Category Archives: Intellectual Property

Competition Law in India Vis-a-Vis Food Delivery Apps in India (Zomato/ Swiggy/ Foodpanda/ Uber Eats) and its Impact on Small Restaurants

In December 2018, Kerala Hotels and Restaurants Association (KHRA) went on a strike for 10 days on the account of high commission being charged by the food delivery apps. Subsequently to which a report was published stating that if this kind of practice is continued by the food delivery apps then it would definitely harm the dining out business in a long- run. Also according to statistics, there is a jump of 30% in the daily handling of daily order in the first quarter of 2018 when compared to the last quarter of 2017.

With emergence of competition being seen in very field it can be noted that the food business is also not protected from its coherence. After the complained filed by  the retailers and shopkeepers against the e-commerce sites we witnessed that 500- small restaurants owners also filed a petition in the CCI and PMO against unfair trade practices of the food delivery apps. They alleged that apps like Zomato, Swiggy, Uber Eats, Food Panda, etc were abusing their dominant position the market. The petition filed against them include allegations like deep- discounting, in- house kitchens and internal sourcing, because of which the small and medium enterprises. Many of us would not see this as a imminent threat but, this could actually have a grave impact on the dine-out/ restaurant industry in the long run.  Since the awareness about competition law in our country is less so in order to  understand  this concept lets us first  understand about the concepts :

WHAT IS DOMINANCE?

The Competition Act,2002 (the Act)  defines dominant position (dominance) in terms of a position of strength enjoyed by an enterprise, in the relevant market in India, which enables it to:

a. operate independently of the competitive forces prevailing in the relevant market;

b. or a affect its competitors or consumers or the relevant market in its favour.

It is the ability of the enterprise to behave/act independently of the market forces that determines its dominant position. In a perfectly competitive market no enterprise has control over the market, especially in the determination of price of the product. However, perfect market conditions are more of an economic “ideal” than reality. Keeping this in view, the Act specifies a number of factors that should be taken into account while determining whether an enterprise is dominant or not[1]. Thus, dominance per se is not bad, but the abuse of dominance which is the concern of CCI[2].

There are primarily three stages in determining whether an enterprise has abused its dominant position:

  1. The first stage is defining relevant market.
  2. The second is determining whether the concerned undertaking/enterprise/firm is in a dominant position has a substantial degree of market power in that relevant market.
  3. The third stage is the determination of whether the undertaking in a dominant position/having substantial market power has engaged in conduct amounting to the abuse of such dominant position[3].

ABUSE OF DOMINANCE

Dominance is not considered bad per se but its abuse is. Abuse is stated to occur when an enterprise or a group of enterprises uses its dominant position in the relevant market in an exclusionary or/ and an exploitative manner.

The Act gives an exhaustive list of practices that shall constitute abuse of dominant position and, therefore, are prohibited. Such practices shall constitute abuse only when adopted by an enterprise enjoying dominant position in the relevant market in India.

Abuse of dominance is judged in terms of the specified types of acts committed by a dominant enterprise. Such acts are prohibited under the law. Any abuse of the type specified in the Act[4] by a dominant firm shall stand prohibited.

Section 4 (2) of the Act specifies the following practices by a dominant enterprises or group of enterprises as abuses:

  • directly or indirectly imposing unfair or discriminatory condition in purchase or sale of goods or service;
  • directly or indirectly imposing unfair or discriminatory price in purchase or sale (including predatory price) of goods or service;
  • limiting or restricting production of goods or provision of services or market;
  • limiting or restricting technical or scientific development relating to goods or services to the prejudice of consumers;
  • denying market access in any manner;
  • making conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts;
  • using its dominant position in one relevant market to enter into, or protect, other relevant market.

EXPLOITATIVE AND EXCLUSIONARY BEHAVIOUR

Abuses as specified in the Act fall into two broad categories: exploitative (excessive or discriminatory pricing) and exclusionary (for example, denial of market access). These are discussed here under.

Are current provisions of the Competition Act,2002 dealing with abuse of dominant position exhaustive in order to address the issue of abuse of dominant position?

Inquiry Into Abuse Of Dominance

In exercise of powers vested under section 19 of the Act, the Commission may inquire into any alleged contravention of section 4 (1) of the Act that proscribes abuse of dominance. Section 19(4) gives a detailed list of factors that the Commission shall consider while inquiring into any allegation of abuse of dominance. Some of these factors are market share of the enterprise, size and resources of the enterprise, size and importance of the competitors, dependence of consumers, entry barriers, and social obligations and costs in the relevant geographic and product market.

The Commission, on being satisfied that there exists a prima facie case of abuse of dominance, shall direct the Director General to cause an investigation and furnish a report. The Commission has the powers vested in a Civil Court under the Code of Civil Procedure in respect of matters like summoning or enforcing attendance of any person and examining him on oath, requiring discovery and production of documents and receiving evidence on affidavit. The Director General, for the purpose of carrying out investigation, is vested with powers of civil court besides powers to conduct ‘search and seizure’.

What form do Anti-competitive practices take when Dominant entities attempt to manipulate the market dynamics to their advantage?

There is a fine distinction between defending one’s market position in market share which perfectly legal and legitimate and may involve a certain degree of aggressive competitive behaviour and deliberate exclusionary and exploitative practices. A greater threat to competition lies majorly from the action(s) of dominant enterprises is inimical to future completion. Based on the definition and understanding of ‘abuse’. Abusive of conducts may classify into broad categories;

 (A) Exploitative practices

1. Excessive pricing- the Indian completion law condemns and prohibits imposition of unfair price by dominant firms.[1] While there is very less guidance as to unfair price so far the CCI is cognizant of the importance of evolving an appropriate analytical framework for treatment of unfair price cases that may come up in future so as to avoid the associated risk and cost to consumers, industry and economy.

(B) Exclusionary practices
Exclusionary practices are contracts, pricing strategies and more generally actions taken by dominant firms to deter new competitors from entering an industry, to oblige rivals to exit, to confine them to market niches, or to prevent them from expanding, and which ultimately cause consumer harm[2]. One class of exclusionary practices involve vertical agreements. Such arrangements are common business practices and infringe the law only if reduce competition. These could result from the following types of arrangements:

1. Predatory pricing– it refers to strategies adopted by a dominant undertaking whereby it offers low prices to consumers( below their cost of production) in the short term to insure the exit of competitors and then followed by higher prices in the medium and long run to recoup the losses. Thus we see that for predatory pricing to be proved two conditions must be fulfilled;

(a) Pricing below cost
(b)With a view to reduce completion and eliminate competitors

Thus we see that the Indian definition of predatory pricing focuses on both cost based approach combined with the intention to dominant undertaking to eliminate competition.

