SpicyIP Weekly Review (September Week 4)

A two-judge bench of the Supreme Court earlier this month made critical remarks on the government’s failure to finalize the drug policy pending since 2003, calling it a ‘slur on the face of all stake-holders’. Following this, the Group of Ministers held meetings to consider a retail pricing mechanism for essential drugs. It was agreed that the prices of 348 drugs set out in the National List of Essential Medicines (NLEM) will be covered under the policy. The drug policy is vital for addressing accessibility and affordability concerns at all levels of healthcare in India. Mathews, in his post, rightly pointed out observations made by the IPAB in denying the stay order to Bayer Corp over the compulsory license wherein the Bench stated that ‘right of access of medicines is as  much as a matter of right to dignity of the patients’.

Shouvik reported three unrelated but connected events which promise to give a major boost to access to knowledge in India. First up is Prof. Anil Gupta’s brainchild Techpedia, an open source virtual platform for professionals and students of technical fields to disseminate, edit and improve their works in addition to seeking assistance on solving problems. As Shouvik puts it, Techpedia is undoubtedly Wikipedia’s technical counterpart. Recently, Techpedia received applause from NIT engineers during a conclave in Nagpur. Next up is Knimbus, a first-of-its-kind initiative which fuses social networking features to facilitate access to scientific content, sharing and networking with peers on a real time basis. Since its inception only a year ago, , Knimbus has a user base of over 30,000 researchers and scientists. Lastly, the Centre for Internet & Society (CIS) received grants from the Wikimedia Foundation for its access to knowledge program in India. CIS will now collaborate with the Wikimedia community to expand the latters’ Indic language free knowledge projects.

The Federation of Indian Chambers of Commerce and Industry (FICCI) announced a first-of-its-kind online certificate course on ‘IPR and Pharmaceutical R&D’ (CCIPR). The course aims to provide a platform to understand the working of the pharmaceutical industry, its business models, research, regulatory aspects and its relevance with respect to IPR. The course is open to students and professionals in the pharmaceutical industry. Registration closes on October 25, 2012. For more details please visit www.ficciipcourse.in or email at ipcourse@ficci.com.

International Developments

The European Trade Council and German Tea Association agreed to confer Protected Geographical Indication (PGI) status to Darjeeling tea, as reported by the Economic Times. This is in continuance with the earlier grant of G.I. status on Darjeeling tea by the European Union. Henceforth, blenders in Europe cannot sell any tea mixture as Darjeeling tea unless the content is purely originating from Darjeeling.

The Cypriot Presidency on September 27, 2012 published the latest draft of the Unified Patent Court agreement, reports the IPKat. The Central Division of the Court will be located in Paris, with London and Munich as other divisions. Among other issues, the draft clarifies that the Court shall have the same jurisdictions as national courts in relation to European patents. 

An actress who appeared in ‘Innocence of Muslims’, the film which wreaked havoc in the Middle East, filed another lawsuit to take down the 13 minute film trailer on YouTube. Cindy Lee Garcia, in a desperate attempt, filed the suit alleging copyright infringement on the part of Google Inc. and sought unspecified damages. The actress claimed copyright over the movie and accused the director of illegal distribution of the movie. Garcia earlier stated that she was duped into believing that the movie was ‘Desert Warriors’ and had no clue that the movie would have anything to do with the Prophet. In my opinion, there are little merits in the suit simply because copyrights usually vests with the producer of cinematographic film and actors acquire rights only upon express agreement.  

In a shocking development, Google disabled an author’s AdSense account for torrenting his own book for free and for providing torrent links on his blog. Cody Jackson published his book on programming language Python on CC license and torrented them on Pirate Bay and Demonoid. He received an auto generated message last week from Google accusing him of ‘hosting copyrighted files on your site, as well as providing links for or driving traffic to sites that contain copyrighted material’. Google rejected his request to restore his account when he tried to explain his situation forcing him to remove the links from his blog.  His AdSense account is, however, yet to be restored.

The neutrality stance of Google came under fire once again following the arrest of its president of operations in Brazil, following the delay in the removal of two videos on YouTube that allegedly slander, insult and defame a candidate in a Brazilian town. An electoral court had earlier held the crime in question to be one of disobedience. Google has repeatedly attempted to stress on its role as an ‘internet middleman’ with no liability over the content posted by its users. The suit presents a jurisdictional dilemma as the employees in the company’s US headquarters are being sued by local courts and authorities even outside the country. 

The African Union is soon to setup the Pan-African Intellectual Property Organization (PAIPO), a specialized agency at the inter-governmental level. PAIPO’s primary functions involve standard setting, harmonization of laws, policy formulation, promoting and development of IP in the Union. On the other hand, opposition to the Agreement is slowly gaining momentum and some even fear disastrous consequences on access to drugs and human right violations in Africa.

Access to Knowledge Platforms and Collaborative Ventures starting to get their due?

(Image taken from here)
“It is no good to try to stop knowledge from going forward. Ignorance is never better than knowledge.” –The thinker who’d come up with these immortal words, Enrico Fermi, would have been glad to hear about the current tidings in India, vis-à-vis ventures relating to access to knowledge. In the past few days, as many as three separate events have caught the eyes of the Spicy IP team that promises the development of a promising new trend of such ventures receiving both financial support and due recognition.

