Why India needs to take intellectual property seriously

Without reform of IP law, Indian companies - and broader economic growth - will remain stunted

DR. Reddy's Laboratories' chairman, called for the Indian pharmaceutical industry to move up the value chain from generics through investing in research and innovation, reported the Business Standard last week. Mr Prasad's aspirational call to action is, however, a sad reminder of how the government's policies create a hostile environment for investment and hobble Indian creativity. A salient example of these counterproductive policies are the attacks on some 15 medicine patents over the past 18 months. While hailed often as victories, these manoeuvres jeopardise the investment India needs to build intellectual capital, foster growth and employment, and develop medicines relevant to Indian needs.

The idea underpinning intellectual property (IP) protections is to encourage innovation. With an assurance of temporary exclusivity, people will invest resources to create new products and technologies, knowing that if they achieve a breakthrough their efforts will be rewarded. (It typically takes a decade and over $1 billion to develop a successful new drug.)

Creating incentives for innovation is an idea reaching back hundreds of years. In the 18th century the framers of the US Constitution included a provision that calls on the Congress to grant authors and inventors "the exclusive Right to their respective Writings and Discoveries" in order to promote progress in science and the arts.

In the intervening years, robust IP rights have helped spark innovation and growth in countries - both developed and developing - throughout the world. As much as 40 per cent of US growth in the 20th century was a result of innovations, according to Nobel laureate Robert Solow. And one of India's most successful companies - Tata - has prospered on the strength of its IP. As of 2012, Tata Motors held 833 patents and Tata Steel had 1,230 patents.

Just as countries with strong IP rights have a foundation for prosperity, countries lacking such protections find innovation and growth more daunting. It is sadly unsurprising that India receives low marks on innovation scorecards. As President Pranab Mukherjee pointed out in his National Technology Day speech in May, "India's innovation bottom line is not very encouraging." He observed that the US and China receive 12 times as many patent applications as India.

Regrettably, he did not elaborate on how IP rights foster innovation - nor did he dwell on how these protections encourage foreign direct investment (FDI). It is well established that such investment brings with it new technologies, higher productivity and wages, and spillovers to other firms that spur modernisation. International businesses also bring R&D to countries that provide supportive environments. That increased R&D is often aimed at unmet local needs, such as drug company investment in tropical disease research. Weak IP protection directly discourages such R&D.

While India did revise its IP laws in 2005, enforcement has been inconsistent, at best, and carve-outs for generic drugs have compromised its integrity to the short-term benefit of the owners of generic companies. These shortcomings help explain why India attracts a mere three per cent of global R&D spending. (China, with its stronger IP law, attracts about 14 per cent and Japan about 11 per cent, reports the Battelle Institute.) These data reinforce the World Bank's findings that multinational firms locate R&D in developing countries with effective IP rights.

As noted, corporations consider IP protections when making decisions about where to direct their FDI. The Organisation for Economic Cooperation and Development has found that a one per cent change in the strength of a country's IP rights environment is associated with a 2.8 per cent increase in FDI inflows. That's bad news for India. From 2010 to 2012, the United Nations reports, India's stock of FDI totalled just 11.8 per cent of its GDP. The average for all developing economies was 30 per cent.

While these data underscore India's failure to attract foreign investment, some argue that IP conflicts with Indian interests. The reality is quite different, as explained by Kiran Mazumdar-Shaw, chairman of Bangalore-based Biocon. "We must understand that intellectual property is important for India to embrace and respect and protect," she told the Press Trust of India. "If you cannot demonstrate that IP is safe in the country, I think you are not sending the right message, you are not going to find people investing in India."

Moreover, IP is not the obstacle to access to healthcare that some officials and activists allege. The Supreme Court's recent decision denying Novartis's rights to Glivec, a patent recognised in over 40 countries, has been acclaimed as an advance in patient access. However, Novartis was already ensuring that 95 per cent of the Indians who were prescribed Glivec received the cancer medicine for free.

The very real obstacles to medical access in India stem principally from the government's failings. It devotes a mere 1.2 per cent of GDP to health care, a level lower than in Haiti, and India lacks the insurance, doctors, clinics and hospitals necessary to make use of the full potential of modern medicine. These monumental challenges won't be addressed by headline-catching patent revocations, but will require sustained investment and reform.