2. Rebates– Sec.4 (2) has been couched in an extremely wide manner and it includes cases when the dominant undertaking provides rebates with the intention of foreclosure of competition in market. Broadly speaking 3 forms of non- predatory price cuts which can be regarded as exclusionary include;

  1. Selective price cuts- price cuts that are offered only to certain selected customers.
  2. Fidelity rebates- discounts or rebates that are offered to customers who purchase products only from dominant undertakings.
  3. Threshold rebates- where the dominant firm offers its customers and across-the-board discounts of x percent if the total value of the customers purchase during a given period crosses a certain threshold.

Thus, it is this differential condition in sale of goods, which attracts liability under section Sec.4 (2)(a)(1).

3. Denial of Market Access- Sec.4(2)(c) suggests that any entry barriers created by the dominant enterprise, by its conduct which results in denial of market access, in any manner will be an abuse. The set clause will cover all acts done by dominant undertaking which will result in market foreclosure for the competitors in the same market or even the downstream or upstream market.

4.Refusal to deal– the term refusal to deal(refusal to supply) describes a situation in which one firm refuses to sell to another firm, is willing to sell only at a price that is considered too high or is willing to sell only under conditions which are deemed unacceptable.[1]

5. Exclusivity- exclusive dealing arrangement are commonly defined as arrangement, which require a buyer to purchase all of its requirements or a large extent thereof only from one (dominant) seller, or, respectively, as arrangements, which require a supplier to sell all of its products or services or a large extent thereof to the dominant firm.[2]

  • Exclusive dealing and purchasing- under such arrangements a retailer agrees to purchase or deal in good of only one manufacturer making entry difficult for new manufacturers
  • Exclusive/selective distribution- under such arrangements the manufacturers supplies one or a selected numbers of retailers making entry difficult for other retailers.
  • Tie-in sales- its makes the purchase one product conditional on the sale of another (tied) product.

LEGAL POSITION IN INDIA

There are a plethora of cases that have come up for consideration before the Competition Commission with respect to Abuse of Dominant position as it has become a rampant practice in the market for dominant enterprises to abuse their position of strength. And such abusive conducts cannot be overlooked as they have far reaching consequences. Hence it would be of immense importance to comprehend the position of this practice in India with the help of certain landmark cases handed down by the commission from various sectors of the market. Transportation sector Case: In Shri Shamsher Kataria[3]: Two levels of market were determined. One was the primary market for “sale of cars in India”, and two aftermarkets, at secondary level, are market for “sale of spare parts” and market for “repair and maintenance services”. Original Equipment Manufacturers (OEM’s) contended that there exists no such distinction as primary and secondary markets and that there is only one “system market”. The Commission observed that the two levels were distinguished so as to see the capability to affect competitors and consumers, market share and entry conditions. As regards market share, it was observed by the CCI that OEM’s have a 100 percent share in the aftermarket for their own brand of cars. This was solely because of the inter and intra brand non-substitutability of the spare parts of one brand with other, due to high degree of technical specificity. As a consequence of lack/absence of substitutability of their spare parts, OEM’s were protected from any form of competitive restraints in the aftermarkets from their competitors in the primary market. Furthermore, through a series of contracts, OEM’s became the only suppliers of their own brand of spare parts and tools in the aftermarket and protected themselves from any competition. This makes it abundantly clear that OEM’s had 100% share in their own brand of cars whereby being in a dominant position and also abusing the same.

Real- Estate Case: In Belaire Owners Association[1], the CCI in this case delineated the relevant market in the context of services of development or construction provided by the opposite party. While determining the relevant product market for the service of construction, the impugned assets were categorized as being of the “residential” and “high-end” assets category. Residential property, being different from the non residential ones, may be of various kinds, such as independent houses, builder-floors, apartments, row-houses, condominiums or studio apartments, et al. Irrespective of the presence of consumer preferences, these categories are substitutable to quite an extent, with respect to the price range, geography, facilities and amenities of these assets. On the basis of these factors the Commission held that DLF is in every sense capable of operating independently of competitive forces in the relevant market and thus, the requirement of conditions laid down in explanation (a) (i) to section 4 are fulfilled. DLF thereby has the ability to manipulate the market dynamics itself in its favour. On one occasion an announcement was made regarding several large projects by DLF Ltd. DLF possesses substantial market power to make its competitors react by withholding some of their own projects in order to avoid market saturation. Similarly, prospective consumers may shift or sustain their demand in expectation of availability of projects to be offered by the market leader. Thus, DLF would be in a position to influence both demand and supply of projects in the given relevant market. These possibilities prove that DLF enjoys a position of strength like none of its competitors as envisaged in explanation section 4 (a) (ii) of the Act.

The Competition Act, 2002 (as amended), follows the spirit and philosophy of modern competition laws regime and aims at fostering competition and at protecting Indian markets against anticompetitive practices by enterprises. The Act prohibits anticompetitive agreements, abuse of dominant position by enterprises, and regulates combinations (mergers, amalgamations and acquisitions) with a view to ensure that there is no adverse effect on competition in India.

Competition laws all over the world are primarily concerned with the exercise of market power and its abuse. The term “market power” is variously known as “dominant position”, “monopoly power” and/ or “substantial market power”[1].

 The Competition law denies the utilization of market controlling position to avoid singular ventures or a group from driving out competing organizations from the market and from managing costs. The idea of maltreatment of dominant position of market control alludes to anticompetitive business in which prevailing firm may take part with a specific end goal to keep up or increment its situation in the market.

Abuse of dominant position bears upon the unilateral behaviour of the enterprise or group thereof. Thus concurrence of wills of two or more parties is not a condition precedent to make out a case under Section.4 of the Act. Abuse of dominance being a unilateral conduct does not emanate from any agreement.

A finding of abuse of dominance-be it of an individual enterprise or that of a group essentially involves a three stage or a threefold process in the Indian jurisdiction- firstly it is the determination of relevant market based on relevant product market or relevant geographic market. Secondly, it is the determination of dominance in the relevant market and thirdly, it is the determination of “abuse” of that dominant position[2].

Conclusion

After understanding these basic concepts of Competition Law, we understand that the practices which Zomato, UberEats, Swiggy and Ola financed FoodPanda are following are  clearly a  case of Predatory Pricing, offering food at unsustainable discounts below the cost price which forces small eateries and restaurant to shut down owing to huge losses , as per reports, Zomato intends to serve meals for as low as 50-60 Rs. Therefore, they are in a manner, directly or indirectly, imposing unfair or discriminatory price in purchase or sale. Over and above this, they are also involved in Exclusive Sales Contract, Tie-in arrangements with restaurants and some like Swiggy have started their own kitchens like “The Bowl Company” and then drive traffic to their kitchens bypassing other restaurants. In this manner these big MNC’s crush small start-up kitchens and to an extent medium business restaurants who are not able to compete due to Predatory Pricing. In view of the above there is a strict need to put an end to this unsustainable pricing.

