Monthly Archives: December 2017

Louboutin’s ‘Red Sole’ Declared as a Well-Known Trademark by Delhi HC

The news of famous French fashion designer Christian Louboutin’s ‘red sole’ shoes with their sky heel stiletto and iconic red sole often regarded as the fashion statement has recently been in the limelight for being declared as a well-known trademark by Justice Mukta Gupta, Delhi High Court, but very few know the story behind the iconic red sole until now. After dissecting Christian Louboutin’s Rizzoli book, it was discovered that while starting off his career as a landscape gardener, it was actually the nail polish that gave Louboutin his inspiration. The renowned reputation of the ‘RED SOLE’ trademark has not been hidden from anyone and is spilled over into India from various countries around the world and consumers are well aware of this goodwill and reputation.

The luxury shoe brand had recently moved the High Court seeking a permanent injunction to restrain the traders, i.e. ‘Kamal Family Footwear’ and ‘Adra Steps’ in Delhi’s Karol Bagh from manufacturing and selling or in any manner, the shoes using his trademarked sole or the design which is deceptively similar or identical to his distinctive design as shown below.

shoe

The Court observed that the Christian Louboutin’s red sole has been a well-known luxury brand with presence in over 60 countries including India and has been using its ‘red sole’ trademark extensively and continuously since 1992.

In the suit which proceeded ex parte, Justice Mukta Gupta observed as follows: “The plaintiff’s trademark is internationally recognizable and has extensive usage in India. The ‘RED SOLE’ trademark also enjoys trans-border reputation in India by virtue of a variety of factors including tourist travel, in-flight magazines, Internet and broadcasting of various films and television programmes…….”

The Court referred to Hindustan Unilever Limited Vs. Reckitt Benckiser India Limited and finally directed two footwear traders to pay compensation of Rs. 10 lakh to the luxury brand owner for infringing the trademark for over a year and a half and decreed the suit by permanently injuncting the defendants from manufacturing, selling, marketing and advertising foot-wears with the trademark ‘RedSole.’

Author: Rashi Gahlaut,  Trademark Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at  rashi@khuranaandkhurana.com.

Source: 

[1] hfttp://lobis.nic.in/ddir/dhc/MUG/judgement/12-12-2017/MUG12122017SC7142016.pd

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Amendments in Patent Application Process in Singapore

The process of applying for patents in Singapore will become much easier and more efficient after Intellectual Property Office of Singapore (IPOS), in its continued efforts to ease patent application process, has introduced few changes in Patent forms 1 and 12B. According to a circular released on November 21, 2017 on IPOS website [1], these changes will be effective from 10 December 2017 [1] and will be available to Patent Applicants from that date. IPOS claims that after these changes the patent application process will be enhanced for general Applicants.

Amendments to ‘Patents form 1’ [2]

a. Patents forms 1 & 8 will be merged

This change will allow Applicants to enter details of inventors for which the patent has been applied in part 7 of the newly merged form i.e. merged ‘form 1’ & 8. There will be no need to file a separate form 8. It is a welcome move for the Applicants as they will not have to fill multiple forms. In addition to this, the Applicants will now be able to derive rights from the Inventor. Applicants can do this by filling in part 8 of the newly merged form. However, these amendments will not change the process of correcting the details of the inventors i.e. Patents Form 13 will not be applicable for such amendment or correction. Applicants will also be able to submit the details of the inventor separately by filling Patent Form 8 which will still be available for submissions.

b. A separate attachment for sequence listing

A new document will also be available for “sequence listing” for attachment at the time of filing of patent applications. A “sequence listing” is a list of biological sequences in the format prescribed by WIPO Standard ST.25 (Presentation of nucleotide and amino acid sequence listings) using controlled vocabulary (i.e. defined terms for certain features). This document will be available to patent applicants in case they do not want to include sequence listing as a part of description or claims. Also, the applicants will be able to paginate this document and will be able to indicate the page count of sequence listing document in a separate field.

In addition to this, if Applicants want to submit sequence listing as a separate reference document, not forming part of the description or claims, such document can be submitted using the mentioned “sequence listing” document type with a cover letter attached to indicate that it will serve as a reference document only.

c. A new feature of auto-population during divisional filings

Yet another efficient and productive move by the IPOS is the introduction of auto-population feature when a divisional application is being filed. This means that when an Applicant files a divisional application, relevant information from the parent application will be auto-populated for the convenience of the Applicants. Having said that, the Applicants will still be able to amend the auto-populated fields if they choose to do the same.

