Category Archives: Intellectual Property

Meta-tagging vis-à-vis Trade Mark Misuse: An overview

Introduction:

For most of our questions, we rely on the internet for answers. While the debate on the reliability of information received on the internet continues, an equally enthralling race of which website will be the first to grab a searching consumer’s attention has begun.  With companies and organizations willing to pay a leg and an arm to ensure maximum footfalls on their websites, it is not surprising that such organizations are searching for loopholes to find ways to manipulate the search results on search engines. Website owners attract unwarranted attention to their website by making dubious use of Meta-tagging, framing, linking, deep linking. This article aims to introduce the concept of meta-tagging and provide an overview of the legal jurisprudence pertaining to unfair use of meta-tags with respect to Trade Marks.

What is a meta-tag?

Webpage are written in mark up languages, usually HTML (Hyper Text Markup Language). HTML uses syntax of tags and mark ups to display data and to send signals across to the web operators to ensure correct outputs. While most tags have visual and aesthetic functions, a tag category named meta-tags allow hidden commenting with regard to the description of the said website, enabling the search engines to pull out relevant websites in reference to the key words searched by the end user.

With an option to doctor the HTML source code in such a manner that it will result in favorable SEO (Search Engine Optimization), any web designer may insert the trademarks or misleading meta-tag descriptions that are similar or deceptively identical to that of his/her competitor so as to enable the search engine to pop out his/her website as well when an unaware user searches for the competitor. In 1997[1], for the first time, under the Lanham Act [U.S. Trademark Act], a law firm dealing with domain name disputes sued a defendant whose meta-tags contained the terms ‘oppedahl’ and ‘larson’, the registered trademark of the law firm, so as to divert traffic that would gain them domain name registrations and web hosting clients. The Court restrained them from using the said terms without authorization as it resulted to unfair use under the Lanham Act.

Though the Indian law does not explicitly define ‘meta-tags’ in any statute so far, in 2014[2], a Single Judge Bench at the Bombay High Court, while addressing a domain name infringement of the plaintiff’s domain name “Shadi.com” by the defendants’ “ShadiHiShadi.com”, used meta-tags to identify malafide intention. The Hon’ble Court found that the defendant was using “Shadi.com”, which was the Plaintiff’s domain name, in their meta-tags to divert traffic and for the first time defined meta-tags as follows:

11. … Meta tags are special lines of code embedded in web pages. All HTML (hyper text markup language), used in coding web pages, uses tags. Meta tags are a special type of tag. They do not affect page display. Instead, they provide additional information: the author of the web page, the frequency of updation, a general description of the contents, keywords, copyright notices and so on. They provide structured data (actually, meta-data) about the web page in question. Meta tags are always used in web-pages ‘<head>…</head>’ section, before the display section that begins with the tag ‘<body>…</body>’.

Liability of misleading meta-tags

The question of whether ignorance of facts claimed by the defendants alleging cluelessness with regard to the insertion of such misleading meta-tags can be used as a defense has not yet surfaced in the Indian jurisprudence, the Belgian Courts, however, have taken a strong stand and made precedents indicating that the owner of the websites is to take the sole responsibility for the content on the website and the source code of the websites.  In a Belgian case[3], it was held that the Defendant alleged that since the meta-tags and its contents are deliverables of the web designer to the defendant, the defendant was not the appropriate authority to decide the contents of the meta-tags; the Belgian Courts firmly held that even so, the website owner is the sole proprietor of the website and besides, the contract executed between the website owner and the web designer exempted the latter from any liability related to the contents of such meta-tags.

In another Belgian case[4], further reiterating and reaffirming the previous judgment, the Court held that it the sole responsibility of the website owner to verify the contents of the source code and not of the administrator of the search engine, thus negating the Defendant’s contention that the administration of the search engine had not updated his database, thus resulting in misleading meta-tags.

Doctrine of Initial Interest Confusion

On the premise of meta-tagging creating confusion in the minds of the unaware consumer, when a consumer searches for a product or service online, it is an undisputed fact that the trademark laws that must guard unaware consumers from being duped by competitor websites who use misleading meta-tagging.

The doctrine of Initial Interest Confusion allows the plaintiff to be granted remedies for infringement even if the alleged infringement causes temporary confusion in the minds of the consumer, even if it is prior to any purchase of such goods or service. This doctrine was first applied in the case of Grotrian v Steinway & Sons[5], where the Court believed that the advertisements in the name of “Steinway” would mislead the consumer into “an initial interest, a potential Steinway buyer may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if not better, than a Steinway” but perhaps considering the consumer demographic of piano purchaser who may be more careful with their purchases thus, not resulting in any major financial losses for the plaintiff. Re-applying the principle of Initial Interest Confusion, Judge L. F. MacMahon, in the case of Mobil Oil Corporation, v. Pegasus Petroleum Corporation[6] where Mobil was the registered holder of the mark “Pegasis” and the logo mark of the Greek God Pegasis while Pegasis Petroleum’s logo did not resemble Mobil’s logo mark or word mark in any way, however, the Court concluded that Pegasis Petroleum was misleading potential customer in initial interest and hence, constitutes sufficient trademark injury.

Applying the principle of initial interest doctrine for the first time in meta-tags in the case of Brookfield Communications, Inc. v. West Coast Entertainment Corporation[7], the plaintiff, a registered proprietor of “Moviebuff” and defendant who used the same mark as description in their meta-tag, thus deceptively resulting both the plaintiff’s and the defendant’s links to popped up in the search result, creating initial confusion in the minds of the consumers only for them to find themselves browsing through the defendant’s websites which was distinctively different from that of the plaintiff, amounted to trademark infringement under this doctrine.

In another interesting case[8], in an appeal for a dismissed suit, the United States Court of Appeal for the Ninth Circuit (the Ninth Circuit) accepted the appellant’s contention that even though the consumers were aware that they were not  buying services from the appellant’s services, selling banner ads with appellant’s trademarks “playboy” and “playmate” still amounted to trademark infringement under this doctrine as the respondent was still feeding on the appellant’s good will to increase their sales.

Thus, it can be concluded that commercially using another’s trademark as a meta-tag seldom amounts to fair use. While the distinction between fair use and unfair use of meta-tags is often circumstantial and tricky, it is can be safely deduced that commercial gain, whether in the form of footfalls, good will or actual sale by the use of trademarks or deceptively similar trademarks in meta-tags or ads, as in the case of People Interactive (I) Pvt. Ltd. v. Gaurav Jerry & ors[9], still amounts to infringement.

Fair use in meta-tags

An Exception to the doctrine of initial interest confusion is the use of trademarks that may actually be descriptive of the service or goods provided by the website owner, which will amount to fair use of such terms or words for the purpose of a meta-tag. In the case of Playboy Enterprises, Inc. v. Welles[10], the defendant, Miss Welles, was a former playmate and hence use of the terms “playboy”, “playmate of the year” and “playmate of the month” among other terms in the meta-tags of her website did not amount to infringement as such use was permitted on the ground that the terms were descriptive of the kind of service her website provided and for describing herself.

Another exception to the doctrine is the use of trademarks in meta-tags so as to attract customers to view the opinion of a certain product or service so expressed. This exception was precedented in the case of Bally Total Fitness v. Faber[11] where the defendant maintained a sub-domain called “Bally Sucks” and justified this use of the trademark “Bally” as a consumer criticism acknowledging the use of the registered trademark to attract customers so that one searches for the term ‘Bally’ on the search engine, both the plaintiff and defendant’s site would be pop up and an average user shall have the option to obtain complete information about ‘Bally’ including the opinion of others on ‘Bally’ and removing the said meta-tags would alienate the user from complete and total information regarding the mark “Bally”. Comparative statements in meta-tags also categorizes as fair use of trademarks in meta-tags[12]

Thus, summarizing, use of trademarks in meta-tags purely for describing goods or services of the said website or as ensuring opinions have been reached or even as to compare competitive brands may be allowed under fair use, however, such use is strictly circumstantial and depends largely on the facts of the case.

