Copyright Act

Key Business Concerns In Commercializing Intellectual Property Rights

Question 1. How is the valuation of intellectual property done?
Answer:

Acceptable methods for the valuation of identifiable intangible assets and intellectual property fall into three broad categories. They are market-based, cost-based, or based on estimates of past and future economic benefits.

• In an ideal situation, an independent expert will always prefer to determine a market value by reference to comparable market transactions.
• This is difficult enough when valuing assets such as bricks and mortar because it is never possible to find a transaction that is exactly comparable.
• In valuing an item of intellectual property, the search for a comparable market transaction becomes almost futile. This is not only due to lack of compatibility, but also because intellectual property is generally not developed to be sold and many sales are usually only a small part of a larger transaction and details are kept extremely confidential.
• There are other impediments that limit the usefulness of this method, namely, special purchasers, different negotiating skills, and the distorting effects of the peaks and troughs of economic cycles.
• Cost-based methodologies, such as the “cost to create” or the “cost to replace” a given asset, assume that there is some relationship between cost and value and the approach has very little to commend itself other than ease of use. The method ignores changes in the time value of money and ignores maintenance.

The methods of valuation flowing from an estimate of past and future economic benefits can be broken down into four limbs;

1. Capitalization of historic profits,
2. Gross profit differential methods,
3. Excess profits methods, and
4. The relief from royalty method.

Discounted Cash Flow (“DCF”) Analysis sits across the last three methodologies and is probably the most comprehensive of appraisal techniques.

Question 2. Explain the usage of the ‘excess profits method’ for the valuation of intangibles.
Answer:

‘Excess Profits Method’ in reference to intangibles looks at the current value of the net tangible assets employed as a benchmark for an estimated rate of return. This is used to calculate the profits that are required in order to induce investors to invest in those net tangible assets. Any return over and above those profits required in order to induce investment is considered to be the excess return attributable to Intellectual Property.

• While theoretically relying upon future economic benefits from the use of the asset, the method has difficulty in the alternative usage of assets. But worldwide, future economic benefits are used to arrive at the current valuation of intangible assets.
• The excess operating profits method determines the value of the intellectual property by capitalizing the additional advantages generated by the business owning the property over and above those generated by similar businesses, which do not have the benefit of the property.
• There are different ways in which the excess advantage may be calculated, for instance by reference to a margin differential or comparing the return on capital employed earned by the business owning the property with that earned by companies without such benefit.
• The calculated excess operating profits expected to be earned over the life of the asset in question are then discounted to the present day to arrive at a value for the asset.

It is significant if using this method, to ensure that the excess advantages identified are particularly attributable to the intangible asset in question and not to some other factor like an efficient production facility or distribution network that relates to the business as a whole.

Question 3. ‘Unfair competition is going on in relation to intellectual property.’ Discuss the safeguards and multilateral agreements in this regard.
Answer:

Multilateral Agreements: A number of multilateral agreements in the field of intellectual property deal with unfair competition in intellectual property transactions.

• The laws dealing with restrictive trade practices in India are contained under the Patents Act and the Competition Act. The Paris Convention for the Protection of Industrial Property provides for efficient protection against unfair competition.
• Article 17 of the Berne Convention for the Protection of Literary and Artistic Works makes clear that the Convention does not prohibit the application of national administrative control this formulation may apply to competition laws.
• The Paris Convention allows the grant of compulsory licenses to prevent abuses resulting from the exercise of the exclusive rights conferred by patents.
• From an objective point of view, it provides intellectual property rights in order to prevent the conclusion of contract negotiations in the abuse of their exclusive right.
• For the restrictions of intellectual property rights, TRIPs agreement to be enough interest, TRI Ps Agreement expressly provides for Article 8 the principle of prohibiting the abuse of intellectual property rights, Article 30 of the exceptions to patentability, Article 31 of the compulsory license system are the embodiment of intellectual property restrictions.
• WTO Agreement on Trade-Related Aspects of Intellectual Property Rights expressly recognizes the role of competition policy in ensuring that PRs promote economic growth and innovation. Article 40.2 of the TRIPS agreement provides that:
• “Nothing in this Agreement shall prevent members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights hurting competition in the relevant market”.

It allows member countries “to adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices in the light of the relevant laws and regulations”. The repression of anti-competitive practices associated with I PRs is therefore assigned to national competition laws and policies.

Safeguards against Unfair Competition under Multilateral Agreements: As a general rule, any act or practice carried out in the course of industrial or commercial activities contrary to honest practices constitutes an act of unfair competition; the decisive criterion being “contrary to honest practices.

• Several multilateral agreements in the field of intellectual property deal with unfair competition in intellectual property transactions. In this context, the need for international cooperation has also been emphasized under the TRIPs agreement.
• In particular, consultations among member countries are envisaged, inter alia, through the supply of publicly available non-confidential information.
• In this regard, Article 8 stipulates that appropriate measures consistent with the provisions of the Agreement may be needed to prevent the abuse of I PRs or practices that unreasonably restrain trade or adversely affect the transfer of technology.
• Article 40 affirms the right of member countries to specify in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having adverse effects on competition in the relevant market and to adopt, consistently with other provisions of the Agreement, appropriate measures to prevent or control such practices.
• For example, exclusive grant back conditions, conditions preventing challenges to validity, and coercive package licensing.

Article 31 of the TRIPs agreement lays down conditions limiting the use of patents without authorization of the IPR holder, including both uses by Governments or by third parties i.e. through compulsory licenses.

• The TRIPs Agreement also contains several provisions relating to the use of I PRs. First, there are general considerations in paragraph 1 of the Preamble that are accompanied by Article 8(2), allowing Members to take appropriate measures to prevent abusive practices.
• Second, there are some very precise provisions concerning competition law. They allow fair use and the possibility of compulsory licensing or the granting of dependent patents, i.e. the granting of a right by public authorities, and against the will of a patent owner, to make use of a patent to the extent necessary to develop a new product.
• Compulsory licensing provisions can be included in both intellectual property and competition laws. Article 31 (k) of the TRIPS Agreement, explicitly provides for the granting of such licenses in the case of patents.
• Grounds for granting compulsory licenses under competition law have included in the US the use of patents as a basis for price-fixing or entry-restricting cartels, the conclusion of market-concentrating mergers in which patents played an important role, and practices that extend the scope of patent restrictions beyond the bounds of the patented subject matter.
• Compulsory licenses may also be issued when cross-licensing unduly limits competition, particularly in cases that involve substitute technologies, i.e. technologies that actually or potentially compete with each other, independently of their intrinsic characteristics.

However, certain exceptions from these conditions are made if the unauthorized use is permitted to remedy a practice determined to be anti-competitive after judicial or administrative process.

Question 4. What is the difference between Intellectual Property Law and Technology Transfer? Please analyze.
Answer:

Intellectual Property (IP) refers to the creations of the human mind like inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.

Intellectual property is divided into two categories:

• Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems, plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.
• Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.

Intellectual property rights protect the interests of creators by giving them property rights over their creations. The TRIPS Agreement encompasses, in principle, all forms of intellectual property and aims at harmonizing and strengthening standards of protection and providing for effective enforcement at both national and international levels.

Technology Transfer: As per the Oxford Dictionary, ‘Technology Transfer’ is the transfer of new technology from the Originator to a Secondary IJaor, especially from developed to developing countries In an attempt to boost their economies.

• As per the Business Dictionary, Technology Transfer refers to (1) Assignment of technological Intellectual property, developed and generated in one place, to another through legal means, such as technology licensing or franchising. Or (2) Process of converting scientific and technological advances Into marketable goods or services.
• In general, it denotes the sum of knowledge, experience, and skills necessary for manufacturing a product or products and for establishing an enterprise for this purpose.
• Transfer of Technology is a complex phenomenon necessarily Involving rights, obligations, privileges, and commitments of the parties to transactions. The basic legal document Is the license agreement (or transfer of technology.
• If technology is transferred through licensing, stronger IPR protection results in greater innovation, and Increased licensing.
• Licensing has the advantage to firms of higher profits due to lower production costs, but involves other costs in terms of contract negotiations, transferring the necessary technology, and in the rents that the innovator must give to the licensee to discourage imitation. By reducing the risk of imitation, stronger IPR protection also reduces the costs of licensing, thus encouraging licensing and freeing up resources for innovation.
• Transfer of technology takes place through formal and informal channels. Some of the formal channels include trade, licensing, joint ventures, franchising, foreign patenting, and Foreign Direct Investment (FDI) while the informal channels include imitation and technology spillover.
• Technology transfer relates to voluntary or non-market transactions by which a firm gains access to technology developed in another country.
• Therefore, policies made to develop a strong IPR regime can help developing countries gain access to foreign technology.
• The impact of stronger IPR protection on technology diffusion Is ambiguous in theory and depends on a country’s circumstances.
• On the other hand, stronger IPR protection could restrict the diffusion of technology, with patents preventing others from using proprietary knowledge and the increased market power of IPR holders potentially reducing the dissemination of knowledge due to lower output and higher prices.

On the other hand, IPRs could play a positive role in knowledge diffusion, since the information available in patent claims is available to other potential inventors. Moreover, strong IPR protection may encourage technology transfer through increased trade in goods and services, FDI, technology licensing, and joint ventures.

1. Despite this theoretical ambiguity, the diffusion of technology from countries at the technological frontier to other countries is considered the main potential benefit of the TRIPS Agreement, particularly for developing countries that tend not to innovate significantly.
2. The other commonly used models of technology transfer are technical assistance agreements, patent and patent agreements, know-how agreements, engineering service agreements, trademark agreements, and other franchisee agreements.

This all requires a huge involvement of IP rights for the best implementation of technology transfer.

Question 5. An Indian automobile company is interested in a joint venture arrangement with a foreign company. It has, however, little knowledge about the due diligence of intellectual property rights in a corporate transaction.
Advise the company regarding :

1. The purpose of IP due diligence is to serve, and
2. The scope of IP due diligence.

Answer:

Purpose of IP Due Diligence

1. IP due diligence is a part of a comprehensive due diligence audit that is carried out to assess the financial, commercial, and legal benefits and risks linked to a target company’s IP portfolio, typically before it is bought or invested in.
2. It provides detailed information that may affect the price or other key elements of a proposed transaction or even abort the further consideration of the proposed transaction.
3. It provides a basis for assessing the risk and value of relevant IP assets in a proposed acquisition or sale of intellectual property Scope.

IP due diligence generally seeks to:

1. Identify and locate IP assets, and then assess the nature and scope of the IP to evaluate their benefits and allocate risks associated with the ownership or use of the relevant IP assets; in particular, it seeks to determine whether the relevant IP is free of encumbrances for its intended business use(s).
2. Identify problems in and barriers to the transfer, hypothecation, or securitization of the IP assets under consideration.
3. Identify and apportion between the two parties the expenses incident to the transfer of IP assets under consideration.

Question 6. Companies are investing huge amounts of money in research and development for the creation of intellectual properties may be in the form of new technology, drug discovery, trade secrets, etc. The major concern for the companies is how to protect the IPR. Suggest the strategies for maintenance and protection of confidential information.
Answer:

Intellectual Property Rights are the key elements needed to maintain a competitive edge in the market in today’s dynamic and competitive business environment.

• Intellectual property is undoubtedly a business asset and an integral part of the business process. Effective acquisition, management, and protection of intellectual property can mean the difference between success and failure in businesses today.
• Thus, companies must take appropriate steps to protect such a valuable asset to get the possible commercial results from its ownership.
• The various statutes that have been enacted provide an adequate mechanism of protection for intellectual property rights.
• In the case of Patents, a patent can provide an inventor/corporation with a 20-year government-approved monopoly and once his 20 years of protection gets exhausted, the invention can be freely accessed and commercially exploited for the larger good of society by any player who is capable of doing it.
• However, it is equally true that some ideas cannot be patented, and indeed, some innovators do not want to patent their ideas/inventions, as, trade secrets or confidential information.

Today more than ever, intellectual property also includes confidential business information, trade secrets, know-how, and key business relationships. If a trade secret is kept a secret, the monopoly on an idea or product may never end.

1. But once the jinny is out of the bottle, you won’t get it back in, if it is lost it is lost forever and the companies are unlikely to extract sufficient damages from whoever breaches their confidentiality. Trade secrets need to be prevented from being disclosed.
2. Though it is difficult indeed, but not an impossible task. The textbook examples included the recipe for Coca-Cola and the formulation of the alcoholic beverage Chartreuse, which was only known by two monks.
3. The need to protect these vital assets is more critical than ever. Knowledge has become the key strategic differentiator. If it is valuable to the company, it is valuable to its competitors as well. Most sophisticated business enterprises (whether small, medium, or large) recognize the need to protect this vital Intellectual Property.

