Punitive damages in IP cases are here to stay: Proctor and Gamble v. Joy Creators

The case stands out owing to the importance given by the plaintiffs to levying punitive damages on the defendants. This is a marked departure from the importance given to injunctions especially temporary injunctions in recent times in intellectual property litigation. Intellectual property litigation in India is mostly confined to proceedings for temporary litigation. Once a temporary injunction is obtained, plaintiffs often abandon the litigation. We had previously posted on a talk by Justice Arjan Sikri on the same.

We had also previously posted on the elimination of temporary injunctions to hasten the litigation process. On a more specific note, a fairly recent post talks about elimination of interim injunctions in relation to trademarks.

Facts:

The present suit is a suit for permanent injunction, rendition of accounts, damages and delivery up of the infringing material. The plaintiff is the manufacturer of Olay Total Effects anti ageing products. The plaintiff owns a registered trademark “OLAY TOTAL EFFECTS” in Class 3 of Schedule 4 of the Trademarks Act. The plaintiff launched its products under the above trademark in 2007.

Around the year 2008, the plaintiff saw an advertisement of an application for registration of the label containing the mark “JOY ULTRA LOOK TOTAL EFFECTS”, in respect of cosmetics by the defendants. The defendants claimed that they were using the label since April 2001. The plaintiffs filed initiated opposition proceedings against the registration and the opposition proceedings are still pending.

Plaintiffs have further alleged that the defendant is using the words “TOTAL EFFECTS” only in relation to anti aging/age defying products. The plaintiffs have thus initiated infringement and passing off actions.

The defendants claim that in their label, “JOY ULTRA LOOK TOTAL EFFECTS”, the words ULTRA LOOK had been given prominence and that the words TOTAL EFFECTS were written below the words ULTRA LOOK in much smaller font size.

The Delhi High Court through an interim order had restrained the defendants from using the trademark “TOTAL EFFECTS” or any other deceptive variation. The interim order was made absolute on 24^th January 2011.

Judgment:

The Court quoted from various judgments and noted that for the action to succeed, the plaintiff only needs to show that the trademark of the defendant “resembles its trademark in a substantial degree, on account of extensive use of the main features” of the trademark. The Court noted that a “consumer with average intelligence and imperfect recollection” has to be kept in mind. It is important to note that the consumer does not have both the marks lying side by side for comparison. This increases the chances of deception.

The Court reasoned that TOTAL EFFECTS was an essential and integral part of the plaintiff’s trademark. Therefore its use with changes like prefixes, suffixes and packaging will not be of significance once the essential part is used. Thus, the court ruled in favour of the plaintiff.

Most interestingly, in the instant case, neither the relief of injunction nor the relief of delivery up of infringing material was pressed for. The plaintiff insisted on the award of punitive and compensatory damages. The plaintiff among other cases relied on Time Incorporated v. Lokesh Srivastava (2005) and Hero Honda Motors Ltd. V. Shree Assuramji Scooters (2006) and claimed for punitive damages. The Court observed that punitive damages are founded on the philosophy of corrective justice. The Court also stressed the need to award punitive damages to defendants who are absent before court. Defendants should not be allowed to escape liability just because the actual profit generated from the infringing mark cannot be computed from the account books. The Court awarded punitive damages amounting to Rs. 1,00,000 each against the defendants.

Click here for the judgment on indiakanoon.

Pictures from here and here.

Demise of Dr Vidya Sagar, Indian IP Legend

With great sadness, we bring you news of the demise of Dr. Vidya Sagar, Senior Partner at Remfry & Sagar and doyen of Indian IP. He was 85 and passed away last afternoon.

In many ways, he was the father of Indian IP, having built up one of the foremost IP law firms in the country, after having taken it over in 1973. Most of the leading IP professionals today were trained by Dr Sagar during their stint at Remfry and Sagar. The IP community in India (as also globally) owes a lot to this visionary leader. We hope that his spirit will continue to guide us as we aim to improve on the foundation that he constructed so well.

I found this wonderful passage from a Business World article that gives us some insights into Dr Sagar's personality, particularly his "reclusive" nature, in sharp contrast to the aggressive marketing types that New Delhi routinely breeds.

"The elderly gentleman with bushy eyebrows having lunch at a corner table in the 8th floor cafeteria of law firm Remfry & Sagar could be mistaken for just another senior employee. Unless, of course, you know that he is the Vidya Sagar — the reclusive, 85-year old, legendary senior partner of India’s largest intellectual property rights (IPR) law firm. We didn’t know.

Rarely seen in public, and even more rarely photographed, Sagar had set a “no photo shoot” pre-condition for our meeting. He is averse to general media interactions too — and this is the first interview he has given in years. Face-to-face, he set another condition: he would give all the background we needed on this business. But everything would be off-the-record.

Once that was agreed upon, he sat down and spent the next two hours chatting passionately about the history of the IPR business in India. After the meeting, he escorts us for a round of the firm’s five floors. His pace is hard to match for us, who are 4-5 decades younger than him.

Vidya Sagar is the doyen of India’s IPR business, and he represents the biggest of IPR law firms here. Remfry & Sagar (set up in 1827) is almost three times as big as its nearest rivals — Delhi-based Anand & Anand (1923), Chennai’s DePenning & DePenning (1856), and Kolkata-based DP Ahuja & Co. (1971)."

Am also copying below the doleful message that was sent out by Dr Sagar's firm:

A barrister at Lincoln’s Inn and a doctor from the Free University, Berlin, Dr. Sagar earned a reputation as one of the country’s most formidable legal minds soon after admission to the Indian bar in 1952. He took over the practice of Remfry & Son in 1973 (renamed Remfry & Sagar in 1991) and with his unique talents steered the firm to become the Indian face of Intellectual Property law.

His consuming passion for developing young talent also found expression in the Sagar School, which he nurtured so lovingly. Of sharp mind and strong will, uncompromising in his insistence on the highest standards of professional integrity and conduct, he was unfazed by difficulties. He was a visionary but a rather unassuming one as he shunned the limelight.

For all those who had the privilege of knowing him personally, none can forget the sheer range of his experiences and the depth of his curiosity. He leaves behind a giant legacy and his loss is an irreparable one for family, friends and colleagues all over the world.

The (Copyright) Remainders of the Day

In the recent past, section 2(m) of the copyright amendment bill dealing with parallel imports has provoked a great deal of controversy. I reflect on this controversy in an opinion piece in the Mint and argue that the reasons offered by publishers for killing this provision are unconvincing.

Thomas Abraham's first piece titled "The Death of Books" that sparked off the debate is here. Rahul Mathan countered this doomsday prediction here. Pranesh's elaborate views (including an exchange with Thomas Abraham and Sai Krishna) are here. And Prashant Iyengar's rather elegantly prosed views are here. Nilanajan Roy reflects critically on this debate here.

My exchanges with Thomas Abraham are available on Divya Dubey's blog. She has not posted the latest exchange, and I will do so in a separate post on SpicyIP.

For those that wish a lighter poetic take on this debate, see here and here.

And lastly, here is my Mint piece for those interested:

Remainders of the day: a case for parallel imports

"Provided that a copy of a work published in any country outside India with the permission of the author of the work and imported from that country shall not be deemed to be an infringing copy.”

Book publishers are up in arms against this rather innocuous line, proposed by the Indian government as an amendment to the country’s copyright law. As part of an orchestrated media campaign, it has even been claimed that this section, if enacted, would sound the death knell of the publishing industry.

Section 2(m)’s apparent danger lies in its attempt to authorize the import and sale of legitimate copies of copyrighted works that have been purchased abroad. In other words, if I were to buy a copy of a Harry Potter book from a London bookstore, I would be well within my rights to bring it to India and sell it in the local market. Commonly referred to as the “parallel imports” or “international exhaustion” exception, provisions such as this are found in the intellectual property regimes of several countries, including Australia, New Zealand and Japan.