Conclusion

The use and misuse of intellectual property on the internet is still a new terrain that needs to be discovered for our legal system. To add to this, while our nation neither recognizes net neutrality as an unfettered right nor complete and absolute intellectual property rights, thus, leading misleading meta-tags to be a huge grey area where every verdict will be based on circumstances than concrete laws and predetermined principles. India has long started recognizing the malpractices in the use of meta-tags and search engines that amount to malicious corruption of search results for the end user but we, as a nation, do not have any concrete laws in place to regulate the use of such tags except a few precedents[13] to formulate basic rules to be abided. The need for statutory laws to address cyber security for intellectual property is being felt now more than ever with the government preferring e-commerce over off-line retail and the netizens have no choice now but to wait and watch for some provisions to be made.

Amruta Mahuli, Legal Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at mumbai@khuranaandkhurana.com

[1] Oppedahl & Larson v. Advanced Concepts, Civ. No. 97-Z-1592 (D.C. Colo., July 23, 1997)

[2] People Interactive (I) Pvt. Ltd. v. Gaurav Jerry & ors., NMS (L) NO. 1504 of 2014 in SUIT (L) NO. 622 OF 2014

[3] Belgacom v. Intouch, 15 October 1999, (translation in) Computerrecht, 2000, Nr. 5, 245-247

[4] NV Resiplast v. BVBA Resin, 4 February 2002

[5] Grotrian v Steinway & Sons, 365 F. Supp. 707 (1973)

[6] Mobil Oil Corporation, v. Pegasus Petroleum Corporation, 818 F.2d 254 (2d Cir. 1987)

[7] Brookfield Communications, Inc. v. West Coast Entertainment Corporation 174 F.3d 1036 (9th Cir. 1999)

[8] Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004)

[9] Ibid. 2

[10] Playboy Enterprises, Inc. v. Welles , 7 F.Supp.2d 1098 (S.D. Cal. 1998)

[11] Bally Total Fitness v. Faber, 29 F.Supp.2d 1161 (C.D. Cal. 1998)

[12] FS 2434/97, Hillerod fodgeret, November 17, 1997.

[13] Mattel, Inc. and Others vs. Jayant Agarwalla and Others, 2008 (38) PTC 416; Consim Info Pvt. Ltd. Vs. Google India Pvt. Ltd. & Ors, 2013(54)PTC578(Mad); Samsung Electronics Company Limited & Anr. vs. Kapil Wadhwa & Ors., C.S. (OS). No.1155/2011

World IP Day celebrated by BIPF

In celebration of World Intellectual Property Day, Bangladesh IP Forum (BIPF) held a boot camp, “Volunteer for Intellectual Property” (VIP), on May 2, 2017 at the Nabab Nawab Ali Chowdhury Senate Bhaban of University of Dhaka to raise awareness on the importance of intellectual property rights (IPR).

On the fourth year this preparation has been held, 300 college students and youthful business people were prepared on fundamental intellectual property (IP) issues, for example, copyright, trademark, patent and designs, with the aim to develop attention to the significance of intellectual property rights (IPR). Manzurur Rahman, Additional Secretary, Ministry of Information, called for attention to the requirement for IP mindfulness so that no other Bangladeshi needs to meet an indistinguishable destiny as the late Lucky Akhand, and included that one ought to look for legitimate help for one’s intangible property the way one would for tangible property. Barrister ABM Hamidul Mishbah, Founder of Bangladesh IP Forum, highlighted the significance of IP mindfulness in the flourishing “idea market”, where even youthful youngsters are making recreations.

Speakers at the event included Ministry of Information Additional Secretary Md Manzurur Rahman; Bangladesh Copyright and IP Forum founder Barrister ABM Hamidul Mishbah; Bangladesh Association of Software and Information Services President Mustafa Jabbar; Copyright Office Registrar Jafor R Chowdhury; Director of Access to Information (A2i) Programme under Prime Minister’s Office Md Mustafizur Rahman; Kazi Food Industries Ltd CEO Tanvir Haider Chaudhury; Dr Nuzhat Chowdhury of Bangabandhu Sheikh Mujib Medical University; filmmaker Asif Munier; and Unmad Editor Ahsan Habib.

Other speakers were Director of Leveraging ICT under ICT Division Sami Ahmed; Bangladesh Organisation for Learning & Development Founder President Quazi M Ahmed; former CEO of IBM Bangladesh and stand-up comedian Naveed Mahbub; Dhaka University Assistant Professor Arif Jamil; Aamra Networks Ltd Head of Marketing Solaiman Shukhon; Gweebarra Bakery Industry Ltd Director Quaseed Abd-Allah Chowdhury, and Bangladesh Innovation Forum Founder Ariful Hasan Opu.

The event was inaugurated by Her Excellence Leoni Cuelenaere, Honourable Ambassador of the Kingdom of Netherlands in Bangladesh. The closing ceremony was presided over by Programme Director of A2i Kabir Bin Anwar, who presented the certificates to the participants.

Upon completion of the training, the volunteers are presently anticipated that they would spread IP mindfulness and go about as ministers of IPR in their groups and systems.

The VIP 2017 event was sponsored by Bellissimo Ice Cream, Kazi Food Kitchen, Microsoft, and Gweebarra Bakery Industry Ltd.

Author: Abin T Sam, Jr.Patent Associate at Khurana & Khurana Advocates and IP Attorneys.

Bangladesh puts to motion GI Registration for Comilla delicacy Rasmalai, textile Khadi

The process to get Geographic Indication (GI) registration of two famous Bangladeshi products, Comilla’s dessert Rasmalai and textile Khadi, has started. Comilla Deputy Commissioner Jahangir Alam has said the district administration has chosen the products and started to find their original producer. “We have started discussions with the producers,” he told bdnews24.com on February 14th.

According to the World Intellectual Property Organization, a Geographical Indication (GI) is a sign used on products that have a particular geographic origin, possess, qualities or a reputation that are due to that origin. GI indication of goods acts as the “claim to fame” for a state. The members of the World Trade Organization signed the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement in 1994. The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date.

Though TRIPS requires WTO members to provide copyright rights, including that related to GI, Bangladesh made the GI law – the Geographical Indicative Products (Registration and Protection) Act – in 2013. A GI policy was formulated in line with the law after another two years. Later, measures were taken to protect the ownership of traditional ‘Jamdani’ saree’s intellectual property. Now the steps have been extended to ‘Rasmalai’ and ‘Khadi’.

A letter from Assistant Commissioner Merina Sultana at the Comilla DC’s office has been issued, announcing the decision to have the two products as geographically indicative ones. ‘Rasmalai’ maker Matri Bhandar and ‘Khadi’ manufacturers were called to the DC’s office to discuss the matter on 13th February.

Brothers Khanindra Sen and Manindra Sen opened the sweets shop Matri Bhandar in Comilla’s Monoharpur in 1930. Now their descendants run the main shop, though shops with similar names are aplenty in the district. Many of the locals believe this shop is the origin of ‘Rasmalai’.

Comilla traditionally produces ‘Khadi’, a textile which was being exported along with world famous ‘Muslin’. Comilla’s Chandina is one of the places famous for handspun and hand-woven ‘Khadi’ or ‘Khaddar’ for a long time. The product became a symbol of the Swadeshi Movement during the British rule of the undivided India to boycott foreign products. A handloom used by Mahatma Gandhi is still there. Many weavers are now involved in the production of ‘Khadi’. Asked how the original producer will be determined from them, a district administration official told bdnews24.com: “The oldest ‘Khadi’ manufacturers are in Chandina. We are scrutinising them.”

DPDT Sub-Registrar (Patent and Design) Saidur Rahman has said the process to register Hilsha and several other products were under way. He told bdnews24.com that the DCs across Bangladesh are finding their corresponding districts’ products following Prime Minister Sheikh Hasina’s order.

A DPDT official, requesting anonymity, said the department would issue the registration for ‘Rasmalai’ and ‘Khadi’ after checking the products to be sent by Comilla district administration. He also said Netrokona’s ‘Sadamati’, Kataribhog’ and ‘Kalijira’ rice, Rajshahi’s mango, and several other products were also being scrutinised for GI registration.

The Department of Patents, Designs and Trademarks (DPDT) is the authority tasked with issuing GI registration.

