Tag Archives: infringement

Patent Trolling

Introduction

A patent is an exclusive right that is granted to an inventor for a specified number of years to make, use, and sell an invention. Once the right s provided, no other person can use the invention without proper license from the patentee. This right is provided to protect such inventors legally from any harm. Later it is usually expected that the inventor will put it in the consumer market for use by licensing it to various other manufacturers.  But recently, many such inventors have been misusing such rights that are provided to them. Recently, many have been patenting items in the vaguest form that the legal system would allow, without the intention of using the patent in the future. Their aim is usually to get money by filing infringement suits against individuals or companies who are using products that is even remotely similar to their patented product. This practice is referred to as patent trolling. Thus, patent trolling can be defined as a practice of obtaining and using patents for licensing or litigation purposes rather than in production of one’s own goods or services; “its real business model is patent trolling.”

Analysis

These patent trollers are usually referred to as Non Performing Entities (NPE). These entities will not sell or produce their product but will rather just license money out of those who appear to have been infringing upon a patent that the NPE owns. Trolling had been becoming a very serious problem, where the small companies, enterprises and individuals had been facing most of the backlash due to the high number of cases being filed against them. Many companies settle as the risk of losing an infringement suit and paying millions of dollars is very risky, even if they don’t believe there is any sort of infringement. The act is more prevalent in USA than in Europe as Europe follows the policy ‘losers pay’ where the losing party has to bear the costs of both the sides. This deters people from filing false cases but this isn’t the case in USA. But in the recent case of TC Heartland LLC v. Kraft Foods Group Brands LLC the Supreme Court has given a very welcoming decision where the court said that patent case defendants could effectively be sued anywhere they do business. In the present case, the defendant weren’t allowed to shift the case to where its company was based but was not allowed by the lower courts, which were following a 1990 precedent from the U.S. Court of Appeals for the Federal Circuit. This decision brings a sigh of relief to many as many cases can now be moved away from ‘plaintiff-friendly’ districts to much more neutral districts where the defendants stand a chance of having a fairer outcome.

Strategies and Measures

The NPEs used a lot of different strategies to gain what they have been looking for. Some of the following measures are the most popular ones:

  1. They accumulate patents related to one area: The NPEs collect a number of patents related to one area which makes it nearly impossible and very expensive for the targeted company to come out of the infringement suit.
  2. They do not produce any product: The patent trollers never produce the product they have patented. This in turns makes it difficult to file a counter sue claim of infringement for the defendant. For example in a technological dispute.
  3. They sue a large number of defendants together: This strategy reduces their overall cost and given them the hope of a large payoff in the future.
  4. They claim a percent of the total revenue from the product:Even though their patent may cover a small aspect of the technology, the award granted can amount to millions for a successful product.

Thus, corporations have been asking for special laws or certain measures to be taken against such companies in order to avoid such suits and large amount of awards granted to them. Here are a few steps that companies can take against such troll patents:

  1. The Big Tent Coalition: The current laws allow even the users of a product, which is an infringement of a patent violation to be sued. The Bill will change that and later only legal action could be taken by the company or the individual who has created the product or service.
  2. How to prepare against such suits: One can always take certain precautionary measures to be safe against such frivolous suits. A company or an individual must always remember these thee simple steps before it opens its doors to others- be proactive, Insure, Ask an attorney.
  3. Giving proper Response: Response to a notice must always be made to the sender of the notice. Looking for ways to settle outside of courts could be a waste of time as the plaintiff already knows about such settlements.

Conclusion

Everyone is very much aware as to such troll patents but is still very far away from assessing them. The simple logic that everyone seems to follow is that everyone has a right to protect their patent even if they aren’t using them. It is simply seen as a way of doing business as it is a very common occurrence among big corporations. But the ones who are affected the most, the small companies and individuals need to be protected against such patent trollers as they face losses which takes years to overcome and even leaves them bankrupt. These NPEs target such companies who will very easily give into their demands looking at the vulnerable position that they are in and this is the reason that such vulnerable companies require protection.

