Category Archives: Legal Issues

Case Summary of “Ajanta Pharma Ltd. v Theon Pharmaceuticals Ltd.”

This article summarises the judgment of High Court of Bombay dated 5th May 2017 in the case Ajanta Pharma Ltd. v Theon Pharmaceuticals Ltd.”.

FACTS:
The case has been filed before the Bombay High Court by Ajanta Pharma Ltd. (hereinafter “Plaintiff) seeking interim relief in a pharmaceutical trade mark and passing off action against Theon Pharmaceutical and Intas Pharmaceutical (hereinafter “Defendants). Initially when the lawsuit was brought, the claim of the Plaintiff was against the use of the mark “FERINTA” by the defendant which was deceptively similar to the mark of the Plaintiff i.e. “FERANTA”. Later, the defendant agreed to discontinue using the mark and it started using “INTAS’ FERINTAS”, with the letter FER in black, and the rest in a rust red color and FERINTAS set in an oval lozenge device. Now the Plaintiff has sought an injunction order against the defendants for the use of the mark “INTAS’ FERINTAS” under the provisions of the Trade Marks Act, 1999 (hereinafter “the Act).

       feranta           ferintas

ARGUMENTS ADVANCED:

The defences taken by the Defendants –

  • The first defence is also known as the ‘copycat defence’ which means that the Plaintiff has indulged in copying of another mark and therefore, they cannot take an action against the Defendants.
  • The second defence was that the Plaintiff goods were sold as a pharmaceutical drug whereas the Defendant’s goods were sold as a food or dietary supplement. The goods are different and the slightest difference in the formulation or the prescribed use is sufficient.
  • The third defence was that the Defendants were honest in adopting their mark. The Defendants have coined their mark by combining the principal ingredient and the main purpose with their corporate name. So the mark was coined as FER-INTAS from Ferrous and INTAS.
  • It was further contended that Class 05 has a wide sweep and within that class if the Plaintiff has used their mark only for pharmaceutical and never for a food supplement then there is no likelihood of confusion. Therefore, the present case falls under the ambit of Section 29(2) of the Act.The test in 29(2) is not of deceptive similarity, but of likelihood of confusion; and, therefore, if this likelihood of confusion is not established, no injunction can be granted.

The counter arguments taken by the Plaintiff –

  • The first counter argument was that the Plaintiff is not guilty of copying its mark. The mark’s registration lapsed in 1989; and it was never in use but only ever proposed to be used.
  • The second counter argument was that the goods were registered under the same class and no such sub-classification can be made to differentiate the goods. According to the Nice Classification, pharmaceuticals include dietary and meal supplements and dietetic foods adapted for medicinal use (but, importantly, do not include meal supplements and dietetic foods not for medicinal use). Also, the ingredients of both the goods are precisely the same and they serve the same purpose. Both the goods are sold to treat Anaemia.
  • It was contended that the Defendants were aware about the Plaintiff’s prior registration. Also, in an infringement action, honesty in adoption of a mark is totally irrelevant to a question of deceptive similarity.
  • It was contended that the Defendants’ mark is similar; used in relation to similar, and possibly identical goods; and results in the Defendants’ mark, or the goods under it, being associated with the Plaintiff’s mark and therefore, the goods are deceptively similar.It was further contended that the injunction is demanded on public interest and if the Defendants are allowed to use the mark it will harm the public interest.

DECISION OF THE COURT:

The Court held that –

  • The two marks have to be seen has a whole to determine if there are any chances of confusion. The test is the impression of a consumer who is of average intelligence and imperfect recollection.
  • There is no prima facie case made out against the Defendants and no injunction order can be granted.

CONCLUSION:

The Court while adjudicating on the question of whether the marks are similar or not observed that the Plaintiff’s mark is a word mark whereas the Defendant’s mark is a composite word and label mark which uses a distinctive black-and-red colour combination. Also, it serves a dual purpose: it visually and structurally distinguishes the Defendant’s product from the Plaintiff’s product, and it proclaims proprietorship and ownership in its product. The Honorable Court placed reliance on the case of JR Kapoor v Micronix India,1994 Supp (3) SCC 215 and held that the two marks have to be compared as a whole to see if there are any remotest chance of buyers and users being misguided or confused. The Court, therefore, held that the two marks have to be compared as a whole and any dissection of the mark is unacceptable.

The Court referred to the case of Indchemie Health Specialties Pvt. Ltd. v Intas Pharmaceuticals Ltd., 2015 (63) PTC 391 (Bom) observed that “Whether or not we should make fine distinctions when looking at goods that, though in the same ‘class’, are used in distinct ways is a question that would arise if one found a similarity in the marks to begin with.” The Court further observed that if the Plaintiff’s argument regarding the Nice Classification is accepted, it is clear that Class 05 does not include meal replacements, dietetic food and beverages not for medical or veterinary use. If the Defendant’s product can be proved to be such a dietetic food then it is another point of distinction.

The Court rejected the contention of harming public interest by referring to the case of Shaw Wallace & Co. Ltd. v Mohan Rocky Spring Water Breweries Ltd.2006 (4) Mh LJ 396, stating that the public is required to be protected from being deceived but that would be a point of contention when the two marks are similar. The Court rests the other counter-arguments of the Plaintiff by stating that “If no similarity is found and a prima facie is not made out, then there is no question of even having to consider the question.