But little real attention is paid to protecting or securing these less formal types of intellectual property.

1. It has been observed that many companies surprisingly are oblivious to the fact that these vital intellectual property assets are walking out their front door on a daily, weekly, or monthly basis, and heading across the street to rival competitors.
2. They need to recognize this reality and take steps like creating awareness of the need to protect the company’s most valuable strategic assets without which no effective risk management program can be initiated; and take stock of the company’s core intellectual property.
3. It is important for a company to know what differentiates them from their rivals and gives them a strategic advantage over them in the marketplace.
4. There are two principal sources of leakage of trade secrets or confidential information to competitors or other third parties, that is, disclosure and departure.
5. Disclosure – Trade Secrets can be leaked advertently or inadvertently to competitors or third parties through careless or deliberate disclosure by the company’s representatives.
6. For example, when a sales representative or accounts manager meets with a potential supply chain provider about pooling resources to go after a new market or business opportunity. During the meeting, proprietary and confidential information is susceptible to be disclosed.
7. The business purpose of the disclosure or exchange of information might be quite legitimate, but the legal effect of disclosing confidential information without the benefit of a confidentiality or non-disclosure agreement could be disastrous.
8. Corporations must make it both a corporate policy and business practice not to engage in commercial negotiations with third parties (whether direct competitors or not) without first ensuring that they have a signed Confidentiality or Non-Disclosure Agreement in place.
9. Departure — The other source of leakage of confidential business information is the exit of Executive(s) or key employees from the Organization. After their employment ceases, the Employee retains the right to use any general skill, experience, and knowledge that he has acquired in the course of performing his normal duties, so that he can continue to earn a living.

This has to be balanced against the employer’s right to protect its confidential information from any disclosure by such an employee. If the employee retains any confidential information about the employer or its business, then such an employee is not entitled to use or convey that information without the employer’s authority/consent.

Question 7. A German company signed an agreement with an Indian company to use its patented technology and trademark to manufacture and market the product in the European market. Suggest how the Indian company assigns the Intellectual Property Rights Patent and Trademark to a German company.
Answer:

An assignment of a trademark must be in writing and with the consent of the Registrar under the Trademarks Act, 1999. A registered/unregistered proprietor can assign a trademark with or without goodwill.

• An assignment is usually required to be made for consideration. The application, which is in a prescribed format, can be submitted by either the Assignee or together with the Assignor, before the Registrar of Trademarks for registering the title of a person who becomes entitled by assignment to a registered trademark.
• The Assignee, after the assignment is complete, must apply to the Registrar of Trademarks to register his/her title and the Registrar enters the name and details of the Assignee in the Register on proof of title, to his satisfaction.
• However, under certain circumstances an assignment cannot be enforced, namely if an assignment will create multiple exclusive rights in more than one person: and if an assignment will create multiple exclusive rights in different parts of India.
• Sections 37 and 38 of the Trade Marks Act govern the assignment of trademarks. When a trademark is assigned, the assignee acquires the right to use the trademark and steps into the shoes of the erstwhile proprietor or owner.
• A patentee may assign the whole or any part of the patent rights to the whole of India or any part thereof.
• There are three kinds of assignments: legal assignments, equitable assignments, and mortgages.
• An assignment (or an agreement to assign) of an existing patent is a legal assignment, where the assignee may enter his name as the patent owner. A certain share given to another person is called an equitable assignment and a mortgage is when the patent rights are wholly or partly transferred to obtain money.
• A valid assignment under the Patents Act requires the assignment to be in writing, to be contained in a document that embodies all terms and conditions, and must be submitted within six months from the commencement of the Act or the execution of the document whichever is later.

Under Section 68 of the Patents Act, an assignment is valid and enforceable only when it is in writing and is duly signed by the assignor or any person authorized to do so. The written agreement must contain all the terms, conditions, rights, and obligations of the parties thereto.

Question 8. Intellectual property rights are often undervalued, undermanaged, or under-exploited. Comment. What are the major concepts for the valuation of intangible assets?
Answer:

Intellectual capital is recognized as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for the market dominance and continuing profitability of leading corporations.

1. It is often the key objective in mergers and acquisitions and knowledgeable companies are increasingly using licensing routes to transfer these assets to low-tax jurisdictions.
2. Nevertheless, the role of intellectual property rights (IPRs) and intangible assets in business is insufficiently understood. Accounting standards are generally not helpful in representing the worth of IPRs in company accounts and IPRs are often under-valued, under-managed, or under-exploited.

Despite the importance and complexity of IPRs, there is generally little coordination between the different professionals dealing with an organization’s IPR. For a better understanding of the IPRs of a company, some of the questions to be answered should often be:

• What are the IPRs used in the business?
• What is their value (and hence level of risk)?
• Who owns it (could I sue or could someone sue me)?
• How may it be better exploited (e.g. licensing in or out of technology)?
• At what level do I need to insure the IPR risk?

Valuation is, essentially, a bringing together of the economic concept of value and the legal concept of property. The presence of an asset is a function of its ability to generate a return and the discount rate applied to that return.

The cardinal rule of commercial valuation is: that the value of something cannot be stated in the abstract; all that can be stated is the value of a thing in a particular place, at a particular time, in particular circumstances. There are four main value concepts, namely, owner value, market value, fair value, and tax value.

Major Value Concepts are:

Owner Value; Owner value often determines the price in negotiated deals and is often led by a proprietor’s view of value if he were deprived of the property.

Market Value: The basis of market value is the assumption that if a comparable property has fetched a certain price, then the subject property will realize a price of something near to it.

Fair value: Is the desire to be equitable to both parties? It recognizes that the transaction is not in the open market and that the vendor and purchaser have been brought together in a legally binding manner.

Tax value: There are quasi-concepts of value that impinge upon each of these main areas, namely, investment value, liquidation value, and going concern value.

Further, other concepts include:

• Cost based valuation
• Market price comparability
• Economic based valuation

Short Notes

Question.1 Write short notes on the following:

1. Tie-in arrangements
2. Employee agreement
3. Preparing an IP audit

Answer: 

Tie-in Arrangements: Tie-in clauses are intellectual property licensing the licensee to obtain raw materials, spare parts, and intermediate products for use with licensed technology, only from the licensor or its nominees.

• These clauses also oblige the licensee to use personnel designated by the licensor. The tie-in clauses generally result in monopoly control of the supply of equipment and other inputs by supplying enterprises, leading to “transfer pricing”, “transfer accounting” or “uneconomic output”.
• The licensor charges a higher price than for comparable equipment and other input that could otherwise be obtained elsewhere. The use of tying clauses not only affects production costs through the overpricing of inputs but may have an important indirect effect on the import substitution, export diversification, and growth efforts of licensees.

Employee agreement: In Employees or Confidentiality agreements, employees should sign Employment agreements to generally detail the terms of their employment.

• Agreement should be signed before the employee commences. Existing employees should be encouraged to sign confidentiality agreements. However, usually, they cannot be forced to do so.
• When employees cease employment, the employer gives them a letter confirming this, any monies being paid to them, and reminding them of their confidentiality obligations.
• If confidential information is to be divulged, a confidential agreement should be signed before the disclosure is made. The type of agreement will vary depending on the nature and context of the disclosure.

In some cases, a confidentiality agreement must be made as a deed to be legally enforceable. A confidentiality agreement should include the following acknowledgments: The information is secret;

1. The disclosure is made to the recipient in confidence;
2. The recipient will not disclose the information to others or use the information for their advantage, without the prior authority of the owner of the information; and
3. The unauthorized disclosure of the information could cause loss and damage to the owner of the information and the recipient will be liable for this.

Preparing an IP audit:

Clarity about the Purpose Before the actual conduct of an IP audit, it is a necessary pre¬ condition that it is clearly understood by all concerned why the audit is being conducted:

• The situations that prompt an audit and the nature and scope of the audit will to some extent depend on why it is being conducted.
• In addition, the amount of time and money available for conducting an audit will have a bearing on how the audit is conducted and its eventual outcome.

Background Research for Preparing an Audit Plan Once the purpose of the audit and the available resources for its performance are clear, a major preparatory step for conducting the audit is to understand the company. It is an essential pre-condition for preparing an audit plan, which will be the basis of the audit.

What is done in background research?

• Gathering as much information as possible on the company and its way of doing business.
• Background research will be the basis of the audit and will provide the auditor(s) with the required background information for preparing a plan for conducting an audit that is comprehensive, focused, timely, and cost-effective.
  • Major issues in background research
    • Internal and external relations and interactions:
    • How does the company regularly interact or intend to interact with such as its

1. Employees;
2. Vendors;
3. Customers;
4. Consultants;
5. Independent contractors;
6. Joint venture partners;
7. Competitions etc.

Business strategy:

• How does the company do its business
• Does it have written policies in place concerning key aspects of the business?
• Does it follow a certain business model?
• Does it, for example, engage in e-commerce and, if so, how does it fit in with its overall business strategy?

3. Importance of IP Assets.

1. Where IP assets are relatively unimportant to the nature of the business as a whole, it might be sufficient merely to confirm that registered IP rights are in good standing and are held in the name of the company.
2. Where the company’s principal assets are IP, it may be necessary to conduct a more thorough assessment of the company’s IP portfolio and IP-based activities.

Status of IP Management

1. Does it have an IP policy or strategy?
2. What is the company’s overall approach to IP management?
3. How well-informed are its staff on IP matters?

IP disputes.

1. Has the company been involved in infringement suits, whether as plaintiffs or defendants?
2. Is the company involved in disputes or potential disputes that involve IP rights?

Preparing an IP Audit Plan.

The last step is to prepare an IP Audit plan.

1. This will set out the purpose, the scope, how long it is expected to take, the budget, and who will be responsible for which area of the audit plan.
2. It will deal with the following:
   • The scope of the audit;
   • The timetable for the audit;
   • The responsible person for each part of the audit;
   • The form of the final audit report to be produced.

Descriptive Questions.

Question.1 What is the significance of intellectual property management?
Answer: The importance of intellectual property management is as follows:

• Effective management of intellectual property enables companies to use their intellectual property to improve their competitiveness and strategic advantage.
• Acquiring intellectual property protection no doubt is crucial but its effective management provides much more than just protection for an enterprise’s inventions, trademarks, designs, copyright,s or other allied rights.
• Effective intellectual property management requires a company to commercialize its inventions and effectively monitor and enforce its intellectual property rights. Indeed, a company portfolio of intellectual property must be viewed as a collection of key assets that add significant value to the enterprise.

Effective management of intellectual property may be a critical business strategy to maintain sustainable corporate growth and maximization of shareholder value resulting in economic growth.

Question 2. Explain the strategies for effective IPR Management.
Answer:

The strategies for effective management of intellectual property assets require the implementation of a comprehensive asset management plan. In this, the most important step is to review the existing intellectual property assets so as to identify and locate the company’s key intellectual property assets such as:

1. Patents;
2. Patentable subject matter;
3. Copyrights;
4. Trade marks;
5. Designs;
6. Trade secrets;
7. Domain names;
8. Mask works;
9. Inventions;
10. Works of authorship;
11. Hardware and
12. Devices depend upon the nature of business.

Once the intellectual property assets are identified, it becomes important to determine the nature and scope of the company’s rights in intellectual property assets, which may range from outright ownership to a license including contingent rights in intellectual property to be developed in the future.

• Capitalizing on intellectual property assets so identified requires a most constructive approach keeping in view, among others, the type of intellectual property assets, the type of business claiming ownership of intellectual property assets, and the long-term and short-term goals of the business organization including intended/possible use of intellectual property assets.
• The ownership and control of intellectual property also attract certain risks and this requires strategies and plans to mitigate those risks.

The most important among others is the infringement of rights in intellectual property, the risk management strategy should take into consideration the situations where a company’s own Intellectual Property Rights may infringe the IPRs of a third party, the company has a valid claim of infringement against a third party.

Question.3 What is valuation? Illustrate the methods for the valuation of intangibles.
Answer:

Valuation is essentially a bringing together of the economic concept of value and the legal concept of property. There are four main value concepts:

• Owner value;
• Market value;
• Fair value and
• Tax value.

There are quasi-concepts of value that impinge upon each of these main areas:

• Investment value;
• Liquidation value and
• Going concern value.

Methods for the valuation of identifiable intangible assets and intellectual property fall into three categories. They are:

• Market-based;
• Cost based or
• Based on estimates of past and future economic benefits.

