Tag Archives: infringement

Referential Names & Intellectual Property Infringement

With progression of time we are witnessing the rise of Intellectual Property (IP) issues in India across industries. Every new case raises a few new questions and simultaneously rests some old ones. While traditionally IP disputes arose mainly in the pharma  and software industries, recent trends have shown a noticeable surge in other industries including the Appliances and Consumer Electronics (ACE). One such case in the Bombay High Court, belonging to a particular segment of the ACE industry, highlights relevant issues for the entire industry.

This suit for IP infringement was instituted by the multinational electronics company Seiko Epson, against Jet Cartridge (India) Pvt. Ltd. Epson, a company whose very name stands for “Son of Electronic Printer” quite imaginably has a strong IP portfolio around its printers, basis which it alleged that Jet Cartridge, was infringing on their IP rights on two counts- one, that of the registered designs of the nozzles that are used in cartridges, and the other of using their trademark ‘EPSON’ without authorization when they label their products as “Compatible with EPSON”.

Assessing the first aspect involves a simple test of comparing the registered designs with that used by the defendants.   The Indian Industrial Design registrations with numbers 235236 & 235237, titled “Packaging Container ” along with 235238 & 235239, titled “Container Cap with Stopper”, entitles EPSON under the Design Act,  2000, to exclusive use of the designs covered. The order by the court dated 23 November 2016 reflects that the counsel appearing for Jet Cartridge, Dr. Saraf, made a statement- as regards the design infringement, the defendants will change the nozzle of the cartridge from the plaintiffs’ proprietary design and they will do so with immediate effect. The nozzles of all existing products and inventories which have not yet gone into market will also be changed.

Coming to the more interesting part of the case, the argument that the trademark law allows EPSON to an outright exclusive use of its name, even if it were used merely as a reference, was a contentious one. Ordinarily,  in a trademark infringement matter, the court sees whether the defendant used a mark identical or similar to the plaintiff’s mark in a manner that may confuse/ deceive a consumer into believing that the defendant’s goods/ services are actually that of the plaintiff’s. Typical examples include using minor spelling or visual variations, strikingly similar packaging or direct  counterfeiting. In this case, however, the question really was whether the inscription “Compatible with EPSON” on a cartridge packaging would qualify as infringement . If so why, and if otherwise why not?

On one side, the argument stands that a clear indication is provided that the cartridge does not belong to EPSON but is merely compatible for use with EPSON printers and hence not misleading. While on the other hand, would it be unrealistic to assume that a casual customer might be led to believe that the company selling the products are authorized by EPSON to do so, and is indirectly buying it from EPSON. Honorable Justice Gautam Patel, had the following to say on this aspect:

Ms. Oberoi for  the plaintiffs  would have it that the defendants are prohibited  from  using the name EPSON  at all, even in a purely  descriptive sense to demonstrate  compatibility, because this is the plaintiffs’ trademark , even if the defendants do not use that word  as a trade mark  but only as a descriptor  to identify compatibility. Prima facia, this does not seem to be a supportable or tenable proposition  in law. A laptop repair service may, for instance, say that it can repair  laptops of  various  makes and brands and names these, but not use these as trademarks. Persons make various kinds of accessories (screen  protectors, peripherals,  etc.)  and  these  are  often  denominated  as  being compatible  with  a certain name  product:  mobile  phones, for instance, of specified makes and brands. This use is not illicit. The plaintiffs  enjoy  a  monopoly  in the  mark  and  are  entitled  to prevent unauthorized  use of  the mark. The defendants are clear that they do not use the name as a mark but only to identify that their cartridges are compatible with printers manufactured by the plaintiffs. There cannot be the kind of monopoly that Ms. Oberoi suggests. At her instance, I  will leave contentions open in  this regard till the replies and rejoinders are filed.

While the court was open to further deliberation and debates over its initial view on the subject matter, as the trend goes, the dispute was settled between the parties. The consent terms dated 20 December 2016 that were tendered to the court had Jet Cartridge reaffirming its undertaking to change the nozzle designs altogether, whereas EPSON agreed to their use of “Compatible with EPSON” on their packaging. Thus, an important perspective regarding the legal principles and consequences on the use of referential naming was set.

Author: Abhishek Pandurangi, Partner, Attorney of Law at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at abhishekp@khuranaandkhurana.com.

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A Take on Producer’s Right in ‘Dubbing’ and ‘Remaking’ of a Movie

Can a producer of a film remake or dub it without the permission of the author of the script? The answer to this question is given by a division bench of Madras High Court in a recent case of Mr. Thiagarajan Kumararaja vs. M/s Capital Film Works (India) Pvt. Ltd. and another.

In this case the Plaintiff, the author of the script of an award-winning Tamil movie “AARANYA KAANDAM” prayed for a permanent injunction against the producers of the film from remaking and dubbing the film in other languages claiming that it would be a copyright infringement of his script.

The following judgement was passed against the judgement and decree passed by a single judge dated 08/09/2016 in which the honourable single judge dismissed the appeal.

In this appeal the following issues came up in front of the division bench:

  1. Whether the producer of the film has any right to dub the in a different language?
  2. Whether the producer of the film has any right to remake a film in a language different from the original one?
  3. If the answer for the first issue is in affirmative, can there still be any injunction against them?

The appellant argued that the dubbing is also remaking a film and it would amount to infringement of his copyright in the script.

The respondents defended that dubbing is only ‘communication to the public’ and it would not amount to infringement of copyright because they are the authors of the cinematograph of the film and hence they are the owners of the copyright of the cinematograph of the film.

The court held that dubbing is included in the term “otherwise enjoyed” of the definition ‘communication to the public’ under section 2(ff) of the Copyright Act, 1957which reads as follows:

“2(ff)”communication to the public” means making any work available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion other than by issuing copies of such work regardless of whether any member of the public actually sees, hears or otherwise enjoys the work so made available.