The first of these would be Techpedia, which is the brainchild of Professor Anil Gupta since 2008, a faculty member of IIM Ahemdabad. It is an open source portal that provides a virtual platform, wherein anybody can put up a project or other information, edit and improve upon the same and can even seek clarification or assistance on solving problems. In short, it is much like Wikipedia’s technical counterpart. The motivation behind building such a platform was to no longer allow the thousands of ideas and projects that students of engineering, healthcare, pharmacy and other colleges come up with to go to waste, simply because of lack of exposure, despite a large number of such projects having tremendous social and commercial possibilities. Techpedia also presents a wide range of problems relating to myriad disciplines like agriculture and hotel management for brainstorming purposes. Already certain innovative solutions to long-pending problems have presented themselves through this forum, just like several existing solutions have been popularized, ranging from the use of the bullock-based tractor post-1994, devised to help farmers owning small tracts of land, to using pressure cooker as an espresso machine etc. Supported by state-funded universities like Punjab, Gujarat and Maharashtra, which require their students to list all their projects in this websites, Techpedia is rapidly emerging as "a breeding ground for generating ideas of future", by bridging the chasm between innovations and its popularization and creates awareness among the city minds of the practical difficulties faced by the rural population and encourages such minds to find solutions to the same. Several corporate bodies have also sought help from budding engineers via this forum to provide solutions to their unique problems. Recently, in an NIT conclave hosted by the Visvesvaraya National Institute of Technology, the portal was officially presented before the NIT engineers. Some have even perceived it as akin to a national laboratory using students for social transformation and forming clusters of innovators in the process.

The second one in this list is Knimbus, which has been created by a start-up concern in Gurgaon (headed by Rahul Agarwalla and Tarun Arora) by fusing popular features of social networking websites. It is essentially a search and collaboration networking platform that would facilitate scientists getting access to contents, sharing their own findings and networking with their peers on a real-time basis. The platform hosts a wide range of academic and technical discussions ranging from development of cures to deadly diseases to decoding complex terms. Since its inception in September, 2011, Knimbus has already acquired an enviable user-base of 30,000 researchers and scientists. One of the major reasons behind its popularity is the availability of a single access window to a large volume of technical literature, which is in sharp contrast with the traditional academic approach of closed-door research submitted to journals, subjected to peer-reviews and then publication for the benefit of other scientists, which incurs considerable time and expenditure in the process. And this collaborative effort is already bearing fruits in brining academia and industry closer to each other. Recently, for instance, Procter & Gamble Co. has sourced ideas for several major products from CSIR's National Chemical Laboratory, sourced through CSIR’s 'Open Source Drug Discovery' programme, a technology platform concentrating on easy-to-afford healthcare, new therapies and drugs produced by CSIR. The sheer scope of the market requiring scientific, medical and technical information is mind-boggling, ranging to almost $25 billion in a world-wide level and India accounts for at least 4% of it. Given the figures involved, it is no doubt that a collaborative platform like Knimbus can reap enormous dividends and at the same time, also be of significant help in lowering the costs of research, information acquisition and sharing of knowledge. Knimbus is thus all set to become the new-age knowledge network.

The third and final piece of welcoming news in the field of access to knowledge is the grant received recently by the Centre for Internet Society (CIS) from the Wikimedia Foundation for developing their access to knowledge program in India to further heights. CIS, which is an independent institution with proven credentials in the field of research regarding Internet policy, will now collaborate with the Wikimedia community of volunteers in India to expand upon Wikimedia’s Indic language free knowledge projects. The grant will also facilitate improvements in India-relevant free knowledge in Wikimedia’s English projects and wider distribution of Wikimedia’s free knowledge within India. The grant will range over two years and will amount to $200,000 USD in the first year and the same for the 2nd year subject to budget review and inflationary tendencies. The 5-member strong CIS Access to Knowledge program team will operate from Delhi and it has already shown interest to hire a program director and other Indian program consultants advising the Wikimedia Foundation. It intends to build upon its current Indian initiatives, including community growth partnerships in several Indic languages, support for a new Malayalam education program, a GLAM (Galleries, Libraries, Archives, and Museums) partnership at the Crafts Museum – New Delhi, new Wikiclubs at the British Council, ongoing efforts to leverage social media, and an exponential increase in blog coverage of the Indian community’s work.

The overall trend that can thus be noticed in such efforts and collaborations appears to be rather promising and the Spicy IP team hopes that similar developments along this line are likely to strengthen Indian presence in the Access to Knowledge scenario much further beyond its current state. 

FICCI announces online IPR course on pharmaceutical research (CCIPR)

Federation of Indian Chambers of Commerce and Industry (FICCI) has started an online certificate course on IPR and pharmaceutical R&D (CCIPR). The objective of the course is to provide a platform to understand the working of pharmaceutical industry, its business models, research, regulatory aspects and its relevance with respect to intellectual property rights.

This is a first of its kind of course introduced with specific focus on the interlinking between the pharmaceutical industry and IPR. The course is of 6 months duration and consists of five (5) modules i.e.  pharmaceutical business, pharmaceutical research and development, intellectual property rights: introduction, IPR - with specific reference to pharmaceuticals, IPR - Indian patent scenario and a case paper to be prepared by the participant.