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

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Fluentgrid Limited Vs. Esyasoft Technologies Private Limited And Others

Fluentgrid Limited, Plaintiff, is a Indian company, which has been carrying out its business in India since the year 1998. It is engaged in providing information technology services through Smart Grid Products under its registered trademark, “mpower” and domain name http://www.fluentgrid.com, along with its website http://www.nxter.io, which is its cloud solution for energy retailers. The Plaintiff, being proactive in protection of its IP, issued a cease and desist notice against the defendants for using deceptively similar trademark “mPowerFlo” and “damages” on 30th April 2018, which was not complied with, by the defendants and further went on to file an application for registering its  impugned  Trademark “mPowerFlo” before Trademark registry, to take refuge of legal protection for the illegal acts of trademark infringement and passing off the registered trademarks and brandnames of the Plaintiff.  The Plaintiff sent a last and final notice to the defendant on 18th May 2018, which was again denied by the Defendant. Finally, a suit seeking temporary and permanent injunction, rendition of accounts and payment of damages, was filed by the Plaintiff against the Defendants before the Hon’ble High Court of Delhi.

The Plaintiff was able to establish a prima facie case before the Court and the Hon’ble High Court of Delhi was pleased to grant an ex-parte ad-interim injunction to the Plaintiff against Defendants restraining them to use the mark “mPowerFlo” or any other mark that is similar or deceptively similar to the Plaintiff’s mark ‘mPower’ vide its order dated 01.06.2018.

Upon finding a strong case in the favour of Plaintiff, the Defendants bowed down to the demands made by the Plaintiff with respect to permanent injunction and sought a compromise in lieu of waiving other reliefs as prayed by the Plaintiff in their plaint such as damages and rendition of accounts. The plaintiff agreed to their proposal and pleaded the court to record the Defendant’s admission of infringing the Plaintiff’s Trademarks.

Thus, the case was decreed in favour of Plaintiff by permanently restraining the Defendants from using the infringing marks vide order dated 16.07.2018. The Plaintiff has been successful in enforcing its IP rights through this case and has put its foot down to demonstrate to others, the consequences of infringing any of its intellectual property rights.

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

Trademark Suit Filed For Infringement/ Passing Off Was Successful At the First Stage

(L’AirLiquideSocieteAnonyme  pour  l’etude  et l’exploitation  desprocedes  Georges  Claude  and Anr vs. Liquid air & Ors.)

 L’AirLiquideSocieteAnonyme  pour  l’etude  et l’exploitation  desprocedes  Georges  Claude  and Anr, Plaintiff No. 1, a company incorporated under the laws of France and operating in Indian territory through Air Liquide India Holding Private Limited,  Plaintiff no. 2 under the trade name “Air Liquide”, and domain name http://www.airliquide.com. The Plaintiffs being vigilant enough to protect their tradename issued a Cease and Desist notice against the Defendants as soon as they became aware of the unlawful acts of the defendants, wherein the latter was using deceptively similar trade name “Liquid Air” and domain name http://www.liquidair.in under the same class of goods as that of the Plaintiffs. The same was admitted by the Defendant and they had undertaken to accept the demand and thereby refrain from using the infringing trademark. It was also agreed that a MoU will sign for the same purpose. However, the defendants later denied the compliance and refrained from signing the aforesaid MoU. Thus, the Plaintiffs filed a suit in the Hon’ble High Court of Delhi against defendants seeking appropriate remedies under the laws.

In the aforesaid case, the Plaintiffs were able to successfully establish a prima facie- case before the Hon’ble High Court of Delhi and thereby secured injunction in its favour vide order dated 09.05.2018, which restrained the defendants from directly or indirectly dealing in any goods/service similar to that of the Plaintiffs as well as from using any name similar to that of Plaintiff’s domain or trade name.

Despite the above mentioned order passed by the Hon’ble High Court, the defendants in contempt of the said order, continued to use their impugned trademark through their website http://www.liquidair.in. Thus, the Plaintiffs filed a Contempt application under Order 39 Rule 2A of the Code of Civil Procedure, 1908 against the defendants for disobedience of injunction order. However, after receiving the notice of such application, the defendants were compelled to pull out their website before the next date of hearing on 01.08.2018.  Consequently, the application was disposed off on 1st August 2018. However, the Court clearly reiterated the injunction against the defendant and sternly directed them from refraining to use the impugned trademarks for the same or similar business.

Author: Pratistha Sinha, Associate, Priya Singh, Legal Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com.

Importance Of India As A Target Country For Design Registration

India has witnessed a long journey since 2000, when its GDP at 46,214.68 crores INR started to rise phenomenally to almost five times, to around 2.26 Lakh Crore INR in 2016 [1]. Since contribution towards it can be traced back to three major sectors of economy, mainly, agrarian, manufacturing and service sector, it is reasonable to observe that growth must also have been observed in these individual sectors as well. Although it is true, but not all sectors displayed equal proportions of growth. Service sector paced forward, while manufacturing and agrarian sectors lagged behind. Since there is a little scope to add value in the agriculture sector, the onus of boosting the economy further falls upon the manufacturing sector.