Following an application from Bangladesh Small and Cottage Industries Corporation (BSCIC), ‘Jamdani’ saree became the first product to get GI registration in November last year.

Author: Abin T Sam, Jr.Patent Associate at Khurana & Khurana Advocates and IP Attorneys.

Myanmar – IP Law Developments

Background

Myanmar has no devoted law on trademarks. In Myanmar, registration of a trademark is possible through “Declaration of Ownership of Trademark” in the Office of the Registration of Deeds under the Ministry of Agriculture, Livestock and Irrigation and Assurances. The Inspector General of Registration supports this process under the section 18(f) of the Registration Act of 1909. To publicize the registration, a cautionary notice is published in local newspaper which describes the details of related trademark.

Process

In order to register a trademark in Myanmar, the below described process has to be followed:

  1. A prior mark search has to be conducted in to ensure the uniqueness of trademark. This confirms that the trademark has not been registered previously. Since there is no IP Office in Myanmar, this search has to be conducted on private basis from the cautionary notices published in the local newspaper or journals. as is the case with services offered through other firms. However, since the publication of a cautionary notice in newspaper is not compulsory this prior mark search cannot be enforced as an exhaustive search. In any case, the Registrar does not conduct a search of prior marks when examining a Declaration of Ownership filing.
  1. Registration of a trademark under the Office of the Registration of Deeds, requires the applicant to submit a signed declaration of ownership of the mark. This self attested declaration must include the detailed description of the related goods and services. The documents necessary for registration of trademark includes, power of attorney, original specimen of each trademark and declaration of ownership of trademark.
  1. Registration process of a trademark takes minimum three weeks once the application has been filed for obtaining a trademark. According to the Myanmar Stamp Act, every instrument to which the duty applies, when executed outside of Myanmar, must be duly stamped within three months of entering the country.

Further, Office of Registration of Deeds does not allow Foreign trademark owners to file a registration directly in the country. To do so, they must apply through a local licensed agent or a lawyer. The must submit the required documents in English, or certified English translations provided where other languages are used.

Lastly, in order to draw the attention of public towards the registered trademark, it’s a common practice to publish a cautionary notice regarding the same in the newspaper to declare that the mark has been registered and is in use by the owner or licensees. The cautionary notice must consist of information like the name of the trademark, its owner, the registration number and a warning stating that any fraudulent imitation or unauthorized use will be dealt with in accordance with the law.

Treaty Obligations

On May 2001, Myanmar became a member of the World Intellectual Property Organization (WIPO). On January 2006, Myanmar was due to bring new intellectual property laws being a member of the World Trade Organization (WTO) and in keeping with TRIPS Agreement. Further, on November 2005, Myanmar and other least developed countries were given an extension by the WTO Council for TRIPS until 1 July 2013, to provide protection for trademarks, copyright, patents, and other intellectual property under the WTO, but this has not eventuated.

Draft Trademark Law

In Myanmar no law has yet passed regarding the Draft Trademark Law although the application for it has been submitted in the parliament in 2013 only. Most probably the Draft Trademark law or it’s amended version will be passed soon.

This law is assumed to have securing the trademark for the duration of ten years from the first filed date and has to be renewed successively for the same duration thereafter. The law will follow ‘first-to-file’ system, which states that the ownership of trademark will be granted to the person who applies first for the registration. For prior mark search of a trademark, one must apply to the Intellectual Property Office, which the law will presumably establish, pay a registration fee and conduct the relevant search.

Currently, Myanmar is under the process of developing special Intellectual Property courts. The courts will deal with the disputes regarding the criminal and civil cases of infringements. Under the draft law a trademark owner may initiate litigation in a criminal and/or civil action for an alleged infringement. Trademark infringement will also be a criminal offence under the draft law, punishable by up to three years in prison.

In order to continue enjoying the rights entitled by a registered mark under the Draft Trademark law pertaining to Registration Act 1909, the application for the trademark has to be refiled by the owner under the new provisions once they come into force.

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

Trademark Law Bangladesh: An Abridgment

Bangladesh is a signatory to the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement under the World Trade Organization (WTO), which came into force in 1995. TRIPS aim at harmonizing the intellectual property laws with most of the world. Hence, all the signatories of the agreement have a uniform IP law subject to minor modifications as allowed by the agreement. Bangladesh being in its transitional period complies with TRIPS to a larger extent (not fully compliant with international IP regime) and still in its process of harmonizing with TRIPS policy. Let’s take a sneak peek into the functionality of IP laws in Bangladesh in relation to the various sections prominently referred to from The Trademark Act, 2009:

The Trademarks Act, 2009:

Meaning of Trademark:

A trademark is any symbol, word, number, phrase, design, or any combination thereof which is used to identify the source of goods or services. The Trademarks Act, 2009 defines the term in Section 2(8). It provides for the following classification of marks:

  • Registered Trademark
  • Mark
  • Certification Trademark

A trademark is:

  • a registered trademark or a mark used in relation to goods so as to indicate a connection in the course of trade between the goods and the person having the right as proprietor to use the mark;
  • a mark used in relation to a service so that it leads to the indication that the person has the right to use the mark in the course of trade as a proprietor;
  • a mark used or proposed to be used (in future) in relation to any service or goods indicating a connection, between the goods and the person having the right, either as proprietor or as registered user (permitted user), to use the mark.

A trademark is generally used to identify the source for goods or services. Bangladesh has adopted the 9th Edition of NICE classification of goods and services. Hence, there are total 45 classes of goods and services, out of which 1-34 are goods, and 35-45 are services.

Procedure for Registration:

There are various steps involved in the procedure for registration:

Step 1: FILING OF APPLICATION – SECTION 15

  • Any person claiming to be the proprietor can file an application for registration of a mark used or proposed to be used.
  • The person(s) shall file separate application for each class of goods or services.
  • The application must be filed at the Head office or any branch of the Trademark Registry having territorial jurisdiction over the principal place of business. If the person does not carry on business in Bangladesh, the application must be filed in the office having territorial jurisdiction over the place mentioned in the address for service in Bangladesh.
  • Requirements:
  • Name of the Applicant(s)
  • Address and Nationality
  • Specification of goods
  • Fees: 3500 taka
  • Form- “TM-1”.

Step 2: ACCEPTANCE – SECTION 15

  • The Registrar may accept the application absolutely and go ahead with further process.
  • He may refuse to accept the application recording the grounds of refusal.
  • He may conditionally accept the application, i.e. subject to amendments, modifications, conditions or limitations.

Step 3: ADVERTISEMENT – SECTION 17

  • After the conditional or absolute acceptance of the application, the Registrar may advertise the application in the prescribed manner along with the prescribed fees.
  • If there are any corrections in the application under Section 19, it will be advertised again after such correction to the satisfaction of the Registrar.
  • Form- “TM-9”
  • Fees- 1000 taka.

Step 4: OPPOSITION – SECTION 18

  • Within 2 months from the date of advertisement of the application, any person may oppose the same by serving due notice to the Registrar via form TM-5 along with the prescribed fees (2000 taka).
  • He shall, within 1 month from the date of receipt of the notice, serve a copy of the same to the applicant.
  • Thereafter, the applicant shall file a counter within 2 months from the date of receipt of such notice to him via form TM-6 and the prescribed fees (1500 taka). If a counter is not filed, the application shall be deemed to have been abandoned.
  • The Registrar shall serve a copy of such counter to the opponent.
  • All the evidences upon which the applicant and opponent rely shall be submitted in the prescribed time and manner to the Registrar, and they shall be granted an opportunity of being heard if so desired upon application via form TM-7 or TM-23 along with prescribed fees (1000 taka).
  • The Registrar, after following due process of opposition shall decide whether to accept, conditionally accept, or reject the application.
  • Notwithstanding anything contained in the Act, the opposition proceedings must be wound up/ concluded in 120 working days.

Step 5: REGISTRATION – SECTION 20

  • If the application is accepted or not opposed or the notice period of opposition has expired, or it has been opposed and the decision is in favour of the applicant, the trademark shall be registered by the Registrar.
  • The applicant shall be issued a certificate of registration with the seal of the trademark registry.
  • Such certificate shall be issued within 150 working days from the date of filing of application.
  • The duration of the trademark shall be of 7 years, and can be renewed by paying the prescribed fees, from time to time.
  • The Registrar may renew the registration of the trademark for 10 years from the date of expiration of original registration or the last renewed registration on application by the applicant.

