Monthly Archives: March 2013

Copyfight or Copyright?- An analysis on the legal scenario of parallel importation

On 19 March, 2013, in a closely divided 6-3 judgment in Kirtsaeng v. John Wiley, the U.S. Supreme Court held that copyright law could not be used to prevent parallel importation into USA for works that are made outside USA.

The facts of the case are as follows:

In 1997, a student named Supap Kirtsaeng, from Thailand arrived at the Cornell University, U.S. to study. He noticed that the textbooks in the U.S. were considerably more expensive than the same textbooks bought abroad. He started his own import business wherein friends and family, from back home, sent him textbooks, which he resold in the U.S. at a profit. On eBay, according to the evidences procured, he made a profit of $ 1.2 million on selling the imported textbooks.

When John Wiley, a well known publisher in U.S. came to know about this venture of Kirtsaeng, he sued him for copyright infringement. His stance was clear- consumers would prefer low-cost books from Thailand over the expensive textbooks he sold. He made sales through the products manufactured abroad but the re-sale of his paid products was not acceptable to him.

Kirtsaeng referred to the first-sales doctrine, mentioned in the U.S. copyright laws which enables residents of the U.S. to resell legally obtained objects without asking for the copyright owner’s permission. This is enshrined in Section 109 of the U.S. Copyright Act which states: “The owner of a particular copy or phone record lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy of phone record.”  This is called as a ‘right of first sale’. In simpler terms, if you are the copyright holder, you get to control only the first sale of your copyrighted article. If there is legitimate re-sale after the first sale, there is no legal recourse that can be taken.

The High Court held that purchasers have the right to re-sell and distribute that copyrighted article without the consent of the copyright holder, and unauthorized parties can import the same into the U.S., regardless to the fact whether the copy was manufactured in U.S. or abroad. This wide interpretation of Section 109 of the U.S. Copyright Act served as a limitation to Section 602(a)(1) of the same Act which mainly deterred gray market importing. Section 602(a)(1) states: “Importation into the United States, without the authority of the owner of copyright of copies of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies [of the work].”

With reference to this, Section 17 of the same Act states that the owner of copies ‘lawfully made under this title’ may sell or distribute their legally acquired copies without the copyright holder’s permission.

The main question raised in this case was whether the phrase ‘lawfully made under this title’ meant lawfully made in the United States’.

Opinion of the Majority

The Majority Bench, with 6-3, reversed the Second Circuit’s decision holding that the first sale doctrine did not apply to foreign-made goods. They emphasized that the first sale does apply to works made abroad if they have been imported by or with the permission of the copyright-holder.

Further, the key phrase which was under fire, did not have any geographical implication but should be interpreted on the provision per se. Further, they stated that copyright infringement under Section 109(a) would essentially refer to libraries circulating books printer abroad without the copyright holder’s consent, book stores to sell such books, for consumers to sell their used foreign-made cars containing automobile software, for consumers or others to re-sell other foreign-made goods that come in copyrighted packaging, for museums to publicly display foreign works without consent.

Coming again to the key phrase ‘lawfully made in accordance with the title’ purely meant ‘made in accordance with the Copyright Act’. So, interpreting Section 109(a)- ‘first sale doctrine’ would apply to copyrighted work as long as their manufacture met the requirements of U.S. copyright law. Again, essentially, focus was on whether the copies were manufactured abroad with the permission of the copyright-holder.

Interestingly, with this decision, copyright law and trademark law both now stand at the same juncture with respect to the goods which are paid for by the original copyright owner. In simpler terms, copyright & trademark law cannot keep a check on the legitimately made copies for which the copyright holder has been paid and keeping a track on the first sale made.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

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What is a Priority Date of a Patent of Addition?

This Article would not discuss as to what is a patent of addition, when does it expire etc., answers to which are clearly mentioned in the Indian Patents Act. Briefly to sum up, a Patent of addition can be filed at any time either before or after the grant of a main application for an improvement/modification on the main invention and expires with an expiry of the main patent (Sections 54, 55 of the Patents Act). Further Section 56 of the Patents Act clarifies that a main application/patent cannot be cited to establish lack of inventive step in the patent of addition but can be cited to establish novelty in the patent of addition.