If India is serious about attracting FDI and becoming an innovation hub, it should reform its IP law to ensure the protections that are a mainstay of the world's advanced economies. Absent such protections, R&D will regrettably go elsewhere, India's "innovation bottom line" will continue to disappoint, and, most troubling, the Indian people will be denied new opportunities, new knowledge, and new medicines.

http://www.business-standard.com/article/opinion/rod-hunter-why-india-needs-to-take-intellectual-property-seriously-114011100711_1.html

 

Protecting patents: India worst in world

Despite the current decade being called Indias “decade of innovation”, the country has been ranked at the bottom of the list of 25 countries in terms of its intellectual property (IP) environment. According to the 2014 International Intellectual Property (IP) Index by the US Chamber of Commerce’s Global Intellectual Property Center (GIPC), India’s percentage score has fallen from 25 per cent in 2012 to 23 per cent.

“The continued use of compulsory licences, patent revocations, and weak legislative and enforcement mechanisms raise serious concerns about India’s commitment to promote innovation and protect creators,” the report said.

The index, titled Charting the Course, gives a snapshot of the IP environment of 25 countries.

David Hirschmann, president and Chief Executive Officer of GIPC, said: “Nations – big and small – are wrestling with domestic legislation, judicial proceedings, criminal proceedings, and other processes regarding IP. These are all opportunities to chart a course toward a strong IP environment.”

He said along with these opportunities, some countries are taking backward steps on IP. “India, which again finished last in the second edition of the Index, continues to allow for the deterioration in its IP climate.”

The US is the highest-ranking country, followed by the UK and France. The five BRICS economies — Brazil, Russia, India, China, and South Africa — continue to face serious challenges.

According to the report, several factors led to the deterioration of the IP environment in India. For instance, in the biopharmaceutical sector, “Indian policy continued to breach international standards of the protection of innovation and patent rights, revoking patents generally accepted around the world and announcing that other patented medicines are being considered for compulsory licences.”

The report also mentions the Supreme Court’s April 2013 ruling on the patentability of the anti-cancer drug, Glivec, that the drug does not meet patentability standards imposed by the Indian Patent Act.

India scored poorly in the areas of patents, copyrights, enforcement, membership and ratification of international treaties (in which it scores zero), among others.

“The continued use of compulsory licences, revocation of patents, and weak legislative and enforcement mechanisms across all IP rights raise serious concerns about India’s commitment to promoting innovation,” the report said.

Most high-income economies — with notable exceptions such as Canada, New Zealand, Chile, and the United Arab Emirates (UAE) — have robust national IP environments in place. The weakest national IP environments are in the lower-middle-income countries such as Vietnam, Indonesia, Thailand, and India.

Some of the developments, which are expected to improve the IP climate globally include the fact that currently 12 countries — the US, Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico, and Brunei Darussalam — are negotiating the Trans-Pacific Partnership Agreement, which is expected to set a higher standard in the Pacific region, and help in protecting and enforcing IP.

Moreover, the US is currently negotiating with the European Union on a trade and investment partnership agreement, which is supposed to promote competitiveness, growth, and jobs.

China continues to show strength in the patents arena, earning the highest score of all middle-income countries and even outperform high-income countries such as Chile and the UAE. While progress is being made, China’s overall IP environment continues to see challenges, particularly with regard to trademark and trade secrets as shown by its overall score.

According to a 2013 study by the European Patent Office and the Office of Harmonization for the Internal Market on the impact of IP rights and IP-based industries on the EU economy, IP-intensive industries generated almost 26 per cent of all direct and 35 per cent of indirect jobs.

The report also found that IP-intensive industries produced almost 39 per cent of EU-wide gross domestic product (GDP), worth almost euro 5 trillion.

Source: http://www.business-standard.com/article/current-affairs/india-ranks-at-the-bottom-in-terms-of-intellectual-property-114012900371_1.html

