An Article On Shamnad Basheer V. Union Of India And Ors.

It is common to witness infringement cases in the intellectual property law sector but rarely there are suits which point out to the defects in the system managing the grant and working of patents, trademarks or other intellectual property rights.

In the case of Shamnad Basheer v. Union of India and Others[1], a writ-petition was filed against the defaulting patentees as well as the Patent Office as both of them were not complying with the statutory requirements.

Facts leading to the case

Section 83 (g) of the Patents Act, 1970 clearly mentions that “patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public”.

To fulfil such an object, Section 146 of the abovementioned Act specifies that a periodical statement as to the extent to which the patented invention has been worked on a commercial scale in India has to be submitted by every patentee as well as licensee. The Controller has the power under the same section to order any patentee (or licensee) to do the same.

But the real scenario seems to be very different as was pointed out by Professor (Dr.) Shamnad Basheer (the Petitioner in the case) through a number of arguments and evidences that neither the ‘commercial working statement’ has been submitted by many Patentees nor any action is taken against them by the Controller of Patents.

Issue

    1. Manifest failure to comply with Section 146 of the Patents Act, 1970 as well as no action initiated under Section 122 of the same Act against the patentees who did not follow the procedure mentioned under Rule 131[2] of the Patent Rules, 2003.

 

  1. Whether information provided under section 146 of the said Act “Confidential” nature of licensees and sub-licensees.

Arguments by the Petitioner

    • Annual Report (2012-13) of the Office of the Controller General of Patents, Designs, Trademarks and Geographical Indications clearly indicated that out of 43920 patents granted in the year 2012-13, only 27946 of them submitted Forms (Form-27) as required by Section 146 and Rule 131 (mentioned above). The fact that only 6201 patents out of them were found to be commercially working in the territory of India shows that neither the Patent Office nor the patentees consider following the general principles of law.

 

    • Furthermore, the Petitioner presented a query as was raised in front of the Patent office under Right to Information Act (RTI), 2005 which was basically an inquiry as to whether any action was taken against those Patentees or licensees who did not submit the Form-27? The answer was in negative indicating that no action had been taken against the defaulters.

 

    • An interesting point that was further raised was that when NATCO Pharma was granted compulsory license (in relation to a patent numbered 215758 o 9th March, 2012), it was ordered to report accounts of sales to the Controller on a quarterly basis, on or prior to the 15th of each succeeding month but when a query related to the same was raised before the Controller General of Patents, Designs, Trademarks and Geographical Indications on 19th January, 2015, no details were available in the concerned office.

 

    • Furthermore, it was informed to the Petitioner by the Controller of Patents and Designs that Form-27 is filed by Patentees only and many Patentee such as M/s Telefonaktiebolaget LM Ericsson state in the column wherein they are required to furnish information regarding licensees that “As all the licenses are confidential in nature, the details pertaining to the same shall be provided under specific directions from the Patent Office.”

 

Court’s Order

According to the Delhi High Court the information regarding licensees (and sub-licensees) cannot be termed as confidential as all information regarding the grant of patent is already available on the website of the Patents Office and failure to disclose such information by the Patentees would mean non-compliance with the requirements of Section 146 of the Patents Act, 1970 and thus, making such patentees liable for action.

Furthermore, It is pertinent to point out that the Delhi High Court had opined on 10.01.2018 that no information that is required to be filled in Form 27 is ‘confidential’. This was negated on 07.02.2018 stating that information cannot be held ‘not confidential’ as it would be voilative of section 146.

The case has been pending in the Court since 2015 and the Court has directed the Patent Office to provide a proposed modified Form27. Few of the recommendation have also been sent by stakeholders. (read here)

Observation

The systematic failure is a topic seldom touched upon in India as already mentioned in the beginning of the article. The fact being that the internal process of an institution is not thoroughly monitored due to which the persons availing facilities get a way to skip the statutory requirements as laid down by the legislature. Hence, it has become all the more important that people should be made aware that they have certain duties related to the rights they receive from an institution and non-compliance with such duties entails action against them.

One such institution is the Patent Office(s) which grants Patent. The basic purpose of granting a Patent is not to provide exclusive rights to the Patentee over his invention but to ensure that the invention is commercialized for the welfare of the public at large. Hence, submission of ‘commercial working document’ as mandated by the Patents Act, 1970  should not be ignored either by the Patent office or by the Patentee otherwise the whole concept of grant and protection of an invention would come down to nothing.

This case was a progressive step taken to ensure that the common man as well as the institutions understand their responsibility in a field (that is, Intellectual Property Rights) which is in its budding stage in India.

Author: Priya,  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] W.P.(C) 5590/2015.

[2] Form and manner in which statements required under Section 146(2) to be furnished.

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An Overview Of The Issues & Suggestions About Sec 146 Of The Patents Act, 1970 And Form 27

As a result to the PIL filed by Prof. Shamnad Basheer, complaining against IPO for noncompliance of section 146 (working statement of Patent invention), in the year 2015,  the Delhi High Court, recently in January 2018, passed an order directing the Government to submit an affidavit outlining a plan for putting in place a standard operating procedure/enforcement mechanism with respect to Form 27 as well as taking an action against errant patentees. With respect to this, the Patent Office invited the stakeholders to come up with  their suggestions for making Section 146 and Form 27 effective.

The IP India portal has provided with suggestions provided by various organizations (here and here), few of which has been majorly discussed by most of the stakeholders as provided below:-

    • One Form One Patent: The first and foremost issue that most of the stakeholders such as Dr. S.K. Murthy Core-Committee Member, In-House IP professionals (IHIPP) forum, DR. P. Ganguly Vision- IPR(Patent Professional Firm), Federation of Indian Chambers of Commerce and Industry(FICCI) raised was the provision of submitting different forms for different Patents. Most of the organizations are with a view that bringing in a single form for multiple Patents would fulfill the business objectives of the present world.

 

    • One Product One Patent: Many stakeholders including S.S. Rana & Co., Singh & Singh Law Firm LLP which pointed out that presently, Form 27 runs on the presumption that one product is equivalent to one patent, which is not the case with many industries where one product is not based on one patent but is actually covered in portfolio of patents and such portfolios are owned by different Patentees. S. Majumdar & Co, an IPR Firm based in Kolkata mentioned that there are many cases especially in FMCG industries, Information and Communication Technology, semi- conductors, Electronic companies, etc, where one product is equivalent to various Patents. Therefore, It is suggested that form 27 may allow patentees to make a statement to the effect that Patent is not worked in a standalone format but form a part of the portfolio licensing program. H. K. Acharya & Company, an IPR Agent firm suggested that it would be sufficient to provide information about product in which the Patented product/process is used rather than providing all the technologies, applications and product where the patent is so deployed or used. Dr. Shital Chopra ASSOCHAM suggested that the forms should provide single statements for multiple Patents, specifying single Patent forms a part of the portfolio license.