The Hon’ble Court held that the mark FERANTA is not deceptively similar to the markINTAS’ FERINTAS and no prima facie case can be made out therefore no injunction can be granted against the Defendants.

Note: Several quotations from the judgement are included in this article. The complete judgment can be found here.

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

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Glenmark Pharmaceuticals Vs. Galpha Laboratories COMIP (L) NO. 1063 OF 2018

(Bombay High Court Decrees Against The Infringer For A Whopping Amount Of 1.5 Crs To Be Paid To Kerela Relief Fund)

Glenmark Pharmaceutical, which has been always vigilant of their products and IP rights was successful in instituting an IP infringement suit against Galpha Laboratories, which resulted in a distinct judgment and a whooping amount of 1.5 Crore damages to be paid by the infringer as a donation to Kerala flood relief.

Galpha Laboratories were involved with manufacturing of the infringing medical product under the infringing trademark “Clodid B”  deceptively similar to the Plaintiff’s famous medical product of Plaintiff – “Candid -B”.

The Bombay High Court relied heavily on the judgment pronounced by Delhi High Court in the Win-Medicare Pvt. Ltd. Vs. Galpha Laboratories Ltd. & Ors.[1], which declared the defendant a ‘habitual infringer’ as was evident from many cases that has been instituted against it by various parties such as Times Drugs and Pharmaceuticals (P) Ltd., Smithkline Beecham PLC and Jagsonpal Pharmaceuticals Ltd.

The plaintiffs highlighted that Galpha Labs has sold the impugned goods bearing the mark CLODID worth Rs 2.92 crores (approx). The Court also found out that Defendant’s drugs and medicine do not meet the standard as prescribed by the Government authorities and FDA regulations and thus, raised concerns over the health of consumers and general public, who are being repeatedly cheated by the Defendant.

After repeatedly being sued by other pharmaceutical companies for their IP infringement and found guilty thereon, the Defendants were audacious to carry on manufacturing substandard, infringing medicinal product. Thus, the hon’ble Court held the Defendant liable and opined that they are a habitual offender with a set modus operandi of copying brands of other companies to make profits.

Although, the defendant submitted that he is willing to submit a decree and bring the present suit to an end.  But looking at continuous and habitual act of infringement by the Defendant, the Court decreed against the defendant, a whopping amount of 1.5 Cr as damages along with permanently restraining them from using the infringed product. The Court also directed the infringing party to manufacture the product in compliance of FDA regulations.

Such serious damages were ordered by the Hon’ble Court to deter the infringer from infringing other products. Such judgment showcases firstly, the seriousness of the Judiciary with respect to the protection of intellectual Property, and secondly,  the changing nature of punishment from mere penalty to punitive damages imposed upon the infringer as actual deterrent factor is when defendants have to participate in the proceedings and have to shell out money from their pockets.

Another prominent factor of this judgment was that the Court ruminated over the catastrophe that has hit Kerala recently, which has been categorized as L3 Level of Disaster by the National Disaster Management Guidelines. Therefore, the Defendant was directed to pay the damages to the Chief Minister’s Distress Relief Fund, with the consent of the Plaintiffs.

Such kind of damages decreed against defendants helps in maintaining transparency among public, thereby keeping faith among them  and  provides incentives to the entities in knocking the doors of the Judiciary for restoration and enforcement of IP rights.

Author: Pratistha Sinha, Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

Reference:

[1] Win-Medicare Pvt. Ltd. Vs. Galpha Laboratories Ltd. & Ors. reported in 2016 (65) PTC 506 (Del)

Case Analysis: Alice Corp. V. Cls Bank (134 S. Ct. 2347 (2014))

Introduction

The Patent Statute of the US defines patentable subject matter as ‘any new and useful process, machine, manufacture, or composition of matter’ and any improvements.[1] But patent cannot be granted for laws of nature, natural phenomena or abstract ideas. In most of the countries, software cannot be patented unless it forms an element within a hardware or a system. However in June 2014, the US Supreme Court’s ruling in the Alice Corp. v. CLS Bank sent software patents down the rabbit hole. Essentially, the Court ruled that ‘implementing the abstract idea’ on a computer does not make it patentable.[2]

Background of the Case

The patent at issue in the instant case disclosed a computer- implemented scheme for mitigating “settlement risk” i.e the risk that only one party to a financial transaction will pay what it owes, by using a third- party intermediary.[3] Alice alleged that CLS Bank International and CLS Services Ltd. began using similar technology in 2002 and therefore CLS Bank had infringed Alice’s patents. CLS Bank filed suit against Alice in 2007, seeking a declaratory judgment that the claims of Alice were invalid. Alice counterclaimed infringement.

The District Court held that all the claims of Alice are not eligible to be patented because they are directed to the abstract idea of “employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk”.[4] A divided panel of the United States Court of Appeals for the Federal Circuit reversed the order holding that it was not ‘manifestly evident’ that Alice’s claims are directed to an abstract idea. In 2013, the members of the Federal Circuit vacated that decision and set the case for argument en banc and again found the claims too abstract in a decision that had the judges produce seven different opinions. The panel as a whole could not agree on a single standard to determine whether a computer- implemented invention is patent eligible or an ineligible abstract idea.