The methods of valuation flowing from an estimate of past and future economic benefits can be divided into four limbs:

Capitalization of historic profits: It arrives at the value of IPRs by multiplying the maintainable historic profitability of the assets by a multiple that has been assessed after scoring the relative strength of the IPR.

For example – a multiple is arrived at after assessing a brand in the light of factors such as leadership, stability, market share, internationality, the trend of profitability, marketing, and advertising support and protection.

Gross profit differential methods: This method is often associated with trademark and brand valuation. These methods look at the differences in sale prices, adjusted for differences in marketing costs. That is the difference between the margin of a branded and/or patented product and an unbranded or generic product.

Excess profits methods: This method looks at the current value of the net tangible assets employed as the benchmark for an estimated rate of return.

This is used to calculate the profits that are required in order to induce investors to invest in those net tangible assets. Any return over and above those profits required in order to induce investment is considered to be the excess return attributable to the IPRs.

The relief from royalty method: It considers what the purchaser could afford, or would be willing to pay, for a license of similar IPR. The royalty stream is then capitalized reflecting the risk and return relationship of investing in the asset.

Question 4. What is Discounted Cash Flow (“DCF”) Analysis.
Answer:

DCF Analysis site across the last three methodologies and is probably the most comprehensive of appraisal techniques. Potential profits and cash flow need to be assessed carefully and then restated to present value through the use of discount rates or rates.

• DCF mathematical modeling allows for the fact that 1 Euro in your pocket today is worth more than 1 Euro next year or 1 Euro the year after.
• The time value of money is calculated by adjusting expected future returns to today’s monetary values using a discount rate.

The discount rate to be applied to the cashflows can be derived from several different models including:

1. Common sense,
2. Build-up method,
3. Dividend growth models, and
4. The capital asset pricing model utilizes a weighted average cost of capital.

Example: In the discounted cash flow model, it would not be correct to drive out cashflows for the entire legal length of copyright protection, which may be 70-plus years, when a valuation concerns computer software with only a short economic life span of 1 to 2 years.

In short, when undertaking a valuation using the discounted cash flow modeling, the value should never project longer than what is realistic by testing against the major lives i.e. physical functional, technological, economic, and legal.

Question 5. What does the term ‘technology’ mean? What are the factors to be considered while defining the technology in the licensing agreement?
Answer:

Technology is a complex concept. As per the UNIDO Guidelines paper, “Technology or know-how denotes the sum knowledge, experience, and skills necessary for manufacturing a product or products and for establishing an enterprise for this purpose”.

Technology is viewed as any systematic or practical knowledge or skills used

• Manufacture of products or application of processes;
• Commercial or management purpose in the industry; and
• The achievement of any desired result, be it industry or social areas for life.

Transfer of technology is a complex phenomenon necessarily involving rights, obligations, privileges, and commitments of the parties to the transaction.

1. The basic legal document is the Licence Agreement for the transfer of technology. License Agreement is a formal instrument that serves several purposes.
2. License may be granted for IP that is necessary to further develop, reproduce, make, use, market, and sell products based on the technology to be transferred.
3. The terms and conditions of a licensing agreement determine the success of the technology transfer. Therefore, while formulating the licensing agreement, the parties involved should define the technology to be transferred without any ambiguity.

The factors to be considered while defining the technology in the licensing agreement include:

• Type of the technology i.e. product, process, facility, software, formula, etc;
• Need for additional license for practicing the technology;
• Industrial standards or specifications associated with the technology; and
• Details required to practice technology.

Other factors that need to be considered for a successful technology licensing are:

1. Owner/s of the technology;
2. Nature of ownership;
3. Other IPRs such as trademarks, copyright, trade secret, etc. associated with the technology;
4. Nature of technology;
5. Scope of rights expected from the technology license;
6. Technology and industry in which the technology can be utilized; and
7. Terms and value of royalty etc.

Question 6. What does an intellectual property audit mean? What are the types of intellectual property audits?
Answer:

IP audit is a systematic review of the IP owned, used, or acquired by a business to assess and manage risk, remedy problems and implement best practices of IP asset management.

• IP audit involves undertaking a comprehensive review of a company’s IP assets, related agreements, relevant policies, and compliance procedures.
• An IP audit helps a business to make an inventory of its IP assets or update it and analyze:
• Determine in the light of all this information, what actions are required to be taken concerning each IP asset, or a portfolio of such assets, to serve the relevant business goals of the company.
  •  How the IP assets are used or unused.
  • Whether the IP assets used by the business are owned by the company or by others.
    Whether these IP assets are infringing the rights of others or others are infringing on these rights.
• An IP audit seeks to uncover unused or underutilized assets, identify any threats to a company’s bottom line, and enable business managers to devise informed business and IP strategies that help maintain and improve its competitive position in the relevant market(s).

Types Of Ip Adult: There are 3 types of IP Audits

General purpose IP Audit: A general or broad IP audit is done in the following types of contexts:

1. Before establishing a new company it is always important to start up a company to be aware of intangible assets it owns or needs to protect.
2. When a business is considering implementing new policies, standards, or procedures relating to IP.
3. When a business is considering implementing a new marketing approach or direction, or is planning a major reorganization of the company.
4. When a new person becomes responsible for IP management.

• Once a comprehensive IP audit has been undertaken, a smaller effort and expense is needed at regular intervals, such as on an annual basis, so that IP assets are reviewed and appropriate decisions are taken, depending on the current and emerging needs of a company.

Event driver IP Audit :

• It is generally much narrower in scope than a broad or general-purpose IP audit. Further, the nature and scope of such an audit is determined by the event in question, and the time and resources available for doing it.
• Event-driven IP audit is often called “IP due diligence” when done to assets, as objectively as possible, the value and risk of all or a part of a target company’s IP assets.

Limited Purpose Focused Audits:

• A limited-purpose audit is typically much narrower in scope than the other two types and is performed under much constrained time schedules. These audits tend to be situational. They are typically used to justify a certain legal position or the valuation of a particular IP.
• A limited purpose-focused audit is done in the following types of contexts:

1. Personnel turnover;
2. Foreign IP filings;
3. Using the Internet for business purposes;
4. Significant changes in IP law and practice;
5. Clean room procedures;
6. Preparing for litigation.

Question 7. Briefly list the restrictive practices used in the intellectual property licensing agreements.
Answer:

Restrictive trade practices under the guise of intellectual property licensing can always be corrected by competition authorities. The restrictive practices mainly used in the intellectual property licensing agreements are as follows:

Restrictions after expiration of Industrial Property Rights or loss of secrecy of Technical know-how: The expiration of the term of the patent in an intellectual property licensing agreement signifies that the knowledge and invention are covered by such patent without any obligation.

Where the supplier of the technology imposes any restriction after the expiration of the term of intellectual property rights. The problem may also arise when the secret know-how loses its secret character before the expiration of the agreement.

Restrictions after the Expiration of arrangements: This will generally oblige licenses to pay royalties, during the entire duration of the manufacture of a product or the application of the process involved, without specifying any time limit.

Restrictions on Research and Development: Such restrictions generally involve limitations on the research and development policies and activities of the licensee. The restriction on research and development activities of licensee companies has also been declared as a restrictive practice under the UNCTAD Code.

Non-Competition Clauses: These include the restriction on the freedom of the licensee company to enter into arrangements to use or purchase the competing technologies or products not furnished or designated by the company supplying technology.

Non-competition clauses which may have an indirect effect, oblige the licensee not to cooperate with competing enterprises or to pay higher royalties if it sells or manufactures competing products.

Export Restrictions: These may include conditions restricting or prohibiting the export of products manufactured by the transferred technology. These conditions restrict the export of such products to certain markets or permission to export to certain markets and the requirement of previous permission for exports.

Price-Fining: It involves the practices where the licensor reserves the right to fix the sale or resale price of the product manufactured by the imported technology. This clause covers the price determined by the licensor on goods produced with the help of transferred technology.

Exclusive sales and representation arrangements: Such practices prohibit the freedom of the licensee company not only to organize its own distribution system but also prohibit the licensee company from entering into exclusive sales or representative contracts with any third party, other than the licensor or a party designated by the licensor.

Copyright Act – Layout Designs Of Integrated Circuits

Question 1. Looking at the growth of mobile phones and other electronic devices in the Indian market an Indian firm is interested in investing in market-integrated circuits in India. The problem is the firm does not have the technology to manufacture IC (Integrated Circuits) therefore the Indian firm is negotiating with an American technology company to sign the technology agreement for IC. Advise the American company how the agreement can be signed between the American company and the Indian firm and whether can American company apply to cancel the registration of the Indian firm as a registered user of layout design in the future if the American Company is dissatisfied with the Indian firm.
Answer:

When a registered layout design is intended to be allowed to be used by some other person, then such person is required to be registered with the Registrar as a registered user.

The registered proprietor and the proposed registered user shall have to make a joint application in writing to the Registrar in a prescribed manner along with an agreement in writing, entered into between them with regard to the use of layout design showing particulars of the relationship, existing or proposed, including the degree of control by the proprietor over the permitted use which this relationship will confer.

The particulars should also clarify whether the proposed registered user shall be the sole registered user and mention the place and duration of the permitted use. After getting the compliance of requirements under the Act, the Registrar registers the proposed registered user.

• The Registrar has the powers under the Act to cancel the registration registered user of layout design on any of the following grounds:A registered user has not used the layout design in accordance with the agreement;
• The proprietor or disclose some material facts at the time of application which would have an adverse bearing on the registration of the registered user;
• The circumstances have changed since the date of registration in such a way that at the date of such application for cancellation they would not have justified registration of the registered user;
• That the registration ought not to have been effected having regard to right vested in the applicant by a contract in the performance of which he is interested;
• Registration may be canceled by the Registrar of his motion or on the application in writing by any person on the ground that any stipulation in the agreement between the registered proprietor and the registered user regarding the topographical dimensions of the layout design is either not being enforced or is not being complied with;
• Registration may be canceled by the Registrar if the layout design is no longer registered.

The Registrar is required to issue a notice in respect of every application received for cancellation of registration of a registered user to the registered proprietor and each registered user (not the applicant)of the layout design. However, before canceling registration, the registered proprietor shall be given a reasonable opportunity to be heard.

Question 2. Explain in brief the conditions and procedure for registration of Layout-Design of Integrated Circuits under the Semiconductor Integrated Circuits Layout Design Act, 2000.
Answer:

Layout Designs (topographies) of Integrated Circuits is a subject in the field of protection of Intellectual Property. Integrated circuits which are commonly known as ‘chips’ or ‘microchips are electronic circuits in which all the components (transistors, diodes, and resistors) have been assembled in a certain order on the surface of a thin semiconductor material (usually silicon).

• In compliance with the TRIPS Agreement, India has enacted the Semiconductor Integrated Circuits Layout- Designs Act, 2000 in order to provide protection to layout designs of integrated circuits. The Act defines “Layout Design” to mean a layout of transistors and other circuitry elements and includes lead wires connecting such elements and expressed in any manner in a semiconductor integrated circuit.

Conditions and Procedure for Registration Acceptance of Application: Any person who wants to register his layout design is required to apply in writing to the Registrar Semiconductor Integrated Circuits Layout-Design Registry in the concerned modifications, as he may consider necessary.

Territorial jurisdiction, as per the procedure prescribed in the SICLD Act, 2000. The Registrar after scrutiny may refuse the application or may accept it absolutely or with amendments or modifications, as he may consider necessary. Layout designs are registered if they are

• Original,
• Inherently distinctive,
• Capable of being distinguishable from any other registered layout design and

If they have not been commercially exploited for more than two years before the date of application for registration”. Thus, it is observed that the act requires distinction rather than novelty for the purpose of registration. A layout design is a combination of elements and interconnection that are commonly known amongst creators of layout designs and manufacturers of semiconductor integrated circuits.

