Category Archives: News & Updates

Intellectual Property of Singapore Launches ‘Patents Open Dossier’

In a bid to continue the growth of Intellectual Property regime in Singapore, the Intellectual Property of Singapore (IPOS) has launched the Patents Open Dossier (POD) on July 24, 2017 [1] [3]. The recently launched POD is an online database, which provides a single point of access for individuals/innovators to access published patent documents.

This POD service have been added to and is available on IP2SG, which is the online e-service portal [2] of IPOS, which enables the public with simple access to a collection of selected published patent documents under Section 27 of the Patent Act and which are not restricted for inspection pursuant to Patents Rule 93(4) and 93(5). These documents comprises of Inventor search reports, the office actions and responses for published patent applications lodged on or after 14 Feb 2014 under the positive grant system, among many others [3].

After the launch of POD, individuals are now able to analyze, view, monitor and manage the patent profiles, which are of interest to them. There are several other advantages of this POD, which are:

  • Reduced time and cost for an individual to extract and analyze patent information of their interest;
  • Enabled work sharing between different IP offices via a single platform for search and examination results; and
  • Enhanced transparency of patent system through easy and increased accessibility of file prosecution histories.

Also, as an administrative concession, the individuals will no longer be needed to furnish any published search and examination results established by IPOS under the positive grant system when they file a Patent Prosecution Highway (PPH) request in the Office of Second Filing. The effective date for IPOS to be a participating Office under the initiative will be announced on a later date.

As a central agency in providing its Intellectual Property consultations and networking for the current & future growth of Singapore IP regime, the IPOS remains at the forefront of the latest IP developments happening globally. With the launch of POD, IPOS joins the ranks of the IP5 Offices, namely, the US Patent and Trademark Office (USPTO), European Patent Office (EPO), Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO) and the State Intellectual Property Office (SIPO) that have developed a Global Dossier Initiative with the same purpose [1].

Below is the list of documents that are accessible and available for download on the POD platform [4]:

  1. Search Report
  2. Examination Report
  3. Written Opinion
  4. Search and Examination Report
  5. Written Submission in response to Written Opinion
  6. Examination Review Report
  7. Amendment and Correction of Specification
  8. Amendment and Correction of Abstract
  9. Patents Form and Common Forms (With the exception of Form CM10 and

Form CM12 and their related correspondence)

  1. Notification relating to the request made on Patents Form and Common Forms

(With the exception of Form CM10 and Form CM12 and their related correspondence)

Documents not available on Patents Open Dossier [4] are as below:

  1. Cover Letter
  2. Supporting Documents and Statements
  3. Statutory Declarations or Affidavit
  4. Certificate of grant of patent 

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

References

[1] https://www.ipos.gov.sg/media-events/happenings/ViewDetails/launch-of-patents-open-dossier/

[2] https://www.ip2.sg/RPS/WP/CM/SearchSimpleP.aspx?SearchCategory=PT

[3] https://in.linkedin.com/company/ipos-international

[4] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/circulars/(2017)-circular-no-5—launch-of-open-dossier-and-patents-formalities-manual.pdf?sfvrsn=0

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Cambodia, China Sign MoU on Cooperation in the Field of Trademark and Branding

In a further step towards the development and strengthening of Intellectual Property regime of both Cambodia and China, a Memorandum of Understanding (MoU) on Branding Cooperation between the Ministry of Commerce of the Kingdom of Cambodia and National Administration of Industry and Commerce of the People’s Republic of China was signed on September 06, 2017 [1][3]. This MoU aims at providing better facilities for trademark and brand registration in both countries.

The MoU signing ceremony took place in the city of Phnom Penh which is the capital of the Kingdom of Cambodia and was held under the presidency of HE Ouk Prachea, Secretary of State, Ministry of Commerce, High Representative of HE Peng Sosachak, Minister of Commerce, and HE Ma Zhengqi, Deputy Minister of National Administration of Industry and Trade of the People’s Republic of China. This MoU will further serve the purpose of strengthening and broadening cooperation between China and Cambodia on an equal and mutually beneficial basis in the Markets, and to also promote the growth of more brands in the respective nations. Additionally, the memorandum will protect consumers and producers’ interests.

This MoU is in continuation with the previous Memorandums [2] which have been signed between Cambodia and China for bilateral cooperation in Intellectual properties. In the press release dated September 6, 2017, on the online portal of Cambodia it is stated that, through this Memorandum both China and Cambodia will share the related documents of intellectual property and also include mutual study visits to strengthen intellectual property regime and trade protectionism. Further under this MoU, China through their experts will be helping in the training of human resources to Cambodia on brand protection and brand control. In addition, China will also in the promotion of Cambodian products exhibitions, as well as building more of Cambodia’s brand in the market.

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

Sources

[1] http://cambodiaip.gov.kh/NewsDetail.aspx?id=110051

[2]http://www.cambodiaip.gov.kh/DocResources/5e50267e-486b-4114-86ef-022e96df991d_c786a043-b88d-4f64-9429-60a330efdc5f-en.pdf

[3] http://www.akp.gov.kh/?p=109309

WORK PLAN FOR BILATERAL COOPERATION IN 2017-2019

WORK PLAN FOR BILATERAL COOPERATION IN 2017-2019

BETWEEN

THE NATIONAL COMMITTEE FOR INTELLECTUAL PROPERTY

RIGHTS (NCIPR)/MINISTRY OF COMMERCE (MOC)

OF THE KINGDOM OF CAMBODIA

AND

THE STATE INTELLECTUAL PROPERTY OFFICE OF THE PEOPLES REPUBLIC OF CHINA

On August 17, 2019 [1] the Intellectual Property Office of the Kingdom of Cambodia, on its online portal, released Work Plan for Bilateral Cooperation in 2017-2019 between the National Committee for Intellectual Property Rights (NCIPR)/Ministry of Commerce (MOC) of the kingdom of Cambodia and the State Intellectual Property Office (SIPO) of the people’s republic of China. The Signing Ceremony on the Work Plan for Intellectual Property Cooperation for the year 2017-2019 between Cambodia and the PRC was held on March 25, 2016 [2][3][4].

Based on the Memorandum of Understanding (MoU) on the Cooperation which was signed on March 23, 2011[5] and also based on the Work Plan for Bilateral Cooperation which was signed June 27, 2014[6] between the National Committee for Intellectual Property Rights (NCIPR)/Ministry of Commerce (MOC) of the kingdom of Cambodia and the State Intellectual Property Office (SIPO) of the people’s republic of China, both parties made a consensus on the below mentioned work plan which will strengthen the bilateral cooperation between both parties in 2017-2019 as far as the Intellectual Property of both the nations are concerned. This work plan will remain valid until December 31, 2019 [1] and may be modified in writing with mutual consent of the parties. The work plan, as stated on the website [1] is as follows:

  1. Objective

The main objective is to recognize the importance of promoting Intellectual Property cooperation between both nations i.e. the Kingdom of Cambodia & the People’s Republic of China and its effect on nation’s economy, trade, science & technology. For this, both parties have made a consensus and expressed their strong desire to further strengthen their friendship and cooperation.

