A Googly From the Madras High Court

Parties, Forum and Decision
Plaintiff/Patentee/Registered Proprietor of the Design: A.R.Safiullah
Defendants: Daniel, Indira Daniel, Rajapudeen and Mariappan
Forum: High Court of Madras
Decision: Ad interim injunction against the defendants for design infringement upheld, non-grant of ad interim injunction against defendants for patent infringement confirmed

Details of the Patent and the Technology Involved
Title of the Patent: Food-grade laminated paper, method and apparatus for manufacturing the laminated paper
Patentee: A.R.Safiullah
Patent Number: 198079 (in para 3 of the judgment, it states 189079)
Date of Filing: 29th August, 2000 (the judgment inconsistently records it as 29th October 2000 in certain portions)
Date of Grant: 20th January, 2006

From what I could glean from the judgment, it appears that the patent relates to a process for manufacturing laminated paper in the shape of a banana leaf coated with food-grade green colour. Not only does this paper resemble a natural banana leaf, it smells like one too, according to the patentee. Further, he claims that the product is devoid of defects associated with natural banana leaves; what exactly are its features which make it better than a natural banana leaf is not elaborated upon in the judgment. As to the question if this patent claims a product as well, the Court held it didn’t.

Facts of the Case
The plaintiff claims that he first got a design registered for artificial paper in the shape of a banana leaf which design was later infringed by the fourth defendant. After a successful action against the fourth defendant, the plaintiff applied for a patent on a process for manufacture of food-grade laminated paper in the shape of a banana leaf and allegedly this patent was for the product as well.

During the course of an enquiry pursuant to an action against an infringer in Kerala, it was revealed that the third and fourth defendants had colluded to imitate the plaintiff’s patented process. Accordingly, the plaintiff filed an infringement suit under the Patents Act; in addition to this, he sought to enjoin the defendants from passing off the scheme and layout of his product (in short, trade dress) and also from infringing his registered design. Applications for temporary injunctions during the pendency of the suit for all the aforementioned causes were prayed for. It must be pointed out here that the prayer for common law relief was not pleaded for in the plaint or the affidavits submitted to the Court.

The case was transferred to a Single Judge of the High Court under s.104A of the Patents Act, 1970 after a counterclaim of invalidity was filed by the defendants. The Single Judge granted an ad interim injunction against the defendants preventing them from infringing the design and denied grant of the same for the patent. Both parties filed interlocutory appeals asking for part reversal of the order.

Issues
1. Is the Court empowered to grant ad interim injunctions when it is expressly not provided for under the Patents Act, 1970?
2. If a common law relief has not been pleaded for in the plaint, can the Court grant such a relief on its own?
3. Is the order on ad interim injunctions passed by the Single Judge valid?

Discussion
I thought only Salman Rushdie was capable of authoring a literary roller coaster which usually leaves the reader in a daze and unsure of where the head or tail is; I guess this judgment from the Madras High Court could teach him a few things in weaving a periphrastic and soporific yarn, replete with errors, with not much value addition at the end of it all.

The instant case involves design and patent infringement issues besides passing off of trade dress, which could and should have been addressed with better coherence. However, the judgment keeps veering off course like a whimsical Ganges tributary, making it difficult to understand the ratio decidendi. I shall try to make it lucid for the readers.

A. Infringement of the Design and Passing off
The question which needs to be answered here first of all is if the principles for the grant of a temporary injunction have been satisfied. These general equitable principles have been dealt with in several posts on SpicyIP (most notably Mihir’s post, which is recommended reading for it questions certain fundamental aspects of grant of interim injunctions). In applications for an interlocutory injunction, the Court needs to ask if:

1. the plaintiff has shown that there is a serious question to be tried as to his entitlement to relief;
2. that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy; and
3. that the balance of convenience favours the grant of an injunction.

These are the organising principles which are to be applied having regard to the nature and circumstances of the case under which issues of justice and convenience are addressed. But this judgment doesn’t reflect the application of these principles, atleast to the issues of design infringement and passing off.

Paras 37 and 43 of the judgment are the only ones which remotely touch the issue of design infringement with no articulation on substantive issues which have a bearing on the grant of an ad interim injunction. And these two paras too somehow manage to get squeezed in the rest of the judgment which discusses patent infringement at length, albeit with scant clarity.

The plaintiff claims to have a registered design; mysteriously enough, nowhere are the details of the registration mentioned in the judgement and from the looks of it, no evidence to this effect was produced before the Court. The Court seems to have proceeded with the assumption that a validly registered design exists in the name of the plaintiff.

The supposedly registered design was granted for the design of a banana leaf incorporated in a laminated paper. The defendants pointed out that the same design has previously been incorporated using silver, stainless steel, glass and ceramic and there is nothing novel, new or original about the design. This should have rightly led the Court to discuss, in brief, the novelty and originality of the impugned design.

Here’s my tuppence worth on the originality of the design. Under the Designs Act, 2000, a registrable design must be “new” or “original”; new refers to a situation where the design is wholly new in itself and “original” refers to application to a new subject-matter (A similar provision exists in the Registered Designs Act 1949 of the UK, where the “or” has been interpreted as being used in a conjunctive sense). In the instant case, obviously the design is not new, but does it qualify to be original?

The originality contemplated in the Designs Act requires that the design originate from a person by the exercise of his intellectual activity in rendering applicable a particular shape or a pattern to a particular object (or “article” as the Act calls it). Such application should not have occurred to anyone before. It bears out while in a “new” design, it is the design which takes precedence, in an “original” design, the subject-matter of application is the centre of attention.

This probably means that for a design to be original, its application to a particular subject-matter must stand out and in a sense, it must be unexpected. This is because originality is judged with reference to the kind of article for which it is registered, having regard to the general character or use of the article. Simply put, if one were to incorporate the design of Qutub Minar to the top of a pencil, its individuality is discernible. On the other hand, if the same were to be applied to a clock tower, it’s easier to draw parallels between the two (Qutub Minar and the Clock Tower) which diminishes (or probably extinguishes) any claim of originality.