• The layout designs and thereby only considered original if the combination is a result of the creator’s own intellectual abilities and efforts.
• The SICLD Act, of 2000 prohibits the registration of certain Layout designs. Layout design that is not original is prohibited. Similarly, the registration of layout design that has been commercially exploited anywhere in India or a convention country has been prohibited.
• Layout design that is not inherently distinctive or which is not inherently capable of being distinguishable from any other registered layout design also cannot be registered.
• The Act, however, provides that a layout design that has been commercially exploited for not more than two years from the date on which an application for its registration has been filed either in India or a convention country shall be considered as not having been commercially exploited.
• According to the SICLD Act, 2000, layout design is to be considered original if it is the result of its creator’s intellectual efforts and is not commonly known to the creators of layout designs and manufacturers of semiconductor integrated circuits at the time of its creation.
• The Act further provides that layout design consisting of such combination of elements and interconnections that are commonly known among creators of layout designs and manufacturers of semiconductor integrated circuits shall be considered as original if such combination taken as a whole is the result of its creator’s intellectual efforts.
• Furthermore, this Act provides that where an original layout design has been created in the execution of a commission or a contract of employment, the right of registration to such layout design shall belong, in the absence of any contractual provision to the contrary, to the person who commissioned the work or to the employer.
• As per provisions of the SICLD Act, 2000, the Registrar has the power to withdraw the acceptance of an application for registration (before registration of layout design) if it comes to his knowledge that the layout design is prohibited from registration under the provisions of this Act.
• The Registrar may, however, provide the opportunity of being heard to the applicant if he so desires, before the withdrawal of the acceptance.
• According to the SICLD Act, 2000, the Registrar shall register the layout design in the register, if the application has not been opposed within the prescribed time limit or the application has been opposed and the opposition has been decided for the applicant.
• The date of making the application is considered to be the date of registration of layout- design. After registration, the Registrar issues a certificate of registration sealed with the seal of the Semiconductor Integrated Circuits Layout-Design Registry. Registration gives exclusive rights to the creator of the layout design for 10 years.
• It enables him to exploit the creation commercially and in the case of infringement, get reliefs permitted under the Act.
• Once the layout design is registered, the original registration and all subsequent assignments and transmissions of layout design are admissible as prima facie evidence of its validity.
• It cannot be held invalid on the ground that it was not a registerable layout design except upon evidence of originality and if such evidence was not submitted to the Registrar before.

The Act confers all the powers of a civil court to the Registrar for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses compelling the discovery and production of documents, and issuing commissions for examination the of witnesses. It can also refer disputes to the Appellate Board.

Practical Questions

Question 3. ABC Communications, a telecommunications company, is in the design phase of a new device that incorporates a cellphone, PDA MP3 player, GPS chip, and Internet capabilities. There is a concern that the new device may have nearly the same design as their competitor’s product, for which an application for registration of industrial design has already been submitted. A former intern, who is now employed by the competitor, is believed to have leaked information. Can ABC Communication apply for registration of the design of the new device under the Designs Act, of 2000? Give reasons in support of your answer.
Answer:

A design is capable of being registered only if it is new or original.

Novelty: A design shall be considered to be new when it has not been disclosed to the public, anywhere in India or in any other Country, by publication or by use, or in any other way, prior to the filing date or priority date. A design shall be considered new if it is significantly distinguishable from known designs or a combination of known designs. (Section 4 of the Design Act, 2000.)

Originality: Original in relation to a design, means

• Originating from the author of the design,
• Includes the cases, which though old in themselves yet are new in their application (Section2(g))

Section 5 of the Act provides that the Controller may, on the application of any person claiming to be the proprietor of any new or original design not previously published in any country and which is not contrary to public order or morality register the design under the Act.

• Every application for registration is required to be in the prescribed manner and accompanied by the prescribed fee. A design when registered shall be registered as of the date of the application for registration.
• As per Section 7 of the Act, the Controller shall, as soon as may be after the registration of a design, cause publication of the prescribed particulars of the design to be published in the prescribed manner and the design be open to public inspection. Under Section 9 of the Design Act, the Controller grants a certificate of registration to the proprietor of the design when it is registered.
• The important purpose of design Registration is to see that the artisan, creator, or originator of a design having aesthetic look is not deprived of his bona fide reward by others applying it to their goods.
• The company who is not actual creator of design cannot apply for registration of design.
• Therefore, going through above provisions of Design Act, ABC Communication can apply for registration of design of new device under the Designs Act, 2002 as competitor has just applied for registration of duplicated design which has not been registered.

During the examination, when ABC Communication is asked to clarify the status of its design with reference to an application filed by a competitor, it can submit proof that its own design is original and new and the competitor has stolen its design while in the stage of development.

Short Notes

Question 1 Write a brief note on infringement of layout design.
Answer:

Infringement of layout design: Only a registered proprietor of the layout design or a registered user can make use of the layout design. What will constitute the infringement of layout design has been explained in detail in the SICLD Act, 2000.

• Under the Act, any person who infringes the layout design shall be liable to pay the proprietor of the registered layout design, a royalty to be determined by negotiation between the registered proprietor and that person or by the Appellate Board.
• Such royalty is negotiated to keep in view the benefit that accrued to the person who has infringed the layout design as per the SICLD Act, 2000.
• The users/purchaser of the infringed layout design is entitled to immunity from infringement under this Act.
• Use of a registered layout design with the written consent of the registered proprietor of a registered layout design also shall not constitute infringement.

Also, where any person creates a layout design by application of independent intellect that is identical to a registered layout design, then, such act shall not constitute an infringement of the registered layout design.

Descriptive Questions

Question 1. Discuss the Procedure for Registration of Layout design under the Semi-Conductor Integrated Circuits Layout-Design Act, 2000.
Answer:

Conditions and Procedure for Registration:

Acceptance of Application:

• Any person who wants to register his layout design is required to apply in writing to the Registrar Semiconductor Integrated Circuits Layout-Design Registry in the concerned territorial jurisdiction, as per the procedure prescribed in the SICLD Act, 2000.
• The Registrar after scrutiny may refuse the application or may accept it absolutely or with amendments or modifications, as he may consider necessary.

Prohibition of Registration of Certain Layout-Designs:

The SiCLD Act, 2000 prohibits the registration of certain Layout designs. Layout design that is not original is prohibited.

• Similarly, the registration of layout design that has been commercially exploited anywhere in India or a convention country has been prohibited.
• Layout design that is not inherently distinctive or which is not inherently capable of being distinguishable from any other registered layout design also cannot be registered.
• The Act, however, provides that a layout design that has been commercially exploited for not more than two years from the date on which an application for its registration has been filed either in India or a convention country shall be considered as not having been commercially exploited.

Withdrawal of Acceptance: As per provisions of the SICLD Act, 2000, the Registrar has the power to withdraw the acceptance of an application for registration (before registration of layout design) if it comes to his knowledge that the layout design is prohibited from registration under the provisions of this Act. The Registrar may, however, provide the opportunity of being heard to the applicant if he so desires, before the withdrawal of the acceptance.

Advertisement of Application: According to the SICLD Act, 2000, when an application for registration of a layout design has been accepted, the Registrar is bound to advertise the accepted application within fourteen days after the date of acceptance.

After the advertisement, the Registrar has the discretion to advertise the application again if the application has been corrected or is permitted to be amended under the Act and notify in the prescribed manner the correction or amendment made.

Opposition to Registration: Any person under the SICLD Act, 2000 can oppose the proposed registration of layout design. After an application for registration of a layout design has been accepted, any person can give notice in writing to the Registrar of his opposition, within three months from the date of advertisement or re-advertisement or within a further period not exceeding one month in the aggregate, (as may be allowed by the Registrar ) as per the procedure provided.

Question 2. Briefly discuss the position of International Law on Layout- Designs of Integrated Circuits.
Answer:

Layout- Designs of Integrated Circuits: International Law: A diplomatic conference was held in Washington, D.C., in 1989, which adopted a Treaty on Intellectual Property in Respect of Integrated Circuits, also called the Washington Treaty or IPIC Treaty.

• The Treaty, signed in Washington on May 26, 1989, is open to States Members of WIPO or the United Nations and to inter-governmental organizations meeting certain criteria.
• The Treaty has been incorporated by reference into the TRIPS Agreement of the World Trade Organization (WTO), subject to the following modifications: the term of protection is at least 10 (rather than eight) years from the date of filing an application or of the first commercial exploitation in the world, but Members may provide a term of protection of 15 years from the creation of the layout-design;

The exclusive right of the right holder extends also to articles incorporating integrated circuits in which a protected layout design is incorporated, in so far as it continues to contain an unlawfully reproduced layout design; the circumstances in which layout designs may be used without the consent of right-holders are more restricted; certain acts engaged in unknowingly will not constitute infringement.

Article 35 of TRIPS in Relation to the IPIC Treaty states: Members agree to provide protection to the layout designs (topographies) of integrated circuits (referred to in this Agreement as “layout-designs”) in accordance with Articles 2 through 7 (other than paragraph 3 of Article 6), Article 12 and paragraph 3 of Article 16 of the Treaty on Intellectual Property in Respect of Integrated Circuits and, in addition, to comply with the following provisions.

Article 2 of the IPIC Treaty gives the following definitions: Integrated circuit’ means a product, in its final form or an intermediate form, in which the elements, at least one of which is an active element, and some or all of the inter-connections are integrally formed in and/or on a piece of material and which is intended to perform an electronic function,

• Layout design (topography)’ means the three-dimensional disposition, however expressed, of the elements, at least one of which is an active element, and of some or all of the interconnections of an integrated circuit, or such a three-dimensional disposition prepared for an integrated circuit intended for manufacture …
• Under the IPIC Treaty, each Contracting Party is obliged to secure, throughout its territory, exclusive rights in layout designs (topographies) of integrated circuits, whether or not the integrated circuit concerned is incorporated in an article.

Such obligation applies to layout designs that are original in the sense that they are the result of their creators’ own intellectual effort and are not commonplace among creators of layout designs and manufacturers of integrated circuits at the time of their creation.

Question 3. Mention the situations in which the Registrar has powers to cancel the registration under the Integrated Circuit Lay Out Designs Act, 2000.
Answer:

The Registrar has the powers under the Act to cancel the registration as a registered user of layout design on any of the following grounds:

• A registered user has not used the layout design in accordance with the agreement;
• The proprietor or the registered user misrepresented, or failed to disclose some material facts at the time of application which would have an adverse bearing on the registration of the registered user;
• The circumstances have changed since the date of registration in such a way that at the date of such application for cancellation they would not have justified registration of the registered user;
• That the registration ought not to have been effected having regard to right vested in the applicant by a contract in the performance of which he is interested;
• Registration may be canceled by the Registrar of his motion or on the application in writing by any person on the ground that any stipulation in the agreement between the registered proprietor and the registered user regarding the topographical dimensions of the layout design is either not being enforced or is not being complied with;
• Registration may be canceled by the Registrar if the layout design is no longer registered.
• The Registrar is required to issue a notice in respect of every application received for cancellation of registration of a registered user to the registered proprietor and each registered user (not the applicant) of the layout design.

However, before canceling registration, the registered proprietor shall be given a reasonable opportunity to be heard.

Question 4. Explain the procedure of assignment and transmission under the Integrated Circuit Lay Out Designs Act, 2000.
Answer:

Assignment and Transmission. The proprietor of a registered layout design has powers under the Act to assign the layout design for any consideration.

• The registered layout design may be transferred with or without goodwill.
• However, the person who becomes entitled by assignment or transmission to a registered layout-design shall also have to register his title with the Registrar as per the procedure provided in the Act.

The Protection Of Plant Varieties And Farmer’s Rights Descriptive Questions

Question 1. Farmers in developing countries particularly in India are very confused and do not understand the concept of intellectual property rights. Some people are misguiding them and creating panic and rumors that the patent law will prevent them from using seeds for cultivation. If you are an IPR expert how you will clear farmers’ doubt about the patent law that it will not affect their livelihood and still they can use the seeds for cultivation as usual?
Answer:

The law on the subject is contained in the Protection of Plant Varieties and Farmers’ Rights Act, 2001 where the concept of Plant Breeders’ Rights has been provided legal sanction/authority. There is undoubtedly a need to provide incentives to the Plant Breeders who are engaged in the creative work of research which sustains agricultural progress through returns on investments made in research and to persuade the researchers to share the benefits of their creativity with the society.

• The issue of enacting a law relating to Plant Varieties Protection and Farmers’ Rights in India assumed importance, particularly in the wake of the TRIPS agreement under WTO which seeks to promote effective protection of Intellectual Property Rights in all fields of technology.
• Article 27 of the TRIPS Agreement defines “Patentable subject matter” and requires member countries to provide for the protection of plant varieties whether by patenting by an effective sui generis system or by any combination thereof.
• With a view to providing for the establishment of an Authority to give an effective system of protection of the rights of plant breeders and farmers, to encourage the development of new varieties of plants, and to give effect to the provisions of the TRIPS Agreement, the Parliament enacted the Protection of Plant Varieties and Farmers’ Right Act, 2001.
• The Act seeks to stimulate investment for research and development both in the public and private sectors for the development of new plant varieties by ensuring appropriate 13i returns on such investments. It also seeks to facilitate the growth OT the seed industry in the country through domestic and foreign investment o the availability of high-quality seeds and planting material to Ino. farmers.
• It also recognizes the role of farmers as cultivators and conserves the contribution of traditional, rural, and tribal communities to the country’s agricultural biodiversity by rewarding them for their contribution through benefits and protecting the traditional rights of the farmers.
• The Act also provides or sets up the Protection of Plant Varieties and Farmer’s Rights Authority to promote and develop new varieties of plants and promote the rights of the farmers and breeders.
• Considering the above, it is not correct to say that the Patent Law prohibits the Farmers from using seeds (for cultivation) that are not a subject matter of grant of a right under the Protection of Plant Varieties and Farmer’s Rights Act, 2001.