It takes around 24-36 months to get a trademark registered in Bangladesh in a smooth case.

Workflow:

1

Rights conferred by Registration:

Registration of a trademark confers the following rights under Section 25:

  • Exclusive right to use the trademark in relation to those goods and services for which it has been registered.
  • Obtain relief against infringement of the same in accordance with the Act.

It also provides that no person except the registered proprietor/ owner of the trademark shall use the same in respect of the goods and services for which it is registered under the Act, without the consent of the registered owner.

The Act, just like Indian law, also incorporates the common law remedy of “Passing Off’ in its Section 24. It provides that no infringement action be instituted for an unregistered Trade Mark. Secondly, nothing in the Act shall be deemed to affect the right of action against any person for passing off goods or services of another person and any other related remedies.

Infringement:

Section 26 deals with the Infringement of Trademarks. Usage by a person other than a registered proprietor of the identical or similar trademarks, the Trade Mark deemed to be infringed. On the other hand, Section 27 deals with the acts that do not amount to infringement. Lawful user, permitted use, etc. are provided in the section.

Assignment and Transmission:

The Act, in Chapter V, comprehensively provides for assignment and transmission of a registered trademark by the registered proprietor, with or without the goodwill (Section 34).  An unregistered trademark shall not be assignable or transmissible except along with the goodwill of the business concerned (Sec 35) under certain circumstances provided in the same section, it can be assigned or transmitted without the goodwill. Moreover, Section 38 incorporates assignment and transmission otherwise than in connection with the goodwill with conditions of fulfillment attached.

Offences and Penalty:

Section 71 firstly discloses the meaning of applying trademarks and trade descriptions, and secondly Section 72 mentions the circumstances when the Trade Marks are falsified or falsely applied. The penalties under the Act are as under:

  • Section 73: Penalty for falsifying or falsely applying Trademark: Imprisonment may extend to 2 years, but not less than 6 months, and/or fine which may extend to 2 lac taka, but not less than 50 thousand taka. For a second or subsequent conviction, the imprisonment would range from a minimum of 1 year to 3 years, and/or fine extendable up to 3 lac taka, but not less than 1 lac taka.
  • Section 74: Penalty for selling goods to which a false trademark or trade description is applied: Imprisonment for a term up to 2 years, and/or fine. For a second or subsequent conviction, imprisonment for a term up to 3 years, and/or fine.
  • Section 76: Penalty for falsely representing a trademark as registered: Imprisonment for a term up to 1 year, but not less than 6 months, and/or fine up to 1 lac, but not less than 50 thousand taka.
  • Section 77: Penalty of improperly describing a place of business as connected with the Trademarks office: Imprisonment for a term which may extend to 1 year but not less than 6 months, and/or with fine which may extend to 1 lac taka but not less than 50 thousand taka.
  • Section 78: Penalty for falsification of entries in the Register: Imprisonment for a term which may extend to 1 year but not less than 6 months, and/or fine, which may extend to taka 1 lac (84,600 INR approx.) but not less than 50 thousand taka.

Biological Diversity Act, 2002 and Patenting of Biological Inventions in India – Part I (Section – 6)

The Biological Diversity Act of 2002 (BDA) is a piece of Indian legislation which came into being in response to compliance with the Convention on Biological Diversity (CBD), to which India is a ratified member. In fact, India has taken the lead among developing and developed nations both in introducing a substantive legislation in conformance with the objectives of the CBD.

The objective of the BDA is broadly to conserve India’s biological diversity, ensure sustainable use of its biological resources, and ensure equitable sharing of benefits arising out of use of its biological resources. Though the BDA came into being in 2002, it was only in 2004 when the Rules were notified, hence, for all practical purposes, the effective implementation date of the BDA is 2004.

The BDA, in general, quite broadly covers access and use of biological resources occurring in India or knowledge associated thereto for various purposes, be it for research or commercial activity, by Indian citizens or non-citizens alike, in India or abroad.

Recognizing the importance of IPR, the BDA makes special mention of the application of the provisions of the BDA to IPR in Section 61. A careful reading of Section 6 reveals the truly wide mandate of the BDA with regard to IPR. Firstly, it is to be noted that Section 6 is not limited to Indian citizens or Indian residents (as defined in the Income Tax Act, 1961). The term “no person” used in Section 6, sub-clause 1 can be broadly interpreted to include any natural or legal person irrespective of nationality. Secondly, the application of the law is extra-territorial in that it is applicable upon IPR laws of other foreign countries also. Thirdly, it is interesting to note that the scope of the said section is not merely limited to biological material “occurring” in India. In fact, the term used is “obtained” from India, which is suggestive in its broadest implication that even exotic material would be within the ambit as long as it is obtained from India.

The language of Section 6 of the BDA leaves open a lot of questions, many of which have no definitive answers due to lack of any judicial precedents established by the judiciary of India. For instance, Section 6 states that permission of the NBA is required when IPR is applied for research or information based on a biological resource obtained from India. There is lack of clarity as to how the NBA will construe the scope of “obtained”? As the objective of the NBA is to safeguard Indian biodiversity, will “obtaining” be limited to only those biological resources which are literally sourced from within India? What about Indian biological material sourced in India but subsequently exported, and obtained elsewhere (outside of India)? Alternatively, does the term “obtained” necessarily mean that the biological resource shall also be found to be “occurring” in India? Does “occurring” mean only indigenous biological resources which are sufficiently distinct compared to their foreign counterparts? Or will it include biological resource of foreign origin which is also found in India regardless of any distinctive trait? How does one determine any time frame after which a biological resource can be considered to be “occurring” in India?

In another instance, Section 6 clearly states that no application for IPR rights is to be filed in any foreign country without prior NBA approval. The first proviso provides that in the event an application is filed, NBA permission may be obtained after the acceptance of the patent but before patent grant by the patent authority concerned. An obvious question here is whether the foreign patent office is legally bound to keep the patent grant in abeyance until NBA approval is provided?

In yet another instance, as per Section 6, the term “no person” is used. While it is clear that the term includes any Indian citizen, or a resident of India (as defined in the Income Tax Act, 1961), does it cover a foreign national operating outside India? A casual reading of the statute would suggest so, however, it puts an unnecessary burden on such a particular group to comply with Indian laws, which they may be contravening without their knowledge! This would make the jurisdictional reach of Act worldwide, whereas Section 1(2) clearly states that the Act extends to the whole of India and not elsewhere!

The definition of “biological resource” can be found in Section 2(c)2 of the BDA. It may be appreciated that the definition is quite broad, while specifically excluding value added products3 and human genetic material. It is quite clear from the definition in Section 2(c) that the legislation is principally directed towards patenting of biological inventions, which puts an additional burden, largely regulatory in nature, on the Applicant to comply with.

The gravity of non-compliance with Section 6 of the BDA can be appreciated from Sections 55(1)4, 575 and Section 586 of the Act. Briefly, under Section 55(1) and 57, the punishment for contravention of Section 6 is imprisonment for a term of up to 5 years, or a fine of up to INR 10,00,000 or more, or both. Under Section 58, such offences are cognizable and non-bailable. This is of particular significance in that the police, upon a complaint, can arrest the person concerned without prior Judge order, and bail is not a matter of right, but at the discretion of the Judge!

Under current Indian Patent Office (IPO) practice, it is observed that for patent applications, which disclose any biological material, in the First Examination Report (FER), it is almost routine to come across an objection requiring clarification as to furnishing of NBA approval in the case of use of any biological resource obtained from India. As mentioned previously, as per Section 6 of the NBA, grant of the patent would be kept in abeyance until proof of NBA approval is provided.  It should be pointed out that for patenting purposes, the application of provisions of the NBA as per the IPO is not limited merely to claimed biological resource. Instead, it encompasses use of any such resource or knowledge thereof in any part of the application. For instance, use of any biological resource for validation purposes of a claimed product would fall within the ambit of NBA!