Another important aspect which did not recieve its due is sourcing a design from nature. Merely because a design has been sourced from nature, it does not fail the test of originality, but where the subject of the design is well-known, narrower is the scope of protection since grant of monopoly to such a design could be unfair to the rest of the competitors or even the general public. Accordingly, application of the design of a banana leaf and that too for an article which is meant to serve and store food isn’t exactly original given that it has been applied to articles of a similar nature and use before.So notwithstanding the factum of registration (which is in doubt), aspersions on originality do make it difficult for the plaintiff to establish a prima facie case.

The plaintiff pointed out that he has earned about Rs.3 lakhs (this again in para 46 is mentioned as 3 Crores) from the product which according to him tilts the balance of convenience in his favour. Had this been a pure patent infringement case, such an argument would have found merit; but unfortunately for the plaintiff he has raised both design and patent issues in the same suit. This should have been avoided because the commercial success of the article could be due to its utilitarian features, which happens to be the plaintiff’s argument on the issue of patent infringement and ironically enough weakens his case on design infringement. This is because functionality of a “design” robs it of registrability under the Designs Act and so it cannot play a role in deciding the balance of convenience. Luckily for the plaintiff, neither of these issues (originality of the design and balance of convenience) were addressed by the Court.

On the issue of passing off, the Court missed out on the opportunity to discuss the issue of trade dress present a registered design. It is clear that trade dress goes beyond the design and in certain cases where the design is not original enough, trade dress may come to its aid. The only issue which the Court addressed in this regard was that absent a pleading in the Plaint for a common law relief, the Court could still grant an injunction under s.151 of the CPC which confers on it power to grant injunctions if the matter is not covered by Rules 1 and 2 of Order 39 of the Code.

And so, the Court upheld the ad interim injunction granted by the Single Judge against infringement of the design.

B. Infringement of the Patent
Similar cases have been discussed before on SpicyIP, so I shall restrict myself to the averments in this case. The defendants alleged there was no invention in making a machine which can manufacture artificial laminated food grade paper in the shape of a banana leaf. The plaintiff countered that nobody had thought of such an idea before and the success of the product was proof enough of its ingenuity.

The Court briefly referred to earlier decisions on the doctrine of immaterial variants and ruled that the plaintiff’s process did not amount to an invention, at best it could be termed an innovation since laminated paper technology was well known all over the world. I wonder if it follows that the use of such a technology in an altered form to produce a specific product lacks inventive step altogether? The 1969 decision of the Bombay High Court in Farbwerke Hoechst Aktiengesellschaft vormals Meister Lucius & Bruning a Corporation etc., v. Unichem Laboratories and Ors is instructive in this regard for it lays down certain principles for judging an “invention” consisting of the production of new substances by known methods from known materials which can be supported from the point of view of subject-matter. According to the judgment:

(i) An invention consisting of the production of new substance from known materials by known methods cannot be held to possess subject-matter merely on the ground that the substances produced are new, for the substances produced may serve no useful purpose, in which case the inventor will have contributed nothing to the common stock of useful knowledge (the methods and materials employed being already known) or of useful materials (the substances produced being, ex hypothesis, useless).

(ii) Such an invention may, however be held to possess subject-matter provided the substances produced are not only new but useful, though this is subject to the qualification that the substances produced must be truly new, as opposed to being merely additional members of a known series (such as the homologues) and that their useful qualities must be the inventor's own discovery as opposed to mere verification by him of previous predictions.

(iii) Even where an invention consists of the production of further members of a known series whose useful attributes have already been described or predicted, it may possess sufficient subject-matter to support a valid patent provided the somewhat stringent conditions prescribed by Maugham J., as he then was, in I.G. Farbenindustrie A. G.'s Patents, (1930) 47 RPC 289 as essential to the validity of a selection patent are satisfied, i.e. the patent must be based on some substantial advantage to be gained from the use of the selected members of the known series or family of substances, the whole (or substantially the whole) of the selected members must possess this advantage, and this advantage must be peculiar (or substantially peculiar) to the selected group.

In the instant case, the plaintiff’s invention may fall under the second or third category which may be further supported by its commercial success. Yet the Court denied an interim injunction with reason for such a ruling being fuzzy. In para 66, the judgment reads thus:

“Therefore, applying the principles laid down in the above cited decisions, we hold that even though the banana leaf is a natural product, the invention on the part of the applicant/plaintiff to use artificial laminated food-grade shape in the form of banana leaf with its colour with artificial scented smell is prima facie innovative and that in view of the Patent granted in his favour for the said product, he is entitled for protection pending disposal of the suit.”

And in para 71, it says:

“Since applications for opposition of grant of patent are pending adjudication before the appropriate authority, and that we are of the prima facie view that the concept of artificial banana leaf prima facie appears to be innovative only, we are not inclined to interfere with the order passed by the learned single Judge”…

…thereby confirming the denial of interim injunction against infringement of the patent. The only coherent part of this judgment is where it says, on the basis of a combined interpretation of ss.48 and 108, that a patentee is entitled to interim relief pending the disposal of the suit and that presumptive validity is indeed a factor to be considered at an interlocutory stage.

Conclusion
Both parties deserve a better judgment; one hopes that Courts apply precedents instead of merely citing them for the sake of citing them.

Kolkata Patent Office Meeting: No "Technical" Software Patents

The last round of the stakeholder's meeting to discuss issues around the patent draft manual concluded on 22nd of November in Kolkata. Since I am now based in Kolkata, I had the good fortune of attending this meeting and witnessing the interactions first hand.

It was reasonably well attended, with the majority of the audience from Kolkatta based law firms. It was chaired by Mr NN Prasad, named by MIP as one of the 50 most influential IP figures this year. Ever since taking over as the joint secretary at the Department of Industrial Policy and Promotion (DIPP), the department that oversees the functioning of the Indian patent office, Mr Prasad has lent some much needed dynamism to IP policy making in India.

One of the highlights of this meeting was Mr Prasad's specific instructions to his drafting committee team to remove most of the statements in the manual that attempted to somehow induct foreign case law (particularly the word "technical") whilst interpreting section 3(k) dealing with the patenting of software.