The global publishing industry is predicated on a business model in which copyright owners grant exclusive publishing and sales rights to different publishers in different territories. Section 2(m) challenges this territorial monopoly by facilitating free movement of books across markets.

This protectionist impulse, however, goes against the principle of international exhaustion: since an intellectual property (IP) owner has already milked the IP once by charging a monopoly price in one territory, it is unfair to let her extract further rents on the same good just because it ships to another territory. To this extent, section 2(m) entails that her rights in relation to the specific IP good stand exhausted and the good can now be freely traded.

Leading IP scholars and economists argue that intellectual property rules are essentially anticompetitive and ought to be tolerated only when there is concrete evidence that their benefits outweigh the harm caused by monopoly rents. Do we have such countervailing evidence to support a clampdown on parallel imports? Such a restriction is not only likely to harm consumer choice by leaving access to books in the discretionary hands of a small coterie of publishers, it will also hamper competition and curb the growth of newer and more creative forms of distributorship.

Further, given the advent of e-publishing and Google Books, it is only a matter of time before the firmly-etched principle of territoriality begins to yield. If section 2(m) and others spur this business model revolution, it will be so much the better.

The Indian legal regime already provides for “parallel imports” exceptions in its trademarks and patents Acts. Why then should we not have this socially progressive clause—which can enable Indian consumers to access a wider range of books from across the globe in a timely manner—for copyrights too?

The key objection stems from a fear of “remaindering”, a phenomenon triggered by excess stocks of book titles, which forces publishers in Western markets to sell copies at dirt-cheap prices. Indian publishers worry that these remaindered copies will flood the domestic market and kill their business. However, even in countries that permit parallel imports, such as Australia, there is little real evidence of such flooding. Therefore, the India’s government ought to insist on empirical proof substantiating the magnitude of this alleged remaindering threat.

Assuming that remaindering is a danger potent enough to hurt booksellers here, the solution is rather simple. Given that Western publishers have effective control over “remaindered” copies before they are released into a “parallel” market, a contractual safeguard would redress this issue. In other words, the Western publisher can be contractually bound by the copyright owner to ensure that surplus copies of books that are of interest to India are returned by bookstores and shipped to the Indian publisher. This will cut out third-party “remaindering” profiteers who wish to plunder the Indian market. Further, it will yield extra profits for publishers and authors.
Alternatively, one can simply carve out an exception to section 2(m) to prevent copies labeled as “remaindered” from getting into India. This would be a far better solution than dispensing with the section altogether.

IP rules are not meant to serve the private interests of industry alone, but the public interests of society as well. The policy presumption ought to favour free market competition. Where the law does decide to stifle such competition, there had better be good reason. Unfortunately, the reasons offered so far to restrict parallel imports are far from convincing, rendering the policymakers’ choice a quintessential no-brainer. With a parliamentary standing committee deciding to retain section 2(m) in the interest of consumers and free competition even after it had heard representations from publishers, there is every reason for the government to proceed cautiously.

More IPRS golmaal?; Minutes of 37th Annual AGM revealed

After much effort we’ve finally laid our hands on the minutes of the controversial 37th Annual General Meeting (AGM) of the Indian Performing Rights Society (IPRS). This meeting was conducted on the 5th of January, 2008 and this was the meeting which completely amended the ‘Articles of Association’ governing the internal functioning of IPRS. The new ‘articles’ basically guaranteed that IPRS was controlled by a group of 8-9 ‘Big Music Companies’. Once IPRS was under control of these ‘big music companies’ they appeared to have illegally transferred IPRS’s rights to PPL, most notably the right to collect mobile ringtones. Given that PPL did not have artists or composers as members the revenues were shared only amongst the music companies.

Our previous posts on this IPRS controversy can be accessed over here.

The ‘Minutes’, which are available over here, reveal that the Barasat Court appointed a ‘Receiver’ to conduct the AGM. The members present at this AGM are as follows:

(i) Mr. G.B.Aayeer on behalf of Saregama India Ltd.
(ii) Mr. Ishwar Advani on behalf of Tips Industries Ltd.
(iii) Mr. Rajat Kakar on behalf of Universal Music India Ltd.
(iv) Mr. Girish Jain on behalf of Venus Records and Tapes Ltd.
(v) Mr. Sridhar Subramanian on behalf of Sony Music Entertainment Ltd.
(vi) Mr. T. Suresh on behalf of Virgin India Ltd
(vii) Mr. Mahendra Shah on behalf of Krunal Music Ltd.
(viii) Mr. Hasan Kamal – Chairman
(ix) Mr. O.P.Sonik
(x) Mr. Rakesh Nigam

It must be noted that of the 7 music companies who were present in this meeting which changed the face of IPRS, 4 were suing IPRS as minority members who were suffering due to mis-management & oppression. Tips, Universal & Sony had petitions pending before the Company Law Board. Saregama had filed a suit in the Barasat Court. Although the suit was termed as a ‘Title Suit’ I’m now informed that it was most probably a ‘derivative suit’ under Common Law. My earlier conclusion that the Barasat Court did not have subject matter jurisdiction may not be entirely true. However is still very doubtful as to whether the Barasat Court had appropriate territorial or pecuniary jurisdiction to entertain the matter.

Questions on the legality of the meeting:

(i) Lack of Quorum: As per Article 18 of the AoA, available over here, no business shall be transacted at a General Meeting unless and until there is a quorum of 1/3rd of all the IPRS members. IPRS has at-least 2000+ members. Even presuming that it had only 1500 members in 2008, it would have still required at-least 500 members to be present in order to even hold the AGM, forget passing resolution. Instead there were only 7 members and all of them Music Companies who until that day had been suing IPRS for mismanagement and oppression. Was there a special exception for the quorum requirement that was used by IPRS for conducting that particular AGM? I have no clue.

(ii) The reference to ‘Owner Members’: The ‘minutes’ refer to the music companies as ‘owner members’. However the AoA under which the AGM was conducted, never had a category called ‘owner members’. Instead it had four categories of members (i) Full Members (ii) Associate Members (iii) Honorary Members & (iv) Provisional Members. There is simply no category of ‘owner member’. Moreover until the new AoA, membership of IPRS was never linked to only ‘ownership’. ‘Ownership’ was only one of the criteria. Even a composer or artist could become a member despite not owning any music. This may not have been in compliance with the Copyright Act which required Copyright Societies to be controlled by owners but then again this means that the Copyright Office goofed up in even recognizing IPRS as a Copyright Society. In any case I have no explanation as to why the ‘minutes’ refer to this category of ‘owner members’.

As usual more questions than answers but me thinks there is some thing fishy.

Also available now on our website are the IPRS reports for 2006-07 & 2007-08.

MANJAL REMOVED FROM TRADEMARK REGISTRY - II

In my earlier post, I had discussed the Order dated 21st January, 2011 which removed “Manjal” from the trade marks registry. “Manjal” is the Malayalam / Tamil translation for turmeric / haldi (in Hindi). The mark was registered by M/s Oriental Extractions Pvt. Ltd (hereinafter Oriental Extractions) in Class – 3 for “ayurvedic bath soap”. The rectification application was filed by Mr. S. Sivasubramanyan, Proprietor of M/s Divine Pharmaceuticals, Kollam before Deputy Registrar of Trade Marks. The Order noted that the mark was inherently incapable of distinguishing the goods within the provisions of Section 9(1) (a) of Trademarks Act. It also satisfied S. 9(1) (b) which precluded trademarks designating kind / quality / quantity / intended purpose / values / geographical origin from being registered.

