Category Archives: News & Updates

Significance of Universities in Filing Patent Application

Universities and Institutes are considered to be the most important foundation for growth of any country. It is the place where most of the basic research is carried out, giving way to inventions. As Intellectual Property Rights (IPR)act as a shield to such invention from being misused by third parties, and help in commercialization of these inventions, it is highly recommended that such inventions be protected under the IP domain in order to guard owner’s interests in order to infuse development in respective field of invention.

Often times, since students are the ones who carry out research that may lead to inventions, it is imperative for them to get these inventions protected in order to commercialize the mas well as thwart misuse of the same by third parties. Moreover, there are various reasons as to why Academic Institutes or Universities should consider filing a Patent Application for protection of inventions that have been carried out in their campus.

 IP Division in University

IP policy in universities is an important toolfor encouraging generation, protection, and commercialization of IP in universities and research institutes. The policy provides a structure and frameworkthat can be used to promote generation, protection and commercialization of IP in Research and Technology organizations. Typically, an IP policy mainly focuses on benefit sharing and ownership of IPRs, strategies for commercialization and management of privately sponsored research, collaborative research, conflict of interest as well as other issues.

 Existence of IP policies in institutes and universities is a strong indicator of their commitment in promoting generation, protection and commercial exploitation of IPRs.[1]

In 2001, due to growing importance of IP institutional policies, WIPO published a booklet entitled Guidelines for developing IP Policies in African Universities and Research Organizations. While the publication title suggests that the guidelines are aimed at African institutions, the content is universally applicable and, as a result, the guidelines have since been used in several developing countries. Recently, a second edition was compiled and is currently awaiting publication entitled Choices in Developing IP Policies in Universities and Research Organizations. It addresses ten issues that senior managers of universities and research organizations may wish to consider while developing institutional IP policies.

Some countries have prepared model IP policies that universities and research organizations may adapt, depending on their mission, research culture and agenda. For example, the Nigerian Office for Technology Appropriation (NOTAP) has prepared a model IP policy, which it has made available to universities and research institutions in Nigeria. This has resulted in speeding up the process of developing IP.

In other words, IP divisions in Universities and Institutions help spread the awareness of importance of IPR, especially for filing patent application for an invention. Such awareness and advantages of Patent protection gives an incentive to members of Universities for more inventions, leading to greater skills. Thus, University, in the end produces high quality manpower that the world is chasing for.

Licensing

Unlike industrial scientists and engineers who generally are hired to invent and assign rights in their inventions to their employer without any residual rights to additional compensation, university personnel are in a different position. The prime focus of universities is to educate and, in some instances, to conduct technical research.[2] However, in case of any invention during the conduct of technical research, Universities must not lose an opportunity to file a Patent application and take benefits from it thereon. This helps the universities in investing more on R&D and helping them in overall development.

 Academic-Industrial Linkages

There are many instances where Universities collaborate with industries for innovating in a specific domain, which gives a lot of exposure to its faculties and students and help them gain a position in these industries, leading to a lot of acknowledgement of the respective Universities. This, in turns, encourages the entire Academic ecosystem to do more research leading to useful invention, leading the country in becoming the hub of research and development.

One such occasion where innovation ecosystem was built was for Drug discovery, in which recently about 45 MoUs were exchanged between Pharmaceutical industries and central institutes such as IITs, IISCs, NIOERs, IISc-B, NIFT NITs, RGIPT, RGNIYD& SPAs. It is steps like these that have led India to enjoy the position of leadership in the world’s pharmaceutical market in Generic medicines.  Much of the credit also goes to policy initiative in terms of Patent Act, 1970 which allowed process patents, enabling in transforming India from medicine importing country to exporting country and Private and Public skill and entrepreneurship of Pharma Industry.[3]

Further, It is observed that India has been increasingly getting involved in research and development, so much so that, various Multinational Corporations across the world has shifted their R&D base in India. This is a significant reason as to why Indian Universities should file for Patent applications as all of the above facts give incentives for the Universities to innovate more useful products that helps grow the society as well as the economy.

Government Policies Supporting the Filing of Patent Applications

The Government of India amended the Patent Act by introducing the following policies that gives incentives to academic institutions to protect their inventions under Patent law.

  • The act has provided a concession to small entities and individual in fees for filing applications. Under the Act, an individual is supposed to pay Rs. 1600/- and Small entities shall pay 4000/-, however other Legal Entity are obligated to pay Rs. 8000/- .Thus, giving approximately 50% relaxation to an individual and small entities.
  • Scheme for facilitating Intellectual Property Protection (SIPP) running on pilot basis till 31st March 2020, facilitating 80 % rebates to start-ups for filing Patent applications. They can also avail the special facility of expedited examination of their patent applications.
  • The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India, has signed an Institutional agreement with Anna University to establish India’s second Technology and Innovation Support Center (TISC) at the Centre for Intellectual Property Rights (CIPR), Anna University, Chennai, under the World Intellectual Property Organization’s (WIPO) TISC program.[4]

Such reduction in filing fees for individuals, small entities and start-ups will help students to file patent application without any inconvenience. The objective of the aforesaid policies is to stimulate a dynamic, vibrant and balanced Intellectual Property Rights (IPRs) system in India to foster creativity and innovation, thereby promoting entrepreneurship and enhancing social, economic and cultural development

 Present Scenario

The data as presented below in Fig.1 and Fig.2 shows that the Indian universities have become more and more aware about the importance of IP over the last decade. The number of Patents filed by the various Indian Institutes of Technology for instance has increased from 91 in 2008-09 to 400 in 2016-17. IITs continue to top the rank list by filling the maximum number of applications in a year for the protection of their inventions within India, following which, Amity University and Indian Institute of Science score 2nd and 3rd rank. It is to be noted that Indian Institute of Science has shown remarkable growth in number of filing Patent applications in 2016-2017 as compared to the year 2008-2009. Further, Amity University recorded about more than 23% growth in the year 2012-2013. Moreover, CIPR has filed more than 185 Patents, 29 Trademarks, 39 Copyrights, 25 Industrial Design and has also assisted in filing 12 International Patent Applications.

                univversity_patent_1

                University_Patent_2

The process of liberalization, privatization and globalization which started in 1991 has gained momentum in recent times. This, in addition to the fact that technology is increasingly penetrating in all aspects of Indian society, has resulted in greater awareness of IPR among all institutions of India. The foremost among them have been the universities and research institutes.