 Explanation: – For the purposes of this clause, communication through satellite or cable or any other means of simultaneous communication to more than one household or place of residence including residential rooms of any hotel or hostel shall be deemed to be communication to the public.”

Therefore, court is of the view that dubbing is included in the cinematograph of the film. It was also held by the court that the producers are the ones who take initiative to make the film and that they are the producers under section 2(uu) of the Copyright Act, 1957 and that producers are the authors of the cinematograph of the film under section 2(d)(v) of the Copyright Act, 1957. Hence dubbing does not amount to infringement and dubbing rights are held with the author of the cinematograph i.e. the producers. This also answers the third issue that since the rights of cinematograph lies with the producer so there cannot be any injunction against the dubbing of a film in different language.

The court is of the view that remaking a film would amount making changes to the main script of the film and hence would amount to infringement of the exclusive copyright given to the author of the script. Therefore, the producers of the film do not have a right to remake a film.

Conclusion

From the judgement of the above discussed case it can be concluded that the producer is the person who takes initiative to make the film and he is the author of the cinematograph of the film and hence holds the right over it. Dubbing is included in “communication to the public”. Dubbing is also part of the cinematograph and only includes change in the audio track of the film and hence it does not amount to infringement of copyright of the author of the script. But remaking a film would lead to making changes to the underlying script without the permission of the author of the script therefore, it leads to infringement of the copyright of the script writer.

Author: M.Sai Krupa, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at anirudh@khuranaandkhurana.com.

References:

[1]https://indiankanoon.org/doc/68611937/

[2]https://spicyip.com/2017/12/madras-hc-producers-right-to-communicate-to-the-public-includes-the-right-to-dub.html

Law On Internet Memes

Internet users in India spend half their time on social media every day. It is one of the most efficient platforms for communication yet the most exploited one. One such famous platform would be Facebook, an online networking site that mostly everyone is aware of. Similarly, internet ‘meme’ is also ubiquitous It is defined as “an idea, behaviour, style or usage that spreads from person to person within a culture.” These memes are a subset of the behaviour passed from one individual to another by imitation or other non-generic memes. In legal terms, it is a ‘derivative work’ and only the copyright owner has the legal right to create such work. Although, if the person claims to have made a “fair use” of the copyrighted work, it can be used as a defense under the provisions of the Copyright Act.

Now, lets come back to the debate as to whether memes shall be protected under the copyright and Trade Mark law or not. You may think that no one is the owner of such memes, rather it is just a creation of the internet but the Law may think differently as some memes do qualify for copyright protection and at some point, they were created by some person who could be the owner of the right. For instance, a meme called the “Grumpy cat” became so famous that it was turned into a business through selling books, posters, mugs, etc. in the name of “Grumpycats.com” and was granted a trademark for the same.

Even though a lot of memes are shared on the internet for the sole purpose of fun, there have been instances in the past that states otherwise. Just like in the case of Getty Images, an American agency which supplies images and illustrations that sent letters demanding license fees who exploited their copyrighted content was an image of “Awkward Penguin”, a photograph taken by George Moberly, a National Geographic photographer, for which Getty enjoys the licensing. Posting a meme on a personal blog (non-monetized) or a personal social network account might not be challenged. However, if it is for a commercial purpose, it might violate the copyright.

Assuming that these marks are registered in India, they will be governed by the Trade Marks Act. Now, if the image on a meme is being used on goods and services or for other commercial purposes, it would lead to infringement of the trademark under Section 29 of the Act which clearly states that a mark may be infringed by use of spoken words or their visual representation meaning that even a slight usage or any modification of that image on social media would result in infringement. However, this provision is only applied to registered marks and not unregistered.

Even though Copyright law in India does not specifically provide remedy in the case of parody, the owner of such artistic work can reach the Court for infringement of his right as any use of the Copyrighted work if,  it is  not a “fair use” can result to infringement leading to a lawsuit.

Even though its tempting to think that viral content is nothing but part of the web that is “owned by everyone”, there is still some source attached to the work and if such work amounts to copyright, the owner should be provided with the rights for the same. Memes are a rapid business and do not get immunity from the skirmishes of copyright and trademark, thus leading to more upcoming battles in court.

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

References:

[1] https://www.plagiarismtoday.com/2013/05/07/copyright-memes-and-the-perils-of-viral-content/

[2]https://www.washingtonpost.com/news/the-intersect/wp/2015/09/08/how-copyright-is-killing-your-favorite-memes/?utm_term=.64b3b3aa2474

[3] http://www.abajournal.com/magazine/article/do_memes_violate_copyright_law

Exide Industries Limited vs. Exide Corporation, U.S.A. & Ors.

The case Exide India v Exide US brings into effect the perplexing issue of Trade Mark law. The dispute dates back to 1997 when the US based Company ‘Exide Technologies’ entered the Indian market post Liberalisation, where Indian company ‘Exide Industries’ was already present over the decades in the local market selling automobile batteries under the trademark “EXIDE”. As soon as the US based company started its operation in India, Indian company “Exide Industries” filed a suit for infringement of trademark in Delhi High Court. After a significantly long and much converse legal conflict, the Court in 2012 restrained Exide Technologies from using “Exide” trademark in India. Exide Technologies further filed an appeal to Division Bench against the judgement of 2012, which was though dismissed the Division Bench held that there was neither infringement nor passing off done by Exide Technologies as both the commercial ventures were genuine users of the mark. Further to this decision, Exide Industries filed an appeal before the Hon’ble Supreme Court, which was disposed off by the court, as the parties to the dispute opted for an out of court settlement. The foremost dispute of the case was as to who is the real owner of the mark EXIDE.