In fact, the law is meant to provide protection to the farmers’ rights over the inventions that they are able to come up with and disclose them for the benefit of the common public at large.

Question 2. Company ABC is a biotechnology-related company. It created a new organism by doing genetic manipulation with the traditional existing organism. Advice on the patentability of such genetic manipulation.
Answer:

• In 1972, Anand Chakrabarty, a microbiologist, and researcher to the General Electric Company filed a patent application in relation to a bacterium from the genus pseudomonas containing therein, at least two stable generating plasmids, each of the said plasmids providing hydrocarbon degradative pathway.
• It was a man-made, genetically engineered bacterium energy separately capable of breaking down multiple components of crude oil. It was asserted that because of this property, which is possessed by no naturally occurring bacteria, the invention could treat oil spills.

The patent claims were of three types:

• Process claim for the method of producing the bacteria
• Claims for an inoculum comprised of a carrier material floating on water such as straw and the new bacteria, and
• Claims to the bacteria itself.

The Patent Examiner allowed the claims to fall into the first two categories but rejected the claim for bacteria. The decision rested on two grounds:

• That microorganisms are products of nature, and
• That as living things, they are not patentable subject matter.

Later, the Patent Office Board of Appeals reiterated the examiners’ decision on the grounds that microorganisms do not fall within the ambit of patentable subject matter since they are living things.

• Besides the Court of Customs and Patent Appeals emphasized that this issue was not whether the claimed bacterium was living or inanimate but whether it constituted an invention made by human intervention.
• The Court reaffirmed that the bacterium was not a handiwork of nature rather it was Charabarty’s own invention.
• The four statutory categories of inventions, that can be granted patents are process, the machine, manufacture, and composition of matter. Hence, on the question as to in which category would the invention fall?
• The Supreme Court held that Genetically Engineered oil-consuming bacterium could be categorized either as composition of matter manufacture.
• The court read the term manufacture in accordance with its dictionary definition, to mean the production of articles for use from raw or prepared materials by giving to these materials, new forms, qualities, properties or combinations whether by hand labor or by machinery.
• The court obviously turned back to the legislative intent of the drafters of the US Patent Act to ascertain the rationale behind using general terminology “any composition of matter” or “manufacture.”
• According to the court, this selection of broad language suggested that the drafters’ goal was to stimulate innovation in a wide range of then unk technologies and scientific fields, a goal that would be frustrated if Co Kn°Wn was repeatedly required to amend the statute to new categories of patentable inventions.
• The court observed that the legislative history of the Patent Act connotes that the patentable subject matter includes “anything under the sun that is made by man.” Chakrabarty simply shuffled genes, changing bacteria that already existed.
• The widest interpretation by the court lets the broadest amplitude to patentability to the living subject matter.
• After this historic decision, the US biotech industry flourished and numerous patents have been granted on human-made higher life forms such as transgenic crops, mice, fish, cows, etc.

TRI Ps supported the argument for the patenting of microorganisms in Article 27.3 of TRI Ps. It excludes two specific classes of subject matter from patentability:

1. Diagnostic, therapeutic, and surgical methods for the treatment of humans and animals; and
2. Plants and animals other than microorganisms and essentially biological processes for the production of plants or animals other than no biological and microbiological processes.

TRIPS permits the patenting of the microorganism but does not define microorganism leaving member states to formulate their own standards relating to it. Indian Patent Act, 1970 through its Section 3 allows the patenting of microorganism and microbiological processes to be patentable.

Hence, India does not allow the patenting of microorganisms already in nature, but genetically modified versions of the same microorganism that result in enhancement of its called efficacies are patentable.

Question 3. Define the terms ‘farmer’ and ‘farmers variety’ under the Protection of Plant Varieties and Farmers’ Rights Act, 2001. Explain the rights of the farmers envisaged under the Act briefly referring to relevant provisions.
Answer:

Section 2(k) of the Protection of Plant Varieties and Farmers Rights Ac. 2001 defines the term “Farmer” as “farmer” means any person who-

• Cultivates crops by cultivating the land himself; or
• cultivates crops by directly supervising the cultivation of land through any other person; or
• Conserves and preserves, severally or jointly, with any other person any wild species or traditional varieties or adds value to such wild species or traditional varieties through selection and identification of their useful properties.

Section 2 (I) of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 defines “Farmers Variety” as, “Farmers Variety” means a variety which-

• Has been traditionally cultivated and evolved by the farmers in their fields, or
• Is a wild relative or landrace of a variety about which the farmers possess common knowledge.

Farmers’ Rights: (Sections 39 to 46) of the Protection of Plant Varieties and Farmers’ Rights Act, 2001 deals with the rights of the farmers. They are as under:

Section 39 – Farmers rights.

• A farmer who has bred or developed a new variety shall be entitled to registration and other protection in like manner as a breeder of a variety under this Act;
• The farmers’ variety shall be entitled to registration if the application contains a declaration as specified in clause (A) of sub-section (1) of the section18;
• A farmer who is engaged in the conservation of genetic resources of landraces and wild relatives of economic plants and their improvement through selection and preservation shall be entitled in the prescribed manner to recognition and reward from the Gene Fund: Provided that material so selected and preserved has been used as donors of genes in varieties registrable under this Act;
• A farmer shall be deemed to be entitled to save, use, sow, re-sow, exchange, share or sell his farm produce including seed of a variety protected under this Act in the same manner as he was entitled before the coming into force of this Act: Provided that the farmer shall not be entitled to sell branded seed of a variety protected under this Act.

Section 40 – Certain information to be given in the application for registration; A breeder or other person making an application for registration of any variety under Chapter III shall disclose in the application the information regarding the use of genetic material conserved by any tribal or rural families in the breeding or development of such variety.

Section 41 – Rights of communities: Any person or group of persons (whether actively engaged in farming or not) or any governmental or non-governmental organization may, on behalf of any village or local community in India, file in any center notified, with the previous approval of the Central Government, by the Authority, in the Official Gazette, any claim attributable to the contribution of the people of that village or local community, as the case may be, in the evolution of any variety for the purpose of staking a claim on behalf of such village or local community.

Section 42 – Protection of innocent infringement: A right established under this Act shall not be deemed to be infringed by a farmer who at the time of such infringement was not aware of the existence of such right; and

A relief which a court may grant in any suit for infringement referred to in section 65 shall not be granted by such Court, nor any cognizance of any offense under this Act shall be taken, for such infringement by any court against a fanner who proves, before such Court, that at the time of the infringement, he was not aware of the existence of the right so infringed.

Section 43 – Authorisation of farmers’ variety: Where an essentially derived variety is derived from a farmers’ variety, the authorization under sub-section (2) of section 28 shall not be given by the breeder of such farmers’ variety except with the consent of the farmers or group of farmers or community of farmers who have made a contribution in the preservation or development of such variety.

Section 44 – Exemption from fees: A farmer or group of farmers or village community shall not be liable to pay any fees in any proceeding before the Authority or Registrar or the Tribunal or the High Court under this Act or the rules made thereunder.

Section 45 – General Fund; The Central Government shall constitute a Fund to be called the National General Fund for the welfare of farmers.

Section 46 – Framing of schemes: The Central Government shall, for the purposes of section 41 and clause (d) of subsection (2) of section 45, frame, by notification in the Official Gazette, one or more schemes.

Question 4. Enumerate the criteria for registration of a plant variety and the prerequisites for filing an application form for registration under the Plant Varieties Act, 2001.
Answer: For the registration of a variety under the Plant Varieties Act, 2001 following criteria must be fulfilled:

Novel: If at the date of filing an application for registration for protection, the propagating or harvested material of such variety has not been sold or otherwise disposed of in India earlier than one year or outside India, in the case of trees or vines earlier than six years, or in any other case earlier than four years, before the date of filing such application.

Distinct: A variety is said to be distinct if it is clearly distinguishable by at least one essential characteristic from any other variety whose existence is a matter of common knowledge in any country at the time of application.

Uniform: A variety is said to be uniform, if subject to the variation that may be expected from the particular features of its propagation it is sufficiently uniform in its essential characteristics.

Stable: A variety is said to be stable if its essential characteristics remain unchanged after repeated propagation or, in the case of a particular cycle of propagation, at the end of each such cycle.

Application For Registration Of A Varieties Can Be Made By:

• Any person claiming to be the breeder of the varieties.
• Any successor of the breeder of the varieties.
• Any person being the assignee or the breeder of the varieties in respect of the right to make such application.
• Any farmer or group of farmers or community of farmers claiming to be breeders of the varieties.
• Any person authorized to make an application on behalf of farmers and
• Any university or publicly funded agricultural institution claiming to be a breeder of the varieties.

Application for registration of plant varieties can be made in the office of Registrar, Protection of Plant Varieties and Farmers’ Rights Authority (PPV&FRA), New Delhi.

According to Section 18 of the Plant Varieties, Act, for registration of a plant variety the following prerequisites have to be completed:

• Denomination assigned to such variety.
• Accompanied by an affidavit that variety does not contain any gene or gene sequences involving terminator technology.
• Complete passport data of parental lines with their geographical location in India and all such information relating to the contribution if any, of any farmer (s), village, community, institution or organization, etc. in breeding, evolving, or developing the variety.
• Characteristics of variety with description for Novelty, Distinctiveness, Uniformity, and Stability.
• A declaration that the genetic material used for breeding of such variety has been lawfully acquired.
• A breeder or other person making an application for registration shall disclose the use of genetic material conserved by any tribal or rural families for the improvement of such variety.

The PPV& FR Act, 2001 provides for the exclusion of the following verities from registration under the Act:

• Where prevention of commercial exploitation of that variety is necessary to protect public order or public morality or human, animal, and plant life and health or to avoid serious prejudice to the environment.
• Which involves any technology that is injurious to the life or health of human beings, animals, or plants such as varieties developed by terminator technology and genetic restriction use technology.
• Whose species or genera are not listed in the notification issued by the Central Government.

Practical Questions

Read the following case study and answer the questions given at the end:

RELMO S.A. (RELMO) is an Argentinean seed company belonging to the Ferrarotti family. The origins of RELMO are to be found in the Ferrarotti Countryside Organization (OFPEC) which was established in the 1960s as the first company in Argentina to devote itself to the genetic improvement of soybean.

• OFPEC was responsible for the program that led to the registration of the first Argentinean soybean “variety” (a plant grouping within a single botanical taxon of the lowest rank) in 1980. RELMO’s business strategy concentrates on the production and sale of plant seeds of mainstay crops soybean wheat and maize.
• Its activities are conducted throughout the Argentinean agricultural and livestock industry. Its central offices are in Rosario Santa Fe, a major grain marketing soybean grinding center and seed export zone.
• In fact, the most important soybean-producing exporting center in the world is to be found in an area within a radius of 200 kilometers around Rosario.
• Despite its traditional approach in certain areas (e.g. the company’s main experimental field remains the Ferrarotti family farm.) RELMO has dramatically changed its way of doing business and has managed to prosper following some of the important changes that took place in the Argentinean seed industry since the mid-1990s.
• One of the main reasons for RELMO’s success has been its ability to manage its intellectual property (IP) successfully and to establish partnerships with foreign and domestic companies and research institutes.
• The Argentinean Law No. 20.247 on Seeds and. Phylogenetics,. A Creations guarantees ownership of plant varieties, and the Argentinean Association of Protection for Plant Breeds (ARPOV) deals with the defense of rights and provides the possibility for collecting royalties for IP rights holders.
• Additionally, Argentina’s accession to the 1 978 Act of the International Union for the Protection of New Varieties Convention (UPOV Convention) plays an important role in the development of companies such as RELMO. One of RELMO’S major areas of work is the genetic improvement of soybeans.
• The company’s market position, however, was seriously challenged when Monsanto, a multinational agricultural biotechnology corporation, started commercializing the Round-up Ready (RR) gene (RR technology allows for the use of herbicide without any adverse effect on the crops) in Argentina during the mid-1 990s.
• The RR gene-based plant varieties soon became popular among farmers. RELMO was quick to realize that to retain its market position, it would have to market RR varieties too. Therefore, RELMO reached an agreement with Monsanto Argentina that authorized its use of the RR gene.
• This agreement also allowed RELMO to place its soybean varieties in other countries. As far as maize is concerned, due to the high degree of adoption of transgenic (genetically engineered) forms of maize in Argentina, RELMO signed a testing agreement with Monsanto in order to work with MON 810, a maize variety based on the Bt gene (gene of a naturally occurring bacteria that produces a protein toxic to certain types of insects.
• The Bt gene can be transferred to crops, thereby making them more resistant to the corresponding insect). RELMO has registered over a dozen trademarks.
• Among them, the most important ones are RELMO, TECNOSOJA, TECNOTRIGO and TECNOMAIZ. The company has also registered the name with which it identifies its lines of products, such as CANAL Trademark registrations done primarily for the domestic market with Argentina’s National Institute for Industrial Property (INPI), as varieties that are licensed to foreign companies, for example, American companies, are generally sold under the licensee’s trademarks.