Held and Analysis

The Supreme Court in several years preceding the Alice decision decided three cases with the same issue of whether a claimed invention was patent eligible. The Court, to reach the decision in Alice referred to these cases. In Bilski, the Court held that a method for hedging commodity prices were ineligible.[5]A five-justice majority held that the claimed method was not eligible to be patented because it was an abstract idea but declined to rule that all business methods were ineligible. The Bilski Court offered negligible guidance on the test of determining whether a patent claim covered an abstract idea or was “too abstract”. On the other hand, while there was a sharp disagreement over the best ground on which the case must be decided, and a very narrow judgment, no justice disagreed that Bilski sought impermissibly to patent an abstract idea.[6]

Next in the case of Mayo, the Court invalidated a patent on a medical diagnostic as it very defensively covered the underlying natural principle or law of nature on which the test was based.[7] The Court basically held that a process that focuses upon use of a natural law must also contain other elements or combination of elements, sometime referred to as an ‘inventive concept’, sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself; it had to be sufficiently creative that it added something of substance to the natural law.[8] The case from which Mayo took the principle was Flook, which declared the rule n denying patent eligibility to an implementation of a mathematical algorithm.[9] A year after Mayo came the Myriad case wherein the issue was whether what was said to be a “product of nature” could be patented. The narrow holding was that DNA was not subject to patenting but cDNA because it is derived by seemingly more complex means; it is deemed not a product already found in nature.[10] The central and unique feature of the legal analysis of the Myriad and the Mayo case was that conventional or trivial expedients do not hold any weight in the patent- eligibility analysis.

While interpreting §101, the Alice Court began: “We must distinguish between patentsthat claim the building blocks of human ingenuity and those that integrate the building blocks into something more, thereby transforming them into a patent- eligible invention”.[11]Relying on Mayo, the Court opined in the Alice Case that an abstract idea could not be patented just because it is implemented on a computer; the software implementation of an escrow arrangement was not eligible for patent because it is merely an implementation of an abstract idea. Further, in cases where the Court has to decide whether a claim is patent eligible or not, the ‘Mayo Framework’ should be used. The Court explained that in order to determine whether a patent claimed a patent-ineligible abstract idea or instead a potentially patentable practical implementation of an idea, a ‘two-step’ analysis must be applied.

In the first Mayo step, the court must determine if the patent claim at hand contains an abstract idea. If not, the claim is potentially patentable subject to other requirements. If this essential stands fulfilled, the court must proceed to the next step. In the second step analysis, the Court must determine whether the patent embodies the inventive concept. This basically means that the implementation of the idea must not be generic, conventional or obvious if it is to qualify for a patent.

In brief the Court gave the judgment that “merely requiring generic computer implementation fails to transform [an] abstract idea into a patent eligible invention; mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent- eligible matter”[12]. Also, stating an abstract idea by adding the words ‘apply it’ is not enough for patent eligibility. [13]

Conclusion

Admittedly, the Supreme Court did not offer the clearest guidance on when a patent claims merely an abstract idea, but it did gave in the guidance that should help to invalidate some of the more egregious software which seek patent protection. Further the Court suggested that claiming a well understood, routine and conventional feature at a higher level of generality does not suffice for an ‘inventive concept’ but the Court provided meager guidance over those somewhat extreme examples. Moreover, the Court did not ‘labor to delimit the precise contours of the ‘abstract ideas’ category. Due to absence of clear guidance from the Supreme court, lower courts have at times faced difficulties in determining what constitutes an abstract idea and what an ‘inventive concept’ would be. The Alice Case has taken a heavy toll on patents for computer related inventions, particularly software patents. There remain a lot of unexpired patents that were granted before the Supreme Court’s decision in Alice. Therefore before filing a lawsuit for infringement of a software patent it is pertinent to scrutinize the claims in the light of the Alice case.

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

References:

[1] U.S. Code 35 §101.

[2] Daniel Nazer and Vera Ranieri, Bad Day for Bad Patents: Supreme Court Unanimously Strikes Down Abstract Software Patent, Electronic Frontier Foundation, June 19, 2014.

[3] Alice Corp. v. CLS Bank (134 S. Ct. 2347 (2014)).

[4] 768 F. Supp. 2d 221, 252 (DC 2011).

[5] Bilski v. Kappos, 561 U.S. 593 (2010).

[6] Richard H. Stern, Alice v CLS Bank: US Business Method and Software Patents marching towards oblivion,http://docs.law.gwu.edu/facweb/claw/Alice-EIPR.pdf

[7]Richard H. Stern, Bilski: A ‘Flipped’ Vote and then a Damp Squib (2011), https://www.researchgate.net/publication/318837752_Bilski_A_Flipped_Vote_and_then_a_Damp_Squib.

[8] Mayo v. Prometheus Labs 132 S.Ct.1289 (2012).

[9]Ibid at 1289 (citing Flook  437 U.S. 584).

[10] Association for Molecular Pathology v. Myriad Genetics Inc 133 S.Ct. 2107 (2013).

[11]Supra No. 3 at 2354 (2014).

[12]Ibid at 2358.

[13]Ibid at 2358.

Brand Protection: A Lesson from Louboutin

In todays’ consumerist day and age, the brand value of a company is key to its profits. It takes years to set up a unique brand that appeals to consumers and becomes a leader in its sector of the economy. Various factors such as intensive research and development, smart marketing and, publicity contribute to building a brand’s reputation and make it sought-after. A higher value of the brand also allows the company to charge more for its products.

