SpicyIP: The G.I Blurb

We have fresh news trickling in from the two States of Andhra Pradesh and Jharkhand for followers of G.I trends.

Since obtaining the first G.I for the Pochamply in 2005, there has been no looking back for the State of A.P in its G.I drive

CII-Andhra Pradesh Technology Development Centre, Hyderabad in Collaboration with Andhra Pradesh Handicrafts Development Corporation have facilitated the grant of Geographical Indications of Nirmal Painitings, Nirmal Furnitures and Leather Puppetry. This is the first hand made paintings, furniture and leather puppets from the state of A.P to be granted a Geographical Indication.

APHDC and the Nirmal Industry along with the Society of the artisans came together to jointly file the G.I application .The financial support was extended by the APHDC which works for the promoting interests of the artisans and handicrafts in the State of AP.

Two things that merit highlighting in this exercise

(a)The collaboration model that underlies the registration makes for an interesting case study, one that could serve as a classic proto for other states to emulate.

(b)In tandem, equal emphasis was accorded to involving the Nirmal artisans and sensitizing them on the importance of securing their collective G.I right.

The collective nature of this genre of IPR makes it additionally imperative that all stakeholders are involved in the process.

We have in our earlier post advocated that PPPs’ could work well in the G.I context. Industry participation towards commercialization and marketing of the craft line could be the vital link in the value chain. We are seeing interesting models of PPP emerge from other developing countries such as Vietnam. The PPP base used to promote the indigenous Phu Quoco Sauce is a classic example where industry, government and the producers have built a sound collaborative model to promote a G.I product.

With many firsts to its credit, it merits mention that Andhra Pradesh was also the first State in responding and resolving successfully the first case of a G.I infringement. The infringement of the Pochampally was countered by the CII effectively and brought to an out of court settlement with Anand & Anand acting as counsel on behalf of the Pochamapally producers.

Very often in my interaction with the artisans, I am asked whether a G.I registration by itself would insulate the artisan community from infringement of their rights. The G.I right confers a collective right on the community as the original producers of the product. Nevertheless any producer who is an authorized user by virtue of him having applied for registration under the G.I act can initiate an action for an infringement of the goods in question. The G.I act stipulates a penalty of Rs.50, 000 with six months imprisonment for the accused if a case of infringement stands proved. While it is common knowledge that infringed items abound the market, the Registry has so far not received too many applications of infringement. In view of this, it is recommended that sensitization programs also educate the producers on the redressal mechanism available to them and urge them to exercise their collective muscle in zealously defending their rights.

Another interesting snippet, that was brought to my notice even as I finish this post-The State of Jharkhand has bagged a G.I for its native Tussar( unfortunately they do it again-the media reports it as a patent much to our chagrin.)

Reports the Hindu
The Jharkhand government has been granted a patent on tussar produced in Kuchai and Kharswan areas of Saraikela-Kharswan district in the state.
With this patent, a pilot project launched on an experimental basis to give tussar produced in Jharkhand an identity by developing it as an organic silk proved successful, Dhirender Kumar, special secretary and director (handicraft, silk and handloom) of Jharkhand said today.
We have streamlined the silk production and now the focus will be on the marketing," he said adding, the patented variety of tussar would be sold under the brand Jharcraft'.
The department has plans to upgrade the products by providing training to weavers and farmer community. Ten training-cum-designing centres would be opened in the current fiscal in the state.
The G.I movement is on an overdrive and the Registry is inundated with applications from producers who are queing up to secure this prestigious recognition. Inside information indicates that the Tirupati Laddoo and the Palani Panjamirtham are also seeking a registration.
Seems like the Gods are in waiting for a G.I cover as well;)

PATENT PROTECTION FOR MARRIAGE PORTAL?

As the better halves of the so called matches ‘made in heaven’ attempt to find their soul mates on online marriage portals like the bharatmatrimony.com, these portals find their terms of endearment in the profit margins involved. Interestingly and quite unbelievably, in order to maintain their leading position in the market, bharatmatrimony is seeking protection under the realm of patents. They have several patent applications pending, including applications for programs like “veriprofile” and “virtual matrimony meet”. Techgoss reported this attempt of bharatmatrimony, to read their report click here.

On the website of bharatmatrimony.com, the “Virtual Matrimony Meet” is described as an “online swayamvar that provides a unique platform for members of a particular caste or community from across the world to meet and interact.” Basically the meet is an “event that aims to provide an online platform for members of the same community to interact with their prospective partners from across the globe on a particular date and time set by the website.” The setup works is follows, during the meet free & paid members of a particular caste or community are invited for an interactive chat session at a particular date & time. All registered members of Bharatmatrimony can participate in the meets. Paid members can initiate chat and also send instant e-mails during the meet. Free members can only reply to the chat conversations and e-mails initiated by paid members. The benefits of the virtual meet setup, as opposed to the earlier offline meet model, is aptly stated by Murugavel Janakiraman, CEO, BharatMatrimony.com, in the following words, “unlike offline matrimony meets where participation is highly localized, Virtual Matrimony Meets provide a platform for people to interact with members of their particular community from around the world.”

Thus, the question is whether the portal should be entitled to patent protection? It is pertinent to note that in the instant case, the application for patent seems to be a US application. However, this note aims to discuss the position of law in India, based on the assumption of the patent application for the Virtual Martrimony Meet being filed in India.

Generally, two sets of arguments can be raised against granting patent to the Virtual Matrimony Meet setup: (1) it’s a business method patent and (2) it’s an attempt to patent a computer program.

BUSINESS METHOD: Section 3(k) of the India Patent Act reads as follows:
“The following are not inventions within the meaning of the Act:
A mathematical or business method or a computer programme per se or algorithms.”

Definition & Other Issues:
Though there is no Indian jurisprudence on the matter, a general definition of business methods would be broad enough to include essentially commercial activities where the hardware and software elements are described and claimed generally and geared towards the ends of a particular business system. More specifically, as per the definition given by Anatoli Kalpakidou in “Business Method Patents: Should They Survive in Europe?” (13 Int'l J.L. & Info. Tech. 243), business methods would cover, inter alia, economic activities such as buying and selling items, marketing techniques, financial schemes and strategies for use with sports and games.”

To give a brief background, it should be noted that over a span of time there has been a substantial reversal in the treatment of business method patents. Historically, business method patents were a strict no no. However, presently United States allows patenting of pure business methods and jurisdictions like India and UK look at qualified patentability. However, many academicians continue to oppose business methods patents, a few of the pros and cons put forth are enumerated below:
Supporters of business method patents argue that such patents would actually support and incentivise innovation as the owner of the patented business model would be allowed to commercially exploit the model, to the exclusion of his competitors. Thus, with the surety of exclusive rights to exploit his model, the owner would have more incentive to innovate.
The critics of such patents argue that in reality such patents actually “stifle innovation”. They argue that once an owner is granted proprietary rights over a business model, he enjoys the exclusive rights over the model for a long time, without the worry of competition. Thus, the exclusionary nature of the proprietary patent regime actually results in these owners (who once enjoy patent protection) not wanting to innovate further. A more refined version of this critique is that free markets work on the basis of competition. Thus, innovation or incentive to innovate comes from the competition present in the market and the desire to become the market leader and attract customers. Patenting of business methods actually creates an imbalance in the free markets as it grants exclusive proprietary rights to a market player to the exclusion of other market players. Thus, given the fact that market competition already facilitates innovation, there is no need for business method patents, in fact such patents actually create imbalances in the efficient functioning of free markets. This is why we see that several consumer organisations rather than favouring business method patent are more in favour of freedom in copying them, which they believe stimulates choice and competition.