Artful claims can’t decide patent law: court

The law of patent in India could not be developed on the artful drafting of claims by companies rather than on the intrinsic worth of invention, the Supreme Court has ruled, rejecting Novartis’ claim for patent for its cancer drug.
A Bench of Justices Aftab Alam and Ranjana Desai said, “We certainly do not wish the law of patent… to develop on the lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skilful lawyers; and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”
The Bench noted that in the United States, ‘Gleevec’ came to the market in 2001, and what was marketed then, beyond doubt, was Imatinib Mesylate. “On its package, the drug was described as ‘Imatinib Mesylate Tablets 100 mg’ and it was further stated that “each film coated tablet contains: 100 mg Imatinib (as Mesylate).” If that be so, and the [appellant’s] claim for patent for the beta crystalline form of Imatinib Mesylate would only appear as an attempt to obtain patent for Imatinib Mesylate, which would otherwise not be permissible in this country.”
The Bench said, “Since the grant of the Zimmermann patent, the appellant has maintained that Gleevec [Imatinib Mesylate] is part of the Zimmermann patent. It obtained drug approval for Gleevec on that basis.
It claimed extension of the term of the Zimmermann patent for the period of regulatory review for Gleevec, and it successfully stopped NATCO Pharma Ltd. from marketing its drug in the U.K. on the basis of the Zimmermann patent.”
“Not only the appellant but the U.S. Board of Patent Appeals, in its judgment granting patent for the beta crystalline form of Imatinib Mesylate, proceeded on the basis that though the beta crystal form might not have been covered by the Zimmermann patent, the Zimmermann patent had the teaching for the making of Imatinib Mesylate from Imatinib and for its use in a pharmacological compositions for treating tumours or in a method of treating warm-blooded animals suffering from a tumoral disease. We thus find no force in the submission that the development of Imatinib Mesylate from Imatinib is outside the Zimmermann patent and constitutes an invention as understood in the law of patent in India.”
The Bench dismissed the appeal filed by Novartis and allowed the appeals filed by NATCO Pharma and Cancer Patients Aid Association.

Increase in Trademarks Infringement Cases

Under the Trademarks Act, 1999, the Registered Proprietor or the authorized user of a trademark can take recourse to civil or criminal action against the infringer in the appropriate fora. The statistics of trademark infringements is not maintained by the Central Government.

 

The accession (proposed notification of Trademark rules under the Trademark (Amendment) Act, 2010 would enable the Indian companies to register their trademarks in the member-countries of the Protocol through a single applications as well as allow foreign companies to register their trade marks in India, within a specific timeframe i.e. 18 months. At present, there are 86 contracting parties to the Protocol. Under the Trademarks (Amendments) Act, 2010, the Head Office of the Trade Marks Registry (which is at Mumbai) or such branch of the Trade Marks Registry as the Central Government may by notification in the Official Gazette specify, will deal with the international applications.

Limitation Act - Time for Appeal

Law relating to limitation is incorporated in the Limitation Act 1963 which prescribes different periods of limitation for suits, petition or applications. The act applies to all civil proceedings and some special criminal proceedings which can be taken in the court of law unless its application is excluded by any enactment. The Act extends to whole of India except the state of Jammu and Kashmir. The statutes of limitation are based on the principles of public policy which diligence and to prevent oppression.

 

The Law of limitation bars the remedy in a court of law only when the period of limitation has expired, but it does not extinguish the right that it cannot be enforced by judicial process. Thus if a claim is satisfied outside the court of law after the expiry of period of limitation, that is not illegal.

 

The intention of the law of limitation is, not to give right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right. The object is to compel litigants to be diligent in seeking remedies in court of law by prohibiting stale claims. It is to help the bona fide claimant and to prevent fraud being practiced by people upon innocent persons by keeping action hanging on them for a long time.

 

Computation of the period of Limitation

 

The Courts in India are bound by the specific provisions of the limitation Act and are not permitted to move outside the ambit of these provisions. The Act prescribed the period of limitation in Articles in schedule to the Act. In the articles of the schedule to the limitation Act. columns 1,2, and 3 must read together to give harmonious meaning and construction.

 

Bar of Limitation

 

Sec 3 of the Act provides that any suit, appeal or application if made beyond the prescribed period of limitation, it is the duty of the court not to proceed with such suits irrespective of the fact whether the plea of limitation has been setup in defence or not. The provision of sec 3 are mandatory. The court can suo  motu take note. The effect of sec 3 not to deprive the court of is jurisdiction. Therefore, decision of a court allowing a suit which had been instituted after the period prescribed is not vitiated for want of jurisdiction.

 

Extension of Time in Certain Cases

 

Doctrine of sufficient cause

 

Sec 5 allows the extension of prescribed period in certain cases on sufficient cause being shown for the delay. This is known as doctrine of “Sufficient cause” for condonation of delay which is embodied in sec 5 of the Limitation Act. 1963. Sec 5 provides that any application other than application under provision of order XXI of the code of civil procedure 1908 may admitted after the period of limitation if the appellant satisfies the court that he had sufficient cause for not preferring the appeal. However it must be a cause which is beyond the control of the party.