  1. High-Level Dialogues

Both parties agreed that high-level dialogues between the two countries keep each party well-informed of the latest trends & developments in the other country, and also provides an opportunity for the parties to exchange their views on future-IP cooperation and IP issues or.

  1. Training

SIPO will invite 5 officials from NCIPR/MOC, once per every year from 2017-2019, to attend intellectual property training courses which will be held in China and last for one week. SIPO will cover all international travel costs (round trip economy-class flight tickets) and local expenses in China (including meals and lodging) incurred by the invited NCIPR/MOC officials.

  1. Exchange of Documentation and Information

Both the nations have agreed on the continuation of exchange of patent related documents and information through the authorized contact persons for that purpose.

  1. Information Exchange & IT systems

Both the parties have reached a consensus on pursuing cooperation of the Cloud Patent Examination System (CPES) based on the 16 accounts provided by SIPO to NCIPR/MOC.

  1. Exchange of Information

Both of the parties agreed on enhancing the exchange of experience on genetic resources, traditional knowledge and folklore, national IP strategy, information technology and dissemination of IP information.

  1. Expenses

All the actions contemplated in the work plan will be subject to the availability and priorities of the funds with each party.

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

References :

[1] http://www.cambodiaip.gov.kh/NewsDetail.aspx?id=110050

[2] https://www.facebook.com/moc.gov.kh/posts/1160609867285223

[3] http://www.akp.gov.kh/?p=78467

[4] http://www.aseanthai.net/english/ewt_news.php?nid=1098&filename=index

[5]http://cambodiaip.gov.kh/TemplateTwo.aspx?parentId=2&menuid=175&childMasterMenuId=31&lang=en

[6]https://www.facebook.com/moc.gov.kh/photos/a.816890791657134.1073742054.689434681069413/816891918323688/

Modification in procedure regarding examination of patent applications involving the use of biological material

The Biological Diversity Act (the BD Act) was enacted with the goal to provide for conservation of Biological Diversity, sustainable use of its components and fair and equitable sharing of the benefits arising out of the utilization of biological resources. One of the provisions under the BD Act (section 6) relates to seeking prior permission from National Biodiversity Authority (NBA) before applying for any intellectual property right, if the invention is based on any research or information on a biological resource obtained from India. In the event of an intellectual property right (patent application) being filed without prior NBA permission, NBA permission may be obtained after the acceptance of the patent but before patent grant by the patent authority concerned.

It has been witnessed in a few recent Indian Patent Office (IPO) decisions that patent applications involving use of biological materials, not procured from India and sourced from commercial sources in countries like Switzerland, Spain, Japan and China, were rejected. In light of such IPO decisions, stakeholders at Mumbai and Delhi held meetings to put forward certain issues regularly faced by patent applicants regarding unwarranted objections raised by the IPO concerning requirement of permission from NBA and further delay in obtaining NBA approval.

In view of the submissions made by stakeholders, this issue has been considered by Indian Patent office and instructions/guidelines for NBA permission have been streamlined by way of the following:

S. No. Issue Modified procedure to be followed
1 Where the invention does not relate to a biological resource defined under the Biological Diversity Act 2002, such as:

(a)    Value-added   product

(b)       Bio- wastes

(c)        Synthetically prepared biological material

(a) Value Added Product:

Section 2 of Biological Diversity Act 2002 explicitly excludes value added products from the purview of “Biological resources”.

As per Biological Diversity Act, 2002:

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

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

Examiners/Controllers shall verify from    the   disclosure in patent specification if the claimed invention resides in the biological resource or value-added product. If the invention resides in a value-added product, then they shall avoid

2 Where the biological resource/material used in invention is not obtained /sourced from India. Section 6 (1) of the Biological Diversity Act, 2002 states,

“No person shall apply for any intellectual property right, by whatever name called, in or outside India for any invention based on any research or information on a biological resource obtained from India without

obtaining   the    previous   approval   of  the    National
Biodiversity Authority before making such application.

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

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

Thus, no    approval from   NBA   is  necessary when the invention is based on any research or information on a biological resource not obtained from India.Therefore, when an applicant makes unequivocal
declaration in application for patent (Form 1) that the
biological material used in the invention is neither
obtained from India nor sourced from India, then

Examiners/Controllers shall duly consider such
declaration before issuing FER and shall avoid raising an objection with respect to the requirements of NBA approval.

3. Marking of applications in the module regarding requirement of NBA approvals.
While examining the applications involving use of biological
resource, Examiners should mark these applications as
“NBA approval application” in the examination module
before sending the examination report to the Controller for
approval.
However, if the Controller is not satisfied with
requirement regarding NBA approval, he shall unmark the
application by giving reasons thereof.
4 Cases held up for grant
of patents only due to
non-submission of
NBA permission.
Where the applicant has complied with all the objections,
except submission of NBA approval, the Controller shall
mark the application in the examination module by remark
that “NBA approval pending, but in order for grant” and,
the System Administrator shall put a tag on such cases so
that these applications can be treated as if disposed of
the Controller.

IPO has further clearly stated that any false declaration on behalf of the applicant makes him liable for revocation of patent under section 64 (1) (j)/ 64(1) (p) of the Patents Act
1970 (as amended). Further, as per provisions in section 55(1) of Biological Diversity Act 2002, if the applicant contravenes or attempts to contravene or abets the contravention of the provision
of section 6 of the Biological Diversity Act 2002, he shall be liable for penal action under section 55(1) of the Act’.

With the streamlining of instructions/guidelines for NBA permission, the patent applicants can now effectively deal with the unwarranted objections raised by the IPO concerning the requirement of permission from NBA. Henceforth, the patent applicants can question the unjustifiable extension of applicability of Section 6 of the BD Act by IPO to reject patent applications even when the invention is not based on Indian biological resource and/or when the invention is one of a value-added product, bio-waste or a synthetically prepared biological material and hence, does not relate to a biological resource defined under the Biological Diversity Act 2002.