Readers may recollect an editoriral in the Mint, where I argued that it would be a disaster for India to co-opt the rather tortuous norms evolved by UK and EU courts in their bid to grant software patents, even when their statutes clearly prohibited such grants. I had noted then that:

"... till such time as the software patent exclusion remains on our statute book, it ought to be adhered to and respected. India must avoid buying into the tortuous interpretative process that has characterized American and European jurisprudence on this count."

I brought all of this to the notice of Mr Prasad during the course of the meeting, as also the fact that the current manual appears to suggest in several places that any software that is somehow "technical" would merit patent protection. As I'd noted in the Mint editorial:

"One is hard-pressed to think of any software program that might fail this “technical contribution” test, particularly when a patent application covering such programs, is crafted by a clever patent attorney.

Indian judges ought to eschew such legal casuistry in favour of a simple straightforward reading of section 3(k), which excludes computer programs per se from patentability."

Mr Prasad clearly reiterated that the Manual was only meant to provide general guidance and that legal interpretation around contentious issues ought to be left to the courts.

I hope to do more posts to bring out other aspects of the discussions that transpired during this patent stakeholders meeting. So watch this space for more.

On the Mumbai attacks

We wish to give our heartfelt condolences to the relatives of the deceased and the injured from the Mumbai attacks that started more than 36 hours ago and are still going on.

Here at SpicyIP, we hope that at least this incident has been hideous enough for those in a position of responsibility to finally stand up and do more than merely condemn the attacks and ensure that terrorism is something that the common man no longer has to worry about.

SpicyIP Event: Training Courses by NIIPM, Nagpur

In line with their efforts to raise awareness about Intellectual Property Rights in India, the National Institute of Intellectual Property Management (NIIPM) is conducting a series of Training Courses at Nagpur in the month of December., the details of which are mentioned below. These courses run from 9.30 am - 5.30 pm and are open to any interested person

1. A 2 day Training Course on Patents, Designs, Trademarks and GI from 15-16th December.
2. A 1 day Training Course on Trademarks on 17th, December.
3. A 2 day Advanced Training Course on Patent Filing & contents of patent specification on the 18th-19th of December.

As there will be a limited number of seats, participation will be on first come first serve basis.
However, for those who cannot make attend these courses, NIIPM is conducting regular training programmes on IPR. These updates are provided on their site
For further details, you can contact Mrs. Chhaya Satpute (0712-2511380) or Mr.Pankaj P. Borkar (9224425777) - available from 9am-7pm.

Spicy IP congratulates NIIPM for their efforts at increasing awareness regarding IPRs and wishes it the very best.

Delhi HC: No 'Confusion' for Dilution under Section 29(4)

A recent decision of a Division Bench (Justices Vikramjit Sen and Bhayana) of the Delhi High Court in Ford Motor Co. v. C.R. Borman is perhaps the first decision to examine the concept of dilution in Section 29 (4) of the Trademarks Act, 1999. The decision is particularly important for its holding that ‘dilution’ under the Section does not require a finding of confusion.

Generally, a trade mark can be infringed only by a person who uses an identical or similar mark in relation to goods or services similar to the ones in respect of which the original trademark is registered. Thus, a person manufacturing ‘Surya’ shoe-polish would not be seen as infringing the mark of ‘Surya’ air-conditioners. On the other hand, a manufacturer of ‘Surya’ air-coolers may well be infringing the mark of ‘Surya’ air-conditioners. The reason for this is that the test for infringement is often seen to be the “likelihood of confusion test” – “Whether the use of the mark is likely to result in confusion amongst the consumers of the product?” Confusion is more likely to be caused when the two marks are used in similar businesses than otherwise. Thus, under common-law, actions for passing-off typically rest on misrepresentation and confusion; and dilution is “merely a genus of damage within passing off and reliant upon a determination of confusion or deception.” (Dev Gangjee, “The Polymorphism of Trademark Dilution in India”, Transnational Law and Contemporary Problems, Vol. 17 (2008), available on SSRN )

However, this is not to say that the nature of the business is always determinative of the question of whether or not there has been infringement. In particular, under Section 29 (4) of the Trademarks Act, a trademark may be infringed even when it is used in relation to goods or services which are not similar to those for which the trademark is registered, if the registered trademark has a “reputation” in India and the use of the mark takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trademark. This provision is dependent not on the typical “likelihood of confusion” test, but on the concept of “dilution”, and has been discussed earlier on this blog in a post by Dr. Gangjee.

Essentially, the question before the Delhi High Court was as to whether using the mark of ‘Ford’ in respect of footwear would infringe the mark of the Ford motor company. The Court explained the position in the following words:

Section 29 (4) is palpably an exception to the scheme of the Act and applies only to those trademarks which have earned a reputation in India. If it is prima facie clear or it is proved through evidence that the concerned trademark enjoys and commands a reputation in India, the plaintiffs do not have to prove deception on the part of the defendants or the likelihood of the customer being misled because of the use of the challenged trademark… relief would be available even if the purveyed goods are not similar and/or fall in the same category or class.

(Emphasis added)

It was then held that ‘Ford’ was a mark which had a reputation in India, and consequently, the mark would be infringed even if it was being used in relation to footwear. The judgment assumes significance because it recognizes that the “likelihood of confusion” test is not the governing test in Section 29 (4) matters. At the same time, the Court does not clearly lay down the legal test for determining when a mark can be said to have acquired a “reputation” in India.

This may be because the Court was dealing with an application for return of plaint under Order VII, Rule 11 of the CPC. It is a settled position of law that in dealing with application for return or rejection of a plaint, the description of facts contained in the plaint must be taken as correct. In the plaint, the fact that the Ford mark had a reputation in India had been specifically pleaded. It was not open for the Court to go into the question of whether this pleading was correct, and therefore, it was unnecessary for the Court to go into the question of when a mark would be said to have acquired a reputation in India. That question, however, is bound to arise in later stages, when the Court does actually go into the question of whether the pleadings in the plaint are correct. Additionally, the judgment also stresses that ultimately, “unfair advantage” must be proved during trial by the plaintiff.