 

Person under legal disability

 

Section 6 is an enabling section to enable persons under disability to exercise their legal rights within a certain time. Section 7 supplements section 6,section 8 controls these section, which served as an exception  to sec 6 and 7. The combined effect of section 6 and 8 is that where the prescribed limit expires before the cessation of disability, for instance, before the attainment of majority, the minor will no doubt be entitled fresh period of limitation.

 

Computation of period of limitation:

i)  Section 12 to 24 deals with computation of period limitation. As per section 12 the day to be excluded in computing period is the day from which the period is to be reckoned and the time requisite for obtaining a copy of decree shall be excluded.

ii)  Time which leave to sue or appeal as a pauper is applied for also excluded.

iii)  The time which a suit or application stayed by an injunction and the continuance of the injunction and the time taken for obtaining sanction or consent.

Divorce by mutual consent

i) A separation of one year before filing the case please note that actual physical separation is not required, even if both parties are sleeping in the same bedroom they can be said to be seperated for the purposes of mutual consent, if they are not living together as husband and wife;

 

ii) A flawlessly drafted MoU (Memorandum of Understanding) that settles the terms on which you part away, people don’t understand the importance of this, this is extremely important so as to end the matters with a finality once and for all, there are no loose ends and make sure there is no litigation in future;

 

Once the above is done – you have to get drafted the Divorce petition that encapsulates the contents of your earlier MoU.

 

After Court

 

When you file your divorce by mutual consent petition – it comes up for hearing and your statements are recorded, then the court gives you a period of 6 months (basically to think over your decision) after which,  on recording of final statements divorce decree is passed.

 

Monetary Settlement/Maintenance/Alimony/Child Custody issues.

 

A Mutual Consent petition gives you the flexibility to come to your own terms with respect to the issue. If a full and final settlement is reached – the money can be paid before the court at the time of final hearing.

 

In all this procedure enables couples to part away amicably on a good note, without ruinous litigation, and without much expense.

Points to remember before purchasing a Re-Sale property

A resale property:

Who does not wish to live in a house of their own? Buying a new flat will take a long time, so some of us may wish to settle for buying a resale property.  However buying a resale property could involve many legal and other procedural requirements. It is prudent to first understand the various procedures and safety measures for buying resale property to avoid hassles in future. 

Buying Resale Property –A Guide

Consult Experts:

It may be ideal to engage a good real estate agent to locate a resale property. He would be in a position to locate sellers as well as guide you regarding the price of such properties in different localities. They would also be in a position to tell you about the seller of the property. Most real estate agents charge a fee and also help with registration, payment of stamp duty and other paper work involved in the purchase of resale property. In addition, taking the help of a good lawyer would also help to make sure that things are clear legally also.

Title of the property:

It will help engaging experts like real estate agents and lawyers to help you, but it is always better to be well-informed yourself when entering into deals for buying resale property. The first step in this regard would be to establish the title of the seller; whether he is the real owner of the property or has been given the power of attorney to transact the deal. All the documents with regard to the property need to be clear. In addition you need to make sure that all the original documents with regard to the property that were given by the builder or original developer are in order.

Documents:

Buying resale property seems great, but it could become a big problem if the documents regarding the original purchase and subsequent transfer of title are not properly stamped. Firstly it could pose great problems especially if you want to apply for a loan for purchase of the resale property. Subsequently it could prove to be unacceptable in case you wish to transact further on the property.

Existing Loan:

It is also necessary to make sure that the property documents are not lying mortgaged in the bank’s custody against a loan taken by the seller. The bank will consider a loan only once the loan taken by the seller is repaid and the documents released.  

Loan Eligibility:

Buying a resale property would definitely provide you with a bigger space in case of older properties. However it is best to note that some banks may not lend money on buildings older than 10 years. This may be due to the reason that they may not want to take the risk of the price of the property going down. Banks also make sure to ensure that the bank’s outstanding loan should always be lower than the value of the property in the market.

Property Valuation:

Next it is imperative to note that the loan amount is highly dependent on the cost of the property. Technical experts would evaluate the property. However it would be useful to yourself avail the services of a property valuer at a small fee before approaching the banks. The bank’s property valuer may valuate the property at a much lower rate. They would also like to safeguard their interests against the fall in the price of the property in future.