The case is important as it includes the aspect of prior-use of identical trademark by two commercial entities and its legitimate ownership. The case involves a significant concept of trademark law according to which the prior use and adoption of trademark show distinctiveness of the trademark on account of sale of the goods in market which makes the seller, owner of the trademark. The Delhi High Court single judge held that the trans-border use of the trademark by the registered owner of a mark in a particular jurisdiction does not make him the owner in another jurisdiction where the similar mark is in simultaneous use by other local registered proprietors with proven prior use of that trademark. But subsequently the Division Bench declared the judgement to be impugned and thus held that the trans-national use of the trademark is one of the significant aspects to look for the ownership of the trademark and also the goodwill of the trademark continues to be with the assignor of the trademark even if it is assigned to some other company for use in another jurisdiction.

Case background:

M/s. Electric Storage Battery Company (ESBC) was incorporated in USA in 1888 and subsequently was granted the trademark ‘EXIDE’ in USA. It incorporated a subsidiary company in UK in 1891 named as M/s. Chloride Electric Storage Co. Ltd. (CESCO) which was permitted to use the trademark as it was a subsidiary of the parent US Company. Later, CESCO was also granted registration of trademark ‘EXIDE’ in UK. In 1947, following an order of a US District Court, ESBC and CESCO broke connection but CESCO continued to have right to use trademark ‘EXIDE’ pursuant to an agreement between the two. CESCO started selling batteries under the name ‘EXIDE’ in India and subsequently, in 1942 it was granted registration of the trademark ‘EXIDE’ even in India. CESCO is the parent company of the present plaintiff company to which the trademark was transferred. In 1978, by executing a deed of assignment, trademark ‘EXIDE’ was assigned to the present plaintiff company. Thereafter, the plaintiff company applied for transfer of registration of trademarks in its favour which was also granted. Therefore, it was selling batteries under the name ‘EXIDE’ for quite a long time in India.

After liberalisation, when US company Exide Technologies started selling batteries under the name ‘EXIDE’ in India, The Indian Company brought a suit for infringement and passing off against it which became a long drawn battle.The ownership of the trademark EXIDE was the primary issue in this case. The Indian Company Exide Industries claimed ownership on two grounds:

  • It was the registered owner of the trademark in India. This ownership was transferred from the transferor-company.
  • It was the prior user of the trademark in India and thus it acquired the ownership of the trademark ‘EXIDE’ in India.

Similarly the US based company, Exide Technologies claimed the ownership on two grounds:

  • It is the parent company (US based ESBC) of the former transferor-company (UK based CESCO) which owned the trademark ‘EXIDE’ and thus only Exide Technologies have the exclusive right of the ownership of the trademark ‘EXIDE’ even in India.
  • The trademark ‘EXIDE’ is registered in its name in about 130 countries and thus it is the worldwide owner of the trademark. As the company has a transnational existence, it is the real owner of the trademark ‘EXIDE’ even in India.

In the present case, the concept of prior use was applied, which implied that the plaintiff company was using the trademark by selling batteries under the name ‘EXIDE’ in India. The defendant claimed that it was the owner of the trademark in India as well because it was the parent company of the transferor-company from which the plaintiff acquired the trademark ‘EXIDE’ and the defendant pleaded that it had not abandoned its right by not using the trademark in India and instead didn’t use the trademark in India for long period of time because of some ‘special circumstances’. The court did not accept the Defendant’s plea as it failed to show any ‘special circumstances’ for not using the mark over such sufficiently long period of time in India. The result was that the court accepted the fact that the transferor-company was manufacturing batteries under the name ‘EXIDE’ in India from around 1960 from which the plaintiff company got the trademark assigned. Thus automatically, as far as India is concerned, the plaintiff and their predecessors are the prior user of the trademark ‘EXIDE’.

Judgement:

The Delhi High Court in 2012 through Valmiki Mehta, J. restrained Exide US from using the Exide mark in India and held the plaintiff as the legitimate user and owner of the mark in India due to its prior use by plaintiff. Both, infringement and passing off by US Company Exide Technologies were confirmed by the court. The Defendant’s plea of non-use of trademark in India due to special circumstances was also rejected as Court observed that the Defendant failed to establish any special circumstances.

However, the case came up as an appeal to the Division Bench of Delhi High Court which considered both the issues, the prior use of the trademark by Exide Industries and whether Exide Technologies is liable for the infringement and passing off. Relying on the landmark Supreme Court judgement like Cadila Healthcare, Dyechem v Cadbury and Durga Das Sharma v Navratan Pharmaceutical laboratories, the court inferred that passing off and infringement are both different concepts wherein, an impression of deception or confusion relating to the manufacture or origin of the goods is created in the minds of the buyers. Court observed that the trademark ‘Exide’ used by both the parties is identical, and both were genuine users of the mark. The judgement of the court was quite inventive and only one of its kind wherein the court outlined that US based Company was kept out of the Indian market due to trade restrictions but however on record of evidence Exide Batteries manufactured by Exide US was substantially known in India as well. Another point that the Court illustrated was that though, through an assignment deed, the mark was assigned to Exide India, yet the goodwill in the mark was retained by Exide US because the agreement did not specifically transfer the goodwill. Thus, the transnational reputation was highlighted and the court allowed Exide US to be in possession of the goodwill of the trademark ‘EXIDE’ despite of transfer of rights of ownership of the trademark. At the end, the court confirmed that there was no circumstance of passing off or infringement by the Exide US as it had legitimate rights to the mark. The court termed the use of the mark by Exide Technologies as “bona fide and legitimately concurrent”. Moreover, the counterclaim against Exide India was not maintainable since they were the registered owners of the mark in India.

The order of the division bench was further stayed by the Supreme Court after an appeal was filed by Exide Industries. The apex court restrained the Exide Technologies (defendant) from using the mark until the final adjudication of the matter but the parties before the decision of the court brought about an out of court settlement.