Mr. Anurag Katriar CEO of deGustiBus Hospitality ( Indigo, Tote on the Turf and Neem) stated

“ Deep Discounting by the online food delivery platforms is impacting footfalls and diverting the Customers Traffic to these platforms , besides the cost of doing business is also escalating because Commission are directly getting impacted, these are hurting us in the Long run”

Thomas Fenn, Founder of Mahabelly restaurant  said  “ We need to reach middle grounds on commissions and have more transparency in the system. The Delivery platforms are very good for the restaurant sector but the concequence cannot be detrimental for businesses. As for the … in house kitchens.[1]

Author: Mr. Shubham Borkar, Senior Associate – Litigation and Business Development  and Co- Author- Poulomi Goswami, at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at shubham@khuranaandkhurana.com or at www.linkedin.com/in/shubhamborkar.

References:

[1] Available at https://www.cci.gov.in/sites/default/files/advocacy_booklet_document/AOD.pdf

[2] Roy Abir and Kumar Jayant, Competition Law in India, Eastern Law House, Second edition,2014,p.159

[3] Clauses (a) to (e) of sub section (2) of Section 4

[4] A combined reading sec. 4(1) along with sec. (2) which lays down the ingredients of unfair or discriminatory price.

[5] Available at  https://www.cambridge.org/core/books/exclusionarypractices/AC0652A15F36536280BAD10F8A2EBC25

[6] OECD Policy Rounds Tables, Refusal to Deal, 2007,(DAF/COMP(2007) 46) at page 11

[7] Reports on Single Branding and exclusive Dealing, The unilateral Conduct Working Group,7th Annual Conference, International Competition Network, April 2008,p.3

[8] Shri Shamsher Kaaria v. Honda Siel, MANU/CO/0066/2014:2014 Comp LR 1 (CCI)

[9] Belaire Owner’s Association v. DLF Ltd., Case no. 19 of 2010. Decided on 12 August 2011.

[10] Available at https://www.cci.gov.in/sites/default/files/advocacy_booklet_document/AOD.pdf

[11] Bhatia G.R., Assessment of Dominance, Issues and Challenges under the Indian Competition Act,2002 Available at http://www.luthra.com/admin/article_images/Manupatra-CLR-Dominance-GRB.pdf



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Correct Interpretation of section 107A of the Indian Patents Act: Judgement in Bayer Vs. Natco & Alembic

In a recent decision, the Divisional bench of Delhi high court has dealt with correct interpretation of Section 107A of the Patents Act, 1970, commonly known as the Bolar provision.The ruling came as a result of two appeals made by Bayer Corp. Ltd.  against the Natco Pharma and Alembic Pharmaceuticals for infringement of its patents for its drugs Nexavar and Xarelto. Both the appeals dealt with the identical issue.

Background of the Case:

Bayer had approached Delhi high court to stop Alembic Pharmaceuticals from exporting Rivaroxaban, the active ingredient of its patented drug ‘Xarelto’ and Natco Pharmaceutical from exporting Sorafenib, the active ingredient of its patented drug Nexavar. Both the Indian drug manufacturers were granted compulsory licenses for manufacturing respective drugs. According to records, both the patents for the drugs ‘Xarelto’ and ‘Nexavar’ granted to Bayer would cease to be in force from 2020.

On March 8, 2017, a single-judge Bench of the Delhi high court lead by Justice Rajiv Sahai Endlaw had allowed Natco Pharma and Alembic to export the active pharmaceutical ingredient (API) Sorafenib and Rivaroxaban for research and development of information for regulatory submissions.

Natco pharma and Alembic pharmaceuticals affirmed that they will export Bayer’s patented drugs only for the purposes allowed as per section 107A of the Patent Act, 1970.

Some of the findings of the single- judge bench were as follows: –

  • Sale by a non-patentee (even if the non-Patentee is a compulsory Licensee) of a pharmaceutical product solely for the purposes prescribed in Section 107A would also not be infringement;
  • Use of the word selling in section 107A refers to selling within India, and also exports;
  • Merely because no provisions are stated to exist in laws relating to export of pharmaceutical products, for ensuring that API exported is used in the destination country for the purposes for which it has been exported, does not allow Court to interpret Section 107A as not permitting export;
  • Natco and Alembic can export the patented invention for purposes specified in Section 107A of the Patents Act, and for no other purposes.

Aggrieved by the judgement, Bayer Corp. Ltd. Appealed to the Division bench of the Delhi high court for correct interpretation of Section 107A.On 22nd of April 2019, the divisional bench gave its final verdict in both the cases.

Bolar provision-Interpretation:

The decision of the divisional bench of the Delhi high court dealing with the issue of correct interpretationof Section 107A(a) of the Patent Act, 1970 relating to “Bolar Provision” concluded that:

The Bolar exemption is the global community’s thought out design to ensure that –

the enclosure of intellectual property rights, granted to inventions, does not last beyond the term assured and that

the general public is afforded with the end of the bargain which every society guarantees while sealing a patent i.e. access to the technology or invention for generations to come.

But for a Bolar exemption, a third party manufacturer would not be able to start experimentation and ready a product, for its availability to the general public after the expiry of the patent term.

Final Judgement of the Divisional bench of the Delhi high court:

On 22nd April 2019, the division bench of Justice S. Ravindra Bhat and Justice Sanjeev Sachdeva affirmed the findings of the single bench Judge Rajiv SahaiEndlaw.

The decision of the divisional bench confirmed that the sale, use, construction of patented products (by individuals and entities that do not hold patents) in terms of Section 107A of the Act for purposes both within the country and abroad is authorized and legal provided the seller ensures that the end use and purpose of sale/export is reasonably related to research and development of information in compliance with regulations or laws of India (or the importing country), for its submission in accordance with such laws.

The divisional bench held that any dispute over the end use or purpose of the export, whether it is reasonably for research or regulatory submissions will be the subject matter of a civil suit, where the relief can be granted based on circumstances and the evidence.

The divisional Bench directed that the court trying the suit would decide the case in accordance with law taking into account discussion and factors indicated in this judgment.

Author: Ms. Mita Sheikh – Associate Director  and Co- Author- Dhanada Deshpande , Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at mita@iiprd.com .



Mike Okada has been Appointed as a New General Counsel and Senior Vice President, IP Licensing & Legal Affairs at Immersion Corporation

Immersion is a leading developer and licensor of the touch feedback technology, also called as haptics. Headquartered in San Jose, California with offices worldwide, Immersion provides with technology solutions for creating mesmeric and realistic experiences that enhance digital interactions by engaging users’ sense of touch. Immersion’s large portfolio of published patents and applications serves as a wide-ranging tutorial to the field. Having not less than 3600 patents, issued or pending, Immersion’s technology has been adopted in more than 3 billion digital devices, and provides haptics in mobile, automotive, advertising, gaming, medical and consumer electronics products. Immersion’s patent portfolio covers a range of innovations for enabling tactile feedback across applications and markets including those of computing, gaming, medical simulation, automotive, and industrial equipment. The mesmeric and expansive work and patent portfolio of the Immersion can be speculated by the following charts:

Immersion is recently in news for its proclamation of Mike Okada being the new General Counsel and Senior Vice President, IP Licensing and Legal Affairs. With this announcement, Mike Okada replaces Amie Peters, the outgoing General Counsel who worked for the Corporation for over a decade in a numerous roles and positions.