The Course may be pursued by any student in pharmacy/ pharmaceutical sciences or industry persons working in the pharmaceutical sector, willing to enter pharmaceutical R&D, formulations, generics, NDDS, regulatory affairs, drug discovery, clinical research, toxicology, international business, business strategy, strategic planning and the like.

Features like online FORUM for query resolution and weekly updates on IPR to registrants make the course interactive.

Registration Start Date:               22nd September 2012
Registration Closing Date:           25th October 2012
Conduct of the Course:               November 2012 – April 2013
Course Duration:                        6 months

For further details, please visit the website - www.ficciipcourse.in or e-mail at ipcourse@ficci.com

GoI criticised for failing to finalise the drug policy

The Supreme Court criticised the government for failing to finalise the drug pricing policy which has been pending since 2003. [For Deccan Herald (“DH”) news report, see here] According to DH, the Court remarked that the issue which has been pending since 2003 was a “slur on the face of all stake-holders”. The Additional Solicitor General Sidharth Luthra reportedly submitted that the Group of Ministers (“GoM”) which discussed the proposed drug policy in its meetings could not arrive at a final decision. According to DH, the submission drew immediate and strong words from the Bench. The Bench noted that the letter pertaining to the deliberations was not carrying any details. (The Bench reportedly remarked: “Was it a silent meeting? The letter states nothing about the deliberations by the GoM or the status of the proposed policy. Did they actually deliberate or the honourable ministers were meditating during the meeting? You don’t talk when you meditate, right?”) The Court observed that it would consider passing an Order bringing all 348 drugs set out in National List of Essential Medicines (“NLEM”) under the price-control policy. The court, however, placed the matter for further hearing on September 27. (The NLEM, which was released in 1996 and subsequently revised in 2003, is meant to achieve a balanced healthcare delivery system in the country. It inter alia includes accessible, affordable quality medicine at all the primary, secondary, tertiary levels of healthcare.)

The GoM, led by Agriculture Minister Mr. Sharad Pawar later met to consider the retail pricing mechanism for essential drugs. Although it could not arrive at a conclusive decision, the GoM reached at a broad consensus on the extent of regulation. It was agreed that the price regulation will be limited to a) 348 bulk drugs and their 652 specified dosage formulation as specified in the NLEM and b) will not include their combinations. The GoM wanted to study the mechanisms in other developing countries such as Mexico, South Africa, Bangladesh and Sri Lanka before finalising the policy on drug pricing in India. The data was, however, unlikely to be available before the forthcoming hearing of the Supreme Court on September 27. The GoM is expected to suggest a new mechanism shortly for setting the prices of essential medicines. [For news reports, see here and here.]

Presently, the government controls the prices of 74 drugs through National Pharmaceutical Pricing Authority (“NPPA”). NPPA is an organization of the Government of India which was established, inter alia, to fix/revise the prices of controlled bulk drugs and formulations and to enforce prices and availability of the medicines in the country under the Drugs (Prices Control) Order, 1995.

On the issue of affordable medicines, it may be pertinent to note the following observations made by IPAB in its recent Order rejecting the petition of Bayer Corp., which sought a stay on the Order of the Controller granting compulsory licence to Natco Pharma.: “Therefore, the right of access to affordable medicine is as much a matter of right to dignity of the patients and to grant stay at this juncture would really affect them and further, it would in effect amount to deciding the main petition itself. Though this is not a reason why we are not granting stay, yet this is an additional factor." [See here for our analysis.]

SpicyIP Weekly Review (September Week 3)

Notable developments in India

1. Kruttika Vijay, an ex-blogger at SpicyIP wrote a guest post on an important design case involving Whirlpool and Videocon. The specific design aspect was a washing machine which had a rectangular shape on one side and a semi-circular shape on the other with a jettisoned panel for the knobs. The court found that the design could not be invalidated despite arguments being advanced that it was not novel and had previously been published. Using the standard appearance based test, it also found that Videocon was guilty of infringement and passing off of Whirlpool's design. The most important take-away from this case however is the ambiguity in the interpretation of Section 6(3) and (4) of the Designs Act itself.

2. Prashant's determined efforts to find out CSIR's revenues from patent licensing hit another road block when a reply to his RTI application contained details of 'extra-budgetary resources generated' and not revenues from patent licensing, which he had explicitly requested. More worryingly however, this appears to be a deliberate attempt to mislead Prashant (and the public!) about their revenue stream despite a valid RTI application being filed. Definitely seems like something fishy is going on here and I'm sure Prashant will follow up on this in due time.

3. In the widely discussed and covered copyright infringement case involving Delhi University and Oxford University Press, there are signs that students and authors are coming together to oppose the publishers' move to declare reading materials/course packs to be illegal. Significantly, some of the authors whose books have been allegedly 'infringed', have come out in full support of the university and have even written letters to their respective publishers, asking them to drop the suit. Most notably, Nobel Laureate Amartya Sen, an Oxford University Press author himself expressed his concern about the suit filed by the publishers, putting the future of Indian education at harm. There are also petitions by student bodies, asking the government of India to implead itself in the suit, to protect the educational safeguard currently existant in the India Copyright Act. There was also a post on Kafila.org from an anonymous contributor who currently works with a major publishing house in India who provided some insights on the 'unethical business of academic publishing'.