On 10th February, 2011, the Deputy Registrar of Trademarks Mrs. N.D. Kasturi, in response to the interlocutory petition filed by Oriental Extractions and another rectification application filed by Mathewsons Exports and Imports (P) Ltd (hereinafter Mathewsons), issued another Order on “Manjal” available here. It was held that the rectification application filed by Mathewsons had abated, citing the removal of mark by the earlier Order. Prima facie, the instant Order appears to be logically congruent with the earlier Order. But a deeper scrutiny into this instant Order raises some grave concerns. Interestingly, as in the earlier rectification application, the counsel for the registered proprietor was absent. [Note - Since the substantive issue in the instant Order i.e validity of mark “Manjal” had already been discussed earlier, I shall not be touching upon it.]

Firstly, the cause title of the Order is wrong!! As can be discerned from the Order, the rectification application was filed by Mathewsons against Oriental Extractions (P) Ltd. The cause title, on the other hand, states that the rectification application was filed by Divine Pharmaceuticals (P) Ltd against Oriental Extractions (P) Ltd.

Secondly, the instant Order reveals that Marico had been assigned the mark “Manjal” by Oriental Extractions Pvt. Ltd way back in 2003. This pertinent fact was not mentioned in the earlier Order. If this fact was mentioned, it would have been difficult to blunt the argument of Oriental Extractions on S. 125. [For discussion on jurisdiction, see here]

As per S. 125 (1), where in a suit for infringement of a registered trade mark the validity of the registration of the plaintiff's trade mark is questioned by the defendant, the issue pertaining to the validity of the registration of the trade mark concerned shall be determined only on an application for the rectification of the register and notwithstanding Ss. 47 or 57, such application shall be made to the Appellate Board and not to the Registrar. In the rectification application filed by Divine Pharmaceuticals, the registered proprietor, referring to the above provision and the pending suit between Marico Ltd and Divine Pharmaceuticals, (O.S No. 550 / 2008) questioned the jurisdiction of Trade Marks registry. The applicant successfully blunted this argument by citing the difference in parties in the pending suit (Marico Ltd and Divine Pharmaceuticals) and the rectification application (Oriental Extractions and Divine Pharmaceuticals). In the light of instant revelation, it becomes clear that the parties were in fact the same and not different. In other words, the Registrar could not have exercised jurisdiction in entertaining the application of Divine Pharmaceuticals by virtue of S. 125.

Further, in the above mentioned pending suit (O.S No. 550 / 2008 ), the Delhi High Court on 7th December, 2010, adjourned the matter to 4th May, 2011 citing the intention of parties for amicable settlement. In this context, it is interesting to note the timing of the earlier Order - 21st January, 2011. I must, however, note that I could not figure out the date of hearing of this application.

Thirdly, the instant Order has to be analysed in the light of pending suit  filed by Marico Limited against Hind Cosmetics in the Delhi HC (O.S No. 380 / 2008). Since none appeared for the defendant, HC initiated ex-parte proceedings by Order dated 14th January, 2009.

In the instant interlocutory petition before the Registrar, Marico contended that Hind Cosmetics was the licensee of Mathewsons. Therefore, by virtue of S. 125 of Trademarks Act, the Registrar could not exercise jurisdiction (p.2 of the Order). On the other hand, Mathewsons argued that the assignment in favour of Marico did not comply with the provisions of Trademarks Act and therefore, Marico Ltd could not be considered as the registered proprietor. It was also argued that the suit was filed by Marico against Hind Cosmetics and not Mathewsons. 

Mrs. Kasturi did not examine the relationship between Mathewsons and  Hind cosmetics. She examined the deed of assignment and held that the deed did not recognise the impugned mark “manjal” as distinctive under section 9 of the Act and therefore, change in proprietorship could not be allowed. I am unable to concur with this reasoning. 

Paragraph 5.2 of the deed of assignment states as follows: “The Assignor represents that the IPR sought to be assigned to the Assignee under this agreement are free from any infirmities in their respective registrations wherever already registered or in the applications or the process for registration, wherever the registration is yet to be received, on any ground, including but not limited to an argument that the terms “Manjal”, “Pasupu”, “Arishina”, “Haldi”, “Holudh” and “Haldar” are descriptive of the products in which the assignor currently carries on any business or that they have a generic meaning associated with them in one or more Indian languages”. As evident from this paragraph, the assignor represented that the IPRs which were sought to be assigned were free from "infirmities". This representation specifically covered “Manjal” and some other marks (as the deed says "including but not limited to"). In other words, this is an absolute warranty. This could not be interpreted to mean that the mark was not distinctive under section 9 of the Act and therefore, change in proprietorship could not be allowed. This reasoning lacks logic and coherence which are essential elements of legal reasoning.

If Hind Cosmetics was indeed the licensee of Mathewsons, then the parties in the pending suit and the rectification application might have been the same – of course, depending on the nature of licence. If so, the Registrar of Trademarks could not have exercised jurisdiction by virtue of S. 125. Therefore, the relationship between the two should have been analysed first. Unfortunately, Mrs. Kasturi looked into the validity of assignment deed without examining the above mentioned aspect. She decided both the interlocutory petition filed by the registered proprietor questioning the jurisdiction and the rectification application together by the same Order.

Fourthly, the language, paragraph sequence and arguments in the written submission of the applicant for rectification, as mentioned by the instant Order (pp. 3 & 4), is same as that of the earlier Order. This may be a sheer coincidence. Or else, the written submission may have been simply copied from the earlier Order!

The Broadcast of World Cup Cricket matches and the SBS Act, 2007 - Did the Delhi HC get it right?

The BS has carried a story on how the Delhi High Court has granted ‘John Doe’ interim injunction orders restraining 144 defendants from infringing on ESPN’s broadcasting rights in the ICC Cricket World Cup, 2011 since ESPN has bought the broadcast rights for the same. The Delhi High Court has also reportedly extended the injunction to un-named cable-operators who may be discovered during the course of the World Cup. The Delhi High Court has passed such order earlier in the case of the IPL matches. We’ve blogged about it over here. The ICC World Cup, 2007 however is on a different footing because of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti) Act, 2007.

(i) The history of the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti) Act, 2007 (SBS Act, 2007): Some of our readers may remember the incessant squabbles, back in 2004, between the Sports Broadcasters and the government owned Prasar Bharti which runs the free-to-air Doordarshan (DD) channel. Although the quality of content leaves much to be desired, DD is known to reach every nook and cranny of the country without the requirement for a cable network. Given the importance of cricket in ‘cricket-crazy’ India, DD used to strike deals with sports broadcasting companies for sharing the signals for particular cricket matches. Several times negotiations have broken down and the dispute usually ends up in Court. This happened in 1995 during the Hero Cup and more recently in 2004 when Prasar Bharti and the private sports broadcasters took their slugfest to the Supreme Court. At that time the Supreme Court played a negotiator and forced the private broadcaster – Ten Sports – to enter into a revenue sharing agreement with DD. The Supreme Court’s basis for this compulsory licensing was the fact that ‘cricketing events’ in India were of national importance and that it was in public interest to mandate the compulsory licensing of the signals. (More on the squabbles over here & here) Eventually everybody got tired of the yearly squabbles and the Information & Broadcasting Ministry introduced into Parliament the Sports Broadcasting Signals Act, 2007 which was passed without too much of a fuss. The legislation mandates a revenue sharing of 75:25 for television coverage and 50:50 for radio coverage.

(ii) The notification of 3rd October, 2007: Once the SBS Act was passed, it was left to the Central Government to notify sporting events of national importance, the broadcast signals of which will necessarily have to be shared with DD. On 3rd October, 2007 the Ministry passed a Notification (available over here) declaring the following categories as sporting events of national importance:

(1) All official One-Day and Twenty-20 matches played by the Indian Men’s Cricket Team and Such Test matches as are considered to be of high public interest by the Central Government.
(2) Semi-finals and finals of Men’s World Cup and International Cricket Council Championship Trophy.

This notification basically ensures that ESPN has to mandatorily share with DD the broadcast signals for all cricket matches being played by India & also the semi-final and final for the World Cup regardless of whether or not India makes it (Ahem!). Please note that IPL matches are not covered under this notification.