It is noteworthy, however, that in discussing the law on the point, the Court referred to the Parliamentary discussions (in particular on a statement in the discussions that “The proposed Bill … seeks to extend protection for well-known trademarks…”) in order to hold that Section 29 (4) was an exception to the general scheme of the act; and that “confusion” was not required to be shown under this exception for “well-known marks”. It appears that the Court was equating “well-known marks” and “marks with reputation”. The term “well-known trademark” is used in Section 11 (2) (b) of the Act (dealing with grounds for refusal of registration of trademarks); while Section 29 (4) specifically uses the word “marks with reputation and not “well-known trademarks”. Given this, it is possible to argue that the judgment should not have equated the two concepts. At the same time, it is essential to note that the two provisions are otherwise rather similar, and there is no real reason for distinguishing between the two concepts.

In this connection, the following propositions made by Dr. Gangjee in his article referred to earlier are apposite:

Despite such elaborate prescriptions for well-known marks, the statute remains strangely reticent about marks with a “reputation,” and we must look elsewhere for guidance on this point. Assuming such a differentiation was intended, one resource that explores these distinctions is Frederick Mostert’s comparative work on the international protection of well-known marks. This species of mark was first incorporated into the Paris Convention in 1925. Various labels have been used for such high-profile marks, such as “famous marks,” “well-known marks,” and “marks with a reputation.” Mostert’s analysis suggests a descending scale, so that a mark which is “well-known” would have to surpass a higher evidentiary threshold than a mark with a “reputation.” Following this differentiation, Section 11 would require more extensive evidence of fame under the relative grounds, while infringement under Section 29 would require less, to invoke the same scope of anti-dilution protection.

Such incoherence may be avoided by resorting to the Trade Mark Rules of 2002. In particular, Rule 48(b)(vi), which specifies the content for notices on opposition to registration, appears to pragmatically equate the concepts of “well-known” and “reputation.” It is submitted that uniformly adopting the “well-known” standard is the more favorable approach, since detailed statutory guidelines are provided for this category and it requires a higher threshold of public awareness. The mark under consideration should truly deserve this broader protection.

To conclude, it can be said that the decision presents the following picture of dilution under the statutory framework:

• Section 29 (4) is an exception to the general scheme of the Act which requires the “likelihood of confusion” approach. ‘Dilution’ under the Section does not require a finding of confusion.
• In the ultimate analysis, mere similarity of marks and the fact that a mark has a reputation in India are not sufficient. There must be proof of unfair advantage in trial.
• While the Court did not lay down exhaustively the test for determining when a mark can be said to have a “reputation”, it does have the merit of equating the concepts of “marks with reputation” and “well-known marks”. The legal tests for the two are presumably the same.

(I am grateful for the comments I received on an initial draft of this note from several experts, including Dr. Dev Gangjee, Shamnad Basheer, and others.)

SpicyIP Tidbits: WIPO rules in favour of re-seller's right to use a trademark as a domain name

In a significant ruling , in regards an internet domain name dispute under the UDRP, the WIPO Arbitration Panel held that even an unauthorized re-seller had the right to use the manufacturer's trademark, not owned by the re-seller, as a domain name, provided that the re-seller in question had a legitimate business interest. In an earlier 2001 case of Okhri Americas the Panel had ruled similarly but with respect to the rights of an authorized re-seller. 

The facts of this case are as follows: The complainant ITT Corporation has been using the 'ITT' trademark since the 1920s and it has registered the trademark in several jurisdictions, worldwide. The Respondent had registered a series of domain names bearing the 'ITT' trademark in combination with the names of the different models of machines manufactured by ITT. Through these websites the Respondent was re-selling genuine ITT products which the U.S. Govt. had resold to him since it had procured exccess stock in this regard. The products sold by the Respondent bore the genuine seal of the ITT Corporation. The Respondents website also bore a disclaimer stating that there were no proffesional affiliation to the ITT Corporation. 

The main line of arguments pursued by the ITT Corporation was that the domain name was causing confusion amongst the public and also that the the Okri dicta could not apply in this case because the respondent in this case was not an authorized re-seller. The complainants implicitly based these arguments on Para 4(b) of the UDRP which states the following:

“(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location.

The Panel however approvingly cited Okhri as a precedent by extracting the following portion of the Okhri decision:

“bona fide offering of goods or services” within the meaning of paragraph 4(c)(iii) of the Policy if the following conditions are satisfied:

- the respondent must actually be offering the goods or services at issue;

- the respondent must use the site to sell only the trademarked goods (otherwise, there is the possibility that the respondent is using the trademark in a domain name to bait consumers and then switch them to other goods);

- the site itself must accurately disclose the respondent’s relationship with the trademark owner; and

- the respondent must not try to “corner the market” in all relevant domain names, thus depriving the trademark owner of reflecting its own mark in a domain name

In this case the Respondent was selling only genuine ITT products through the particular websites and had put up an accurate disclaimer in regards the professional affiliations with the trademark owner. The fact that the Respondent had placed links on those websites to his other websites, selling similar products of different companies, was disregarded by the Panel since the Complainant failed to prove that these other companies posed serious competition to itself. Since the Respondents use of the domain name met all of the above criteria the Panel held that he did indeed have a legitimate business interest in using the trademark of the manufacturer-complainant. 

All in all it is a very fair decision and hopefully such decisions will assuage the fears of those conspiracy theorists who are convinced that the internet will be taken over by the big corporations. 

TO BE OR NOT BE PATENT FREE!

Even though India fared dismally in the recent rankings on E-governance, losing 26 places in the World E-Government Readiness Index 2008 and ranking seven places below China in the Web Assessment Survey, the attempt of the Indian Government to establish E-Governance throughout the country continues undeterred. This persistence has been applauded by the United Nations. In particular, India’s attempt at establishing a comprehensive national portal http://india.gov.in/, to account for the important policies and the strategy of the government in relation to issues of E-Governance has been praised.

A visit to the national portal reflects upon the firm commitment of the government to E-Governance. The end aim being to make all government services accessible to the common man in his locality and ensuring efficiency, transparency and reliability of such services at affordable costs. In its most recent attempt, in pursuance of the National E-Governance Plan (NeGP), the Indian Government released a Draft Policy on Open Standards for E-Governance. The Draft Policy lays down certain basic standards which a format adopted by the Government, for it’s E-Governance Plan, should necessarily possess.