Present scenario and analysis:

In the event of widespread reputation through immense technology (internet, websites), globalisation and restructuring of Indian market, Exide case comes as an exception and as a tenet that considers territorial character of Trademark above trans-border reputation. The Delhi High Court judgement of 2012 clearly delineated that the territorial prior use of the trademark by a registered user in one jurisdiction weighed more than the worldwide reputation of the trademark used by another registered user in other jurisdictions. The case was twirled when the Division Bench restored the rights to the mark to both competing proprietors in a way. In this case the true scope and effect of concurrent use of an identical trademark for similar products in different jurisdictions were brought into light. Both concurrent users of the identical trademark in different jurisdictions were held to be the legitimate users in their respective jurisdictions. The allowed of the retained goodwill for substantiating bona fide claim to the mark was an exclusive and unique approach.

However, out of the court settlement by the parties clearly marked an end to the hopeful jurisprudence in cases of use of identical trademark by different commercial proprietors in different jurisdictions. The parties mutually agreed subject to certain terms and conditions to fully and finally settle all disputes and their rights and obligations with respect to the mark in the way set out in the agreement. As a result of the settlement, the Supreme Court disposed off the case without a proper jurisprudence on the issue.

Source:

[1]   MANU/DE/4642/2012

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

Google AdWords Giving a Good Wallop to Trademark Law

Introduction

In this era of globalization, we use Internet on a regular basis in our daily lives. People are continuously trying to gain more profits and for this they sometimes adopt illegal practices for promotion of their goods and services. These practices include unauthorized use of a registered name or mark owned by their competitor. This misuse leads to infringement of rights of legitimate owner of the name or mark. A specific kind of software is generally used by search engines, called spider or crawler to gather information of web pages available on the Internet. In order to attract customers towards their websites, owners are continuously making use of “Google AdWords”, “Meta-Tags”, “Hyper- Linking”, “Deep- Linking”, etc.

The present article outlines relation between “Use of Google AdWords” and “Trademark Infringement”. Basically, Google AdWords are keywords to search for a particular category of goods and/or services required by a person. When a person types a particular keyword on a search engine, the search engine matches the keyword entered by the person with the Google AdWords of various web-pages, and accordingly displays the most prominent results. By using the competitors name and/or mark with various permutations and combinations, search engine results are effortlessly manipulated to lure the visitors to one’s website. Google AdWords are used to set the web links in a prioritized manner based on the queries of user. They act as a code for providing information about the web page, which helps in diverting Internet traffic to their websites, causing considerable commercial loss to the legitimate registered owner.

 

What is a Google Ad-Word?

Google AdWord is a successful and client capturing advertisement option that is also a misleading source with respect to the Trade Mark rights of a trademark owner. Google AdWords are basically keywords that are used by an advertiser of certain goods and services to advertise their products, wherein when a specified keyword is searched for, the search engine shows the advertisements/websites of various advertisers. Hence, in this way, Google AdWords are used to divert Internet traffic towards a particular advertisement/website. The keywords used, generally denote someone’s area of business. It is an intelligent system that highlights ads/website depending on the keyword search. Its use is very simple and Google is paid by the website owner for each and every click on their website. AdWords is a paid referencing service started by Google for business promotion.

 

Misuse of Google AdWords leads to Trade Mark Infringement

This is a very important question as to how the use of Google AdWords may lead to Trade Mark infringement. If a person selects any word to be used as an AdWord, which is either similar or identical to a third party’s trademark, does the person infringe the rights of the trademark owner?  It was held in the very famous Consim- Google AdWords controversy[1] that if these AdWords are used by the person which is similar or identical to the third party’s trademark, then this amount to diluting/tarnishing the goodwill or reputation of the third party as this creates confusion in the mind of the customers of the person whose trademark is allegedly infringed. Therefore, this should not be allowed and becomes a case of trademark infringement.

Let us understand this with the help of an illustration: Suppose ‘A’ is the registered trademark owner of certain brand. Now ‘B’ is using AdWords which is in competition to the business owned by ‘A’, and uses Trade Mark of A as one of the paid keywords in the Google Adwords. ‘B’ is therefore diverting the internet traffic towards his own advertisement by using Trade Mark of A such that when users search for A, advertisement of B would also be shown, thereby causing damage to the goodwill/reputation owned by ‘A’, which is not allowed under Trade Marks Law. Hence, selection of Google AdWords becomes very relevant in the eyes of Trademark Law.

A case, Matrix Cellular (International) Services Limited v TSIM Communication Services Private Limitedand IP Attorneys, which represents the plaintiff in the Delhi High Court, wherein the Plaintiff, Matrix Cellular (International) Services Limited, is the proprietor/ owner of the trademark MATRIX since 1995 in respect of ‘International roaming Sim cards’. The defendant is accused of dishonestly using plaintiff’s trade mark i.e. MATRIX as Google AdWords to divert the users to their website by creating a confusion in their minds. The Court recognized that the defendant has engaged in dishonestly using Plaintiff’s trademark to gain profits and the same has resulted in infringement of Plaintiff’s trademark, as a result of which the Court was pleased to grant an interim injunction in the favor of the Plaintiff.

 

Exemplary Landmark Cases

  1. Consim Info Pvt. Ltd. vs. Google India Pvt. Ltd. & Ors. [2]

In this case, Appellant was a private limited company that provided online matrimonial services. In the course of its business, it had adopted several trademarks including Bharat Matrimony, Tamil Matrimony, Telugu Matrimony, Assamese Matrimony, etc. It had registered several domain names with these word marks. The respondents, Google India and its parent company were in the business of offering an advertisement program called AdWords. It generates ‘Sponsored Links’ on the right-hand side of any organic search results produced by Google, closely corresponding to the term searched for.

Google allows the Key Word to appear as a part of the advertisement as well. Therefore, the more the term is searched for, more the chances that it is a heavily demanded Key Word. The competitors would thus bid for the Key Words of other players in their business to catch the attention of user and thereby divert the business meant for such other players. The appellant filed a suit for permanent injunction restraining Google from infringing their trademarks by using them in the AdWords Program and Key Word suggestion Tool. It also restricted Google from passing off their services using the appellant’s trademarks and their closely resembling variants. The issue in question was whether such use of appellant’s trademark by Google’s Ad program amounted to trademark infringement.