The counterfeiting conundrum

However, today’s markets are also rife with counterfeit products that rip off the characteristics, designs and logos of high-end brands and sell them at extremely cheap rates. Most of these products come from China and Hong Kong. India is the 6th biggest origin destination for these products. According to a report published by the Organisation for Economic Cooperation and Development in April 2016, the estimated value of cross border trade in fakes is close to $461 billion a year or about 2.5% of global imports.This is harmful for the original brand’s revenue, reputation and relationship with consumers. Sometimes, even designer brands can copy local brands without any permission such as the dispute between Christian Dior and People Tree, an Indian brand. But, brands can protect themselves by seeking protection of Intellectual Property (“IP”) Rights. They can enforce the trademarks and copyrights associated with the products to make the infringers compensate for their wrongdoing.

 Louboutin: The Red trademark battle

The latest landmark trademark case was fought between famous designer shoe brand Louboutin and vanHaren, a Dutch company. The case was with respect to Louboutin’s demand that its signature red soles (Pantone 18-1663TP) be protected from all copycats. It involved European trademark law, specifically Article 3 of Directive 2008/95 and whether a trademark that consists of a colour applied to a shoe consists exclusively of a shape and thus cannot be protected as a registered mark or whether it was a position mark. A position mark is basically the specific way in which the mark is placed on the product.

The European Court of Justice finally ruled in favour of Louboutin. The ECJ stated that, “In that regard, it must be noted that, while it is true that the shape of the product or of a part of the product plays a role in creating an outline for the colour, it cannot, however, be held that a sign consists of that shape in the case where the registration of the mark did not seek to protect that shape but sought solely to protect the application of a colour to a specific part of that product…..the mark at issue does not relate to a specific shape of sole for high-heeled shoes since the description of that mark explicitly states that the contour of the shoe does not form part of the mark and is intended purely to show the positioning of the red colour covered by the registration.”

This ruling shows that Courts are refusing to let counterfeit products continue to thrive. Additionally, the affected brands are willing to take legal action or settle out-of-court (as done recently between People Tree and Christian Dior). But for this, it is necessary that companies are aware of the value of their brand and the importance of managing a strong IP portfolio to strengthen protection.

Author: Aparajita Kaul, Legal Intern,  at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

Fluentgrid Limited Vs. Esyasoft Technologies Private Limited And Others

Fluentgrid Limited, Plaintiff, is a Indian company, which has been carrying out its business in India since the year 1998. It is engaged in providing information technology services through Smart Grid Products under its registered trademark, “mpower” and domain name http://www.fluentgrid.com, along with its website http://www.nxter.io, which is its cloud solution for energy retailers. The Plaintiff, being proactive in protection of its IP, issued a cease and desist notice against the defendants for using deceptively similar trademark “mPowerFlo” and “damages” on 30th April 2018, which was not complied with, by the defendants and further went on to file an application for registering its  impugned  Trademark “mPowerFlo” before Trademark registry, to take refuge of legal protection for the illegal acts of trademark infringement and passing off the registered trademarks and brandnames of the Plaintiff.  The Plaintiff sent a last and final notice to the defendant on 18th May 2018, which was again denied by the Defendant. Finally, a suit seeking temporary and permanent injunction, rendition of accounts and payment of damages, was filed by the Plaintiff against the Defendants before the Hon’ble High Court of Delhi.

The Plaintiff was able to establish a prima facie case before the Court and the Hon’ble High Court of Delhi was pleased to grant an ex-parte ad-interim injunction to the Plaintiff against Defendants restraining them to use the mark “mPowerFlo” or any other mark that is similar or deceptively similar to the Plaintiff’s mark ‘mPower’ vide its order dated 01.06.2018.

Upon finding a strong case in the favour of Plaintiff, the Defendants bowed down to the demands made by the Plaintiff with respect to permanent injunction and sought a compromise in lieu of waiving other reliefs as prayed by the Plaintiff in their plaint such as damages and rendition of accounts. The plaintiff agreed to their proposal and pleaded the court to record the Defendant’s admission of infringing the Plaintiff’s Trademarks.

Thus, the case was decreed in favour of Plaintiff by permanently restraining the Defendants from using the infringing marks vide order dated 16.07.2018. The Plaintiff has been successful in enforcing its IP rights through this case and has put its foot down to demonstrate to others, the consequences of infringing any of its intellectual property rights.

Author: Pratistha Sinha, Associate,  at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

Trademark Suit Filed For Infringement/ Passing Off Was Successful At the First Stage

(L’AirLiquideSocieteAnonyme  pour  l’etude  et l’exploitation  desprocedes  Georges  Claude  and Anr vs. Liquid air & Ors.)

 L’AirLiquideSocieteAnonyme  pour  l’etude  et l’exploitation  desprocedes  Georges  Claude  and Anr, Plaintiff No. 1, a company incorporated under the laws of France and operating in Indian territory through Air Liquide India Holding Private Limited,  Plaintiff no. 2 under the trade name “Air Liquide”, and domain name http://www.airliquide.com. The Plaintiffs being vigilant enough to protect their tradename issued a Cease and Desist notice against the Defendants as soon as they became aware of the unlawful acts of the defendants, wherein the latter was using deceptively similar trade name “Liquid Air” and domain name http://www.liquidair.in under the same class of goods as that of the Plaintiffs. The same was admitted by the Defendant and they had undertaken to accept the demand and thereby refrain from using the infringing trademark. It was also agreed that a MoU will sign for the same purpose. However, the defendants later denied the compliance and refrained from signing the aforesaid MoU. Thus, the Plaintiffs filed a suit in the Hon’ble High Court of Delhi against defendants seeking appropriate remedies under the laws.

