GST IMPLICATION ON INTELLECTUAL PROPERTY

GST IMPLICATION ON INTELLECTUAL PROPERTY

  1. Once upon a time . . .

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

 

  1. Growing Stronger Together

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

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

 

  1. Rates in relation to Intellectual Property

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

Under Sl. No. 17, Heading 9973-

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

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

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

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

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

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

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

  1. Reverse Charge on Copyright

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

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

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

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

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

  1. Conclusion

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

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

References :

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

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

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

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

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

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

[7]Ibid.

[8]Section 15, CGST, 2017.

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

[10]Ibid at Explanation (v).

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

[12]Supra at 3.

[13]Supra at 2.

[14]Supra at 9.

[15]Ibid.

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

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

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

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

[20]Supra at 17, 18.

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

[22]Supra at 19.

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THE EXCLUSIVITY OF BRAND TAGLINES

Brand taglines are catch phrases which serve to draw a connection for consumers with the business’ products and services, and the concerned brand in general. A particular sequence of words repetitively used in the promotion of a brand or business in relation to its products and services often finds a place in the associative memory of the public. For example, when coming across the catch phrase “Finger lookin’ good”, one is instantly reminded of KFC’s sumptuous range of food products.Similarly, the tagline “Just Do It” is commonly associated with the brand NIKE and the phrase, “There are some things money can’t buy. For everything else, there’s MasterCard” connotes a connection with Mastercard.

Taglines are primarily used for advertising as they are memorable, differentiate the brand and impart certain emotions regarding the brand. The said exclusive association also flows from the mere mention of the brand, for example when one refers to Mc’donalds, the phrase “I’m Lovin’ It” automatically comes to mind, thereby indicating that some sort of intangible ownership of the particular phrase exists. This short note will attempt to elucidate upon whether and if so, what type of intellectual property protection is accorded to taglines or trade slogans with specific reference to the Indian context.

Scope of Brand Taglines as Trademarks

Section 2(m) of the Trademarks Act, 1999 defines “mark” as including a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. It is seen that the legislation provides for a tagline or combination of words to be included within the ambit of the definition of mark.

Trademark is defined under the Act as a mark capable of being represented graphically and of being able to distinguish the goods or services of one person from those of others in the course of trade.[1] Therefore, it is seen that a brand tagline is capable of being reduced to two-dimensional representation on paper. It is submitted that the distinctiveness criterion has a close nexus with Section 9(1) of the Trademarks Act under absolute grounds for refusal of registration.

In order for a brand tagline to qualify as a trademark, it must be distinctive,by acquiring secondary meaning and goodwill,and must not be descriptive of thefeatures of the products and services in respect of which it is used. The brand tagline by itself also must not indicate anything which has become customary in the established trade practices of that particular business.

Distinctiveness of the Generic

The Karnataka High Court in Reebok India Company v. Gomzi Active[2] has held that the person claiming the benefit of distinctive usage has to establish that over a period of time the concerned trade slogan has developed a secondary meaning and goodwill.[3] The Court accepted Reebok’s (Defendant) contention that the phrase “I AM WHAT I AM” is generic in nature and has not any acquired distinctive character in relation to the goods produced by Gomzi Active.[4]It was further held that both parties were operating under different and distinct trade names and by the mere use of the common phrase and expression “I AM WHAT I AM” it cannot be said that a customer with reasonable prudence would be misled to purchase the products manufactured by Reebok mistaking them for the products manufactured by Gomzi Active.[5] It is submitted that extensive advertisement through various modes and subsequent inherent association by consumers of the brand tagline with brand’s products and services would satisfy the test of distinctiveness even if concerned tagline is a common and generic phrase.

Descriptiveness and Commercial Features

The Hon’ble Supreme Court in a petition for special leave to appeal[6] upheld a Division Bench decision of the Delhi High Court in Procter & Gamble Manufacturing (Tianjin) Co. Ltd. &Ors. v. Anchor Health & Beauty Care Pvt. Ltd.[7], wherein the issue of distinctiveness and descriptiveness of brand taglines was discussed and elaborated.[8]The Court held that

  • The expression “ALLROUND PROTECTION” in Anchor’s advertisements and on its product is covered within the meaning of Section 2(m) & (zb) of the Act.

  • There is a difference between specific descriptiveness and generic descriptiveness.Forexample,a particular tagline may be descriptive of such features that are unique to the brand’s products but not generic features of the said products. (It is pertinent to note that Anchor was the first in the industry to use “ALLROUND PROTECTION”)

It is submitted that the Court in a way has interpreted a brand’s tagline or its“communicated commercial essence”tobe considered as a unique feature of its products and services, while deciding that is not a descriptive tagline.

Expressions of Customary Trade Practice

In Stokely Van Camp Inc v. Heinz India Pvt Ltd.[9], the Delhi High Court Division bench held that the trade slogan “Rehydrate Replenish Refuel” used in respect of Gatorade, even though a registered slogan mark, cannot be granted protection since in the energy drink market it has become customary and in fact necessary to describe products as such. Therefore, the Court held the defendant’s use of the expression “Rehydrates fluids, Replenishes vital salts, Recharges glucose” will fall within the ambit of Section 30 (2)(a) of the Trademarks Act, wherein a registered trademark is not infringed when the alleged infringing mark/expression is used to indicate features and characteristics of the products in respect of which it is used.