Madras High Court thus concluded that the appellant had made a prima facie case and the balance of convenience lied in its favor and thus eventually granted an injunction.

  1. Rescuecom Corp. v. Google Inc. [3]

This is a very interesting case where the main question before the court was whether the use of trademark as keywords amount to Trademark infringement. The US Court of Appeal held that the use of trademark as keywords can be equated to the use of trademark as Meta –Tags. Therefore, Google was held liable for using the trademarked words in its Keyword Suggestion Tool. [4]

Conclusion

Thus, summarizing, use of Trademarks as a Google AdWords can be allowed if it comes under fair use, otherwise the same is restricted. Google is everywhere and it is estimated that approximately 80-85% of the world’s population uses it. If a person wants to mislead someone from the actual website of the proprietor to the impugned one it is the best platform available. Thus, customers are lured and are often misguided by the person violating by increasing the traffic and demand towards his/their website. The use of such Google AdWords is entirely dependent upon the facts and circumstances of case. Google AdWords being special keywords are embedded in web-pages and are often used by search engines in deciding the relevant websites to show in a search result. Therefore, the unfair and illegal use of the Google AdWords with respect to the Trade Marks leads to the Trademark infringement and irreparable damage to the legitimate owner. Choice of keywords becomes very important in this regard otherwise it would lead to infringement of other person’s rights. The concept of Google AdWords in relation to Intellectual Property should be understood and their misuse should be prevented.

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

 

References

  1. Consim Info Pvt. Ltd. vs. Google India Pvt. Ltd. & Ors. 2013 54 PTC 578 (Mad).
  2. 2013 54 PTC 578 (Mad).
  3. 562 F.3d 123 (2nd Cir. 2009).
  4. Mattel Inc. and Others vs. Jayant Agarwalla and Others 2008 (38) PTC 416; Samsung Electronics Company Limited & Anr. vs. Kapil Wadhwa & Ors. C.S. (OS) No.1155/2011.

Teva held responsible for Induced Infringement of Eli Lilly’s Blockbuster drug ALITMA

In Teva Parenteral Medicines, Inc.; APP Pharmaceuticals LLC; Pliva Hrvatska D.O.O.; Teva Pharmaceuticals USA, Inc.; and Barr Laboratories, Inc. (hereinafter referred to be as Defendants/Appellants/Teva) Vs. Eli Lilly & Co. (hereinafter referred to as Plaintiff/Appelle/Eli Lilly) decided by United States Court of Appeals for the Federal Circuit (CAFC) on January 12, 2017, Plaintiff had filed Hatch Waxman suit against defendant to prevent them from launching generic version of the lung cancer drug whose rights are reserved with the plaintiff. The decision from CAFC came after an appeal from the United States District Court for the Southern District of Indiana in No. 1:10-cv-01376-TWPDKL, Judge Tanya Walton Pratt.

Eli Lilly owns a patent US 7772209 (hereinafter referred to as US‘209) issued in 2010, relating to method of treatment administering the chemotherapy drug pemetrexed disodium (hereinafter referred to as “pemetrexed”) (used to treat certain types of lung cancer and mesothelioma) after pretreatment with two common vitamins—folic acid and vitamin B12 (reduce the toxicity of pemetrexed in patients). Eli Lilly markets pemetrexed under the brand name ALIMTA®.

In 2008-2009, Defendants notified Eli Lilly that they had submitted ANDA seeking approval to market generic version of ALIMTA®. After issuance of US’209 patent, Teva sent additional notice that they had filed Para IV certifications, declaring that US’209 patent was invalid, unenforceable, or would not be infringed. Subsequent to which Eli Lilly alleged Teva of induced infringement. Eli Lilly asserted that Teva’s generic drug would be administered with folic acid and vitamin B12 pretreatments and thus will result in infringement of the 209 patent.

Eli Lilly asserted claims 9, 10 (dependent on claim 1), Independent claim 12, and its dependent claims 14, 15, 18, 19, and 21 of the US’209 patent at trial.

Independent claims 1 and 12 have been reproduced below for reference:

Claim 1:

A method of administering pemetrexed disodium to a patient in need thereof comprising administering an effective amount of folic acid and an effective amount of a methylmalonic acid lowering agent followed by administering an effective amount of pemetrexed disodium, wherein the methylmalonic acid lowering agent is selected from the group consisting of vitamin B12, hydroxycobalamin, cyano-10-chlorocobalamin, aquocobalamin perchlorate, aquo-10-cobalamin perchlorate, azidocobalamin, cobalamin, cyanocobalamin, or chlorocobalamin.

Claim 12:

An improved method for administering pemetrexed disodium to a patient in need of chemotherapeutic treatment, wherein the improvement comprises:

  1. a) administration of between about 350 μg and about 1000 μg of folic acid prior to the first administration of pemetrexed disodium;
  2. b) administration of about 500 μg to about 1500 μg of vitamin B12, prior to the first administration of pemetrexed disodium; and
  3. c) administration of pemetrexed disodium.

It is important to note that current case involves issue of induced infringement i.e. a type of indirect infringement that may be committed under section 271 (b) (dealing with infringement of Patents).

In June 2013, Defendants conditionally conceded induced infringement under then-current law set forth in Akamai Technologies, Inc. v. Limelight Networks, Inc. (Akamai II) which at that time was the subject of a petition to the Supreme Court for a writ of certiorari. The parties’ stipulation included a provision reserving Defendants’ right to litigate infringement if the Supreme Court reversed or vacated Akamai II.

District court had rejected contentions of the defendant that Patent was invalid for obviousness or obviousness-type double patenting and also due to indefiniteness of the term vitamin B12.