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

INDIA’S PROTECTION TO SECRETS OF TRADE

  1. Introduction

The global econoamy is trending towards an era of protectionism as can be seen from policies such as “Make America Great Again” and “Make in India”, thereby increasing the significance on exports and the manufacturing sector. As a corollary effect, the importance of Intellectual Property (IP) protection also increases due to the need to extend such to exports for its proper commercialization. On April 28, 2017, the Office of the United States Trade Representative (USTR) released the 2017 “Special 301” Report[1] which reviews global developments on trade and intellectual property (IP). The USTR placed India on the Priority Watch List and one of the reasons for doing so was an outdated and insufficient trade secrets legal framework.[2] It is pertinent to note that the so called Special 301 Report has vested interests of corporate lobbying from the likes of PhRMA (Pharmaceutical Research and Manufacturers of America), Business Software Alliance (BSA) and Intellectual Property Owners Association (IPOA). This piece will attempt to analyse India’s approach to trade secrets protection and its adequacy in terms of business.

  1. What are Trade Secrets?

Trade secret is a formula, process, device or other business information that is kept confidential to maintain an advantage over the competitors. It is the information which includes formula, pattern, compilation, programme, device, method, technique, or process, that derives independent economic value from not being generally known or readily ascertainable.[3] Therefore, the ingredients of trade secrets are- (a) it is such information not generally known to the public which in turn confers economic or commercial benefit through the maintenance of confidentiality and exclusivity, and (b) it is subjected to reasonable efforts of secrecy since disclosure would result in undue enrichment of others. For example, Coca-Cola’s formula for its aerated drinks and KFC’s recipe for its delicious fried chicken are considered to be trade secrets which have been preserved for many decades.

  1. Interface with Intellectual Property?

Article 1(2) of the Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS Agreement”), states that intellectual property shall include protection of undisclosed information.[4] Article 39 of the TRIPS Agreement states that in the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention, with respect to information which is (a) a secret not generally known or readily accessible, (b) has commercial value by virtue of secrecy, and (c) has been subjected to reasonable steps for ensuring its secrecy, Member nations are to ensure that natural and legal persons have the possibility of preventing such information, within their control, from being disclosed to, acquired by, or used by others without their consent, in a manner contrary to honest commercial practice. It is submitted that the possibility referred to hereinbefore implies that trade secrets should be accorded protection within the legal system and not necessarily in the IP legislative framework of the said Member nation.

  1. India’s Policy Approach

The 1989 GATT (General Agreement on Tariffs and Trade) discussion paper[5] of India sets out that as per India, trade secrets cannot be considered to be intellectual property rights, because while the fundamental basis of intellectual property right rests in its disclosure, publication and registration, trade secrets are premised upon secrecy and confidentiality. It may be noted that disclosure and publication are necessary before according the protection of exclusivity when viewed from the IPR context since the prosecution stage involves challenges and objections which test the grant of said exclusivity. The paper further goes on to state that the observance and enforcement of secrecy and confidentiality should be governed by contractual obligations and the provisions of appropriate Civil Law but not by intellectual property law.

On May 12, 2016 India approved the National IPR Policy with seven objectives and elaborative steps to be undertaken by the identified ministries/departments. One of these objectives was to ensure an effective legal and legislative framework for the protection of IPRs. The steps outlined to be taken towards attaining this objective include, among other things, identification of important areas of study and research for future policy development, and one such area identified was the protection of trade secrets.[6] Hence it may be noted that India has taken a step towards considering the protection of trade secrets under the ambit of IPR protection.

Subsequently, the U.S.-India Trade Policy Forum held on October 20, 2016 in New Delhi included a meeting of the High-Level IP Working Group, a side-event on trade secrets, and several notable consensus outcomes related to promoting IP. India announced that it has taken important initiatives and steps, designed to enhance trade secrets protection in India, showing India’s strong commitment towards the importance of trade secrets protection. These initiatives and steps include the following:

  • A workshop was convened with government officials, academics, legal experts and representatives from U.S. and Indian industry that facilitated the exchange of information and best practices on trade secrets protection in both countries;
  • India noted that it protects trade secrets through a common law approach;
  • A toolkit would be prepared for industry, especially SMEs, to highlight applicable laws and policies that may enable them to protect their trade secrets in India;
  • A training module for judicial academies on trade secrets may also be considered;
  • A further study on various legal approaches to protection of trade secrets will also be undertaken by India.
  1. India’s Common Law Approach

The Delhi High Court in American Express Bank Ltd. v. Priya Puri,[7] defined trade secret as formulae, technical know-how or a method of business adopted by an employer which is unknown to others and such information has reasonable impact on organizational expansion and economic interests. Indian courts have approached trade secrets protection on the basis of principles of equity, action of breach of confidence and contractual obligations.

  • Equity

In John Richard Brady v. Chemical Process Equipments P. Ltd.,[8] it was held that independent of an underlying contract or in the absence of one, he who has received information in confidence is not allowed to take unfair advantage of it. This lays down that undue enrichment at the expense or detriment of another goes against the tenets of equity and fairness which need not be dependent on contractual obligations.

  • Breach of Confidence

In Zee Telefilms Ltd. v. Sundial Communications Pvt. Ltd.,[9] it was laid down that in an action of breach of confidence, the obligation of confidence is not limited to the original recipient but also extends to those persons who received the information with knowledge acquired at the time or subsequently that it was originally given in confidence. In Diljeet Titus v. Alfred Adevare & Ors, it was held that the Court must step in to restrain a breach of confidence independent of any right under law and that such an obligation need not be expressed but be implied and the breach of such confidence is independent of any other right. Therefore, it is submitted that the protection of trade secrets does not always necessarily stem from the owner of such secret having a right per se in respect of the same but from the implied obligation to maintain confidence by virtue of the nature of trade secrets in general.

  • Contractual Obligations

In Niranjan Shankar Golikari v. Century Spinning[10], it was held that negative covenants in employment agreements pertaining to non-disclosure of confidential information operative during the period of the contract of employment and even thereafter, are generally not regarded as restraint of trade and therefore do not fall under Section 27[11] of the Contract Act, 1872 as a former employee should not be allowed to take unfair advantage of the employer’s trade secrets which are vital for business. Post service restraint in maintaining confidentiality and also carrying on any other business for a limited period is permissible under the exception to Section 27 of the Contract Act, as was held in Homag India Pvt. Ltd. v. Mr. Ulfath Ali Khan.[12]

  1. Conclusion

It is submitted that as explained hereinabove, the common law trinity of equity, breach of confidence and contractual obligations for the protection of trade secrets is well suited to business requirements in India. India’s position should not be mistaken to connote that there is insufficient protection accorded to trade secrets and confidential information in the country. In fact, it must be clarified that Intellectual Property may not be the correct form of protection accorded to trade secrets. Trade Secrets rely on their nature of secrecy which precludes the quid pro quo disclosure required by the State before granting a statutory right of monopoly. Moreover, secrecy prevents the subject matter from being tested with regards to the scope of “has commercial value” and “has been subjected to reasonable steps of secrecy”. It is also pertinent to note that statutory enactment may not be sufficient to define the scope of what constitutes trade secret and protection thereof which could be more adequately handled on a case to case basis by the common law approach. It would be apposite to mention that legal proceedings and pleadings pertaining to trade secrets should be based on high modicum of confidentiality to protect the nature of the information as such.]