4. In another case dealing with  fair use in a copyright matter, Archana Sahadeva covered the recent decision of ICC Development v. New Delhi Television with respect to broadcasting rights and the use of ICC CWC 2011 clips by news channels. An appeal has been preferred and we will be sure to cover the decision in detail when it is delivered.

5.The draft version of the Copyright Rules, 2012 were also released recently. An overview of the rules and its impact can be found here. You can also read Prashant's piece where he questions the constitutionality of the new scheme of the Copyright Board, proposed in the draft Rules.

6. In the battle of trademarks in the search engine space (AdWords disputes, in short) the Madras HC declined to set aside the judgment of a Single Judge of the same court, declining to grant Consim an interim injunction in its dispute with Google. Importantly, as Prashant notes, the appellate court did not make any observations on the descriptiveness/lack of distinctiveness of the 'bharat matrimony' TM, despite the fact that this was an important issue raised by the lower court.

7. The last week also saw two very important trademark cases - first, the Modi group has been prohibited from using the Mogardshammar trademark and corporate name 'Morgardshammar’ in an appeal heardby the Delhi High Court, in a suit first filed in 2010 by Morgardshammar AB, a subsidiary of the Danieli Group of Italy. Secondly, in perhaps one of the most important decisions in the last week, the IPAB has upheld the validity of the XEROX trademark, holding that it is not a generic term and should not be removed from the register. You can read more about the case here.

International developments

In copyright issues, the German Pirate Party, which proclaims itself as a defender of internet freedom, has found itself in a bit of a mess with one of its Executive Committee members being accused of 'hypocrisy' for demanding that an illegal copy of her book be taken down from the internet, whilst advocating abolition of copyright laws at the same time. You can read more about the case here. 

In other copyright news, Warner Bros has accused Amazon of promoting the sale of illegal copies of its DVD's through various Amazon sellers. Warner Bros. is alleging that the sellers operated as unauthorized distributors, peddling infringing copies of the "Harry Potter" movies and television series such as "Shameless," "Boardwalk Empire" and "Treme."

Despite the much proclaimed patent win that Apple secured over Samsung in its software patent case in the U.S., it seems like courts in other jurisdictions are not ruling similarly - with Apple losing its case against Samsung and Motorola in Germany. This really calls into question the tenability of software patents with the exact same multi touch gesture software patent in dispute in Germany as well, with different outcomes in the U.S. and Germany. 

In another patent dispute along similar lines, TiVo has now settled for roughly $250 million in its dispute with Verizon, with the latter agreeing to license patents that is essential to its technology business. The patent in dispute relates to TiVo's DVR techonology, which allows one to record television programs and play them on demand at a later point in time. You can read more about the case here. In a similar patent licensing story, it has now emerged that RIM (the makers of Blackberry have licensed certain patents from Microsoft). We will have to wait and see how it is incorporated into its new OS - the Blackberry 10 smartphones.

Guest Post: Will the amendments to the Copyright Act serve their purpose?

Arun Mohan, a practising IP lawyer before the Madras High Court sent us this interesting piece exploring the possible complexities in enforcing the recent amendments to Indian copyright law and also the larger question of whether the amendments will serve their purpose? 

Guest post: Will the amendments to the Copyright Act serve their purpose?

by,

Arun Mohan

Many an IP lawyer representing the entertainment industry would have spent several hours grappling with the new Copyright Act, and its consequences. In working with the same especially on assignments and agreements, many issues seem to arise for which solutions don’t seem to appear in the statute itself. My focus on this blog would be on musical works in movies, which have in any event garnered the lion’s share of the amendments (atleast in the media). 

I have had the experience of representing both sides of the table, the composers and the record labels/producers, and hope to get inputs on the various queries I have raised in this blog. 

The provisos to secs 18 and 19 are the most relevant, which in substance state that an author (in this case the composer and lyricist) cannot give up his rights to demand equal royalties on his works for any purpose apart from a theatrical screening of the film in which the musical works form a part. To ensure the same, the proviso goes on to say that any agreement to the contrary would be void (note not voidable but void). The language of the provisos is far-reaching, to include “utilization..in any form”. Further, the agreements cannot run contra to the rules of any copyright society of which the author forms part of. Does this include only the Indian copyright society or even the international ones, like Performing Rights Society, UK? The Act does not elaborate on that front. 

In the light of the above provisions, which have bloated the size of many an agreement, the non-problematic areas are: 

1. Radio broadcasts 

2. Internet broadcasts 

3. TV broadcasts of the songs only 

4. Endorsements (which use the musical work) 

I call these non-problematic because the revenue that is accruing from the songs per se are calculable. With IPRS being in hyper-drive, collection of revenues has become rather efficient. However, it has to be pointed out that the Act does not provide the manner in which the royalties are to be collected and by whom. Composers are tending towards putting the responsibility on the producers and also inserting an indemnity clause in the case the producers are unable to recover the royalties due. The downside to this being that the composers do continue to remain at the mercy of the producers albeit to a much lesser degree. There are also clauses stating that copyright reverts to the composer upon non-payment of any royalty to stabilize the financial claim of composers. 