Therefore, it is seen that brand taglines have been recognised as trademarks in India provided they have acquired distinctiveness through goodwill and secondary meaning. It is also seen that trade slogans can be used to describe particular unique commercial features of the brand’s products and services.

Scope of Brand Taglines as Copyrights

Copyright subsists in original literary, dramatic, musical and artistic works, cinematographic films and sound recordings.[10]The Delhi High Court in Pepsi Co. Inc. and Anrv. Hindustan Coca Cola and Ors.,held that advertising slogans are not to be accorded protection under the Copyright Act and they may be protected under the law of passing off.[11] The Court also opined that although the task of devising advertising slogans often requires a high level of skill and judgment but they will usually not qualify as original literary works.Law of passing off is not limited to names but is wide enough to encompass other descriptive materials including slogans, as part of goodwill built by extensive advertisement.[12]

Further, in Godfrey Phillips India Ltd. v DharampalSatyapal Ltd. & Another[13], the Delhi High Court followed the ratio of Pepsi Co and held that the advertising slogan “ShauqBadiCheezHain” is a mere combination of common words and hence cannot be granted protection as a literary or artistic work under the Copyright Act since they are as such not an outcome of great skill, and at best can be given protection under the law of passing off provided the requisite case is made out for passing off.

It is submitted that the reason as to why advertising slogans or brand taglines are usually not granted copyright protection is due to the generic use of words in such taglines. Brand taglines are often arrived at after much deliberation and exercise of intellectual activity and hence it may be argued to come under the ambit of originality and creativity in order to be treated as literary or artistic works.

Conclusion

In conclusion, it is submitted that a particular brand tagline may be accorded protection as a trademark if it satisfies the distinctiveness and non-descriptiveness criteria. In case of Tagline comprising of common words or generic phrase, it is through extensive use, advertising and campaigning that a tagline or slogan acquires secondary meaning to the extent consumers and the general public start associating it exclusively with the concerned brand or business. Therefore, proper documentation and detailed records regarding the use and advertising of brand taglines are essential for the purpose of preventing the dilution of goodwill created with the public.

It is also to be noted that brand taglines are usually not granted copyright protection due to the use of generic common-place words and the Courts are reluctant in considering them to be original literary or artistic works.

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

References:

[1] Section 2(zb), Trademarks Act, 1999

[2] 2007 (34) PTC 164 (Karn)

[3]Ibid at paragraph 11

[4]Ibid at paragraph 12

[5]Ibid at paragraph 16

[6]C. Nos. 15928-15929/2014

[7]2014 (59) PTC 421 (Del)

[8]Ibid at paragraph 10

[9]MIPR 2010 (3) 273 at paragraph 9

[10] Section 13(1)(a), Copyright Act, 1957

[11] 94(2001)DLT 30 at paragraph 70

[12]Ibid at paragraph 68

[13] 2012 (51) PTC 251 (Del) at paragraph 14

Revolutionizing Gesture Recognition Technologies: Project Soli

Google has been a pioneer of a number of leading inventions and projects that have not only changed the way we perceive science and technology but has also made out lives easier and leisurelier. From Google Cardboard to Driverless cars to Google glasses, Google has never disappointed us when it comes to show casing its talent in the world of technology and innovation.

Have you ever fantasied of lowering the volume of your system or changing the time on your phone by making just tiny movements with you hands in air without even touching the screen, like Minority Report and Iron Man movies? Yes? Then Google’s next project has come as an answer to all your fantasies. In June 2015, Google, during it annual developer conference announced the world’s first radar based key technology project, Project Soli that would change the way shoppers interact with wearable devices.

About the project

Soli is a creation of Google’s research and development lab, ATAP (Advanced Technology and Projects), headed by Dr. Ivan Poupyrev, an award-winning scientist, inventor and designer in the field of design and technologies who is famous in blending the realities of digital and physical world. Mr. Poupyrev was Principal Research Scientist at the Walt Disney Imagineering research division.

Soli is a new sensing technology that makes movements or detects touchless gesture with the help of miniature radar. The entire sensor and antenna array is incorporated into an ultra-compact 8mm x 10mm chip (size of a finger-nail). The Soli chip can be embedded in wearable, phones, computers, cars and IoT devices in our environment[1]. Soli has no moving parts; it gets attached onto a chip and consumes little energy. The chip does not get bothered by light conditions and works through most materials.

The radars emitted by the chip, keeps a track of movements with sub-millimeter accuracy, helping you control the volume of a speaker, or dialing number in mid-air. Google’s Soli radars are so accurate that they not only detect the exterior of an object, but also its internal structure and rear surface, helping you to know what the thing is.

How does Soli work?