However, this positive trend of greater awareness of IPR and high growth in number of patents being filed by Indian Universities have been somewhat limited to just the top universities of India. If India is to become a knowledge-based developed economy and society in the coming decades, the trend of greater number of patent filings has to permeate to all the Universities of India and not just remain at the top. Innovation has to be in the forefront of this process. The universities need to implement all the above mentioned steps in order to gain recognition and acknowledgment in the field of research and development and innovation by protecting them through patent law. The need of the hour is to equip our Universities enough, so that large numbers of them are able to engage themselves in good quality and innovative research, resulting in socially relevant and commercially viable inventions. Along with this, the Universities also need to ensure they are able to realize the commercial benefits of their invention by using the IPR regime.

Thus only when the recent trend as seen in the top Indian universities is further developed and replicated in other universities, will India truly realizes its goal of becoming innovative and knowledge-based developed economy and society.

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

References:

[1]http://www.wipo.int/edocs/pubdocs/en/intproperty/958/wipo_pub_958_3.pdf

[2]http://www.tms.org/pubs/journals/JOM/matters/matters-0301.html

[3]http://pib.nic.in/newsite/PrintRelease.aspx?relid=130224

[4]http://pib.nic.in/newsite/PrintRelease.aspx?relid=173318

 

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Exclusive Webinar On Intellectual Property Issues And Portfolio Management

In today’s competitive global market, Intellectual Property (IP) plays a key role in a company’s expansion and success. As India aligns its policies to make itself more growth-friendly, it is essential to recognize innovation as a key aspect for accelerating economic development. Intellectual Property Rights (IPR) can aid a start-up entrepreneur in gaining key advantage and exclusivity over the other competitors. A company’s IP portfolio is an extremely valuable asset to attract investors and protect the business.

Recognising the increasing importance of IPR for budding entrepreneurs, Khurana&Khurana, along with IIPRD, bring to you a unique opportunity to learn from the absolute best in the field in a special Webinar on June 30, 2018 from 3:00 PM to 4:00 PM IST. It shall be conducted by Mr. Parvez Kudrolli, an esteemed Senior Associate and registered Patent Agent at Khurana & Khurana and IIPRD. He will holistically deal with the creation, management, protection and enforcement of IP Portfolios. His expertise in patents, consultancy, business development and Software related IPR ensure that every budding enterpriser will gain comprehensive awareness on contemporary IP issues. The attendees will also get the unique opportunity to clear any doubts they may have, post the Webinar.

Interested individuals can register here.

GDPR- The New Era of Privacy Protection

General Data Protection Regulation or GDPR is the new privacy protection regulation of the European Union which was adopted on 26th April 2016 and has to come into effect on 25th May 2018. The nucleus of the GDPR is to reinforce data protection for individuals not only within the territory of EU but extends to secure export of Personal Identifiable Information (PII) from the territory of EU.

GDPR replaces the existing Data Protection Directive and aims at harmonising laws across the entire EU.

Parties Involved

  • Data Controller that is the ones who decide upon the purpose of the data.
  • Data Processors that is the ones who directly are in the act of processing of the data.
  • Data Subjects that is the citizen’s of EU who takes the services of the data controller.

Within these data controller and processors there are essentially two categories which the new legislation aims to cover:

  • A presence in an EU country of the controller or the processor.
  • Not present in EU but organisation deals in data belonging to the EU citizens.

What ‘Personal Data’ does GDPR covers?

The new legislation by the term personal data means to cover any information which is used to identify a person (natural person) this includes:

  • Basic identity information such as name, email, address, and online ID numbers;
  • Web data such as location and IP address;
  • Health, genetic, mental and biometric data;
  • Racial or ethnic data;
  • Political opinions;
  • Cultural or social identity.

Appointment of a Data Protection Officer

The legislation mandates the appointment of a data protection officer where processing activity is being carried on by public authority except for courts in their judicial capacity, also when the core activity of the controller and the processor is such that it requires systematic monitoring of the data subjects or when the processing of data relates to people involved in criminal convictions.

Key Policies

The focal point of the policy is the consent factor. Companies will now have to take proper and informed consent from the person who is sharing Personally Identifiable Information (PII), any sort of vague or confusing statements cannot be used future onwards in order to extract personal information. This is a major shift from the idea where the companies used to have a single consent box and by checking in the box users tend to consent on a number of things, as now consent has to be taken individually.

Withdrawal from consensual record of the data has to be as easy as consensually submitting the data and this is the point of convergence of the new regulation. The law now mandates the guardian to opt in for a child below 16 years in regard to any sharing of personal information.

Consumers now have enormous control over the data, they will be able to access the personal data being stored in, inspect as to the purpose for which the data is being used and have the ‘right to be forgotten’ that is ask the data controllers at any point of time to erase the data existing with them.

The new law takes into account even the measures to be taken in case of any breaches. The companies will now have to within 72 hours of becoming aware of any data breach inform the protection authority as well as the customer whose data is under threat without any undue delay.

Effect of GDPR on Websites

Websites will need to comply with GDPR in respect of both privacy policy and cookie policy. The websites now ought to have privacy policy which is concisely clear and transparent. Meaning thereby that the policy should be written in plain language rather than complicated and make it easy for the users to understand. The key is that the users have to be well informed of the data which is being collected from them.