The tricky part comes in the provision which enables the author of a musical work to claim royalty on any utilization of the work, which is a non-theatrical screening. This would include: 

1. Satellite broadcast of the movie 

2. DVD sales of the movie 

3. Pay per view such as in Tata Sky 

In such circumstances, the Act does not prescribe the royalty that would accrue to the author of the musical works which would be broadcast with the movie. How does one calculate it? Based upon the length possibly i.e. the length of songs vis-a-vis the length of the movie? Given the several crores the movies are sold for, even a 8-10% claim on the basis of length could potentially be rather substantial, depending on the scale of the movie in question. To put it in perspective, Salman Khan has sold the satellite right of Dabaang 2 for a whistle-inducing/cringe-inducing (depending on if you love or hate Sallu bhai) 45-50 crores. Given the numerous songs which one would presume to be found in such a commercial movie, the music director may well be set to claim the highest remuneration for a musical director in India on the basis of such satellite rights alone. 

The Act becomes even trickier on a bit more probing. The record labels sell the CDs of the songs and the songs are offered on iTunes/FlipKart etc for digital downloads. Can the music composer and lyricist claim royalty on the same? Assuming they have assigned the copyright to the producer, who in turn has sold the same for a healthy amount to the record company, what are the rights which accrue to the composer and lyricist? Can royalties be claimed on the same as the Act states that “utilization..in any form” apart from theatrical screening of the songs as a part of the film? 

The challenge now is working out an appropriate revenue model to pay music directors. The earlier model of a single payment has become antiquated in this law. The up-front payments given to composers are dramatically being reduced to allow for such royalties. This in turn increases the pressure on composers to give out songs which would have a huge commercial following, as their earnings are now heavily dependent on royalties. While this may be good for established commercial composers and lyricists, what about the newer ones? Debutants are already paid a pittance, and this pittance is further reduced on the basis of a royalty which may or may not accrue. I also believe this law would tend to influence (some naysayers say even corrupt *gasp*) artists to produce music that is exclusively mainstream as this may be their only source of income, as they do not receive a decent sum upfront, as was the case till date. If the album becomes a success, everyone is happy but if the album does not succeed, the composer would have ended up working almost for free. Does this not seem to be in the favour of record companies and producers, who needn’t pay upfront and can hedge their payments upon success of the album. Such contingency seems to have the potential to backfire. Even artists who would want a single-shot payment are not given this option by record companies, as the companies would throw up their hands and say such payment would be illegal under the amendment. Is this possibly why the record labels and producers are not making as big a noise as expected? 

This brings me to my primary question, does this amendment support all artists? Or is it for the benefit of the bollywood club seeking a larger share of the mythical 100 crore box-office pie?

Guest post: Whirlpool v. Videocon

One of our former bloggers, and my former classmate Kruttika Vijay, has returned to us with a guest post on a topic that has not received much attention here. After graduating from Nalsar University in 2009, she worked at Anand & Anand for a few years, and has now just begun her LLM degree at Stanford University. Hopefully, she says, this will be the first of many more guest posts by her in this coming year.

Pictured above: Not Whirlpool's registered design

In India, patents have been the “in-thing” for the last couple of years. Copyright makes a resurgence occasionally. However, the law of designs isn’t (and has never been) too much of a conversation starter. It probably has to do with the meandering language of some of the provisions (Section 6 to me is pure legislative torture), or just because most people would rather have copyright protection wherever possible.

In other countries, however, design infringement is a big deal. Case in point Apple v. Samsung. And, more amusing, recent news reports that Apple may be sued by a Swiss company for copying the design of its clock on iOS6!

In India, we make do with the cases we get. Whirlpool v. Videocon is a recent-ish decision of the Bombay High Court. And it seems that while most of the judgment is well-reasoned, the Court like me is flummoxed by Section 6.

On a motion of temporary injunction before the Bombay High Court, Whirlpool alleged that Videocon had infringed and passed off its registered design for its washing machine which had a rectangular shape on one side and a semi-circular shape on the other with a jettisoned panel for the knobs. The case appears to have been argued in great detail by both sides on issues of infringement, passing off and, as a defense, invalidation of the registered design.

To invalidate the design, the defendant argued that the design ought to be invalidated on grounds of Section 4(a) & (b) of the Designs Act i.e. the design was neither new nor original and had previously been disclosed to the public. This appears to have been the strongest argument for the Defendant. At first glance, this made sense to me. How many designs/types of washing machines could there be? (You’d be surprised- check out the human washing machine or the dog-cat washing machine.) To substantiate, the Defendant relied on several documents but failed to convince the Judge that a washing machine of similar design already existed on the market.

Now for the tricky part. The Defendant also argued that the Plaintiff itself had two similar designs, and the design involved in this suit was only a minor variation, and therefore neither new nor original. The Court did not agree with the Defendant and used Section 6 to explain why. The relevant sub-provisions of Section 6(3) and (4) are:

• “Section 6….
  (3) Where a design has been registered in respect of any article comprised in a class of article, the application of the proprietor of the design to register it in respect of some one or more other articles comprised in that class of articles shall not be refus¬ed, nor shall the registration thereof invalidated.
  (a) on the ground of the design not being a new or original design, by reason only that it was so previously registered; or
  (b) on the ground of the design having been previously published in India or in any other country, by reason only that it has been applied to article in respect of which it was previously registered:
  Provided that such subsequent registration shall not extend the period of copyright in the design beyond that arising from previous registration.
  