The Soli Sensor:

Project Soli is based on the concept of touchless interactions, which can be achieved with radar system. The device used in the project is RadarCat (Radar Categorization for Input and Interaction) and functions like any normal radar system. It is a small, versatile radar-based system to identify material and object classifications that help you interact with digital devices.

Think that you are walking in dark and you use torch to see the objects. The light beam that travels out from the torch, reflects off objects in front of you, and bounces back into your eyes, which helps you see the objects lying near you. RadarCat also functions in a very similar manner. The base units fires electromagnetic waves at its target, some of which gets bounce back and return to the radar antenna helping in detecting the movement and gesture of the hands.

It is just not the bouncing back of the radar that helps Soli in analyzing the hand movements, size, shape, orientation, material, distance, and velocity of the object but properties such as energy, time delay, and frequency also help in analyzing the work.

So in short, the radar base emits a broad beam of electromagnets, which in turn gets reflected because of the hand gestures. The sensor then receives motion of signals as a series of reflections, which in turn is detected by the radar chip and are transformed into multiple representations. From these representations, engineers can extract features, such as “range doppler distance”. The features are then passed to machine learning algorithms, which interpret them and approximate hand motions based on the signals received.[2]A device that is capable of classifying and interpreting gestures, perceives all the motion signals. For example:-

  • A pinching motion can indicate the press of a button.
  • Rubbing a finger along the length of a thumb can indicate moving a slider, say for volume control.
  • Pulling your thumb across your pointer knuckle simulates dragging a screen.

The radar sensors used in Soli does not require large bandwidth and high spatial resolution like the traditional radars. Rather Soli’s evaluation board has juts two transmit antennas and four receive antennas. It’s spatial resolutions rely on motion resolution that can be perceived by subtle changes from signals that are received over time. It is because of this signal variation that Soli can distinguish complex finger movements and deforming hand shapes within its field.

Limitations of RadarCat

  • RadarCat does occasionally confuse objects with similar material properties (eg. Glass of mirror or a class of a mug),
  • It takes longer to detect a hollow object as compared to the solid objects with flat surfaces.
  • It also needs to be taught how exactly each object looks like before it can recognize it.

How is Project Soli helpful?

The project Soli is futuristic interface that will forever change the way we use all the technological devices, and not just wearable. A smart watch with a Soli chip wouldn’t need a digital crown as you could just wave your fingers in the air to get things done. The work forth going by ATAP is not marvelous but commendable too as to how they transformed a briefcase size radar system into a fingernail sized chip that fits any smart watch. Soli in no time, after its release, will be get updated and could be worked from meters away, which would mean that with a snap of a finger you could control your devices.

This comes as boon for that area of medical field that are under a constant threat of infections and contamination. The benefit of gesture recognition feature over the present multi touch inputs would be that we no longer would be requiring screens. Which would be all new accomplishment in the world of machine and electronics.

Gesture recognition inputs will be a revolutionary and groundbreaking feature in the field of VR devices and play station. This project can further help in improving operator safety at work place. If the operator’s hands aren’t near moving parts of the machine then there are great chances of reducing onsite accidents.

Conclusion

The pace at which developments in technology and digital world is moving is faster than expected. The Project Soli will forever change our perspective on how we interact with machines, specially the wireless ones. Soli was initiated not just with the aim to quantify and interpret human gestures, but it also aimed to refine it to that extent that they could make use of gestures without receiving any interference from the environment.

Project Soli would be seen having major impact on the virtual and augmented reality. Today, where while using VR headsets we have to hold the controller, with this revolutionary project, we can simply use gestures movement to define how a user roams a virtual world.

Google, later this year, would start shipping development kits worldwide for its project, confirmed the ATAP officials at the Game Developer Conference. It would be interesting to see where developments in interface of Soli will take us

ABOUT THE AUTHOR: Ms. Shireen Shukla, intern at Khurana and Khurana, Advocates and IP Attorneys and can be reached at  swapnils@khuranaandkhurana.com.

Disclaimer:

Views expressed in this article are solely of the intern and do not reflect the views of either of any of the employees or employers.

[1] ATAP: Google: Soli; What are the potential applications of Soli? <https://atap.google.com/soli/#how-it-works&gt;

[2] Kate Smith: The Tiny Radar Chip Revolutionizing Gesture Recognition: Google ATAP’s Project Soli; All about Circuit < https://www.allaboutcircuits.com/news/radar-chip-revolutionizing-gesture-recognition-google-atap-project-soli/&gt;

MYANMAR: NEW TRADEMARK LAW EXPECTED TO BE ENACTED IN 2017

For the past few years, the nation of Myanmar has been proactively working on the implementation of its first ever formal trademark law, keeping in mind that the new law will overhaul the nation’s legal framework to encourage and motivate the industries and businesses to come and invest and grow in the country [1].

The implementation of this new Trademark law has been projected for this year. Hopefully once this new trademark law becomes effective, the practices which are currently followed by the practitioners i.e. the registration of Declarations of Ownership at the Registrar of Deeds and Assurances, which is followed by the cautionary notices published in the newspaper, will then be replaced by the new modern Trademark system which will stick to International standards set by WIPO.