 

    • Quantum Valuation: De Penning & De Penning, Federation of Indian Chambers of Commerce and Industry, IPR International Services, KRISHNA & SAURASTRI ASSOCIATES and others observed that Form 27 has nowhere described the method of calculating sales and commercial use of Patents, it becomes difficult to calculate the value of Patent in the market because  of various confusion such as whether taxes is to be included or not or whether the end product is to be valued, etc. While recommendations from Federation of Indian Chambers of Commerce and Industry, Huawei Technologies Co Ltd, China emphasized that provision of submitting such quantum and valuation’ should be removed, there were few stakeholders such as Bosch Group of Companies, CIPA Patents Committee, Chartered Institute of Patent Attorneys (‘CIPA’), London and Hindustan Unilever Ltd., Lal Lahiri and Salhotra,  which showed their concerns over the same and have expressed its interest in a guidance notice in order to clarify on how to ascertain the quantum.

 

    • Simple, Clear and Unambiguous: Few Academicians such as Raj S. Davé IPR Chair Professor for Excellence at Gujarat National Law University and Justice Asok Ganguly, Former Supreme Court Justice of India and Adjunct Professor at Gujarat National Law University, Prof. Shamnad Bashir ,Nirma University Pankhuri Agarwal, reseach associate N. Sai Vinod, Advocate along with Hrishikesh Raychaudhury Corporate Law Group , Singh & Singh Law Firm LLP and other stakeholders pointed out that the existing Form is ambiguous regarding the information related to the commercial scale, scope of public requirement, disclosures and reasonable price etc. It is requested to make it simple, clear and unambiguous and limit it to statutory requirements that has to be met, which is ‘whether the Patent has been worked or not.’

 

    • Information regarding Manufacturing in India and Imported to India: The current form is concerned with the information regarding ‘working of Patent in India’, however, nowhere in the Act, the term ‘working Patent’ has been defined. Obhan & Associates, KRISHNA & SAURASTRI ASSOCIATES and ALG India Law Offices LLP highlights that there exists an ambiguity with respect to the term ‘working’ which may or may not involve manufacturing in India, the quantum value of production of products sold in India or for only exporting purpose.  It is suggested that the Act must clearly explain as to ‘what is working Patent’ and is also recommended that ‘Working Patent’ must be limited to India as far as it meets the public requirement. Huawei Technologies Co Ltd, China interprets the IPAB decision of Bayer Corporation v. Union of India and Article 27(1) of TRIPS agreement and identifies that the term ‘working’ may include importation.

 

    • Frequency of Form of Submission: According to Section 146 of Act, information regarding the working Patent is to be submitted annually, with intervals not being less than six months apart. Therefore, this increases the burden on the Patent office as well as the Patentees and it is also difficult to collect the relevant information on such a frequent basis. The  same issue was brought forth by Eri Honda(Ms.) Corporate Intellectual Property and Legal Headquarters Canon Inc., Japan, Japan Pharmaceutical Manufacturers Association, Japan, Remfry& Sagar  and  Obhan & Associates. It is pertinent to note that most of these stake holder have suggested to  reduce the frequency of submitting a statement to once in every three years.

 

    • Confidentiality: Most of the stakeholders such as In-House IP professionals (IHIPP) forum, Anand & Anand, K&S Partners, Lexorbis IP Attorneys etc, are concerned about disclosing the confidential information related to their licensees and other related data due to the requirement of the publication of the submitted information. SKS LAW ASSOCIATES went ahead and noted that such provision/practice is not business savvy. Further, Singh & Singh Law Firm LLP highlighted that such disclosure of information is also contrary to section 62 of the Patent Act which provides for an opportunity to the Patentee to request the Controller to not to disclose the information to anyone except the order of the Court. Moreover, on a careful perusal of Section 146(3)  r/w Rule131(3), it can be observed that the use of the word “may” in the provision,  puts a discretionary power  on the controller to disclose the information or not. However, the Controller is required to apply his mind while practicising the  descretion vestedin  These stakeholders also Laxmikumaran & Srihdaran mentioned that provision for providing such information may be retained, however, the disclosure of such statements must be done away with.

 

    • Exemption from Form 27: while deliberations for modifying Form 27 was going on, few of the stakeholder also suggested to give exemption from submitting Form 27 for the first three years of the patent issued because the statutory limit for compulsory licensing is three years.

 

    • Penalties: Section 122 provides for penalty for not complying Form to 27. Such penalty includes imprisonment as well, which is believed to be harsh. Thus, stake holders like Hindustan uniliver or Industries in association with USA (Global Innovation Policy Center (GIPC) and U.S.- India Business Council (USIBC)), have suggested to strikeout such penalty for failing to provide working statement. Moreover, IP firm Remfry and Sagar, came up with a view that compulsory licensing as a penalty  for non-compliance of provision would be enough for deterring the errant Patentee. However, there are few that stakeholders like  who strongly  support the said provision with a view that striking off  of criminal penalty would dilute the system leading to its rampant misuse.

 

  • Miscellaneous: There are suggestions like removal of sec 146 and rule 131 completely, in order to ease the business of Industries. where digitalization is taking over the world and most of the most important work can be done through internet. It is recommended to digitalise the form in order to make it convenient for the Patentee to submit the Form.

 

It is incredible to note that the stakeholders were also as much a part of this process as the Government. As much as 64 stakeholders came forward with various issues with regard to Form 27 and its solutions. Stakeholders included major keyplayers in the market such as Bosche, Japanese IP Group, FICCI, Huawei Technologies Co Ltd, China, CIPI, London and many more. There were other responsible academicians from various Law universities and the rest were Intellectual Property Firms such as Lexorbis, Anand and Anand, S.S Rana and others.

The above mentioned are the few suggestions to the issues that have been recommended by majority of Organizations. It can be observed that Form 27 needs to be a little flexible with the changing dynamics of Industries of the Contemporary practices. Also, the Act needs to be more clear about its provisions and explanations with respect to ‘Working Patent’ , ‘disclosure of information’ and frequency of submission of Form 27. This would not only make the procedure smoother for the Patentee, but would also help the Patent Offices to function swiftly. The proposed revised form may be something like as provided below.

                                    Blog_form

Author: Pratistha Sinha, Associate, Yogita Shinde, Intern  and Mudiganti Sai Krupa, Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

Legal Issues Pertaining To Internet of Things (IOT)

The cyber laws particularly the laws pertaining to data protection and data security in India are in the nascent stage and are still developing, with the only significant legislations being the Information Technology Act, 2000 (“ITA”) and the “Reasonable practices and procedures and sensitive personal data or information Rules, 2011”. Due to the paucity of legislation in this regard, the legal issues pertaining to an IoT service provider can be fully addressed only by drafting and executing agreements incorporating relevant provisions to safeguard the interest of both the IoT service provider and the IoT user. The key issues to be taken into consideration for an IoT environment have been discussed below:

Data Privacy & Protection

With innumerable IoT devices talking to each other via the internet, the potential for a data security breach is high and as more and more IoT devices are introduced in the market, this issue would only complicate further.The provisions relating to data protection of individual personal information are covered under the Information Technology Act, 2000 (“ITA”) and the “Reasonable practices and procedures and sensitive personal data or information Rules, 2011” (“Rules”) issued under Section 43A of the ITA (as amended). Section 43A of the ITA deals with protection of data in electronic medium and provides that when a body corporate is negligent in implementing and maintaining ‘reasonable security practices and procedures’ in relation to any ‘sensitive personal data or information’ that it deals, possesses or handles in a computer resource that it owns,operatesor controls and such negligence causes wrongful loss or wrongful gain to any person, such entity shall be liable to pay damages by way of compensation to the person so affected. Further, Section 72 of the ITA, enunciates penalty for breach of the confidentiality and privacy of the data collected.