(iii) Does it make sense for the Delhi High Court to grant an injunction in light of the SBS Act, 2007?

Whether or not you agree with the SBS Act, 2007 the fact of the matter remains that it is the law and even as we speak ESPN et. al. are sharing the signals for India matches with DD. Since DD is in any case free to air, none of the cable operators or hotels require a special licence to broadcast the India matches. They can just pick up the DD signal. Of course if they want to broadcast a cricket match between Netherlands and Bangladesh, they will need a licence to broadcast the ESPN signal. I have not had access to the Order passed by the Delhi High Court in this case but I’m very curious as to whether ESPN et. al. have disclosed the SBS Act to the Court. It is unlikely that the Delhi High Court would have passed such a wide injunction order against 144 defendants plus unnamed defendants if it had been appraised of this Act. Given the fact that this Order applies all over India, it could be implemented in Kanyakumari and the poor cable operator will have to pay up or trudge all the way to Delhi in order to contest the case. This is the danger of ex-parte remedies.

EU to be sued over maintaining secrecy in trade talks with India

As Reuters reports here, EU is being sued over  secrecy as it has withheld documents on free trade talks with India. The WSJ blog reported that Corporate Europe Observatory, a left-wing advocacy group backed by Quaker organizations, said it was suing the European Commission for refusing to release details of its negotiating position in ongoing free trade talks with India. The letter published by CEOb is available on the WSJ blog link. I was unable to link it here.

Apparently, the case concerns 17 documents, including meeting reports, emails and a letter, which the Commission sent to industry lobby groups including Business Europe, the EU’s main industry lobby and the Confederation of Indian Industry (CII). Despite having repeatedly been approached, the EC has allegedly refused to release the documents in question fully to CEOb. The Commission claims that the censored information is sensitive, as it concerns the EU’s priorities and strategies in the ongoing trade negotiations with India. It argues disclosing this information would undermine the EU’s international relations.

 EU-India trade negotiations has attracted significant protests from EU, India and Kenya. There is a fear that if the talk succeeds, it will limit India's production of cheap generic HIV and anti-malarial drugs.

According to Reuters,the Commission has cited the protection of international relations in its refusal to reveal details of meetings between EU officials and representatives of European pharmaceuticals companies including Sanofi-Aventis and GlaxoSmithKline.

We will update you on this as soon as we hear something more!

Of missed deadlines and how (not) to kill a patent

[Warning: Long post]

Two High Courts recently handled interesting questions of deadlines in patent prosecution: the Delhi and Madras High Courts dealt with the consequences of errors in recording important filing-related dates. Both cases involve one of India’s best known IP firms, Anand and Anand, who took their grievances to court after the Intellectual Property Office (IPO) refused to entertain their requests to condone the delays. Both decisions offer valuable lessons in how not to kill a patent application because of, as a school-teacher of mine used to put it, ‘silly mistakes’. (Image from here.)

[NB: this post may contain prosecution jargon which may seem abstruse to some readers. My apologies for being unable to find normal English equivalents for some terms – but it wasn't for lack of trying!]

Decision 1: Madras HC: Nokia Corporation vs Deputy Controller Of Patents and Designs (read here)

Nokia’s application was filed under the National Phase (PCT) in India on 18 August 2009, claiming priority from a US application filed on 11 January 2007. For those not in the know, an applicant must enter the National Phase in India under the Patent Cooperation Treaty (PCT) within 31 months of the priority date (Rule 20, Indian Patent Rules). That date lapsed on 11 August 2009. The IPO, thus, returned the application as the time-limit for entering India had passed.

In response, Nokia filed the application once again, along with a request under Rules 137 and 138 of the Indian Patent Rules, requesting the IPO to condone the delay. (Rules 137/138 grant discretionary powers to the Controller of Patents to condone delay in some circumstances by up to one month after the prescribed time limit has lapsed.) This request was not entertained, and the matter reached the courts.

The IPO argued that requests under rules 137/138 ought to be made within the prescribed time limit. Since the request was not made within the 31-month period, it could not be taken on record. Justice Vinod K Sharma of the Madras High Court disagreed, quashing the IPO’s earlier order. The court returned the application to the IPO, observing “it was not correct on the part of the Deputy Controller to have rejected the application, by treating it to be not maintainable”. It also held that:

An “application for extension is to be filed within one month after expiry of prescribed time under Rule 20. In case, an application is moved for extension of time … it is required to be decided on merit by taking into consideration facts and circumstances of each case.”

Decision 2: Delhi HC: Nippon Steel Corporation vs Union Of India (read here)

The facts here were different from Madras, as was the decision, with the court ruling that a delay in filing a Request for Examination (RFE) could not be condoned under any circumstance.

For those unfamiliar with patent prosecution, an applicant needs to make a request to the patent office to examine a patent application within 48 months of the priority date of the application. Otherwise, the application will be deemed to have been withdrawn (section 11-B(4), Indian Patents Act).

In this case, due an error while entering the dates in the database, the date of filing the RFE (Feb 2010) was missed by over 8 months. When the mistake came to light, the attorneys attempted to remedy the situation, by seeking to amend the application and change its priority date.

The parent application was filed in Japan in 9 February 2006, from when the Feb 2010 deadline for the RFE was calculated. The corresponding PCT application was filed on 9 February 2007, a year later. Logically, if the IPO were to accept the request to drop the Feb 2006 priority date and change it to Feb 2007, correspondingly, the deadline for filing the RFE would extend by a year from when it was originally due.

As it turned out, the IPO refused to entertain the request for amendment, pointing out that the request had become time-barred, since the application had ceased to exist (on account of S. 11-B(4)). Therefore, according to the IPO, there was no question of amending a non-existing application.

When the matter reached court, the patent applicant argued, among other things, that while there may be a time limit for submitting an RFE, a request for amending the priority date could be taken on record at any time. Justice S Muralidhar of the Delhi High Court, in a decision crafted with immense clarity, held that a request for amendment could be made “only in relation to an application that exists in law”. The applicant’s writ petition was dismissed without merit, and the IPO’s decision to reject the request for amendment was upheld.

----

The patent attorneys succeeded before one court, but could not convince the other, of reasons for the delay in meeting deadlines. Of course, circumstances were different in the two cases, but both Delhi and Madras HC are saying the same thing, and stating the obvious, really – it’s best if you stick to prescribed time limits, because it’s not going to be an easy job convincing the authorities otherwise!

Controversial MoU between IPRS-PPL-IPI, dated 12 November, 1993 now available on our website

Pursuant to our last few posts on the IPRS dispute, a source has passed on to us a copy of the controversial Memorandum of Understanding (MoU) between the Indian Performing Rights Society, the Indian Phonographic Industry & the Phonographic Performance Pvt. Ltd. We thank the source for this disclosure. We've briefly discused the ramifications of the MoU in this post over here. This is the MoU referred to by the Registrar of Copyrights during his attempted inquiry into the alleged mis-management at IPRS. The letters detailing the inquiry are available over here. The royalties of the sixteen lyricists and composers was witheld by IPRS on the grounds that they had not signed the MoU. We are in the process of analyzing the legality of the MoU. Keeping with our misson of transparency the PDF version of the MoU is available over here. It is simply not readable as a result of which the text format of the same is reproduced below:

The Indian Performance Rights Society Limited
Registered Office: 717, Dalamal Towers, Nariman Point, Bombay – 400 021
Cable PERFORIGHT Telephone (022) 2832175

MEMORANDUM OF UNDERSTANDING

In this memorandum of Understanding,
IPRS-means The Indian Performing Right Society Ltd
IPI means The Indian Phonographic Industry.
PPL-means The Phonographic Performance Pvt Ltd.

IPRS confirms that Record Companies are owners of musical works as publishers and the parties hereto viz IPRS and IPI confirm the following understanding:-

1. IPRS understands that IPI members who are all record producers own the copyrights, that is, copyright in their sound recordings and the copyright which includes performing and mechanical rights in the musical and literary works used therein in the record producers’ capacity as the ‘music publishers’.