Author: Pratik Das, Legal Intern at Khurana and Khurana, Advocates and IP Attorneys and can be contacted at info@khuranaandkhurana.com

References :

[1] Available at https://ustr.gov/sites/default/files/301/2017%20Special%20301%20Report%20FINAL.PDF

[2] In the International IP Index, 2017 released by the U.S Chamber of Commerce, India was ranked 43 out of 45 countries in terms of the IP regime existing in the said countries; available at https://www.uschamber.com/event/2017-international-ip-index-the-roots-innovation

[3] Black’s Law Dictionary, Ed. 8, cited in Bombay Dyeing & Manufacturing Co. Ltd. v. Mehar Karan Singh, 2010 (112) BOM LR  3759.

[4] All categories of IP that are the subject of Part II, Sections 1 to 7 of the Agreement; Section 7 is titled as “Protection of undisclosed information”.

[5] MTN.GNG/NG11/W/37.

[6] Paragraph 3.8.4, National IPR Policy, 2016.

[7] (2006) HI LLJ 540 (Del).

[8] AIR 1987 Delhi 372.

[9] 2003 (27) PTC 457 (Bomb).

[10] AIR 1967 SC 1098.

[11] Agreement in restraint of trade is void.

[12] M.F.A. No. 1682/2010 C/W M.F.A. No. 1683/2010 (CPC) decided on 10.10.2012, Karnataka High Court.

Enzo Biochem Inc. v. Applera Corp. – A case pertaining to Doctrine of Equivalents

On August 02, 2017, the United States Court of Appealsfor the Federal Circuit ruled in favor of Applera Corp.and Tropix Inc.in the matter of Enzo Biochem Inc., Enzo Life Sciences Inc., Yale University v. Applera Corp., Tropix Inc. The Court affirmed that the district court accurately interpreted proper construction of claims in U.S. Patent No.5,449,767 (“the’767 patent”) and correctly analyzed Enzo’s doctrine of equivalents argument. In over thirteen years of litigation between the parties, the Court has considered this present infringement action on three separate occasions.

Background

Technology as disclosed in the ‘767 patent pertains to use of nucleotide probes to detect presence of a particular DNA or RNA sequence in a sample or to identify anotherwise unknown DNA sequence. According to the ’767 patent, many procedures employed in biomedical research and recombinant DNA technology rely on use of radioactive labels such as isotopes of hydrogen, phosphorus, carbon, oriodine. The ’767patent also notes serious limitations and drawbacks pertaining to use of radioactive materials that include, elaborate safety precautions, expensive use and purchase, and short shelf-life. As an alternative to use of radioactive labels, the’767 patent elaborates on a series of novel nucleotide derivatives that contain biotin, iminobiotin, lipoic acid,and other determinants attached covalently to pyrimidine or purine ring. Further, the ’767 patent asserts that the use of modified detection approach provides detection capacities equal to or greater than procedures which utilize radio isotopes, and also overcomes other limitations and drawbacks pertaining to use of radioactive labels.

The disputed languageof claim 1 involves following limitation:

“wherein A comprises at least three carbon atoms and represents atleast one component of a signaling moiety capable ofproducing a detectable signal . . . .”

Procedural History

In 2004, Enzo filed a suitag ainst Applera alleging infringement of six patentsincluding the ’767 patent. After multiple years of litigation in 2012, an appeal to the federal court regarding invalidity issues decided on summary judgment, Enzo I, 599 F.3d 1325 (Fed.Cir.2010). The jury found Applera infringed the claims at issue and awarded $48.6million in damages. In appeal, Applera argued that the district court erred in its claim construction because claims of the ’767 patent only cover indirect detection and alternatively, if the claims cover direct detection, they are invalid for lack of written description andlack of enablement. The Federal Court agreed with Applera and reversed the district court’s claim construction, Enzo II, 780 F.3d 1149, 1150 (Fed. Cir. 2015). The Court concluded that the inventors were claiming only indirect detection and thus, held that “the district court erred in construingthe disputed claims of the patent-in-suit to cover bothdirect and indirect detection”. The Court then remanded the case to the district court to determine whether accused product infringes under proper claim construction. The district court agreed with Applera and rejected doctrine of equivalents argument raised by Enzo. Hence, Enzo Appealed.

Opinion of the Court

Firstly, the Court discussed scope of Enzo II and concluded that the district court correctly interpreted Enzo II. According to the Court, the district court rightly referred to specification of the ’767 patent and opined that specification does not support inclusion of direct detection.

Secondly, the Court discussed doctrine of equivalents. According to Enzo, Applera infringes claims under doctrine of equivalents and the district court “misconstrued” its expert declaration and improperly drew inferences in favor of Applera, rather than Enzo. Further, Enzo asserted that scope of equivalents focused on a particular subset of direct detection.

According to the Court, the district court rightly explained that the patent “describes its method of indirect detection as a superior means of detection as compared to direct detection, with ‘detection capacities equal to or greater than products which utilize’ direct detection”. The Court explained that “the specification provides additional support that claim 1 covers only indirect detection”.

The Court relied on Dolly, Inc. v. Spalding & Evenflo Cos., 16 F.3d 394, 400 (Fed. Cir. 1994), according to which “the concept of equivalency cannot embrace a structure that is specifically excluded from the scope of the claims” and noted that the same principle applies in the present case. “Including direct detection as an equivalent of indirect detection would render meaningless the claim language on which decision in Enzo II was based”. Thus, direct detection cannot be an equivalent of indirect detection in relation to these patent claims.

Conclusion

The doctrine of equivalents is generally considered when a product or process does not literally infringe a patented invention but the product or process contains elements identical or equivalent to each claimed element of the patented invention. Further, an analysis of role played by each element in context of function, way, and result of the claimed element and the product or process is required. In the present case, the court excluded direct detection from the scope of claims by referring to specification of the patent application even when the claims expressly did not exclude direct detection. Thus, the present case is an instance of difficulties pertaining to analysis of doctrine of equivalents and indicates proving doctrine of equivalents as unfeasible.

CORPORATE INSOLVENCY RESOLUTION PROCESS (CIRP) OF JAYPEE INFRATECH: IMPLICATION ON WISHTOWN & JAYPEE AMAN HOUSING PROJECT – CLAIM SUBMISSION BEFORE AUGUST 24, 2017

  1. Introduction

On August 9, 2017, the Allahabad Bench of National Company Law Tribunal (“NCLT”) admitted[1] the insolvency application of IDBI Bank against Jaypee Infratech Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016[2] (“IBC”). On June 13, 2017, the Reserve Bank of India (“RBI”) issued a press release[3] whereby it identified 12 accounts which represented 25% of the gross bad loans in the banking system that would be eligible for immediate reference for bankruptcy proceedings. The said criterion for referring accounts for resolution under IBC was identification of total outstanding amount greater than ₹5000 crore, with 60% or more classified as non-performing by banks as of March 31, 2016.