  (4) Where any person makes an application for the registration of a design in respect of any article and either-
  (a) that design has been previously registered by another person in respect of some other article;
  or
  (b) the design to which the application relates consists of a design previously registered by another person in respect of the same or some other article with modifications or variations not sufficient to alter the character or substantially to affect the identity thereof, then, if at any time while the application is pending the applicant becomes the registered proprietor of the design previously registered, the foregoing provisions of the section shall apply as if at the time of making the application the applicant had been the registered proprietor of that design.
  
  

The Court says that in light of Sections 6(3) and (4), the registered design cannot be invalidated even if not novel or published previously. This however makes no sense to me. 

Section 6(3) and (4) of the Designs Act are strangely worded and at first glance seem to be in direct conflict with Section 4. However, the Manual of Design Practice and Procedure provides some clarity. It states that :

“If the applicant has registered the design in any other class of articles, prior to the application under consideration, the fact shall be mentioned in Form-1…Upon Examination, if it is found that the design under consideration is already registered by the same applicant in another class and the applicant has not disclosed that fact in the application form, the Examiner shall raise an objection only with an objective to predate the application, and not on the ground of novelty. In such cases, the objection is communicated along with the citation of such prior registered design and the applicant is asked to amend the application. The term of the copyright of the design under consideration shall be co-terminus with the term of previously registered design….”.

Therefore, it seems that these provisions are for the prosecution of a design application, and cannot be a valid answer for a minor modification of a previously known and registered design. If it were an answer, then the Court ought to have clarified that the application may require to be pre-dated in line with the earlier published design applications of the Plaintiff.

The Court, after rejecting the arguments on invalidity, examined the issues of infringement and passing off based purely on appearance (as is the standard test in the law of designs). Holding that the similarities were more important than any minor differences, the Court held that there was infringement and passing off of the Plaintiff’s design. The Court also fleetingly refers to an admission of “similarity” of designs by the Defendant. Perhaps not the best move, but my guess is that they were hoping to succeed on their claims of invalidation.

The case itself isn’t path-breaking or positing new or unknown legal principles. And the designs may very well be similar in appearance. However, this is one of the first design cases I have read where neither the lawyers nor the Court discuss the fact that the design ought to be invalidated since it is functional rather than aesthetic. Also, another look at the manner in which the Court dealt with the arguments of novelty and originality may be required. Or perhaps Section 6 could be amended to provide some clarity, and save us all some trouble labouring through its phrasing.

CSIR provides misleading information; aims to hide revenues from patent licensing

Image from here

Pursuant to my last post, I received the annexures that CSIR had forgotten to send me along with its RTI reply which I had blogged about over here. The information contained in the annexures is not the information that I had asked for under the RTI Act and this information is nothing but yet another attempt to mislead me. 

I had asked for licensing revenues from CSIR’s patents but was provided instead with a list of ‘lab-wise extra-budgetary resources generated during the period of 2002-03 to 2011-12 (Rs. in crores)’. According to this list, which can be accessed over here & here, CSIR has reportedly generated close to Rs. 4,402.265 crores in extra-budgetary resources. 

So what does the term ‘extra-budgetary resources’ mean? Well, I sent CSIR an email asking them what it means but I never received a reply. In any case I compared the list of licensed patents, that CSIR had provided me earlier and compared it to the present list and came to the conclusion that ‘extra-budgetary resources’ definitely does not refer to revenues from patent licensing as there is almost no co-relation between both lists. Some of the labs are showing revenues even in those years when they licensed no patents. My guess is that the list includes earnings from all sources which were not initially allotted through its annual budget. This would include contract research from the private sector and the public sector. My guess is that most of the Rs. 4,402.265 crores was earned ‘in-house’ i.e. through government projects and grants and not through patent licensing. It is highly unlikely that a lab such the National Aeronautics Laboratory (NAL) would have earned Rs. 501 crores in the last 10 years through private sector contracts. I for one am interested in knowing the work that CSIR did to earn this money. So I ask the question once again – Why is CSIR going out of its way to hide the revenues it has earned from patent licensing?

Academic Publishers: An Insider's View

In my previous post, I had written about the support for Delhi Universities from other student bodies in India and the calls from several OUP authors to the publishers to drop the suit. With opposition coming in from the authors of such allegedly infringing books themselves, it becomes increasingly apparent that this entire litigation is about the publishers. In fact, I had reproduced a famous quote that went:

"When we talk about copyright, we need to remember that we aren't talking about authors versus readers. We're talking about the interests of corporations versus the interests of the public" - Karen Coyle.

Lawrence Liang, a contributor to the well-read blog - Kafila, posted an article this week  titled 'Academic Publishers – An Insider’s perspective: Anonymous Contributor'. In this anonymous piece, the writer provides an insider's view of the business of academic publishing'. 

Some of the issues highlighted by the author include:

1. Publishing companies have no qualms about violating copyright when it serves their interests. 

2. Publishing companies are concerned with selling their books to the syllabus review committees and not the students. 

3. The authors are milked to the limit and paid peanuts.

4. Perfectly good manuscripts by Indian authors are sometimes rejected if they pertain to topics which have no “sales potential”. 