2. IPRS had in the past admitted 184 film producers as ‘music publishers’. IPRS would de-recognise these film producers and terminate their membership.

3. After de-recognition of film producers as members as specified in Clause 2 above, IPRS will admit IPI members as the members of IPRS in the category of ‘music publishers’, after receiving IPI members assignment in IPRS’s favour provided that IPRS will be entitled to administer only the performing rights (and not the mechanical rights) of IPI members’ musical/literary works in India and through its associates/agents outside India. IPRS however shall be solely liable for proper accounting of the revenue to IPI members directly.

IPRS shall distribute the revenue earned by it (less administrative expense attributable to such revenue earnings) in the following proportion:

30% for IPRS’s composer-members
20% for IPRS’s author-members
50% to IPRS’s music-publisher members.

4. IPI agrees to the appropriation of 50% o the revenue for composers/authors as stipulated above in the best interests of giving encouragement to the composers/authors.

5. IPRS’s Governing Council at present comprises of 'composer-members', author-members and 2 publisher-members. To begin with, IPI will nominate two publisher-members on IPRS’s Governing Council. This strength of 2 publisher members will be increased by IPRS to 6 publisher-members at the earliest but not later than 6 months from the implementation of this MOU. In any event, the publisher-members of the Governing Council shall have minimum 50% of the voting strength in the Governing Council.

6. Upto 31.12.03 in cases where record producers have assignments of musical/literary works in record producers’ favour from composer/authors in non-film recording, then in those cases IPRS shall recognize the record producers not only as music publishers but also as composers/authors. Thereafter individual contracts in between record producers and composer/authors would govern the possession of the respective rights provided it is specifically mentioned in the concerned contract that the composers/authors is not a member of IPRS. In case of a dispute, the record producer’s contract shall prevail.

7. The record producers copyright in their sound recording shall at all times be recognized by IPRS. This arrangement does not create nor is it intended to create any right or interest or authority whatsoever in favour of IPRS in respect of the copyright in sound recordings owned by the IPI members, the broadcasting and public performance rights therein assigned by them in favour of PPL for collective administration thereof, and the trademarks and the labels owned and/or used by the IPI members in respect of their sound recordings.

8. Although this MOU is intended to start a long-standing relationship between IPI, IPI members and IPRS as laid down herein, it may be clarified by way of abundant caution that IPI members will at all times be at liberty to terminate the assignments as per the Articles of Association of IPRS.

9. In case PPL wishes to use IPRS’s set-up for collection of PPL-license fees, IPRS will, if so authorized by PPL, collect PPL-license fees and remit the amounts to PPL after deducting the administrative charges as may be mutually agreed upon.

10. This MOU will come into force only if IPRS governing Council and IPI’s Executive Committee approves it by resolutions.

FOR THE INDIAN PERFORMING RIGHTS SOCIETY LIMITED

CHAIRMAN GENERAL MANAGER

FOR THE INDIAN PHONOGRAPHIC INDUSTRY

PRESIDENT SECRETARY

Summarizing the IPRS dispute - Information Filter

I received a comment earlier this morning on the IPRS posts which basically informed me of ‘an information overload – filter failure’. In hindsight its does appear that the 6 posts on the IPRS controversy are slightly complicated. I have therefore briefly summarized the contents of the previous posts in this one post:
(Image from here)

The first post (available over here) explains how IPRS stopped collecting royalties for mobile ringtone royalties and how PPL instead started collecting royalties on behalf of IPRS. Although PPL was collecting royalties on behalf of IPRS it does not seem to have shared the royalties with IPRS and IPRS does not seem to have raised this issue of non-payment of royalties with PPL. The reason for this is that the very same directors control both IPRS and PPL. IPRS however has a much wider membership with several thousand lyricists and composers. Therefore although the music companies are enjoying the Rs. 360 crores that they collected ringtone royalties, the lyricists and composers are yet to see a single penny.

The second post (available over here) explains the events leading up to situation wherein the music companies managed to take control of IPRS, which until now had a healthy representation of lyricists and composers. Through a series of ‘special resolutions’, the most controversial one being the one on 5th January, 2008, the bye-laws governing IPRS were amended in such a manner to ensure that firstly voting rights were now linked to the number of works owned & secondly to ensure that lyricists and composers were always in a minority on the Board of Directors.

The third post (available over here) explains the events leading up to the controversial ‘special resolution on 5th January, 2008 which had amended the ‘bye-laws’ to ensure that music companies had complete and total control of IPRS. The ‘events’ are basically a list of strategically planned law-suits before a Court which did not have the jurisdiction to hear the matter. There was also mention of an application to the Registrar of Companies seeking for the postponement of the ‘Annual General Meeting’ in 2007. The application was based on alleged order of the High Court which finds no mention in the Director’s report. Eventually the AGM which amended the Articles of Association was passed 5 days after the deadline granted by the Registrar of Companies.

The fourth post (available over here) explains how the IPRS management abused the judicial process to deliberately frustrate an inquiry by the Registrar of Copyrights in November, 2009. The Registrar of Copyrights was examining the issues raised above, when IPRS and its members connived to get a court order which they later misrepresented as an injunction against the Registrar of Copyrights.

The fifth post (available over here) explains the various legal options available to the Registrar of Copyrights.

The sixth post (available over here) explains how the Registrar of Copyrights may have goofed up in even recognizing IPRS as a Copyright Society back in 1996 since its ‘bye-laws’ were in complete violation of the Copyright Act, 1957.

SpicyIP Announcements: Extension of deadline for IJIPL

The deadline for submissions for Volume 4 of the journal 'Indian Journal of Intellectual Property Law' has been extended to February 28th, 2011.

The Submissions must be made in accordance with the Submission Guidelines and Editorial Policy found in the ‘submissions’ section of their website: www.ijipl.com

Submissions are to be mailed to submissions@ijipl.com

For any queries please mail: queries@ijipl.com

SpicyIP Tidbit: Liquid Sunshine from Scotland gets GI in India

Scotch Whiskey of Scotland has been accorded geographical indication status by the Geographical Indication registry. This is the fourth product from across the border to be accorded GI status in India. The Scotch Whiskey was accompanied by local products; Byaadgi chilli from Karnataka, Khandua saree and fabrics from Orissa, Phulkari from Punjab, Haryana and Rajasthan, Payyannur Pavithra Ring from Kerala among others.

The other GIs from abroad that have been registered in India are Pervian Pisco from Peru, Champagne from France, Napa Valley wine from USA and Scotch Whiskey of UK in that order. Foreign products began to be registered as recently as 2009. We are likely to see more GI registrations of products from Europe in the near future. A detailed note on the importance given to GIs by Europe can be found here. The increase in registrations of foreign products can be attributed to the growing marketing opportunities in India, particularly for luxury goods. With this also comes the need to secure the jobs of workers in the industry.

The most recent local product to obtain the GI tag was the Byaadgi Chilli of Karnataka. The Byaadgi chilli is not only an essential part of kitchens across Karnataka but is also significant in the Oleoresin industry. This is used in the food, cosmetics, confectionary and beverage industry. The other local chillies to be registered are Naga Mircha of Nagaland and Guntur Chilli form Andhra Pradesh. The southern states of Karnataka (29), Kerala (20), Tamil Nadu (18) and Andhra Pradesh (16) dominate the GI registry.

Click here for more posts on GI registration in India.

The Scotch whiskey pic from here.

SpicyIP Tidbits : Coke formula leaked!

One of the biggest stories of the day has been the leakage of one of the world's fiercely guided trade secrets- Merchandise X, the formula of coca-cola. While we do not have much details on this as of now, this is definitely going to be one of stories we would love to track!