In order to ensure the privacy and protection of the data collected, the IoT service provider can have specifically drafted privacy policy detailing the private information that is collected by the service provider, the scope and extent of the use such information is put toand the steps taken to ensure the protection of the collected information.

The Service provider can also adopt precisely drafted terms & conditions which typically regulate, Limitation of Liability, Responsibilities of the service provider and consumer/user, Indemnification, Intellectual Property Rights, Assignment/ Licensing, and Dispute Resolution etc.

Further, in order to ensure compliance with Section 72 of ITA, the service provider can execute stringently drafted Non-Disclosure Agreements with its customers.

Liability Issues

Considering the volume of the data/ information and the number of stakeholders involved, which in all likelihood is going to increase in the coming time, the service provider may be required to outsource the responsibility of accumulating, processing and safekeeping of the data to third party “specialist data brokers/vendors”. In such a scenario, it is pertinent that, prior to any disclosure to any third party, the service provider takes all the reasonable steps to ensure that there is no breach of the privacy and data protection clauses. The Service provider can also execute separate vendor agreements providing guidelines to protect “sensitive personal data or information” in accordance with the provisions of the Indian IT Act.

The service provider needs to strike the right balance concerning the “allocation of risk”. This is particularly vital in order to set the limitation of liability for the service provider in the event of breach of data privacy and non-disclosure requirements. The allocation of risk can be dealt with by incorporating relevant provision in the terms & conditions of use of service. Alternatively, the service provider can have software End User Licensing Agreements (EULA) drafted that incorporate the relevant clauses which can be executed each time a user of IoT agrees to use the service provider’s software/services.

Data Ownership

Due to the involvement of multiple stakeholders/IoT users, involvement of third parties and the multitude of sources of the data, the data may come into possession of many data processors. The IoT service provider, being the data controller would essentially determine the scope, extent, manner and purpose of the use of the personal data, whereas the service provider may have different third party data processors, functioning to process the data on the instance and under the control of data controller. Therefore, an aspect worth noting is that since there are numerous channels of dissemination of the data/information and multiple stakeholders involved, the IoT service provider (data controller) at all times should ensure that the line between data controller and data processor does not get obscured. Additionally, the Machine Generated Information (MGI) and Machine to Machine Communication (M2M) generated in an IoT environment would also pose ownership and liability issues.

In light of the above, the allocation of risk and responsibilities between the parties must be defined preciselyin particular, which party bears the liability for any damage caused to the user of an IoT and which party owns the information generated by the IoT project. Hence, warranties and indemnities regarding data protection, security and privacy will become important to help draw the line between data controller and data processor which are made all the more complex by the large number of stakeholders involved in an IoT environment. The question that who will own the data will be purely based upon the agreement between the two entities.

Privity of E-Contracts

The issues pertaining to data ownership, security and privacy in an IoT environment can be reasonably addressed by contracts between device manufacturers/ IoT service provider and the IoT users. These contracts may be entered by way of click wrap and shrink-wrap contracts which are basically End User Licensing Agreements (EULA) governing the terms and conditions of use of the software or device. Like any normal contract, an e-contract can form a valid and binding relationship between the parties under the Indian Contract Act if it fulfils the essentials of a valid contract as provided under Section 10 of the Act. In an IoT environment, there is no privity of contracts between multiple IoT users which may lead to complexity in case of a dispute. Therefore, the draft agreement should contain express provisions regarding third party liabilities and dispute resolution.

Product Liability & Consumer Protection

In case where an IoT device malfunctions, or if data or software is compromised or lost, individuals and businesses may suffer devastating losses. Such device failures may result not only from a device defect but also from a network failure to provide communications as needed. Thus, it will be important for IoT device manufacturers to purchase and cover themselves with product liability insurance.

Intellectual Property Rights

An IoT environment facilitates data generation and content creation including Machine Generated Data. The question that arises is, “When an original data is created by virtue of the interaction of various devices in an IoT environment, which may include, inter alia, a new process of arriving at desired results, who claims the IP Rights in such content/data/process?” The ownership of the title and claim to the IP Rights needs to be expressly enunciated in the agreements executed between IoT service providers and device manufacturers/consumers, especially considering the fact that the IP rights confer upon the owner a host of other rights like licensing and commercialization of their IP to further exploit the commercial utility of their IP.

Conclusion

The legal wisdom regarding the IoT is inadequate due to the lack of sentience and awareness in this regard. With the advancement in technology, the IoT environment continues to evolve at an unprecedented rate and the legal acumen regarding IoT cannot lag behind for long. Europe, US and Australia have already embraced the legal implications of an IoT environment and it is about time that Indian legislature triggers a befitting enactment!

About the author: Anirudh Sarin, Trademark Attorney at Khurana & Khurana, Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com

References:

[1]https://www.wrighthassall.co.uk/knowledge/legal-articles/2016/08/30/internet-things-what-it-and-what-are-legal-issues/

[2]http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research

%20Papers/Internet_of_Things.pdf

Sphaera Pharma, Pte. Ltd. And Anr. Vs Union Of India

Delhi High Court Decides upon Delay in Filing a Patent Examination Request

Introduction

The question regarding the condonation of delay in the filing a request for examination of a patent application was once again decided by the Hon’ble Delhi High Court in the case of Sphaera Pharma, Pte. Ltd. And Anr.Vs Union Of IndiaThe Hon’ble Mr. Justice Vibhu Bakhru decided upon the issue pertaining to the limitation period for the examination of a patent application prescribed under the Patents Act, 1970 (“Act”).

Facts

Sphaera Pharma (the Petitioner), claimed that they had developed some new compounds which were useful in the treatment of cancer. The Petitioner, thereafter, filed a patent application (no.3114/DEl/2012) with the Indian patent office on 05.10.2012. Accordingly, the Petitioner was also required to file a request for the examination of the patent application within 48 months from the date of filing the initial patent application.

The Petitioner had also filed Form 30 with respect to the Patent Application so that the request for examination could be taken on record. However, the said request was not uploaded due to some technical reasons and as a result the patent application was shown as abandoned under Section 11B of the Act. Thereafter, the Petitioner filed a review petition for its patent application which was not considered by the Patent Office. The Petitioner, aggrieved by the Patent Office, filed a writ petition before the Hon’ble Delhi High Court for the restoration of the Patent application. The Petitioner contented that the Controller of Patents had the power under Rule 138 of the Patent Rules, 2003 (“Rules”) to extend the prescribed time period, for filing a patent examination request, for a period of one month.

Analysis

The Court critically examined the language of Section 11B of the Act along with Rule 24B of the Rules and held that a plain reading of both the provisions clearly depict that there is no scope for consideration of any application for examination which is filed beyond the prescribed time period (48 Months) from the date of filing of the Patent application.

The Petitioner’s contention regarding power of the Controller of Patents under Rule 138 was rejected by the Court. In this regard, the Court held that a plain reading of Rule 138 would clearly show that the power of the Patent Controller to extend the prescribed time period under the said Rule does not extend to the time prescribed under Rule 24B as it expressly excludes sub-rules (1), (5) and (6) of Rule 24B. The court also opined that even if Rule 138 is ignored, no recourse is available to the Petitioner under Rule 138 as, according to Rule 138(2), it only applies to the examination requests which are made before the expiry of the prescribed time period. In the present case, the Petitioner had not made any such examination request within 48 months from the date of filing of the Patent application.