Defendants filed an appeal on invalidity. While that appeal was pending, the Supreme Court reversed Akamai II, holding that liability for inducement cannot be found without direct infringement, and remanding for CAFC court to possibly reconsider the standards for direct infringement. In view of that development, the parties in this case filed a joint motion to remand the matter to the district court for the limited purpose of litigating infringement. CAFC granted the motion.

The district court held a second bench trial in May 2015 and concluded in a decision issued on August 25, 2015 that Defendants would induce infringement of the US’209 patent. This was after considering the effect of Akamai V decision, which had broadened the circumstances in which others’ acts may be attributed to a single actor to support direct infringement liability in cases of divided infringement.

Defendants appealed.

Below given factors are taken into consideration while deciding cases of induced infringement:

  • Whoever actively induces infringement of a patent shall be liable as an

Infringer;

  • There cannot be indirect infringement without direct infringement;
  • Patentee needs to prove alleged infringer knew or should have known his actions would induce actual infringements; and
  • Standard of proof required by Patentee to claim relief under induced infringement is ‘preponderance of the evidence’.

It was agreed by parties that Defendants’ proposed product labeling would be materially the same as the ALIMTA® product labeling and consists of two documents: the Physician Prescribing Information and the Patient Information. District court found that both the documents included instructions regarding the administration of folic acid—the step that the district court found would be performed by patients but attributable to physicians.

According to Akamai V, where no single actor performs all steps of a method claim, direct infringement only occurs if the acts of one are attributable to the other such that a single entity is responsible for the infringement. The performance of method steps is attributable to a single entity in two types of circumstances:

  • when that entity “directs or controls” others’ performance, or

 

  • when the actors “form a joint enterprise.”

In Akamai V, CAFC had held that directing or controlling others’ performance includes circumstances in which an actor:

(1) “conditions participation in an activity or receipt of a benefit” upon others’ performance of one or more steps of a patented method, and

(2) “establishes the manner or timing of that performance.”

District court found taking folic acid in the manner recited by the asserted claims is a critical and necessary step to reduce potentially life threatening toxicities caused by the Pemetrexed amounts to receive the benefit of the patented method.

Regarding first of the two pronged test, the court found, based on the product labeling, that taking folic acid in the manner specified is a condition of the patient’s participation in the Pemetrexed treatment. Regarding the second prong, the court found that physicians would prescribe an exact dose of folic acid and direct that it be ingested daily. Hence court held all steps of the asserted claims would be attributable to physicians.

Court further observed that the mere existence of direct infringement by physicians, while necessary to find liability for induced infringement, is not sufficient for inducement but there has to be also specific intent and action to induce infringement. Court went on to find intent on the part of physician for the inducement and held that there was no error in district court’s decision. Some important observations of court have been mentioned below.

CAFC made two important observations as below:

  • The intent for inducement must be with respect to the actions of the underlying direct infringer, here physicians.

 

  • Second, it is not required to show evidence regarding the general prevalence of the induced activity. When the alleged inducement relies on a drug label’s instructions, the question is not just whether those instructions describe the infringing mode,..but whether the instructions teach an infringing use such that we are willing to infer from those instructions an affirmative intent to infringe the patent. Court further observed that the label must encourage, recommend, or promote infringement and it is irrelevant that some users may ignore the warnings in the proposed label.

Court went on to observe a label that instructed users to follow the instructions in an infringing manner was sufficient even though some users would not follow the instructions, but vague instructions that require one to look outside the label to understand the alleged implicit encouragement do not, without more, induce infringement.

On the issue of invalidity on the indefiniteness of the term “vitamin B12”, CAFC hold that a person of ordinary skill in the art would understand the scope of the claim term “vitamin B12” with reasonable certainty. Applying Nautilus (outcome of this decision) in this case did not lead CAFC to a different result from the district court’s conclusion on the question of indefiniteness.

Regarding issue of invalidity due to obviousness, CAFC was not convinced that the district court committed clear error in concluding that Defendants failed to carry their burden of proving that it would have been obvious to a person of ordinary skill to use vitamin B12 pretreatment to reduce Pemetrexed toxicities.

Thus CAFC affirmed district court decision.

About the Author :  Ms. Rashmi Goswami, WOS-C at TIFAC, intern at Khurana and Khurana, Advocates and IP Attorneys and can be reached at swapnil@khuranaandkhurana.com

News Snippet: Novartis sues Cipla for infringement of patents covering “Onbrez”

In a latest update, Novartis has sued Cipla for infringing its patents on “Onbrez” (Indacaterol) after Cipla lunched its generic version for Indacaterol in October claiming “urgent unmet need” for the drug in India.

Earlier, as we have reported here, Cipla approached Govt. of India to exercise its statutory powers to revoke the five patents covering Indacaterol granted to Novartis, which is yet to be decided.

Novartis requested high court to permanently restrain Cipla from manufacturing Indacaterol in any form and selling it in India. It also sought damages for infringing the five Indian patents covering Onbrez.. In reply, Cipla contended that “Onbrez” sold by Novartis is too expensive and is not easily available to the public. Delhi High Court has reserved its verdict on January 9 after hearing detailed arguments by both parties.

Practice of Patent Asserting Entities: Boon or Bane: Global Innovations

Introduction

Patent troll relates to a person or company that enforces its patents against one or more alleged infringers in an opportunistic and unduly aggressive manner, often with no intention to manufacture or market the patented invention. Various terms such as patent trolls, patent monetization companies, or patent assertion entities are used for such entities; however, irrespective of term used, it solely talks about companies that conduct very little research to create new ideas and produces no products. Instead, they hold patents in which they were not involved at any level: ranging from designing, manufacturing or process associated with that patent. Their main aim is to sue similar patent holder firms or to extract license payments under the threat of lawsuits or actual litigation to enforce their demands.

A more polite and neutral name used for them is “Non-Practicing Entities” (NPE’s). Non-practicing entities include legitimate institutions such as start-ups, technology transfer agencies, universities, research organizations inter alia.