 Amendments to Patents ‘Form 12B’ [3]

Similar to the changes in Patents form 1, for the ease of Applicants, Patents Form 13 will also be merged with Patents Form 12B. Applicants don’t need to fill Form 13 in case they wish to make amendments to the specification when requesting for an examination review report using Patents Form 12B, and can do so by selecting the option “Written submissions and proposed amendments are filed” in Patents form B. With this selection, the Applicant will be required to submit both a clean and a marked up copy of the amendment of the specification.

Conclusion

Such amendments in the Patent Application process as mentioned above will be available from December 10, 2017. Further, these changes will ease the application process and will allow Applicants some flexibility in sequence listing, and amending details of inventors as well as amending the specification.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

 References:

[1] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/circulars/(2017)-circular-no-8—enhancements-to-patent-application-process.pdf

[2] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/patent-forms-and-fees/form-pf1—otc.pdf

[3] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/patent-forms-and-fees/form-pf12b—otc477c1877c2d0635fa1cdff0000abd271.pdf

Trade Mark Infringement-Toyoto Jidosha Kabushiki Kaisha. vs. M/S Prius Auto Industries Ltd. and Ors.

Time for Considering Territoriality Principle over Universality Principle 

Courts are gradually shifting their focus to territorial nature of Trade Marks. The same was also quite evident in the Exide case, that has been discussed in the previous blog (here). However, no conclusion was drawn in the case due to ‘out of court settlement’. But, the Supreme Court of India in the instant Toyota case has left a landmark precedent of recent times and re-explained the character of Trademark law.

The case goes back to 2009[1], where Toyota, which is a car manufacturer, claimed that Prius Auto Industries that trades with auto parts and accessories, bore the Plaintiff’s registered ‘Toyota’, ‘Toyota Innova’, ‘Toyota Device’ and ‘Prius’ Trade Marks. The plaintiff approached the Trade Mark Registry for cancellation of registered mark of the defendants, and also filed the suit on the ground that the defendant was using their ‘well known mark’ without their consent, leading to an unfair advantage of their reputation and goodwill of the plaintiff. However, following the decade old practice, ‘global reputation and prior user was upheld’ by the Trial court and gave the judgment stating the Defendant liable for passing off of the Trade marks of the Plaintiff, thereby restraining them from using the said trade marks and imposing punitive damages of rupees ten lacks.

However, the Division Bench of the High Court of Delhi gave a very balanced view and held that the decision of Trial Court was acceptable as far as injunctions against the mark Toyota, Toyota Innova’ and ‘Toyota Device’ is concerned. Injunction against the use of Prius by the Defendant was not justified, as the Plaintiff has to give evidence for showing that there existed a cause of likelihood/actual confusion in the Indian market. Thus, this part of the judgement of the Trial Court was set aside. Therefore, the current case is an appeal filed by the Plaintiff before the Hon’ble Supreme Court which dealt with the question that ‘whether the defendant is liable of passing off due to the use of ‘PRIUS.’

The factual matrix lie in issue that revolves around the mark ‘Prius’. This was the  Mark under which the Plaintiff’s first commercial hybrid car was launched in Japan as well as in other countries since 1997. However, the Plaintiff did not get the Trade Mark “Prius” registered in India and its Prius car was introduced in India only in the year 2009, much later than the year when the Defendant got there Trade Mark ‘PRIUS’ registered in India in 2002.

The importance of the case pertains to the tussle between the two theories of Trade Mark Law. However, the true meaning of Trans-border reputation can very well be observed through this case.

Universality Principle on behalf of Appellant

The Appellantsmain argument was that their Trade Marks had acquired immense reputation and goodwill due to intense advertisement of the product worldwide through print media and internet that were even available in India. Reliance was even made on NR Dongre vs Whirlpool Corporation[2], where it was held that “wide advertisement of trade mark without existence if the goods in local market can well be considered as use of the Trade Mark in the local market”. Also the real test to determine the prior user is to establish that ‘who is the first in the market.’

