON’ shall be associated exclusively with the plaintiff.  Agreeing with the plaintiff’s contention concerning well-known trademark, the Court stated, “I have no doubt in my mind that the Plaintiff’s trademark ISKCON has come to enjoy a personality that is beyond the mere products/services rendered thereunder and the recognition, reputation and goodwill of the said trademark ISKCON is today no longer restricted to any particular class of goods or services.” The court further added, “From the material placed on record, it is evident that (a) the Plaintiff’s trademark ISKCON has wide acceptability; (b) the popularity of the Plaintiff’ s trademark ISKCON extends not only in India but in other countries as well; (c) the Plaintiff is using its trade mark ISKCON openly, widely and continuously since the beginning; and (d) the Plaintiff has taken several actions against various infringers in the past”.

The Court was of the opinion that the said trademark, “ISKCON” satisfied the test and requirements of a well-known trademark as provided in sections 11(6) and 11(7) of the Trademarks Act. The suit was decreed in terms of the prayer sought by the plaintiff.

Author: Aparthiba Debray an intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

3D Bio-Printing of Tissues/Organs

“Patent data shows that 55% of the total patent publications in 3d printing of tissue/organ domain are pending patent applications. Higher percentages of applications point to a growing market”

Bioprinting refers to an additive manufacturing technique that is used for the creation of organ/tissue-like structures that mimic the natural organs/tissues. 3D printers deposit layers of material otherwise known as bioinks to create various complex bodily structures including bones, skin, and even corneas. The technique is widely applicable to the fields of medicine and bioengineering.

Normally, the 3D bioprinting involves the same mechanism as that of the conventional 3D printers. In bioprinting, living cell suspensions are used for the printing. The required cells are normally extracted from a patient or, if this is not possible, adult stem cells can be used and cultured into a bioink to ‘print’ an organ or tissue objects. These cells are normally held together through some sort of dissolvable gel or collagen scaffold that can support the cells and mold them into the correct shape.

3D bio-Printing involves more-or-less of the following steps:

  • 3D Imaging: Through a standard CT or MRI scan to get the exact dimensions of the tissue/organ.
  • 3D Modeling: Blueprint of the organ/tissue generated by means of AutoCAD software. Mainly aims to avoid the transfer of defects.
  • Bioink Preparation: Bioink comprises of a combination of living cells, compatible base, like gelatin, collagen, etc. and cell growth/differentiation materials based on the requirements.
  • Printing: Layer-by-layer deposition of the bioink based on the AutoCAD design.
  • Solidification: Solidification or crosslinking may be aided by employing specific chemicals, UV light, or heat (also typically delivered via a UV light source).

3D bioprinting market’s growth is primarily steered by the ever-increasing use of 3D bioprinting in the cosmetology and pharmaceutical industries, technological developments in 3D bioprinters and biomaterials, and the increase in funds for research activities related to 3D bioprinting. The 3D bioprinting market is estimated to reach USD 1,647 million by 2024 from USD 651.6 million in 2019, at a CAGR of 20.4% from 2019 to 2024. Many factors have encouraged the industry players to increase and strengthen their existing production and supply capabilities, particularly in the emerging markets, which are predicted to experience growth at the highest rated.

India and China are projected to offer considerable growth opportunities for companies engaged in the 3D bioprinting research, owing to the growing demand for cosmetic surgeries, support from government bodies, and the less-stringent data requisites and regulations.

Our Patent Research Team at IIPRD performed a detailed analysis of patenting activity pertaining to 3D bio-printing to understand underlying technologies and growth of 3D printing technology in bioprinting space. In our research, the USA was found to be the top innovator in the technology domain while APAC countries China and Korea are majorly innovating in investigative technology. Although ortho industry happens to be the major beneficiary of the investigative technology, 3D printing is gaining popularity in bioprinting of delicate tissues like ocular tissues and islets of Langerhans, etc. Also, the inventions related to the 3D bio-printing of breast tissues would prove to be beneficial- both in cancer research as well as regenerative medicine. Presently, more than half of the total patent in the 3D bioprinting space use Extrusion bioprinter technology for bioprinting, and around 50% of patented technology relates to regenerative medicines and tissue defects. To review more details related to 3D bioprinting, click here to download complete report or write to us at sanjay@iiprd.com