Coming to a moot point of our discussion that is what the priority date of patent of addition is. Well, this is a question for which we always get answers stating that the original filing date of the main application is a priority date of the patent of addition. Not only our interview candidates, peers, colleagues, but, yes you will read it right, even our respected Indian patent office controllers had told us the same answer!

That is when we protested in order to save one of our client’s rights. The identity of our client as well as the Controller we have spoken to has not been disclosed herein.

So here it goes, our client had filed a patent application (hereinafter referred to as “main application”) on 17th October 2008 and an application for a patent of addition on 22nd June 2010 (containing new matter and new claims) during the pendency of the main application. According to an Indian Patent office website regarding the status of this Application, we were very surprised to learn that the said patent of addition application has been “Deemed to be withdrawn u/s 11B(4)” for non-request of examination.

We had written our grievance letter to the Patent Office on behalf of our client emphasising mainly on the following points as discussed herein below.

Each Patent of Addition is clearly an independent patent in view of Sections 54 and 55 of theIndian Patent Act, and therefore

  • rendered a new Application Number,
  • requires a separate request for examination to be filed,
  • is published after 18 months, and
  • undergoes separate examination.

In view of the same, the deadline for request for examination of a Patent of Addition has to be 48 months from the date of filing of the Patent of Addition, which in the present case should be 22’nd June 2014.

We requested the Patent Office to give a reason for which the application has been “Deemed to be withdrawn u/s 11B(4)” for non-request of examination. We further contended that it is completely logical to say that the priority date of a patent of addition is the date of filing of the application for patent of addition. Else, what would be the deadline for filing a request for examination in case the application for a patent of was filed after 48 months from the main invention? For example, what should be a deadline of filing a request for examination for a patent of addition application where the main application was filed on 01st January 2001 which was granted on 01st January 2005 and the patent of addition application was filed on 01st January 2006? How can a 48-month deadline of filing RFE from priority date of main application be complied in this case?

Further logic can be easily drawn from the right to file a PCT application for a patent of application. Had it been so that a patent of addition has a priority date of the original application, would an applicant for a patent of addition application, in that case, be not entitled to file a PCT application in case the patent of addition application is filed after 12 months from the date of filing of the main application. For example, if a main application was filed on 01st January 2005 and a patent of addition application was filed on 01st January 2007 and if, as the patent office says, a priority date of the patent of addition application is taken as the original filing date of main application, does that mean that an applicant cannot ever file a PCT application for his patent of addition application.

Our discussions with the respected Controllers in this matter made us give a rational that “it is obvious” that a priority date of patent of addition is the main application filing date as both are expiring on the same date. We were also justified that Patent of Addition is rendered as a “further application” in context of the Indian Patent Act, which made us feel the wide gap that non-mention of the actual deadline in the Patent Act actually made. It was only after we had explained to him giving all logical reasons and explanations (as discussed above) as to why the priority of the patent of addition (containing new matter and claims) cannot be the original main application filing date, was when the concerned Controllers got the point and agreed and accepted that our client’s application has been deemed withdrawn incorrectly, the status of which has now been rectified to state “Examination Request Not Filed”!!

We are fortunate that we were not made to contest this matter at the IPAB, which would have been such an unnecessary investment of time and energy, for an issue which is amply clear and logical. This article is merely being written to share a commonly misunderstood concept relating to patent of addition and provide clarity to all our inventors and patent agents of their rights of priority in case of patent of addition.

Happy Patenting!

About the Author: Ms. Meenakshi Khurana, Patent Attorney at Khurana & Khurana and can be reached at: Meenakshi@khuranaandkhurana.com

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Depository Material

Indian Patents Act provides an applicant to deposit a biological material in support of the Indian patent application. It is an exigent via which an applicant can cure what might otherwise be a conceivably fatal defect in a patent application or even for an issued patent.

A “biological deposit” can, in that case, fulfil the requirement of best mode, sufficiently describing the invention and its operation or use and the method through which it is to be performed. Furthermore, biological material deposited and incorporated into the disclosure may be used to support a claim interpretation more broadly than that explicitly disclosed in the specification.