The importance of this policy is to be understood in light of the basic standards of E-Governance identified by Sameer Sachdeva in his White Paper “E-Governance Standards in India”. To elaborate, the White Paper authored by Sameer Sachdeva for the United Nations has identified some basic characteristics which a format adopted in India needs to necessarily possess, some of these characteristics being adequate funding, privacy, authentication, interoperability, standardisation and ability to use local language. The question which then arises, against the background of the White Paper, is whether the Draft Policy is satisfactory.

It is submitted that while the policy works well against most of the parameters identified by Sachdeva, there are some significant problems. The biggest problem relates to the possible interpretation of the guiding principle for selection of standards which states that the standard should be openly implementable, i.e., every agency should have the freedom to implement the specification without royalty and without any patent related encumbrances till the life of the standard. It is submitted that on a literal reading of the principle the requirement is two-fold, i.e., a standard should be royalty free and possibly patent free. The patent free requirement creates a significant problem as both the international standards, OOXML and ODF, are protected by patents. It is a separate issue that originators of both these standards have released not to sue covenants in relation to use of their standards. This post seeks to elaborate on the possible concerns which arise if the guiding principle was to be interpreted as being patent free.

Definition and Characteristics

In order to address this debate we must first have a working understanding of open standards. The following definition is pretty comprehensive and has been developed and adopted by the International Telecommunications Union.

As per the definition:

“Open Standards” are standards which are made available to the general public and are developed (or approved) and maintained via a collaborative and consensus driven process. “Open Standards” facilitate interoperability and data exchange among different products or services and are intended for widespread adoption.

Other elements of “Open Standards” include, but are not limited to:

• Collaborative process – voluntary and market driven development (or approval) following a transparent consensus driven process that is reasonably open to all interested parties.
• Reasonably balanced – ensures that the process is not dominated by any one interest group.
• Due process - includes consideration of and response to comments by interested parties.
• Intellectual property rights (IPRs) – IPRs essential to implement the standard to be licensed to all applicants on a worldwide, non-discriminatory basis, either (1) for free and under other reasonable terms and conditions or (2) on reasonable terms and conditions (which may include monetary compensation). Negotiations are left to the parties concerned and are performed outside the SDO.
• Quality and level of detail – sufficient to permit the development of a variety of competing implementations of interoperable products or services. Standardized interfaces are not hidden, or controlled other than by the SDO promulgating the standard.
• Publicly available – easily available for implementation and use, at a reasonable price. Publication of the text of a standard by others is permitted only with the prior approval of the SDO.
• On-going support – maintained and supported over a long period of time.

From the above, it would appear that the only requirements are that the file format be freely available, easily accessible, interoperable etc. However, none of the criteria are compromised upon if the format enjoys patent or other intellectual property protection. In practice, in order to ensure that “openness” (in terms of accessibility, availability, open life cycle) is met, it is presumed that the entity concerned would not enforce its intellectual property rights against the other entities using the standards. Thus, the Indian policy, if interpreted to mean ‘patent free’, would fly in the face of industrial practice.

Openness and ISO standardisation

The criterion of “openness” is important in that it is a step forward from the RAND standards presently advocated by ISO. To elaborate, as per ISO norms, a format can only become a standard if offered on reasonable and non-discriminatory (RAND) terms. Thus, it is possible that under RAND terms the originators or owners of the standards can make the standard available on payment of ‘reasonable’ royalty. Interestingly, both ODF and OOXML have exceeded the RAND requirement, and have actually made their formats freely available on the internet. Hence, the point is that in practice the international standards already satisfy the mandate of “openness”, in terms of being freely available, as stipulated in the Draft Policy. For instance, Microsoft has made the 6,000-page specification of OOXML freely available. (The Open Specification Promise is dealt with in the next section and the details are available here). Microsoft is the originator of OOXML and Sun Microsystems is the originator of ODF. (Refer to B. Winterford, Developers Warned over OOXML Patent Risk available here).

Hence, the question is what is the requirement to have a “patent free” approach?

Other modes of satisfying the Openness criteria?

Other steps taken by Sun Microsystems (originators of ODF) and Microsoft (originator of OOXML) to satisfy the various aspects of “openness” is to include undertaking “not to sue” covenants.

To elaborate, Microsoft released the OOXML standard under a “covenant not to sue”, which has since been updated into a document called the Open Specification Promise (OSP available here). The OSP is essentially a form of a license agreement designed to give software developers peace of mind that Microsoft won’t come after them in patent-infringement or other intellectual-property litigation upon using the specification. (Refer to B. Winterford, Developers Warned over OOXML Patent Risk available here) Also, the royalty free criterion of “openness” is met by OOXML, as the standard is freely available to be downloaded from ECMA’s website.

On the other hand we have the ODF, which as per Sam Hiser (as per his article on the O’Reilly Open Source Web Platform, available here) is the only format unencumbered by intellectual property rights (IPR) restrictions on its use in other software, as certified by the Software Freedom Law Center. Further, in order to prevent any confusion, the originator of ODF, Sun Microsystems, provides a simple covenant-not-to-sue, which covers any of potential Sun patents used in the development of ODF implementations. As per the license, Sun irrevocably covenants that, subject to certain exceptions, it will not seek to enforce any of its enforceable U.S. or foreign patents against any implementation of the Open Document Format for Office Applications (Open Document) v1.0 Specification, or any subsequent version thereof, in whose development Sun participates to the point of incurring an obligation, as defined by the rules of OASIS, to grant (or commit to grant) patent licenses or make equivalent non-assertion covenants. (Refer to Oasis-Open website and Software Freedom Law Centre website available here and here.)

Lastly, ODF has a similar policy to Microsoft’s royalty-free policy. It is pertinent to note that the royalty free approach for ODF comes from the fact that it is developed and maintained by a technical committee whose members are obligated to a royalty-free policy. Thus, the several thumb rules of “openness” seemed to have been met by ODF.

Thus, we see that both the international standards, OOXML and ODF, are “open”, “reasonably available” and “royalty free”, exceeding the RAND mandate of ISO, irrespective of any kind of intellectual property protection available to such standards.