For the rest of the points and the full length article, originally published on Kafila.org, please click here:

Looking beyond IP Internalism

In a previous post, I had mentioned Kapczynski's paper "The Cost of Price: Why and How to Get Beyond Intellectual Property Internalism". Since then, I've had a chance to read it more thoroughly and will be reviewing the article here as it goes over a topic I personally find very important and relevant. (Full disclosure: I had RA-ed for Prof Amy Kapczynski in 2010 and she is also on my dissertation committee.) Also, Warning: Longer than usual and theoretical (but very interesting) post ahead! 

Previously, I have commented on alternatives / variations to the typical patent-incentive based innovation, though primarily in the health sector. (Medicines Patent Pool, Health innovation Fund). I've also discussed the efficiency problems within exclusion rights (ie, patents) here (and outside the blog, here). Most relevant to this current post though, I have discussed a rough framework for alternative innovation system in light of the failure of a market based framework to sufficiently align with the the interests of society. 

It is this last (underlined) bit which seems to be the starting basis for Kapczynski's paper and she very clearly elucidates reasons for looking beyond the current IP framework that most of the innovation discussion seems to revolve around. She starts by identifying at least 2 other major scientific and cultural generation mechanisms that we as a society use. 

1. The Commons-based approach: In the US, about 1/3rd of all scientific R&D is funded by government and nonprofit sectors, with the results often being disseminated under norms of open scientific exchange, rather than under property rules. Similarly, in the cultural arena, with the advent of the internet and opening up of ability to share and create content, the rate of generation of content has exploded. 

2. Financial inducement prizes: This method, while once popular, declined in usage but is again generating growing interest in the field of informational economics. 

With these two in mind, let us look at IP again. 

Since information is a nonrival good (ie, my usage of it does not take away from your usage of it), the most efficient manner of sharing information is by freely sharing it, but free sharing may reduce the incentive to generate the information in the first place. IPRs provide the incentive to produce this information by removing other's ability to free-ride on the costs incurred in generating that information. However, by excluding others, deadweight loss is generated since information is not being used by as many as it could have been. This is then countered by the argument that this deadweight loss serves as the incentive for dynamic efficiency - ie, more future production of scientific and cultural goods. 

Moreover, the IP structure, provides an advantage over government production (and other systems), because it generates market signals and these guide future allocation of resources for more production of scientific and cultural goods. As she says, "This argument has been so deeply internalized in the field of IP law that it is typically taken for granted." And no doubt, most debates in IP, notably access to medicines, software and media related, argue how the inefficiencies within the system can be reduced. 

What her paper discusses though, are the tradeoffs between IP and other institutional approaches to innovation, such as the methods mentioned above; rather than the standard approach of trying to figure out the optimal balance between access and incentives within the IP system by tweaking exceptions and limitations. The fundamental values that she considers while discussing tradeoffs between the institutional approaches, are primarily efficiency, distributive justice and surprisingly, privacy. 

Looking at the IP system now from beyond merely an 'internalist' view:

Price is the factor for determining production of goods. Thus, information is produced as to what direction of investment is most likely to be supported by the market.  However, what this also means is that needs of the poor will constantly be put behind needs of the richer, and this relationship leads to a self perpetuating cycle as more information goods biased towards the rich's needs are produced and then in turn used for further production of information goods. That is not necessarily a negative on its own. 

However, certain basic information goods are increasingly gaining importance as requirements in the realisation of important freedoms and capabilities that all should have access to. Is this a price worth paying? 


I - Efficiency Arguments: 

Now to compare with other systems. In bold is the characteristic of IP and in plain text is the comparison with the two other systems. 

A) As discussed above, the IP system inherently has negative externalities in the form of static inefficiencies caused by exclusion rights. They are later 'justified' by allegedly serving as incentives, but they are still present. 
-- There are no exclusion rights in the two other systems, therefore no negative externalities generated by artificial price rise. This is a huge advantage for the other two systems as there is no deadweight loss and incentives don't need to be balanced against access. 

B) As price signals determine the direction of growth, innovation is biased towards the needs of the rich and this relative lack of advances of science and culture directed at the poor leads to a reduction in the abilities of the poor to realise certain basic freedoms and capabilities. 
-- Information gathering for direction of growth is a problem in the other systems. Investment would be required for finding the required information. Depending on the sector however, it is possible that the government can have better information. On the flip side, biases can be better avoided. 

C) Racing and information asymmetry leads to duplication and wastage of resources. Patent law gives its 'reward' to the first one who reaches it. Thus all other competitors who were also working towards that goal but do not receive the patent, have wasted their resources in chasing it. It is impossible to know which firms are working towards the same goals because firms will want to keep secret any information that gives them an edge. 
Racing is also a problem in prize systems. Government procurement though can limit the number of entrants so can reduce the risk of racing when it is a problem. 

D) IP uses private information such that companies/individuals self-select whether they are best suited to compete or not. 
-- Prize systems too have this advantage too, since entrants determine whether they feel best suited to compete or not; however government procurement does not as they select (with less information) who will compete. Government contracting via auctions etc, can mitigate this risk to some extent. 