More Down Payment:

Most banks wish to make sure that you be responsible for the maintenance and good upkeep of the resale property. So banks would expect you as the purchaser of the resale property to pay a certain percentage of the price as down payment. You may have to pay about 20% of the price as down payment; property of 50 lakhs requires 10 lakh as down payment.

Age of the property:

This down payment could be more in case of older properties. In addition, banks usually lend only on properties that are unto 50 years old. The tenure of the loan also decreases with the age of the property.

Flat Society:

The bank may grant the loan and you may make the down payment, but there could be another problem. It arises out of the need for some Flat societies that require the payment of a heavy price for change of ownership. It is best to consider this cost also when coming to a conclusion while purchasing resale property in cooperative and other societies.

Conclusion:

Buying resale property would give you a chance to settle in your own house fast and save you of high rents paid and the need to frequently shift your place of living. Taking a loan from the bank could give you tax deductions on the interest paid soon. You would not have to wait till the possession as in the case of new flats. It is always prudent to be well   informed about the various details of the resale property. 

http://www.agarwalandco.com/

Delhi HC judgment in Lt Foods Ltd v. Sunstar Overseas Ltd &Anr.

The Delhi HC, in Lt Foods Ltd v. Sunstar Overseas Ltd &Anr., decided on a bunch of interim applications filed by the parties in the cross-suits, seeking injunction against each other. The parties, in the instant case, claimed ownership rights over the mark “HERITAGE” used in respect of rice. While plaintiff claimed to be the user of the mark since 1997, the defendant claimed to be the user from 1985.The parties did not dispute that the marks used by them viz., “HERITAGE” by plaintiff (Registration no. 799246) and “INDIAN HERITAGE” & “INDIAN HERITAGE SELECT” (Registration no. 1149872) by defendants were deceptively similar.

Background

The plaintiff, in March 2009, came to know that the defendant exported rice under the mark “INDIAN HERITAGE”. The plaintiff, along with an interim application, filed the first suit (CS (OS) No. 612/2009) for permanent injunction restraining the infringement of trademark, passing off, rendition of accounts of profits/damages etc. against the defendants. The defendants filed a separate suit against the plaintiff (CS (OS) No. 639/2009) for permanent injunction restraining the infringement of trademark, passing off, rendition of profits etc. The plaintiff filed its second suit (CS(OS) No. 653/2009) wherein it made additional statements based on subsequent events. The plaintiff, in the aforesaid suit, argued that the invoices adduced by the defendant were dubious and fabricated and did not establish any substantial, continuous and genuine commercial use of the mark “INDIAN HERITAGE SELECT”. The instant judgment, discussed in this post, decided upon a bunch of interim applications filed by the parties in the above mentioned cross-suits, seeking injunctions against each other.

Judgment

Considering Section 28(3) of Trade Marks Act, 1999, the Court held that the suits filed by them against each other for infringement of trademark were not maintainable. [ Section 28(3): Where two or more persons are registered proprietors of trademarks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trademarks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trademarks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.] However, suit for passing off was held to be maintainable.

The Court, in this context, examined the evidence adduced by parties for determining the prior user of the mark in question. The Court appointed Local Commissioners to verify the copies of invoices presented before the Court by the plaintiff and the defendant. On perusing the evidence produced by the plaintiff (application for registration dated 20.04.1998 in class 30, statement of total annual sales during the period 1998 – 2009 & invoices during the period 1998 – 2009), the Court prima facie determined that the plaintiff was using the mark continuously since 1998.

The Court, however, dismissed the documents filed by defendants as “not genuine”. Considering the report of Local Commissioner which stated that the defendant did not use the mark “HERITAGE” in any of the exports as evidenced by the shipping bills and supporting documents made available by the customs department, it was held that the defendants argued their case based on documents which were prima facie forged and fabricated. The report of the Local Commissioner noted that the defendants interpolated the mark “HERITAGE SELECT”by replacing the words “SUPER” or “KITCHEN KING” marks in the invoices produced before the Court.

The judgment noted that there was not any clear and cogent evidence available on record to show use of mark prior to 11.11.2002 (date of application filed by defendant) by the defendant. It was noted that the defendant did not furnish sales figures for any financial year. It was also noted that the defendants did not produce and furnish the originals in spite of being given ample opportunities. The Court applied the principle of adverse presumption viz., the Court can draw an adverse presumption against the party if the party withholds a document or evidence knowing that the said document will operate to his disadvantage and held that Court would not assist a party whose case was founded on falsehood. The Court accordingly dismissed the interim applications filed by the defendant. The defendants, their licensees and franchisees were restrained from selling, exporting or dealing in rice under the impugned marks “INDIAN HERITAGE SELECT”/ “HERITAGE SELECT” or any other mark which might be deceptively similar to the mark “HERITAGE” of the plaintiff till the disposal of the suit. Further, the defendant was asked to deposit INR 50,000 with the Prime Minister’s Relief Fund for wasting the time of the Court.

Analysis

The conduct of defendant prima facie did give an impression that the case was built on forged and fabricated documents. It will be highly unfortunate (both legally and ethically) if it is conclusively determined in the final judgment. Further, the judgment is a warning to those who fail to adduce originals as and when they are required to be produced before the Court- especially in a suit for passing off as it is imperative to produce clear and cogent evidence in such a suit. Passing off protects a mark only if goodwill and reputation are effectively demonstrated. The burden is upon the aggrieved to gather survey evidence for demonstrating the possibility or existence of confusion.

The judgment also highlighted the law of adverse presumption by referring to the Supreme Court judgment in Pradip Buragohain v. Pranati Phukan (2010 (11) SCC 108): “We may in this regard refer to illustration (g) to Section 114 of the Evidence Act which permits the Court to draw an adverse presumption against the party in default to the effect that evidence which could be but is not produced would, if produced, have been unfavourable to the person who withholds it. The rule is contained in the well-known maxim: omniapraesumuntur contra spoliatorem. If a man wrongfully withholds evidence, every presumption to his disadvantage consistent with the facts admitted or proved will be adopted.”

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Source: http://spicyipindia.blogspot.in/2012/06/note-on-delhi-hc-judgment-in-lt-foods.html

Passing Off Action by Mid-Size Foreign Companies Having Unregistered Marks in India

There are often cases that we undertake for representation, wherein the cases relate to enforcement of trademarks by/of mid-sized foreign corporations that have not been filed and/or used in India against Indian companies that have deceptively used their marks thereby constituting misrepresentation, which might amount to passing off. Rupkatha and Poorva, interns at Khurana & Khurana, look at some of these cases and try to identify certain parameters based on which the mid-sized foreign companies can protect their interest.

Perry v. Truefitt[1], the English case where the tort of passing off was first articulated had clearly pointed out that “a man is not to sell his own goods under the pretence that they are the goods of another trader.” The House of Lords further laid down the essential elements of passing off in Reckitt & Colman Ltd v Borden Inc [2] as:

• The existence of claimant’s goodwill
• Misrepresentation
• Damage or likely damage

Section 27(2) of the Trade Marks Act, 1999 authorizes any trader to institute passing off action against another in spite of the fact that his mark is unregistered. The Hon’ble Supreme Court of India has laid down three elements that need to be fulfilled in order to institute a passing off action by the plaintiff in Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.[3]:

• The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant’s goods or services are the plaintiffs.
• The likelihood of confusion in the minds of the public that the goods or services offered by the defendant are the goods or the services of the plaintiff.
• The likelihood of confusion in the minds of the public that the goods or services offered by the defendant are the goods or the services of the plaintiff.

Unregistered Marks of Foreign Companies

Section 18 of the Act allows foreign nationals to register their mark in India. Once a mark is registered, the company can take action for infringement against any person who tries to do so. The problem arises when the mark is unregistered. Is there any remedy for the company in such a situation? Or will it remain at the receiving end?

The Indian judiciary has played its role of filling up the gap in the law in such situations. Time and again it has granted relief to foreign companies who are yet to register their marks in India even though the defendant had registered its mark. In N.R Dongre v. Whirlpool Corporation[4], injunction was granted in favour of Whirlpool Corporation based on the fact that although their mark was not renewed, they had gained enough goodwill and reputation in the Indian market which was being wrongly used by the defendant.

The general trend has been to grant relief only to multinational corporations who have a good market in India or who are big names in the international arena. The Hon’ble Bombay High Court in Centrol Industrial Alliance Ltd. versus Gillette U.K. Ltd.[5], the Hon’ble Delhi High Court in Jolen Inc. vs Doctor & Company[6] and Indian Shaving Products Ltd. v. Gift Pack[7] and several other High Courts have held that in order to get injunction in favour of a foreign company with an un-registered trademark, goodwill in the Indian market is an essential pre-requisite.