CEO of Immersion, Ramzi Haidmus, while acknowledging and praising the newly made General Counsel said that it is the substantial experience of Mike in the field of technology and corporate law that makes him ideally fit for the post. Further, his in-depth knowledge on IP licensing and other complex transactions that deals with global technology leaders will be an asset to the organization as a whole. Talking of Amie, the outgoing Counsel, Ramzi mentioned and praised her work, dedication and support she bestowed to the Immersion and its stakeholders. She also acknowledged Amie’s contribution to the Corporation over the timespan she worked for.

Before joining the Immersion, Mike was a part of Dolby Laboratories as the Vice President, IP Transactions and Legal Affairs. As a Vice President of Dolby, with over one thousand licensees across various segments like PC, mobile, broadcast and consumer electronics, he led a global team which supported the audio and imaging technology businesses of the company. Even before working in Dolby, Mike was a partner at Wilson, Sonsini, Goodrich &Rosati where being a member of Technology Transaction Group, his work focused on domestic and international commercial transactions including IP. Speaking of his qualification, Mike hold a JD from the University of Southern California and an AB in Economics from Columbia University.

Quoting Mike Okada on how he looks up at the new post and the company he is joining, he says, “I’m excited to be joining Immersion, a recognized leader in haptics. I look forward to working with the team to scale adoption of digital touch experiences in the market.”

With a vast experience in the field of technology and IP licensing with his previous works and achievements, and Immersion’s forte in licensing of technology, it is expected that Mike’s experience will be an aid towards further flourishing of the Corporation. It will be interesting to see how the Immersion builds with its new General Counsel and Senior Vice President after the end of Amie Peter’s tenure.

Author: Sonal Sodhani , Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at ankit@iiprd.com



Interference with Autonomy of Democratic Institutions is a Threat to Democracy

Any country’s claim of having a democratic form of government is subject to the extent of division of power in the system and the strength of independence in functioning of the democratic institutions. These institutions are the pillars which keep the soul of the democracy alive, their independence give a sense hope to the citizens, that their interest will not be compromised for the sake of anyone’s political ambition. However, there are instances when the conflict of interest arises between the government and the institutions. That is the instance when the government in power makes the attempt to weaken the autonomy of such institutions as per its whims and fancies, in order to obtain the political gain. Eventually it results in causing disturbance to the very fundamental structure of the democratic system.

In the recent times, we have seen many instances where the governments have made the attempt to disturb the functionality of several democratic and autonomous institutions. The Central Bureau of Investigation (CBI) has already been termed as a ‘caged parrot’ by the Supreme Court and now again during the power tussle between the two top most officials in CBI, the Apex Court had to warn the government not to interfere with autonomy of CBI.

Similar is the situation with the autonomy of the Reserve Bank of India (RBI) and Election Commission of India (ECI), other two very prominent democratic and autonomous institutions of India. In RBI, the disputes of the government with former governor Mr. Raghuram Rajan to the recent disputes with Mr. Urjit Patel, another recent former governor have already diminished the image of the RBI in the mainstream media. It was not over that the recent news flourished through limelight when Mr. Shaktikanta Das was appointed as the new governor of the RBI and the news headline appeared “India’s central bank board meets with new worries about autonomy” on Economic Times of 14th December, 2018.

Moreover, the speculations regarding the autonomy of the election commission are on the similar line as of CBI and RBI and many prominent scholars have shown their concern for the same that it has become mere agent of the government.

In order to reinstate the faith in these institutions, the urgent reforms are necessary. Therefore in order to achieve the same, these institutions must be made more independent in their functioning and their autonomy should not be compromised for the sake of any individual or political party at any point of time.

To attain the same goal, there are few steps which are essential and needed to be taken effectively. The most important step is with respect to appointment and removal of the officials in these institutions, that it must be done judiciously and with utmost transparency. Therefore, the bodies constituted for appointment and removal of the officials should include only the prominent persons and should also have the representation of every democratic body; such as the Government and Opposition as well.     

Perhaps, these measures will only keep the faith of the people in democratic institutions alive.   

Author: Vishal Soni , Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at rishabh@khuranaandkhurana.com

Trade Secret Laws: Need Of An Hour

“Trade secret protection directly addresses the appropriability problem by limiting contracting parties use and dissemination of proprietary information, thereby enhancing incentives to produce valuable information.[i]

When we see the Indian laws there are no such legislations with regard to the same but this concept has been widely discussed around the world. India tried to resolve the protection of Trade secret in a joint statement made in 2015 in the Trade Policy Forum with the United States.[ii]  On the 12th May 2016, the Union Cabinet approved the NIPR Policy (National Intellectual Property Rights) which basically focused on the upcoming growths of the ideas, innovation and technologies. India have recognised major forms of IPR like copyrights, patents, trademarks etc. but has some where lacked to recognise the concept of Trade secrets, they have no statutory recognition. The issues or the problems related to trade secrets in India are being resolved using the principle of common law, equity, Sec 16[iii] of The Copyright Act, Sec 405[iv] of the Indian Penal Code, Sec 2(3[v]) of the National Innovation Bill and Sec 27[vi] of the Indian Contract Act.

A trade secret refers to any information or data which is not disclosed to general public and which the owner attempts to keep confidential.[vii] The TRIPS Agreement lays down the following basic criteria for as to the any information to be kept as an undisclosed information or as a trade secret:

  • The data must not be readily accessible or known by those individuals who deals such sort of information generally.
  • The information must have a commercial value as secret.
  • The lawful owner of the same must have taken reasonable steps to ensure its secrecy.

Trade secrets are basically of two types:[viii]

  1. It generally relates to any invention or process of manufacturing which can be disclosed in public, which can only be sheltered as a trade secret as it does not fulfil the patentability criteria. This information may include the customer details or any secret manufacturing process as in the case of coca cola.
  2. It includes some innovations which can be patented and are protected under the patent act. In such kinds of information the owner on his discretion may keep it as secret or get it patented.

Being a signatory of the TRIPS Agreement India is under an obligation to legislate the laws with regard to IPR in accordance to the international standards. Although there are no such legislations related to IPR but India has achieved a lot by enacting new laws and amending the old ones as to IPR because of which the foreign investors are so cautious about the protection of secrets in India[ix]. The National Innovation Bill was drafted in 2008 was drafted basically for the protection of trade secrets and confidential but it was unfortunately does not get passes by either of the Houses of Parliament.[x] The judiciary relies upon different legislations to resolve the problems.