Since GDPR covers all forms of personal data, cookie policy has came into picture. Cookies store unique information about the user thereby storing the personal information hence cookie consent has to be enabled.

Implied consent is no longer sufficient that is the users will have to expressly consent to the data which is being collected by cookie. This means that the websites which show pop up stating that ‘by using the website you agree with the cookie policy’ are no longer sufficient.

 Penalty

An organization in breach of GDPR laws will be fined up to 4 percent of annual global turnover or 20 million Euros ($24.6 million), whichever is bigger.

Impact of GDPR on Indian Market

The main question which sails through the mind of most Indians is whether GDPR will apply on Indian Data Processing Companies or is the law restricted to only the EU companies. This question demands looking into Article 3 of the regulation which has laid down the territorial scope of the policy.

Further the definition of data processor has been given a wide connotation in the legislation. It means any operation performed on personal data such as collecting, recording, structuring, storing, using, disclosing by transmission and includes erasing and destroying. Article 3 makes it precise that it shall apply to all companies and organisation whether within EU or not.

The dilemma then arises as to whether in the absence of any sort of treaty can EU legislation have such an extra territorial reach? The answer to this is simple, that the EU legislation intends to apply to only those extra territorial organisations which have EU citizens as their data subjects. The fact that it involves the citizens of their territory the law is binding on the other countries as well including Indian companies which tend to deal with EU as data subjects.

In a nutshell GDPR aims to cover any organisation in the EU that handles personal data and any individual in the EU whose personal data is handled by an organisation, wherever that organisation is based. Europe has always been a substantial marketplace for the IT’s, BPO and Pharma companies. The IT companies estimate for about 155–220 billion USD in the European member states. Thus for an Indian IT company to continue its relations with EU it has to mandatorily follow the GDPR.

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

Tobacco Packaging Laws: An Effectual or an Ineffectual Effort?

There have been growing concerns associated with the ill effects of smoking. The Government has been trying to focus on the public heath measure side-lining the trademark related rights and commercial interest of the Tobacco companies, and 85% mandatory health warning display on the Tobacco boxes is a result of the same. Attempts have also been made to mandate plain packaging of tobacco products[1] and to prohibit sale of lose cigarettes and disallow indirect advertisements of tobacco products[2]. The central objective behind all these attempts remains dis-incentivising sale of tobacco products.

The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 or COTPA, 2003 regulates trade, commerce, production, supply and distribution of cigarettes and other tobacco products in India. Rules[3] were framed there under in 2008 by the ministry of Health and Family Welfare which prescribe a framework for packaging and labelling of tobacco products.

The 85% Mandatory heath warning display notification

In 2014, the Government amended the Cigarettes and other Tobacco Products (Packaging and Labelling) Rules and increased the size of the health warning on the principle display area from 40% to 80%. The amendment was challenged in the Karnataka high court and the court declared it as unconstitutional.

The court held that there is no scientific approach adopted by the Health Ministry in framing the amended policy. The Government was unable to establish it’s rational or basis on the following considerations:

  • That the prior 40% pictorial display requirement in the rules did not satisfy the test of being legible, prominent and conspicuous;
  • That is why the 85% compulsory display area requirement is uniformly applicable to all the products, i.e., cigarettes, beedis, chewing tobacco, despite the fact that their packaging is inherently different;
  • That whether or not the 85% pictorial and textual warning would result in violating the rights of the petitioner under Section 28 of the Trade Marks Act, 1999.

Since there was nothing to indicate that enlarging the size of the warning from 40 to 85% of the package would serve any meaningful objective and the Government could not establish its rationale behind adopting the policy, the division bench unanimously declared the impugned amendment as unconstitutional.

However, on January 8, 2018, Supreme Court stayed the Karnataka high court judgement and reinstated the 85% mandatory warning display requirement. Emphasising on the importance of public health and its harmful effects of tobacco product, the court held that a policy based decision on the health risks posed to citizens cannot be struck down. The court asserted that the citizens must be aware of the affect the products can have on their health.

The reasoning stated by the court indirectly inclines on the belief that failure to reinstate the prescription and allowing a display warning of anything less than 85% will not safeguard their health. Instead of dealing with the question that whether there is a rationale for the Government to increase the size from 40% to 85%, the court stepped onto the notion of safeguarding health of citizens at all costs and thereby presumed that anything less 85% of the warning display will fail in safeguarding health of citizens.

The policy of enforcing Graphic warning labels has spread globally based on the Framework Convention on Tobacco Control. Article 11 of the Framework Convention on Tobacco Control (FCTC) also recommends the introduction of these labels for 50% of the packet cover. Perhaps the middle path suggested by Kapil Sibal, to allow 50% of the surface area to be covered by the warning as an ad hoc measure could have been a more balanced way out.

Plain Packaging Laws                           

In 2016, a PIL was filed in the Supreme Court of India for implementation of Plain Packaging Laws in India. The Supreme Court directed the Ministry of Health contending that delaying the implementation of plain packaging was in violation of the rights of the citizens under Articles 14 and 21 of the Constitution.  The response of the Ministry to this notice is awaited. Back in 2012, a private member bill was introduced in the LokSabha by Member of Parliament Baijayant Panda which stipulated for plain packaging of tobacco products. This move came days after Australia became the first country in the world to ban coloured packaging of tobacco products and mandating plain packaging for tobacco packs, removing any indicators to distinguish between brands except for the brand of the name itself.

The amendment bill proposed for plain packaging of cigarettes and other tobacco products wherein the brand and product names would be permitted in a standard colour, position, font and size in a predefined area on the packet and all tobacco products will be similar with 60% of the front and the back cover occupied by graphic health warnings.

The constitutionality of the Australian mandatory plain packaging law was challenged in Australian High Court by the tobacco companies alleging that the Government is trying to seize their intellectual property by banning the display of their trademark on the cigarette packets. The Court held that although the IP rights and other related rights of tobacco companies may be restricted as a result of the plain packaging laws, the restriction imposed by this law does not “involve the accrual of a benefit of a proprietary character to the Commonwealth which would constitute an acquisition.”