Thus, the mark PRIUS was a well-known mark under section 2 (1) (zg) r/w Section 11(6) & 11(9) of the Act  as the mark PRIUS had acquired a great deal of goodwill in several other jurisdictions in the world much prior to Prius Auto’s use and registration in India.

Territoriality Doctrine on behalf of Respondent

The Hon’ble Court was convinced with the averments made by the Respondents that most of the courts globally has accepted ‘territorial doctrine over universality principle’, so as to establish the goodwill and reputation in a particular jurisdiction. Therefore, in order to follow the Territoriality Doctrine, one has to show adequate evidence that he has acquired the a substantial goodwill in India for its mark, relying on Starbucks v. British Sky Broadcasting, where the Court observed that:-

“No trader can complain of passing off as against him in any territory… in which he has no customers, nobody who is in trade relation with him.”

Therefore, prior use of the trade mark in one jurisdiction would not ipso facto entitle its owner or user to claim exclusive rights to the said trade mark in other jurisdiction as observed by Division Bench of Delhi Court.

Judgment

Thus, the Supreme Court held that “likelihood of confusion” would be a better test of proving a passing off action, which can only be established from evidentiary documents, which the Appellants failed to provide. In furtherance of this, the Supreme Court also insisted on the Trinity Test as laid down by Reckitt & Colman Products Ltd. v Borden Inc[3] :

  • The goods or services have acquired goodwill or reputation in the marketplace that distinguishes such goods or services from competitors;
  • The defendant misrepresents his goods or services, either intentionally or unintentionally, so that the public may have the impression that the offered goods or services are those of the claimant; and
  • The claimant may suffer damages because of the misrepresentation.

These seven years of clash between the Toyota and Prius automobile company came to an end and the Supreme Court concluded that trademark rights are territorial and not global, thus one has to prove that one has acquired its reputation and goodwill in a territory, only through actual evidence, thereby rejected the trade mark case brought by Toyoto jidosha kabushiki kaisha.

Analysis

The Hon’ble Supreme Court has reiterated the much-needed revision of foundational basis of Trade Mark law, which has also very well described and explained the two most important Doctrine of the Trade Mark law that helps in determining the right owners – Universality Principle and Territoriality Doctrine. Also, Division Bench of High Court has played a very significant role in highlighting the groundbreaking principle and it was very consistent with its view towards the territorial aspect of the Trade Mark law. (which can be seen Exide case). Moreover, the Court Aptly relied on Trans Tyres India Pvt. Ltd vs. Double Coin Holdings Ltd & Anr., which observed that Universality Doctrine (which posits that a mark signifies the same source all over the world) has not been accepted by the courts. Modern day trade; globalization have brought in multi-channel modes of sale in the market and therefore it is the territoriality Doctrine (trade mark being recognized as having a separate existence in each sovereign country) would hold the field.

Thus, it is time to also look into the territorial character of the Trade Mark above the rights of prior user and Trans-border reputation.

Sources:

[1]  http://supremecourt.gov.in/supremecourt/2017/9646/9646_2017_Judgement_14-Dec-2017.pdf

[2] 1996 (2) ARBLR 488 SC

[3] [1990] 1 WLR 491

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

Exide Industries Limited vs. Exide Corporation, U.S.A. & Ors.

The case Exide India v Exide US brings into effect the perplexing issue of Trade Mark law. The dispute dates back to 1997 when the US based Company ‘Exide Technologies’ entered the Indian market post Liberalisation, where Indian company ‘Exide Industries’ was already present over the decades in the local market selling automobile batteries under the trademark “EXIDE”. As soon as the US based company started its operation in India, Indian company “Exide Industries” filed a suit for infringement of trademark in Delhi High Court. After a significantly long and much converse legal conflict, the Court in 2012 restrained Exide Technologies from using “Exide” trademark in India. Exide Technologies further filed an appeal to Division Bench against the judgement of 2012, which was though dismissed the Division Bench held that there was neither infringement nor passing off done by Exide Technologies as both the commercial ventures were genuine users of the mark. Further to this decision, Exide Industries filed an appeal before the Hon’ble Supreme Court, which was disposed off by the court, as the parties to the dispute opted for an out of court settlement. The foremost dispute of the case was as to who is the real owner of the mark EXIDE.