Although RBI did not disclose the identity of said 12 accounts, Jaypee Group, along with Essar Steel, Bhushan Steel and Lanco Group, is considered to be among the said identified accounts. The said application of IDBI, a government owned financial services company, against Jaypee Infratech was in respect of default of an amount of ₹526 crore. Jaypee Infratech Ltd. is the construction arm of the Jaypee Group and was responsible for the construction of the Yamuna Expressway connecting Noida to Agra.

  1. Wishtown and Jaypee Aman Housing Projects

Jaypee Infratech had constructed the Wishtown Housing Project in Sector 128, Noida and Jaypee Aman Housing Project in Sector 151, Noida, with a promise of delivery by 2012-13. However, the aforesaid projects have not been completed and possession has also not been given to the flat owners. These projects were built on land given to Jaypee by Noida Authority in return for the construction of the Yamuna Expressway. Subsequently, Jaypee Infratech had taken loans from financial institutions including IDBI Bank for the construction and completion of the said projects. Flat owners are apprehensive that in the event of liquidation secured creditors such as IDBI would get preference in repayment thereby leaving flat owners with no possibility of refund of the amount paid. Moreover, it is speculated that the amount received from the sale of assets of Jaypee Infratech might not be sufficient to complete said projects and deliver possession to the flat owners.

  1. Public Announcement

In accordance with Section 13 of the IBC, the NCLT made a public announcement[4] with regard to initiation of CIRP of Jaypee Infratech and appointment of Mr. Anuj Jain, Chartered Accountant, BSRR and Co. as the Interim Resolution Professional (“IRP”) who shall be vested with the management of the affairs of Jaypee Infratech. It is pertinent to note that NCLT has also ordered a moratorium prohibiting institution of fresh suits or continuation of any legal proceedings against Jaypee Infratech in any court, tribunal and/or arbitration panel. Therefore, all proceedings of flat owners pending in consumer courts/any other proceedings pertaining to the non-delivery of possession/incompletion of the housing project has been effectively stayed till the date of approval of resolution plan by NCLT or passing of liquidation order. It is also to be noted that the CIRP is to be completed within a period of 180 days (extendable by 90 days) from the date of insolvency commencement, that is, August 9, 2017.

  1. Proof of Claims

Under the IBC, after the initiation of CIRP, the public announcement calls for submission of proof of claims against corporate debtor (Jaypee Infratech) from financial creditors, operational creditors and employees and workmen. It is pertinent to note that on August 16, 2017, the Insolvency and Bankruptcy Board of India (“IBBI”) notified[5] the IBBI (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2017 whereby inserting Regulation 9A, titled “Claims by other Creditors” and in effect, has introduced a new class of creditors under the IBC, that is, those creditors who does not fall under the ambit of financial or operational creditors. Under the IBC, CIRP can be initiated by financial creditor, operational creditor and also, corporate debtor itself. Although, the amendment does not indicate that CIRP can be initiated by any ‘other creditor’. This amendment is a welcome move since it recognizes that there could be situations when the claim is legitimate but cannot be classified as either financial or operational, as in the case of flat owners of Wishtown and Jaypee Aman.

The amended regulation has introduced Form F and flat owners have been directed to submit said Form F to the IRP by August 24, 2017. Form F is available here http://jaypeeinfratech.com/communication/2017/6-Form-F-Other-than-Financial-Creditors-and-Operational-Creditors.pdf

The above named amendment has specified that the following documents are required to establish the claim of these ‘other creditors’:

  • documentary evidence demanding satisfaction of the claim (Example: Allotment letter, communications from Jaypee);
  • bank statements of the creditor showing non-satisfaction of claim (Example: EMI Monthly Instalments);
  • order of court or tribunal that has adjudicated upon non-satisfaction of claim, if any (Example: orders of consumer courts).

As per press release dated August 18, 2017, (available here http://jaypeeinfratech.com/communication/2017/Press-Release-dated-18-August2017.pdf), the IRP has specified that no claim shall be disqualified for the reason of submission of incorrect form.

It is also pertinent to note that Regulation 12(2) of IBBI Regulations allows a creditor who has failed to submit proof of claims before last date mentioned in the public announcement to submit such proof at any time before approval of resolution plan by committee of creditors. As explained hereinbefore, Regulation 9A has recognised the flat owners as a separate distinct class of creditors and hence, it may be argued that proof of claims by flat owners may be submitted even after the aforesaid date. However, in order to be cautious, flat owners should adhere to such aforesaid date and as instructed by the IRP in aforesaid press release, may submit only additional information in respect of the claim after the deadline.

  1. Conclusion

It is pertinent to note that the resolution plan, to be finalized within 180 days of insolvency commencement date, has to be approved by 75% majority of committee of creditors. Under the IBC, all financial creditors are constituted into the said committee. It would be pertinent in public interest to allow said flat owners to have adequate representation in the committee of creditors and for their claims to be treated at par with those of financial creditors such as IDBI Bank and other financial institutions. Section 16(5) of IBC specifies that the term of the IRP shall not exceed 30 days from date of appointment, thereby in this case tenure of IRP will be from August 9, 2017 till September 8, 2017. Moreover, Regulation 17 of IBBI Regulations mandates the IRP to constitute committee of creditors before expiry of aforesaid 30 days and that first meeting of said committee shall be convened within 7 days of constitution. In the first meeting, the committee, by 75% majority, decides whether to appoint IRP as resolution professional and in the event it does not, it must recommend a resolution professional to NCLT.

It is hoped that all the claims of the flat owners are verified and collated in such a way so as to ensure that their interests are protected. It is to be seen whether the government takes any tangible step to ensure that the claims of flat owners are treated at par with those of the financial/operational creditors.

Author: Pratik Das, Legal Intern at Khurana & Khurana, Advocates and IP Attorneys and can be reached at info@khuranaandkhurana.com

Reference:

[1] Order available at http://nclt.c2k.in/OtherNCLT/interim_orders/allahabad/09.08.2017/1.pdf

[2] Available at http://ibbi.gov.in/Law/IBC%202016.pdf

[3]Available at https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=40743

[4] Available at http://jaypeeinfratech.com/communication/2017/2-Public-Announcement-EN.pdf

[5] Available at http://www.ibbi.gov.in/CIRP_Amendment.pdf

United States district court upholds the validity of two Horizon Pharma patents covering VIMOVO®

Horizon Pharma plc, an Irish specialty biopharmaceutical company, on 27 June 2017, reported that the United States district court for the district of New Jersey upheld the validity of two Horizon Pharma patents covering VIMOVO®, a pain relief treatment for arthritis patients, and that the ANDA applicants viz. Lupin Limited, Dr. Reddy’s Laboratories and Mylan Inc. would infringe at least one of the two patents with their proposed generic version of VIMOVO®.