The new Trademark law will prove to be greatly beneficial to the brand owners and businesses as the new law will bring proper clarification to the whole trademark application process. Since the Myanmar market is on an economic rise, the new trademark law, once implemented, will be a welcome move for the businesses and their brands, thereby encouraging further growth and prosperity of their brands in Myanmar.

The New Trademark System

The new Trademark Law will be based on the first-to-file principle. The new law will have the following features:

  1. The new Trademark law will include following marks which can be protected [2]:
  • Smell and touch signs,
  • Visual marks, and
  • Perceivable sound.

The above mentioned marks are categorized further into service, trade, collective marks, and certification. Registration as a group/collection of marks will also be allowed.

  1. The new law will allow both domestic and global/foreign brand owners to apply for registration of trademarks in Myanmar. Having said that, the global/foreign applicants will have to appoint an authorized agent and this agent must be domiciled in Myanmar [2]. This agent will then represent these foreign mark owners at the Myanmar Intellectual Property Office on their behalf.

The new Trademark law will allow the trademark applications to claim priority from foreign applications/registrations.

  1. The registration process under the new trademark law will include [2]:
  • Filing of an application (where, the application must be either filed in either English or Burmese and must have a Declaration of Intention to Use)
  • Substantive examination and other formalities
  • Publication for opposition and
  • Issuance of certificate.
  1. The validity duration of the registered trademarks will be 10 years from the effective filing date and after each renewal will extend the validity by 10 years [2].
  2. The new Trademark law will also have a provision for submitting a request for a non-use cancellation against those registered trademark which are not in use for a period of 3 consecutive years [2].
  3. The new Myanmar Intellectual Property (IP) office will be created [1] to look after the operations in the new Trademark law. Additionally, new Intellectual Property Courts specialized in handling trademark litigations will be established.
  4. Enforcement:

The new Trademark law will have both civil as well as criminal liabilities for potential infringements in Myanmar.Such liabilities as far as Trademark infringement in Myanmar is concerned will have a criminal offence punishable by maximum up to 3 years of imprisonment or fines or both [3].

Another feature which is a welcome move is the possibility that a trademark owner can enforce its rights through customs. In other words, with enough reasons for alleged import, export or transit of infringing goods into, out of or via the country, the trademark mark owners will be allowed to apply to the Department of Customs for a detention or suspension order.

  1. Transition from the current to new trademark law

All those owners who have their trademarks registered under the current trademark law will be required to, within the period of three years, re-register under the new law [4].

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

References

[1] http://www.wipo.int/edocs/mdocs/aspac/en/wipo_tm_tyo_2_16/wipo_tm_tyo_2_16_3_4.pdf

[2] http://dbav.org.vn/trademark-protection-in-myanmar-and-the-new-draft-trade-mark-law/

[3] www.wipo.int/ip-development/en/pdf/asean/myanmar.pdf

[4] Griffiths, AJ Park -Amanda. “New Trade Mark Laws for Myanmar Coming in 2017.”Lexology.Lexology, n.d.

 

INTELLECTUAL PROPERTY OFFICE OF THE PHILIPPINES (IPOPHL) LAUNCHED PATENT PROSECUTION HIGHWAY (PPH) PILOT PROGRAM WITH THE EUROPEAN PATENT OFFICE (EPO)

European Patent Office (hereinafter “EPO”) had launched the Patent Prosecution Highway (hereinafter “PPH”) program on July 1st, 2017 [1]. The PPH Pilot Program is part of the agreement made between Intellectual Property Office of the Philippines (hereinafter “IPOPHL”), Director General Atty. Josephine R. Santiago and EPO President, Benoit Battistelli on 5 October 2016 [2] at the sidelines of the World Intellectual Property Organization (WIPO) General Assembly. The EPO and the IPOPHL announced on 10 October 2016 [4] their intention to launch a comprehensive Patent Prosecution Highway pilot program.The PPH pilot program between the EPO and IPOPHL starting from 1st July 2017will run for three years ending on 30 June 2020 [4].

What is Patent Prosecution Highway Pilot Program?

Patent Prosecution Highway is a global work-sharing framework that allows patent applicants, whose applications have been considered allowable by a patent office, to request the preferential examination of the corresponding applications in another patent office based on the examination results issued by a PPH office [2]. Patent applicants follow a simple procedure when making the request. Another aspect of this program that eases the prosecution process of patent applications is that another Intellectual Property Office in conducting substantive examination in the corresponding applications can use work products from one Intellectual Property Office as reference. In other words, PPH leverages on the fast-track patent examination procedures alreadyavailable in the IP Offices to allow applicants to obtain corresponding patents faster and more efficiently.

Under the IPOPHL-EPO PPH Pilot Program, the patent applications, which are prosecuted under the PPH Program, shall be subject to certain guidelines present in IPOPHL MEMORANDUM CIRCULAR NO.17-007 [1]. The patent applicants and their agents who desire to make use of this program had to file the duly accomplished Request Form and Claim Correspondence Table present in the Annex B of the circular [1]. This is the minimum requirement for the processing of a PPH Request.