The case is important as it includes the aspect of prior-use of identical trademark by two commercial entities and its legitimate ownership. The case involves a significant concept of trademark law according to which the prior use and adoption of trademark show distinctiveness of the trademark on account of sale of the goods in market which makes the seller, owner of the trademark. The Delhi High Court single judge held that the trans-border use of the trademark by the registered owner of a mark in a particular jurisdiction does not make him the owner in another jurisdiction where the similar mark is in simultaneous use by other local registered proprietors with proven prior use of that trademark. But subsequently the Division Bench declared the judgement to be impugned and thus held that the trans-national use of the trademark is one of the significant aspects to look for the ownership of the trademark and also the goodwill of the trademark continues to be with the assignor of the trademark even if it is assigned to some other company for use in another jurisdiction.

Case background:

M/s. Electric Storage Battery Company (ESBC) was incorporated in USA in 1888 and subsequently was granted the trademark ‘EXIDE’ in USA. It incorporated a subsidiary company in UK in 1891 named as M/s. Chloride Electric Storage Co. Ltd. (CESCO) which was permitted to use the trademark as it was a subsidiary of the parent US Company. Later, CESCO was also granted registration of trademark ‘EXIDE’ in UK. In 1947, following an order of a US District Court, ESBC and CESCO broke connection but CESCO continued to have right to use trademark ‘EXIDE’ pursuant to an agreement between the two. CESCO started selling batteries under the name ‘EXIDE’ in India and subsequently, in 1942 it was granted registration of the trademark ‘EXIDE’ even in India. CESCO is the parent company of the present plaintiff company to which the trademark was transferred. In 1978, by executing a deed of assignment, trademark ‘EXIDE’ was assigned to the present plaintiff company. Thereafter, the plaintiff company applied for transfer of registration of trademarks in its favour which was also granted. Therefore, it was selling batteries under the name ‘EXIDE’ for quite a long time in India.

After liberalisation, when US company Exide Technologies started selling batteries under the name ‘EXIDE’ in India, The Indian Company brought a suit for infringement and passing off against it which became a long drawn battle.The ownership of the trademark EXIDE was the primary issue in this case. The Indian Company Exide Industries claimed ownership on two grounds:

  • It was the registered owner of the trademark in India. This ownership was transferred from the transferor-company.
  • It was the prior user of the trademark in India and thus it acquired the ownership of the trademark ‘EXIDE’ in India.

Similarly the US based company, Exide Technologies claimed the ownership on two grounds:

  • It is the parent company (US based ESBC) of the former transferor-company (UK based CESCO) which owned the trademark ‘EXIDE’ and thus only Exide Technologies have the exclusive right of the ownership of the trademark ‘EXIDE’ even in India.
  • The trademark ‘EXIDE’ is registered in its name in about 130 countries and thus it is the worldwide owner of the trademark. As the company has a transnational existence, it is the real owner of the trademark ‘EXIDE’ even in India.

In the present case, the concept of prior use was applied, which implied that the plaintiff company was using the trademark by selling batteries under the name ‘EXIDE’ in India. The defendant claimed that it was the owner of the trademark in India as well because it was the parent company of the transferor-company from which the plaintiff acquired the trademark ‘EXIDE’ and the defendant pleaded that it had not abandoned its right by not using the trademark in India and instead didn’t use the trademark in India for long period of time because of some ‘special circumstances’. The court did not accept the Defendant’s plea as it failed to show any ‘special circumstances’ for not using the mark over such sufficiently long period of time in India. The result was that the court accepted the fact that the transferor-company was manufacturing batteries under the name ‘EXIDE’ in India from around 1960 from which the plaintiff company got the trademark assigned. Thus automatically, as far as India is concerned, the plaintiff and their predecessors are the prior user of the trademark ‘EXIDE’.

Judgement:

The Delhi High Court in 2012 through Valmiki Mehta, J. restrained Exide US from using the Exide mark in India and held the plaintiff as the legitimate user and owner of the mark in India due to its prior use by plaintiff. Both, infringement and passing off by US Company Exide Technologies were confirmed by the court. The Defendant’s plea of non-use of trademark in India due to special circumstances was also rejected as Court observed that the Defendant failed to establish any special circumstances.