The problem then arises with the mid-sized companies. There are about 40 marks in the latest trademark journal published by the Controller General of Patents, Designs and Trademark which are deceptively similar or rather have been ‘copied’ from the trademark of some foreign company, big or small. Till now, the trend has been to provide no relief to companies having without any trans-border reputation. The Intellectual Property Appellate Board rejected the opposition posed by the appellant in Kraft Jacobs Sucharc Ltd. v. Government of India by Secretary[8] on the ground that the opponent did not have any presence in the Indian market and did not intend to come to do business here in the near future.

The road ahead

The Court has definitely observed in the Jolen Inc. case[9] “even if it is assumed that such advertisements or marks do not travel beyond the borders of the countries where the plaintiff has the business, still it has a right to protect its reputation and goodwill. It is more so where the trade name has been pirated in totality and not by way of having deceptive or confusing similarity.” The Supreme Court in Milment Oftho Industries & Ors. v. Allergan Inc.[10] held that non-use in India would be irrelevant if the plaintiff was the first in the world market. However, the decision carried a word of caution that foreign brand owners who have no intention of coming to or introducing their product in India will not be allowed to stifle an Indian company by not permitting it to sell a product in India, if the Indian company has genuinely adopted the mark.

Therefore, if it can be shown that the defendant had adopted the complete mark knowing very well that another company of some other country has already adopted that mark, then mala fide on part of the Indian company can be argued.

Now, the Indian courts have been conservative in their approach and constantly relied upon the circulation of magazines, journals and extent of Indian travellers going abroad while deciding these types of cases. This approach is outdated in the light of modern means of exchanging information. The internet, for example, provides a global forum for any product manufactured in one country. Thus, when an Indian company launches a website bearing the trademark of some foreign company, it becomes easier to hold it liable. The Internet Corporation for Assigned Names and Numbers (ICANN) manages the top-level development and architecture of the internet domain name space. It authorizes domain name registrars through which domain names can be registered and re-assigned. Thus, any person who seeks to register a domain name is informed about the availability of that domain name. Rule 2 of the Uniform Domain Name Dispute Resolution Policy[11] requires an applicant to determine that the domain name for which registration is sought does not infringe or violate another’s rights. Thus, if the proposed domain name violates another person’s trademark rights, it will violate Rule 2 of the policy. In such eventuality, the registrar can refuse to register the domain name. Thus, a domain name that is properly registered under international requirements is still subject to the Trademarks Act if a rights owner successfully proves that it has rights flowing from the act.

It was held in the celebrated UK case of Marks and Spencer’s v. One in a Million[12] that any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organization must expect to find himself on the receiving end of an injunction to restrain the threat of passing off. This was reiterated by the Delhi High Court in Yahoo!, Inc. v. Akash Arora[13]. After the celebrated case of Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.[14], there is no doubt that internet domain names are subject to the legal norms applicable to trademarks.

Conclusion

A person who has directly copied the trademark of a foreign company having a proper accessible website and trading in the same goods and services, cannot take the plea that he was not aware of his opponent’s presence in the market. Further, it is strongly recommended that the plight of the mid-sized companies be addressed soon and internet as an advertising and communicating forum gets acknowledged. After all, this is a wrong committed by the Indian company and thus a remedy must be sort out.

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[1] (1842) 6 Beav. 66

[2] [1990] 1 All E.R. 873

[3] 2004(6) SCC 145

[4] 1996(5) SCC 714

[5] 1998 PTC (18) (DB)

[6] 2002 (25) PTC 29 (Del.)

[7] [1998] PTC 698 (Del)

[8] 2004 (29) PTC 376 IPAB

[9] Supra n6

[10] 2004 (28) PTC 585 (SC)

[11] It is a process established by ICANN for the resolution of disputes regarding the registration of internet domain names. It currently applies to all .aero, .asia, .biz, .cat, .com, .coop, .info, .jobs, .mobi, .museum, .name, .net,.org, .pro, .tel and .travel top-level domains,and some country code top-level domains. Refer to http://www.icann.org/en/help/dndr/udrp

[12] 1998 FSR 265

[13] 78 (1999) DLT 285

[14] AIR 2004 SC 3540

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Source: http://iiprd.wordpress.com/2012/06/02/passing-off-action-by-mid-size-foreign-companies-having-unregistered-marks-in-india/