E) IP ties the incentive for production to the market, so generally private players have sufficient information about the market value of a desired creation or invention. 
-- IP has relatively more certainty in incentive than the other two systems. However, prizes can be structured to give ex-post rewards, with the reward being tied to the social value of the product. Recent work has also shown that rewards can be tied to market signals as well. However, the government often is less likely to know about the possibility for creations or inventions and thus, even less likely to know their value. 

F) Transactions between those who create and those who benefit are hazy, thus there can be high transaction costs. Ie, the uncertainty about what fair use means, or the scope of a patent, etc. 
-- On the other hand, commons based production have flown so smoothly that consumers are often producers as well. (youtube, open source software, etc). This is due to a combination of the price (since it no longer needs to be balanced against an incentive) and self-selection of producers/consumers. From my observation, this is seen especially strongly amongst those who's primary incentive is not financial. 

---- There may have been some more points she's raised in the article that I've missed, if so, please point them out in the comments section ----  


Thus, comparing IP with the other two systems in terms of efficiency, it is seen that  compiling and comparing all the efficiency points between systems, there is no clear reason to view IP as more efficient than the alternatives. 


Once this is established, it is helpful to look at values other than efficiency to help guide us to a system. 


II - Distributive Justice Arguments 

She makes a number of fair points regarding the scope for improving distributional justice within the IP system (page 993 - 1000), but I'll skip over those for now. Continuing from the externalist perspective, 'distributive justice' can be considered a state wherein there has been a 'just' allocation of resources - here - informational goods. 

Naturally, the Commons have an immediate attraction to the distributive justice perspective as 'free access' removes all price barriers. Aside from this obvious connection though, it also has advantages in that price-less distribution ensures that informational resources are allocated and further prduced regardless of existing wealth, which means that other signals such as perhaps creativity or even simply 'need' become more relevant. 

However, Governmental production has an even bigger advantage in terms of distributive justice. Since it would be focusing resources to consumers who 'need' them more, and will (likely) be funded through some sort of progressive tax system, it will essentially be using money of the rich to fund and produce informational goods for the poor - thus  also redistributing wealth. This is also it's disadvantage though, as it excludes transnational systems due to a lack of an 'international tax' system. 

Her paper does not discuss the inherent question with this though - what exactly is a 'just' allocation of resources? I get the feeling that this question has been glossed over in favour of the assumption that while it may be difficult to determine what exactly 'just' is, in more broad and current terms, it is simple enough to identify the clearly unjust allocations - and an attitude of "we will deal with the finer nuances of 'just' when we come to them as they're still a long way off". 

As long as certain information goods - such as education and healthcare - provide access to certain basic freedoms and capabilities, distributive justice advantages will be very persuasive. Contrarily, IP, with it's dependance on market signals (price) for development direction, is not a useful system for fulfilling this goal. 


III - Privacy Arguments

While at first, it seems confusing that 'privacy' is taken as a value, this is perhaps the most interesting angle that the paper takes. As stated before, static inefficiencies enter the IP system because rents need to be taken. When taking these rents, the deadweight loss suffered by is sought to be reduced as far as possible through means such as price discrimination - ie, exceptions and limitations. To perform this price discrimination though, personal information of the consumer is required and this is not required in other systems. 

So, what is the value of information privacy? Once again, very interestingly, the paper points out 2 issues

Firstly: what happens when there is a lack of privacy - constant surveillance, which in turn hampers robust public debate as repercussions contribute to the guidelines for the content of our debates.  
Conversely, when our private information is used to direct content towards us, the filter-bubble effect becomes a cause of concern. (I had written a less articulate version of the same concern earlier this year here). Essentially, in an extreme form, this means that we surround ourselves with our own views till we can no longer see criticisms by others or even just other viewpoints. In a less extreme form too though, we limit our constructions and creations by limiting the input we get. 

She further discusses several more nuanced aspects of the two issues here, for those who are interested in reading up on it. These two concerns need to be treated very differently, of course, but the main takeaway here is that the IP system pushes us towards a system which generates a tension between information privacy and efficiency. (more privacy = less efficiency, and vice versa) 

Looking at the alternatives: Government provisioning and prize systems will also require certain amounts of information, however not the same detail of private information that is required for price discrimination. More vaguely defining possibilities such as aggregate data for certain classes of people, or age ranges, etc, are possible manners of collecting information. 
Commons based production, on the other hand, seems more random. With incentives ranging from 'personal desire to create' to 'reputation' to 'user driven' innovation, etc, there is no clear connection between private information of a consumer and generation of a product. Sometimes it may be high, sometimes it may be zero. She gives the example of Wikipedia receiving the least 'intrusive to privacy' score in a comparison of the top 50 websites of USA. 

Conclusion
Her paper gives a strong backing to the argument that IP does not have any clear efficiency advantages over other systems of science and culture generation. Once this is understood, taking a step back and looking at other values that can be used as determining factors for an innovation system becomes a sensible step. She does not mention other values that could be used, and perhaps there are more. But the values that she does take into consideration - distributive justice and information privacy - are ones that show alternatives to IP to be more desirable than IP. She rightfully does not pick a particular system, but merely puts forward a few different 'externalist' tradeoffs that can (and probably should) be evaluated while taking the discussion on innovation systems forward.