In the case of national phase or convention applications deriving priority from a foreign country, typically a declaration may be provided stating that no biological resource obtained from India has been used in the invention. Understandably, it may be difficult for an Indian applicant to do so.

Interestingly, it is to be noted while the IPO does not require evidence of compliance with any other law of the land prior to grant of patents, it particularly requires compliance with the BDA! This “cooperation” between the IPO and the NBA is admirable in that it represents a cooperation between two different ministries, namely, The Ministry of Environment and Forests under which the NBA is a statutory autonomous body, and The Ministry of Commerce and Industry (Department of Industrial Policy & Promotion, under which the Office of the Controller General of Patents, Designs & Trademark functions.

In conclusion, under current IPO practice regime, any Applicant using any biological resource (as defined under Section 2(c) of the BDA) is suggested that he seek NBA clearance at the earliest instance in order to ensure a timely and smooth prosecution progress.

In the next part of this article, provisions of the BDA with respect to access of biological resources by Indian citizens or non-citizens, and sharing of research results generated from such biological resources will be elucidated and discussed.

About the Author: Amitavo Mitra, Sr. Patent Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at amitavo@khuranaandkhurana.com.

1Section 6 of BDA: (1)“ No person shall apply for any intellectual property right, by whatever name called, in or outside India for any invention based on any research or information on a biological resource obtained from India without obtaining the previous approval of the National Biodiversity Authority before making such application

Provided that if a person applies for a patent, permission of the National Biodiversity Authority may be obtained after the acceptance of the patent but before the seating of tile patent by the patent authority concerned

Provided further that the National Biodiversity Authority shall dispose of the application for permission made to it within a period of ninety days from the date of receipt thereof”.

(2) “The National Biodiversity Authority may, while granting the approval under this section, impose benefit sharing fee or royalty or both or impose conditions including the sharing of financial benefits arising out of the commercial utilization of such rights”.

(3) “The provisions of this section shall not apply to any person making an application for any right under any law relating to protection of plant varieties enacted by Parliament”.

(4) “Where any right is granted under law referred to in sub-section (3), the concerned authority granting such right shall endorse a copy of such document granting the right to the National Biodiversity Authority”.

2Section 2(c) of BDA: “biological resources” means plants, animals and micro-organisms or parts thereof, their genetic material and by-products (excluding value added products) with actual or potential use or value, but does not include human genetic material.

3Section 2(p) of BDA: “value added products” means products which may contain portions or extracts of plants and animals in unrecognizable and physically inseparable form.

4Section 55(1) of BDA: “Whoever contravenes or to or abets the contravention of the provisions of section 3 or section 4 or section 6 shall be punishable with imprisonment for a term which may extend to five years, or with fine which may extend to ten lakh rupees and where the damage caused exceeds tend lakh rupees such fine may commensurate with the damage caused, or with both”.

5Section 57 of BDA: (1) “Where an offence or contravention under this Act has been committed by a company, every person who at the time the offence or contravention was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence or contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence or contravention was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence or contravention”.

(2) “Notwithstanding anything contained in sub-section (1), where an offence or contravention under this Act has been committed by a company and it is proved that the offence or contravention has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the offence or contravention and shall be liable to be proceeded against and punished accordingly.

 

6Section 58 of BDA: “The offences under this Act shall be cognizable and non-bailable”.

Division Bench of Delhi HC stays restoration of Monsanto license agreements with Nuziveedu Seeds

In the light of the recent order by Division Bench of Delhi High Court, this is an update to author’s prior blog dated April 5 2017 pertaining to the legal dispute between Nuziveedu Seeds and Mosanto.

US-based agro major Monsanto Technology LLC and Hyderabad-based seed manufacturer Nuziveedu seeds had been locked in a long-term licensing agreement whereby Nuziveedu Seeds was entitled to use Monsanto’s patented seed technology – Bollgard II, for which Monsanto received a patent in 2009 (Patent Number- 232681, granted on 20th March 2009) in India, for its ability to modify cotton seeds to include a microbe- Bacillus thuringiensis (Bt), which fortifies cotton plants against bollworms. In lieu of making use of this technology, Nuziveedu Seeds was required to pay trait fees to Monsanto.

However in November 2015, MMBL (Mahyco Monsanto Biotech Ltd), a joint venture through which Monsanto sells cotton seeds in India and has sub-licensed Bt cotton seed technology since 2002 to various domestic seed companies, terminated the license agreements of Nuziveedu Seeds Ltd. and its subsidiaries – Prabhat Agri Biotech Ltd and Pravardhan Seeds Private Ltd on account of what it said continued refusal to pay contractually agreed trait fees amounting to more than $20 million.

Monsanto later sued Nuziveedu Seeds (and its subsidiaries) for continuing to sell cotton seeds using its patented Bt technology, even after the termination of the license agreements in 2015. Dismissing the claim, the single judge (Justice R.K. Gauba) on March 28 had held (order) that the license agreements allowing Nuziveedu Seeds to use Monsanto’s patented seed technology still continued to be in force and binding on both parties.

This decision allowed Nuziveedu to continue to use Monsanto’s genetically modified cotton seed technology and had directed the license agreements between the two companies to be modified as per the GM Technology Licensing Agreement found in the Licensing and Formats for GM Technology Agreement Guidelines, 2016.

The court had also held that all future royalty payments for the use of Monsanto’s patents were to be made as per the cotton seed price control order issued by the central government. The 2015 price control order reduces the cost of cotton seeds by 74 per cent, from Rs 163 to Rs 43 per packet (exclusive of taxes)[1].

Monsanto appealed against this single-judge order passed on March 28 which had held that the termination of its license agreements with Nuziveedu was illegal and arbitrary in nature.

Senior advocate Kapil Sibal, counsel for Monsanto, argued that the single judge could not pass a direction to restore inter-party contracts that had been terminated by one of the companies[2].

The Division bench of Hon’ble Delhi High Court granting interim relief to Monsanto, stayed its single judge’s order reinstating a sub-licence between US-based agro major Monsanto Technology and three Indian seed companies, which the foreign entity had terminated.

ABOUT THE AUTHOR:

Tanu Goyal, Patent Associate at IIPRD and can be reached at: tanu@khuranaandkhurana.com.

[1]http://www.business-standard.com/article/companies/high-court-stays-restoration-of-monsanto-agreements-with-nuziveedu-seeds-117041000803_1.html

[2]http://www.livemint.com/Companies/DvBDJEMcG9GXATm9JADOLL/Delhi-HC-stays-restoration-of-Monsantos-sublicence-pact-wi.html

Liability of online market portals vis-à-vis trademark infringement in the cyberspace

With the emergence of globalization and sharp advancement of technologies, our society and its knowledge making has also changed steadily. The scope and range of knowledge has expanded and is only a click away, due to the expansion of digital connectivity. However with every pro come the cons. Infringements of copyrighted works are considered as big threats hampering the growth of the Internet, e-commerce and digital economy. The amendment to the Information Technology act 2000, in the year 2009 did gave a fillip to IPR issues in cyber law, however one of the major issue that is still untouched is the issue of secondary liability for trademark infringement on 3rd parties involved in some manner in the sale, advertising, shipment or other activities relating to the goods/services in cyberspace.

Before dealing with the Indian Scenario, it would indeed be pertinent to deal with the international perspective of labiality of operators of online market portals vis-à-vis trademark infringement in cyberspace.

Before proceeding further it is significant to know the concept of secondary liability. The concept of secondary liability is a common principle of law of torts, which arises when a party materially contributes to, enables, induces, or is otherwise responsible for directly or contributory-infringing acts carried out by another party. It is wellspring of unfair competition law. There are two kinds of secondary liability:

  1. Vicarious liability: It is a stricter liability amongst the two as the law of tortimposes responsibility upon one person for the failure of another, with whom the person has a special relationship, to exercise such care, as a reasonably prudent person would use under similar circumstance.[1]
  2. Contributory liability: It is a tortious liability for soliciting and aiding and abetting, the infringement, i.e. if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, then the manufacturer is liable for contributory liability[2].

While the concept of Vicarious Liability comes into picture when:

  • The third party has the right and ability to control the actions of the direct infringer; and
  • The third party derives a direct financial benefit from the infringement.