The growth of RELMO in recent years is essentially based on license agreements linked to IP. It has been capable of negotiating licenses for its own varieties and those created by third parties to other companies in Argentina and abroad.

• Agreement v/rth the National Institute of Agriculture Technology (INTA) of Argentina:
• In 2002, RELMO concluded an agreement on technology transfer with INTA for the genetic improvement of the subtropical germplasm of maize. Under the Agreement. INTA provides the germplasm, installations, and technical staff and RELMO covers the operating expenditures.
• The hybrids obtained are marketed exclusively by RELMO while INTA receives a percentage royalty as the owner of the germplasms. This unique public-private agreement also allows RELMO to produce the hybrids with its own trademark and also to license them out to third parties.
• Licensing Agreement with the National Livestock Research Institute (INIA) of Uruguay:
• INIA and RELMO have a special deal under which INIA has granted RELMO exclusive rights over the licenses for INIA’s wheat varieties in Argentina. In return, RELMO has authorized similar rights to INIA for soybean varieties from RELMO.
• This license agreement allows RELMO to enter the wheat seed market with adapted varieties at a cost roughly equivalent to that of developing its own crops, however at a much quicker pace. INIA benefits from the expansion of the market for its wheat varieties.
• For RELMO, this is a very good commercial opportunity RELMO has typically focused on soybean sown in summer, but the incorporation of the seeds of winter crops from INIA allows them to expand their sales structure and to generate more revenue.
• The scheme of licenses for soybean varieties to INIA, with a view to market them in Uruguay, has similar results for both parties.
• Licensing-out to South African companies: In the past, RELMO had granted licenses for conventional varieties in South Africa and more recently, it has done so for RR varieties, thereby contributing to the development of the crop in that country. As in previous agreements, RELMO is the owner of the varieties and a South African company exploits them commercially.
• Partnership with Delley Semences et Plantes (seeds and Plants) S.A. (DSP) of Switzerland:
• RELMO established a commercial relationship with DSP in Switzerland, which includes licenses for varieties of wheat for the whole of South America and technical collaboration, including the training of RELMO staff in Switzerland.
• As in the Agreement with INIA, the varieties here are also owned by DSP, and RELMO is responsible for commercial exploitation. The agreement allowed RELMO to access the Argentinean markets with high-quality wheat varieties.
• Argentina constitutes a major market for the production of soybeans in the world. FMT provides important technical support for the crop in Brazil where approximately 16 million hectares are cultivated.
• RELMO has established a program of work that includes the joint launch of varieties of soybeans, which is carried out in both countries.
• This joint project does not involve any licenses but an ambitious joint development of varieties and research on disease resistance, as well as cultivation technology. Integration with Sursem S.A.: In April 2009, RELMO reached an agreement with Sursem S.A., another Argentinean seed company.

Based on this agreement, Sursem has taken over the responsibility of the distribution of seeds for RELMO in Argentina. Sursem will build upon the existing marketing structure of RELMO and improve its services to customers and distributors.

• For its part, RELMO will be integrated into Sursem and will focus on research programs and the improvement of soybean and wheat to meet Argentinean requirements. It will at the same time continue its technology exports to neighboring countries.
• Starting as a small family business, RELMO has come a long way to establish itself as a pioneer in the genetic improvement of soybeans in Argentina. The partnership strategy that RELMO pursued not only enabled it to retain its market position in Argentina but also provided it with improved plant varieties, access to foreign markets, and consequently higher revenue.
• The integration with Sursem allows RELMO to concentrate more on research and development while at the same time assuring it of the much-needed market access at home and abroad.

A strategic partnership approach through licensing and intelligent use of IP was the key factor behind RELMO’s success.

While the national and international legal framework facilitated the task of ensuring the ownership of phylogenetic creations (varieties or lines), the partnerships helped RELMO move forward quickly and very actively in retaining and extending its domestic and foreign market positions.

Questions.

1. Assess the RELMO’s ability to manage its Intellectual Property (IP) successfully.
2. How the Argentina’s accession to the 1 978 Act of the International Union for the Protection of New Varieties Convention (UPOV Convention) play an important role in the development of companies such as RELMO?
3. Although RELMO’s major area of work is the genetic improvement of soybeans the why company’s market position is seriously challenged by Monsanto.
4. How is the licensing agreement with the National Institute of Agriculture Technology (INTA) and the National Livestock Research Institute (INIA) helpful for RELMO?

Answer:

1. RELMO’s ability to manage its Intellectual Property (IP) successfully can be assessed from the following:
Agreement with Monsanto Argentina: During the mid-1990s when Monsanto commercialized the RR gene in Argentina and RR gene-based plant varieties became popular among farmers, RELMO quickly realized that to retain its market position, it would have to market RR varieties too.

• Therefore RELMO reached an agreement with Monsanto Argentina that authorized its use of the RR gene. This agreement also allowed RELMO to place its soybean varieties in other countries.
• As far as maize is concerned, due to the high degree of adoption of transgenic (genetically engineered) forms of maize in Argentina, RELM signed a testing agreement with Monsanto in order to work with MON 81 0, a maize variety based on the Bi gene (gene of a naturally occurring bacteria that produces a protein toxic to certain types of insects.

 Registration of trademarks: RELMO has registered over a dozen trademarks. Among them, the most important ones are RELMO, TECNOSOJA, TECNOTRIGO and TECNOMAIZ.

• The company has also registered the name with which it identifies its lines of products, such as CANAL This trademark registration enabled foreign companies like American Companies to sell the varieties under the licensee’s trademarks.
• So, Telco did not limit itself to Argentina but also targeted foreign countries for its registered varieties.

 Entering into Licensing Agreements Linked to IP: The growth of RELMO in recent years is essentially based on license agreements linked to IP. RELMO has been capable of negotiating licenses for its own varieties and those created by third parties to other companies in Argentina and abroad for example.

Agreement with the National Institute of Agriculture Technology (INTA) of Argentina: This unique public-private arrangement allows RELMO to market exclusively hybrids of maize developed by INTA, to produce hybrids with its own trademark, and also to license them out to third parties.

Licensing Agreement with the National Livestock Research Institute (INIA) of Uruguay: This was a special deal between INIA and RELMO which enabled RELMO to enter into exclusive rights over the licenses for INIA’s wheat varieties in Argentina on a reciprocal basis for giving similar rights to INIA for its soybean varieties.

This license agreement allowed RELMO to enter into the wheat seed market with adapted varieties at a cost roughly equivalent to that of developing its own crops however at a much quicker pace. Through this agreement, RELMO expanded its sales structure and generated more revenue.

Licensing-out to South African companies: RELMO granted licenses in South Africa not only for its conventional varieties but also for RR varieties which enables the commercial exploitation of its varieties in South Africa.

Partnership with Delley Semenceset Plantes (Seeds and Plants) S.A. (DSP) of Switzerland: This agreement allowed RELMO to access the Argentinean markets with high-quality wheat varieties.

Integration with Suresam S.A.: This partnership strategy enabled small family business RELMO to retain not only its market position in Argentina but also provided it with improved plant varieties, access to foreign markets, and consequently higher revenue.

• The integration with Sursem allowed RELMO to concentrate more on research and development along with ensuring much-needed market access at home and abroad. RELMO started as a small family business and became the first Argentinean Company to devote itself to the genetic improvement of soybeans in the 1960s.
• RELMO dramatically changed its way of doing business and adopted changes that took place in the Argentinean seed industry since the mid-1990s. One of the main reasons for RELMO’s success has been its ability to manage its intellectual property (IP) success and to establish partnerships with foreign and domestic companies and research institutes.
• A strategic partnership approach through licensing and intelligent use of IP was the key factor behind RELMO’s success.

While the national and international legal framework facilitated the task of ensuring the ownership of phylogenetic creations, the partnership helped RELMO move forward quickly and very actively in retaining and extending its domestic and foreign market positions.

2. The Argentinean Law No.20.247 on Seeds and Phylogenetic Creations, guarantees ownership of plant varieties, and the Argentinean Association of Protection for Plant Breeds (ARPOV) deals with the defense of rights and provides the possibility for collecting royalties for IP rights holders.

•  Additionally, Argentina’s accession to the 1978 Act of the International Union for the Protection of New Varieties Convention (UPOV Convention) plays an important role in the development of companies such as RELMO.
• The International Union for the Protection of New Varieties of Plants (UPOV) is an intergovernmental organization with headquarters in Geneva (Switzerland).
• UPOV was established by the International Convention for the Protection of New Varieties of Plants. The Convention was adopted in Paris in 1961 and it was revised in 1972, 1978, and 1991.
• UPOV’s mission is to provide and promote an effective system of plant variety protection, with the aim of encouraging the development of new varieties of plants, for the benefit of society. Introducing the UPOV system leads to increased availability of new varieties, and accession to the UPOV Convention means greater availability of foreign new varieties.
• For example, in 1991, when the Argentina PVP law incorporated provisions of the UPOV Convention, the number of titles of protection immediately tripled.
• With Argentina’s accession to the UPOV Convention in 1994, titles of protection granted to foreign breeders substantially increased as their varieties began to be introduced into the country. Argentinean farmers therefore gained access to, for example, varieties of wheat from abroad with superior baking qualities.
• One of RELMO’s major areas of work is the genetic improvement of soybeans. The company’s market position, however, was seriously challenged when Monsanto, a multinational agricultural biotechnology corporation, started commercializing the Roundup Ready (RR)gene (RR technology allows for the use of herbicide without any adverse effect on the crops) in Argentina during the mid-1990s.
• The RR gene-based plant varieties soon became popular among farmers. RELMO was quick to realize that to retain its market position, it would have to market RR varieties too.

Therefore RELMO reached an agreement with Monsanto Argentina that authorized its use of the RR gene. This agreement also allowed RELMO to place its soybean varieties in other countries.

3. RELMO S.A. is an Argentinean seed company belonging to the Ferrarotti family. RELMO was established in the 1960s as the first company in Argentina to devote itself to the genetic improvement of soybeans.

• RELMO’s business strategy concentrates on the production and sale of plant seeds of mainstay crops: soybean, wheat, and maize.
• Although the RELMO’s major area of work is the genetic improvement of soybean the company’s market position, however, was seriously challenged when Monsanto, a multinational agricultural biotechnology corporation, started commercializing the Roundup Ready (RR) gene (RR technology allows for the use of herbicide without any adverse effect on the crops) in Argentina during the mid-1 990s.
• The RR gene-based plant varieties soon became popular among farmers. RELMO was quick to realize that to retain its market position, it would have to market RR varieties too.
• Therefore RELMO reached an agreement with Monsanto Argentina that authorized its use of the RR gene.
• This agreement also allowed RELMO to place its soybean varieties in other countries. The apprehension of acquiring market dominance in the commercial market of RR varieties by Monsanto derives the RELMO to comprehend the requirement of commercial collaboration where authorized usage can give them more economic opportunities to breed soybean varieties in the same market and different places conducive to local specification, geographical area to such products.
• As far as maize is concerned, due to the high degree of adoption of transgenic (genetically engineered) forms of maize in Argentina, RELMO signed a testing agreement with Monsanto in order to work with MON 810, a maize variety based on the Bt gene (gene of a naturally occurring bacteria that produces a protein toxic to certain types of insects.
• The Bt gene can be transferred to crops, thereby making them more resistant to the corresponding insect).