Also, there are concerns that granting such patents would adversely affect the interest of small enterprises as such patents would demand money, time and expertise that small businesses cannot afford and put them in a disadvantage position relating to big companies. Obviously the supporters of business method patents argue that such patents actually shield small enterprises by protecting their work and ideas against theft by bigger companies.
(Refer to A. Kalpakidou, “Business Method Patents: Should They Survive in Europe?” 13 Int'l J.L. & Info. Tech. 243 and John J. Love, "Business Method Patents", The Richmond Journal of Law and Technology, Vol. VII, Issue 2, Fall 2000.)

United States:
Unlike the world at large, in the United States business methods fall within the realm of patentable subject matter post the Federal Circuit dicta in the State Street Bank case. It is pertinent to note that following this case the United States Patent and Trademark Office created a new class for business method patents under Section 705. As per the section, the new class consists of “methods for performing data processing operations or for performing calculation operations wherein the apparatus or method is uniquely designed for or utilized in the practice, administration, or management of an enterprise, or in the processing of financial data.” Based on the definition and scope of Section 705, author John Love states that the financial and business data processing areas can be grouped into four categories that are focused to business operations of:
(1) Determining who your customers are and the services they need. Includes operations research and market analysis (with the aim of satisfying those needs through your products and services), (2) Informing customers that you exist, showing them your products and services and getting them to purchase such as advertising management, (3) Concluding commerce over the Internet like exchanging money and credit such as electronic payment processes, billing, banking and funds transfer, and (4) Tracking resources, money and products such as human resource management.
(Refer to A. Kalpakidou, “Business Method Patents: Should They Survive in Europe?” 13 Int'l J.L. & Info. Tech. 243 and John J. Love, "Business Method Patents", The Richmond Journal of Law and Technology, Vol. VII, Issue 2, Fall 2000.)

United Kingdom & India:
Similar to the computer program exception, one has to be mindful that in the Indian statute, the business method exception is qualified by the per se stipulation. Thus, on a literal interpretation of the text, if a business method is included in an otherwise patentable product/process, patent protection cannot be denied on the ground of inclusion of a business method.

The real debate is these jurisdictions is: What makes a concerned invention ‘otherwise patentable’?
This issue was dealt with by the UK Court of Appeal in Aerotel’s case, [2007] 1 All E.R. 225. In the concerned case, the Court of Appeal reviewed EPO and UK case law relating to excluded subject matter and laid down the following structured approach to interpret such exclusionary provisions:
In inventions including excluded subject matter, the patent examiner should (1) properly construe the claim; (2) identify the actual contribution; (3) ask whether it falls solely within the excluded subject-matter; and (4) check whether the actual or alleged contribution is actually technical in nature (although this step may be superfluous). If the invention incorporating excluded subject matter satisfies the requirement of ‘technical contribution’, it should be granted patent protection.

It is pertinent to note that the term ‘technical contribution’ is yet to be clearly defined. For instance, the Court of Appeal in Aerotel’s case interpreted ‘technical contribution’ to be creation of a new system which represented a new physical combination of hardware. As per the court, this contribution of the new physical combination was more than just a method of doing business as such (similar to India’s per se approach), and was clearly technical in nature. On the other hand in Vicom’s case, the court interpreted faster processing to be ‘technical contribution’, taking the concerned invention outside the realm of the excluded subject matter. However, while interpreting the term ‘technical contribution’ one should note that, “the fact that the method of doing business may be an improvement on previous methods of doing business is not material. Novel or inventive steps falling within purely excluded matter do not count as a ‘technical contribution’.” (Aerotel’s case)

In India, the Draft Patent Manual follows the UK position on excluded subject matter and broadly states that an invention otherwise barred by Section 3(k), will fall out of the category of excluded subject matter if it has ‘technical character’ or solves a ‘technical problem’.

US to grant patent to Virtual Matrimony Meet:
Thus, to sum up, unlike the United States, India and UK don’t allow patentability of pure business methods and in order to granted patent in these countries the inventions categorized as business methods have to satisfy the additional qualifier of ‘technical contribution’ or ‘technical character’. So to apply this distinction to the case at hand, if we were to reach the conclusion that Virtual Matrimony Meet is a business method, it would fall within the realm of patentable subject matter in the US. However, if so categorized in India and UK, the Virtual Matrimony Meet would have to show the existence of ‘technical character’ or ‘technical contribution’ before it could be placed in the realm of patentable subject matter.

Virtual Matrimony Meet in India:
In light of the above given background, the question the Indian patent examiner needs to ask in the present case is two fold: First, whether Virtual Matrimony Meet is a business method and second, if so, is there any ‘technical contribution’ made by the concerned invention.

To answer the first question lets go back to the description of Virtual Matrimony Meet. On the website of Bharatmatrimony.com the meet is described as an “online Swayamvar that provides a unique platform for members of a particular caste or community from across the world to meet and interact.” The benefit of the setup as stated by Murugavel Janakiraman, CEO, is that, “unlike offline matrimony meets where participation is highly localized, Virtual Matrimony Meets provide a platform for people to interact with members of their particular community from around the world.” As per their “about us” page, Bharatmatrimony.com can be described as a website or network which is in the business of facilitating marriages and helping one find their life partner (for better or for worse).

Thus, given their (Bharatmatrimony.com) business model, business objectives and the problems faced by offline matrimonial meets, the Virtual Matrimony Meet is seen as a way to increase the participation and interaction of the members of the website, in order to help serve the end aim of the business model, i.e., helping the member find a life partner. More specifically, as per John Love, a category of business method patents is ‘the determination of who your customers are and the services they need, with the aim of satisfying those needs through your products and services.’ Virtual Matrimony Meet squarely falls within this categorization as it’s a business model/setup aimed at satisfying the customers of Bharatmatrimony.com by providing them with a broader base for finding their life partners through such online meets. Consequently, given the fact that the setup is merely an improvement to serve the business of Bharatmatrimony.com, it comes under the scanner for being a business method.

The next question which follows is whether the concerned setup is a mere improvement on the previous business methodology or does it solve a ‘technical problem’. To understand this better, let’s take the example of an alumni google group where one’s batchmates are also members. So as the administrator of the group, I post a message on the group stating that everyone should sign up on Google Talk on x date at y time. Does this setup have any ‘technical contribution’ or does it solve any ‘technical problem’? Clearly it does not. In the present case, bharatmatrimony.com is trying to patent a similar setup by way of Virtual Matrimony Meet. One should note that Virtual Matrimony Meet is merely an innovative business technique and does not solve any technical problem or even constitute a new system which represented a new physical combination of hardware (Aerotel’s parameter) to give the setup any ‘technical character’[ as required by the Draft Patent Manual. Thus, on this ground alone the application should be dismissed as constituting excluded subject matter under Section 3(k) of the Indian Patent Act, 1970.