The grant of patent related to a biological material depends upon regulations regarding requirements for the deposition of biological material in recognized International Depository Authority formed under Article -7 of BUDAPEST TREATY.

As per Section 10(4)(d)(ii) of Indian Patents Act, 1970, the “biological material” “if not being described fully and is not available to public, the said biological material is to be deposited before the IDA under the Budapest treaty before filing application in India.”     Once the deposits are made, the Authority provides an accession number, which is considered as an equivalent description of the living material. The sample of biological material or genetically modified microorganisms (GEMs) is to be submitted to Microbial Type Culture Collection & Gene Bank (MTCC), Institute of Microbial Technology, Chandigarh.

Referring to the proviso, it is compulsory to deposit the biological material if:

  • such material and its use or operation and the method by which the invention is to be performed are not fully and particularly described in the specification;
  • the best mode of performing such an invention is not disclosed;
  • such material is not available to public.

Stressing on the time line—it shall be made no later than the date of filing the patent application in India and a reference thereof shall be made in the specification within the period of 3 months (as per rule 13(8) in Indian Patent Act 1970).

What does a Deposit accomplish?

After the aforementioned mechanism, the invention is deemed to have satisfied the sufficient disclosure requirement. As part of the disclosure, the deposited material may be employed to augment or correct deficiencies in the specification of the application, specifically, as to enablement, written description, and best mode requirements.

The depository system leads to provide a mechanism to stand with the concern that a fair access is given to genetic resources and benefit sharing.

The regulation India has followed in adopting the depository system, though are not compatible to TRIPS requirement.

[To be noted] India’s patent act and draft guidelines requires applicant to disclose the source and geographical origin of biological materials used to make an invention that is the subject of a patent application, failure to-do-so may be a basis for opposition or revocation proceedings.

TRIPS have not laid any of aforementioned compulsion.

However, one can insight it, as TRIPS facilitate the provision for the member country to adopt a “sui-generis” system to protect the GEMs and invented biological material.

Rather, India has implemented the depository system to meet the provision of the Convention on Biological Diversity (CBD), which India has adopted in 1992. CBD aims to provide “sustainable use” of the elements of biological diversity and allowing for the “fair & equitable sharing of benefits”.

What can be deposited as a depository microorganism?

In spite of trailing with the Indian patents act and its practise, the patenting of biological material still requires to clear some aspects, such as, what is the definition for ‘biological material’. Referring to the constraint, there arises various techno-legal issues which are supposed to be addressed. Such as, the expression “biological material” has not been defined in any of the Sections of Indian patents act or rules there under. However there are other ways to understand the “biological material” in light of Section 3(j) of Indian Patents Act, 1970, providing inter-alia, patenting of microorganisms.

Conventionally, micro-organisms include bacteria, fungi, virus, protists and other prokaryotes. An isolated biological material in contradiction to a modified genetically biological material is still considered prima facie not to fulfil the requirement of patentability by the Indian Patent Office (IPO).

As per European Convention, the “biological material” can be construed as “any material containing genetic information and capable of reproducing itself”. However, the Indian law is yet to answer this question that is whether all biological materials which satisfy the definition stated can be considered patentable under Indian Law.

The complete procedural details on deposits of biological material can be accessed in an MTCC manual available at: http://mtcc.imtech.res.in/downloads/brochure.pdf

Is a Deposition Required?

The biological deposit “requirement” is a requirement per se. A deposit could be required where an invention cannot be practiced without access to an organism only obtainable from nature.  Even a new formulation containing combination of known microorganisms should also be submitted to the depository. The deposition satisfies issues of enablement and sufficiency of disclosure, dealing with section 10(4) (a) and (b).

The axiom governing biological deposits in respect of an Indian patent application provides a flexibility in the preparation of the application as discussed above on the grounds of sufficiency of disclosure, or representing best mode or method, written description and potentially broaden the scope of claims in the event of litigation. A deposit will usually be necessary only when words fail to explain how to make and use the invention, but an applicant may reference a deposit even when not required. The public will have access to biological materials deposited in support of a patent application after the publication of the patent application.

About the Author: Ms. Priyanka Pathak, Patent Associate at Khurana & Khurana and can be reached at: Priyanka@khuranaandkhurana.com

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