Thereafter, the Court took reference to a previous judgement in the case of Nippon Steel Corporation v. Union of India[1], wherein there was an error in entering the priority date of the Patent. The relevant excerpt of the judgement is below:

“There is a logic to the time limits set out under the Act. The scheme of the Act and the Rules require time-bound steps to be taken by applicants for grant of patent at various stages. The provisions of the Act and the Rules have to expressly reflect the legislative intent to permit relaxation of time limits, absent which such relaxation cannot be read into’ the provisions by a High Court exercising powers under Article 226 of the Constitution. In other words, it is not possible for this Court to accept the submission of the learned Senior counsel for the Petitioner that the time-limits under Section 11-B(1) of the Act read with Rule 24-B of the Rules, notwithstanding Section 11-B(4) of the Act, are merely directory and not mandatory. In fact, the wording of Section 11-B(4) of the Act underscores the mandatory nature of the time limit for filing an RFE in terms of Section 11-B(1) of the Act read with Rule 24-B of the Rules.”

The Court discussed the Nippon case judgment and clarified that the time-limit prescribed under the Act for filing a Patent examination request is mandatory in nature and cannot be relaxed under any circumstances.

Conclusion

The Delhi High Court has re-affirmed the issue regarding time limit for filing a request for examination of a Patent application. The Court has clarified that the time limit of 48 months is mandatory in nature and must be adhered to regardless of the delay caused due to any technical reason, any error in entering the priority date for the Patent or due to any other reason. The time limits are prescribed for a purpose and thus they must be followed by the applicants strictly. However, considering the problems which arise due to technical reasons, there must some alternate recourse available to the applicants for filing the request for examination of Patent application after the termination of the prescribed time period.

Author: Harshit Dave, 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] 2011 (46) PTC 122 (Del)

Are IP Disputes Arbitrable In India? And To What Extent?

The Alternative methods of dispute resolution have eventually acquired a huge popularity and utility in the commercial and business- commerce sector. One of the most utilised methods is the arbitration, most of the parties associated with the commercial transaction nowadays prefer to opt for arbitration for the settlement of any kind of dispute. Arbitration in particular works especially well in the areas of commercial and international disputes as a quasi-judicial system developed to counter the snags of litigation and an over burdened judiciary.[1]

Over the years, the law of arbitration in India from the 1940 Act to 2015 Amendment Act has developed a lot thereby lessening the involvement of courts and providing friendly and effective rules for better and independent arbitration. Though ‘arbitration’ is nascent, still evolving, and yet to gain a foothold in India.

Intellectual Property Disputes are principally commercial in nature and often have international dimensions because of people protecting their Intellectual Properties or licensing them in multiple jurisdictions. The question which this paper target is whether arbitration is possible in IP disputes? If yes, then in what kind of disputes is it possible? In the past, many legal systems did not allow the arbitration of IP disputes, simply because the rights had been granted by a sovereign power. It was argued that the nature of the rights was such that questions as to validity should only be decided by the authority which issued the right. However, it is now broadly accepted that disputes relating to IP rights are arbitrable, just like disputes relating to any other type of privately held rights like transfer of granted IP rights as in licensing or any other such commercial arrangements. The WIPO has also promoted ADR in IPR matters by setting up the WIPO Arbitration and Mediation Center, a neutral, international and non-profit dispute resolution provider that offers time- and cost-efficient alternative dispute resolution (ADR) options and enable private parties to efficiently settle their domestic or cross-border IP and technology disputes out of court.

The stand of India towards arbitrability of IP disputes is a little complicated but logical. The policy debate arises because of the distinction between rights in rem and right in personem, also between judgement in rem and judgement in personem. The scope of remedies that should be available to parties in intellectual property arbitration is a source of controversy.

The judgement in personem is in form, as well as substance, between the parties claiming the right; and that it is so inter partes appears by the record itself.[2] A judgment in rem is an adjudication, pronounced upon the status of some particular subject-matter, by a tribunal having competent authority for that purpose.[3] Disputes seeking judgement in rem are thus generally considered to be unsuitable for private arbitration, although this is not a rigid rule. The Apex Court in Booz Allen Case[4] has stated that subject matter of arbitration that involves only rights in personem are arbitrable in nature, but no matter involving right in rem, for example, with validity proceedings, where the effect of the award could potentially be to discontinue the existence or enforceability of the monopoly[5], can be put before any private arbitral tribunal for decisions.

However, the Supreme Court also recognized that this rule isn’t infallible and that subordinate rights in personem that arise from rights in rem might be subject to arbitration[6], for example, if the IP disputes arise from commercial arrangements for the use of Intellectual Property, they are arbitrable disputes. While dealing with the similar issue the bench of the Hon’ble High Court of Bombay headed by Justice G.S. Patel in the case of Eros International Media Limited v. Telemax Links India Pvt. Ltd. and Ors[7] held that IP Dispute arising out of a commercial contract, like between two claimants to a copyright or a trademark in either an infringement or passing off action, that action and that remedy can only ever be an action in personem and hence such IP disputes are arbitrable in nature. It was observed that the section 62(1) of The Copyright Act should not be read down to mean the ousting of the jurisdiction of an arbitral panel. But in the case of Indian Performing Right Society Limited (IPRS) v. Entertainment Network, the bench chaired by Justice Dhanuka of the Hon’ble High Court of Bombay has taken a different stand. Justice Dhanuka differentiated the IPRS case from Telemax on the basis of IPRS’ right to claim royalties while later dealing with a case of infringement. Relying on the judgement in the case of Mundipharma AG v. Wockhardt Limited[8] and interpreting Section 62(1) he held that in a case of infringement of copyright, the remedies of injunctions, damages and otherwise may only be conferred by a Court, and are hence not arbitrable.

In case of patents, arbitration is available as a means to resolve disputes but is not widely used. However, arbitration is not available to determine matters of invalidity, as the Patent Office does not recognise arbitral awards in this respect. Only the disputes arising out of contracts between parties, like patent licensing disputes, can be subject to arbitration.

Arbitration in a way is beneficial for more creative remedies in comparison to a court action if the arbitration agreement so specifies, but such remedies will be subject to the public policy concerns. Parties may nonetheless choose to give the arbitrator jurisdiction to award any remedy, but the enforceability of the award would be affected

The most selling point for arbitration in IP disputes is the ensured confidentiality of subject matter of dispute among the parties. But in a country like India, the difficulty arises in balancing the interests of the parties in maintaining confidentiality, and the interests of the public, thereby, preventing the arbitration of disputes involving rights in rem or third-party interests. The confidentiality conflicts with the public interest especially, in having the outcome of revocation proceedings be published. The answer to this criticism is that any award which is against the public policy of India can be challenged before the appropriate court of law, arbitral awards relating to patent infringement or validity could be denied as being against public policy or patently in violation of statutory provisions.[9] Challenges with respect to confidentiality of IP disputes which affect public at large can be addressed through legislation requiring that some or all of the proceeding be publicly disclosed. For example, USA laws explicitly allow arbitration of patent validity and infringement issues and arbitration of “any aspect” of patent interference disputes but a copy of any arbitral award must be given to the United States Patent and Trademark Office. The award is unenforceable until this notice is given.[10]  Similarly, Switzerland practices the registration of an arbitral award with the authority which issues and maintains patents. Also, awards rendered in connection with the validity of intellectual property rights are recognized as the basis for entries in the register, provided these awards are accompanied by a certificate of enforceability issued by the Swiss court at the seat of the arbitral tribunal in accordance with Article 193 para. 2 [Swiss Private International Law Act] [11] Such examples suggest that India can also increase and promote arbitration in IP disputes also ensuring balance between confidentiality and public interest with the help of  effective legislation.