As reported, an American public radio show claims to have found the recipe kept in an Atlanta

steel vault. It is said, only two employees of the company at a time know how to mix. So much to protect the secrecy that these two never even fly together!!

The broadcasting organization, thisamericanlife claimed that it found the list of ingredients in a 40-year-old newspaper. Apparently the newspaper, named Atlanta Journal-Constitution, had published the photo of a book containing a handwritten replica of the original recipe on February 8, 1979. Interested readers may access it here.

 Coca-cola ltd. is yet to respond to this but we will surely keep tracking the story for you. Till then, enjoy your coke :)

Vakilsearch: The All-new Easy Online Access to Legal Services

(Image taken from here)

For those despairing to find easily accessible pocket-friendly online legal services, Spicy IP bears forth some long-overdue good news, in the form of Vakilsearch. A brainchild of Hrishikesh Datar, alumnus of the National Law School of India University (NLSIU), Bangalore, it takes a good shot to fill a lacuna that has been there for quite some time.

Among others of its unique features, it enables a person to find competent and reliable professional legal help in 10 cities across India, completely free of charge. Given the prohibition imposed on Indian lawyers to advertise, it has always been a problem for the general public to know the right person to go to when facing a legal conundrum. Now all one has to do is to fill in an online form at Vakilsearch and he will be subsequently connected to a reliable professional lawyer in his locality.

Business professionals, particularly those operating on a small and/or medium scale, will have the enviable option of their queries answered for a paltry sum of Rs. 399 by a team of experts on diverse matters of law, including Tax, Intellectual Property, Labour and Company laws. NRI-s too have a whole group of experts waiting to help them out with their specific legal queries. Other features include providing aid and guidance for preparation and drafting of legal documents such as rental agreements, wills and testimonies and legal notices for dishonor of cheques, at attractive prices starting from Rs. 299.

The website of Vakilsearch now offers a free registration for lawyers, with the provision of an optional feature termed Lawyers' Case Management System, which is intuitive and very effective, and costs just Rs. 2499 per year. As the promoters of Vakilsearch describes the case management system, "It is now cheaper to organize your practice than to get that daily dose of coffee to cope with the chaos." Certainly it looks like Vakilsearch will help removing several creases of worry from the foreheads of lawyers as well as their potential clients in times to come.

The Sound of Silencing (a blog)

If there is one thing that we cherish on this blog, it is the ability to speak our hearts and minds freely, within the reasonable bounds of propriety and the law. Naturally, we are wont to take umbrage at any attempt to silence us, particularly by those that have a vested interest in the outcome of a case.

Given that a prime objective of this blog is to foster transparency in IP institutions, we often have to hunt for and unearth information that is otherwise opaque..... information that no other IP stakeholder will publish or disseminate, for fear of consequences.

Prashant's posts on IPRS were some of the finest in legal investigative journalism that I have seen. Night after night, as he burnt the midnight oil, a burning to which I was privy, I couldn't help but wonder at the sheer passion and dedication that went into the task ...a task involving meticulously painful reviews of a complex array of information (that he procured through craftily worded RTI's) to construct a brilliant expose...highlighting the underbelly of collecting societies and their sham deals and transactions aimed at screwing artists (pardon my French). What is most surprising about this entire ordeal is the fact that these premeditated efforts went unseen and unchecked for so long...shining India indeed!

Given the high stakes involved in IP matters, it's not surprising that we're frequently at the receiving end of dark forces that harbour a rabid distaste for sunlight, which as the legend goes, is one of the best known disinfectants.

Attempts to silence us have taken various forms in the past. Some have tried to speak to our feeders (those that feed us with information), warning them of dire consequences. Some have threatened defamation law suits. Some have even gone to the extent of threatening our families.

The latest silencing avatar seeks to do so rather speciously through his own conjured up version of the law of sub-judice.

Satish Murti, who appears to be a Cochin based lawyer wrote to us in the wake of the Manjal controversy, alleging that we violated cardinal principles of sub-judice by commenting on the order passed by the Deputy Registrar, wherein the said Registrar had revoked the "Manjal" mark. He noted in an email to Mathews George, the author of the post, as below:

"As counsels appearing for a party who is deeply aggrieved by the grant of registration of "Manjal" before various courts we would still never venture to report on matters that are pending consideration before courts of law. We know for sure the need to honour and safeguard the majesty of court proceedings. This is normally achieved by refraining onself from reporting any further on this matter until the litigation comes to an end..."

Prashant Reddy replied to Murti as below:

"Dear Mr. Murti,

If you have any specific comments on the content of the post or the facts of the case, you are more than free to make a comment on our blog - we welcome it. However please do not try to lecture us on the merits of writing about a case which is pending appeal. There is no law and no judgment barring anybody from speaking on the merits of a case which is under appeal. In fact you may have heard of the fundamental right to free speech enshrined in Article 19 of the Constitution and we merely choose to exercise the same.

The majesty of the Court is in no way reduced just because we reported on a case that was lost by your clients. Besides we need independent confirmation that you indeed represent who you claim to represent because the order records that nobody appeared for the trademark proprietor.

We hope you can engage with us in a constructive debate on the blog because we will definitely sharpen our focus on this case after your attempt to silence us."

Murti in turn replied to Prashant in an obviously upset tone, clarifying that he was not counsel for Marico, but was counsel for one of the parties that was actually challenging the validity of the Manjal mark.

I then later replied to Murti as well, as below:

"By your logic, no case can be written about till it is finally disposed off by the Supremes, for that is when a litigation comes to a final end (barring cases of review). And 95% of most legal writings on cases in this country (the writings in newspapers and magazines, blogs, law journals etc) will all fall foul of this heightened legal standard that you have conjured up and wish to impose on us.

I hope your advise to clients re: trademark law is more sound than your advise to us on the principles of sub-judice and what can and cannot be commented upon in media.

Please note that we will take a strong stand against any attempt to unduly silence us."

Hurt and shaken by what he labelled as very "rude" responses from Prashant and me, Murti proceeded to complain to Prof MP Singh, the Vice Chancellor of WB NUJS, the University where I work. Prof Singh very politely told him that the blog is independent of NUJS and that keeping in line with principles of academic freedom, he cannot and will not interfere in the work that I do. Hardly surprising, given that Prof Singh is one of the staunchest defenders of academic freedom that I know.

In fact, prior to my joining NUJS, when I queried him on the limits of academic freedom and my apprehensions that the government may try and silence me (since my Chair was instituted and paid for by the government), his one line response was: "if they ever try that, we will ask them to take back their chair." Indeed, academic freedom continues to be one of the strongest reasons that I remain at NUJS.

Mr Murti did not leave it at that, but proceeded to lecture Prof Singh on why he still thought the University should take a strong stand against those that dared to comment on matters before courts. And continued to rant on sub-judice (or at least his delusional version of this doctrine) and the majesty of our courts that he was so keen on shielding. A true officer of the court, one might say!

What strikes me as rather odd is that our first post on Manjal (highlighting its revocation) was hardly adverse to Murti's client. Why then is Murti upset? Is there something more than meets the eye? Does he not want us to examine the case at a deeper level and report? In one of his posts, Prashant highlighted the fact that the Registrar may not even have had jurisdiction to revoke the Manjal trademark. A comment to this post interestingly states:

"Dear Prashant:

Have you seen the order passed by Mrs. Kasturi in a related rectification filed for removal of mark Manjal by Mathew & Sons. I am an insider to Trade Marks Registry and hence not in a position to provide u with the same. In that order Mrs. Kasturi not only overlooked the position of law but also failed to change the name of parties to the dispute. It is believed firmly believed even by higher authorities at Trade Marks Registry that Mrs. Kasturi has malafidely passed this judgement without giving any reason and in violation of natural justice."

Daal main kuch kaala hain kya? Only time will tell.....