The issue which then arises is, what does the term “patent free” mean. It is submitted that it ought to mean that the patent ought not to be enforced by any entity implementing this standard and that it ought to be available on royalty free terms. If it is taken to mean that there should be no patent at all, it would immediately exclude the ISO approved standards from the options available to the government. Thus, the government should clarify the meaning of this term immediately.

{I would like to thank Mr. Vijay Kapur, Mr. Sunil Abraham (Director – Policy, The Centre for Internet and Society) and Mr. Shamnad Basheer for their guidance and instructive comments on this post. The response to the Draft Policy on Open Standards by CIS is available here}

IPAB begins the hearings over the 'Glivec' pre-grant rejection

The special IPAB bench has commenced hearing Novartis's appeal against the decision of the Asst. Controller of Patents rejecting its patent application for the beta-crystalline form of Imatinib Mesylate, popularly known as 'Glivec', during a pre-grant patent opposition proceedings initiated by the the Cancer Patient Aid Association (CPAA) and Natco amongst other parties. For a detailed explanation of the facts as also the Section 3(d) issues, please feel free to download this paper co-authored by Shamnad and me and which was published in Script-ED. The paper can be downloaded at the SSRN database over here.

Once again we would like to express our appreciation for the factual and balanced reporting by Lawyers Collective. The proceedings can be viewed here. Mr. Anand Grover the head of LC is representing the CPAA in this particular case. Respected Supreme Court, Senior Advocate Shanti Bhushan is appearing on behalf of Novartis.

A brief recap of the milestones in the development of Glivec, as mentioned in our paper:

1. Synthesizing imatinib as its free base, a compound that was patented in the US, EU and several other countries. However, this could not be patented in India, owing to the fact that in 1993, India did not provide product patents for pharmaceutical substances.

2. Converting the free base to a particular salt form, imatinib mesylate, by adding methanesulfonic acid.

3. Crystallising the imatinib mesylate to obtain the beta crystalline form, which is allegedly the most stable polymorphic form of the salt. A patent application was filed for this and it is this application that is the subject matter of dispute.

4. Formulating the beta crystalline form of imatinib mesylate into a pharmaceutically useful drug, Glivec.

The main issues in this appeal

Anticipation of the beta-crystalline form of Imatinib Mesylate

One of the reasons for the rejection of Novartis's patent application was the Patent Office's conclusion that the 'beta-crystalline form of Imatinib Mesylate' was anticipated by the '93 US Patent 5521184 as also a patent term extensions certificate issued by the USPTO which specifically mentions Imatinib Mesylate as the product. At pre-grant stage Novartis had unsucessfully attempted to argue that this patent covered only the Imatinib free base and that the beta-crsytalline form of Imatinib Mesylate was not obvious from a reading of the '93 patent. We have noted at p.22 of our article that:

“It is interesting to note that the international search report for a PCT application claiming the beta crystalline form (filed on 16^th July, 1998 and claiming a priority date of 18^th July 1997) suggested that imatinib mesylate is anticipated from the ‘184 patent (filed in 1993 in the US):

“Methanesulfonic acid addition salts of the present compound….are disclosed in D1(D1: US Patent Application)….However, no mention is made of a particular crystalline form of the monomethanesulfonic acid addition salt of said compound. The novelty of the present claim can therefore be acknowledged.”

In other words, while imatinib mesylate may be “known”, the same cannot be said for the beta crystalline form of imatinib mesylate.

The LC reports that Mr. Shanti Bhushan has approached this issue from the angle of 'selection patents' and has only warmed up the Bench by discussing the basics as laid down in an EIPR article.

[Julian Jeffs, "Selection Patents", 1988 European Intellectual Property Review 10(10), 291–296].

“Quoting from the article, he said that a selection patent involves the selection for a useful and special property of a particular compound or class of compounds.” By broaching on the topic of 'selection patents' it appears that Novartis will attempt to argue that although the beta-crystalline form was as obvious from the '93 patent as several other salt groups, it still deserves patent protection for narrowing down on the beta-crystalline form and discovering those special properties of the beta-crystalline form which were not obvious from the prior art on the subject.

Putting it simply: it is broadly known as to what will be the various salt groups that will result from the addition of a particular acid and a person skilled in the art usually know the properties of these various salts. Such a disclosure from a prior patent is referred to as enabling disclosure. However if in case the inventor discovers a special property, in one of the salts, which was not obvious from the prior art then in that case he is entitled to patent protection for his efforts in selecting that one salt and testing it to get the unexpected results. Although such protection is at times controversial it is thought necessary in some quarters to grant such incentives failing which the inventors will lack an incentive to explore these various salts.

Mr. Bhushan has not seemed to have go into much detail into 'selection patents' at this stage and will probably do so at the later stage.

The standard of 'efficacy' demanded by Section 3(d)

Section 3(d) of the Patent Act grants patent protection to only those new forms of known substances which demonstrate an increased efficacy. The LC website reports that Mr. Bhushan argued that the beta-crystalline form of imatinib mesylate was 30% more bioavailable, thermo-stable at room temperature and less hygroscopic than other forms of imatinib and imatinib mesylate,he said that these advantageous properties made the beta-crystalline form more efficacious. He added that for cancer drugs, which are attendant with serious side-effects, such increase in bioavailability was crucial as it meant that a greater quantity of the drug could reach the target site with the same or lesser dosage. The bench however observed that the term "efficacy" has a fixed understanding in the pharmaceutical field and asked Mr. Bhushan to provide documents to support his explanation of efficacy.

At the pre-grant stage the patent office held that Novartis had failed to demonstrate increased efficacy in this case. The pre-grant opposition order of the patent office notes that:

As per the affidavit the technical expert has conducted studies to compare the relative bioavailability of the free base with that of beta crystalline form of imatinib mesylate and has said that the difference in bioavailability is only 30% and also the difference in bioavailability may be due to the difference in their solubility in water. The present patent specification does not bring out any improvement in the efficacy of the beta crystal form over the known substances – rather it states the base can be used equally in the treatment of diseases of in the preparation of pharmacological agents wherever the beta crystal is used. Even the affidavit submitted on behalf of the Applicant does not prove any significant enhancement of known efficacy.