In the aforesaid case, the Plaintiffs were able to successfully establish a prima facie- case before the Hon’ble High Court of Delhi and thereby secured injunction in its favour vide order dated 09.05.2018, which restrained the defendants from directly or indirectly dealing in any goods/service similar to that of the Plaintiffs as well as from using any name similar to that of Plaintiff’s domain or trade name.

Despite the above mentioned order passed by the Hon’ble High Court, the defendants in contempt of the said order, continued to use their impugned trademark through their website http://www.liquidair.in. Thus, the Plaintiffs filed a Contempt application under Order 39 Rule 2A of the Code of Civil Procedure, 1908 against the defendants for disobedience of injunction order. However, after receiving the notice of such application, the defendants were compelled to pull out their website before the next date of hearing on 01.08.2018.  Consequently, the application was disposed off on 1st August 2018. However, the Court clearly reiterated the injunction against the defendant and sternly directed them from refraining to use the impugned trademarks for the same or similar business.

Author: Pratistha Sinha, Associate, Priya Singh, Legal Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

Case summary of “Cabell v. Zorro Productions, Inc.”

BRIEF INSIGHT INTO THE DISPUTE:

Introduction:

This case is a result of copyright infringement of a musical based on the story of Zorro.The character of Zorro originally was developed by Johnst McCulley which was further adapted in stories. All of the stories are part of public domain. Cabell (hereinafter “the plaintiff) made a musical based on the story available in public domain and Zorro Productions (hereinafter “the defendant) is the assignee of the character Zorro. The Plaintiff produced a musical titled “Z – The Musical of Zorro” and got its scripts and audio with the U.S. Copyright for original, novel elements of his work but not the elements in the public domain as of 1996.

The Plaintiff met the Defendant for the production of the Musical but the agreement did not materialise and the defendant gave a legal threat to the Plaintiff not to publish their work without a license from them. Later, the Defendant licensed the use of the character Zorro to Allende in 2005 and separate musical in 2008.

Facts:

  • The Plaintiff filed an infringement suit claiming that the novel and the musical was infringing its musical and seeking a declaration that the Plaintiffs’ musical is not infringing the copyright of the Defendant.
  • The Defendant cross-moved an application claiming that the Plaintiff was infringing its copyright.

ARGUMENTS BEFORE THE COURT:

The arguments advanced by the Plaintiff are –

  • The Defendant had access to the script of the musical of Plaintiff due to their exchanges with respect to a licensing agreement in 1966 which did not materialize.
  • The Plaintiff contended that there was substantial similarity between both the works.
  • The Plaintiff further contended that three characters from its script were sufficiently developed and therefore, it should be granted protection.
  • The Plaintiff’s musical was based on public domain and therefore, does not infringe the copyright of the Defendant

 The arguments advanced by the Defendant are –

  • The Defendant contended that the Plaintiff’s musical is infringing its copyright.
  • The Defendant further contended that Statute of Limitations will be applicable because when both the parties met for the licensing agreement, the Defendant had informed the Plaintiff that its musical is infringing the copyright of the Defendant.

DECISION OF THE COURT:

The court thus decided;

  1. That the Plaintiff’s musical does not infringe the Defendant’s copyright over the character of Zorro.
  2. That the Defendant’s musical and novel does not infringe the Plaintiff’s musical and does not have similar theme and setting.

CONCLUSION:

The Court analyzed the plaintiff’s claims. It was not disputed that the Defendant had access to Plaintiff’s script as a licensor holds a supervisory authority and there was an agreement between the Plaintiff and the Defendant which did not materialize so the Court cannot rule out a possibility of the Defendant having an access to the script. The Court followed the extrinsic test to conclude if there is a substantial similarity between the two works. The extrinsic test focuses on “articulable similarities between the plot, themes, dialogue, mood, setting, pace, characters, and sequence of events”. The Court determined that the plot of the novel was focused on the character Zorro’s childhood whereas the Plaintiff’s musical is based on Zorro when he is an adult. The Court found differences in the settings, theme, pace, mood and tone of the two works.  The Court concluded the claim of the Plaintiff by adjudicating that the claim of Plaintiff that three characters from the musical were sufficiently developed in the novel cannot stand as there is no substantial similarity between the two and the treatment given to them is also dissimilar.

Adjudicating on the claim of the Defendant that the Plaintiff is infringing its copyright, the Court concluded that a reasonable person will not find substantial similarity between the two musicals. The Court disagreed with the contention that Statute of Limitations will be applicable in the present dispute as the Defendant has the right to file an infringement claim whenever the Plaintiff produces its musical. The Court rested the dispute by applying the doctrine that a party abandons claims by not raising them in opposition to a summary judgment motion and held that the Defendant had abandoned its claims of copyright infringement by not raising it in opposition to a summary judgment motion and passed a declaratory judgment claim in favour of the Plaintiff in this regard.

Note: Several quotations from the judgement are included in this article. The complete judgment can be found here.