In the meantime, Mr Murti, may we please urge you to help restore the majesty of the courts and the legal profession by defending the fundamental right to free speech, even if it should jar in your ears or those of our esteemed judges? And may we beseech you to substitute your heartfelt sub-judicious view with a more evolved super-judicious one...one that will help promote a more vibrant, courageous, open and "sound" discussion around IP cases?

'Dive' into more SpicyIP content with Dhiti

Those of you who've been visiting our blog over the past fortnight or so (and not just receiving email updates or accessing posts via RSS feed), will have noticed a box that appears at the bottom of each page which gives you a list of recommended related reading from within our blog. Do try clicking on some of the topics there to see how the recommended readings change.

This is the result of an impressive little widget called Dive that we've added to the blog, courtesy the amazingly creative folks at Dhiti, a company that is "working passionately towards creating technologies that make reading and content discovery on publisher sites insightful and effective." For those of you who are wondering, yes, the widget is absolutely free for publishers! If you're interested in adding this widget to your blog or site, do contact the Dhiti people.

(I know this reads like a shameless advertorial, but it is in all earnest: I've seriously enjoyed using Dive myself so much, I had to give the Dhiti team a plug for the work they're doing)

We added this feature very consciously, to improve the reading experience for visitors like yourselves, and to better understand what kind of content you are interested in, so that we can provide you more of the same.

Bharath Mohan and Aditya Nagesh, the two people at Dhiti, who have been overseeing the response to this widget, explains the widget thus: "Readers tend to click on topics to find articles that interest them. The topic clicks tell us a lot about what your audience are interested in reading [which is always useful feedback for us]... This is normally unstated intent, something you would not get through explicit searches on your site."

We look forward to your feedback on this, to let us know if you like this small change or not! Of course, we'll also pass it on to the widget-makers to help them improve their product.

IPO publishes Draft Design Manual; seeks comments

The Intellectual Property Office (IPO) has released a Draft Manual of Design Practice and Procedure, for those design prosecutors among you. The Draft Manual can be downloaded and read here. The Manual promises much, including e-filing of design applications, open access to design file wrappers, and a 3-month turnaround time from filing to registration starting April 2011.

The IPO notification requests interested persons to send comments and suggestions on the Draft to sukhdeep.ipo@nic.in latest by 10 March 2011.

(Speaking of Manuals, I think it's time Prashant Reddy wrote one on the Artful RTI, and how to get the government to reveal its best-kept secrets! in re his recent series of posts on the IPRS, PPL, and other things... !,, which I would urge you to read for sheer fun, if nothing else.)

(Image from here, in tribute to my worst-kept secret: an obsession for crime fiction, the classic variety.)

The Draft Manual's agenda is well-stated, and highlights an interesting statistical factoid -- that 9 out of 10 applications are objected to only for reasons of not meeting formal filing procedure. It appears that very few applications are objected to on substantive grounds (e.g., novelty, or originality). The Draft Manual seeks to bring applicants, agents and examiners up to speed with filing procedure, and thereby expects to register a properly filed Design Application within a period of three months from the date of filing, starting April 2011.

E-filing and e-access to Design status

I have not had a chance as yet to read the entire Draft Manual, but the Preface to the Manual written by the Controller General of Patents, Designs and Trade Marks, P H Kurian, promises a great deal.

In particular, we are informed that the Designs Wing of the IPO -- which is presently housed in Kolkata, West Bengal -- is being completely automated, and the entire process will be made fully e-enabled shortly. As a result, not only will the public be able to access the status of an application online, but it will also open up access to the Register of Designs (which is at present only available by way of physical inspection).

While applicants are already able to file for patents and trademarks electronically, designs are still physically filed at the various IPOs. There is expected to be some respite here, with the Draft Manual mysteriously indicating that "E-filing facility for filing of Design Applications and all the subsequent documents will be made available shortly".

Annexure of relevant cases

The Annexure to the Draft Manual also contains a table of relevant cases, including both Indian and foreign decisions, organised according to the various points of law/procedure they discuss.

I personally would have preferred relevant judgements to accompany the text where a particular section or clause is discussed, but this appears to be a preferred format of the IPO, since it seems to follow a format similar to that in the Draft Manual of Patent Practice and Procedure. (A revised Draft of that long-pending Manual was made available in November 2010, and can be downloaded and read here).

The Designs page of the IPO can be accessed here, where interested observers will also find a General Information Booklet for Registration of Design; and Ten Steps to Design Applications. The documents that the IPO believes readers to be interested in are amusing, for a lot of them appear to overlap in content - such as these two above, added to which is now a third (the Draft Manual). Hopefully, all of this will also get sorted out soon.

Did the Copyright Office goof up when it recognized IPRS as a Copyright Society back in 1996?

I know it’s a little late to be asking such a fundamental ‘brick & mortar’ question but I’ve just noticed, during the fag end of a due diligence on IPRS’s documents, that the Copyright Office may have goofed up in registering IPRS as a Copyright Society, without first asking them to amend their Articles.

Image from here.

As most of our readers may know IPRS was registered as a Copyright Society only on 27th March, 1996, two years after the 1994 Amendments to the Copyright Act, 1957, which for the first time recognized Copyright Societies. The Registration Certificate is available over here.

Normally when the Government is recognizing a certain institution under the law it is required to ensure that the institution in question is in compliance with the law. There are two glaring errors in IPRS's Articles of Association:

(i) Did IPRS require its members to assign their copyrights to it?

As per Section 33 of the Copyright Act, 1957 one of the fundamental requirements, while registering a Copyright Society, is to ensure that the Copyright Society does not require its members to assign their copyrights to the Society in order to obtain membership of the Society. In pertinent part the proviso to Section 33 states the following:

Provided that an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society.

Section 34, however does allow the Copyright Society to accept an exclusive licence to administer the rights. The difference between as ‘assignment’ & an ‘exclusive licence’ is that while an ‘exclusive licence’ is usually revocable, an ‘assignment’ is irrevocable and is usually the equivalent of a ‘sale’.

At the time IPRS was recognized as a Copyright Society, Article 4 of the original AoA, as drafted in 1969, (full text available over here) required all members to assign their performing rights to the Society, after they were granted membership. In 1991 the Special Resolution passed in the Annual General Meeting, renumbered Article 4 as Article 7 (full text of the resolution is available over here) but the wording remained the same.

Article 7 was never amended to do away with the requirement of an ‘assignment’ of Copyright at the time the Registrar of Copyrights recognized IPRS as a Copyright Society.

Which bring us to the question – should the Registrar of Copyrights, now cancel the Society’s registration?

(ii) Did IPRS require members to assign even ‘mechanical rights’ to it?

A look at the Registration Certification available on the IPRS website (available over here) indicates that IPRS was recognized as a copyright society for performing rights in only ‘musical works and any words or any action intended to be sung, spoken or performed with the music’.

Now this is where things turn hazy. The original Article 4 of the AoA required the assignment of only performing rights. The 1991 Resolution renumbered this to Article 7 without suggesting any changes to the wording per se. However the Amended AoA submitted to the RoC (full text available over here) has been tweaked to add in the words ‘mechanical rights’. Assuming that this version is the correct version, there are three very interesting questions:

(i) Why was IPRS recognized as a Copyright Society for only performing rights when it was known that the Society was administering even ‘mechanical rights’?

(ii) How did PPL members, i.e. the big music companies, become members of IPRS if they didn’t assign their mechanical rights to IPRS?

(iii) And if they didn’t assign their mechanical rights to IPRS, then how did they qualify as the members who eventually replaced the Articles of Association in 2008?

(iv) And if they did assign their mechanical rights to IPRS, then how exactly is PPL functioning without these rights?

As usual, no answers over here but as Holmes would say, ‘The plot thickens my dear Watson’!

Enercon Litigation Gets Wings - Flies from Madras to Delhi; IPAB hosts Enercon orders on its website

The IPAB website is finally hosting the Enercon Orders over here.