In this regard I reproduce an extract, from p.9 of our paper, below:

“As can be seen from the above, the decision of the patent office is not very illuminating and the patent controller did not give any detailed reasons as to why he thought the beta crystalline form lacked enhanced “efficacy.” The following questions remain unanswered.

1. What did the term “efficacy” mean? Did it connote only “therapeutic efficacy”? Assuming this is the case, would “bioavailability” qualify? Would advantages such as heat stability and increase in manufacturing efficiency qualify?

2. What would constitute a “significant enhancement in efficacy” under the Explanation to section 3(d)? Would a 30% increase in bio-availability suffice?”

What should qualify as the 'known' substance against which the comparison under section 3(d) ought to be made?

“In the case at hand, would the “known” substance be the imatinib free base (in relation to which it is far easier to show increased efficacy) or the later salt, imatinib mesylate? Or the alpha crystalline form of imatinib mesylate?” In an earlier post Shamnad had discussed how the Patent Manual had attempted to pre-judge the matter by expressly stating at para 4.5.3 that: “The examiner makes comparison with regard to properties or enhancement of efficacy between the known substance and the new form of known substance. In case the new form is further converted into another new form, the comparison is made between the already existing form and another new form but not between the base compound and another new form.” At the IPAB, Novartis is arguing against this proposition by demanding that the comparison be made between the free base and the beta-crystalline form. It would be interesting to see the stand taken by the IPAB especially since the Patent Manual does not have the force of the law and is merely an indicator of patent office practices.

Can Novartis introduce new expert evidence in front of the IPAB?

The LC reports that Mr. Anand Grover has objected, strongly, to the introduction of new expert evidence at the appellate stage. Technically he does have a point since expert evidence should typically be introduced only at the trial stage where it can be adequately cross-examined by the opposing party. It remains to be seen how exactly the Bench rules on this point. So far the LC has put up proceedings for only the 17^th of November. We'll continue to bring you updates on this case: so do watch this space.

Mattel Files Appeal in Scrabulous Matter: Jaitley vs Singhvi Again

SpicyIP has just learnt that Mattel has preferred an appeal against Justice Bhat's order in the SCRABULOUS matter. For our previous posts on this case, see here and here. The appeal is being heard by a Division Bench consisting of Justice Vikramajit Sen and Justice S L Bhayana.

The matter came up in court last Thursday and was argued by Jaitley on behalf of Mattel. The Agarwalla brothers are represented by Dr. Abhishek Manu Singhvi and Mr. Sanjay Jain. Interesting that in the big ticket IP litigations before Indian courts now, Arun Jaitley appears to be the most sought after IP counsel (having appeared in Roche vs Cipla, Warner Bros vs Times Entertainment [Harry Potter vs Hari Puttar] and now in this Mattel appeal).

More interestingly perhaps, just as in Roche vs Cipla, Jaitley (a BJP spokesperson) is pitted against Singhvi (a Congress spokesperson) here as well. Depending on the fate of the elections next year, one of them is certainly bound to become a senior cabinet minister.

The Bench has posted the matter for detailed hearing on 12th January 2009. Both parties are likely to file a written note summarizing their arguments.

As reported in our last post, the trial judgement by Justice Bhat maybe summarized as:

1. The SCRABBLE board is not an original work and does not meet the standard of 'modicum of creativity'.

2. The board cannot be protected under copyright law because of the idea-expression merger

3. The board is not entitled to copyright protection because of section 15 (2) of the Copyright Act, 1957

At the hearing on Thursday, Jaitley gave the Bench an overview of the copyright findings in the order and Mattel's objections to these findings.

On procedure, Jaitley argued that the originality argument and the idea-expression argument was neither pleaded nor raised in the course of the Defendants' submissions before Justice Bhat. He argued that Mattel had no opportunity to respond to these issues.

Jaitley also took the Judges through foreign judgments relied on by Justice Bhat to illustrate the doctrine of merger. He argued that Justice Bhat had reproduced only certain portions of these foreign judgments, without noticing that the same paragraphs he relies on in his order actually recognize that copyright protection is available to game boards.

In fact, this appears a problem in some of Justice Bhat's other judgments as well. Prashant Reddy pointed me to a serious mistake committed by J Bhat in the Roche vs Cipla case, where he cites Roussel Uclaf Vs. G.D. Sarle and Company Ltd. 1977 FSR 25, where, according to him, the Court of Appeal observed that even a limited injunction ensuring that a patient already on the drug in question should be continued to be supplied, as a condition for interlocutory restraint of the defendant, could prove inadequate.

J Bhat goes on to note:

"A life-saving drug is in an exceptional position. There are often cases where a number of drugs exist alongside each other and are in general all equally efficacious for a particular ailment or disease. If the evidence shows it to be the fact that there may well be cases where it would make little, if any, difference to the public, apart from satisfying personal preference, whether a particular drug was no longer available or not, then in such a case it may well be proper to grant an injunction. At the other end of the scale, however, there is the unique life-saving drug where, in my judgment, it is at least very doubtful if the court in its discretion ever ought to grant an injunction and I cannot at present think of any circumstances where it should. There are infinite variations between these two limits.”

What Justice Bhat failed to notice was that the Roussel Ulcaf facts really involved a generic drug that was on the market and an innovator company which hadn't yet released any drug in the particular market. In other words, the generic version was the only one that patients had access to (whether or not they could afford the innovator version--since the innovator version was not present in the market at all!)

Given that Justice Bhat appears to be bringing some semblance of sanity to IP jurisprudence by swinging the pendulum away from an extreme IP rights owner tilt, these small mistakes do not bode well and could destroy his credibility in the years to come. He ought to be more cautious in future judgments.

SpicyIP Take on Scrabulous Appeal

Justice Bhat may have pegged the standard of "originality" a wee bit too high by stipulating that the Scrabble board is not "original". It would appear therefore that this part of the ruling is likely to be overruled.

As for the ruling on the idea expression dichotomy: Am not sure. Could go either way.

And lastly, on section 15(2): If one were to go by recent cases which have interpreted this section (Microfibre etc), Mattel does not appear to have a winning case on this count. I personally think that this section is redundant and does not make any sense whatsoever--but that is a matter for another post altogether!