However, the case came up as an appeal to the Division Bench of Delhi High Court which considered both the issues, the prior use of the trademark by Exide Industries and whether Exide Technologies is liable for the infringement and passing off. Relying on the landmark Supreme Court judgement like Cadila Healthcare, Dyechem v Cadbury and Durga Das Sharma v Navratan Pharmaceutical laboratories, the court inferred that passing off and infringement are both different concepts wherein, an impression of deception or confusion relating to the manufacture or origin of the goods is created in the minds of the buyers. Court observed that the trademark ‘Exide’ used by both the parties is identical, and both were genuine users of the mark. The judgement of the court was quite inventive and only one of its kind wherein the court outlined that US based Company was kept out of the Indian market due to trade restrictions but however on record of evidence Exide Batteries manufactured by Exide US was substantially known in India as well. Another point that the Court illustrated was that though, through an assignment deed, the mark was assigned to Exide India, yet the goodwill in the mark was retained by Exide US because the agreement did not specifically transfer the goodwill. Thus, the transnational reputation was highlighted and the court allowed Exide US to be in possession of the goodwill of the trademark ‘EXIDE’ despite of transfer of rights of ownership of the trademark. At the end, the court confirmed that there was no circumstance of passing off or infringement by the Exide US as it had legitimate rights to the mark. The court termed the use of the mark by Exide Technologies as “bona fide and legitimately concurrent”. Moreover, the counterclaim against Exide India was not maintainable since they were the registered owners of the mark in India.

The order of the division bench was further stayed by the Supreme Court after an appeal was filed by Exide Industries. The apex court restrained the Exide Technologies (defendant) from using the mark until the final adjudication of the matter but the parties before the decision of the court brought about an out of court settlement.

Present scenario and analysis:

In the event of widespread reputation through immense technology (internet, websites), globalisation and restructuring of Indian market, Exide case comes as an exception and as a tenet that considers territorial character of Trademark above trans-border reputation. The Delhi High Court judgement of 2012 clearly delineated that the territorial prior use of the trademark by a registered user in one jurisdiction weighed more than the worldwide reputation of the trademark used by another registered user in other jurisdictions. The case was twirled when the Division Bench restored the rights to the mark to both competing proprietors in a way. In this case the true scope and effect of concurrent use of an identical trademark for similar products in different jurisdictions were brought into light. Both concurrent users of the identical trademark in different jurisdictions were held to be the legitimate users in their respective jurisdictions. The allowed of the retained goodwill for substantiating bona fide claim to the mark was an exclusive and unique approach.

However, out of the court settlement by the parties clearly marked an end to the hopeful jurisprudence in cases of use of identical trademark by different commercial proprietors in different jurisdictions. The parties mutually agreed subject to certain terms and conditions to fully and finally settle all disputes and their rights and obligations with respect to the mark in the way set out in the agreement. As a result of the settlement, the Supreme Court disposed off the case without a proper jurisprudence on the issue.

Source:

[1]   MANU/DE/4642/2012

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

The Budding Patent Law in Myanmar

Myanmar, also known as Burma, a least developed country in mainland South-East Asia, is still in its embryonic phase of Intellectual Property Laws. The country is not presently a signatory to the Paris Convention for the Protection of Industrial Property or any other treaty protecting patents. The Burma Patents and Designs (Emergency Provisions) Act 1946 came into force in 1993 in the country, but has been repealed, and therefore currently Myanmar does not have any standard through which Patents can be applied and enforced. This brings about a scenario where goods that are patented, and for which companies or individuals hold relevant patent rights outside Myanmar, can be produced and used for commercial purposes and traded in Myanmar without the permission of the actual rights owner. There is no regulation or any law for protection of inventions and related IP. As a result, it is currently not possible to apply for patents in Myanmar.

Current setting for Patent Protection: Though, there is a gap between the redundant Patent Law and enforcement of new law, Patent protection has found its way through section 18(f) of the Registration Act under which Declaration of Ownership with the Myanmar Registry Office of Deeds and Assurances can be filed by the Patent owners. This declaration is a solemn statement of facts made by the Patent owner. After the declaration is registered, it is advisable to publish a Cautionary Notice in a daily English Language newspaper informing the public about the ownership of the patent which warns the potential infringers of legal action by patent owners. There is no substantive examination of the patent filed by way of such Declaration. The Declaration is valid for three months period with possibility of renewal. Nonetheless, this Declaration doesn’t grant any patent rights and currently, in absence of a proper legislation, there is actually no option to enforce patents in Myanmar.The Specific Relief Act (Section 54(b) and (c), and Illustration (u)) allows for patent infringement lawsuit, but it is ambiguous as to how such lawsuit may be conducted and decided upon in absence of patent law and the required legal standard. Thus, this law provides limited patent protection. Moreover, priority claim registration is not available under the Registration Act.