With this concept in mind, under the banner of “MAKE IN INDIA” initiative [2], it was envisaged by the present Government to bring an increase in the share of manufacturing in the country’s Gross Domestic Product from 16% to 25% by 2022 by making sure that the sector ensures and endures a growth rate of 12-14% per annum over the medium term [3]. In order to support this vision, funds were mustered from every source possible and it is evident from the fact that cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$ 73.70 billion during April 2017-December 2017 [4]. In wake of such heavy investments made, it is obvious to assume that the sector will observe some turbulence on the positive side.

Further, a lot of policy related measures have been taken in this regard, including improvisation   of   Intellectual   Property   (IP)   protection   measures   and   their   effective administration, including computerized work flow along with digital manuals that were made available to the applicants have streamlined the process. However, it can be observed that executive focus is highly customised with regard to different kinds of intellectual property rights. This opens up scope to find out the potential among those regarded as the underdogs.

Moving ahead, from a recent report from World Economic Forum on “Global Competitive Index – 2018” [5], India was placed at 40th position while Switzerland was placed at the top. On a comparative analysis, the score for Basic requirements section which comprises of Institutions, of which Intellectual Property protection is a part, India scores 4.4 points at 52nd position, while Switzerland is on the top with 6.6 points. The margin in both rankings as well as points is quite high, and steps taken to develop this domain can help to bring early signs of positive change.

                              

The domain of Intellectual Property is reasonably wide and is divided into two parts: copyright and industrial property. Copyrights generally do not require registration which makes it difficult to track and monitor. According to Article 1(2) of Paris Convention for Protection of Intellectual Property which reads as “The protection of industrial property has as its object patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition” [6]. Industrial property refers to assets created primarily for the advancement of technology, industry and trade such as patents (inventions), industrial designs, trademarks, service marks, trade secrets and geographic indications of origin [7].

Industrial design (also interchangeably referred to as “Design” or “Design Patent”) recognizes creation new and original features of new shape, configuration, surface pattern, ornamentations and composition of lines or colours applied to articles which in the finished state appeal to and is judged solely by the eye [8].

A Design, under Section 2(d) of The Designs Act, 2000 [9] refers to the features of shape, configuration, pattern, ornamentation or composition of lines or colours applied to any article, whether in two or three dimensional (or both) forms. This may be applied by any industrial process or means (manual, mechanical or chemical) separately or by a combined process, which in the finished article appeals to and judged solely by the eye.

Design does not include any mode or principle of construction or anything which is a mere mechanical device. It also does not include any trade mark as defined under Section 2(l) of The Trade Marks Act, 1999 [10] or any artistic work described under Section 2(c) of The Copyright Act, 1957 [11]. Also, property marks as defined under Section 479 of Indian Penal Code, 1860 [12] will be excluded from the scope of design.

If the design is not new or original, or cannot be distinguished from the existing design or combination of such designs or contains scandalous or obscene matter, the such design shall not be registered. Further, a design is barred from registration if it has been disclosed to public prior to the filing date.

The registration of a design, under Section 11(a) confers upon the registered proprietor the exclusive right to apply a design to the article in the class in which the design has been registered. This implies conversely that no right exists of any proprietor of a design that has not been registered, and hence cannot be enforced in the Court of Law against any such infringer. A registered proprietor of the design is entitled for protection of his intellectual property. He can take step against infringement, if his right recognised by law is infringed by any person. He can license or sell his registered design as legal property for a consideration or royalty. Registration initially confers this right for ten years from the date of registration, with a further extension of five years. The right expires if extension for registration is not applied for within stipulated time.

Hence, non – registration possesses a potential loss of any enforceable right against the infringer, as a risk management tool. Moreover, the fee charged for registration seems to be reasonable keeping in view the rights protected by it for a period of about fifteen years. For instance, it takes around INR 1000 for registration of a design [13]. And if a design is meant for industrial production, it must provide returns greater than the registration fee, which is again quite possible.

However, in the absence of any registration for a given design, the design is vulnerable to piracy and proprietor stands to lose market as well as profit share at his/her own expense. An estimate of losses can be observed by drawing inference from the fact the total international trade in counterfeit and pirated goods is estimated to value around half trillion USD [14] with around half of it effecting the industries that could have been protected under designs act. The business of piracy and counterfeit goods also result in employment losses of 2.5 million, with a total global economic and social cost, when estimated liberally seem to touch around a trillion USD. Also, it is assumed for UK market that it may lead to displacement of more than half of the market share of genuine products. In India, it is responsible for eating away a market share of 30% with estimated losses of 9000 crores INR to Auto components market alone with total loss accruing among seven prominent sectors was estimated to be around 73000 crores INR [15].