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

Too General To Be Trademark-Able: A “Cocky” Debate

There have been plethora of cases in India and abroad that discuss the menace caused due to monopolization of general English terms in course of business. The argument given by the proprietors is that to get a trademark over a name, it is important that the name is arbitrary and it does not describe the product that is being sold under it. While the importance of getting protection over one’s intellectual property is stressed upon, the bigger problem here lies with the concept of owning a name that everyone knows and uses in their day-to-day life. “Trademark Overreach or Trademark Abuse” refers to this practice of using and monopolizing general words as brand names. This article analyses the predicament of dominating general words for business purposes while highlighting upon the recent ‘COCKY’ controversy.

The COCKYGATE:

After Penelope Ward and Vi Keeland’s book ‘The Cocky Bastard’ became a major hit in 2015, number of romance novelists titling their books ‘Cocky’ was on the increase. The word is adored by these novelists for its implication to alpha-male heroes and for its under-playing potential. On 17th April 2018, the United State Patents and Trademark Office (USPTO) invited litigation when it granted a troublesome trademark on the general English word “COCKY”. Crux of the matter is that, self-published author Faleena Hopkins had filed for registration of trademark on the word “Cocky” in relation to a series of downloadable e-books in the field on romance, ‘Cocker Brothers of Atlanta’. The 19 book series is about Cocker brothers where each book features the word ‘Cocky’ in the title (books in the series can be viewed here Cocker Brothers Series). Adding fuel to the fire, Ms. Hopkins also wrote out to other authors to cease and desist from using the word in their book titles. Many authors like Jamila Jasper, Bianca Somberland have received notices from Ms. Hopkins stating that they should change the name of their books or else face legal actions. She also filed a complaint against these authors with Amazon as a consequence of which Amazon took down their books from sale. The matter came to light last week when many authors resorted to social media to write about the letters received from Ms. Hopkins with #COCKYGATE. The actions of Ms. Hopkins had led to an outcry in the romance writers’ community.

A petition to cancel the registration of ‘Cocky’ has been filed in the USPTO which has been signed by 17,000 people so far. The writers have claimed that romance novels usually involve alpha-male protagonists who are frequently described in the titles with this word. They also claimed that such generic terms cannot be trademarked. In her defense, Ms. Hopkins claims that ‘COCKY’ is an essential part of the titles of her books, hence, require protection. She said that she is received letters from the readers who lost their money thinking they bought her series. She stated that she is trying to protect the interests of such innocent buyers.

Analysis:

As stated earlier, general terms are not trademark-able. General terms refer to the terms or words that we use regularly in our day-to-day affairs or which are words of common tongue. General term is a term which ideally should not become the exclusive property of a single firm but at the same time it maybe a term which describes the source of a product or service provided under it; therefore, must not be appropriated by the rivals to use freely. Such terms cannot be trademarked unless they have attained a secondary meaning. A trademark claim may be overreaching if a mark similar to the registered mark comprised of a general term is separately registered and used in relation to a different class of goods. The court must not deny the defendants from using the general trademarked term unless it has acquired secondary distinctiveness.

Secondary Distinctiveness: An American Overview:

Federal Trademark Act, 1946 popularly known as the ‘Lanham Act’ governs the trademark law in the United States.  The act allows the owners of trademarks and service marks to register them on Principal Register. The refusal of registration is constrained to certain grounds enumerated in Section 2(a), (b), (c), (d) and (e) which includes grounds like mark being deceptively similar to another mark already registered, consists of immoral, deceptive or scandalous matter etc. This section is the American counterpart of Section 9 of the Indian Trademark Act, 1999, however, Section 2(f) of the Lanham Act provides an exception to refusal of registration on grounds of section 2(a), (b), (c), (d) and (e) (3), (e) (5). It states that “nothing herein shall prevent the registration of a mark used by the applicant that has become distinctive of the applicant’s goods in commerce”, thus, in US too, a general term can acquire protection only if the term has acquired a secondary meaning.

The Judicial outlook on this matter in United States is also in consonance with what the Act most states. Commonly descriptive terms or general terms used by the public or other businesses to describe a particular good cannot be trademarked unless it has acquired a distinctive meaning, in the sense that the public associates the term to a particular product of a particular company. Yet, there have been cases like the CITI Bank’s matter against AT&T over the term “THANK YOU”. The court sided with the defendants and stated that the term had achieved no secondary meaning, hence, CITI Bank cannot monopolize it.

Secondary Distinctiveness: Indian Perspective:

Section 9 of the Trademark Act, 1999 lays down the grounds for absolute refusal of registration of trademark and includes that a mark that is descriptive of the goods and services purported to be sold under it cannot be registered. It also bars registration of marks which have become customary in the current language or in bona fide and established practices of trade, however, the section gives an important exemption to the marks that have acquired distinctive character as a result of their use maybe registered. The exemption gives birth to the idea of ‘secondary distinctiveness’ which relates to the situation where certain terms acquiring a secondary meaning because of its use in the common parlance; such terms may be trademarked.

Examples of trademark overreach in India are many ranging from Ultratech’s claim over the term ‘Ultra’, or Reebok’s claim over the phrase ‘I am what I am’. In all these cases, the court ratio emphasized on the fact that a general term can be granted protection if and only if it is proven that the term has acquired distinctiveness and that public relate to the term by this secondary meaning rather than a definite meaning.