  Furthermore, Technology Transfer Agreements are enforceable if they are registered with the Myanmar Scientific and Technology Research Department but it doesn’t cover patent licensing. As there is no specific law for protection of patents in Myanmar, most entrepreneurs as an alternate way of protecting their inventions, spend extensive amounts in protecting their trademarks through the available means. By doing so, they protect the brand reputation and goodwill of their products as a minimum that they can achieve.

TRIPS and MyanmarMyanmar has acceded to Trade Related Aspects of Intellectual Property Rights (TRIPS), and therefore it is required that the country complies and implements the laws in consonance with the Agreement by no later than 1st July 2021. Consequently, Myanmar is drafting IP laws particularly Patent Laws to ensure its legislation is in line with the TRIPS. Thus, the status of IP Law seems to be improving as the country has drafted a new legislation for regulation of Patent which is supposed to be in compliance with TRIPS Agreement.

The Draft Law for Patents: The Draft law has been framed and published in 2015 and it is endowed with the procedural and substantive provisions found in patent laws of most Paris Convention countries. The Attorney General’s Office and Ministry of Science and Technology were instrumental in drafting the said law that is expected to be promulgated by the end of 2017 or in early 2018. According to the Draft Patent Law, to be patentable, the invention must be novel involving an inventive step and should also have an industrial applicability. These requirements are the basic three requirements as per the international standards of patent protection globally.

 According to the draft bill, Patent applications can be filed with the Myanmar Intellectual Property Office (IPO) and the registration system has been kept similar to the other ASEAN countries. IPO shall be responsible for all IP registrations in the country. After the receipt of the application for the patent filed, preliminary examination will be conducted by the IPO following publication of the patent application only after making sure that it does not defy the integrity, national security, and public safety. If it is found that the patent application is contrary to national security and public safety, the rights will get transferred to the Myanmar Government. After the publication, a three months period will be provided for any opposition which can be raised from the date of publishing of the patent application, it will be subsequently followed by substantive examination and finally grant or reject the application. The life of protection of Patents will be twenty years, subject to annual fees.

The draft bill has also provided for the grant of compulsory licenses wherein, the Myanmar Government will have the right to issue compulsory licenses for specific vital pharmaceuticals and the owner of the rights can’t deny such grant of license subject to royalties. The interest of the patent owners has been protected by the law and specific remedies have been provided in case of infringement of the patents which include civil litigation and criminal prosecution. Also, the patent owners can apply to appropriate courts for grant of preliminary injunctions.

At present, it is extremely difficult to enforce patent protection in Myanmar in absence of proper Patent law and legal standards. Innovations and intellectual inventions can’t be protected in Myanmar, so it is highly worthwhile to think before bringing such innovations into place in Myanmar. However, it is a sigh of relief for the inventors and investors, that the country has acceded to TRIPS, the law for patent protection has been drafted and is set to arrive anytime soon.

References:

[1] http://www.youripinsider.eu/patent-protection-myanmar/

[2] http://www.myanmarpatent.com/patent.htm

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

IP Rights Encompassing Comic Books

Comic book characters like Superman, Batman, Spiderman, Iron Man, Harry Potter etc. have become part of our daily lives ever since they were created via comic books and later incorporated through television shows, merchandise and more recently movies. From soft toys, video games to movies all such methods provide various avenues to the owners and creators of such characters to earn money and goodwill in this fiercely competitive market.

The artists behind such characters use their imagination, intellect and imagination and provide such characters with certain specific and unique attributes such as, costume, alter ego, superpowers, backstory etc. with which they are uniquely identified with when the consumers read about them or watch a TV show or a movie based on such characters. These unique attributes also give the idea of the artist an expression. It is due to these reasons that the creator/artist to protect such character to avoid infringement, copying, and misappropriation by third parties.