Computer Programs and Computer Software:
It is pertinent to note that in UK, the Aerotel approach also applies to determine patentability of computer software and computer programs. Thus, in order to determine patentability of computer software, the patent examiner has to follow the structured four step approach to examine if there is any ‘technical contribution’, in the absence of which, the software will not be granted patent protection.

As expected, imitating the UK approach, the Draft Patent Manual (quite controversially) introduces the requirement of ‘technical contribution’ to the patentability of computer software and programs. Thus, as regards the present case, the arguments earlier raised in relation to patentability of the Virtual Matrimonial Meet as a business method and the absence of ‘technical contribution’ or ‘technical character’ in the concerned invention would apply squarely to the portal as a computer program.
Consequently, the absence of ‘technical contribution’ would render the computer program being used to execute Virtual Matrimony Meet unpatentable.

Some Notes:
First, a finding of unpatentable subject matter on either of the two grounds would result in the alleged invention being unpatentable. However, given the fact that the question involved in both the scenarios is that of ‘technical contribution’, the examiner is likely to come to the same conclusion in both the cases.

Second, it is pertinent to note that the general approach of the Court of Appeal and the structured test laid down by the court in the Aerotel case, was critiqued by Judge Fysh (Judge, Chancery Division) in Aerotel Ltd. v. Wavecrest Group Enterprises & Ors., [2008] EWHC No. 1180 (Pat). However, given that the fact that the judgments of the Court of Appeal bind the Chancery Division, the law and the structured test laid down by the Court of the Appeal still holds ground.

Drugmakers in Para IV Litigation

Hoffman – La Roche has slapped a lawsuit at Indian generic drugmaker Orchid Chemicals & Pharmaceuticals Ltd. over a newly issued patent for Roche's blockbuster osteoporosis drug Boniva. The US Patent was issued (US Patent 7410957 - Method of treatment using bisphosphonic acid) on August 12, 2008 and Orchid had filed an ANDA (Abbreviated New Drug Application) with the USFDA under Para IV of the Hatch-Waxman Act. Interestingly, Orchid was sued in September last year over the alleged infringement of another patent of Boniva by Roche. Orchid was accused of infringing US Patent 7192938 (US Patent Issued on March 20, 2007) following its paragraph IV ANDA submission to manufacture a generic version of Boniva.

The Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, strikes a balance between the interests of pioneer pharmaceutical companies, competing generic manufacturers and consumers. It creates several modifications to conventional patent law. One of the several is a bounty for challenging patent validity, infringement or enforceability in the form of 180 days of market exclusivity to the first generic applicant to file a patent challenge against any approved drug. Hatch-Waxman employs a unique procedural framework to manage the interplay between pioneer New Drug Application (NDA) and their generic Abbreviated New Drug Application counterparts (ANDA). Upon filing an NDA, a pioneer firm must provide a list of relevant patents, which are then listed in an FDA publication known as the Orange Book. Subsequent ANDAs must reference these Orange Book listings and make one of four certifications for each patent:

I. The required patent information has not been filed;

II. The patent has already expired;

III. The patent has not yet expired, but will do so prior to FDA approval of the ANDA; or

IV. The patent is invalid or will not be infringed by the ANDA.

The most significant and contentious of these is the Paragraph IV certification, because a generic firm is seeking market entry prior to patent expiration. Generic applicants making Paragraph IV certifications must notify the pioneer firm, which then has forty-five days to initiate a patent infringement lawsuit. Pioneer drug makers typically pursue litigation, automatically triggering a thirty-month stay that prevents FDA approval of the ANDA until the earliest of the following dates: patent expiration, a final resolution of the patent litigation, or expiration of the thirty-month period. If the generic drug manufacturer prevails in the Paragraph IV patent litigation, it is rewarded with a 180-day marketing exclusivity period, during which the FDA cannot approve subsequent generic versions of that drug. This 180-day monopoly can be immensely profitable, and it thus rewards the first Paragraph IV filer for bearing the risks and expenses of patent litigation. Once the exclusivity period has been triggered and expires, the FDA may approve subsequent generics to enter the market.

The independent claim of the US Patent 7410957 reads as follows -

What is claimed is: 1. A method for treating osteoporosis comprising commencing treatment by orally administering to a subject in need of such treatment, on a single day, a first dose in the form of a tablet, wherein said tablet comprises an amount of a pharmaceutically acceptable salt of ibandronic acid that is equivalent to about 150 mg of ibandronic acid and continuing said treatment by orally administering, once monthly on a single day, a tablet comprising an amount of a pharmaceutically acceptable salt of ibandronic acid that is equivalent to about 150 mg of ibandronic acid.

Under the Indian Patents Act, Section 3(i) makes such inventions non-patentable which are any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic treatment of human beings or animals. The patent claim [mentioned above] in its description of oral administration of the tablet (a pharmaceutically acceptable salt of ibandronic acid) evidently is for a process for the medicinal treatment of osteoporosis (a disorder involving abnormal bone resorption) which makes it patent non-eligible. The composition of the tablet, which is a salt of ibandronic acid, will show patent eligibility once, under section 3(d), it differs from the known substance, significantly in properties with regard to efficacy.

On a separate note, the mounting litigation costs and diminishing possibility of victory are probably forcing the domestic generic drug firms to stay away from patent rows. Authorized generics, manufactured by firms under license from innovator companies as well as diminishing blockbuster drugs are thought to force the domestic drug companies to shun the legal route to benefit from patented drugs.

The Innovation Bill, 2008, and Trade Secrets: Part II

In an earlier post, I had looked at some of the provisions in the Innovation Bill, 2008 dealing with the protection of trade secrets. This post continues that discussion, and I now focus on a few areas in the Bill which are likely to be controversial.

‘Public interest’ and ‘Reasonable royalties’?

Section 11 of the Bill, “Exceptions to Misappropriation of Confidential Information”, is a rather fascinating provision. Particularly interesting is Section 11 (c) which says “Confidential information shall not have been misappropriated where disclosure of the confidential information is held to be in the public interest by a court of law.” Is this really a change from the position of law? In the SCC article mentioned in the earlier post, the authors argue, “It is well established that no liability attaches to the use of information, which it was in the public interest to use or disclose…” A ‘public interest’ exception has also been recognized under case-law in England, for instance in Attorney General v. Guardian Newspapers (No 2) [1990] 1 AC 109. In a famous observation, Lord Goff stated “(the public interest protecting confidence) may be outweighed by some other countervailing public interest which favours disclosure.”