Though there are various benefits of using arbitration as a method for resolving IP disputes there are also many criticisms against it. One of the biggest criticisms against arbitration in IP is that it is binding only between the parties and does not set a public precedent as regards its use as a deterrent to infringement and establishing a culture of integrity. Parties also do not actually resort to arbitration primarily on account of finding suitable arbitrators or because of jurisdictional issues in case of international contracts. One also needs to ponder on the effect of the counterclaim or defence of revocation in cases of infringement. As these remedies or reliefs are in rem, henceforth, the parties would have to turn to the relevant forum for resolution of that claim. So, whether such action would render the entire dispute non-arbitrable or the tribunal may stay its proceedings until the appropriate forum decides on the validity of the copyright/ trademark/ patent? This is, however, far from ideal as it would delay the arbitration and substantially increase costs.

The conclusion which can be drawn in relation to the arbitrability of IP disputes in India is that it is a budding scheme which needs legislative support and a proper mechanism for better implementation. Though court rulings are quite unclear in the present scenario still it can be inferred that IP disputes are arbiterable, but still there is a long way ahead.

Author: Umang Kapoor, ILS Law College, Pune, 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]http://www.lexmantis.com/pdf/May-2013-LexMantis-Arbitration-And-IP.pdf

[2]https://thelawdictionary.org/judgment-in-rem/

[3]https://thelawdictionary.org/judgment-in-rem/

[4] AIR 2011 SC 2507

[5]https://www.lawteacher.net/free-law-essays/commercial-law/the-arbitrability-of-intellectual-property-disputes-commercial-law-essay.php#ftn5

[6] Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. &Ors, AIR 2011 SC 2507

[7] 2016 (6) ARBLR 121 (BOM)

[8] ILR 1991 Delhi 606

[9] ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705

[10]https://www.lawteacher.net/free-law-essays/commercial-law/the-arbitrability-of-intellectual-property-disputes-commercial-law-essay.php#ftn58

[11]https://www.lawteacher.net/free-law-essays/commercial-law/the-arbitrability-of-intellectual-property-disputes-commercial-law-essay.php#ftn67

An Insight Into The Jurisdiction Of ASCI

Introduction

In the recent years, India, as one of the fastest growing marketplaces, has witnessed tremendous competition in the field of Advertising industry. The existence of a huge population coupled with their ever-increasing purchasing capacity has created a profitable market in India which has led to a cut-throat competition between the sellers. Thus, every competitor in such a lucrative market wants a piece of the pie, which often leads to the sellers making false and misleading claims about their products and services through the advertisements.

There has been a considerable rise in the instances of false and misleading advertisements recently in India. Thus, like every other major economy, India also has a sole organisation The Advertising Standards Council of India that was established to promote honest advertising and fair competition in the market in order to protect the interests of the consumers. However, this has also given rise to some legal consequences which shall be discussed in the later part of this post.

The Advertising Standards Council of India

The Advertising Standards Council of India (ASCI) is a self-regulatory organisation which was established in the year 1985 for the regulation of the Advertising industry and to safeguard the interests of the consumers. The ASCI was the formed with the concerted efforts of the four main sectors of the advertising industry viz. Advertisers, Advertising Agencies, the Media (which includes the Broadcasters and the Press) and other associated organisations such as PR Agencies, Market Research Companies etc. The ASCI is registered as a ‘Not-for-Profit Company’ under Section 25 of the Indian Companies Act of 1956.

The organization has a Board of Governors which consists of 16 members who represent Advertisers, Agencies, Media and other individual firms. It also has a Consumer Complaints Council (CCC), which has 21 members out of which 12 members are eminent personalities from various fields such as Engineering, Legal, Medical, Human Resource and Consumer Interest Groups and the rest 9 members are from the Advertising industry.

The ASCI Code

The ASCI has also adopted a Code for Self-regulation in advertising. The ASCI Code for Self-Regulation of Advertising content in India (Code) was drawn up by the people in professions and industries in or connected with advertising, in consultation with the representatives of the people affected by advertising, and was accepted by the individuals, corporate bodies and associations engaged in or concerned with the practice of advertising.[1]

As the Code becomes increasingly accepted and observed pro-actively, three things will begin to happen.

  1. Lesser false or misleading claims
  2. Fewer unfair advertisements
  3. Increasing respectability.[2]

This ASCI Code applies to advertisements read, heard or viewed in India even if they originate or are published abroad so long as they are directed to consumers in India or are exposed to significant number of consumers in India.[3] The ASCI Code is also a part of the Cable Television Networks Rules, 1994 (Rules). The Rule 7 (9) states that, “No advertisement which violates the Code for self-regulation in advertising, as adopted by the Advertising Standards Council of India (ASCI), Mumbai for public exhibition in India, from time to time shall be carried in the cable service.” This recent amendment in the Rules has now increased the power of the ASCI.

Jurisdiction of The ASCI

The jurisdiction of the ASCI in cases related to the infringement of intellectual property rights is making a way for being a well-established law.

In the case of Procter and Gamble Home Products Private Limited vs. Hindustan Unilever Ltd.[4], the Delhi High Court had discussed the issue pertaining to the jurisdiction of ASCI. The court held that the ASCI has been established as a self-regulatory body in the field of advertising and not for dispute resolution or for resolution of claims made by the Plaintiff in the suits against the Defendant. Although, the ASCI has a Complaints Committee, but only to ‘self-regulate’. The ASCI, even if finds merit in complaint, can only recommend the advertiser to remove the advertisement but has no mechanism to compel removal of the advertisement or to grant any interim relief or to award damages.

The Delhi High Court decided upon the same issue in the case of Metro Tyres Ltd Vs. The Advertising Standards Council of India & Anr[5], however, this time the Court took a different view. The Court observed that the district courts are empowered under the Copyright Act, 1999 (Section 62) and the Trademark Act, 1999 (Section 134) to adjudicate upon infringement cases, however, this shall not preclude the jurisdiction of ASCI in adjudicating upon infringement cases. The Court also recognised the role of self-regulatory bodies in curtailing the litigation thereby providing a mechanism for amicable settlement of disputes and also function as an alternative dispute mechanism.

Conclusion

The ASCI has been established as a self-regulatory body and it has evolved over the time as an alternate mechanism for dispute resolution. The role of ASCI has also been recognised by the Hon’ble Supreme Court[6] as a self regulatory mechanism for advertising content in India. However, the law with regard to the jurisdiction of ASCI in claims of copyright infringement still needs to be more focussed in order to have a strong legal backing.  However, with respect to the ASCI as a company under Section 25 of the Companies Act of 1956, a question is always raised that can it exercise its control over entities and pass orders against other entities. Till now, it has been observed that ASCI can only make recommendations and cannot assume the powers of a civil court in granting an interim relief. Thus, the opinions of High Courts of various jurisdictions needs to be observed so that the legal position of ASCI is cleared and affirmed.