The law of the land The Constitution of India provides for ‘Right to Free Mobility’ under Art 21 and Art 19(1)(g) in accordance to some reasonable restrictions. Art 19(1)(g)- Every citizen of India has freedom to practice any profession, or carry on any occupation, trade or business. It also provides the freedom to get employment and work in raising the living standards, right against the employer that he cannot restrain an employee from performing his work nor to work forcefully[xi]. Art 21 guarantees human rights to every citizen and non-citizens.

If any restraint made by the employer in any contract with his employee requiring him not to get into any service or employment for a reasonable period such control is Valid under the English laws[xii] but void under the Indian laws[xiii].

Sec 27 of The Indian Contact Act, 1872 states that the agreement in restraint of trade are void with an exception that an individual may limit it under some valid conditions not to carry the business with specific limits to the reputation of their industry. The literal interpretation of the provision does not expresses any such exception but it has been drawn because of the judicial interpretation which implies that an employee can be restrained to trade only on some reasonable grounds.

There are some issues with this provision:

  1. It actually do not concern with the protection of legal rights.
  2. It does not actually provides with the remedies to the owner of the trade secret.

The theft of trade secret can also be filed to the police under Sec 378 of IPC which includes stolen confidential client list, business innovation etc. IPC also punishes for criminal breach of trust & confidence under sec 405 & 408 read with Sec 420 i.e. cheating.

Even after having such laws it is the need of an hour to understand that these legislations are not enough to protect the trade secrets so it is required to legislate new and proper laws related to it. The penal laws should also include provisions for criminal misappropriation in case the trade secrets are leaked, high standards of secrecy should be maintained within an organisation and audit for the same must be done on regular basis, employee should be well aware with the trade secrets policies also.

“Trade your secrets and become who you are.[xiv]

Author:  Oorja Jain , Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[i] Friedman, Landes and Posner, 1991

[ii]https://ustr.gov/about-us/policy-offices/press-office/press-releases/2016/october/%E2%80%8BIndia-US-Joint-Statement-TPF

[iii] No copyright except as provided in this Act

[iv] Criminal breach of Trust

[v] Definition of Confidential information

[vi] Agreement in restraint of trade

[vii] American Express Bank Ltd. V. Mrs.PriyaPuri MANU/DE/2106/2006

[viii] http://www.wipo.int

[ix] ISSN: 2394-5044(2017) Nikhil Nair, “Are The Trade Secrets in India Satisfactorily Protected?” The World Journal of Juristic Policy

[x]https://spicyip.com/2008/10/innovation-bill-2008-and-trade-secrets.html

[xi]Gujrat Bottling Compant Ltd. & Others V. Coca Cola Company & Others, MANU/SC/0472/1995; WIPRO Ltd. V. Beckman Coulter International S.A. MANU/DE/2671/2006

[xii] Supra Note 20

[xiii] Superintendence Company of India V. KrishanMurgai 1980 AIR 1717; 1980 SCR (3)1278

[xiv] Frank Warre

Intellectual Property Protection in Software Industry

The computer was born not out of a need to solve a serious number-crunching crisis.[1] By 1880, the U.S. population had risen so much that it took more than seven years to tabulate the U.S. Census results.[2] So, to get the job done faster the Government sought a faster way which gave rise to punch-card based computers. These computers were huge and took up almost an entire room.

If we go through the history of computing projects we can make out that software was created long before the first electronic computers came to be.[3] The credit for the invention of the software in the mid-1800s goes to Charles Babbage. [4]

Intellectual property rights are at the root of the software industry. Innovations made in the software products can quintessentially be protected by patents, copyrights and trademarks. Patents and copyrights provide protection to the software itself. On the other hand, Trademarks protects the names or symbols used to create a distinguishable identity in the marketplace.

Copyright protection generally extends to protect the expression of any idea, but not the mere idea itself.[5] The application of copyright protection for software products was established internationally via the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).[6] In case of Software, the protection provided Copyright is basically on the source and object code along with certain unique and original elements of the user interface.

Section 2 (o)[7] defines ‘literary work’ which includes “computer programs, tables and compilations including computer databases.” Section 13[8] provides “the categories of work in which the copyright subsists which includes original literary work.” The author of a work is the first owner of copyright in the work.[9] However, in case of employer-employee if a work is made in course of employment under a contract of service or apprenticeship, the employer shall be the first owner of the copyright in the above of any contract to the contrary.[10] These provisions of the copyright law are applicable mutatis mutandis[11] to computer software/ programmes as well.

The copyright owner holds a bunch of exclusive rights preventing unauthorized using, making, selling or distributing copies of the work. Violation of any of the exclusive right will lead to infringement of copyright and such violation is subject to liability for damages or statutory fines.

Article 27 of the TRIPS Agreement makes patent protection available to inventions in all fields of technology, only if they meet the minimum requirements of novelty, utility and non-obviousness.[12] The protection offered by patentis wider than that of copyright, as copyright protection extends only to a specific expression whereas patent protection extends to the underlying functionality of an invention. Because patents can offer broader protection than copyrights, they turn out to be more valuable if they can be obtained.

However, obtaining patent protection is a lengthy process and is more expensive.

Trademarks can protect the name of a software, its logo and taglines, and prevent competitors from using similar names. Trademarks protect software brands, but not the code that runs the software.  For example, “ADOBE” is a registered trademark for a variety of software products and services[13].  Any materials that are identified as the originator of specific product or service can be registered as a trademark.

A trademark will not protect the software program itself from recreation or imitation.[14] If a design of a program is to be protected, then copyright protection should be sought for.

Author: Debopriya Mukherjee, B.A. LL.B(Hons.) Amity University, Kolkata, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[1]Kim Ann Zimmermann, Live Science Contributor, History of Computers: A Brief Timeline

[2] ibid

[3] The History of Software development

[4] ibid

[5] Dr. M.K. Bhandari, Law relating to Intellectual Property Rights(5th edtn, Central Law Publication, 2017)

[6] G. Krishna Tulasi and B. Subba Rao “A detailed study of patent system for protection of inventions

[7] Copyright Act, 1957

[8] ibid

[9] See section 13(2) of the Copyright Act, 1957

[10] N. Mahabir “India: First Owner Of Copyright

[11] A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856

[12] See Article 27 o the TRIPS Agreement, 1 January, 1995

[13] Xavier Morales, Esq., “Can I Trademark Software?”