Agreement with the National Institute of Agriculture Technology (INTA) of Argentina: In 2002, RELMO concluded an agreement on technology transfer with INTA for the genetic improvement of the subtropical germplasm of maize.

Under the Agreement. INTA provides the germplasm, installations, and technical staff, and RELMO covers the operating expenditures.

The hybrids obtained are marketed exclusively by RELMO while INTA receives a percentage royalty as the owner of the germplasms. This unique public-private agreement also allows RELMO to produce the hybrids with its own trademark and also to license them out to third parties.

Licensing Agreement with the National Livestock Research Institute (INIA) of Uruguay: INIA and RELMO have a special deal under which INIA has granted RELMO exclusive rights over the licenses for INIA’s wheat varieties in Argentina.

• In return, RELMO has authorized similar rights to INI A lots of bean varieties from RELMO. This license agreement allows I U I MO to enter the wheat seed market with adapted varieties at a cost roughly equivalent to that of developing its own crops, however at a much quicker pace. INIA benefits from the expansion of the market for Its wheat varieties.
• For RELMO, this is a very good commercial opportunity; RELMO has typically focused on soybeans sown in summer, but the incorporation of the seeds of winter crops from INIA allows them to expand their sales structure and generate more revenue.
• The scheme of licenses for soybean varieties to INIA, with a view to market them in Uruguay, has similar results for both parties.
• Variety licensing allows breeding companies or institutions to commercialize their products (plant varieties) and is also an efficient tool for technology transfer.
• New technology in a variety, represented by improved genetics and expressed mostly through improved agricultural performance, can be transferred to farmers by licensing out seed production and distribution rights to seed companies.
• The variety license itself consists of an agreement between the owners of the varieties, an authorized representative, and a legally eligible person who wishes to commercialize the variety. Access to new varieties requires proper handling of intellectual property (IP).
• This can be accomplished through variety license agreements, which also provide a strategy for developing and introducing new varieties. In-licensing plant varieties can raise market share or offer competitive advantages by increasing the ability to meet customer demands.
• The most obvious reason for in-licensing varieties is to enhance or complete a company’s variety portfolio. This applies both to companies with their own breeding programs and to companies working exclusively with in-licensed varieties.
• Those species for which a company has existing breeding programs-or other species that may be of interest to the market are potentially subject to in-licensing.
• Demand for certain products from farmers, the processing industry, or consumers could be met by a company obtaining a license from the variety owner to supply the market with seeds of that variety.
• The most common reason for a company to out-license its varieties is to maximize the return on its investment by allowing others to produce and sell its varieties in markets that the company cannot reach.
• Exclusive licenses are preferred because breeders believe that the mutual commitment will be stronger when working exclusively. A good variety provides a competitive advantage and will thus create revenue for the company with the exclusive rights.

It is in the best interest of both parties to make the variety as profitable as possible, and the commitment resulting from exclusive rights is considered to lead to the best market coverage possible.

Short Notes

Question 1 Write a short note on the constitution of the Protection of Plant Varieties and Farmers’ Rights Authority.
Answer: Protection of Plant Varieties and Farmers’ Rights, Authority, and Registry. The provisions under the Protection of Plant Varieties and Farmers-Rights Act, 2001 on the subject of Protection of Plant Varieties and Farmers’ Rights, Authority and Registry’ are contained in Chapter II (Sections 3 to 13) of the Act. The relevant provisions thereof are reproduced herein below:

Section 3 – Establishment of Authority: The Central Government shall, by notification in the Official Gazette, establish an Authority to be known as the Protection of Plant Varieties and Farmers’ Rights Authority for the purposes of this Act.

• The Authority shall consist of a Chairperson and fifteen members.
• The Chairperson, to be appointed by the Central Government, shall be a person of outstanding caliber and eminence, with long practical experience to the satisfaction of that Government especially in the field of plant varietal research or agricultural development.

The members of the Authority, to be appointed by the Central Government, shall be as follows, namely:-

1. The Agriculture Commissioner, Government of India, Department of Agriculture and Cooperation, New Delhi, ex officio;
2. The Deputy Director General in charge of Crop Sciences, Indian Council of Agricultural Research, New Delhi, ex officio;
3. The Joint Secretary in charge of Seeds, Government of India, Department of Agriculture and Cooperation, New Delhi, ex officio;
4. The Horticulture Commissioner, Government of India, Department of Agriculture and Cooperation, New Delhi, ex officio:
5. The Director, National Bureau of Plant Genetic Resources, New Delhi, ex officio;
6. One member not below the rank of Joint Secretary to the Government of India to represent the Department of Biotechnology, Government of India, ex officio;
7. One member not below the rank of Joint Secretary to the Government of India to represent the Ministry of Environment and Forests, Government of India, ex officio;
8. One member not below the rank of Joint Secretary to the Government of India to represent the Ministry of Law, Justice and Company Affairs, Government of India, ex officio;
9. One representative from a National or State level farmers’ organization to be nominated by the Central Government:
10. One representative from a tribal organization to be nominated by the Central Government;
11. One representative from the seed industry to be nominated by the Central Government,
12. One representative from an agricultural University to be nominated by the Central Government;
13. One representative from a National or State level women’s organization associated with agricultural activities to be nominated by the Central Government; and
14. Two representatives of State Governments on a rotation basis to be nominated by the Central Government.

The Registrar-General shall be the ex officio member-secretary of the Authority.

• The Chairperson shall appoint a Standing Committee consisting of five members, one of whom shall be a member who is a representative from a farmers’ organization, to advise the Authority on all issues including farmers’ rights.

Section 4 – Meetings of Authority: The Authority shall meet at such time and place and shall observe such rules of procedure in regard to the transaction of business at its meetings including the quorum at its meetings and the transaction of business of its Standing Committee-appointed under sub-section (7) of section 3 as may be prescribed.

• The Chairperson of the Authority shall preside at the meetings of the Authority.
• No act or proceeding of the Authority shall be invalid merely by reason of
• Any vacancy in, or any defect in the constitution of, the Authority; or
• Any defect in the appointment of a person acting as the Chairperson or a member of the Authority; or
• Any irregularity in the procedure of the Authority not affecting the merits of the case.

Section 7 – Chairperson of be Chief Executive: The Chairperson shall be the Chief Executive of the Authority and shall exercise such powers and perform such duties as may be prescribed.

Section 8 – General functions of Authority: It shall be the duty of the Authority to promote, by such measures as it thinks fit, the encouragement for the development of new varieties of plants and to protect the rights of the farmers and breeders.

In particular, and without prejudice to the generality of the foregoing provisions, the measures referred to in subsection (1) may provide for

• The registration of extant varieties subject to such terms and conditions and in the manner as may be prescribed;
• Developing characterization and documentation of varieties registered under this Act;
• Documentation, indexing, and cataloging of farmers’ varieties;
• Compulsory cataloging facilities for all varieties of plants;
• Ensuring that seeds of the varieties registered under this Act are available to the farmers and providing for compulsory licensing of such varieties if the breeder of such varieties or any other person entitled to produce such variety under this Act does not arrange for the production and sale of the seed in the manner as may be prescribed;
• Collecting statistics with regard to plant varieties, including the contribution of any person at any time in the evolution or development of any plant variety, in India or in any other country, for compilation and publication;
• Ensuring the maintenance of the Register.

Section 11 – Power of Authority: In all proceedings under this Act before the Authority or the Registrar,
The Authority or the Registrar, as the case may be, shall have all the powers of a civil court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses, compelling the discovery and production of documents, and issuing commissions for the examination of witnesses

The Authority or the Registrar may, subject to any rule made in this behalf under this Act, make such orders as to costs as it considers reasonable and any such order shall be executable as a decree of a civil court.

Section 12 – Registry and offices thereof:  The Central Government shall establish, for the purposes of this Act, a Registry which shall be known as the Plant Varieties Registry.

The Authority may appoint such number of Registrars as it thinks necessary for the registration of plant varieties under the superintendence and direction of the Registrar-General under this Act and may make regulations with respect to their duties and jurisdiction. There shall be a seal of the Plant Varieties Registry.

Section 13 – National Register of Plant Varieties: For the purposes of this Act, a Register called the National Register of Plant Varieties shall be kept at the head office of the Registry, wherein shall be entered the names of all the registered plant varieties with the names and addresses of their respective breeders, the right of such breeders in respect of the registered varieties, the particulars of the denomination of each registered variety, its seed or other propagating material along with specification of salient features thereof and such other matters as may be prescribed.

Question 2 Write a brief note on infringement offenses, penalties, and procedures.
Answer: Infringement, Offences, Penalties, and Procedure (Chapter X- Section 64 to 77)

Section 64 – Infringement: Subject to the provisions of this Act, a right established under this Act is infringed by a person-

• Who, not being the breeder of a variety registered under this Act or a registered agent or a registered licensee of that variety, sells, exports, imports or produces such variety without the permission of its breeder or within the scope of a registered license or registered agency without the permission of the registered licensee or registered agent, as the case
  maybe
• Who uses, sells, exports, imports, or produces any other variety giving such variety, the denomination identical with or deceptively similar to the denomination of a variety registered under this Act in such manner as to cause confusion in the mind of general people in identifying such variety so registered.

Section 65 – Suit for infringement:

1. No suit-(a) for the infringement of a variety registered under this Act; or (b) relating to any right in a variety registered under this Act, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
2. For the purposes of clauses (a) and (b) of sub-section (1), “District Court having jurisdiction” shall mean the District Court within the local limits of whose jurisdiction the cause of action arises.

Section 66 – Relief in a suit for infringement:

1. The relief which a court may grant in any suit for infringement referred to in section 65 includes an injunction and at the option of the plaintiff, either damages or a share of the profits.
2. The order of injunction under sub-section (1) may include an e/ pane injunction or any interlocutory order for any of the following matters, namely:–
   • Discovery of documents;
   • Preserving of infringing variety or documents or of evidence which are related to the subject matter of the suit,
   • Attachment of such property of the defendant which the court deems necessary to recover damages, costs, or other pecuniary remedies which may be finally awarded to the plaintiff,

Section 67 – Opinion of scientific adviser:

1. When the court has to form an opinion upon any question of fact or a scientific issue, such a court may appoint an independent scientific advisor to suggest it or to inquire into and report upon the matter to enable it to form the desired opinion.
2. The scientific adviser may be paid such remuneration or expenses as the court may fix.

Offenses, Penalties, and Procedure

Section 68 – Prohibition to apply denomination of (25 of 1961) registered variety:

1. No person other than the breeder of a variety. registered under this Act or a registered licensee or a registered agent thereof shall use the denomination of that variety in the manner as may be prescribed.
2. A person shall be deemed to apply the denomination of a variety registered under this Act who–
   • Applies it to the variety itself; or
   • Applies it to any package in or with which the variety is sold, or exposed for sale, or had in possession such package for sale or for any purpose of trade or production; or
   • Places, encloses, or annexes the variety which is sold, or exposed for sale, or had in possession for sale or for any purpose of trade or production, in or with any package or other thing to which the denomination of such variety registered under this Act has been applied; or
   • Uses the denomination of such variety registered under this Act in any manner reasonably likely to lead to the belief that the variety or its propagating material in connection with which it is used is designated or described by the denomination; or
   • In relation to the variety uses such denomination in any advertisement, invoice, catalog, business letter, business paper, price list, or other commercial document, and such variety is delivered to a person in pursuance of a request or order made by reference to the denomination as so used.
3. A denomination shall be deemed to be applied to a variety whether it is woven in, impressed on, or otherwise worked into, or annexed or affixed to, such variety or to any package or other thing.

Section 69 – Meaning falsely applying to denominate of (25 of 1961) registered variety:

1. A person shall be deemed to falsely apply the denomination of a variety registered under this Act who, without the assent of the breeder of such variety,-
   • Applies such denomination or a deceptively similar denomination to any variety or any package containing such variety;
   • Uses any package bearing a denomination which is identical with or deceptively similar to the denomination of such variety registered under this Act, for the purpose of packing, filling, or wrapping therein any variety other than such variety registered under this Act.
   • Any denomination of a variety registered under this Act falsely applied as mentioned in sub-section (1), is in this Act referred to as a false denomination.
   • In any prosecution for falsely applying a denomination of a variety registered under this Act the burden of proving the assent of the breeder of such variety shall lie on the accused.