What is VIMOVO®?

            VIMOVO® is a fixed dose combination of naproxen, a nonsteroidal anti-inflammatory drug (NSAID), and esomeprazole magnesium, a proton pump inhibitor (PPI). VIMOVO is used to relieve signs and symptoms of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis and to decrease the risk of developing stomach (gastric) ulcers in people who are at risk of developing gastric ulcers with NSAIDs.

            The two Horizon Pharma patents which cover VIMOVO® and have now been upheld as valid by the US district court are:

  1. US6926907B2 – expires in February 2023. The US’907 patent claims a pharmaceutical composition in unit dosage form comprising therapeutically effective amounts of an acid inhibitor and a non-steroidal anti-inflammatory drug (NSAID), which unit dosage form provides for coordinated release of the acid inhibitor and the NSAID.
  2. US8557285B2 – expires in May 2022. The US’285 patent claims a pharmaceutical composition in unit dosage form comprising therapeutically effective amounts of: (a) esomeprazole, wherein at least a portion of said esomeprazole is not surrounded by an enteric coating; and (b) naproxen surrounded by a coating that inhibits its release from said unit dosage form unless said dosage form is in a medium with a pH of 3.5 or higher; wherein said unit dosage form provides for release of said esomeprazole such that upon introduction of said unit dosage form into a medium, at least a portion of said esomeprazole is released regardless of the pH of the medium.

            On April 21, 2011, July 25, 2011, and June 28, 2013, Horizon Pharma filed patent infringement lawsuits at the New Jersey District Court against Lupin Limited, Dr. Reddy’s Laboratories and Mylan Inc., seeking adjudication for patent infringement by these companies of one or more claims of the US‘907 and US’285 Patents. The infringement lawsuit came after these companies filed an Abbreviated New Drug Application (“ANDA”) with the U.S. Food and Drug Administration (FDA) seeking regulatory approval to market a generic version of VIMOVO before the expiration of the US‘907 patent in February 2023 and the US’285 patent in May 2022. At trial, the ANDA applicants alleged that the claims of the US‘907 and US’285 patents, listed in the Orange Book for VIMOVO were invalid.

            The announcement from Horizon Pharma came on the same day the U.S. district court for the district of New Jersey ruled in favor of Horizon Pharma and upheld the validity and enforceability of the patents at issue. Horizon Pharma says the outcome of the infringement lawsuit will prevent the launch of generic VIMOVO, which is being developed by Indian drug makers Lupin Limited and Dr. Reddy’s Laboratories as well as American generic drug maker Mylan Inc., in the United States.

TAKEDA PHARMACEUTICAL’S PATENT ON CANCER DRUG VELCADE® UPHELD BY THE US COURT OF APPEALS FOR THE FEDERAL CIRCUIT

On July 17, 2017, the United States Court of Appeals for the Federal Circuit ruled that the U.S. Patent No. 6,713,446 (“the ‘446 patent”) covering Takeda Pharmaceutical’s cancer drug Velcade® is valid and enforceable. The appellate court decision overturned an earlier 2015 decision from a US District Court which ruled the ‘446 patent was invalid as the compound it covered was the result of an obvious process. The lawsuit came on the heels of ANDA submissions by generic companies, including Sandoz Inc, Accord Healthcare Inc, and Actavis LLC, to the FDA for a generic version of Velcade® prior to the expiration of the ‘446 patent in 2022.

VELCADE®:

Velcade® (bortezomib) is approved for the treatment of people with multiple myeloma (a cancer of the plasma cells). Velcade® is also approved for the treatment of people with mantle cell lymphoma (a cancer of the lymph nodes). The drug generated U.S. sales of $1.13 billion in 2016.

In 2003, the Food and Drug Administration (“FDA”) granted “accelerated approval” to New Drug Application No. 21-602 for VELCADE® for Injection, for the treatment by intravenous administration of patients with multiple myeloma who have received at least two prior therapies and have demonstrated disease progression on the last therapy. VELCADE® for Injection was subsequently approved in 2005 for treatment by intravenous administration of patients with multiple myeloma who had received at least one prior therapy; in 2006 for treatment by intravenous administration of patients with mantle cell lymphoma who had failed at least one prior therapy; in 2008 for frontline treatment by intravenous administration of patients with multiple myeloma; in 2012 for subcutaneous administration; and in 2014 for treatment of adult patients with multiple myeloma who had previously responded to VELCADE® for Injection therapy and relapsed at least six months following completion of prior VELCADE® for Injection treatment.

The ‘446 patent has been listed in connection with VELCADE® for Injection in the FDA’s Orange Book.

 

US District Court ruling related to VELCADE® patent:

On August 2, 2012, November 19, 2012, and December 21, 2012, Millennium Pharmaceuticals Inc filed patent infringement lawsuits in the United States District Court for the Delaware against Sandoz Inc, Accord Healthcare Inc, and Actavis LLC (collectively, “defendants”) respectively, alleging that the ANDA applications filed by the defendants infringe on claims 20, 31, 49, and 53 of the ‘446 patent. The defendants argued, and the District Court agreed, that asserted claims 20, 31, 49, and 53 of the ‘446 Patent were invalid as obvious.

Millennium Pharmaceuticals Inc, the Takeda Oncology Company, is the exclusive licensee of the ‘446 patent which covers a D-mannitol ester of bortezomib, the active ingredient in Velcade®. This active ingredient is claimed in claim 20 of the ‘446 patent:

[Claim 20] The lyophilized compound D-mannitol N-(2-pyrazine)carbonyl-L-phenylalanine-L-leucine boronate.

Claims 31, 49, and 53 of the ‘446 patent recite method of preparing the D-mannitol ester of bortezomib via lyophilization, a lyophilized cake comprising the D-mannitol ester of bortezomib, and reconstitution of the lyophilized mixture with a pharmaceutically acceptable carrier, respectively.

[Claim 31] The method of claim 23, wherein the compound of formula (1) is D-mannitol N-(2-pyrazine)carbonyl-L-phenylalanine-L-leucine boronate.

[Claim 49] A lyophilized cake comprising the compound of claim 20.

[Claim 53] The method of claim 31 further comprising (c) reconstituting the lyophilized mixture with a pharmaceutically-acceptable carrier.

