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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”.

Dunkin Donuts Sued for Alleged Trademark Infringement

Life isn’t so sweet for Splenda in what could turn into a bitter courtroom battle.

Heartland Consumer Products, the Carmel-based company behind Splenda, is suing Dunkin’ Brands Inc., alleging the company is misleading consumers into thinking they are getting the real Splenda when it’s just a knockoff.

According to the complaint filed in federal court this week, after Dunkin’ and Heartland ended their business relationship in April, the restaurant chain turned to “Chinese-made, off-brand sucralose” in packaging that Heartland claims is similar to Splenda’s.

Both sweeteners come in pastel-yellow paper packets.

The Dunkin’ version does not include any brand name for the sucralose it contains, but the new packaging indicates it is manufactured for Dunkin’ by Chicago-based Merisant.

Additionally, the company claims Dunkin’ employees tell customers that Dunkin’ uses Splenda products.

“Investigators revealed that a clear majority of stores affirmatively represented, through their agents or employees, that non-Splenda sucralose sweetener was used instead Splenda brand sweetener,” the complaint states.

Heartland has applied for an injunction to stop Dunkin’ Donuts from representing that it uses Splenda products, as Dunkin’ is “irreparably damaging the value of Heartland’s iconic Splenda trademark and other marks,” according to the 22-page complaint.

The company is claiming other damages arising from Dunkin’s “violations of trademark and trade dress infringement, dilution and unfair competition under the Lanham Act, the Indiana State Trademark Act, the common law of the State of Indiana and the Indiana Crime Victims Act.”

Splenda is a low-calorie sweetener derived from sugar using a patented process to create a sweetener that tastes like sugar, according to its website.

It was introduced to American markets in 1999. and Heartland and owns 62% of market share as of 2007. The company’s U.S. trade sales this year are expected to be $163 million.

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.

Indian Court takes strict action against website selling fakes

In a landmark action towards preventing online sale of fake products, the Indian judiciary has taken the strictest action against online infringement activities that were being carried out by an e-retail website.


Online Investigation found that an e-retail website was selling fake goods of globally well-known brands which included some of the biggest athletic footwear & apparel companies and a couple of premium lifestyle companies dealing in apparel, home, accessories and fragrances. Test-purchases confirmed that the goods on this website were infringing the trademark of these global brands. After this finding, a combined action was taken by the right-holders against the website.counterfeitORDER OF THE COURT

Counsel for the Plaintiff – Mr. S.K. Bansal in his arguments, stressed on the Trans-border reputation of the global brands. Taking serious cognizance of the increasing menace of Online-counterfeiting, the court, in order to prevent such infringing activities in future provided for every possible remedy against the Defendants which are currently available under the IPR legislations in India by way of various directions to the Registrar as well as Web-hosting providers of the website. The court appointed a Local Commissioner (LC) to oversee the search and seizure of the infringing products and also restrained the defendants by way of an injunction-order. A complete take-down (blocking) of the entire online presence including social media accounts of was ordered and effected successfully.


The court also directed the Department of Telecommunication (DOT), Government of India, to block the web pages/URLs /other listing of This direction acted as a breakthrough as it meant that each and every URL containing contents of the infringed trademark will be blocked by the Ministry of Communications and Information Technology through all the (Internet Service Providers) ISPs of the country, as and when notified by the Plaintiff through its regular detailed investigations.

Court’s decision under the circumstances of the case acted as a positive proof of the enforcement mechanism of Intellectual property laws in India and the willingness of the court to go to the extra mile for protection of the right holders.

Italian Fashion Brand GUCCI loses the Trademark Infringement battle against GUESS

In what appears to be the third phase of an on-going litigation between the well-known Italian Fashion Brand “Gucci” and American Fashion Brand “Guess”, Gucci faced a second time defeat, this time before the Court of France which ruled in favour of Guess stating that the American brand is not guilty of any infringement of the rights of Gucci in its registered trademarks. The Court dismissed Gucci’s claim for damages and in turn ordered it to pay an amount of USD 34,000 as compensation to Guess.

The first phase of the battle was in the year 2012, the Court of New York ruled in favour of Gucci holding that Guess was guilty of infringement of Gucci’s rights in 4 out of 5 well-known trademarks (the green and red strips pattern, the repetitive GG pattern, the diamond motif trade dress, the stylized G design mark and the script Gucci design mark). The Court ordered Guess to pay damages to the tune of USD 4.7 million to Gucci as compared to USD 124 million as claimed by Gucci in the law suit. The reason behind the massive reduction in the amount of damages was two-fold as deciphered by the Court, firstly, the case being filed only in the year 2009 was stricken with delay, latches and acquiescence as Gucci was aware of Guess’s designs which were introduced in the year 1995. Secondly, Guess was not guilty of counterfeiting Gucci’s logos but only diluting them as “courts have uniformly restricted trademark counterfeiting claims to those situations where entire products have been copied stitch-for-stitch.”, as quoted by the Judge.

The second phase of the litigation between the brands was in the Court of Italy where Guess filed a legal action for challenging the validity of 3 Gucci trademarks in Milan. The Court passed the decision in favour of Guess and cancelled the disputed trademarks which were the Diamond pattern, Flora pattern and the G logo. The appeal against the decision of the Court of Italy was filed by Gucci which was further ruled in its favour.

Having undergone grisly litigation for over 6 years, Gucci has faced a serious loss of revenue, time as well as rights in certain trademarks in the jurisdiction of Italy and France. There are grim chances of settlement between the two brands and this case ensures another chapter in the famous litigation battle.

Online Broadcasting now within the scope of Statutory Licensing under the Indian Copyright Law

In a recent development, the Department of Industrial Policy and Promotion (DIPP), Government of India issued a memorandum clarifying the ambiguity over the term ‘Broadcasting Organisation’ as mentioned in section 31D of the Indian Copyright Act.

Section 31D of the Copyright Act deals with Statutory Licensing and subjects any ‘Broadcasting Organisation’ to the provisions of the same.

Section 31D states “Any broadcasting organization desirous of communicating to the public by way of a broadcast or by way of performance of a literary or musical work and sound recording which has already been published may do so subject to the provisions of this section.”Further to which clause 3 of Section 31D states “The rates of royalty for radio broadcasting shall be different from television broadcasting and the Copyright Board shall fix separate rates for radio broadcasting and television broadcasting.”

Clause 3 of Section 31D only expressly refers to television and radio as the broadcasting organisations and mentions the royalties to be imposed for television and radio to be different. Taking into account only ‘radio’ and ‘television’ further caused the ambiguity with respect to the term ‘Any Broadcasting Organisation’. The question as to the scope of ‘Any Broadcasting Organisation’ was whether the same was limited to ‘Television’ and ‘Radio’ or ‘Internet Broadcasting’ could be included under the ambit of the same.

As per the memorandum issued by DIPP (which can be found ), the term Internet Broadcasting is included in Communication to the publicas defined in section 2(ff) of the Copyright Act. DIPP finally quoted that, “any broadcasting organisation desirous of communicating to the public, may not be restrictively interpreted to be covering only radio and TV broadcasting as definition of “broadcast” read with “communication to the public”, appears to be including all kind of broadcast including internet broadcasting. Thus, the provisions of Section 31D are not restricted to radio and television broadcasting organisations only but also cover internet broadcasting organisations.”

Implications of the Memorandum

Earlier Internet Broadcasters could voluntarily enter into agreements with distributors. Now they will be covered under the ambit of statutory licensing as per section 31D of the Copyright Act. Subsequent to the memorandum, prior intimation of broadcasting would be a requirement to be complied with. The rates of royalties would now be fixed by the copyright board. The memorandum curbs the contractual freedom of music distributors and on the other hand entitles internet broadcasters for a statutory license where the broadcaster is not interested.

The notification takes into account the importance of internet as a medium of broadcasting but still has to withstand any possible challenges of the court.

Publishers lose copyright case against Delhi University’s Photocopy shop

In an important judgment certain to have a far reaching impact on Copyright Law in India, the Delhi High Court yesterday ruled in favor of photocopiers and students by holding that photocopying of textbooks for educational needs of students does not amount to copyright infringement.

This judgment means that the Rameshwari Photocopy Shop (a small photocopy shop situated in the North Campus of the Delhi University) has managed to successfully stand against the might of globally renowned publishers (including Oxford University Press, Cambridge University Press, Taylor & Francis) which sued it for copyright infringement alleging that bulk photocopying of textbooks by students was causing them financial losses students had stopped buying textbooks, preferring to simply purchase or copy relevant chapters at a meagre amount.

The stand of the photocopy shop and the Delhi University (which backed this shop throughout) was that photocopying enabled the students to have easy and affordable access to education material and was thus in the larger interest of the society.

This gave rise to the following important question of law which the Court had to settle –

Whether photocopy of books by students and academicians would qualify as a fair dealing under the Copyright Act, 1957 if the same was beyond affordability for the academia.

The High Court opined on the scope of “educational exception” under “fair dealing” as laid down under Section 52(1) of the Copyright Act, 1957.  Some of the lines of arguments taken by the Plaintiffs, amongst others, were to the effect that “publishers are not charity houses” and “why should they give out their work for free”.

The Hon’ble Judge held that the alleged infringement was covered under the exception of fair dealing as per section 52(1) of the Copyright Act, 1957 hence there was no infringement on part of the defendants. The Judge further quoted that “Copyright is not a divine right”, stating that Delhi University or any of its agents had the right to photocopy whether inside or outside the campus, if and when the same is for educational use and not commercial use.

This case attracted huge media attention and was greatly talked about in academic circles, colleges, publishing houses and the intellectual property law fraternity.

Irrespective of the fact that whether one agrees with this judgment or feels that the publishers have been hard done by, it is undeniable that this judgment settles an important debate under the Indian Copyright Law, at least for now, the same being liable to an appeal in the higher court.

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”.