Mr.Pot to Mr.Kettle: Hey, You are Black!

Talk about getting paid back in one’s own coin! Be it the annual human rights report card or the IP progress report (the USTR Special 301 report), the US of A finally seems to have met its match and this time it’s someone its own size, literally and figuratively- China. It looks like Pax Americana is truly at an all time low (what’s the word for it? Ah yes- rock bottom).

According to a post on the International Economic Law and Policy Blog, a Chinese official, Mr. Wang Ni Ni, who purportedly is the director general for the "China WTO/TBT National Notification & Enquiry Center” in Beijing, has sent a letter to a state senator from Vermont. Senator Virginia Lyons of Chittenden County, chairperson of the Natural Resources and Energy Committee, received the letter from the Chinese official who raised objections to Ms.Lyons’ bill that seeks to impose fees on manufacturers of electronic goods sold in Vermont, based on the weight of the item. The fee collected is meant to be spent on recycling of e-waste (an extension of the polluter pays principle?).

This scheme, according to Ms.Lyons, could prove to be effective in reducing the volume of electronic waste in Vermont landfills. However, she expressed her outrage saying that the letter flew “in the face of state sovereignty and democratic principles". She further added that:

"It's simply not OK for other governments, foreign national governments, to feel they have a right to intervene in our state legislative process in the way China has”

The Forum on Democracy and Trade, a network of US public officials from State and Federal governments has issued a statement in this regard and believes that China's allegations are too vague "without much factual or legal explanation". Specifically addressing the objections of China, the forum feels that the proposed Vermont legislation, on one hand could fall under the definition of “technical regulation” as defined by the TBT for it lays down product characteristics and on the other, since the primary objective of the bill is recycling of e-waste, it may not strictly be a “technical regulation”. However, all the parties involved are treating it as one.

It has gone on to state that Chinese manufacturers may not fall within the definition of “manufacturers” as defined by the Vermont bill, though in the natural course of things, any additional financial burden on the US distributors could indirectly affect manufacturers in dragonland.

Without taking sides (lest I be accused of taking vicarious pleasure in the perceived violation of US sovereignty), I would like to understand the facts better before passing a comment.

First things first, (as many articulate and better-informed readers would know) an agreement called the Agreement on Technical Barriers to Trade, negotiated in the Uruguay Round, was entered into by WTO members. As the title explains, this agreement deals with the kind of technical barriers to trade that may be legitimately imposed by both the Central government (Article 2) and Local governments of provinces (Article 3) of a member on the products imported within its territory, transparency provisions of such barriers, dispute resolution mechanism etc.

What constitutes a legitimate technical barrier has been listed in Article 2, though not in an exhaustive manner. According to Article 2 (which is applicable to local governments under article 3 as well), legitimate objectives include protection of human health or safety, animal or plant life or health, or the environment. To this extent, Ms.Lyons’ scheme is justified in its objective.

What about the solution proposed to achieve this objective? Does the Agreement have provisions to guide such solutions? Paras 2.3- 2.9 of Article 2 deal with standards for such technical barriers. The gist of these paras is that in cases where international standards already exist on such technical specifications, or if they are on the verge of being adopted, members shall either adopt them or atleast relevant portions of the same. This is to ensure that the regulation is implemented in the “least trade restrictive way” possible and to achieve harmonization in international standards.

This leads us to ask if there exist international standards on recycling of e-waste. ISO 9001:2001 and ISO 14001 cover electronic recycling plants; then there’s Waste Electrical Electronic Equipment (WEEE) Directive of the EU. Interestingly, para 2.7 of the TBT Agreement states thus:

“Members shall give positive consideration to accepting as equivalent technical regulations of other Members, even if these regulations differ from their own, provided they are satisfied that these regulations adequately fulfil the objectives of their own regulations.”

One is not sure if these regulations have been considered; the most important fact to be noted here is that most of these standards are customised for certain categories of electrical and electronic equipments pointing to the fact that there is no single standard possible for all classes of electronics, though the end objective is the same- cleaner and safer environment free of e-waste. This means a gross standard for all kinds of electronic goods cannot be applied. More importantly, para 2.8 of the Agreement unequivocally states thus:

“Wherever appropriate, Members shall specify technical regulations based on product requirements in terms of performance rather than design or descriptive characteristics.”

Here’s where Ms.Lyons’ scheme fails to comply with the Agreement for, as far as my knowledge goes, no reasonable, intelligible and satisfactory justification has been given for choosing “weight of the good” as the criterion for fixing the fee. This violates para 2.5 of Article 2 which states thus:

“A Member preparing, adopting or applying a technical regulation which may have a significant effect on trade of other Members shall, upon the request of another Member, explain the justification for that technical regulation in terms of the provisions of paragraphs 2 to 4.”

Evidently, Ms.Lyons hasn’t thought this through; however, in her defense she can probably say that the objections were not forwarded through the federal channel since para 3.3 of Article 3 states that members may require “contact with other Members, including the notifications, provision of information, comments and discussions referred to in paragraphs 9 and 10 of Article 2, to take place through the central government.”

The Chinese centre/center in question is officially called WTO/TBT National Notification Authority & Enquiry Point of People’s Republic of China. The Technical Barriers to Trade (TBT) Notification authority is required to be set up by every WTO member in accordance with Article 10 of the TBT Agreement, which authority is capable of answering all reasonable enquiries from other Members and interested parties in other Members; this, in addition to providing relevant documents regarding technical regulations, standards, conformity assessment procedures etc adopted within its territory. So the Chinese official should probably have contacted his US counterpart through the federal route (the USTR) instead of shooting off a letter to Ms.Lyons. The irony in this case is that Ms.Lyons believes that it was the US federal government that notified the WTO of this legislation and its purported violation of international trade law.

Notwithstanding all this, many among us feel that this is a case of selective amnesia, rather selective cognition on the part of the US. Instances of US interference both in WTO/TRIPS-related and other mainstream political issues aren’t rare (in fact, they abound; the Mulford episode for instance); so though legally correct, it would be better if one is spared that tone of sanctimony and righteous outrage (“Raudram” is the word which describes righteous outrage better) with which Ms.Lyons conveys her views. What goes around comes around.....