After Australia, several other nations including Ireland, the United Kingdom and France have also brought in legislations with plain packaging laws for tobacco products.

Remarks

Tobacco packaging and labelling policies have developed as a cost effective tobacco control measure. Graphic warning labels policies which have been deemed to be more effective than text warnings and thus have been adopted in over 70 countries. Similarly, the standardisation of colour and design of tobacco products, have been argued to have major benefits. Firstly, that it increases effectiveness of health warnings, secondly, that it reduces false health beliefs about cigarettes and lastly, that it reduces brand appeal especially among youth and young adults. However, the effectiveness of such laws in reducing the consumption of tobacco have been much contested and debated over the last decade. One of the major argument against such tobacco packaging laws has been that the harmful effects of consumption of tobacco, which is already widely known and that attachment of such huge sizes of graphic warning violates trademark rights and copyrights and incites the production of counterfeit tobacco[4]. According to Tobacco companies, plain packaging makes it harder to control the entry of counterfeits in the market. The production of counterfeit tobacco has been the foremost fear in bringing such packaging laws. The counterfeited tobaccos do not adhere to any standards and may be adulterated with Sulphur and Carbamide making them far more harmful to public health than ordinary tobacco. It has been pointed out by many that that nothing is easier to template and copy than standardized design, shape and colour of a product[5]. According to a 2014 KPMG report[6], the use of illegal tobacco in Australia reached record levels in 2013 and represented 14.5% of total consumption.

In Indian context, taking into consideration that nearly 75% of all cigarettes are sold loose and the buyer does not even come in direct contact with the packaging, it becomes even more important to examine whether or not there is a need of such packaging laws and policies. Apart from the effectiveness of such policies, the policy makers must also consider all the possibilities of the ill-outcomes that such can policies have. A few psychologists have also argued that the mandatory placement of graphical warnings and packaging requirements on the boxes can easily increase its ‘attractive value’, stemming from the appeal often associated with experimenting with the illicit and forbidden, – inducing the young adults to play daredevil and try their hand on that-which-must-not-be-touched. There also have predictions that standardized packaging would lead the brands to a brutal price war making the products cheaper than before and thus making them more affordable. Thus, all such concerns leads us to a need of analysing the pros, cons and effectiveness of such Tobacco packaging and labelling policies.

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

References:

[1] Amendment to Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (COTPA) introduced in LokSabha by M.P, Baijayant Panda in 2012.

[2]http://www.prsindia.org/uploads/media/draft/Tobacco%20Act.pdf

[3]https://www.tobaccocontrollaws.org/files/live/India/India%20-%20G.S.R.%20182%28E%29%20-%20national.pdf

[4] Vathesatogkit P, Charoenca N Indian J Public Health. 2011 Jul-Sep; 55(3):228-33.

[5] Snowden, C. (2012). Plain Packaging.Commercial expression, anti-smoking extremism and the risks of hyper-regulation. Adam Smith Research Trust, pp9.

[6]https://home.kpmg.com/content/dam/kpmg/pdf/2016/04/australia-illict-tobacco-2015.pdf

Is Censorship a Necessary Evil?

With more than 1000 films being released every year, in India censorship of films has not only been a debate in the legal fraternity but also a topic of discussion at the family dinner table. The recent delay and cuts in the movie “Padmavati” is just one of the many examples of censorship in India. The current trend of CBFC of cutting scenes and banning of movies has raised various questions in people’s mind which need clarification.

What is the need for Censorship of a film?

In 1970, a Supreme Court judge in K. A. Abbas v. The Union of India & Anr, recognized the universal treatment of motion pictures different from that of other forms of art and expression. He further insisted that it has a deep impact on adolescent children more than that on mature women and men. The need of censorship thus arises from the prolonged effect that a motion picture has on an individual that doesn’t occur in a painting, book or play.

Who can censor a movie?

A motion film is certified by Central Board of Film Certification (CBFC), the regulatory authority in India, under Section 5A and B of the Cinematograph Act, 1952.

In addition, powers are given to the Central Government to suspend a granted certificate for such period as it thinks fit or it may revoke such certificate if it is satisfies the conditions under Section 5E of the aforementioned Act.

There are 4 types of censor certificates to be given:

  1. U certificate: Sanctioned for unrestricted public exhibition
  2. U/A certificate: Sanctioned for unrestricted public exhibition except any child below the age of twelve years may be allowed to see such a film after the consideration of child’s parents or guardian
  3. A certificate: Sanctioned the film for public exhibition restricted to adults
  4. S certificate: Sanctioned the film for public exhibition restricted to members of any profession or any class of persons, having regard to the nature, content and theme of the film, e.g.: doctors, farmers etc.

What are the grounds for Censorship?

Section 5(B) (1) lays the grounds for not certifying a film for public exhibition if, in the opinion of CBFC, the film or any part of it is against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or involves defamation or contempt of court or is likely to incite the commission of any offence. This is in accordance with the reasonable exceptions specified in Article 19 of the Indian Constitution.

To help CBFC facilitate the certification process, guidelines have been issued by Central Government time and again. A few out of the 20 guidelines that must be ensured by the CBFC are:

  1. Anti-social activities such as violence are not glorified or justified
  2. The modus operandi of criminals, other visuals or words likely to incite the commission of any offence are not depicted;
  3. Human sensibilities are not offended by vulgarity, obscenity or depravity;
  4. Scenes degrading or denigrating women in any manner are not presented;
  5. Visuals or words contemptuous of racial, religious or other groups are not presented.

Moreover, the Censor Board has also released a list of banned words which includes Hindi English curse words, abusive language and the mention of Mumbai not Bombay as per Government’s Official Notification dated 04/08/1996.