The notion of Contributory liability comes when:

  • The defendant knows of the infringement; and
  • The defendant materially contributes to the infringement.[3]

One of the earliest cases, which dealt with this principle, was the case of Kalem Co. v. Harper Brothers[4], while the landmark case that dealt with Secondary Liability in Trademarks was Inwood Laboratories v. Ives Laboratories[5]

While in India we still haven’t got the opportunity to give a verdict on the issue, but the judgments of Court of Justice of the European Union[6] and US Federal Court[7] comes as a guiding force on the subject.

L’Oréal v. eBay International AG[8]

Facts:

  • The proceedings was between L’Oréal SA and its subsidiaries Lancôme parfums et beauté & Cie SNC, Laboratoire Garnier & Cie, on one hand, while eBay Inc. and subsidiaries on the other regarding the sale of L’Oréal products on the online marketplace operated by eBay without L’Oréal’s consent.
  • L’Oréal was a manufacturer and supplier of perfumes, cosmetics and hair-care products, which operate a closed selective distribution network, in which authorised distributors are restrained from supplying products to other distributors. On the other hand eBay operates an electronic marketplace, which provides platform to sellers to set up online shops on eBay sites. Thereafter eBay facilitate prospective buyers to bid for items offered by sellers.
  • On 22 May 2007, L’Oréal communicated its apprehensions to eBay about the widespread incidence selling of counterfeit goods on the site. And soon a trademark infringement case was filed against eBay.
  • The Court of Justice of emphasized and considered whether the display of the sign (which is identical to the registered mark), in the sponsored link, constitute “use” of L’oreal’s trademarks ‘in the course of trade’. Or whether eBay could claim immunity from secondary liability under provisions of the EU E-commerce Directive.

Judgment:

  • The role of online marketplace operator cannot be assessed under Directive 89/104 or Regulation No 40/94, but must be examined under rule and laws set out under Directive 2000/31 (Section 4 of Chapter II)(‘liability of intermediary service providers’) along with Articles 12 to 15 of that directive.
  • In order for an Internet service provider to fall within the scope of Article 14 of Directive 2000/31, it is essential that the provider be an intermediary provider within the meaning intended by the legislature in the context of Section 4 of Chapter II of that directive.
  • It was held by the Court of Justice that eBay has not used the registered trademark ‘L’oreal’s’ in its own commercial communications, but has simply displayed the sign or selected keywords corresponding to L’Oréal trade marks on Google search engine in order to offer sale to prospective buyers. In that context the operator of the online marketplace was just acting as an advertiser. However the court held that the proprietor of a trade mark is entitled to prevent an online marketplace operator from advertising his trademark as the goods offered on sale through advertisement does not enable reasonably well-informed and reasonably observant internet users, and makes it difficult for prospective buyers to ascertain whether the goods concerned originate from the proprietor of the trade mark or from an undertaking economically linked to that proprietor or, on the contrary, originate from a third party.
  • The court while assessing what construes ‘active role’ under Article 14 under Directive 2000/31 stated that “the operator plays such a role when it provides assistance which entails, in particular, optimizing the presentation of the offers for sale in question or promoting them.” Therefore the court held that the defendant did not play any active role in the same regard, however the court stated that if the operator of the internet market was aware of facts and circumstances that there unlawful offer of sale were being executed at his portal and still did not take any step to prevent the same then he is exempted to take any exemption from the liability.
  • Due to the s reasons stated above the court granted injunction in favor of L’Oréal.

Tiffany (NJ) Inc. v. eBay, Inc.[9]

Facts:

  • In 2002 eBay had implemented a “fraud engine,” which is principally dedicated to ferreting out illegal listings, including counterfeit listings. The fraud engine incorporated Tiffany-specific filters too. A page named, “About Me” was also maintained by Tiffany and not eBay. The headline of the page was “BUYER BEWARE,” & the page began: “Most of the purported TIFFANY & CO. silver jewelry and packaging available on eBay is counterfeit.”
  • In 2004 Tiffany & Co sent a number of notices to eBay stating to remove counterfeit products of the brand and by 2005 Tiffany & Co. filed injunction suit in the district court in order to shut down the legitimate secondary market dealing in Tiffany goods.

Judgment:

  • The District court rejected the allegations of Tiffany that eBay had directly infringement its trademark. Rather the court said that eBay’s was protected by the doctrine of nominative fair use[10]. As a result, an appeal came before the circuit judge.
  • The bench relied on the two-prong test while awarding its judgment:
  1. Whether the plaintiff’s mark is entitled to protection, and
  2. Whether the defendant’s use of the mark is likely to cause consumers confusion as to the origin or sponsorship of the defendant’s goods.

The court discussed the case under 4 heads:

  1. Direct Trademark Infringement
  2. Contributory Trademark Infringement
  3. Trademark Dilution
  4. False Advertising
  • Direct Trademark Infringement: The bench observed “defendant may lawfully use a plaintiff’s trademark where doing so is necessary to describe the plaintiff’s product and does not imply a false affiliation or endorsement by the plaintiff of the defendant.” The court also observed that eBay promptly removed all listings that Tiffany challenged as counterfeit and took affirmative steps to identify and remove illegitimate Tiffany goods. As a result the court observed that eBay’s use of Tiffany’s mark in the described manner did not constitute direct trademark infringement.
  • Contributory Trademark Infringement: The court rejected to apply Inwood test[11] as it observed that eBay clearly possessed generalized knowledge as to counterfeiting on its website which makes it insufficient to impose any penalty on the issue. The court also observed that it was the duty of the plaintiff to establish the ‘knowledge’ of contributory infringement. The court agreed with the decision of the district court that eBay was not willfully blind[12] to the counterfeit sales of Tiffany.
  • Trademark Dilution[13]: The court rejected Tiffany’s dilution by blurring claim on the ground that “eBay never used the TIFFANY Marks in an effort to create an association with its own product, but instead, used the marks directly to advertise and identify the availability of authentic Tiffany merchandise on the eBay website.”
  • False Advertising: The court of appeal rejected the argument that eBay advertised the sale of Tiffany goods on its website, and because many of those goods were in fact counterfeit, eBay should be liable for false advertising and that the advertisements at issue were not literally false because authentic Tiffany merchandise were also sold on eBay’s website, even if counterfeit Tiffany products are sold there, too.
  • In conclusion the court approved with the district court’s judgment that eBay’s use of Tiffany’s mark on its website and in sponsored links was lawful and that eBay as an operator of online market was not liable for any trademark infringement.

 

Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc[14]

Facts:

  • Vuitton filed trademark and copyright infringement against the defendant, Akanoc on the context that the defendant sold counterfeit replica LV goods. The plaintiff had earlier too given several notices to the defendant him to remove the infringing products.
  • The suit was assessed under 4 heads:
  1. Contributory trademark infringement,
  2. Vicarious trademark infringement,
  3. Contributory copyright infringement, and
  4. Vicarious copyright infringement.

Judgment:

  • The court while relying on the case of Applied Info. Sciences Corp. v. eBay, Inc.[15] held that in order to establish direct infringement of a trademark, a plaintiff must show:
  1. Ownership of a valid trademark, and
  2. A likelihood of confusion resulting from a defendant’s alleged infringing use.

The court while discussing the case held that third parties have infringed Plaintiff’s copyrights and trademarks.

  • While deciding the issue of Contributory Trademark Infringement the court replied their judgement on the test of Inwood Lab[16]. The court found that the defendant had actual or constructive knowledge knowledge of trademark infringement of the rightful proprietor Louis The court observed that the defendant had the ability to terminate websites by unplugging an entire server or disable individual IP addresses and thereby remove websites using their servers. As a result the court observed that the defendants knew third parties were infringing Plaintiffs trademarks and remained wilfully blind despite his ability to terminate its services to those third parties.
  • While deciding the issue of vicarious liability it was important that the direct and second infringer shared some relation[17] amongst each other. The Defendant Chen stated in his declaration that he have never known any operators of websites as he does not directly deal with infringing website operators.
  • As a result the jury granted injunction in favour of plaintiff and awarded $10,500,000 for contributory trademark infringement/counterfeiting against each of the defendants making it a total of $31,500,000 as damages.