Nevertheless, the ‘public interest’ exception in the draft Bill has already drawn criticism. For instance, Mr. Pravin Anand is reported to have criticized the public interest exception, in the context of Section 11 (c) along with Section 12 (4). Section 12 (4) says that “In exceptional circumstances, an injunction may stipulate conditions for future use upon payment of a reasonable royalty for no longer than the period of time for which use could have been prohibited.” According to Mr. Anand’s comments reported here, these proposed rules virtually create a “compulsory licensing” system in trade secrets. The provisions are also likely to be considered by some as too vague.

Undoubtedly, a comprehensive definition of ‘public interest’ is impossible. However, it might seem better to exclude certain activities from the purview of the term. It might well be (although the proposition will not always be free from doubt) in the public interest to enable access to medicines at cheaper prices. It appears unreasonable, though, to say that providing for cheaper access to the formula for preparation of soft-drinks is in the public interest. Perhaps, it could be considered whether an explanation can be added to Section 11 – something along the lines that mere economic benefit shall not be deemed to be in the public interest.

On the other hand, is there really any harm in leaving open the meaning of ‘public interest’ to the Courts? There might be cases when even an economic benefit on its own would be in the public interest. Why take away the discretion of the Courts in this connection? Under common law, Courts recognize the public interest in protecting trade secrets. That public interest may, however, need to be balanced against another countervailing public interest. The meaning of ‘public interest’ is then best left to Courts. One of the biggest merits of ‘public interest’ is its ability to be used to achieve a just result in peculiar factual circumstances. Defining public interest will take away this virtue. Seen in this light, the ‘public interest’ exception is more ‘flexible’ than ‘vague’.

The ‘public interest’ exception should be understood not as moving away from the policy of protection of trade secrets, but as recognizing that there may be stronger public interest issues which in certain circumstances would require a result where the secrets are not protected. In this light, the ‘public interest’ exception as it stands may well be praiseworthy; and certainly does deserve deep consideration before it is rejected.

So too is the case with Section 12 (4) where future use of the secret may be allowed on the payment of a reasonable royalty. Again, this must be understood not as an ‘anti-protection’ measure. The power in Section 12 (4) is to be exercised only under exceptional circumstances. As Mr. Anand noted, this might well appear to be a form of compulsory licensing. This, however, need not be a bad result on its own and may well have the important advantage of allowing Courts to mould the relief according to the specific circumstances.

Other issues:

Another interesting issue arises in Section 14 – this provides that “No legal proceeding or any other claim or action shall lie against any person for anything one in good faith under this Act or the Rules and Regulation made thereunder.” Now this is perfectly fine if the provision said that it was to apply to provide immunity to any of the officials/authorities acting under the Act. The use of the term “against any person” might open the door for a general good faith exception. I am not sure whether a broad good faith exception is useful – after all, the Act provides for civil remedies such as injunction and damages. Why should good faith prevent a remedy in these cases? Indeed, section 13 (which deals with mandatory damages) provides for three times the mandatory damages in cases of willful or malicious intent. It seems that policy behind the Bill is not to insist upon a requirement of “intent”. Also, the effect of the good faith exception is magnified by the public interest exception – if the defendant believes in good faith that disclosure is in public interest, he will be protected even if in reality the disclosure is not in public interest. Also, the ‘good faith’ provision is not found in the Section on exceptions (Section 11), but occurs at the end of the Chapter.

Presumably, then, ‘good faith’ is not intended to be a general exception. It might, therefore, be clearer to use the terminology found in several other enactments – “No legal proceeding or any other claim or action shall lie against any person exercising any power or discharging any function under this Act, for anything one in good faith under this Act or the Rules and Regulation made thereunder…”

Conclusion:

As an earlier post on this blog had noted, making the Bill available to public scrutiny is indeed a welcome step. Nonetheless, this is only a first step. Certain aspects of the Bill need to be subjected to public debate, and it might be necessary to clarify these aspects and other issues raised by such debate. Hopefully, there will indeed be such a critical discussion, and the outcome of the discussion will be taken into consideration before the Bill is enacted.

(I would like to thank Mr. Shamnad Basheer for his guidance on this post in general, and for his invaluable suggestions on ‘public interest’ and ‘reasonable royalties’ in particular.)

SpicyIP Review: “Perceptions of IP” by Roya Ghafele

SpicyIP wishes its readers a Safe, Happy and Prosperous Diwali!

Introduction
The joy, of seeing someone express a particular opinion in the right forum on an issue which one strongly feels about, in a manner better than one could have done, and in exactly the way one would have liked it, is something best experienced than expressed. This was precisely what I felt after reading Roya Ghafele’s “Perceptions of IP” (a report prepared under the aegis of the Intellectual Property Institute of the UK); and hence this disclaimer- I was in a bit of a problem because it was difficult to separate her views from mine, so I have tried my best to clearly demarcate the two so that I don’t end up committing the worst of sins possible on an IP forum- appropriating another’s ideas as one’s own.

The instinctive question that came to my mind after reading the report was “why wasn’t such an exercise undertaken earlier?”, because its very relevance makes one sit up and read every word of it. In a way this could be the first step, and a major one, towards evolving IP’s own, if I may borrow from classical quantum mechanics, Grand Unified Theory (GUT) rather Grand Unified IP Theory (GUIPT). May be the topic was awaiting the right author. Roya’s understanding of IP in all its avatars legal, social, economic, psychological, gender-specific and every other form indicates the sheer profundity of her grasp of the subject (SpicyIP congratulates Intellectual Property Institute, UK for having undertaken such a venture which is of utmost global relevance).

To capture so many actors in the “IP drama”, as she calls it, on so huge a canvass and yet flesh each of them out with such precision indicates the clarity of her concepts. The reason why I discuss her first rather than the report is because some of the best works in literature are more about the author than the authored. They give us a sneak peek into the most private of domains- the thought process of the author (unless of course one employs Derridian deconstruction methodology, which is almost ideal and hence near-impossible).

The Gist
If I am to capture the essence of her work in a nutshell, I hope it wouldn’t be far from the truth to say that identifying, acknowledging and putting stereotypes surrounding IP, particularly attributable to TRIPS, in proper perspective and the impact of these stereotypes on academic debates and policy-making form the heart and soul of the report. She also makes a disclaimer to the following effect- that the current initiative is neither “Pro IP” nor “Contra IP”, but “pro fact-based research” and against “unsubstantiated statements”. This, I think, off late has become necessary to distance oneself from accusations of intellectual baalism (sycophancy…..) or worse- working for a vested interest group or furthering the agenda of a particular lobby. Nothing could discredit and hurt honest efforts, such as this, more than slander.

Roya impliedly divides, and rightly so, the modern history of IP into two major periods- the one before TRIPS and the one Post-TRIPS (If one were to give it a Gregorian touch, it would be Anno Domini Nostri TRIPS). According to her, no other piece of international legislation in recent times has generated views/passions/emotions in such diametrically opposite spectra; on one hand TRIPS has been hailed for setting a la’Common Minimum Programme for nations on IP and on the other it has been loathed with unmatched passion & unbounded energy for being the most vicious, unabashed and ruthless symbol of globalisation & capitalism. She goes a step further to state that the reason why passions run high in pharma-centric and Traditional Knowledge-centric discussions (which SpicyIP is only too familiar with) is because of the way TRIPS and hence IP are perceived to be the latest additions in the “arsenal” of developed nations to subjugate developing nations.