[14] Dr. M.K. Bhandari, Law relating to Intellectual Property Rights(5th edtn, Central Law Publication, 2017)

Protection of Design Rights

Design protection provides protection to a functional items’ look and feel or in other words to the non – functional attributes of the item. An object with a substantially similar design to an existing items’ design cannot be made, copied or used without the permission of the person who holds the right to the existing design. Few notable examples include, shape of a bottle of a beverage like Coca – Cola, design of an automobile, mobile phones and iPod. Additionally, design of a product is a critical factor that attracts or influences the behaviour of a consumer and ultimately creates an impact on the products performance in the market.

Strategy is an essential part of any organization doing business of any sort. These strategies can be about the business model, marketing strategy to penetrate multiple markets or demographics etc. Similarly, IP (Intellectual property) strategy is essential however is often overlooked. A good IP strategy is of utmost importance to further grow or scale a business. A poor strategy or a lack of one can often lead to the end of a business. Especially in areas like South East Asia where there is an overabundance of competitors, cheap manufacturing costs and cheaper automation making it a hub for notorious endeavours.

As these rights are territorial in nature, it is a good strategy to at least seek protection on a products design in multiple countries where an organization plans to indulge in business activities. An industrial design may consist of three dimensional shapes or two dimensional structures like lines/patterns or colours.

How Industrial Design Rights Are Obtained

Depending on the applicable laws, independently created industrial designs must fulfil some or all of the following criteria: novelty/originality.

Novelty or originality of a design, to some extent, is subjective in nature and can vary from one jurisdiction to another. Generally, a design which is not disclosed to the public can be considered novel. Similarly, a design can be considered original if the design is different from the existing known designs or their combinations.

The duration of these rights also varies from country to country, for example:

In Indonesia, a design right is valid for ten years and the holder cannot seek renewal. Likewise, ten years is also the validity period for design rights in Canada. In Japan, the same right is provided for twenty years while in Singapore, the right in a design expires after fifteen years.

The procedure of applying for these rights differs from country to country as well, as does the cost. There can be different out of pocket expenses that can be incurred depending upon the country the application is being made to.

It is recommended to conduct searches for existing designs as it helps save time, money and avoid any potential infringement (knowingly or unknowingly) of others’ rights before applying for a design application.

Strategies

Since the design right is an intellectual property, there is always the option of licensing. If an organization isn’t operating in a certain region yet and finds out that there exist other company/companies in those areas with substantially similar or even infringed design, it is within the rights of the organization to seek an infringement suit or settle for a certain amount of royalty to be paid to them for making use of their designs.

Organizations must also keep the relationship of design rights and other intellectual properties in mind. Some countries allow for an overlap between the design right and copyright applications as well. This overlap however by no means states that it provides a cumulative protection and is solely dependent upon the countries laws. However, this does provide the benefit of having an added layer of protection over the design rights.

Author: Dhruv Verma, Business Analyst at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at dhruv@iiprd.com.

References:

[1]https://www.wipo.int/wipo_magazine/en/2017/04/article_0006.html

[2] https://www.aseanbriefing.com/news/2018/06/14/design-rights-protection-south-east-asia.html

[3] https://www.wipo.int/designs/en/

How Online Recordation of IP Rights with Customs Works?

Introduction

Cross-border counterfeiting and infringement of goods can have severe long-term consequences for an economy. In order to protect the IP rights of the holders as well as to secure the economy from such breaches, the government formulated Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. These rules are aimed to prevent counterfeiting and infringing good from entering into the market. In order to benefit from the rules, right holder has to fulfill certain procedural obligations. The whole procedure is known as recording of IP Rights with the Customs. This process can now be done online through Indian Customs IPR Recordation Portal (https://ipr.icegate.gov.in).

What are ‘goods infringing intellectual property rights’?

According to Rule 2(a) of the IP Rules, “any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder” fall under the ambit of ‘goods infringing intellectual property rights’. The definition is thus, wide enough to encapsulate all the goods that the respective IP Statutes deem infringing the rights of IP right holders.

Indian Customs IPR Recordation Portal

The portal was created for easy facilitation of recordation of IP rights with the Customs. The portal provides for recordation of the major IP rights i.e. trademark, designs, copyright and geographical indicator.

Procedure for recordation of IP rights with the Customs

  1. The right-holder must file application for recordation of a trademark, patent, design, copyright or geographical indication and submit the following documents electronically on http://www.ipr.icegate.gov.in/.
  2. The first step of filing an application will involve creating a unique id and a password on the website and thereafter, submit the relevant documents and fill the online forms. The information submitted will be saved and can be edited later. However, any post-recordal edits will be subjected to approval of the Custom authorities.
  3. Where the applicant is seeking to record multiple IP rights, separate forms must be filled for each IP right.Similarly, where the applicant holds multiple registrations (for example: four registrations for one trademark, each in a single class) for single IP right, a separate application for each registration has to be filed. Likewise, if one multi-class registration is owned in three classes, one application shall cover all the three classes.
  4. Thereafter, a unique temporary registration number will be generated.
  5. The physical copies of the documents which were uploaded along with a print out of the application form filed online are required to be filed at the Customs Office of the Right holder’s choice which has an IPR cell along with a demand draft towards payment of the official fee of INR 2000.
  6. Thereafter, the concerned IPR Cell of the relevant Customs Office will scrutinize the documents, register the notice of the Right holder and thereafter issue a Unique Permanent Registration Number (UPRN). This process could take upto 30 days.
  7. Once the UPRN is generated, the design, trademark, copyright, or geographical indication is formally recorded with the Customs authorities and this information is made simultaneously made available at all ports.

Documents to be Submitted with the Application Form

Following documents are to be submitted along with the application form:

  1. Proof of ownership of the IP right and a scanned copy of the registration certificate of such IP right.
  2. Serial number of the demand draft of INR 2000/-. The demand draft must be issued by any nationalized or scheduled bank in India and made out in favour of the Commissioner of Customs of the opted location.
  3. Scanned copy of power of attorney in favour of counsel / advocate / agent who is filing the Application.
  4. A statement of exclusivity outlining the scope of the IP right sought to be recorded.
  5. Digital images of genuine goods (for trademarks and designs)
  6. Statement of grounds of suspension of infringing goods
  7. Digital images of infringing goods (if applicable/available).
  8. Differentiating features of genuine and infringing goods (not mandatory but advisable for trademarks and designs).
  9. The IEC code of the rights holder and/or other authorized importers (not mandatory but advisable).
  10. Customs Tariff headings of the applicable goods (if available).
  11. In case of geographical indications, description of the geographical indications, geographical area of production and map.
  12. The General Bond or Centralised Bond

Application of Bonds in the Setup

The procedure provides for the application of three kinds of bonds: General Bonds, Centralised Bonds and Indemnity Bonds.

During the registration, the right holder may opt to submit a General Bond in form of an undertaking that s/he will submit the specific consignment-wise security bonds at the time of interdiction of infringing goods. The forms for General Bond and a Consignment Specific bond are available here. When required, the right holder is required to execute the Consignmentspecific Bond of an amount equivalent to 110% of the value of the goods detained by the Customs, along with security, in the form of a bank guarantee or fixed deposit, equivalent to 25% of the bond value at the port of interdiction within 3 days of interdiction of the consignment.