Appeal Procedure:

If the applicant is aggrieved by the order of the CBFC he may appeal to the Appellate Tribunal which is chaired by a retired High Court judge or any person so qualified to be a High Court Judge. Further, Revision powers are given to the Central Government to call for the record of any proceeding in relation to any film which is pending before, or has been decided by the Board and may make a decision as it deems fit, after giving the applicant an opportunity for representing his views in the matter.

Role of Judiciary

The Judiciary has frequently demarcated between the expression and abuse of freedom of speech. It has always tried to maintain a balance between rights of artists and the need of censorship wherever required. In S. Rangarajan v. P. Jagjivan Ram, the Court opined, censorship by prior restraint is not only desirable but also necessary in case of motion pictures as it has a strong impact on the minds of the viewers and can affect their emotions. In this case the ban on this movie was lifted. Similar cases in which Supreme Court passed an order in the favour of artists are Raj Kapoor v. Laxman, and Patwardhanv. Cent. Bd. of Film Certification, Life Insurance Corporation of India v. Prof. Manubhai D. Shah and the most recent was the lift of ban on Padmavati.

Analysis

As the title suggests, censorship is a necessary evil, but that doesn’t negate the freedom of speech and expression completely. The chief problem is that it seems that Censor Board doesn’t look into alternative options before banning a film and fails to take into account a lot of mitigating factors involved in the making of the film. While public interest needs to be protected, private interest of the parties involved cannot absolutely be forgotten. Right from the script to music, to production and advertising, a lot of effort and money has gone into films which when banned enormously impacts the economic status of people involved, which in turn comes under the ambit of their fundamental right of livelihood. This repeated pattern of Board or Government banning or halting the release of movies, thereby consequently an appeal being filed to High Courts and Supreme Court where the ban is lifted is getting quite tedious. Since the scope of grounds are quite wide it calls for some stringent measures to be taken by authorities, to clarify the objectivity with which a film must be granted a certificate. The struggle between the necessity of censorship and freedom of speech must be met with a right balance.

Author: Ms. Avadhi Jain, intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at swapnils@khuranaandkhurana.com.

References: 

[1] https://www.cbfcindia.gov.in/main/guidelines.html

[2] https://blog.ipleaders.in/censorship-films-law/#_ftn7

[3]https://factly.in/how-is-a-film-certified-by-the-censor-board-cbfc-film-certification-process-in-india/

[4] http://mib.gov.in/acts/cinematograph-act-1952-and-rules

Half-Day Symposium on Software, Electronics, and Mechanical Patent Portfolios

After successfully conducting several symposiums over the years, IIPRD is coming up with half-day seminar on software, electronics, and mechanical patent portfolios with focus on preliminary preparation, prosecution, and litigation in India, US, and EP.  The symposiums are being organized in Bengaluru on 16’th April2018, and in Mumbaion 17’th April 2018.The seminar is being arranged by IIPRD along with Khurana and Khurana, Advocates and IP Attorneys (India), Sughrue Mion (US), and Keltie (EP).

With speakers like Chid Iyer-Partner of International Law Firm of Sughrue Mion, Robert McDougall-Chartered Attorney at Keltie, Vinod Khurana-Senior Partner at IIPRD and Khurana & Khurana, IP Attorneys, and Tarun Khurana – a Partner and Patent Attorney at Khurana & Khurana, each having over 15 years of experience in a broad range of IP subject matters, one cannot afford to miss same.

This event turns out to be great opportunity for IP Groups, R&D experts, In-House IP/Legal Counsels, Patent Agents & Attorneys in the field of Practice, Patent Litigators, and Professionals in Legal Domain related to Software,Information Technology, Instrumentation, Electronics, Electrical, Embedded, Mobile Technology, IoT, Telecom, and Mechanical Domains.

Fee per delegate is INR 4,000 for Indians and is USD 100 for foreign applicants.

For more details about profiles of partners, programme outline, speakers, why and how to apply, please click here.

The Take of Supreme Court over Abuses, Falsehoods on Social Media

With a view to express opinion, belief and thought, every citizen of India is bestowed with the right of freedom of speech and expression guaranteed under Article 19 of the Indian Constitution. This right has been most distinguished in the matters where citizens have been able to raise voice against the unjust, express ideas freely and expose the discriminatory and corrupt practices of the government which nothing but intends to deceive people with malice and fraudulent practices. Running parallel are also the reasonable restrictions which can be imposed upon the citizens to protect the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence.

Recently, there has been an expressed concern over abusive and derogatory comments on social media as uncharitable comments, trolls and aggressive reactions on almost every issue, including judges and judicial proceedings came under the scanner of the Supreme Court which expressed concern over it agreeing that regulating them was necessary and also opined that people doing so should face the consequences. In furtherance the apex court also disapproved and expressed anguish over a statement made by a senior advocate and former Supreme Court Bar Association President that most of the judges are pro-government. The issue mainly arose after Samajwadi Party leader Azam Khan termed the Bulandshahr gang rape act as “an outcome of political conspiracy”. Consequently a petition was filed against him in the apex court by the survivor’s family following his remarks. The court referred the matter to a constitution bench and said the larger bench would be at liberty to frame questions for adjudication, including the issue of social media. Emphasizing the need to regulate social media to restrain people from posting objectionable and abusive posts, senior advocates Fali Nariman and Harish Salve, who assisted the court as amicus curiae, narrated their own ugly experiences with trolls to a bench of Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud. The renowned counsels expressed the abusiveness faced on twitter handles and claimed that government functionaries so assorted to the mediums claimed that it was their personal view was in need of some urgent regulation. Justice Chandrachud, perhaps a follower of social media, expressed concern over the untamed online space stating that wrong information pertaining to even court proceedings were posted and circulated. The bench further added that one of the observations made during the hearing on the Rohingya matters was projected as if an order was delivered and it became a subject matter of debate.