It is worth mentioning that out of 24898 applications filed, design registrations at about 2935 account for only one – eighth of the total share in comparison with 9584 patents granted in the year 2016 – 2017 [16]. This itself talks about the scope in increase of design registration as it is completely product based, and product are re – modified and re – designed in order to maintain their demand in the market.

                   

For the purpose of registration of a design, the procedure is carried out in accordance with Rule 10 of The Design Rules, 2001 which deals with the classification of goods with respect to which registration of design has to take place. There are 31 different classes with Class 99 which is a miscellaneous class and includes all products not included in previous classes.

Any contravention of The Designs Act, 2000 by the infringer will impose a liability to pay to a registered proprietor a sum of up to twenty – five thousand rupees under contract debt. Further, if a suit is brought, damages valuing up to fifty – thousand rupees along with injunction can be prayed.

India, on the other hand is a huge promising market, being placed at number 3 due to its sheer size, and hence can act as an attractive site for design registration. When collaborated with the vision of transforming the nation into a highly industrialised manufacturing hub. This is further consolidated by when it is observed that top corporate applications are lined up for the purposes of registration. Also, the design registration is available to foreign players who wish to enter and exploit the open Indian market. Further, Indian manufacturers must also make sure that their designs are not only protected by The Designs Act, 1999, but also by the design law of those economies where they wish to sell their product. The registration under The Designs Act is an effective and cost – friendly risk management tool for both domestic as well as foreign players and hence should not be avoided at any cost.

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

References:

[1] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD

[2] http://www.makeinindia.com/policies

[3] http://www.makeinindia.com/policy/national-manufacturing

[4] https://www.ibef.org/industry/manufacturing-sector-india.aspx

[5]http://www3.weforum.org/docs/GCR2017_2018/05FullReport/TheGlobalCompetitiveness

Report2017%E2%80%932018.pdf

[6] http://www.wipo.int/edocs/lexdocs/treaties/en/paris/trt_paris_001en.pdf

[7] http://www.wipo.int/edocs/pubdocs/en/patents/867/wipo_pub_867.pdf

[8] http://www.ipindia.nic.in/designs.htm

[9] http://www.ipindia.nic.in/writereaddata/images/pdf/act-of-2000.pdf

[10] http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_43_1_trade-marks-act.pdf

[11] http://www.copyright.gov.in/Documents/Copyrightrules1957.pdf

[12] http://ncw.nic.in/acts/THEINDIANPENALCODE1860.pdf

[13] http://www.ipindia.nic.in/writereaddata/images/pdf/rules-2001.pdf

[14] https://cdn.iccwbo.org/content/uploads/sites/3/2017/02/ICC-BASCAP-Frontier-report-2016.pdf

[15]https://cdn.iccwbo.org/content/uploads/sites/3/2016/11/Counterfeiting-piracy-and-smuggling-in-India-Value-of-IP-in-india.pdf

[16] https://patseer.com/2017/06/india-filing-trends-2016-2017/

Fashion And Trademarks: The Clothing Controversy

Much like the trends on a ramp evolve every season, in the same way legal strategies of the industry’s leading fashion brands, fashion-houses and designers are in flux. Fashion is something to which each one of us relates. It is a part of everyone’s daily life; be it in the form of apparels or shoes we wear or a new hairstyle we adorn or the exotic jewelry we flash.  Fashion industry is one of the most popular and profit-making industry in any country and yet is also one of the most vulnerable. The vulnerability of fashion emerges from the lack of protection to original ideas and works in terms of Intellectual Property. As a result, many fashion houses are often seen suing for the infringement of their designs. This article depicts the tendencies witnessed in affording IP protection to fashion while focusing upon the recent case of Burberry v. Target.