Bortezomib and its esters were already described and claimed in U.S. Patent No. 5,780,454 (“the ‘454 patent”). The ‘454 patent also identified bortezomib as a very potent, promising lead candidate with the highest in-vivo activity of all the compounds disclosed in the ‘454 patent. The ‘454 patent was considered as the closest prior art document by the defendants as well as the district court.

At trial, the defendants predominately argued that the asserted claims were obvious because the ‘446 patent claims the inherent result of an obvious process-namely, that freeze-drying bortezomib with mannitol produces an ester. Specifically, the defendants argued that lyophilization is a standard formulation option and that one skilled in the art would have chosen lyophilization process in order to stabilize bortezomib. In response, Millennium Pharmaceuticals argued that a person of ordinary skill would avoid lyophilization in developing a formulation involving bortezomib because bortezomib was known to be unstable even in the dry state as a freestanding solid compound. Millennium Pharmaceuticals also argued that a person of ordinary skill would not have expected a lyophilized mannitol ester of bortezomib to provide dramatic improvements in stability, solubility and dissolution as compared to bortezomib. The district court however agreed with the defendants that lyophilization was well-known in the field of formulation and often utilized when a liquid formulation provided limited success, and that the decision to attempt a lyophilized formulation of bortezomib was routine application of a well-known problem-solving strategy. The district court also concluded that mannitol was among the “finite number of identified, predictable solutions” to freeze-drying investigational anti-cancer drugs like bortezomib, and one skilled in the art would have found it obvious to choose mannitol for the lyophilization process. As such, the asserted claims of the ‘446 patent were found invalid under 35 U.S.C. § 103.

 

US Appeals Court reverses the District Court’s obviousness determination:

The US Court of Appeals for the Federal Circuit first analyzed the District Court’s obviousness determination by framing the relevant question as whether a person of ordinary skill, seeking to remedy the known instability and insolubility and to produce an efficacious formulation of bortezomib, would obviously produce the claimed and previously unknown D-mannitol ester of bortezomib. In its analysis, the Federal Circuit found error in the District Court’s obviousness determination because (1) there is no teaching or suggestion in the prior art references to produce the claimed mannitol ester, (2) no reference or combination of references provide a reason to make the claimed mannitol ester of bortezomib, and (3) no reference shows or suggests ester formation at freeze-drying conditions, or that any such ester might solve the problems of instability and insolubility of the free acid while dissociating rapidly in the bloodstream.

The Federal Circuit agreed with the defendants that lyophilization was generally known in formulating pharmaceutical products, bulking agents were known for use in lyophilization, and mannitol was a known bulking agent. However, the Federal Circuit explained that for the compound to be obvious, the prior art must teach or suggest that lyophilization of bortezomib in the presence of mannitol would produce a chemical reaction and form a new chemical compound (i.e. mannitol ester of bortezomib), or provide a reason to make this specific new chemical compound, or describe that this new compound would solve the previously intractable problems of bortezomib formulation. The Federal Circuit also stated that “[a]lthough mannitol was a known bulking agent, and lyophilization was a known method of drug formulation, nothing on the record teaches or suggests that a person of ordinary skill should have used mannitol as part of a synthetic reaction to make an ester through lyophilization.”

With regard to the District Court’s conclusion concerning the unexpected results and commercial success of the lyophilized mannitol ester of bortezomib, the Federal Circuit made the following ruling:

“We conclude that the district court should have treated bortezomib as the closest prior art compound, and acknowledged the unrebutted evidence that the D-mannitol ester of bortezomib exhibited unexpected results compared with bortezomib, including unexpectedly superior stability, solubility, and dissolution.”

 

“The district court clearly erred in attributing Velcade®’s commercial success to bortezomib alone, as bortezomib is not a viable commercial product and had been denied FDA approval because of its instability. The D-mannitol ester was responsible for Velcade®’s successful results, for the D-mannitol ester is necessary to provide the required solubility and stability.”

Accordingly, the Federal Circuit reversed the District Court’s ruling that the asserted claims of the ‘446 patent are invalid due to obviousness. The appellate court’s ruling will help Takeda to put off the risk of generic competition until the ‘446 patent expires in 2

GST IMPLICATION ON INTELLECTUAL PROPERTY

GST IMPLICATION ON INTELLECTUAL PROPERTY

  1. Once upon a time . . .

Before the Goods and Services Tax (GST) regime,the Union government exclusively used to levy tax on transactions relating to Intellectual Property (IP) rightsif such were classified as services[1] (under Service Tax, Chapter V, Finance Act, 1994), while the State governments used to levy tax on IP rights if the transaction involving such were classified as sale/deemed[2] sale of goods[3] (under State Sales Tax/State Value Added Tax or Central Sales Tax which was collected and retained by the originating State). The aforesaid indirect tax system required interpretation on the classification of the transaction.This often led to double taxation when the same transaction was subjected to both sales tax and service tax due to the industry being cautious so as to avoid penalties of avoiding tax.

 

  1. Growing Stronger Together

With the advent of GST, the need to classify transactions involving IP as either relating to rendering of service or sale/deemed sale of goods was absolved. This is due to GST being concurrent[4] in naturewith the Centre and the States simultaneously and seperately levying it on a common base or transaction irrespective of its classification. It is pertinent to note that GST would be applicable on supply of goods or services[5] as against the previous concept of tax on the manufacture of goods or on sale of goods or on provision of services.

The GST to be levied for intra-state supply of goods and services by the Centre would be called Central GST (CGST) and that to be levied by the States [including Union territories with legislature] would be called State GST (SGST). On inter-state supply of goods and services, Integrated GST (IGST) is to be collected by the Centre.[6] IGST would also be applicable on imports.[7] GST is a destination based consumption tax, that is, the tax is received by the state in which the goods or services are consumed and not by the state in which such goods are manufactured.

 

  1. Rates in relation to Intellectual Property

Section 9 of the CGST, 2017 [corresponding section 9 of SGST] states that the CGST (or SGST as the case may be) shall be levied on the transaction value[8] or the price actually paid or payable for the said supply of goods and/or services and at such rate to be notified on the recommendations of the GST Council. Subsequently, the rates have been notified as follows[9]:

Under Sl. No. 17, Heading 9973-

  • Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of goods other than Information Technology software at the rate of 12% (6% CGST and 6% SGST).
  • Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of Information Technology software at the rate of 18% (9% CGST and 9% SGST).

“Information Technology software” means[10] any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment.

  • Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration at the same rate of central tax as on supply of like goods involving transfer of title in goods.
  • Any transfer of right in goods or of undivided share in goods without the transfer of title thereof at the same rate of central tax as on supply of like goods involving transfer of title in goods.
  1. Brief Analysis

It is pertinent to note that under the GST regime, permanent transfer/sale of a particular intellectual property right would be considered as supply of service and a 12% tax (6% CGST and 6% SGST) would be levied on the transaction price provided such IPR is not in respect of software. Temporary transfer or permission to use or enjoy (license or assignment) any IPR would also be taxable at the same rate provided it is not relating to IT software.

Earlier, permanent transfer was not considered as declared service and hence not exigible under service tax. It is also to be noted that earlier the exclusivity test (whether transfer/assignment/license is exclusive to the transferee) as laid down in the BSNL judgment[11] was the standard for determining whether the transfer would amount tosale (and hence, subject to sales tax) or license (and hence, subject to service tax). Under the GST it is immaterial for the purpose of taxation whether the said transfer is exclusive or for that matter temporary since it will be subjected to the same concurrent tax.

It is also pertinent to note that sale or licensing of intellectual property pertaining to software would be charged 18% tax (9% CGST and 9% SGST). Even though GST has done away with the need to classify transactions in respect of goods and services, the Centre has in a way reversed the TCS judgment[12] which had held that transactions relating to shrink wrapped software (software bound with product) was to be considered as transfer of the right to use such software goods (and hence deemed sale of goods[13]) while the same is to be treated as service due to the notification.[14]

It may also be noted that the Constitution (One Hundred and First Amendment) Act, 2016 [by which the GST was introduced in the constitutional framework] did not amend Article 366(29A)(d) which specifies that the transfer of the right to use any goods is to be deemed as a sale of those goods. However with the aforesaid notification[15], the Centre while notifying the taxation rate, has in a way classified the transfer of the right to use any goods to be treated as service.

  1. Reverse Charge on Copyright

GST is to be levied on the person supplying the goods and/or services. However, Section 9(3) of the CGST Act, 2017 states that the Centre may specify certain categories of supply of goods andservices on which the tax is to be paid on reverse charge basis by the recipient of the supply. Therefore, as per notification[16], the tax on the supply of services by an author, music composer, photographer, artist, etc. by way of transfer or permitting the use or enjoyment of a copyright relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer etc., shall be borne by the said publisher, music company or producer.

  1. “Registered Brand Name” in the context of GST

It is to be noted that the supply of certain goods, such as chena or paneer, natural honey, wheat, rice and other cereals, pulses, flour of cereals and pulses, other than those packed in unit container and bearing a registered brand name, is exempted from CGST[17]. Supply of such goods, when put up in unit container and bearing a registered brand name attracts 2.5% CGST rate[18].

Subsequently, doubts were being raised as to the meaning of “registered brand name”. On July 5, 2017, the Finance Ministry issued a press release[19] clarifying the same. The statement noted that “registered brand name” has been defined in the notifications[20] and the same would mean brand name or trade name which is registered under the Trade Marks Act, 1999. In this regard, registered trade mark means a trade mark which is actually on the register and remaining in force[21].

Thus, unless the brand name or trade name is actually on the Register of Trade Marks and is in force under the Trade Marks Act, 1999, GST rate of 5% (2.5% CGST and 2.5% SGST) will not be applicable on the supply of such goods.[22] It is pertinent to note that this may lead up to a situation wherein a particular company selling, say, cereals in unit containers bearing a brand name but such brand name is not on the Trade Mark Register and hence not in force, would be exempted from GST. Such situation would also extend to new players in the cereals (or other exempted goods) industry who have applied for trademarks and whose marks have not been registered. The relevant question posited by this clarification is that whether smaller players would now be discouraged from filing for trademark registration due to availing tax exemption which in turn would reduce their costs? This might go against the objective of the National IPR Policy 2016, which encourages commercialization of IP at the grass-root level. Still considering the importance of Intellectual Property, such manufacturers need to understand the gravity of the matter that non registering of Trade Mark is not favourable to them considering the market for their products which is ultimately identified by their brand name and hence they cannot afford to not protect their brand name only to save some minor percent of GST. Thus, importance/benefits of Trade Mark Registration when compared to the applicable GST for products under Trade Mark which is not on register, it is indeed crystal clear that manufacturers should protect their IP which in all circumstances should be of paramount interest which help reap profits by leaps and bounds.

  1. Conclusion

With the introduction of GST at nascent stage, it is still to be seen as to how the implementation is carried forward. At the very least, the GST has brought about a positive change by doing away with the need to classify transactions as either relating to goods or services since all transactions would now be concurrently levied tax by both the Centre and the States (provided transaction is intra-state supply; inter-state to be levied exclusively by Centre). The GST has also subsumed numerous central, state and municipal taxes and by doing so, will ensure that indirect tax rates and structures are common across the country thereby increasing certainty and ease of doing business.

About the Author: Pratik Das, Legal Intern at Khurana and Khurana, Advocates and IP Attorneys and can be reached at abhijeet@khuranaandkhurana.com

References :

[1] Intellectual Property Service meant the temporary transfer or permission to use or enjoy any intellectual property right.

[2] Article 366 (29A) (d) of the Constitution specifies that the transfer of the right to use any goods to be deemed as a sale of those goods.

[3] Supreme Court in Tata Consultancy Services v. State of Andhra Pradesh,  (2005) 1 SCC 308 held that the term “goods” under Article 366 (12) of the Constitution includes intangible/incorporeal property which is capable of abstraction, consumption and use, and which can be transmitted, transferred, delivered, stored, possessed, etc.

[4]Article 246A, Constitution (One Hundred and First Amendment) Act, 2016.

[5]Articles 366(12A), 286(1A), 286(1B), 286(2), Constitution (One Hundred and First Amendment) Act, 2016.

[6]Article 269A, Constitution (One Hundred and First Amendment) Act, 2016.

[7]Ibid.

[8]Section 15, CGST, 2017.

[9] Notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 [which notify the rates for supply of services under CGST Act].

[10]Ibid at Explanation (v).

[11]Bharat Sanchar Nigam Ltd. v. Union of India, (2006) 3 SCC 1.

[12]Supra at 3.

[13]Supra at 2.

[14]Supra at 9.

[15]Ibid.

[16]Notification No. 13/2017-Central Tax (Rate), dated 28th June, 2017 [which notify the categories of services on which tax will be payable under reverse charge mechanism under CGST Act].

[17] Notification No. 2/2017-Central Tax (Rate), dated 28th June, 2017 [which exempts intra-state supply of the specified goods from CGST].

[18] Notification No. 1/2017-Central Tax (Rate), dated 28th June, 2017 [which notifies the CGST rates of intra-state supply of goods].

[19]Available at http://pib.nic.in/newsite/PrintRelease.aspx?relid=167146.

[20]Supra at 17, 18.

[21]Section 2(w), Trademarks Act, 1999.

[22]Supra at 19.