Conclusion

While deciding the liability of trademark infringement 3rd parties on the virtual market it is significant and vital to know the Inwood Lab test. If someone directly “monitors and control” the instrumentality of infringement, then such person would be held liable for such trademark infringement. While discussing landmark cases of different countries it is pertinent to note that different courts held totally an unlike and distinctive opinion while the dealing with the same issue or subject in hand.

Where while examining the Tiffany case on one hand, the court emphasized on the importance and significance of actual and constructive knowledge of an breach, on the part of the secondary infringer in order to establish a contributory trademark liability on the part of operators online marketplaces, there on the other hand, the judgment of CJEU in L’Oréal v. eBay International AG, the court gave stricter ruling while assessing the liability of the online market operators. The court in the case of L’Oréal held that the proprietor of a trademark registered in a Member State had the right to prevent offers for sale or advertising even online of good associated with his registered trademark.

The court in the case of Tiffany (NJ) Inc. V. eBay the court have stressed the ‘control‘ element an operator posses on the part of the secondary infringer and held that the defendant did not have any direct control on the infringing goods, hence was liable to be set free without and damages. The Court in the case of L’Oréal giving a firmer judgment said eBay’s advertisements created an evident association between the registered trademarked goods and online market site, which eventually created an adverse effect on the registered trademark. The court also held the advertisements eBay had not only contravened the interests of fair trading but had also violated consumer protection rules laid down by Directive 2000/31 Article 6.

The jury in Louis Vuitton Malletier case gave a much firmer, securer and accurate judgment stating that the defendant not only provided its services to the infringing party but also had a direct control and monitoring of the instrumentality used by a third party to infringe. The court siad in order the prove an infringement case against an online market operator it was imperative to show that contributory infringer was assisted with actual or constructive knowledge of trademark infringement. While passing a deterrent judgment, the court awarded statutory damages of $31,500,000 in favour of the plaintiff for contributory trademark infringement.

Convenient for international courts, they have appropriate legislations and directives that would help them deal with the subject. The Indian courts have yet to address the issue critically and bridge this important gap of liability of 3rd part in a trademark infringement in the cyberspace. Fortunately the international courts have critically analyzed the subject and have set an enlightening, fitting and instructive path for Indian courts.

Indian jurisprudence on “liability of online market portals vis-à-vis trademark infringement in the cyberspace” will be dealt by me in my next blog.

About the Author:

Ms. Shireen Shukla, a legal intern at Khurana & Khurana, Advocates and IP Attorneys articulates her finding on the International jurisprudence on the labiality of operators of online market portals vis-à-vis trademark infringement in cyberspace.

[1] The Free Dictionary: http://legal-dictionary.thefreedictionary.com/vicarious+liability

[2] Justice O’Connor, Justice Burger, Justice Brennan, Justice Blackmun, Justice Powell, Justice Stevens & Justice Marshal in Re: Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 102 S. Ct. 2182, 72 L. Ed. 2d 606 (1982)

[3] Michael J. McCue: Lewis Roca Rothgerber Christie: Secondary Liability for Trademark and Copyright Infringement; last visited as on 5th April, 2017 <https://www.lrrc.com/secondary-liability-for-trademark-and-copyright-infringement-02-05-2012&gt;

[4] 222 U.S. 55 (1911)

[5] 456 U.S. 844 (1982)

[6] L’Oréal v. eBay International AG

[7] Tiffany (NJ) Inc. v. eBay Inc. 600 F.3d 93 (2d Cir. 2010)

[8] C-324/09

[9] 600 F.3d 93 (2d Cir. 2010)

[10] “it allows the defendant to use a plaintiff’s trademark to identify the plaintiff’s goods so long as there is no likelihood of confusion about the source of the defendant’s product or the mark-holder’s sponsorship or affiliation.”

[11] i.e. if a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, then the manufacturer is liable for contributory liability

[12] Where a person suspects that users of its service are infringing a protected mark (suspects wrongdoing), and that he shields himself by deliberately failing to investigate by giving a blind view to the issue.

[13] The Federal laws of US allows the owner of a “famous mark” to enjoin a person from using “a mark or trade name in commerce that is likely to cause dilution by blurring or dilution.

[14] 658 F.3d 936 (9th Cir. 2011)

[15] 511 F.3d 966, 972 (9th Cir. 2007).

[16] The plaintiff must establish that the defendant:

  1. Intentionally induced the primary infringer to infringe, or
  2. Continued to supply an infringing product to an infringer with knowledge that the infringer is mislabeling the particular product supplied

[17] That the defendant and the infringer have an apparent or actual partnership, have authority to bind one another in transactions with third parties or exercise joint ownership or control over the infringing product.

Can non-compliance of mandatory provisions under the patents act, 1970 land you behind the bars?

Technically YES.

The Patents Act, 1970 (hereinafter referred to as the “Act”) is a piece of legislation, penalties under which are largely civil in nature, such as fines, award of monetary damages, injunction, loss of patentee rights including compulsory licensing, abandonment of application or revocation of a patent.

However, violation of certain provisions, such as Section 39 attracts liabilities as set forth in Section 40, and Section 118 of the Act.

In 2002, the foreign filing license (FFL) requirement was introduced in the Act. This requirement required that any inventor / applicant who is a resident of India should file or cause to be filed a patent application for his/her own invention first in India; and only after a period of six weeks after the date of filing of the patent application, a filing could be done in a country outside India. Such a requirement clearly indicates that any Applicant (including inventor) who is a resident of India and desirous to file a patent application firstly outside India is required to U/S 39 to seek a Foreign Filing License (FFL) prior to filing the patent application in any foreign jurisdiction. The principal intent behind FFL is to allow the Indian Patent Office (IPO) to track applications which may be of national importance and/or of sensitive nature, such as atomic energy, defense or national security. It is to be noted that there is no provision under the Act to seek a FFL retrospectively, which makes adherence to the provisions of Section 39 and related Sections that much more critical and important.

Under Section 39: “Residents not to apply for patents outside India without prior permission.—(1) No person resident in India shall, except under the authority of a written permit sought in the manner prescribed and granted by or on behalf of the Controller, make or cause to be made any application outside India for the grant of a patent for an invention unless—

(a) an application for a patent for the same invention has been made in India, not less than six weeks before the application outside India; and

(b) either no direction has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.

(2) The Controller shall dispose of every such application within such period as may be prescribed: Provided that if the invention is relevant for defence purpose or atomic energy, the Controller shall not grant permit without the prior consent of the Central Government.

(3) This section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India”.

It is also important to note that, the scope of Section 39 with respect to “Residents” is not limited to citizens of India or people (citizens of India or elsewhere) living in India. The term “resident” in law is construed to be broader than the term “citizen.” The term “resident” is not defined anywhere in the Patents Act of 1970. The lack of a definition for the term “resident” in the Act necessitates that this interpretation be made from the definition of “resident” as given in the Income Tax Act, 1961. According to the Indian Income Tax Act, an individual is termed as a ‘Resident of India’ if he stays for the prescribed period during a fiscal year i.e. 1st April to 31st March, either for: 182 days or more; or Has been in India in the aggregate for 365 days or more in the previous 4 years. Thus, the scope of who is a resident, while not defined in the Act, can be found in Section 6 of the Income Tax Act, 19611.

Violation of directions under Section 39 attracts civil liabilities under Section 402 of the Act.  Briefly, under the said Section, contravention of Section 39 would result in the application deemed to have been abandoned, and if granted, shall be liable to be revoked under Section 64, sub-clause (n). The language of the provision clearly suggests that non-compliance of Section 39 would severely prejudice the interests of a patent applicant or patentee. A plain reading of the statute suggests that there is no option provided to the applicant to remedy the deficiency, and there are no judicial precedents established by the higher judiciary which may allow any such relief to the Applicant.

More importantly, violations of directions under Section 39 also attract criminal liabilities under Section 1183 of the Act, in which the term of imprisonment may extend to 2 years or a monetary fine imposed on the inventor, in addition to abandonment of the patent application or revocation of the patent even if it is already granted.

It is to be noted that judicial proceedings under Section 118 are to be initiated by the Controller. However, since the Controller has no powers to pass any order of imprisonment, the matter is to be sent to the Courts for formal proceedings.