The production companies, advertisers, licensees and business houses, who invest a substantial amount of money to obtain rights of such characters for using such characters through various media like TV, movies, radio, merchandising, shall also have a genuine concern over infringement of their rights over such characters by any third party. It is due to these reasons that it becomes very important that such comic book characters are also included in the ambit of Intellectual Property Rights.

It is very important to understand that when do such comic book characters come under the ambit of copyright and trademark related legal protection and what happens to characters which are already in public domain but may be used subsequently in new copyrighted work.

Characters may be differentiated into two categories: graphic, and fictional. Where a graphic character can be depicted simply by a cartoon, or another form of graphic representation with its physical representation and characterization being visually obvious for the readers, a fictional character is a word portrait of which the physical appearance and characterization reside in the mind of the reader. Since images are more easily identifiable, retained in the memory of the readers and characterized than literary descriptions, it is are easier to afford them legal protection. David B. Feldman goes as far as to opine that fictional characters’ are the second-class citizens in the world of intellectual property.

Graphic characters

Copyright protection under the ambit of ‘artistic work’ can’t be afforded to such graphical characters since such characters and their personalities evolve from various episodes which the artist/creator creates, as it can’t be visually expressed and can only be perceived by the human mind. The copyright law though can protect such expressions of the character which can be graphically represented through drawings, colors, art, storyboard etc.

In the case of Hill vs. Whalen Mortell, 220 F 359 (S D NY, 1914), in which the court had held that the stage characters of Nutt and Giff were copies of plaintiff’s characters Mutt and Jeff since everybody viewing these characters was able to make the connection.

In another such case of protection to graphic characters, the case of Detective Comics vs. Bruns Publication, 111 F 2d 432 (2d Cir, 1940) comes to mind. In this case, the defendants had created a character called ‘Wonderman’ which had the same physical and emotional attributes as the Plaintiff’s popular comic character ‘Superman’. It was held by the court that the defendant’s had also copied the Plaintiff’s character’s pictorial and literary details. The court said that protection to characters can be given only if they have been portrayed in detail and they have been converted from an idea into a visual expression. In the present case, the idea of ‘superhuman powers’ can be used by anyone but the character must have different personality than an already existing one.

In another landmark judgment of Walt Disney vs. Air Pirates, 581 F.2d 751 (9th Cir, 1978), cert. denied, 439 U.S. 1132 (1979), the court had held that a two step test needed to be carried out to determine if copyright infringement has taken place. Firstly the visual similarities of the characters are analyzed and in the second step the personalities of the cartoon characters.

The second step is to be done through the ‘character delineation’ test which was developed in the case of Nichols vs. Universal Pictures, 45 F 2d 119 (2d Cir 1930), cert denied, 282 US, 902 (1931), this test is used to determine if the character in question is distinct and unique from other characters in such a way that it warrants copyright and trademark protection. It means that this is a penalty on authors and creators who do not put in effort or intellect on making their characters distinct from others.

In the Indian case of Malayala Manorama vs. V T Thomas, AIR 1989 Ker 49, the court had held that V T Thomas could continue drawing the characters of ‘Boban’ and ‘Molly’ despite leaving MalayalaManorama’s employment, since the characters had been created by Mr. Thomas before entering into employment with Manorama and the publishing house did not create or use their artistic imagination or intellect to create the aforementioned characters so their copyright will only be limited to the extent of the drawings made using the character, but the copyright over the character would remain with Mr. Thomas.

Fictional characters

While fictional characters are generally associated with copyright protection, increasing commercialization has meant that the intellectual property in these characters is no longer limited to the artistic works that created them, but has also extended to associated goods and services, which has benefited tremendously from the immense appeal and popularity of these fictional characters. This is known as character merchandising. The obvious consequence of the fact that the goodwill of these characters perform both, source-identifying as well as promotional functions meant that in most cases, they have been protected with trademarks.

Fictional characters have three significant components: name, physical or visual appearance, physical attributes, personality traits or characterization. In the case of Anderson vs. Stallone, 11 USP Q 2d 1161 (C.D. Calif. 1989), the court had held that the ‘Physical’ and ‘Emotional’ characterization of the character ‘Rocky’ were set in such detail that they were highly delineated, distinguishable and unique and imprinted in the mind of the viewers.