Conclusion:

In the present case also, the USPTO must take into consideration the genericness of the term ‘Cocky’ and the manner in which it is used by romance novelists in their titles. Generic terms should not be allowed to be trademarked unless there is proof of its acquired distinctiveness. The evidence of secondary distinctiveness must be made mandatory for those seeking to register generic terms as trademarks. Further while entertaining infringement suits involving such generic terms the Courts should be cautious to identify if the claim is bona fide; meaning, the generic term trademarked by the Plaintiff has attained a distinctive character and the public at large associates such term with the products of the Plaintiff.

Author: Aishwarya M. Pande, 5th Year, BA LLB (IPR Hons.), Institute of Law, Nirma University, Ahmedabad, Legal Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

References:

[1] Trademark Registration no. 5447836 granted by USPTO

[2] http://tsdr.uspto.gov/#caseNumber=5447836&caseSearchType=US_APPLICATI

ON&caseType=DEFAULT&searchType=statusSearch

[3] Section 2, Federal Trademarks Act, 1946

[4] Section 9, Indian Trademarks Act, 1999

[5] https://timesofindia.indiatimes.com/life-style/books/features/romance-novelist-trademarks-word-cocky-stirs-up-controversy/articleshow/64108602.cms

[6] https://www.vox.com/culture/2018/5/15/17339578/cockygate-explained-romance-publishing-faleena-hopkins

[7] http://www.victoriastrauss.com/2018/05/09/trademark-shenanigans-weighing-in-on-cockygate/

[8]http://www.cbc.ca/radio/asithappens/as-it-happens-wednesday-edition-1.4665345/romance-writer-renames-book-after-author-trademarks-cocky-1.4665355

[9] James M. Treece and David Stephenson, ‘Another look at descriptive and generic terms in American Trademark Law.’,  66 Trademark Rep. pp 452,453

[10] Ultratech Cement Ltd. v. Dalmia Cement Bharat Ltd., (2015) 2 Mah LJ 354 (Bom)

[11] Reebok India Co. v. Gomzi Active, MANU/KA/0781/2006

Analysing Anuradha Doval V. Controller: A Revisit To Prior Publication And Novelty In Designs

Exactly a year back, Calcutta High Court gave an elaborate judgement discussing the conditions for grant of design. The case holds relevance as it discusses element of Novelty and Prior Publication in detail. This post will try to comprehensively analyse the case.

FACTS

The design-in-dispute is a bottle cap under class 09-01 bearing Application No. 222799. The Private Respondent applied for cancellation under all the grounds mentioned in Section 19 of the Designs Act, 2000. The grounds are:

a. Design has been previously registered in India.
b. Design was published prior to the date of registration.
c. Design is not new or original.
d. Design is not registrable under the Act.
e. It is not a design as per Section 2(d) of the Act.

The Private Respondent claimed that the design features of the bottle-cap were not original or new. To adduce his statement, he relied on three evidences. Firstly, he provided the impugned registration nos. 195268, 195269, 200344 and 200682. All these ‘registered’ designs had bottle caps and closures with shape and configuration which was claimed by the Applicant. Secondly, he also produced a document titled ‘Ambrosia’ which was a magazine published in January 2009 and alleged it to be a prior art. Thirdly, he contended that the claimed design was a conventional design which has been in use for a long time.

LEGAL TIMELINE

1.  Publication of magazine ‘Ambrosia’ Vol. 16 No. 8 JANUARY 2009
2.  Applicant filed for registration of ‘claimed’ design MAY 2009
3.  Design published in Journal MARCH 2010
4.  Private Respondent filed for cancellation of ‘claimed’  design under Section 19 DECEMBER 2012
5.  Controller upheld the cancellation of design
6.  Calcutta High Court upheld Controller’s decision APRIL 2017

 ISSUE

Whether the Controller was correct in allowing for cancellation of the registration of the design under Section 19 of the Act?

FINDINGS

In the present case, J. Soumen Sen found out that the Private Respondent is an expert and thus has the required expertise to decide the matter. The Court held that the claimed design was published prior to registration and hence liable to be cancelled under Section 19 of the Act. The Court relied on Ambrosia magazine and held that since it was published in February 2009, the design cannot be granted protection. It was devoid of novelty and originality. The Court upheld the decision of the Controller and justified the cancellation of registration of design.

ANALYSIS

The present judgement revisits the element of Novelty and Prior Publication. Both the conditions are grounds for cancellation of registration of design under Section 19 of the Act. The design in the finished article has to be judged solely by the eye is no new fact. The reason why this exclusion was granted to the eye was that the purpose of granting design is to encourage and reward design of a good product. This helps in protecting the skill, creativity and labor of product designers.

What amounts to prior publication is a question of fact. It depends upon case to case. The test of prior publication is satisfied only when the previously registered design is out in public. The details of the design applied to the article should be such that it is can be judged by the eye. A person of ordinary intelligence and imperfect recollection must be able to see the design in his mind’s eye and not rely on imaginative faculties in constructing the design. The main ratio is that cancellation of design will be allowed if the claimed design is substantially similar to the of the prior publication design.