The language of the said Section, particularly in reference to the word “shall” suggests that judicial proceedings are to be mandatorily initiated and that the Controller has no discretion in the matter. It is up to the Judge’s discretion to pass an order of fine, imprisonment or both. While there is no prior case of prosecution under Section 118, it is important for an Applicant to assume strict compliance in order to avoid unnecessary judicial proceedings.

Therefore, it is in the interests of the Applicant to not only be aware of the provisions of Section 39, 40, and 118, but also take timely action to be in compliance. The said Sections assume more relevance in the present context as many foreign companies have R&D centers in India, research findings of which are filed as patent applications first outside India.  Another common scenario is Indian citizens carrying out research abroad which can lead to generation of patents, or conversely, foreign citizens in India carrying out research. In any of the instances, it is likely that the foreign patent attorney may not be aware of the particular provisions as discussed herein and may inadvertently not only prejudice patentee rights, but also expose the applicant to court proceedings.

Thus, it is always recommended that, in the case of doubt over the residency status of an inventor, it is always safer to first file a patent application in India or to obtain written permission from the Controller of Patents for the grant of foreign filing license and thereby, safeguard the inventor from criminal consequences of Section 118 of The Indian Patents Act of 1970.

ABOUT THE AUTHOR:

Dr. Amitavo Mitra is a Patent Agent and Sr. Patent Associate at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the author and do not reflect the views of either of any of the employees or employers.

Queries regarding this may be directed to amitavo@khuranaandkhurana.com or swapnils@khuranaandkhurana.com

1Section 6 of Income Tax Act, 1961: (1) An individual is said to be resident in India in any previous year, if he- (a) is in India in that year for a period or periods amounting in all to one hundred and eighty- two days or more; or (b) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty- five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

Explanation.- In the case of an individual,- (a) being a citizen of India, who leaves India in any previous year 4 as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958 ), or] for the purposes of employment outside India, the provisions of subclause (c) shall apply in relation to that year as if for the words” sixty days”, occurring therein, the words” one hundred and eighty two days” had been substituted; (b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub- clause (c) shall apply in relation to that year as if for the words” sixty days”, occurring therein, the words 5 one hundred and eighty- two days”] had been substituted.]

(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.

(3) A company is said to be resident in India in any previous year, if- (i) it is an Indian company; or (ii) during that year, the control and management of its affairs is situated wholly in India.

(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.

(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.

(6) A person is said to be” not ordinarily resident” in India in any previous year if such person is- (a) an individual who has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more; or (b) Hindu undivided family whose manager has not been resident in India in nine out of the ten previous years preceding that year, or has not during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and thirty days or more.

2 Section 40 of Patents Act, 1970: “Liability for contravention of section 35 or section 39.—Without prejudice to the provisions contained in Chapter XX, if in respect of an application for a patent any person contravenes any direction as to secrecy given by the Controller under section 35 or makes or causes to be made an application for grant of a patent outside India in contravention of section 39 the application for patent under this Act shall be deemed to have been abandoned and the patent granted, if any, shall be liable to be revoked under section 64”.

3 Section 118 of the Patents Act, 1970: “Contravention of secrecy provisions relating to certain inventions.—If any person fails to comply with any direction given under section 35 or makes or causes to be made an application for the grant of a patent in contravention of section 39 he shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both”.

Early publication of patent application under the Indian patent law system

Publication of a patent application is one of the prime stages in the process of getting a patent. The publication date of the patent application is considered of a specific significance because the applicants’ advantages as well as rights start from the publication date. Even though the applicant cannot seek any infringement proceedings till the patent is granted.

Generally, the patent application is published in the Official Patent Office Journal automatically after 18 months from the date of filing of the application or the priority claimed date, whichever is earlier. It is to be noted that only complete applications are published, whereas the provisional applications, unless filed as a complete after provisional (CAP) application (i.e., complete application before the expiry if 12 month form the filing date of the provisional application), are neither published nor examined by the Patent Office. The provisional application will be deemed abandoned at the expiry of the 12 month period if a CAP application is not filed.

The provision for early publication is given under Section 11A(2) of the Indian Patents Act, 1970, which states that “The applicant may, in the prescribed manner, request the Controller to publish his application at any time before the expiry of the period prescribed under sub‑section (1)1 and subject to the provisions of sub‑section (3)2, the Controller shall publish such application as soon as possible”.

Thus, a request for early publication can be made by filing a Form 9 along with a payment of fees of INR 2500 (if applicant is a natural person/startup) or INR 6250 (if applicant is a small entity) or INR 12500 (if applicant is other than natural person/startup or small entity). Under rule 24A, and upon the request for early publication, the application will normally be published within 1 month from the date of such request.

It is important to note that the provision to file the request for early publication for any patent application is available ONLY to the Applicant of the patent application, whereas any other person, apart from the Applicant of the patent application, cannot file such request for any reason whatsoever.

Advantages of early publication:

Reducing prosecution time. Examination of a patent application takes place only after publication of the patent application (subject to the queue position of the application pending examination and filing of request for examination by way of Form 18). Provided that if an Applicant files a complete application in the first instance along with Form 18 and Form 9, the Applicant stands to advance prosecution time by approximately 17 months. In another example, if the Applicant files a CAP along with Form 18 and Form 9 at the 12 month deadline, the Applicant stands to advance prosecution time by approximately 5 months.
Start time of patentee rights. A patentee can institute a suit or other proceeding for infringement against the infringing party only after grant of the patent, however, the rights start accruing only after the publication date. Therefore, in the instance of early publication, the applicant gets “extra” time for which damages may be claimed from potential infringers.
Prior art: A patent application does not become prior art until it is published, i.e. it becomes a prior art only after 18 months from the date of filing of the application or the priority claimed date, whichever is earlier. An applicant interested in securing his patent rights at the earliest can take advantage of detracting his competitors by making his invention/application public at the earliest instance.
Discouraging competitors: Early publication allows the applicant to advertise to potential competitors that a particular subject matter is already a subject of the patenting process. This may serve to detract the competitor from coming up with a similar product or process. However, with India following first-to-file system, the utility of this advantage has diminished and of limited value.
Disadvantages of early publication:

Fees: Though the fees for filing a request for early publication (as stated above) is not significant, however, for many individual or small entities, the amount may not be trivial and represents a cost over and above the regular fees.
Withdrawal of application: Under normal procedure, the applicant has upto the 15th month from priority date to withdraw the application. However, with early publication, depending upon when the request is made, the Applicant’s choice to withdraw may be greatly curtailed.
Pay-to-play: The early publication feature allows those with financial wherewithal to leapfrog the examination queue in part by eliminating or substantially decreasing the latency time while the application is not published. This may be unfair to applicants who otherwise cannot avail of this opportunity.
Risk of pre-grant opposition: A pre-grant opposition can be filed by any person upon publication of the application and at any time before grant of the patent if the prescribed examination fee has been paid. Thereby, early publication certainly gives more time for the opponents for pre-grant opposition.
Overall, it can be appreciated that based on the strategy of the Applicant and his interest, the provision of early publication can be exercised at the Applicants discretion to maximize the value of the patent.

It should be noted that given the long pendency of applications currently awaiting examination at the Indian Patent Office, early publication just might be a relatively non-expensive method (for those who can afford it) to expedite the prosecution process.

1Section 11A(1): Save as otherwise provided, no application for patent shall ordinarily be open to the public for such period as may be prescribed.

2Section 11A(3): Every application for a patent shall, on the expiry of the period specified under sub‑section (1), be published, except in cases where the application-(a) in which secrecy direction is imposed under section 35; or (b) has been abandoned under sub‑section (1) of section 9; or (c) has been withdrawn three months prior to the period specified under sub‑section (1).

ABOUT THE AUTHOR:

Mr. Amitavo Mitra, Patent Agent and Sr. Patent Associate at Khurana and Khurana, Advocates and IP Attorneys. Views expressed in this article are solely of the author and do not reflect the views of either of any of the employees or employers.

Queries regarding this may be directed to amitavo@khuranaandkhurana.com or swapnils@khuranaandkhurana.com