Author: Harshit Dave, legal  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]https://ascionline.org/images/pdf/code_book.pdf

[2]ibid

[3]ibid

[4] 238 (2017) DLT 585

[5] 83(2000) DLT 205

[6] Common Cause (A Regd Society) v Union of India and Ors 2017 (2) SCALE 169

Artificial Intelligence (AI) And Copyright

“The rapid growth of Artificial intelligence (AI) in producing artistic work has raised a controversial question of the Copyright Ownership. This article address the issue of IP ownership of AI generated works and provides for some feasible solutions to remedy the copyright laws which lacks protection for authorless works produced by Artificial Intelligence

Google has just started to fund computer software which will write local news. A short story written by Japanese computer software made it to second rounds of national literary prize. And an artificial intelligence company called deep mind has created software that can generate music by listening to music. All these foregoing flashy news stories are evident of the benefit and popularization of Artificial Intelligence in the modern world.

Earlier, the computer generated works relied heavily upon the input provided by the programmer, the software was very much like a tool or a mechanism like brush or canvas. But, of late, the rapid development in technology especially artificial intelligence forces us to think about the nexus between computers and creative processes. This nexus is a result of machine learning software, a subset of artificial intelligence that is capable of learning from the past experience without being specifically programmed by a human.

When machine learning algorithms are applied to literary works, music and art; they learn from the inputs provided by the programmer and generate a new piece of work while making independent decisions to determine what the new work looks like. Today these computer programs are often referred to as neural network, a process which is akin to the thought process of humans.

Complications for Copyright Law

Works which are produced by machine learning programs could create implications for copyright laws. Traditionally, the ownership of copyright work was not in question as the software was used as a mere tool to support the creative process. Furthermore, creative works are granted protection only if they are original in nature and the definition of originality requires a human mind. Copyright laws of Germany and Spain states that work of human minds will only be protected.

So, there are two ways in which copyright ownership can be bestowed on computer generated work. Firstly, copyright protection can be denied as there is no involvement of human mind. Secondly, it can be attributed to the creator of the program.

There are many countries whose laws are not compliant with non human copyright ownership. For ex. – in United States, the Copyright Office has declared that it will register an original work of authorship, provided that the work was created by a human being. This position flows from the case of Feist Publications v Rural Telephone Service Company[1]. Following the lead, in a recent Australian case (Aschos Pty Ltd v Uorp Pty Ltd)[2], the court ordered that the copyright protection cannot be granted as the work was produced with substantial intervention of computers.

The Court of Justice of the European Union also declared in Infopaq International A/S v Danske Dagbaldes[3] Forening that the copyright work must reflect the author’s own intellectual creation, which clearly means the human author is necessary.

The second option is to grant copyright ownership on the programmer or developer itself. It is evident in countries like India, New Zealand, UK, and Hong Kong. This approach is present in section 9(3) of the UK law – Copyright, Designs and Patents Act (CDPA).

“In the case of a literary, dramatic, musical or artistic work which is computer generated, the author shall be taken to be the person by whom the arrangements necessary for the creation of the work are undertaken

This definition creates another question; who should be considered by law to be the person making the arrangements for the work generated, whether the person is the programmer or the user of the programme. This is asking whether the copyright should be given to the maker of the pen or the writer.

Similarly, taking the example of artificial intelligence, there are algorithms capable of generating a work and the user’s contribution to the creative process is just to press a button while the software will do its thing. So, on whom the authorship should be bestowed, creator or the user of the algorithm.

There are some case laws which indicate that the above question can be solved on case to case basis. In an English case – Nova Productions v Mazooma Games[4], the court had to decide on the authorship of computer game and it held that the player’s input is not artistic in nature, thus he has contributed no skill or labour of an artistic kind.

At last, things in the future are going to become more complex as the use of artificial intelligence by artists will become more widespread and the machines will get better by producing more creative works , further blurring the line between artwork that is made by a human and by a computer. Enormous advancement in computing and availability of large datasets for processing is gradually making computers better at mimicking humans, thereby creating problems to distinguish between human generated and machine generated work. As of now, we are not at that stage where no human intervention is required by artificial intelligence but we are not far from achieving that stage, so we have to devise some type of protection for these creative works.

Finally, granting copyright to the person who made the artificial intelligence software seems to be more pragmatic and sensible approach and it will ensure that companies keep investing in technology, keeping in mind that they will get a return on their investment.

Author: Anmol Khurana, 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] 499 U.S. 340 (1991)

[2] 2012 FCAFC 16

[3] ECLI EU 2009/89

[4] [2007] EWCA Civ 219.

Uber v. Waymo and Lessons for Trade Secret Protection for Companies

It’s been over 100 years since the establishment of the theory of the separate juristic personality of a corporation. Nevertheless, a corporation still functions through humans. The unique competitive edge that corporations wield in the market as against other competitors is by virtue of certain ideas or information pertaining to a particular ingredient of an edible product, method of conducting business or the list of certain supplies that a company may hold on to very closely.

This competitive edge can be diluted or gained by the acts of unauthorized disclosure by the human actors who are acquainted with the idea/information/method during the period of employment by the company. The law on trade secrets in India stands previously enumerated on this blog, so the author shall focus his efforts on the lessons one can learn from this case.

The recent Waymo v. Uber[1] settlement is yet another lesson for R&D intensive industries, especially in a field as nascent as self-driving vehicles, to implement best practices in order to prevent dominant firms such as Uber from, maliciously or otherwise, diluting competition in the market by unconscionably acquiring trade secrets from smaller firms. The present case concerned the theft, amongst other valuable, of sensitive Waymo business information including the manufacture, sampling, calibration and testing of the sensors, Waymo’s highly confidential proprietary design of a LiDAR circuit board,[2] a laser-based scanning and mapping technology that uses the reflections off objects around it to create a real-time 3D image of the world.

It also enabled LiDAR, when mounted onto a car, to help the car navigate even in pitch dark and without the need for any steering wheels or pedals, thus effectively giving Waymo a first mover advantage in the field of driverless cars. Waymo Manager Anthony Lewandowski, who subsequently left the company along with the SD card containing all the data in tow to start his own self-driving truck company, that was later acquired by Uber, was the principal defendant charged with unjust enrichment, misappropriation and infringement of Waymo’s intellectual property.

While many were shocked that Uber and Waymo settled midway through the trial despite the weak case that Waymo brought against Uber, it has been noted[3] that Waymo would have probably received less from the settlement than it sought due to the onerous burden to prove the third party was actually aware of the tainted origin of the trade secrets and intentionally hired Lewandowski from that point of view.

The protection of trade secrets has more to do with the confidential information that a departing employee carries in their head because of a fiduciary relationship (or one of trust) due to which the information was disclosed which attracts an obligation of confidence, even if there might not be actual documents to prove unjust enrichment from stolen trade secrets.[4] This obligation need not even be express, it can even be implied.[5] In India, common law protection through actions in equity and tortious liability such as breach of confidence as well as non-compete clauses in contracts of service (tested against the plank of section 27 of the Indian Contract Act) is accorded. Thus, corporations only have exorbitant legal fees and damage to their reputation to account for if they do not carry out diligent vetting of the employee and his files. Any trade secrets’ origins need to be traced when hiring an employee, especially from a competitor.