Under this program, patent applicants should file the claims which have been found patentable either by the IPOPHL or by EPO andmay ask for preferential examination of their corresponding patent applications at the former IP Office after following a simple procedure and with minimal documentary requirements. This PPH Program is available for national and PCT applications.

The PPH Program has 45 participating countries worldwide. The IPOPHL became a member of the PPH network on February 2012 when it signed its first PPH agreement with the Japan Patent Office (JPO).The IPOPHL now has bilateral PPH agreements with the JPO, USPTO, KIPO and EPO [3].

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

References

 

[1] http://www.ipophil.gov.ph/images/Patents/MemoCircularNo_17-007.pdf

 

[2]http://info.ipophil.gov.ph/dev/releases/2014-09-22-06-26-21/609-ipophl-commences-patent-prosecution-highway-pph-pilot-program-with-the-european-patent-office-epo

 

[3] http://ipophil.gov.ph/services/patents/patent-prosecution-highway-pph

 

[4] https://www.epo.org/law-practice/legal-texts/official-journal/2017/06/a47.html

 

Intellectual Property Office Singapore (IPOS) wins Architecture Excellence Award in “Business Architecture”

On July 13, 2017 [1], the Intellectual Property Office of Singapore was declared the winner of the Architecture Excellence Award in the “Business Architecture” category at the Architecture Excellence Awards Night held at Sydney, Australia. The award was presented by iCMG International Award certificates and prizes were given to the winners during the dinner gathering on July 13th during Architecture World Summit 2017, Sydney Australia [2].

Evaluation process for these Awards:

There were multiple rounds for evaluating the winners for different categories. Through every round of competition, the Jury was assigned applications in the area of their individual interest and expertise, so that the applications always evaluated by people who appreciate and understand the type of architecture work that the applicants for the awards have done. The whole evaluation process has been described below [3]:

Round 1

In the first round of competition, submission was reviewed by the core committee. The applications which were qualified on the initial criteria were moved to the next round.

Round 2

In the second round of the competition the qualified applications from the first round were reviewed by the members of the Jury independently. Their scores given by the judges determined the finalists in each category.

Round 3

In this round of the competition, top three finalists in each category were identified based on the combined scores of the jury members.

Round 4

In this round of the completion a video interaction took place between the jury members and business leaders from the finalists. After all the rounds the combined scores of jury members determined the Winners in each category.

There were multiple categories in which awards were given in the Architecture Excellence Awards organized by ICMG International. ‘Business Architecture’ was the category of which IPOS was the winner [4]. As stated in the press release by IPOS [1], this award recognizes architects and enterprises whose work demonstrates a combination of talent, vision and workmanship in creating successful and enduring systems and enterprises. It also serves to highlight remarkable projects and best practices to the global audience. IPOS was recognized for its achievements in re-engineering its business services, information, timing cycle and stakeholders for achieving business goals. This attests to IPOS’ commitment to be an innovation agency that uses its IP expertise and networks to help local and foreign enterprises commercialize their ideas and intellectual property, from Singapore and through Singapore into the world. This award has become a global benchmark of excellence for leading companies from USA, Europe, Asia, Middle East, Africa and South America that have participated in this competition.

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

References

[1] https://www.ipos.gov.sg/media-events/happenings/ViewDetails/ipos-wins-architecture-excellence-award-in-business-architecture/

[2] http://live.icmgworld.com/anz/architectureworld/2017/

[3] https://live.icmgworld.com/anz/architectureawards/2017/process/evaluation-process.html

[4] https://live.icmgworld.com/anz/architectureawards/2017/winners/2017#

 

SUMMARY JUDGMENT IN INTELLECTUAL PROPERTY DISPUTES UNDER ORDER XIII-A OF CIVIL PROCEDURE CODE

  1. Applicability of order XIII-A of CPC to Intellectual Property Dispute

With the objective of streamlining and expediting the disposal of disputes in litigation, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as the “Act”) came into effect on October 23, 2015.  The Act provides for the setting up of specially designated Commercial Courts at District level and Commercial Division of High Courts with ordinary original civil jurisdiction to adjudicate on commercial disputes of a certain specified value. “Commercial dispute” includes disputes arising out of intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semi-conductor integrated circuits.[1] “Specified Value” has been defined[2] to mean the value of the subject-matter of the suit, determined in accordance to Section 12 of the Act, which shall not be less than one crore rupees or such higher value to be notified by the Central Government. The value of subject matter in an intellectual property right dispute would be determined by the market value of the said IP right, as estimated by the plaintiff[3].

  1. Amendment of the Code of Civil Procedure

The said Act has amended the Code of Civil Procedure, 1908 (hereinafter to be referred to as “CPC”) to incorporate stricter timelines and procedures. These amended provisions of the CPC are applicable[4] only in respect of commercial disputes of specified value (one crore rupees). One such salient feature of the Act is the inclusion of Order XIII-A in CPC which provides for the mechanism of Summary Judgment in respect of a claim without recording oral evidence. In light of two recent decisions of the Delhi High Court, this article aims to  analyse the said mechanism in respect of intellectual property disputes.