She observes that WTO, and not WIPO, has become the hate figure since IP was pushed through the trade channel and not the innovation route. This was seen by renowned left-wing academics like Carlos Correa (of South Centre) and Nobel laureate Joseph Stiglitz as a move propelled by the fact that WTO’s Dispute Resolution mechanism has more teeth than WIPO, to force developing nations to get their acts together (This is in line with Stiglitz’s frequent columns against globalisation in The Hindu. For quite some time now, Paul Krugman too has been writing in the same column in a similar vein. Interestingly, the Nobel Prize committee too has recognised his efforts in understanding the impact of globalisation and his new trade theory).

As more and more things change, the more they remain the same. IP is the latest front where age old conflicts between the haves and have-nots, rich and poor, North and South, left-wing v. right wing, are being replicated with greater vigour. The imposition of an IP framework on all WTO members was interpreted as a kind of bargain in international trade and politics- Laws for IP protection in return for transfer or flow of technology and know-how from the developed world to the Third World. Accordingly, developing nations were mere passive receivers or “supplicant states” (this term was also frequently used in the Indo-US nuke deal debate). The fallout of this was the rise of the cliché in which developing nations are portrayed as hapless victims of ignorance caught in a web of rules and in a maze of laws.

To explain the far reaching consequences of such a trite idea, Roya looks for both outward and silent expressions.

Linguistics and IP Discourse
As is the case with every ideological debate, there are 3 parties- one on either sides of IP- the believers & non-believers and the third one being the fence-sitters, the agnostics. Naturally, the only way the sentiments of these parties are expressed explicitly is language and so Roya brings to fore a point which unfortunately has been an oft-used barb unfairly hurled at lawyers and the legal profession since time immemorial- language, semantics and their inseparability/indispensability to human transactions.

In fact, a major portion of the article is dedicated to making sense of the linguistics involved and understanding the course of IP discourse, reconciling rights jurisprudence with public interest, in other words, individualism and social engineering (speaking of linguistics, “social engineering” is used here in the sense of law being a tool of social control and does not refer to manipulative techniques used to extract otherwise inaccessible information). This emphasis on giving linguistics its due forms both the introduction and the conclusion of her article.

Using popular sentiments expressed about IP, Roya goes on to show how the pharmaceutical industry has borne the brunt of the truism of IP v. Public Health. IP and Public health are seen as two incongruous entities with the former being an imminent threat to the latter. This is partly also because each country views IP through the prism of its own worldview, experiences and interests; naturally IP doesn’t conjure images of exploitation in the West; however, in countries like India with its colonial past and historical baggage, IP is synonymous with imperialism so much so that even in popular culture, the same line is parroted.

Very accurately she says that this points to another important aspect of the debate- equating intellectual property with patents and patents with pharmaceutical industry i.e. equating the part with the whole (This is similar to arguments furthered by proponents in the early days of plea bargaining that law is all about dispute resolution forgetting that dispute resolution is but one of the mechanisms and objectives of law). The most legally relevant impact of such perception, in my opinion, is when national IP legislations are interpreted with pharmaceutical industry and public health as the sole or atleast the most important points of reference- the parallel imports debate is a case in point.

This is not to deny that there are instances where the microcosm mirrors the macrocosm, but it certainly doesn’t hold good in this case. Further, according to Roya, discussions on IP and Public health have been dominated rather “hijacked”, by NGOs and this may have led to a perversion of sorts thanks to the kind of language employed. NGOs and the media have borrowed liberally from terms used in the context of war (“global war for public health”) indicating comparisons which an average person would draw and images which such statements conjure in his mind’s eye (even I am guilty of this, for one of my posts was titled “Choking the Patients?”). According to her, the caricature of multinational drug corporations as “evil multinational drug syndicates” with cabalesque characteristics has contributed in distorting the nature and tone of such discussions where NGOs have used the fear of the “other” to best effect. This reminds one of the last US presidential elections.

The use of compulsory licenses as a sure-fire tool for browbeating corporations into reducing their prices is another ramification to which Roya draws attention (the Novartis case and Thai instance of compulsory licensing were touted as “victory of patients over patents”). This, according to her, is a socialistic reaction to a predominantly capitalist idea- IP. In this entire din, according to her, facts and sanity are lost for want of a louder voice. She points out that less than 5% of medicines of WHO’s essential drugs list are protected by patents; patent protection for HIV/AIDS exists in just over 20% of 53 African nations with no patents whatsoever in 13 countries.

By the same taken, Roya says that TK and its commoditization by TRIPS is another reason for its unpopularity and misconceptions. TK is such an emotive issue because it strikes at the heart of a society’s personality- its culture, its way of life, the value systems which it holds dear; consequently, one sees repeated demands for sui generic systems which treat TK in a manner unlike the way the West (or the “other side”) sees it. The premise in most such arguments is that TK is thoroughly incompatible with western proprietary jurisprudence and hence IP, since culture as a commodity is a concept which is supposedly alien to indigenous groups.

The next area where she diverts her attention and energies to is copyright chaos and counterfeiting. For a change, Roya notes, this debate presupposes IP more as a legal right than a business asset. In a reversal of roles, here it is the industry which calls for a “war against piracy”. Software patents and piracy, according to her, top the list when it comes to exaggerated and passionate arguments; candle light vigils, rallies and protest marches by open source movement are proof to this. That counterfeiting could have both negative and positive effects is something which quite a few commentators tend to forget. Roya also addresses, albeit briefly, the link between counterfeiting and terrorism.

The last two areas of research deal more with human rights, such as the First Amendment rights in the US, international human rights law and gender justice. Questions such as the effect of copyrights and related rights on freedom of expression, access to information and trade, are issues which too have contributed their mite to the ever growing myths surrounding IP. This is an interesting observation since morality in this case is the focal point in the context of a commercial right; in my opinion, this stands in stark contrast to politico-economic reasons slowly finding their way into public law such as criminal law where morality ought to come first.

The most obscure and definitely interesting part of this article was the attempted ligature between gender justice and IP jurisprudence, which was unorthodox by any standards. Roya points to the prevalence of a particular view that IP is a male bastion with a “hypermasculinized” system of values. The notion of the inventor according to certain groups smacks of male chauvinism since perceptions of technology and innovation between men and women fundamentally differ, which IP is grossly oblivious to. Both these areas, international human rights and gender justice in context of IP, are in my opinion extremely fertile grounds for research.

Conclusion
From all these examples, Roya draws a very pertinent conclusion. Beyond a certain point, it is polemic that dominates the debate rather than reason and both sides hold strongly to their opinions without keeping an open mind. In other words, for each side its view is the sole view- the ultimate truth and the entire truth. Ironically, the discussion turns into a fight for “monopoly” over truth, i.e. who is right rather than what is right.