Although Waymo did have standard security measures in place, such as dual authentication processes for access to all documents, encrypted and password-protected communication, or having separate vendors for supply of different parts, these measures are inadequate when the enemy is within. Companies need to have mechanisms in place that monitor the behaviour of employees both before they leave for new opportunities as well as when they have joined from a competitor. Critical information should only be disclosed on a “need-to-know” basis. For employees with access to critical information, an investigation into whether the employee has ever downloaded or copied this information en masse should be carried out. At the end of the day, when the line between confidential information and trade secrets blurs, it is the degree of sensitivity of the information that the employer impresses upon the employee that counts.[6]

A non-disclosure provision that applies when the employee departs and joins another competitor should be added as a matter of practice, subject to reasonableness and specific enumeration of geographical extent of application, scope and duration. Companies should take note that not all information or ideas are trade secrets if it is not the subject of transformation into a protected work,[7] and only something that was learned in course of the previous employer’s business having entered the employee’s head after application of due skill and knowledge.

In American Express Bank Ltd. v. Priya Puri,[8] the Court refused the plaintiff’s request for an injunction against the defendant for using mere names and addresses of the customers of a bank at her new workplace as she had only used knowledge in the public domain to further her own career prospects. As was held in the case of Ambiance India Pvt. Ltd. v. Naveen Jain,[9] business acumen, ways of dealing with the customers or clients, or routine day-to-day affairs of the employer in the knowledge of many cannot be considered trade secrets or confidential information. Thus, section 27 of the Indian Contract Act, 1872 has been used to balance the interests of both trade secret owners as well as employees even after the termination of service of an employee.

Conclusion

It is not enough to simply prove that the employee had access to important trade secrets and limitation to it has to be narrowly and specifically tailored. In fact, this issue goes beyond the legal sphere. A strong management and constant update of industry’s best practices in safeguarding intellectual property can cement a company’s first mover advantage that matters greatly in industries that go through rapid shifts in technological progress, as well as save companies, a humongous amount of money by way of future profits and legal disputes.  As has been noted, Silicon Valley’s high rate of technological innovation lies in “talent mobility”, or the refusal to enforce non-compete clauses. However, this comes with the caution to make sure one is acquiring talent and know-how, not the trade secrets.[10] The law of confidentiality imposes a strict burden on companies alleging breach of confidentiality against a previous employee lest they disproportionately impinge on the employee’s fundamental right to freely conduct his trade or profession once he leaves the company.[11] What we can learn from Uber v. Waymo is that, best practices have not been evolved even in the talent and ideation heavy tech industry, which should be zealously protective of innovation; the case should act as a wake-up call for development of context-specific security measures where currently the extent of active legal safeguards are the minimal, rarely enforced, non-disclosure and non-compete agreements.

Author: Swrang Varma, 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] Waymo LLC v. Uber Technologies, Inc., (3:17-cv-00939).

[2]http://www.wired.co.uk/article/waymo-uber-lawsuit-case-sues-anthony-levandowski-google-alphabet

[3]http://www.ipwatchdog.com/2018/02/09/uber-settles-trade-secret-waymo/id=93563/

[4] Diljeet Titus v. Alfred A. Adebare, 2006 (32) PTC 609, 130 (2006) DLT 330.

[5] Margaret, Duchess of Argyll (Fame Sole) v. Duke of Argyll, [1965] 1 All ER 611, [1965] 2 WLR 790.

[6] Faccenda Chicken Ltd. v. Fowler, [1986] 1 All ER 617.

[7] Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber, 61 (1996) DLT 6.

[8] (2006) III LLJ 540, (2006) 110 FLR 1061.

[9] 122 (2005) DLT 421, 2005 (81) DRJ 538.

[10]https://hbr.org/2017/06/the-uber-waymo-lawsuit-it-should-be-easy-to-poach-talent-but-not-ip

[11] Article 19(1)(g), The Constitution of India.

Relation of IPR and Olympic

Introduction

Olympic is the largest sporting event in the world, which features both summer and winter sports. Currently XXIII Olympic Winter Games are going on in the capital of Republic of Korea. Thousands of players and their supporters come from across the globe. South Korea is expected to spend $ 13 billion in organizing the 2018 winter Olympic[1]. Historically, to get sponsorship for organizing the Olympic games, the hosting country uses the Olympic symbol, flag, motto and anthem, transfers all the rights related to these elements to the sponsors. The intellectual property(IP) system plays an important role in safeguarding the unique character of the Olympic Games. In Olympics games, the act of ambush marketing has been an increasing phenomenon which is a serious concern for the hosting countries. This article will highlight the IP aspects of the Olympic games.

Intellectual Properties in Olympic

Usually, motto, logo, anthem and emblems are seen as Olympic properties but in practice it is more than that. It encompasses all rights relating to the Olympic Games in relation to advertisement, organization, telecast, broadcast and marketing of the event. The Olympic properties qualify for IP protection under laws governing copyright, trademark and industrial designs, which together with patents, utility models and trade secrets make up the palette of IP assets that are relevant to the Olympic Games[2]. All the IP rights associated with the Olympic properties are exclusively owned by the International Olympic Committee (IOC), which provides support for organizing and hosting of Olympic.

Innovation in Olympic games

The 2018 Pyeon Chang Olympics is the latest example in which one can easily find the relation of invention and Olympics. In the 2018 PyeongChang Olympics, a torch was designed in such way that the flames will continue to burn in all weather conditions, and that will withstand the strong winds and heavy snowfall that can be expected in the Republic of Korea. This example shows the quality of innovation in the Olympic Games. Therefore, it is a duty of the hosting country to protect the rights of the innovator.

Challenges to the Protection of Olympic Intellectual Properties

The IOC places heavy emphasis on protecting intellectual properties rights associated with Olympics because financial success of the Games and the profit that Games themselves generate for corporate sponsors depends entirely upon the protection of the Olympic properties. These properties are threatened in several ways, including ambush marketing, trademark infringement, counterfeiting and cybersquatting. Ambush marketing and trademark infringement occur more often in the Olympic Games.

Ambush marketing – Ambush marketing occurs each time when a non-Olympic sponsor tries to portray itself as an official Olympic sponsor in an effort to “capitalize on the goodwill, reputation, and popularity” of the Olympics[3]. In 2016 Rio Olympic Games, there were many cases of ambush marketing like Nike and its ‘unlimited campaign’, social media posts, Ford videos etc. To tackle with the menace of ambush marketing, the hosting countries have started to enact special legislation. An anti-ambush marketing legislation was introduced for the first time in 2000 Sydney Olympic. Similar was the means used in the 2016 Rio Olympic where Brazil enacted special legislation called Olympic Act (Law 12,035/2009) to protect the interest of official sponsors from ambush marketing.

Trademark Infringement  The hosting country’s ability to raise money from sponsors, suppliers, advertising agencies and licensees is hindered by a mere possibility of trademark infringement. The IOC has taken numerous steps to prevent the trademark infringement. There are numerous lawsuits that have been filed by the IOC against trademark infringers i.e. lawsuit to restrain defendants from using term “Olympic” in an athletic competition[4] and trademark opposition suit against application of bakery to register mark “Olympic Kids” for use on its baking goods.[5]

International Treaty on the protection of the Olympic Symbol

The Nairobi Treaty on the Protection of the Olympic Symbol is one of the international treaties on IP administered by WIPO. Any state that has ratified the treaty is obliged to refuse or to invalidate the registration of a mark and to prohibit by appropriate measures the use of a mark or other signs, for commercial purposes, of any sign consisting of or containing the Olympic symbol, as defined in the Charter of the International Olympic Committee (IOC), except with the authorization of the IOC[6].