J Sen also cited various landmark cases like Parle Products Ltd.(2008) and Gopal Glass Works (2005) to elaborate on the concept of novelty and publication. Specifications, drawings of any demonstration done in connection with the registration of design does not constitute publication per se of the said design. This applies in registration of a design in foreign country as well. It means that specifications of the design disclosed while getting a registration will not amount to prior publication. Also, the judgement states that to constitute prior disclosure, the publication needs to firstly, be in tangible form of the design so applied to the article. The main factor that needs to be compared in prior publication is the visual effect and the appeal of the picture illustration.

The Court also cites Reckitt Benckiser IndiaLtd. v. Wyeth Ltd (2013) and few paragraphs from Russell-Clarke and Howe on Industrial Designs VIIIth edition quoting:

“In practical terms, there are two main ways in which a design can be published: by prior use of the design, by selling or displaying to the public articles to which the design has been applied; and by paper publications of one sort or another. It is not, in fact, necessary that publication should be on paper; an oral disclosure, provided it is non-confidential, will amount to publication.”

One of the notable mention is of Section 4(1) of the Registered Designs Act 1949 of UK. It is an exception wherein no prior art will be constituted if the proprietor of the registered design applies for registration with modifications and variations subject to conditions in respect of another article. In such case, his previous registration or the publication of his design as registered will not constitute prior publication. However, the term of protection will be limited only to the term of original design. This proves to be a great deal in UK as an Applicant who finds out that the claimed design has been previously registered with respect to a different article is allowed to buy the earlier design and then enjoy the advantage under the said section.

However, there lies a shortfall in the judgement. J. Sen has based on his findings based on the expertise of the Respondent (Refer Para. 39 of the judgement). This has further been aggravated by absence of any mention of the qualifications of the un-named Respondent. The Court should have compared the features of the design physically. Rather, it just relied on the Respondent’s submission as he was an expertise in the said field. Apart from this point, the judgement is a must-read for summarizing the element of publication and novelty in Design protection.

Author: Esha Himadri, Legal Intern, at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

References:

[1] Anuradha Doval v. The Controller of Patents and Designs [2017(71) PTC 288 (Cal)]

[2] Section 19, The Designs Act 2000

[3] Parle Products Private Limited v. Surya Food & Agro Limited [2009 (40) PTC 638 (Mad.) (DB)]

[4] Reckitt Benckiser India Ltd. V. Wyeth Ltd. [2013 (54) PTC 90 (Del) (FB)]

[5] Gopal Glass Works Limited v. Assistant Controller of Patents & Designs & Ors. [2006 (3) CHN 188]

[6] Russell-Clarke and Howe on Industrial Designs [VIIIth Edition]

IP as Security (Canara Bank v NG Subbaraya Setty)

The cause of action for this case arose in 2003 on the assignment of the trademark ‘EENADU” by the defendant, NG Subbaraya Setty, in favor of the Petitioners, Canara Bank. This lead to two separate lawsuits: one by the borrower over cancellation of the assignment and another to recover the sum of money paid as royalty before the cancellation of the assignment deed with interests.

The case predominantly discusses whether the suit falls within the prohibition laid down under the principle of res judicata, also by sec 45 of the Trade Marks Act of 1999. The section specifies that any unregistered assignment cannot be presented as evidence in court of law. The assignment deed between the parties was never registered with the registry and thereby it cannot be accepted as a valid document under sec 45 of the TM Act. Furthermore, the party was of the opinion that the question of law was already decided by the courts by previously passed orders and therefore, the representation between the Supreme Court was barred by the doctrine of res judicata. However, the court in this matter held that if a question of law is wrongly decided by the other courts then that question being raised before the competent court between the same parties with the same cause of action is not barred by the doctrine of res judicata.

However, another important question in this case was whether the IP assignment was acceptable or not. The court held for this particular case that the assignment of IP was not valid. The reason for that was that the parties had not attached the IP as security or collateral at the time of entering into the loan agreement and the Court felt that subsequently an unrelated IP cannot be attached as collateral as a way to set off the claims of the banks. Furthermore, under Sec 6 and 8 of Banking Regulation Act a bank can only engage in certain types of business. And the selling of goods and obtaining royalty from the IP by way of a third party is not allowed as per Sec 6 and 8 of BR Act. Furthermore, the court clarified that a bank may sell the goods to set-off any claims it holds but it cannot do so by way of a third party and just obtain royalties from the goods which were never put as security or collateral before the bank. Therefore, in this particular case the assignment of IP was found invalid.

Now, ordinarily, the National IP Policy does allow for an IP to be attached as a security. However, the same is seen very skeptically by the banks since IP valuation can be tricky. Unless there is a system that makes registration mandatory, securitization will be very difficult in the Indian scenario. Any prior user who has not registered his trademark can challenge the claim of a registered IP owner as per current laws.[1] The banks would be left vulnerable in this case and the same can negate the whole purpose of allowing IP as security.

For example, in the much reported case of Vijay Mallya, his TM ‘Kingfisher’ was offered as collateral/security to the banks at the time of agreement and therefore did form part of security under sec 6 of BR Act. However, the auction of the TM was unsuccessful but it was a valid security nonetheless.

Therefore, it can be concluded that although IP as security is legally possible but it is a road less taken. The various aspects of the dynamic nature of the IP make it a very uncertain back-up for banks to realize their debts. However, if an appropriate method is introduced for valuation and registration then the banks may increasingly accept IP as collateral/security.

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

References:

[1]//economictimes.indiatimes.com/articleshow/50194124.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst