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ANNUAL REPORT 2015-16: GROWTH OF PATENTS IN INDIA

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The pro-active approach of the Indian Patent Office has been commendable as per the Annual Report 2015-16. Indian Patent Office strengthened the culture of transparency, accountability and efficiency in its management which is evident from the increased Patent Applications filling by about 10 per cent to 48,904 in 2015-16 as against 43,000 in the previous fiscal year. As per the report, the filing of patents, design and trademark applications recorded a double-digit growth in percentage terms in 2015-16. These figures reflect a new found interest in the general public towards protection of their IP and direct us towards a future of innovation, development of knowledge-based industries and favourable environment for technology transfer.

Overall Impression to be taken into Account to Ascertain Similarity between Trademarks

Trademark Registration in India

The Bombay High Court in a recent Judgment (Rahul Uttamsuryavanshi versus Sunil Kasliwal, MANU/MH/1951/2016) reaffirmed the importance of taking into consideration the overall image or impression conveyed by a trademark in an issue concerning the inquiry with regard to infringement of a trademark. The same suggests Law Firms offering Registration of Trademark Services in India and Trademark Litigation Services in India to be cautious of initiating frivolous litigation or registration processes.

Liability of Online Intermediaries viz-a-viz Copyright Infringement

What is Copyright?

World Intellectual Property defines copyright as, “copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered under copyright range from books, music, paintings, sculptures and films, to computer programs, databases, advertisements, maps, and technical drawing”.

Legality of Parallel Imports in India viz a viz Kapil Wadhwa Judgment

Intellectual Property Rights (IPR) exist to incentivize innovation & trade and provide exclusivity of usage to authors/innovators/trademark holders. In the present scenario where right holders are vigilant and aggressive in asserting their claim over their intellectual property, the issue of Parallel Imports is assuming an ever greater importance towards determining the limits of Enforcement of IPR in India.

What is Parallel Import? – The Concept, Explained

Parallel Import occurs when goods belonging to right-holders are legitimately acquired/bought by a third party in country A and are then imported to and sold in country B without the express consent of right holders. These goods are legitimately bought in country A where the goods may be available at a lower price than Country B and the same goods are then sold in Country B at a price higher than the authorized sellers of the right-holder, thereby making the same goods available at a lower price to consumers (through parallel channels). This trade practice is carried out to take advantage of differentiation of price of goods between different countries which may be due to various factors including different taxation regime(s), subsidies, market trends, etc.

“For easier understanding, a product which may be priced at $60 in Nepal is imported into India and is sold for $70 in India whereas the actual right-holder of the product has priced the same product at $ 80 for Indian markets. Consumers, in this case, are getting two products of the same brand but at different prices (parallel channels turning out to be cheaper).”     

Whether such imports are legal or illegal depends on the Principle of Exhaustion followed in the country of import. Article 6 of TRIPS (Trade-Related Aspects of Intellectual Property Rights) read with foot note 6 of Article 28 and Article 5(d) of Doha Declaration makes it clear that it is open for countries to determine the principle of exhaustion they want to follow. The Principle of Exhaustion followed by a country determines the country’s stand on whether or not the right holder’s exclusive right over a product is “exhausted” after its first genuine sale to a customer or whether the right holder can control further re-sale or distribution of the goods after first sale. Broadly, two types of exhaustion principles are followed by countries – 1) National and 2) International. In case of national exhaustion principle (followed in USA), the goods can be legally resold only within the territory where they are first sold, which means that the interest of the right holder will exhaust only in the country of first sale and further re-distribution by imports of such goods from other countries is illegal. In case of International Exhaustion Principle (followed in India), after the first sale, the right holder exhausts all the rights over that unit of product internationally and such product can be legally imported/distributed further anywhere in the world.

Under the current Indian law, legislations pertaining to each IPR provides for parallel imports differently such as Parallel imports are expressly prohibited under the Designs Act, 2000 and that the Geographical Indicators Act, 1999 doesn’t cover the issue of parallel imports at all. Since the Section 2(m) had been dropped from the Copyright Amendment Bill, 2012 India still follows principle of national exhaustion with respect to Copyrighted material. In so far as Patents are concerned, Section 107A (b) of The Patents Act, 1970 expressly provides for parallel imports. In addition, Section 30(3)(b) of the Trade Marks Act, 1999 also provides for the issue of parallel import and was discussed in great detail in the case of Kapil Wadhwa v. Samsung Electronics[2013 (53) PTC 112 (Del.)].

A Division Bench of the Delhi High Court, in this case, re-considered the question of whether the Trade Marks Act,1999 embodies the International Exhaustion Principle or the National Exhaustion Principle when the registered proprietor of a Trade Mark places the goods in the market under the registered trade mark. The court held that the earlier finding -that there was legislative intent to put barriers on importation-was premature and went on to interpret Section 30(3) as follows:

“(1) Where goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market by that person is not infringement of the trade mark by reason only of the registered trade mark having been assigned by the registered proprietor by some other person after the acquisition of those goods. (2) Where goods bearing a registered trade mark are put on the market and are lawfully acquired by a person, the sale of the goods in the market by that person is not infringement of the trade mark by reason only of further sale in the market. The two situations are distinct and operate in mutually exclusive areas and the question of any one being interpreted in a manner to render the other otiose does not arise.”

While defining what “lawful acquisition” is, the court stated that there is no law which stipulates that goods sold under a trade mark can be lawfully acquired only in the country where the trade mark is registered. In fact, the legal position is to the contrary. Lawful acquisition of goods would mean the lawful acquisition thereof as per the laws of that country pertaining to sale and purchase of goods. Trade Mark Law is not to regulate the sale and purchase of goods. It is to control the use of registered trademarks.

Thus the division bench held that the Trademarks Act embodies the principle of International Exhaustion and the term “market” Section 29 and 30 of the act refers to international market and not the domestic market. The only condition imposed by the court on parallel import, in relation to trademark, is that the imported goods should state they have been imported and that after sales service and warranty is not provided by the right holder but rather by the importer.

Despite different principles followed in different countries, Right holders can avail remedies like Injunctions, Damages etc. in cases where unauthorized parallel import amounts to infringement. On the other hand, in a case where parallel import has been declared illegal, provisions of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 and the Customs Act, 1962 are also provided for. Under these Enforcement Rules, a right holder may apply to a Commissioner of Customs at a port where the goods infringing his IPR are likely to be imported. If the Custom authorities arrive at the conclusion that the goods being imported are infringing in nature and are liable to be confiscated under Section 111 of the Customs Act then they may Sub-rule (9) of Rule 7 of the said Rules seize the goods. Penalty can also be imposed on importer in terms of Section 112 of the Customs Act. This ensures that the protection of right-holders’ interest remain paramount in the eyes of law.

Ed Sheeran sued over ‘Thinking Out Loud’

The British pop music sensation, Ed Sheeran, yet again faces charges of infringement as the successors of Marvin Gaye, sued him, claiming that his hit record “Thinking Out Loud” infringes the song “Let’s Get It On”, which was composed by Gaye. The law suit has been filed in the Southern District of New York. The successors of the singer have claimed that Ed Sheeran had copied key elements of the aforementioned music track in his own song.

This would mark the second complaint of copyright infringement against Ed Sheeran in the last few months, before this he was sued for his song “Photograph”. The present lawsuit against him is for damages. The grounds of infringement are on the harmonic progression and melodic elements of Gaye’s “Let’s Get It On” formed the basic structure of the song “Thinking Out Loud”.

Trade Mark Infringement – Delhi’s Khan Market threatens to sue Salman Khan

Salman Khan’s venture in to the online shopping space finds itself in a legal soup! The Bollywood star had launched his website khanmarketonline.com on his birthday last year. The website was well received by the actor’s fans and found mention at most social media platforms as well.

However, the website has irked the market association of Central Delhi’s most famous market – Khan Market, due to its name being markedly similar to the 65 year old market’s name. The Khan Market Trader’s Association has decided to pursue legal action against Salman Khan, in case the actor denies changing the name of his website. The Market Association contends that the website gives a deceptive resemblance that it is the online portal for the famous Delhi based market. This in the view of the market association is unjust utilization of their public image by Salman Khan!

Reportedly, the market association has served a Legal Notice on Salman Khan and has given him 7 days to reply.

Salman Khan is yet to comment on this development. It is not going to be an easy decision for him, as many people have already registered on the website and it has received considerable popularity.