Conclusion

In the current world, the Olympic Games are a brand in itself and the protection of the Olympic properties is very important. The IOC has been trying to protect the Olympic properties with the help of international treaties and national legislations. However ordinary legal protection, such as trademark, copyright remains essentials. These laws are not sufficient in protecting the Olympic properties and like other trademark or copyright owners, IOC faces a number of challenges in managing its IP, particularly in relation to social media platforms. IOC and other bodies must therefore, ensure that the Olympic properties should be protected so that people of all ages and all continents can continue enjoy the mega event that Olympics are.

Author: Ajay Sharma, 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]https://www.npr.org/2018/02/02/582790412/south-korea-prepares-to-spend-13-billion-on-winter-olympics-is-it-worth-it (Last Updated on 26/02/2018)

[2]http://www.wipo.int/portal/en/news/2018/article_0002.html(Last Updated on 26/02/2018)

[3] Stephen M. McKelvey, Atlanta ’96: Olympic Countdown to Ambush Armageddon? 4 SETON HALL J. SPORT L. 397,401(1994)

[4] San Francisco Arts & Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522 (1987)

[5] O.M. Bread, Inc, v. U.S. Olympic Comm, 65 F.3d 933(Fed, Cir. 1995)

[6]http://www.wipo.int/ip-sport/en/olympic.html(Last updated on 26/02/2018)

Battle of the Brands: Gilead Sciences Inc. vs. Merck & Co. Inc

The legal dispute between the two pharmaceutical majors Gilead Sciences Inc. and Merck & Co. Inc. involving Hepatitis C drugs clearly indicates the high stakes involved when it comes to intellectual property.

It all began in 2013, back in the day when Gilead Sciences Inc, filed for a New Drug application (NDA) with the FDA for the treatment of HCV which includes Sofosbuvir. Sofosbuvir was known to treat multiple genotypes of the disease with a higher cure rate and lesser side effects. On administration of Sofosbuvir, duration of the treatment reduced when compared to conventional medical therapy. Gilead launched and marketed the drug with the trade name Sovaldi which was a combination of Sofosbuvir and anti viral agent ribavarin. Gilead launched another drug Harvoni with sofosbuvir as one of its components. In 2013 itself, FDA approved Sovaldi, and it earned the company huge profits.

Legal issues arose when Idenix Pharmaceuticals, filed a complaint stating that by manufacturing Sovaldi and Harvoni Gilead had infringed their U.S patent 7608600. The patent claims a method of treating persons affected by HCV by administering the drug orally via a capsule or tablet containing hydrogen, amino acid ester and a nitrogen base like thymine or adenine. This patent was granted in October 2009.

Although Gilead did have patents of its own in the field of HCV treatment, Idenix claimed that the patents infringed on their ‘600 patent. Gilead was granted a U.S patent 8415332, which mentions that the drug is effective in preventing multiplication of the virus when administered in combination or alternation with an antiviral, antibacterial or anti cancer treatment. This patent was filed by Pharmasset in 2010, a pharmaceutical company which was then purchased by Gilead in 2011.

The ‘600 patent was the first patent mentioned in the case, the following patents were also claimed to be infringed by Idenix:

U.S Patent No. 6915054

U.S. Patent No. 7105499

U.S. Patent No. 7608597

U.S. Patent No. 8481712

In the case of infringement against patent ‘597, the case fell in the favour of Idenix who then received 10% of the total revenue as royalties which was $25.4 billion. They received a total of $2.5 billion.

Merck (which acquired Idenix in 2014) claimed that the use of Sofosbuvir , key ingredient in Gilead’s Sovaldi and Harvoni contributed to the infringement of their patents ‘499 and ‘712.

‘712 deals with compounds of a specific structure, whereas ‘499 claims methods of administration of the drug alone or in combination with other HCV treatment.

Gilead mentioned in their case that the patent claims were invalid and agreed to pay the charges if proven otherwise. On reviewing the case, the court came to a decision that Gilead’s claims were false. During the court proceedings it was found that the claims in the patents ‘499 and ‘712 were not invalid. In March 2016, the jury awarded Merck $200 million in damages for the sales of Sovaldi and Harvoni. In April of the same year Gilead filed for a motion to reopen the case and to allow evidence to be submitted against Merck. The motion was passed and the case was reopened.

Gilead claimed that Merck tried to write off the patent rights and attempted to receive permanent licence of the compound from Pharmasset (Gilead’s company of interest). It also claimed that Merck scientist stole the structure of the compound and failed to mention the details of these happenings during the court procedures. It was proven later that the scientist turned patent lawyer did try to deceive Gilead, and also lied to the court. The jury found the evidence provided by Gilead in support of Merck’s misconduct and as a result passed an order to Merck to return the $200 million.

The ongoing case between these two drug conglomerates reached a new high when Merck lost another $2.5 billion to Gilead with respect to its patent ‘597 in 2018. The legal dispute began when it was not clear if Pharmasset derived Sofosbuvir on its own or from an Idenix patent.

The US District Court judge in Delaware passed the judgement stating the patent claims were too broad. The patent should be such that, a skilled person should be able to develop a drug without considerable experimentation. The judge also determined that the drug couldn’t easily be developed from the Idenix patent, favouring Gilead’s defence. Merck believes there is more to the case than what meets the eye. Unless either one of them decides to settle, they will continue to battle it out in the court.

Both the drug developing giants have lost and gained in billions in the past few years. In the era of biosimilars, such cases will be seen more often in the near future. Science & technology together with law now exist in a symbiotic relationship, where both facilitate each other striving for a common goal.

 

Author: Poorvi R Balkundi, 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]https://pink.pharmaintelligence.informa.com/PS119751/Brand-vs-Brand-Patent-Battles-Heat-Up-Focus-On-Big-Drug-Classes

[2]https://www.biospace.com/article/federal-court-overturns-gilead-sciences-and-merck-patent-dispute/

[3] Mark S. Reisch, Gilead wins reversal in $2.5 billion dispute with Merck, Chemical and Engineering News, February 2018

[4]https://www.fiercepharma.com/legal/gilead-wins-reversal-2-54b-verdict-merck-hep-c-patent-case

[5]https://www.fiercepharma.com/pharma/judge-nixes-merck-s-200m-hep-c-patent-win-citing-fabricated-testimony-pervasive-misconduct

[6]https://www.fiercepharma.com/pharma/merck-snags-record-2-54b-hep-c-patent-verdict-against-gilead

[7]http://www.ipwatchdog.com/2017/01/05/merck-subsidiary-idenix-wins-largest-patent-infringement-verdict/id=76243/

[8] United States District Court, Case no 13-cv-04057-BLF, Gilead Sciences Inc. (Plaintiff) vs Merck & Co Inc. et al (Defendant)

[9] United States District Court For the District of Delaware, case no 14-846-LPS, Idenix Pharmaceuticals LLC Universita Degli Studi DI Cagliari,(Plaintiff) vs gilead Sciences Inc. (Defendant)