The need of the hour in Roya’s opinion and mine is a calm atmosphere in which discussions are held and the possibility of a third way is explored. She recognizes the positive efforts undertaken again by NGOs such as MIHR, the Centre for Management of Intellectual Property in health Research and Development etc. In fact this is where one’s knowledge of IP asset management in the larger context is required, to put at rest looming misconceptions, to increase levels of IP awareness. As a kid, I remember having seen public awareness ads on GATT were run on good ol’ Doordarshan by the then government led by the late Shri P.V.Narasimha Rao. It is time that we had more of such programmes.

As is the case with any other branch of law, it must be understood that IP too is a cow which can be tied to any tree- constitution, taxation, international law, criminal law and the rest. A syncretic jurisprudence of IP must be the outcome of such efforts and in doing so it has to be borne that language is of the essence and though emotions cannot be done away with in entirety, reason should prevail. One cannot get too jingoistic about IP as an individual right given the ramifications on those around the individual. So a truncated view of IP should be abandoned and a middle path chosen.

In an earlier post, Mr.Basheer rightly discussed and quoted Buddha on the Golden Mean approach. I am reminded of Kalidasa who wrote on how a king ought to tax his subjects. He compared tax laws, in general any law, to a lioness holding her cubs between her teeth. She should hold the cubs tightly enough so that they don’t slip and also should be careful not to inflict pain. This is precisely what we need now. I realise that it is easy to wax eloquent on the need for such efforts; however, a beginning must be made and it has already been made by IPI and Roya Ghafele.

The Innovation Bill, 2008, and Trade Secrets: Part I

A previous post on this blog looked at some of the important provisions in the National Innovation Bill, 2008. I now look at the impact which the Bill may have on the important area of protection of trade secrets. In particular, this post will deal with (a) the nature of the protection granted under the Bill, (b) the subject-matter entitled to protection, and (c) the duties cast on third parties who have received any confidential information.

The Nature of Protection:

Typically, claims concerning protection of trade secrets are brought to enforce confidentiality agreements, or on the grounds of the tort of breach of confidence. Equitable obligations often tend to arise in this regard – for instance, directors of a company are under a fiduciary duty to the company; and one of the duties of directors as fiduciaries is to prevent misuse of corporate information and to refrain from using corporate information for their personal benefit.

Provisions in connection with trade secrets are found in Chapter VI of the Innovation Bill, titled “Confidentiality and Confidential Information and Remedies and Offences”. The draft Section 8 (1) allows parties to “contractually set out the terms and conditions governing rights and obligations in respect of confidential information, including with a view to maintain confidentiality and prevent misappropriation.” On the face of it, this does not alter the position of law – parties were always, it would seem, able to do this.

It is interesting to note that in cases where such contracts existed, the employee could try to avoid the contract on the basis of Section 27 of the Indian Contract Act (contracts in restraint of trade). Indeed, several decisions have attempted to draw a line between “restrictions” on employment and protection of employers’ rights. Section 16 of the draft Bill says that the provisions of the Bill would have effect “notwithstanding anything inconsistent therewith contained in any other law.” One possible argument is that a conjoint reading of Sections 8 (1) and 16 would mean that agreements between parties concerning rights and obligations in respect of confidential information cannot be challenged under Section 27 of the Contract Act.

This argument, however, is not fully convincing – Section 8 uses the words “contractually set out” and not “set out by agreement”. It appears then that any agreement in this connection must nonetheless be a valid contract under the Indian Contract Act. With this interpretation, it is clearly possible to avoid any conflict between Section 8 of the Innovation Bill and Section 27 of the Contract Act. One may then conclude that Section 8 (1) of the Bill does not change the existing legal position.

Further, the Bill does not do away with the non-contractual basis for the protection of confidential information. Section 8 (3) says that notwithstanding anything in sub-section (1) “parties may nevertheless enforce any rights in Confidential Information arising in equity or as a result of circumstances imparting the obligation of confidence.” This, it appears, would cover equitable and tortious claims arising under breach of confidence.

The addition in this scheme is in terms of Section 8 (2) which – subject to the contract between the parties – gives the appropriate government the power to set out the terms and conditions governing the rights and obligations of parties in respect of confidential information. Thus, the specific enumeration of the rights and obligations of parties is left for a later stage.

What is protected?

Having looked at the nature of the protection of trade secrets, I now turn to the important aspect of the subject-matter of protection. What exactly is “confidential information” which can be protected under the Bill?

It might be useful in this connection to look at the US position. In the US, laws protecting trade secrets are enacted by the states, but most such laws are based on the model Uniform Trade Secrets Act linked here.

Under this model US draft (which has been adopted by 46 states), a “trade secret” is defined as “information, including a formula, pattern, compilation, program device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

This might very well be compared with the rather similar Section 2 (3) of the Indian Innovation Bill which defines “confidential information”.

“Confidential Information means information, including a formula, pattern, compilation, program device, method, technique or process, that: (a) is secret, in that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within circles that normally deal with the kind of information in question; (b) has commercial value because it is secret and (c) has been subject to responsible steps under the circumstances by the person lawfully in control of the information, to keep is secret.

It is debatable whether “information” is to be treated as property. In the US, in addition to the model Trade Secrets Act, trade secrets are protected under the Economic Espionage Act which, under some circumstances, makes “theft” of confidential information a crime. This might lend credence to the view that confidential information is “property”. Under (English) common law principles, the protection of confidential information is looked at as an equitable right rather than a property right. In such circumstances, it might be necessary to be cautious before borrowing straight from the US position.

However, the definition in the Innovation Bill also appears to be based (more than the US model law) on Article 39.2 of the TRIPs agreement. A note on Article 39.2 on the WTO website says, “The Agreement does not require undisclosed information to be treated as a form of property, but it does require that a person lawfully in control of such information must have the possibility of preventing it from being disclosed to, acquired by, or used by others without his or her consent in a manner contrary to honest commercial practices. “Manner contrary to honest commercial practices” includes breach of contract, breach of confidence and inducement to breach, as well as the acquisition of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices were involved in the acquisition.” The definition in the Bill is thus consistent with the nature of the right sought to be protected.

Impact on third parties:

Moving on to another aspect, Section 9 of the Bill says that when confidential information been received by a third party without the consent of the complainant, “obligations of confidentiality and equitable considerations” may also create rights and obligations in respect of the confidential information. The tort of misappropriation was originally developed in American Courts to impose liability on third parties for the use of trade secrets. English Courts have followed this lead; but have held third parties to be liable only when the information is both unknown in public, and is known to be confidential by the defendants (Fraser v. Thames Television, [1983] 2 All ER 101; reference may also be made to Vandana Pai and Ramya Seetharaman, “Legal Protection of Trade Secrets” [2004] 1 SCC Jour. 22 linked here.) Under Section 9, this common law position is unchanged.

Conclusion:

The full text of the draft Bill is available online here. So far as the matters discussed in this post are concerned, it appears that the Bill does not radically change the existing legal position.