Initially during the old times the right to privacy could be infringed by the state only, but in recent times it has emanated from private parties also. India, which is broadly a country of immigrants and many religions, castes, languages, ethnic groups, etc. needs to adopt essential measures for being united and ensuring prosperity along with tolerance and equal respect to all communities living in the nation. Majority population being illiterate and ignorant, the real question to the media is whether to lift up the intellectual level of our people by propagating rational and scientific ideas, or whether it should go down to that low level and seek to perpetuate it? A person’s reputation is linked to his fundamental right and that has to be respected by all is the universal principle that must be advocated by all.

Author: Mr. Diwadkar Sayali Manish, intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at anirudh@khuranaandkhurana.com.

References:

[1]https://timesofindia.indiatimes.com/india/sc-concerned-over-abuses-falsehoods-on-social-media-agrees-there-should-be-curbs/articleshow/60959972.cms

[2]http://www.thehindubusinessline.com/info-tech/social-media/abuse-of-social-media-platforms-comes-under-supreme-court-lens/article9889190.ece

[3]http://www.worldnews.easybranches.com/regions/india/sc-concerned-over-abuses-falsehoods-on-social-media-agrees-there-should-be-curbs-338137

Know the Roster System

January 12th, 2017 is a date earmarked in judicial history, an event that witnessed four senior most sitting Judges of Supreme Court of India, publicly raising concerns about the structural flaws regarding the functioning of the administrative division of the Supreme Court. They put forth the complete responsibility upon the shoulders of Chief Justice of India regarding roster system of the Apex Court. In this article, we would make an attempt to gain better understanding and clarity regarding this roster system and about the controversy surrounding it.

The word ‘roster’ can trace its roots since early 18th century, where it was originally used in order to indicate the list of duties and leave for military personnel[1]. In the contemporary world, it is defined as a system to allocate different tasks to all the members in order to achieve higher efficiency.

Since this system allocates tasks to the group members, it has to be under control of some decision making authority. The issue starts when the decision making authority is also to be assigned tasks under that system. The issue is regarding the misuse of that authority of decision making for any reasons whatsoever.

After sufficiently discussing about the meaning of a roster system, let us link it back to the Supreme Court:

1. Firstly, the efficiency of the roster system. As on November 1st 2017, the Supreme Court still had 55,259 pending matters, 24.69% of which cannot be listed for ‘hearing’ before Honorable Although the situation has improved as compared with half a decade earlier, when on November 1st 2012, the Supreme Court had 64,931 pending matters, 62.10% of which could not be listed for ‘hearing before Honorable Court[2]. These reductions in pending cases signify that we need a more efficient procedure for allocation of cases in order to achieve higher utilization of workforce. Hence, better management roster system seems to be necessary.

2. Secondly, regarding the issue of the source that confers such power to a decision making According to the Supreme Court Rules, 2017[3]. Chapter V: Powers, Duties and Functions of the Registrar, Rule 29, expressly states that the Registrar shall prepare roster under the directions of the Chief Justice of India, andall such powers, duties and functions of the registrar are subjected to any further special or general orders of the Chief Justice of India. This power bestowed by the handbook upon the CJI has been reiterated in a separate chapter dedicated to Roster (Chapter VI). It has further been mentioned in Chapter XIII: Listing of Cases. Therefore, as per the rules, the Chief Justice of India has an absolute authority in this regard. Also, to strengthen the argument a step further, we can take into account the precedents that have been established by the Supreme Court Judgments and thereafter been considered as the ‘Law of the Land’. In the seminal judgment of State of Rajasthan v. Prakash Chand[4], paragraph 67 clearly defines that regarding the matters of the High Court, the Chief Justice is the master of the roster( point 2), and this precedent has been considered in the later judgment of Campaign for Judicial Authority and Reforms v. Union of India[5] where the court has reiterated it and extended the understanding of authority of Chief Justice of a High Court to be applicable to the Supreme Court and the Chief Justice of India as well.

3. Thirdly, the issue is regarding unrestricted use of roster system by the Chief Justice which is not accountable under Constitution or under Supreme Court rules. And the issue can be rectified only by the sitting Chief Justice of India as he has a direct authority over the formulation of the rules of the Supreme Court. And here there is conflict of interest as it does not make much sense for a person adorning the position of Chief Justice of India to take a step in order to formulate a rule that will restrict his/her own power in the end. Moreover, if any action by way of Constitutional Amendment is attempted by the Legislature, it is more likely to be taken as an interference of the legislature in the matters of the judiciary and is likely to be struck down as being against the basic structure doctrine[6].

Another viewpoint can also be formed that based on the existing system, before the event took place, one of the four sitting senior most Justices of the Supreme Court would most likely have become Chief justice of India after some time and can then also have played an instrumental role in bringing out the they desired. Other than public awareness, this event seemed to bring out something more that would be  constructive and tangible in nature.

Author: Mr. Madhur Tulsiani, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at anirudh@khuranaandkhurana.com.

References:

[1] https://en.oxforddictionaries.com/definition/roster

[2] http://supremecourtofindia.nic.in/statistics

[3] http://supremecourtofindia.nic.in/pdf/LU/ppop2017.pdf

[4] http://sci.gov.in/jonew/judis/13613.pdf

[5] (2018)1SCC196

[6] http://sci.gov.in/jonew/judis/29981.pdf

M/s. Sunwhite Infrastructure Pvt Ltd. V. Kindle Developers Pvt Ltd, CP No. 40 (ND)/17 (decided on 23.08.2017)

Facts

The petition was filed by M/s Sunwhite Infrastructure Pvt Ltd (hereinafter referred to as “the petitioners”) against Kindle Developers Pvt Ltd (hereinafter referred to as “the respondents”) Sec 241[1] and Sec 242[2] of the Companies Act, 2013 alleging acts of mismanagement and oppression prejudicial to the interests of the company as well as the stakeholders. The respondent company, engaged in the business of real estate development was incorporated in March 2011 with a paid up capital of Rs. 1 Lakh of which the petitioner acquired a 40% shareholding from respondent No. 3. The petitioners alleged that upon the representation of the respondents that they had been allotted a plot by Greater Noida Authority for development of a group housing project and were in need of financial assistance, the petitioners extended a loan of Rs. 6 Lakh to the respondents upon the following conditions:

  1. The loan was to be repaid within the period of one year.
  2. The respondent undertakes not to borrow any further money from third parties without the petitioners consent.