Modus Operandi of patent trolls

Patent trolls usually gather together large portfolios of patents, which they purchase from companies that are going out of business, from firms that have developed technology that they don’t intend to pursue on a particular technology, or from individuals who are lacking funds to develop their inventions or ideas. Further, the trolls look for successful products that use the technology covered by their patents and demand a licensing fee. Because patent suits are expensive to defend, the target company is most often willing to settle out of court.

Trolls accumulate patents related to a target company. By purchasing many patents focused on one area, they are able to bring up so many occasions of possible infringement which further makes it harder and more expensive for the target company to defend the suit. They also sue multiple defendants so that the legal cost per defendant is reduced but makes for a large overall potential payback.

On the other hand, as a matter of practice, lawyers are paid on a contingency basis – they are only paid if they win the case. That reduces the cost further of the  trolls. On the other hand cost for the accused infringer is sky-high and if they try to fight the case, there is no quick way to end the litigation and achieve success in the litigation.

The patent trolls may also claim a share in total revenue from the product although patents may cover only a small aspect of the technology. The award can amount to millions for a successful product.

From various sources, it is believed that 97 percent of infringement suits in U.S. are settled before trial rather than risk judgement irrespective of the merits of the case and also the cost of patent litigation (bringing or defending a patent lawsuit is expensive, with legal costs and lawyers’ fees reaching into the millions of dollars) works to patent trolls advantage, too. Further adding to the list of advantages for trolls, if a defendant company loses a suit, it may be liable for treble damages in a case of wilful infringement.

The result is a situation where the accused infringer faces so much of a burden of fighting the court case that it becomes appealing to pay some lesser amount to make the litigation go away.

Patent Trolling in India

The practice of patent trolling was prevalent and practiced in India in the Information Technology and Communications sector till 2005 prior to passage and enactment of the Patents (Amendment) Act, 2005 after which there was steep decline in trolling activities.  The reason for this decline is nothing but the inclusion in the 2005 Act of a list of non-patentable subject matter which includes Software domain which is considered to be most significant domain involved in patent trolling among others, imposition of stringent deadlines for pre-grant opposition, introduction of post-grant opposition, as well as the introduction of a variety of other provisions such as compulsory licensing.

Pertinently patent law in India do not aims to prohibit the existence of patent trolls but threatens its existence.  For instance, Indian patent law makes it mandatory that a (granted) patent be worked or used in India. However otherwise, if a patent is not used in the territory of India within a period of 3 years from the grant of patent, compulsory licensing might be invoked.  Also, the Indian Patents Act makes it mandatory to file statement of working of a patent at the end of each financial year. And if the patent holders fail to file such a statement, he may be liable for a fine and/or imprisonment.  Hence in India, patent trolling does not pose any major threat to any entity seeking opportunity to enter the Indian market in view of the amendments to the laws which fairly controls the patent troll activity in India.

Conclusion:

While patent trolls are a major threat in many countries they are not a viable option to operate in India In view of provisions incorporated in Indian Patent Laws vide Patents (Amendment) Act, 2005.  It can be observed that while the other countries are plagued with patent troll activities, the Indian system strived fairly to control the problem of patent trolls.  May be US and other developed countries need to take a leaf out of Indian Patent Laws to curb the menace of patent trolls instead of criticising IPR regime.

About the Author: Mr Sitanshu Singh, Patent Associate, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: sitanshu@khuranaandkhurana.com

Rockstar Consortium US LP et. al.v. Google Inc

Gopikrishnan M, an intern at Khurana and Khurana, Advocates and IP Attorneys, looks at Google Inc. been accused of infringing technology related to its searching technology itself.

Yet another high-tech and high-profile patent war is on, this one involving a combined attack on the search giant’s core technology. Google is being sued for direct patent infringement in a suit filed on 31st of October, 2013 in the US District Court in Texas. Plaintiffs, Rockstar Consortium and NetStar Technologies (jointly owned by Apple, RIM/Blackberry, Ericsson, Microsoft and Sony) have accused Google Inc. of infringing a patent that is related to web search advertisement. Google has been sued in the past for bypassing user privacy, but perhaps this is the first time the search giant has been accused of infringing any technology related to its searching technology itself. Google is considered to be the pioneer in web search technology and leads the searching industry by a very high margin (as of 2013, Google owns around 80% of the web search market share).

Background of Technology

Nortel Networks Corporation, a Canadian company, holds a granted patent US6098065, titled “Associative Search Engine”, which accepts user queries and produces search results in response. The results also contain advertisements that are related to the entered search query. The following figure in the patent illustrates how their algorithm works, providing search results as well as user targeted advertisements.

Gopi

Image retrieved from the Nortel Patent

Above figure illustrates different entities that constitute the patented service. A brief understanding of the patented method is provided below:

In operation, an end user enters a query into a terminal computer, which is connected to a server. The server in turn is connected to a router which connects the computer to the Internet. Search engine can be configured to process three databases, i.e. Contextual Database, Product Database, and User Profile Database. While the Database Search Engine processes search results for the entered query, an associative search Engine searches the product (advertisement) database in relation with the search query based on the user database, which has information as to the past preferences of the user. As a result, the database search engine produces results in accordance with the user query and the associative search engine enhances it by choosing between the general search results and search results based on what the user actually wants.It also generates user targeted advertisements which will be displayed along with the search results.The search engine, in a way predicts what the user would want based on his past preferences.

In an example, consider a situation depicting practical significance of the patented method. A law student uses a search engine functioning with the inventive method being spoken about. User database would have information relating to the student including his profile, preferences, interests, among other like details. When the student searches for “Europe”, advertisements displayed would be something targeted at him, for example “Study in Europe – A career launcher website”. An investment banker, on the other hand may not get the same results when he searches for the same query.