There is a strong case for a more flexible approach leaving the matter to the Courts. In the absence of any specific delineation of rights and obligations in the Bill itself, however, the issue is likely to generate greater debate after the Bill in enacted and the specific principles are notified in separate Rules (in accordance with Section 8, sub-section 2). The danger, of course, is that the Rules would impose a degree of rigidity which would not suit the equitable nature of the rights in question. It is therefore worth asking whether a statutory model of protection is necessary. Even if a statutory model is appropriate, it needs to be considered whether the principles governing the rights and obligations of parties should be a matter left for the Rules. Perhaps, it would be better if broad terms and conditions were set out in the Bill itself. First, there is the possibility of the Bill once enacted being challenged on grounds of excessive delegation. Secondly, it will be easier to debate these terms and conditions in the Bill itself, rather than waiting for specific Rules. Of course, there may be a need for Rules to take into account the needs of specific industries – that should not prevent general principles being laid down in the Bill itself.

The second part of this post will look at some of the potentially controversial parts of the Bill, including the ‘public interest’ exception and the power of the Court in connection with the payment of ‘reasonable royalties’.

(I would like to thank Mr. Shamnad Basheer for his useful suggestions regarding this post)

Call for final contributions: Indian Journal of Intellectual Property Law

The Indian Journal of Intellectual property law, a NALSAR University of Law publication, is calling for final contributions for the second issue of its journal. With an impressive advisory panel (comprising of several eminent persons such as Hon'ble Justice CK Thakker, Prof. Anil Gupta, Mr. Anil Sinha from the WIPO, Shamnad Basheer, Prof. Johanna Gibson, Joseph Beck, Mr. Peter Ganea- to name a few), and with one sucessful issue already out, the Journal is now looking for articles by students, practitioners and academicians for its next issue to be released in July 2009.

The final date for the submission of the contribution is December 15th, 2008 and all submissions may be made to submissions.ijipl@gmail.com. The details of the submission guidelines, as well as about the Editorial Board, Adisory panel and articles from the previous issue are all up on their newly revamped website .

Any queries in this regard may be mailed to the Editorial Board at queries.ijipl@gmail.com

The AWS Report on IP in India: The Good, the Bad and the Ugly

The overwhelming response to the previous post on the allegations of corruption in the IPO has led SpicyIP to also undertake a study into the AWS Report that the Mint had referred to in its investigation.

Austria Wirtschaftsservice inquired on behalf of the Austrian Ministry of Commerce and Labour between 11.02.2008 and 29.02.2008 with several official IPR institutions and private IPR service providers in India about the current national IPR situation in regard to foreign entities. The supreme objective was acquiring transparency in service pricing and increasing competition amongst service providers; thus facilitating and supporting IPR protection for Austrian businesses.

Overview of the Indian IP Scene

The Report, has essentially intended to make a study on the Intellectual Property Regime in India. Therefore, much of its focus is toward the study of the regimen here in India- the institutions, the policy, the legislation as well as the Courts. Interviewing several persons from law firms, the Patent Offices and the Government, AWS in its report had hoped to gauge the true scenario of Intellectual Property as it exists in India today.

Findings of the AWS Report: The Good

The AWS Report has chronicled the enforcement of intellectual property rights through police & court. Recounting a historical background to the same, the AWS Report has stated that the legacy left by the British, has culminated into a respected and effective enforcement mechanism.

Further as a part of the Executive summary, (though not mentioned anywhere else in the Report), AWS has also noted that firms dealing with Intellectual Property offer services not only in India, but also Pakistan and Bangladesh: indicating an expanding base of expertise.

Impressively, IP enforcement was found to be carried out almost entirely in trademark law. Further, the AWS Report has found that “The backlog of unexamined applications of approximately 5 lakh cases brought down to zero. Renewal of Trademarks certificates being done instantaneously in clear cases and new applications are examined within one week.” This coupled with increased filing rates of Trademarks is one of the silver linings in India’s IP cloud.

In the field of design, apart from noting that the Utility Model Law is under the process of being drafted, the Report also found increasing domestic design registration (something missing in the patent arena).

Findings of the AWS Report: The Bad

1. Areas of worry, keeping in mind the emerging IP “Dragon” were that almost 90% foreign patent applications compared to only 40% in China, 2007, the lack of more domestic applications as well as acceptance of the IPR system in India was found to be problematic. This was linked to the fact that Indian industry as of now focuses far more on the aspect of production rather than R&D.

Further, even though considerably more affordable in comparison to the European rates, the IPR application rates were found to be extremely expensive compared to Chinese fees based on PPP. Especially where the foreign rates of filing are sky rocketing, this could be a problem and perhaps lead to a shift of a patent filing base.

“A reason for the above situation can be found in the lack of public incentives for domestic enterprises in creating a strong national IPR portfolio. There are neither national nor regional subsidies for Indian companies to apply for formal IPR protection. The Chinese government creates with its subsidies on all levels of governance an enormous advantage for domestic over foreign applicants, reducing the overall expenses to roughly a tenth of what incurs to a foreign company. There exists nevertheless the CSIR (counsel of scientific and industrial research), which is an institution similar to AWS/FGG. It is the largest Indian patent filer in and outside of the country and files IPR mainly for universities. Private companies and individual inventors can also to a certain extent obtain support from the NDRC (National Development and Research Center) if they don’t have the financial means to file IPR themselves.”

2. Keeping in mind the recent rise of IP in metropolitan areas, an examination as to backlogs was made in the Patent Offices. While historically, the Calcutta PO and their High Court (in terms of injunctions etc.) were found to be extremely efficient, the Report has found that there is almost a 2 year patent application backlog in Delhi PO- which could be attributed to the fact that there are a large number of vacancies in the Patent Offices.

This large gaping hole of vacancies and increasing filing rates, has forced the Patent Office to recruit many new examiners were taken in during the recent years- several of whom have not yet acquired enough experience and “therefore may respond with incoherent and inconsistent objections to an application.” This has led to increasing workload since despite the recruitment of new Patent Officers, the Report claims that “first substantive examinations and first objections are carried out by senior examiners, and only after the first rectification will senior examiners (assistant controller or higher) take over from the juniors. The wave of newly staffed examiners might worsen this situation.”

Findings of the AWS Report: The Ugly

1. Unethical Alliances?

Stating that the patent backlog is great, the Report however acknowledges that in cases where a patent official is well known to the patent agent, the time for the grant of patent may not be as much.

Similar to what was stated in the Mint report by SpicyIP, the AWS Report also has found “Wide spread collaboration” between patent attorneys and IP officials. The Report suggests a “clear dependency” by legal representatives of patent drafting and the official examiners on patent searches that previously carried out in other national IPR jurisdictions.

2. Filing charges unclear?

Inquiring into the quantum of official fees and fees that are charged by private service providers, there was found to be a difficulty in obtaining precise charges for each service offered. Particularly since the procedures have been standardized by the law, this was found to be very disconcerting.

Especially for private service providers, the fees were found to be paid not as a lump sum but at every step of IPR registration- which the Report found clearly to avoid transparency and further making it very difficult for an enterprise seeking to file any application to estimate costs. Upon direct inquiry the law firms provided quite different pricing that ranged for patents around EUR 600-3500; trademarks EUR 200-1200; designs EUR 500-1000; copyright EUR 300-500.