However, due to the failure of the respondents to repay the loan within the time specified, the petitioners filed a suit for permanent and prohibitory injunction in Court of Civil Judge, Delhi to restrain the defendants from parting, selling or creating rights of third parties over the allotted land. An order of injunction was passed against the respondents by the said Judge. The present petition was filed subsequently against the acts of oppression and mismanagement by the respondents who failed to appear despite being served and were, thus, proceeded ex parte.

Contentions of the Petitioner

The petitioners in the present petition contend that:

  1. In complete disregard of the loan agreement entered into by the petitioners and the respondents, the respondents not only defaulted on the payment but also took further loans from various third parties.(Para 5)
  2. The defendants were defrauding investors by siphoning off the funds collected from prospective buyers without engaging in any significant construction work. The petitioners also entered into record the audited balance sheet of the defendants for 2015-2016 reflecting advances of Rs. 157 crores collected for booking of flats against which very little construction was completed.(Para 5)
  3. The petitioners further alleged that statutory compliances were not carried out on time, no Annual General Body meeting had been conducted since Sept, 2014 and books and accounts of the defendant company were not available for inspection to the petitioners.(Para 6)
  4. It is also contended by the petitioner that in complete contempt of the order of Civil Judge, Delhi, which restrained them from altering the management of the company, respondent no. 4 & 5 were appointed as Additional Directors by the respondent company. Such appointment is otherwise illegal as well due to it not being ratified by the remaining management. (Para 6)

Issues

  1. Whether there has been oppression and mismanagement by the respondent company?
  2. Whether the appointment of additional directors is in violation of the order of civil judge, Delhi?

Judgement

The NCLT held that there had been no oppression of the petitioners in their capacity as shareholders and that their grievance was misplaced as they were aggrieved in capacity of creditor whose entitlement under a loan agreement was violated  for which the appropriate remedy would lie in a civil forum. It observed that, “The non-payment of a creditor could not be held as oppressive to the shareholder. The order of Civil Court Judge restraining the respondent from alienating the said property was enough to secure the interest of the creditor” (Para 9d).

It was held that allegations of siphoning off of funds by the respondents were largely uncorroborated and unsubstantiated and on the basis of the material placed on record, it was not possible for the Tribunal to conclude whether the advances justified the quantum of work done (Para 9a). On absence of any cogent material, the Bench was unable to accept allegations of siphoning off of funds, duping of prospective buyers or direct an investigation into the affairs of the company.

Secondly, with regard to non-availability of books & accounts of the respondent company, it was observed that there was nothing to show that the petitioners ever made any effort to inspect the same which they, as shareholders of the company, had a right to do. (Para 9b)

The NCLT held that insofar as the appointment of the Additional Directors was concerned, the appropriate form to deal with such appointment was the Court of Civil Judge, Delhi who has passed the impugned order restraining the respondents from doing so. (Para 9c)

Lastly, in response to the allegations that no AGM had been held since Sept, 2014, and that statutory compliances have not been complied with, the Bench held that as shareholders with 40% equity in the respondent company, the petitioners were well within their rights to requisition the management to convene a meeting to discuss any agenda or matter they thought fit. (Para 9e)

Directions

The NCLT gave the following directions:

  1. The Bench directed the respondents to hold AGM for defaulting years as well as the Financial Year ending on 31.03.2017 in exercise of provisions of Sec97[3] of the Companies Act, 2013, holding, the allegation of non-compliance with statutory requirements would, in absence of any defence by respondents, be tantamount to mismanagement. (Para 13)
  2. The respondents were also directed to lay before members, all Financial Statements, Annual Returns, Directors Report etc followed by filing them with the Registrar of Companies as statutorily required as well as paying all taxes required by Government. (Para 14)
  3. Lastly, though observing that courts should not ordinarily interfere with the management, with due regard to the fact and circumstances of the present case, the Bench directed the appointment of an independent Observer/ Administrator to oversee proper convening of the AGM and ensuring that all statutory requirements are complied with. The Bench also remarked that failure to comply with any of the directions would invite penal consequences under the Act. (Para 15 & 16)

 

Author: Ms. Noyonika Mukherjee, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1] Sec 241, Companies Act, 2013 provides that any member may apply to the Tribunal who complains that the affairs of the company are  being conducted in a manner prejudicial to public interest, interest of the company or is prejudicial/oppressive to him or any member of the company OR any material change has taken place in the management/ control of the company by reason of which it is likely that affairs of the company will be conducted in a manner prejudicial to interests of the company, any members or any class of member. The Central Government can also apply to the Tribunal for an order under this section.

[2] Sec 244, Companies Act, 2013 provides that an application may be made under Sec 241 by any member- (a) in case of a company having a share capital, not less than 100 members or not less than 1/10th of total members or any members(s) holding not less than 1/10th of issued share capital provided that have paid all calls/sums due on their share;(b) in case of company not having share capital, not less than 1/5th of total members. The Tribunal may, on an application, waive any of the requirements.

[3] Sec 97, Companies Act, 2013 provides that the Tribunal may, on the application of any member of the Company, call or direct calling of an AGM and give such ancillary/consequential directions as it thinks expedient, if any default is made in made in holding the AGM under Sec 96, provided that the directions may include a direction that one member of the company present in person or proxy shall be deemed to constitute a meeting. A general meeting held in pursuance of the above may be deemed to be an annual general meeting.