First independent claim of US ‘065 reads as follows:

  1. A method of searching for desired information within a data network, comprising the steps of:

receiving, from a user, a search request including a search argument corresponding to the desired information;

searching, based upon the received search argument and user profile data, a database of information to generate a search result; and

providing the search results to the user

wherein searching the database includes correlating, as a function of a fuzzy logic algorithm, the received search argument and user profile data to particular information in the database, and providing the particular information as the search results.

Google uses very similar technology for placing ads. The popular Google service “Google AdWords” uses user based advertisement delivering tools like ‘Contextual Targeting’, ‘Topic Targeting’, ‘Interest Targeting’ and more of such tools whose concepts of working are very similar to the patented method.

More information about the same and how Google AdWords works can be found at Google’s AdWords web page.

Fight for the Nortel Patents and the Subsequent Law Suits

When the Canadian based Nortel Corporation went bankrupt, around 6000 of their patents were auctioned. Google tried to acquire all of the patents starting their bid from $900 million dollars eventually raising them up to $4.4 billion but failed. Rockstar acquired the patents for $4.5 billion.  This was followed by Google’s acquisition of Motorola for $12.5 Billion

Now Rockstar has filed an infringement suit against Google Inc. alleging that Google has infringed their family of patents relating to ‘associative search’. They have alleged that Google already knew about the infringement and took part in the auction knowing the same.

An extract from the plaint reads as follows

Google has infringed and continues to infringe the ‘065 patent by its manufacture, use, sale, importation, and/or offer for sale of systems, methods, products, and processes for matching search terms with relevant advertising and/or information based on those search terms and other user data, including but not limited to Google’s process of receiving search requests from a user, using its search engine to generate search results based at least in part on the search request, selecting  —through Google’s AdWords and/or any other products, methods, systems, or services Google uses to store and choose relevant advertising — a relevant advertisement based on the search request and/or user data, and providing the search results together with the particular advertisement to the user; and additionally Google’s systems, methods,  products, processes of using other user  data aside from the search request to help select the search result and/or advertisement; and additionally and alternatively its contributing to and inducement of others to manufacture, use, sell, import, and/or offer for sale infringing systems, methods, products, and processes in the manners described above. Google is liable for its infringement of the ‘065 patent pursuant to 35 U.S.C. § 271

Accusation Made

Plaintiffs here have accused Google of infringing their patents submitting that they own the IP and technology used by Google to sell advertisements, which overlaps with their ‘065 patent and hence according to 35 U.S.C. § 271, they are liable of patent infringement. The plaintiffs Rockstar consortium have filed suits against Google for infringing 7 patents all relating to the same family. The other patents are US 7,236,9697,69,2457,672,9707,895,1787,895,183 and 7,933,883. Moreover they have specifically mentioned, that Google despite losing an attempt to acquire the patent-in-suit(i.e. all the above 7 patents) at the auction, infringed and continues to infringe the patents-in-suit. The plaintiffs have accused Google of willful infringement and have asked for enhanced damages of past and future loses under 35 U.S.C. § 284 and attorney charges for prosecution under 35 U.S.C. § 285.

A general non-technical reading into Google’s technology shows that its concept is similar to ‘065 patent. But the page ranking and ad ranking algorithms used by them are very different and way more complex and efficient. Google’s desperate effort to acquire Nortel’s patents and their subsequent accession of Motorola Mobility shows how critical it was for them to have access to the technology. Plaintiffs have pointed out the same in their plaint, leading to a situation wherein Google might have a tough time defending themselves in this face off. Another interesting development is the introduction of Patent Litigation Integrity Act by the US Congress (an anti trolling law which is heavily backed by Google), which protects active inventors and innovators against patent trolls. Google may even defend the case using the provisions of this act. With all these developments in progress, it will be interesting to see how this lawsuit turns out.

An insight on the legal implications of BYOD

Bring Your Own Device (BYOD) is a scheme wherein employees are allowed to bring their own devices like mobiles, laptops, tabs and utilize them in the workplace for work purposes. Some employers themselves fund the software to their employees, meanwhile some prefer to simply grant permission for their employees to bring their technology at their own expense.

This is beneficial to the employee since it would be evident that he would be comfortable using his own devices, adding to the fact that he can work from home on his own gadget at his own convenience. Sounds simple, doesn’t it?

Unfortunately, this scheme seems to have created numerous problems as far as employers i.e. companies are concerned. It is a herculean task for companies to keep a check on which device is being used and by whom and for how much time. If companies remain oblivious to this and let the employees have a free reign over the usage of their software, it can serve as a deterrent in the form of unending and expensive infringement litigations due to security breach and/or privacy and data protection interests. Hence, many companies are averse to BYOD since the risks outdo the benefits involved.

If you think about the intellectual property rights that can protect anything being used via the BYOD scheme, the utmost concern would be your copyrighted works. Anything that the user is enabled to see on screen, be it algorithms, source codes, object codes, software designs, databases, manuals, complete written specifications of the software, and so on, can be copyrighted. Now, the question stands as to the ownership of these copyrighted works.

Coming to the Indian scenario, under the Copyright Act, 1956, the ownership of the copyrighted work generally vests with the employer, unless there exists a contrary agreement between the employer-employee.  The question arises here is in case the employee uses his own Device to better the copyrighted works belonging to the employer, who would be the rightful owner of the intellectual property rights of the works? Further, an employee can engage in infringement activities simply by unlawfully copying and storing the copyrighted works on his personal device. Altering or deleting data can also invite severe repercussions for the employee.

Meanwhile if the employees are using unlicensed software for their work purposes, the employers can be held liable for infringement. The employer can be held vicariously liable unless guidelines are not written down to protect their interests.

Hence, companies need to implement guidelines that control the usage of BYOD devices and maintain regular checks of these devices to ensure there are no illegal activities taking place. Along with guidelines, password protection, encryptions, antivirus and wireless access policies can be implemented along with various other privacy policies in order to prevent legal misuse of softwares. The onus, in the end, remains on employees to be diligent while using their own gadgets in workplaces.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

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