  1. Context of the mechanism under Order XIII-A

Order XIII-A delineates the procedure by which the Court shall, on application of a party, decide a claim without the recording of oral evidence. Previously, suits which had more or less a clear outcome based on merits would still have to go through the entire procedure enumerated under the CPC before the case could be disposed.

The technicalities led to inordinate delays for the parties concerned and the entire docket system was overburdened. To counter this event, the amendment envisages a process for a summary judgment which is on similar lines to summary suits provided in the CPC with the primary difference that application for summary judgment can be in respect of any relief in a commercial dispute while summary suits relate to such relief relating to liquidated demand or fixed sum of debt.

Application to be in respect of a claim or part thereof

Under order XIII-A, the “claim” in an application for summary judgment shall include (a) part of a claim, (b) a particular question on which the whole or part of the claim depends, and (c) counter-claim.[5] For example, in Trade Mark infringement suit, the question of prior user/first use may be a question on which the claim for damages depends either in whole or in part, and such question may be determined in an application for summary judgment.

When and on what considerations:

Under mechanism as provided under Order XIII-A, the application for summary judgment can be made by either party after the service of summons to the defendant and before the framing of issues.[6] Upon consideration and satisfaction of the Court, a summary judgment may be given that (a) the plaintiff/defendant has no real prospect of succeeding on the claim/defence, as the case may be; and (b) there is no other compelling reason as to why the claim should not be disposed of before the recording of oral evidence.[7]

The rationale being that the Court, after hearing both parties to an application for summary judgment, is of the view that there are no material propositions of fact or law on which further evidence needs to be led since the respective rights of the parties are well-established as per the merits of the dispute.

  1. Bright v. MJ Bizcraft

In the case of Bright Enterprises Private Ltd. v. MJ Bizcraft LLP[8], decided by a Division Bench of the Delhi High Court in appeal, a suit was originally instituted before a Single Judge to claim a permanent injunction, restraining trademark infringement and dilution of goodwill by the defendant. The Plaintiffs used ‘PRIVE’ in the hotel business while the Defendants used ‘PRIVEE’ in relation to a nightclub in the hotel Shangri-La Eros. The Single Judge, without issuing summons to the defendant, dismissed the said suit by suomoto invoking Order XIII-A and stating that a plaintiff’s suit with “no real chance of success” ought to be dismissed at whichever stage the Court finds it so. Subsequently, this was appealed by the plaintiffs.

  • No dismissal without issue of summons

On an appeal by the Plaintiffs on the dismissal of their case, the Division Bench held that the principle of audi alteram partem is embedded in the CPC and hence issue of summons is not optional at the instance of the Court when a particular suit has been duly instituted. It was further held that at the stage of admission of the suit, it is only to be seen whether the suit has been duly instituted. It observed that the case of a plaintiff may be weak but that is not a ground for dismissing a suit without granting the plaintiff an opportunity of proving and establishing his case.

  • Window for application and no suomoto invocation

The Division Bench further held that Order XIII-A cannot be suomoto invoked by the Single Judge on inquisition and that summary judgment may only be delivered upon appropriate application being made by either of the parties.[9] Moreover, it was stressed upon by the Court that the window for preferring an application for summary judgment is only after issuance of summons to the defendant and before the framing of issues, and since such proceedings are of an exceptional nature it was the prerogative of Courts to be scrupulous while observing the requirements of Order XIII-A.

  1. Ahuja Radios

In Ahuja Radios v. A. Karim[10], an application for summary judgment was made on the basis of admissions on part of the defendant. The plaintiff was a leading manufacturer and seller of audio equipment under the registered AHUJA mark since 1940. A suit was filed against the defendant for selling counterfeit products under its mark.

The court restrained the defendant from selling audio equipment using the mark AHUJA or other deceptively similar mark and ordered a local commissioner to inspect his premises. The inspection resulted in seizure of a number of products bearing the AHUJA mark, which the defendant admitted were not original. Subsequently in pleadings, the defendant made claims contrary to his initial admitted statements and claimed that such counterfeit products were placed in his premises by the plaintiff immediately before the inspection.

The Court noted that the defendant had no real prospect of resisting the decree of permanent injunction and that the defendant also had little prospect of succeeding in its defence that he was not dealing in the counterfeit products, thereby indicating that there was no compelling reason for the Court to not dispose of the claim for permanent injunction before the recording of oral evidence.

The court passed a decree for permanent injunction in summary disposal of the suit under Order XIII-A on the basis of the admissions of fact by the defendant. Therefore, it is pertinent to note that admission on fact is a relevant criterion for admitting an application for summary judgment.