The War of Brands

On 2nd May 2018, one of America’s largest big-box retailers Target was slapped with an 8 million dollar trademark infringement and counterfeiting lawsuit that a British luxury brand Burberry filed in a New York Federal Court. The allegations against Target are that, it has been selling products having ‘blatant reproductions’ and bearing unauthorized copies of Burberry’s world famous ‘checks’ trademark. The infringement is alleged to be of continuing nature as Target has been involved in the act for over a year and continues to do so despite of numerous cease and desist letters being sent. Target was selling products including eye wear, water bottles and luggage, since early last year, bearing the trademarked pattern of the plaintiff. Burberry sent the retail giant a cease and desist letter alerting them about Burberry’s exclusive rights in said check pattern. A few months after receiving this letter, Target, being explicitly aware of Burberry’s special rights chose to ignore them and began offering a number of scarves on sale, all of which bore Burberry’s legally protected trademark. Burberry claims that Target purposely intended to continue selling infringing merchandise even after receiving the cease and desist letter which demonstrates the ill-intention on part of Target and its utter disregard to the intellectual property rights of Burberry. The motive behind Target’s actions in selling infringed merchandise was to misappropriate the colossal goodwill of Burberry and therefore be unjustly enriched from the enormous profits earned. The design in question is produced below for convenience:                     Burberry_scarves

Although the scarves produced by Target are of inferior quality yet they are on the surface indistinguishable from the genuine Burberry scarves. The items sold by Target were not approved by Burberry and such a reproduction of the check print of Target’s items could cause confusion in the minds of the consumers and would lead them to believe that those items are sponsored by Burberry. Burberry claims that Target’s history of collaborating with popular brands and fashion designers to promote and sell Target’s exclusive products further enlarges the scope of consumer confusion. It is stated that the classic cashmere scarf of Burberry sells for $430 which Target is selling for $12.99 (Check it out here Target and here Burberry).

Burberry is seeking $2 million for every instance of infringement along with damages to the full extent possible.

Analysis

The first and the most quintessential question which arises here relates to the scope of IP protection in the fashion industry. Fashion brands are not immune to counterfeiting. It is easier for the counterfeiters to copy fashion products and clothing because they are relatively simpler to manufacture as compared to the hi-tech devices. Also, they can be sold with a high mark-up owing to the reputation or goodwill associated with a well-known brand. With the increasing awareness of intellectual property in the fashion world more and more stake-holders are seeking trademarks and other IP protections for their creations. According to the Trademark Industry Report 2017 prepared by Trademark Now, Clothing, Apparel and Luxury Goods industries were under Trademark Spotlight in 2016 with more than 6400 applications being filed around the globe.    In order to avoid the menace of counterfeiting, where the counterfeit product incorporates a well-known brand name, trademark enforcement is the best and most effective tool. Fashion brands register their house brand name and key sub-brands.  Some of the leading luxury brands have been vigilant to safeguard their shape, color, patterns, cuts, style etc. For example, Christian Louboutin has trademarked red soles of their shoes. He has also sued Zara for infringement.

Indian Perspective

Fashion industry is one of the fastest growing industries in India especially after some Indian designers have earned respect and recognition of other nations.  However, the growing fame comes with certain vulnerability erupting from the scope of infringement by other domestic or even international designers. Fashion fraternity of India is slowly getting the hang of intellectual property protection for their creation.  In comparison to other countries especially USA, France, Spain and London, India is lagging behind in granting protection to fashion designers. Many designers are still unaware of their IP rights to guard their brands and creations from reproductions, printing, publishing, distribution of prints that are colorable imitations etc.

Conclusion

With the growing awareness of importance of IP in the fashion world, there is a serious need to re-evaluate the spectrum of protection that is granted to the fashion industry. Fashion designers should go forward and enhance their knowledge of Intellectual Property Rights and should try to find out most suitable safeguard for their products. The Burberry case is the classic example of how far the fashion industry has come with respect to recognizing their rights and enforcing them at all costs and at all levels. It would be interesting to find out the outcome of this case as it could be a game-changer in the fashion-industry.

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

[1] Burberry Limited (UK) et al v. Target Corporation et al, 1:2018-cv-03946 (SDNY)

[2]http://www.thefashionlaw.com/home/burberry-slaps-target-with-multi-million-dollar-counterfeiting-lawsuit

[3]http://www.worldtrademarkreview.com/blog/detail.aspx?g=7fe051f2-eba0-423c-b1b0-ef80109587f3

[4]http://www.fortune.com/2018/05/11/burberry-suing-target-trademark-infringement-check-print/

[5]https://www.iipta.com/ip-assets-fashion-industry/

[6]http://www.thefashionlaw.com/home/the-state-of-trademark-protection-in-fashion-and-luxury

[7]https://www.trademarknow.com/trademark-industry-report

[8]http://www.worldtrademarkreview.com/Intelligence/Anti-counterfeiting/2015/Industry-insight/IP-enforcement-in-the-fashion-industry

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.

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.