It has recently come to our notice that Dr. Wobben, the owner of Enercon GmBH has filed a appeal before the Delhi High Court against the Orders of the IPAB striking down 12 patents belonging to Dr. Wobben. (We've blogged about these orders over here and here)The appeal, invoking the writ jurisdiction of the Delhi High Court, was heard by Justice Murlidhar, who has recorded in his order, dated 4th February, 2011 that the petitioners themselves had asked for the writ petition to be transferred to the Original side of the Delhi High Court hearing the patent infringement suits filed by Enercon GmBH. The Judge consented and transferred the petition to the Judge hearing the infringement suit bearing number C.S.(O.S.) 1349 of 2009. In pertinent part the Judge notes the following:

2. It appears to this Court that in order to avoid possible conflict of orders, it would be in the interests of justice to have this petition also heard along with the suits. The question of granting any interim relief will be considered by the said Court. Accordingly, it is directed that the present writ petition also be placed for consideration before the same Court on 21st February 2011 before which CS(OS) No. 1349 of 2009 (Dr. Aloys Wobben v. Yogesh Mehra and Ors.) and other connected suits are pending subject to the orders of Hon?ble the Chief Justice.

This move to file an appeal before the writ jurisdiction of the Delhi High Court is simply baffling because the IPAB Bench which passed the 12 orders was situated in Chennai and therefore within the jurisdiction of the Madras High Court, a fact accepted by Wobben/Enercon GmBH themselves when they previously invoked the jurisdiction of the Madras High Court in appeals against IPAB’s orders. As per the Supreme Court precedent in the landmark L. Chandra Kumar case, High Courts may review the orders of subordinate tribunals, even if the statute in question does not provide for a statutory right to appeal to the High Court. However an appeal against a tribunal invoking the writ jurisdiction of a High Court can be made to only the High Court which is exercising territorial jurisdiction over the tribunal. In this case since the tribunal involved was the Madras/Chennai Bench of the IPAB, the appeal should have been filed with the Madras High Court. The Delhi High Court could have entertained such an appeal only if the order had been passed by the Delhi Bench of the IPAB.

The order, transferring the writ petition to the judge hearing the infringement suit, itself makes little sense since there is no way the Judge, who is sitting as a civil court, while hearing the suit, can exercise the powers of a writ court.

Can writ courts hear appeals against private parties?
A more pertinent question at this point, is whether High Courts can even issue writs against orders of the IPAB, that have adjudicated disputes between private parties. As of now every tribunal in India, with the exception of the IPAB, adjudicates disputes between the government and private parties. Therefore, it is possible for High Courts to hear appeals against such matter invoking its writ jurisdiction because writs can be issued only when one of the parties involved is a ‘state’ as defined in Article 12 of the Constitution.

For example if the IPAB decided a case against a private party who had appealed to it against the decision of the Patent Office then in case the High Court can entertain an appeal because the ‘patent office’ is within the definition of ‘state’ as per Article 12 of the Constitution.

However in the present litigation both parties are private parties not falling within the definition of ‘state’. The only manner in which they could have appealed, as was the case in the earlier Madras High Court case, was to make the IPAB itself a party to the litigation, through its Registrar.

The Madras High Court has been entertaining writ petitions of this nature but the question is whether it is right in doing so.

It is a moot question as to whether tribunals and courts fall within the definition of ‘state’ as understood by the interpretation of Article 12 of the Constitution. There have been some cases on this point but very few.

If we were to strictly apply this logic then the Registrar of a High Court should be made party to any appeal before the Supreme Court and that is prima facie ridiculous.

This brings us to the question – what kind of appeal does Wobben/Enercon GmBH have against the IPAB’s orders? The answer is my opinion is a Special Leave Petition (SLP) before the Supreme Court. Article 136 of the Constitution which is the enabling provision for SLPs reads as follows: “(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.”

The limitation period to file a SLP before the Supreme Court expires on the 2nd of March, 2011 i.e. 3 months from the IPAB’s orders in majority of the Enercon orders. However four orders were delivered between the 16th and 18th of November, 2011 which means the limitation period is already done, subject to of course Court holidays and time to procure certified copies. Of course, there is always the ever-friendly Section 5 of the Limitation Act, 1963 but let us not get in to that now.

Will the Registrar of Copyrights ensure ‘Justice for All’ affected by the mismanagement at IPRS?

This is the last in the series of posts on the state of affairs at IPRS. The previous posts on the subject can be accessed over here, here, here & here.

When I started of this series I had clarified that the contents of the posts were only one side of the story, as I had not contacted either PPL or IPRS for their side of the story.

However the revelations in the last few posts, raise several prima facie issues that require a more detailed investigation by various agencies of the Central Government. If ever the Central Government does bother to investigate the matter further, I presume that the Registrar of Copyrights will have to take the lead in the investigations and maybe co-ordinate with the Registrar of Companies, Mumbai.

The following are some of the legal actions that may be initiated by the Registrar of Copyrights:

(i) Interim suspension of the registration of IPRS & PPL as Copyright Societies: As per Section 33(5) of the Copyright Act, 1957 the Central Government may suspend the registration of a copyright society pending inquiry for such period not exceeding one year and instead appoint an administrator to discharge the functions of the Copyright Society. Given the wording of the provision i.e. ‘pending inquiry’, I don’t think the Registrar of Copyright even has to afford the Societies involved a ‘right to be heard’ and can straight away suspend the registration. The members of the society are unlikely to be prejudiced as the government appointed administrator will be required to ensure that members receive their dues. Within the one year period the Registrar of Copyrights will have to conclude the investigation and pronounce a final decision.

The specific allegations which require further investigation are:
(a) Whether it is was legal for PPL to collect mobile ringtones on behalf of IPRS?
(b) Whether IPRS acted in the best interests of its members when it did not intervene to halt PPL from collecting royalties for ringtones?
(c) Whether IPRS deliberately, with mala-fide intent attempted to halt the Registrar’s inquiry in 2009?
(d) Whether IPRS was acting within the boundaries of the law when it stopped making royalty payments to the 16 lyricists and composers?

(ii) A joint investigation by the Registrar of Companies and Registrar of Copyrights into the events leading up to the amendments of IPRS’s ‘Articles’ in January 2008: The Companies Act, 1956 lays down strict norms for conducting ‘Annual General Meetings’ and amending the ‘Articles’ of a company. As evident from our previous post, available over here, it prima facie appears that several of the AGMs were not conducted and even the one conducted on the 5th of January, 2008 was 5 days pass the deadline granted by the RoC.

The specific allegations which require further investigation are:
(a) Whether the AGMs cancelled in 2004, 05, 06 & 07 were cancelled as per the law?
(b) Was IPRS justified in not contesting the Saregama suits in the Barasat Court?
(c) Whether IPRS management acted in ‘good faith’ when they instructed their lawyer in the Barasat Court, in November, 2009 to not contest the injunction application by Saregama?
(d) Whether the application by IPRS to postpone the AGM in 2007 was within the boundaries of the law?
(e) Whether the new Articles of Association are valid in law?

In the interim, the Central Government has the power to remove key managerial persons on the IPRS board after receiving approval from the Company Law Board for the same.

(iii) A joint-investigation between the Registrar of Copyright and Director-General of the Competition Commission to investigate whether the ‘Big Music Companies’ engaged in anti-competitive behaviour:

Apart from investigating IPRS as a separate legal entity there is also a requirement to investigate the collusive practices of the individual music companies like Saregama, Universal, Tips etc. because all these companies have prima facie colluded together as board members of both PPL and IPRS to abuse their dominant position. I’m not too familiar with Competition Law, so I’ll refrain from any further comments but I think there is an arguable case over here.
Image from here.

Conclusion: Well, this ends the present investigation. Let me reiterate that several of the issues raised in this post are only one-side of the story and there is no conclusive proof. Only a full and complete investigation will result in the truth coming out in the open. Hopefully the system will work this time and the Central Government shall live up to its motto of Satyameva Jayate!