Alternatively, the right holder can file a Centralised Bond for a value that is sufficient in their judgment, to correspond to value of suspected allegedly infringing goods all over India. This security amount will then be used against future interdiction of goods that infringe the IP right holder. The format of the Centralised Bond is available here.Right hold has to furnish a security for an amount equivalent to 25% of the value of the Centralised Bond with the relevant Customs authority. Once the above requirement is fulfilled, the relevant Customs Office will create an on-line centralised bond account and security account. The system will generate a unique Bond Registration Number (BRN) and the same will e-mailed to the Right holder or his/her authorised representative.  All future correspondence relating to bond management shall be with reference to this BRN only. There will be a single BRN for an Right holder which may cover more than one Unique Permanent Registration Number (UPRN).

Through the centralised bond, the IP right holder is at the liberty to ‘top-up’ the bond at any time without worrying about producing a consignment-specific bond in a short period when infringing goods are interdicted. In case, the amount of the Centralised Bond and the security is not enough to cover the value of the goods interdicted, then the right holder is required to furnish a supplementary bond within three days of interdiction.

Further, an indemnity bond is also required to be furnished by the right holder. This is done to protect the Custom authorities against any liability and expenses that may be incurred as a result of detention of the goods. A format for the indemnity bond is provided here.

After furnishing these bonds and completing other procedural requirements, the recordation process is completed. The recordations remain effective for a period of five years or expiry of the IP, whichever is earlier

Detaining of Goods by the Custom Authorities and Remedies to the Right Holder

After detaining goods, Customs gives notice of invite to both the importer as well as the rights holder to join the proceedings. Failure to join the proceedings within the given time period shall result in release of the goods to the importer. At this point, the right holder is required to furnish bonds as discussed above. After the completion of this procedure, the right holder (or its authorised representative) is provided with the photographs or serial numbers of the products or samples of the products for scrutiny and testing to ascertain whether the products are infringing or not. The right holder can request for the name, address, serial number, import documents and other relevant information to aid in his/her determination as to whether the goods are infringing.The inspection must be finished within ten working days from the date of notice. Thereafter, a follow-up action is taken. If no action is taken within that period, the goods are released. This limitation is further restricted to three working days (may be extended to seven) in case of perishable goods. If the relevant Customs officials conclude that the goods are infringing the IP right holder’s rights and no other legal proceeding is pending then, the infringing goods will be destroyed or disposed outside the normal channels of commerce after obtaining a “no objection” or concurrence of the Right holder. All the cost of detention, demurrage and destruction is to be borne by the right holder. Goods of non-commercial nature contained in personal baggage or meant for personal use of the importer are not subject to the above Rules.

Powers of the Commissioner

A Commissioner can on his/her own motion suspect the clearance of the imported goods if there is prima facie evidence or s/he has reasonable grounds to believe that the goods infringe IP rights even where the said rights are not recorded under the IPR Rules. Given that situation, the rights holder is required to comply with the requirements of recordal within 5 days, else the suspension shall be cancelled.

Conclusion

The setup has become quite convenient for the IP holders after the launch of the portal. With proper recordation, Custom authorities are at a better position to tackle cross-border counterfeiting and infringement of IP rights. However, efficiency of the setup depends to a great extent on the right holder.

Author: Yashvi Padhya, Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

IPR Vis- à- Vis Traditional Knowledge

What is Traditional Knowledge?

Knowledge base which is developed by indigenous, local or native community has been preserved and passed on to generations, so much so, that it becomes the identity of such community. Traditional knowledge can be found in variety of concepts such as calculation of time, food article, plant properties, spice uses, yoga practices etc. The most essential factor of Traditional Knowledge is that it has ancient roots and it is often oral.

Why Traditional Knowledge must be protected?

Need to protect traditional knowledge have increased with changing time, especially in order to stop unauthorized and commercial misuse of such knowledge. It is important to protect the indigenous people from such loss and also help them to preserve such ancient practices. Protection to TK shall also promote its wider and efficient use.

Protection of Traditional Knowledge

The most difficult aspect of traditional knowledge is in its protection. There has been a lot of debate to protect traditional knowledge under IP regime but that in itself faces a lot of challenges such as; a) under which IP under which traditional knowledge can be protected, b) since every IP protection is provided for a limited period of time then how will traditional knowledge have a continuous protection. Protection of traditional knowledge is rooted in the problem of Bio-piracy. Bio-piracy occurs when there is commercial utilization of traditional knowledge without proper authorization of the indigenous or local people associated with such knowledge.

How to Protect Traditional Knowledge?

There are methods through which TK can be protected: a) Positive Protection, and b) Defensive Mechanism. Positive protection means protecting TK by way of enacting laws, rules and regulations, access and benefit sharing provisions, royalties etc. Defensive Mechanism means steps taken to prevent acquisition of intellectual property rights over traditional knowledge.

India, for example, followed by the well-known case of USPTO, wherein patent was granted on healing properties of turmeric and with much difficulty CSIR proved the prior existing knowledge of such properties of turmeric with help of numerous ancient scriptures and documents, has adopted a Defensive mechanism to protect its traditional knowledge by way of setting up a Traditional Knowledge Digital Library (TKDL) in 2001, in collaboration between Ministry of Ayush and CSIR.

But is TKDL adequate? The digital library, although comprising of voluminous documents and work of Indian traditional knowledge, has its own shortcomings such as; translation problems, disclosure of traditional knowledge as prior art is unadvantageous since it leads to public disclosure of entire traditional knowledge which simultaneously results to fishing expeditions, further one of the major aspect of traditional knowledge is that it is mostly passed by generations in oral manner, therefore, a lot of TK has no documentary record and TKDL maintains no record of oral traditional knowledge.

Adequacy of IP protection to Traditional Knowledge in India

Unlike other categories of intellectual property rights, India has no substantive act or law to protect traditional knowledge but other IP acts contain provisions with respect to traditional knowledge such as the Patents Act, 1970, Section 25 and Section 64, gives one of the grounds for revocation of a patent application on the basis of traditional knowledge. Under the Copyright Act, 1957, has not specific mention of protecting traditional cultural, literary or artistic work or folklore but Section 31A provides for protection of unpublished Indian work, nonetheless Copyright protection in for a limited time period and also demands certain criteria to be fulfilled, therefore under this IP as well protection of traditional knowledge doesn’t have much scope.

Past few years it has been seen that India has actively participated in TK conventions and has made efforts to protect its TK at international level. Access to Indian TK is available at USPTO and EPO and CSIR is day by day improving the efficiency of TK database.