However in the case of Warner Brothers Pictures vs. Columbia Broadcasting Systems, 216 F 2d 945, 104 US P Q 103 (9th Cir. 1954), cert. denied, 348 US 971, 99 L Ed 756, 75 S. Ct. 532 (1955), the test of ‘story being told’ was applied. In this case, the court had held that the copyright protection would only be applied to the characters only if the story revolves around the particular character.

In another case of Silverman vs. Columbia Broadcasting Systems, the concept of ‘characters entering public domain and later acquiring new copyrighted work’ came into question. In this case it was held that the character will be entitled to protection once it enters the public domain unless new traits or characterizations have been added to it in subsequent works.

Conclusion

In conclusion I would like to say that it is clear from the various judgments discussed here that in case of graphic characters courts have had a lenient approach in granting protection because of their visual impact, as opposed to fictional characters where protection has been granted only if it is proved beyond doubt that they are distinct and distinguishable. Another aspect is that under Indian law ‘character’ has not been included in the definition of ‘artistic work’ and similarly under the definition of ‘literary work’ the work to be protected must be written down. It is hoped that the ambit of artistic and literary work is expanded to include characters as well.

References:

[1]https://www.americanbar.org/publications/landslide/2013-14/march_april/ip_and_comic_book_superhero.html

[2]https://spicyip.com/2016/04/giving-due-protection-to-fictional-characters-the-possibility-of-copymark.html

[3]https://theconversation.com/who-owns-superman-the-man-of-steel-fights-trademark-law-14625

About the Author: Aditya Vardhan, Trademark Associate, Khurana and Khurana Advocates and IP Attorneys, aditya@khuranaandkhurana.com

Initial Coin Offering (ICO) and its Intellectual Property (IP) Interface

With growing importance and widespread adoption of Cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Ripple among many others, Initial Coin Offerings (ICO) have become very popular over the last few years. In brief, an ICO is an unregulated means by which funds are raised for a new cryptocurrency venture or even by a technology company that integrates its offerings/products with issuance and/or transactions of cryptocurrencies. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists (VCs) or banks, wherein in an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other Cryptocurrencies as mentioned above. More information on ICO’s can be seen herehere, and here.

Having been an active part of ICOs since 2016, and have drafted over 5 ICO offering documents, and 10 white papers, we have closely observed that there has been a strong and growing correlation between subscription levels for an ICO during the initial offering and the manner in which they depict/demonstrate their Intellectual Property (IP), especially their Patent portfolio. A clear mapping between ICO entity’s product commercialization, coin offering strategy, basis of product differentiation, and how they harness the blockchain technology with respect to their Patent/IP portfolio is a strong indicator of how they create entry barriers. Investors too are gaining maturity by doing thorough due-diligence on the IP that the ICO-entity holds before they invest in the ICO through comprehensive assessment of how broad the claims are, how the claimed subject matter integrates with the blockchain platform for issuance or transaction of newly issued currencies/coins, whether claim charts have been prepared, assignment/ownership issues if any, litigation/pre-litigation outcomes, validity challenges, competitive analysis, market landscape, white-space analysis, among other common IP due-diligence parameters.

Most ICO white papers therefore pay significant attention to how they present their Patent portfolio with respect to the manner in which each feature of their blockchain based implementation would be executed such as, for instance, how digital contracts would be managed, for an IoT architecture based entity: how blockchain would enable optimization of IoT device monitoring, and for an analytics company: how data analytics can be configured to associate with blockchain network tokens. Some white papers go further to even map their patent claims with the cryptocurrency interfacing mechanisms. Although most ICOs focus on their US Patent Portfolio, companies in other major startup communities such as in Israel, UK, Germany, and Singapore are also engaging strongly in how they uniquely position their offerings to gain competitive advantage through presentation of their IP. Most white papers intend explaining what their tokens are, how they are acquired, released/spent, along with their token generation events, and IP’s that interface with each of these steps can be integrated into the relevant portion of the white paper so as to demonstrate the extent of coverage and protection that the entity has done, which is also reflective of their IP strategy.

It is therefore, in sum, crucial to develop a robust IP strategy before launching an ICO to instill higher confidence in potential investors and create a differentiator in the market.

 

Author: Tarun Khurana, Partner and Patent Attorney at Khurana & Khurana (K&K) and IIPRD can be reached at Tarun@khuranaandkhurana.com