While acknowledging that a legal service provider rarely offer a fixed price for their services, the lack of precise cost proposals and incomparable services by firms (vis-à-vis other areas of law as well as other firms), the Indian IP firms were reported to create perceptions of “inexistent transparency and very vague pricing.”

[The report has also taken into account that there are additional unforeseen costs under Indian patent law due to pre-grant oppositions, and cannot usually be calculated beforehand.]

3. The tale of two patents

Reported by SpicyIP, the AWS report also chronicles the problem of “Double patent granting” and blames this correctly on the failure of a cross verification system.

SpicyIP’s Take on the Report

The Report carried out by AWS was to expressly examine the IP Environment (existing infrastructure, policy and the statutory requirements) for a informed entrance of Small and Medium Enterprises from Austria. Interestingly, while initially several people (including this blogger) thought that the report was the basis of the Mint Investigation, both Mr. Unni from the Mint as well as our own study of the report has made it apparent that the Mint has by way of their investigation, come up with most of the hard hitting findings.

However, the significance of the report apart from some of its findings as to the working of the IP Regimen in India also raises valid questions as to the shying away of foreign entrants from the Indian scene due to alleged “collaborations” and lack of “transparency”, as well as the backlog in several cases.

SpicyIP once again hopes that a greater level of transparency be ensured as both these Reports (the Mint and the AWS Report) have brought focus to a larger problem that may exist in India's IP Regime.

Ravi Kamal Bali v. Kala Tech: India's First Doctrine of Equivalents Case?

We had a guest post on a case that allegedly brought in the doctrine of equivalents into Indian patent jurisprudence.

Unfortunately, many of our readers pointed out to me that the post was not very clear in explicating either the facts or the legal issues arising therefrom. We therefore thought it fit to run this post clarifying key aspects of the case:

Firstly, the decision by Justice S.J. Vazifdar was not in relation to the main suit, but only disposed of an interim application dealing with the request for submission of additional documents by the Defendant.

To summarise the case, the plaintiff alleged infringement of its patent covering a tamper proof lock/seal for containers (incidentally, the main customers of this technology were pharma companies, Cipla, Dr Reddys and Merck: so perhaps this makes it yet another pharma patent case, alebit indirectly!).

Ex Parte Orders in Patent Cases?

At the initial stage, the defendant was not present and the plaintiff procured an ex parte (ad interim) order injuncting the defendant. As to how courts can grant ex parte orders in patent cases (which allegedly involve complicated issues of technology and claim scope determination) is beyond me! No doubt, courts routinely grant them in copyright and trademark cases:, and perhaps rightly so in some cases. Howver, to extrapolate the logic to patent cases and grant similar orders here is a big stretch--particularly since most patent cases are likely to involve an invaldity challenge and complicated issues of claim scope.

Forum Shopping and Trigger Happy Delhi Judges?

What is even more surprising is that this ex parte order comes from the Bombay High Court--a court that is not particularly known for granting ex parte orders in IP cases. And this explains why a number of IP owners creatively structure their plaint in such a way as to show some causal nexus with Delhi and bring actions before Delhi courts. Some cases seem to suggest that the moment a defendant has a website, Delhi courts would have jurisdiction--since the websie can be accessed in Delhi!. In short, given that most businesses today have a web presence, almost any defendant could be dragged before the Delhi Courts! Delhi courts are to IP owners in India what the Texas courts are to IP owners in the US.

Justice Bhat however seems keen on putting an end to this limitless stretch of jurisdiction principles.

Back to the facts of our case. Upon hearing of the ex parte injunction, the defendant approaches the court and prays that the injunction order be vacated. The court vacates the ex parte order and sets a date for a detailed hearing of the interim application . After hearing both parties, the court reserves judgment. In the meantime, the Defendant moves an application to bring on record further documents and to raise a new defence.

This application was heard by the judge on 3.6.2008, who then proceeded to reject the application. It is this decision (of rejection) that is the subject matter of this post as well as the earlier post, which unfortunately, was not very clear on these aspects. I'm not entirely sure if the decision on the interim application (which was reserved by the judge) has now been issued--a search on Manupatra did not yield any results. If any of our readers have more information on this case, please let us know.

Now back to this case and its bearing on the doctrine of equivalents. During the course of arguments before the judge, the defendant alleges that its product does not infringe since it differs in material particulars from the plaintiffs product and falls outside the scope of claims. The plaintiff however alleges that the defendant ought to be restrained under the doctrine of equivalents.

This is essentially a doctrine developed by US courts to catch defendant's who make inconsequential changes to their products to avoid a "literal" infringement of the plaintiffs patent claims. In essence, this doctrine suggests that a defendants product will be held to infringe if it performs substantially the same function as the plaintiffs patented product in substantially the same way to yield substantially the same result. Tulzapurkar (counsel for defendant and one of the most sought after IP counsels in India) argued that "the Defendants device, even if held to perform the same function, to obtain the same result, did not function in substantially the same way as the Plaintiffs device". Surprisingly, Tulzapurkar did not deny the application of the "doctrine of equivalents" in this case, a doctrine that has, to the best of my knowledge, never ever been endorsed by any Indian court. A doctrine that is largely a creature of US courts and followed in some way by courts of Japan and Germany (albeit with differences).

The UK allegedly does not follow this doctrine but treats "non literal" infringement cases by simply resorting to what they creatively call "purposive construction". I'm guessing that given the nature of facts in this case and our propensity to rely more on British jurisprudence than American jurisprudence, the court is more likely to "purposively construe" the claims in question to catch the Defendants product as well. That way, Indian courts are spared the agony of explicating the scope of the doctrine of equivalents, that continues to be controversial in the US. We'll bring you a guest post from Professor Josh Sarnoff who is quite critical of this doctrine and its application.

The judge in our case does not really pass any order explicating the doctrine of equivalents and whether or not the defendant infringes. Rather, he merely deals with this issue in passing--and going by the tenor of his discussion, it would appear that he is more inclined to hold in favour of infringement. Once again, it bears reiteration that the judge was only deciding on an application, whereby the Defendants sought to bring on record further documents and to raise a new defence. And not on the main interim injunction application. On this application (preceipe) itself, the judge holds:

"The matter was argued fully. The judgment was reserved. By a preceipe dated 29.3.2008 the Defendant sought to tender a further affidavit to bring on record documents allegedly discovered after the judgment was reserved. It was stated that the documents have been downloaded from the internet. This application was heard today. I see no reason to allow the further documents to be taken on record at this stage."

ps: It is important to note that the decision deals extensively with "patents of addition", a specific kind of patent mentioned in section 54 of the Indian Patents Act. But I'll leave this separate discussion on patents of addition for another day. Also, it bears noting that the defendant did not counterclaim invalidity of the plaintiff's patent (a critical aspect since many injunction decisions turn on invalidity challenges: the most recent high profile case being Justice Bhat's order in Roche vs Cipla).