Conclusion

It is pertinent to note that sometimes disputes in relation to intellectual property rights are pertaining to infringers who do not enter appearance in the proceedings to the suit. Instead of requiring the plaintiff to lead evidence ex-parte, summary judgment under Order XIII-A of the CPC is an efficacious mechanism of disposal of disputes in such cases. The Courts are already passing punitive damages in trademark infringement cases where the offence of infringement is gross and clearly made out and hence, it is submitted that Order XIII-A would find an appropriate application in such disputes.

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

References :

[1] Section 2(1)(c)(xvii) of the Act.

[2] Section 2(1)(i).

[3] Section 12(1)(d).

[4] Section 16(1) and 16(2).

[5] Order XIIIA, R. 1(2).

[6]Ibid, R. 2.

[7]Ibid, R. 3.

[8]2017(69)PTC596(Del).

[9] Order XIII-A Rule 4.

[10] IA No. 5202/2017 in CS(COMM) 35/2017 delivered on May 1, 2017.

Revised Guidelines for Examination of Computer-related Inventions (CRIs)

On 30th June 2017, the Office of the Controller General of Patents, Designs, and Trade Marks (CGPDTM) published Revised Guidelines for Examination of Computer-related Inventions (CRIs) that are applicable with immediate effect. The revised guidelines have replaced the Guidelines for Examination of CRIs, published on 19th February, 2016. The revised guidelines are short and precise as compared with the previous versions and have relaxed the criteria for patentability of the CRIs.

The heart of the 2016 guidelines was a three stage test to examine a CRI application, according to which the Examiners may:

  • Properly construe the claim and identify the actual contribution
  • If the contribution lies only in mathematical method, business method or algorithm, deny the claim
  • If the contribution lies in the field of computer programme, check whether it is claimed in conjunction with a novel hardware and proceed to other steps to determine patentability with respect to the invention. The computer programme in itself is never patentable. If the contribution lies solely in the computer programme, deny the claim. If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability.

Therefore, the requirement of a novel hardware was apparent under the three step test laid in 2016 guideline. The revised guidelines have however done away with this test. The revised guidelines focus on substance over form and states:

If, in substance, claims in any form such as method/process, apparatus/system/device, computer program product/ computer readable medium belong to the said excluded categories, they would not be patentable. Even when the issue is related to hardware/software relation, the expression of the functionality as a method is to be judged on its substance. It is well-established that, in patentability cases, the focus should be on the underlying substance of the invention, not the particular form in which it is claimed. The Patents Act clearly excludes computer programmes per se and the exclusion should not be allowed to be avoided merely by camouflaging the substance of the claim by its wording.

The revised guidelines further discuss determination of excluded subject matter relating to CRIs. According to the revised guidelines, it is important to ascertain from the nature of the claimed CRI whether it is of a technical nature involving technical advancement as compared to the existing knowledge or having economic significance or both, and is not subject to exclusion under Section 3 of the Patents Act.

Further, the sub-section 3(k) excludes mathematical methods or business methods or computer programme per se or algorithms from patentability. Computer programmes are often claimed in the form of algorithms as method claims or system claims with some means indicating the functions of flow charts or process steps. It is well-established that, while establishing patentability, the focus should be on the underlying substance of the invention and not on the particular form in which it is claimed.

What is important is to judge the substance of claims taking whole of the claim together. If any claim in any form such as method/process, apparatus/system/device, computer program product/ computer readable medium falls under the said excluded categories, such a claim would not be patentable. However, if in substance, the claim, taken as whole, does not fall in any of the excluded categories, the patent should not be denied.           

Hence, along with determining the merit of invention as envisaged under Sections 2(1) (j), (ja) and (ac), the examiner should also determine whether or not they are patentable inventions under Section 3 of the Act.

Thus, it can be inferred that the revised guidelines focus on substance over form instead of novel hardware requirement. That is, while examining an application its substance is considered and a claim is taken as whole, if it does not fall in any of the excluded categories, the Examiner can proceed with other steps to determine patentability with respect to the invention.

Various stake holders associated with the software industry and Associated Chambers of Commerce & Industry of India (ASSOCHAM) have been lobbying for such a change. ASSOCHAM trough a communication to the Prime Minister’s Office, urged the Prime Minister to bring out appropriate amendments to the 2016 guidelines and simplify the criteria in pursuance of becoming a leading global player in areas of research and development (R&D) and software products.

In the view of the foregoing, it can be concluded that as the CGPDTM has done away with the requirement of novel hardware, the patentability criteria is eased out. This not only facilitates the patentability of CRIs but also attracts big software MNCs and startups to invest in the area of development of software technologies.

About the Author: Ms. Prigya Arora, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at prigya@iiprd.com

Registered Designs (Amendment) Bill of Singapore

Registered Design Act had originally been enacted in 2000 in Singapore. This act has gone through various amendments by formal and informal consolidations in 2001[1], 2005[2], 2012[3], and 2014[4]. Major change has been brought in act in 2001 and 2005 in which this act has been revised. This article includes the proposed reforms that have been tabled in the Parliament of Singapore for the Second reading on 8th May, 2017. The proposed changes aims to support modern business practices while continuing to balance the interests of design creators/owners and users and provide business certainty.