Online Disputes and Forum Jurisdiction

The Delhi high court on 3rd January, 2018 in Impresario Entertainment & Hospitality Pvt. Ltd. vs S&D Hospitality[1], took a different view with respect to the Internet jurisdiction[2].

In the above case, plaintiff sought permanent injunction against the defendants who was running a restaurant at Hyderabad, under  the impugned trademarks ‘SOCIAL’ and ‘STONE WATER’ and its services were available through Zomato. The court held that the plaintiff would have to produce material prima facie to show that some commercial transaction using the website was entered into by the Defendant through the app- ZOMATO, within the forum state and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state.

Defendants contended that this Court has no territorial jurisdiction to entertain the present suit  as the defendant neither has his registered office within the jurisdiction of the said Court nor carries on any business within the jurisdiction of this Court. Mere existence of a website without proof of ‘the effect’ does not clothe this Court with territorial jurisdiction to entertain the present suit. Returning the plaint, the court held that a mere hosting of a website that is  accessible by anyone within the jurisdiction of the court is not sufficient for this purpose[3].

Convinced with the Defendant’s contention, the Court Further relied on Banyan Tree Holding (P) Limited v. A. Murali Reddy and Anr[4] which held that a passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. The Hon’ble Court also observed that for the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injury on the plaintiffs business, goodwill or reputation within the forum state as a result of the Defendant’s website being accessed in the forum state would have to be shown.

Earlier, the stance of the court was a bit different  in the case of World Wrestling Entertainment v. M/S Reshma Collection & Ors[5]– The Delhi High court had held that the mere website of the party referring to various goods  is not an offer but an invitation to an offer, just as a menu in a restaurant. The invitation, only if accepted by a customer in Delhi, becomes an offer made by the customer in Delhi for purchasing the goods “advertised” on the website of the appellant/plaintiff. Further, it held that mere accessibility of website in a forum state which ‘solicits’ its business, through which Defendant’s goods and services are sold, is enough to raise cause of action and in determining the personal jurisdiction in Delhi.

Legal Provisions in Regard to Jurisdiction

The Code of Civil Procedure, 1908 contains the provisions under section 20 with respect to institution of the suits where defendant resides or cause of action arises . It reads as : Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction –

  • The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
  • any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or 
  • the cause of action, wholly or in part, arises.”

[Explanation]: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Section 62 [6] provides that every suit or other civil proceeding in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

 Learned author Mulla in the Code of Civil Procedure, 18th Edn., has observed that under clauses (a) to (c) of section 20, plaintiff has a choice of forum to institute a suit. The intention behind Explanation to section 20 of the Code of Civil Procedure is that once the corporation has a subordinate office in the place where the cause of action arises wholly or in part, it cannot be heard to say that it cannot be sued there because it did not carry on business at that place. The linking of the place with the cause of 12 action in the Explanation where subordinate office of the corporation is situated is reflective of the intention of the Legislature and such a place has to be the place of the filing of the suit and not the principal place of business. Ordinarily the suit has to be filed at the place where there is principal place of business of the corporation.

The Indian Courts have always followed the parent legislation – Civil Procedure Code, 1908 and have  constantly tried to harmonize the technological advancement with the statute. Therefore, in the following caselaws, the courts have explained Section 20 of the CPC with reference to IPR and internet jurisdiction.

Indian Performing Rights Society Ltd. v. Sanjay Dalia & Anr The Supreme Court of India interpreted section 62 of the Copyright Act, 1957 and section 134(2) of the Trade Marks Act, 1999 with regard to the place where the plaintiff can institute a suit. Wherein it observed that “The very intendment of the insertion of provision in the Copyright Act and Trade Marks Act is the convenience of the plaintiff. The rule of convenience of the parties has been given a statutory expression in section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.”

Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November, 2009– The division bench of the Delhi High Court held that “Under clauses (a) to (c) of section 20 CPC, a plaintiff has a choice of forum and cannot be compelled to go to a place of business or residence of the defendant and can file a suit where the cause of action arises.”

In Icon Health And Fitness, Inc vs Sheriff Usman And Anr. – the Delhi High Court assumed jurisdiction under Clauses (a) and (b), stating that the defendants ‘carried on business’ in Delhi. The entirety of the Court’s reasoning for the above is contained in two sentences – “Though the defendants are not residing in Delhi, however, the defendants are offering their fitness apps and brands through App Store, Google Play Store and e-commerce portals like http://www.amazon.in which can be accessed and operated from all over the country, including from Delhi. Thus, it can be said that the defendants are carrying on business or working for gain at Delhi and this Court has territorial jurisdiction to try and decide the present suit as per section 20 of the CPC, 1908

Conclusion

At the outset, the Court does not subscribe to the view that mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. However, a passive website, with no intention to specifically target audiences in the forum State where the host of the website is located, cannot vest the forum court with jurisdiction.[7] The Court in Impresario Entertainment & Hospitality Pvt. Ltd. vs S & D Hospitality, took a very balanced stand and logically differentiated the concept of ‘mere presence of website’ and ‘targeting the forum state’. Thus, it is appreciated that the Court is not rigid and is flexible in providing a reasonable and tenable judgments by considering different facts and circumstances. Hence, it can be seen that the Indian Judiciary is swiftly moving towards a new jurisprudence on internet jurisdiction, in accordance to section 20 of CPC.

Author: Mr. Himanshu, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1] Decided on: 3rd January, 2018 ; CS(COMM) 111/2017

[2] The Code of Civil Procedure, 1908, S-20 (c) – Other suits to be instituted where defendants reside or cause of action arises.

[3] Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414

[4] CS (OS) No. 894/2008

[5] https://indiankanoon.org/doc/71641182/

[6] The Copyright Act, 1957, Section-62-Jurisdiction of court over matters arising under this chapter.

[7] Banyan Tree Holding (P) Ltd