Important International TK related conventions

The CBD and the 2010 Nagoya Protocol introduces the recognition and protection of TK at international level. Article 8(j) of the CBD, requires parties are required to respect and maintain knowledge held by indigenous communities, and promote broader application of TK based on fair and equitable benefit-sharing. Article 16 recognizes TK as a ‘ technology’ for effective practices of conservation and sustainable use of biodiversity, with procedural requirements established in Article 15 for access to genetic resources, including those based on prior informed consent and mutually agreed terms. The Nagoya Protocol broadens the CBD provisions relating to access and benefit-sharing.

Call for Sui Generis Protection and its Awareness

There has been an increasing demand of Sui Generis system of Protection for traditional knowledge since IP protection has its own downside and loopholes. Sui Generis is a Latin word meaning ‘of its own kind’. Sui generis instrument shall provide legal framework of protection of TK, enforcement of right of indigenous communities, prevent misuse and control of TK, provisions of ABS (access and benefit sharing) system etc.

In addition to TKDL system,  India can work towards a more active approach, foremost to create awareness and understanding among people who are till date completely unaware or have very limited knowledge on Intellectual Property Rights as well as the term ‘traditional knowledge’.

Author: Ms. Vatsala Singh, Litigation Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at vatsala@khuranaandkhurana.com.

Update on Recent Stakeholder Meeting Held On 03.08.2018 at IPO, Delhi

Few of the following issues with respect to various field of  Intellectual Property, were raised by the stakeholders :

I. Patents:

a) E-communication, websites and allied issues

  • FERs are not notified to the applicants leading to abandonment of application.
  • The Patent Office website do not provide for Sequence Listing uploading in txt. format and the inline module do not provide for uploading of formal drawing after the Indian Patent application has been filed. This website also do not provide for Foreign filing authorizations and do not facilitate the certified copy as well.

b) Processing Of Application , Hearing, Video-Conferencing

  • There is no clarification regarding what documents can be filed by a Foreign Entity for claiming Small Entity Status as per Patent Rules, Form-28.
  • Hearing notices are not received, thereby leading to abandonment of the application, in case the hearing is not attended.
  • Hearings are pending in respect of post grant matters and review petitions.

c) There is no mechanism to keep a check on the opposition filed against a patent/patent application, and also the same including Pre-grant opposition is not served to the Applicant.

 
d) Other Issues

  • IPOs should provide FAQs with regard to Start-up , NBA and TKDL and allied subject.
  • IPO must conduct user satisfaction survey on quality of examination.

The IPO considered these issues and is implementing the following change:

  1. IT Support Cell has been established to provide necessary help and resolve the problems relating electronic communication. This has helped IPO in the errors relating to e-communications to less than 1%.
  2. IPO will be implementing IPO2 version of patent database, which will make filing of patent application easy and efficient and would resolve other websites issues.
  3. IPO clarifies that a Foreign entity may submit the financial statement showing its annual turnover in order to claim Small Entity Status complying with the provisions stipulated under MSME Act 2006 of India
  4. IPO advices the applicant to ensure that none of the mails regarding IPO shall drop in the spam account.
  5. In order to settle the work load of IPO with respect to FER, amended cases and post-grant matters and for clearing the pendency of matters, the Controllers appoint hearings.
  6. IPO is under the process of developing a separate module for tracking and updating the proceedings related opposition.
  7. With regard to the FAQs faced by stakeholders from their clients, IPO welcomed to answer all the FAQs provided that the stakeholders shall submit a list of such FAQs.
  8. IPO is developing a separate window of the IPO website in order to facilitate user satisfaction survey on quality of examination.

 II. Trade Mark

a) Trade Mark Registry does not allow any amendment to user details defying to the directions given by Delhi HC through decision.

b) TMR do not exercise a uniform Practice in show cause hearings with regard to interpretation of law.

c) Video Conferencing in Trade Marks should be implemented.

d) Refusal orders are sent even after filing the required documents. TMR Chennai is not handling post-registration matters.

e) There is no up-gradation of records of TMR, which results in citing in the examination report, those marks that were registered but not renewed. The dead marks continue to remain in the records of Trade mark register.

f) Hearings in international matters are being held at Mumbai Trade Marks Registry only. However, Section 36C states that an international application shall be dealt with by the head office of the Trade Marks Registry or such branch office of the Registry, as the Central Government may, by notification in the Official Gazette, specify.

The steps taken by IPO with regard to the above raised issues:

  1. IPO clarified that Delhi high Court has directed to decide the amendment of user details on case to case basis and no other administrative directions can be issued in this regard. IPO confirms that the matters are refused only in case of insufficient supporting documents.
  2. Trade mark Registry is under the process of preparing a Module for the purpose of registered user.
  3. In order to bring consistency in the proceedings, All hearing officers are being provided with a regular basis training program.
  4. IPO is seriously considering to implement the use of Video Conferencing and thus, the same is under Trial in TMR.
  5. Appropriate action has been taken up for sorting any issues related to proceedings of the post registration matters.
  6. TMR has noted the concern regarding non-up-gradation of Trademark records and appropriate actions will be taken against it.
  7. TMR will be providing Video-conferencing facility in order to conduct the hearings of International matter at all branch office.

 III. DESIGNS

a) There are many technical issues regarding online filing of Designs application. Few of the problems are:

  • Application forms drafted using the online portal are non-editable, therefore, if any amendment has to be made, the whole application is to be drafted again.
  • The fee receipt issued for online applications do not show details regarding classification of articles.
  • The online portal of the Design Office do not provide any applications except certified copies.
  • The applications filed online sometimes are objected to submit original application form and representations, thereby, duplicating efforts and increasing timelines.
  • The online portal do not show any update regarding any amendments/assignments made in the design post registration.

The Indian Patent and Design office has noted the above issues and are in the process of updating the Module to resolve the issues relating to online filing of applications.

IV. COPYRIGHT

a) IPO do not have efficiency and transparency as the Copyright office does not timely acknowledge or respond to the applicant. In many cases, the copyright office asks the applicant to re-submit copyright work without providing any explanation for the same.

b) Copyright – Searchable data is not available

The steps taken by IPO with regard to the above raised issues:

  1. The Copyright office has taken various steps to reduce the pendency of applications, which has brought a positive change.
  2. The Copyright office website has started to display the application received on a monthly basis, in order to increase transparency and stakeholder’s participation and to make it easier for the applicant to keep a track on the status of the Application. This also helps in facilitating information to the stakeholders and thereby, providing them an opportunity to file an objection if any before the Registrar of Copyrights.
  3. Further, the communication regarding Discrepancy Letter and the Register of Copyrights (R.O.C) between the Copyright Office and the Applicants can be transmitted via emails registered on: http://www.copyright.gov.in.
  4. Copyright Office has also published the Practice and Procedure Manual for examination of Literary, Artistic, Musical, Sound Recording and Cinematograph Films.
  5. Preparation of database for past copyright register for search purpose is under consideration.