Key features of the Registered Design (Amendment) Bill

  1. Widened scope of registrable Design

The definition of “Design” in the proposed bill has updated to give expand the scope in granting of design right, which clearly aims to incentivize creativity and innovation. It is expected to include an important aspect i.e. colour under the umbrella of important component of design. However, the scope will not extend to colour per se but only to limited colours monopolizing that result in impeding design innovation.

Second important inclusion is of virtual designs of non-physical products that can be projected onto a surface and have useful functions. Those design need to fulfil two requirements (a) be capable of being represented clearly and without subjectivity; and (b) retain the same (or substantially similar) design features irrespective of the surface or medium they are projected on.

  1. Ownership of Rights

Under the current section 4 of the RDA the commissioning party is considered to be owner of rights by default, not the creator/designer. However, this bill gives creator/designer the actual right of ownership. According to proposed change ownership rights shall be vested with commissioning party, subjected to any agreement or liberty of contract between the parties concerned.

  • Extension of grace period for registration

If any designer had disclosed his/her design before registration and designer wish to register it that grace period of 6 month was granted for filing for registration. This grace period has been extended to 12 months as per the amendment under RDA.

  1. Allowance of multiple design of same classification under same application

Before, designer need to file one application for designs of same Locarno sub-classification.  However, each design has its separate application number and treated as individual application with separate fees for registration. The amendment will allow registration of multiple designs under the same broad category and through a single application, which in turn may reduce the costs involved with subsequent designs within the same application.

About the Author: Mohini Sharma, Legal Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at abhijeet@khuranaandkhurana.com

Sources

  1. Helika Jurgenson,”Upcoming Reform: Registered Designs Regime in Singapore”, available at http://www.youripinsider.eu/upcoming-reform-registered-designs-regime-singapore/
  2. IP newsletter, available at https://f.datasrvr.com/fr1/017/70864/2017Apr17_IP_Newsletter.pdf
  3. Ministry of Law, Singapore at https://www.mlaw.gov.sg/content/minlaw/en/news/press-releases/legislative-changes-introduced-to-update-singapores-registered-d.html
  4. https://www.gov.sg/~/sgpcmedia/media_releases/minlaw/speech/S-20170508-1/attachment/Registered%20Designs%20Amendment%20Bill%20-%202R%20Speech%2008052017.pdf

Cambodia: Declaration on the procedure for applying to register the brand online

On May 4, 2017 [1] the Ministry of Commerce, Kingdom of Cambodia issued a regulation declaring a new online trademark registration procedure. This new online trademark system was launched on May 25, 2017 [2]. The new e-filing system [3] allows an applicant for easy and quick filing for new trademark applications. This system can be used by both local and foreign applicants (either individual or groups).Applicants either local or foreign can now upload the necessary documents and detailed certificates for mark registration online.

The newly launched online-filing portal is used only for filing new trademark applications, but the actions which are performed post-filing are to be filed manually and in person at Intellectual Property Department of Cambodia. However, the traditional paper-filing system for trademark applications still continues alongside the new e-filing system.

According to the ‘disclaimer details’ of the new e-filing system, the user account, i.e. the username & password to access the trademark Filing System is created upon a request to DIP official [4].But the foreign applicants must have a local registered trademark agent from Cambodia itself who can file their applications on their behalf.The payment for the filing fee by the applicants can be made either online or off-line. For offline payment of filing fees, the applicants have to pay to the Ministry of Commerce in one of the three cooperative banksgiven below:

  1. FOREIGN TRADE BANK (FTB)
  2. CANADIA BANK
  3. ACELEDA BANK

The e-filing portal ‘https://efiling.cambodiaip.gov.kh/efiling/’ [3] has been developed with the help of technical experts from World Intellectual Property Organization (WIPO) [5] with the goal of bringing Cambodia’s Intellectual Property department up-to-speed with other developed international patent offices. Yo Takagi, assistant director-general of global infrastructure at the World Intellectual Property Organisation (WIPO), said online filing systems make it easier for individuals and small and medium sized enterprises to register trademarks without physically going to the Commerce Ministry – thus being a huge boost to Cambodia’s burgeoning economy.

This new system is another milestone achieved by the department of Intellectual Property of Cambodia, having earlier becoming the first country in Asia to recognize European patents on its territory under the European Patent Organization (EPO) by signing a validation agreement with the EPO on 23 January 2017 [6].

About the Author :Shilpi Saxena, Patent Associate at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at abhijeet@khuranaandkhurana.com

References:

[1] http://www.cambodiaip.gov.kh/NewsDetail.aspx?id=110048

[2] http://www.akp.gov.kh/?p=103057

[3] https://efiling.cambodiaip.gov.kh/efiling/

[4]https://efiling.cambodiaip.gov.kh/efiling/disclaimerDetails

[5]http://www.wipo.int/edocs/mdocs/mdocs/en/wipo_tm_pnh_16/wipo_tm_pnh_16_t13.pdf

[6] https://www.epo.org/news-issues/news/2017/20170123.html