Section 70 – Penalty for applying false denomination, etc :  Any person who

• Applies any false denomination to a variety; or
• Indicates the false name of a country or place or false name and address of the breeder of a variety registered under this Act in the course of trading such variety, shall, unless he proves that he acted, without intent to defraud, be punishable with imprisonment for a term which shall not be less than three months but which may extend to two years, or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

Section 71 – Penalty for selling varieties to which false denomination is applied, etc.: Any person who sells, or exposes for sale, or has in his possession for sale or for any purpose of trade or production of any variety to which any false denomination is applied or to which an indication of the country or place in which such variety was made or produced or the name and address of the breeder of such variety registered under this Act has been falsely made, shall unless he proves-

• That having taken all reasonable precautions against committing an offense against this section, he had at the time of the commission of the alleged offense no reason to suspect the genuineness of the denomination of such variety or that any offense had been committed in respect of indication of the country or place in which such variety registered under this Act, was made or produced or the name and address of the breeder of such variety;
• That, on demand by or on behalf of the prosecutor, he gave all the information in his possession with respect to the person from whom he obtained such variety; or
• That otherwise he had acted innocently, be punishable with imprisonment for a term which shall not be less than six months but which may extend to two years, or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

Section 72 – Penalty for falsely representing (25 of 1961) variety as registered: Whoever makes any representation with respect to the denomination of a variety or its propagating material or essentially derived variety or its propagating material not being a variety or its propagating material or essentially derived variety or its propagating material registered under this Act, to the effect that it is a variety or its propagating material or essentially derived variety or its propagating material registered under this Act or otherwise represents any variety, or its propagating material, or essentially derived variety or its propagating material not registered under this Act to the effect that it is registered under this Act shall be punishable with imprisonment for a term, which shall not be less than six months but which may extend to three years, or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.

Section 73 – Penalty for subsequent offence.- Whoever, having already been convicted of an offense under this Act is again convicted of such offense shall be punishable for the second and for every subsequent offense with imprisonment for a term which shall not be less than one year but which may extend to three years, or with fine which shall not be less than two lakh rupees but which may extend to twenty lakh rupees, or with both.

Section 74 – No offense in certain cases: The provisions of this Act relating to offenses shall be subject to the right created as recognized by this Act and no act or omission shall be deemed to be an offense under the provisions of this Act if such act or omission is permissible under this Act.

Section 75 – Exemption of certain persons employed in the ordinary course of business: Where a person accused of an offense under this Act proves that in the ordinary course of his employment, he has acted without any intention to commit the offense and having taken all reasonable precautions against committing the offense charged, he had, at the time of the commission of the alleged offense, no reason to suspect the genuineness of the act so charged as an offense and on demand made by or on behalf of the prosecutor, he gave all the information in his possession with respect to the persons on whose behalf the offense was committed, he shall be acquitted.

Section 76 – Procedure where the invalidity of registration is pleaded by the accused:

1. Where the offense charged under this Act is in relation to a variety or its propagating material or essentially derived variety or its propagating material registered under this Act and the accused pleads that the registration of such variety or its propagating material or essentially derived variety or its propagating material, as the case may be, is invalid and the court is satisfied that such offense is prima facie not tenable, it shall not proceed with the charge but shall adjourn the proceedings for three months from the date on which the plea of the accused is recorded to enable the accused to file an application before the Registrar under this Act for the rectification of the Register on the ground that the registration is invalid.
2. If the accused proves to the court that he has made such application within the time so limited or within such further lime as the court for sufficient cause allows the further proceedings in the prosecution shall stand stayed till the disposal of such application for rectification.
3. If within a period of three months or within such extended time as may be allowed by the court, the accused fails to apply to the Registrar for rectification of the Register, the court shall proceed with the case as if the registration were valid.
4. Where before the institution of a complaint of an offence referred to in subsection (1), any application for the rectification of the Register concerning the registration of the variety or its propagating material or essentially derived variety or its propagating material, as the case may be, in question on the ground of invalidity of such registration has already been properly made to and is pending before the Registrar, the court shall stay the further proceedings in the prosecution pending the disposal of the application aforesaid and shall determine the charge against the accused in conformity with the result of the application for rectification.

Section 77 – Offences by companies:  If the person committing an offense under this Act is a company, the company as well as every person in charge of, and responsible to, the company for the conduct of its business at the time of the commission of the offense shall be deemed to be guilty of the offense and shall be liable to be proceeded against and punished accordingly:

Question 3 Write a short note on farmer rights.
Answer:

Farmers’ Rights (Chapter VI- Section 39 to 46)

Section 39 – Farmer’s rights: Notwithstanding anything contained in this Act,

• A farmer who has bred or developed a new variety shall be entitled to registration and other protection in like manner as a breeder of a variety under this Act;
• The farmers’ variety shall be entitled to registration if the application contains a declaration as specified in the clause of sub-section of section 18;
• A farmer who is engaged in the conservation of genetic resources of landraces and wild relatives of economic plants and their improvement through selection and preservation shall be entitled in the prescribed manner to recognition and reward from the Gene Fund:
• Provided that material so selected and preserved has been used as donors of genes in varieties registrable under this Act;
• A farmer shall be deemed to be entitled to save, use, sow, re-sow, exchange, share, or sell his farm produce including seed of a variety protected under this Act in the same manner as he was entitled before the coming into force of this Act:

Explanation.- For the purposes of clause (iv), “branded seed” means any seed put in a package or any other container and labeled in a manner indicating that such seed is of a variety protected under this Act.

Where any propagating material of a variety registered under this Act has been sold to a farmer or a group of farmers or any organization of farmers, the breeder of such variety shall disclose to the farmer or the group of farmers or the organization of fanners, as the case may be, the expected performance under given conditions,

And if such propagating material fails to provide such performance under such given conditions, the farmer or the group of farmers or the organization of fanners, as the case may be, may claim compensation in the prescribed manner before the Authority and the Authority, after giving notice to the breeder of the variety and after providing him an opportunity to file an opposition in the prescribed manner and after hearing the parties, may direct the breeder of the variety to pay such compensation as it deems fit, to the farmer or the group of farmers or the organization of farmers, as the case may be.

Descriptive Questions

Question.1 Mention the provisions related to ‘Plant Varieties Protection Appellate Tribunal.
Answer: Plant Varieties Protection Appellate Tribunal (Chapter VIII- Sections 54 to 59)

Section 54- Tribunal: The Central Government may, by notification in the Official Gazette, establish a Tribunal to be known as the Plant Varieties Protection Appellate Tribunal to exercise the jurisdiction, powers, and authority conferred on it by or under this Act.

Section 55 – Composition of Tribunal:

1. The Tribunal shall consist of a Chairman and such number of Judicial Members and Technical Members as the Central Government may deem fit to appoint.
2. A Judicial Member shall be a person who has for at least ten years held a judicial office in the territory of India or who has been a member of the Indian Legal Service and has held a post in Grade-ll of that Service or any equivalent or higher post for at least three years or who has been an advocate for at least twelve years.
3. A Technical Member shall be a person who is an eminent agricultural scientist in the field of plant breeding and genetics and possesses experience of at least twenty years in dealing with plant variety or seed development activity, or who has held the post in the Central Government or a State Government dealing with plant variety or seed development equivalent to the Joint Secretary to the Government of India for at least three years and possesses special knowledge in the field of plant breeding and genetics.
4. The Central Government shall appoint a Judicial Member of the Tribunal to be the Chairman thereof.
5. The Central Government may appoint one of the Members of the Tribunal to be the senior Member thereof.
6. The senior Member or a Member shall exercise such of the powers and perform such of the functions of the Chairman as may be delegated to him by the Chairman by a general or special order in writing.
7. Every such appeal shall be preferred by a petition in writing and shall be in such form and shall contain such particulars as may be prescribed.

Section 57 – Orders of Tribunal:

1. The Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
2. The Tribunal may, at any time within thirty days from the date of the order, with a view to rectifying the mistake apparent from the record, amend any order passed by it under sub-section (1), and make such amendment if the mistake is brought to its notice by the appellant or the opposite party.
3. In every appeal, the Tribunal may, where it is possible, hear and decide such appeal within a period of one year from the date of filing of the appeal.
4. The Tribunal shall send a copy of any order passed under this section to the Registrar.
5. The orders of the Tribunal under this Act shall be executable as a decree of a civil court.

Section 58 – Procedure of Tribunal:

1. The powers and functions of the Tribunal may be exercised and discharged by Benches constituted by the Chairman of the Tribunal from among the Members thereof.
2. A Bench shall consist of one Judicial Member and one Technical Member.
3. If the Members of a Bench differ in opinion on any point, they shall state the point or points on which they differ, and the case shall be referred to the Chairman for hearing on such point or points by one or more of the other Members and such point or points shall be decided according to the opinion of the majority of the Members who have heard the case, including those who first heard it.
4. Subject to the provisions of this Act, the Tribunal shall have the power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or the discharge of its functions, including the places at which the Benches shall hold their sittings.
5. The Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the Registrar under section 1 1, and any proceeding before the Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code, and the Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
6. Notwithstanding anything contained in any other provisions of this Act or in any other law for the time being in force, no interim order (whether by way of injunction or stay or any other manner) shall be made on, or in, any proceedings relating to an appeal unless-

• Copies of such appeal and of all documents in support of the plea for such interim order are furnished to the party against whom such appeal is made or proposed to be made; and
• Opportunity is given to such a party to be heard in the matter.

Section 59 – Transitional provision.- Notwithstanding anything contained in this Act, till the establishment of the Tribunal under section 54, the Intellectual Property Appellate Board established under section 83 of the Trade Marks Act, 1999 shall exercise the jurisdiction, powers, and authority conferred on the Tribunal under this Act subject to the modification that in any Bench of such Intellectual Property Appellate Board constituted for the purposes of this section, for the Technical Member referred to in sub-section

1. Of section 84 of the said Trade Marks Act, the Technical Member shall be appointed under this Act and he shall be deemed to be the Technical Member for constituting the Bench under the said sub-section.
2. Of section 84 for the purposes of this Act.

Question 2. Discuss the Procedure of surrender and revocation of the certificate.
Answer: Surrender and Revocation of certificate (Chapter V- Sections 33 To 38) Section 33 – Surrender of certificate of registration:

1. A breeder of a variety registered under this Act may, at any time by giving notice in the prescribed manner to the Registrar, offer to surrender his certificate of. registration.
2. Where such an offer is made, the Registrar shall notify in the prescribed manner every registered agent or registered licensee relating to such certificate.
3. Any of such agent or licensee may, within the prescribed period after such notification, give notice to the Registrar of his opposition to the surrender, and where any such notice is given, the Registrar shall intimate the contents of such notice to the breeder of such variety.
4. If the Registrar is satisfied after hearing the applicant and all the opponents, if desirous of being heard, that the certificate of registration may properly be surrendered, he may accept the offer and by order revoke the certificate of registration.

Section 34 – Revocation of protection on certain grounds: Subject to the provisions contained in this Act, the protection granted to a breeder in respect of a variety may, on the application in the prescribed manner of any person interested, be revoked by (he Authority on any of the following grounds, namely:

• That the grant of the certificate of registration has been based on incorrect information furnished by the applicant;
• That the certificate of registration has been granted to a person who is not eligible for protection under this Act;
• That the breeder did not provide the Registrar with such information, documents, or material as required for registration under this Act;
• That the breeder has failed to provide an alternative denomination of the variety which is the subject matter of the registration to the Registrar in the case where the earlier denomination of such variety provided to the Registrar is not permissible for registration under this Act;
• That the breeder did not provide the necessary seeds or propagating material to the person to whom a compulsory license has been issued under section 47 regarding the variety in respect of which registration certificate has been issued to such breeder;
• That the breeder has not complied with the provisions of this Act or rules or regulations made thereunder;
• That the breeder has failed to comply with the directions of the Authority issued under this Act;
• (That the grant of the certificate of registration is not in the public interest; Provided that no such protection shall be revoked unless the breeder is given a reasonable opportunity to file an objection and of being heard in the matter.

Section 35 – Payment of annual fees and forfeiture of registration in default thereof:

1. The Authority may, with the prior approval of the Central Government, by notification in the Official Gazette, impose a fee to be paid annually, by every breeder of a variety, agent, and licensee thereof registered under this Act determined on the basis of benefit or royalty gained by such breeder, agent or licensee, as the case may be, in respect of the variety, for the retention of their registration under this Act.
2. If any breeder, agent, or licensee fails to deposit the fee referred to in subsection (7) imposed upon him under that sub-section in the prescribed manner up to two consecutive years, the Authority shall issue notice to such breeder, agent or licensee, and on service of such notice if he fails to comply with the direction in the notice, the Authority shall declare all the protection admissible under the registration certificate issued to such breeder or agent or licensee forfeited.
3. The arrears of fee imposed under sub-section (/) shall be deemed to be the arrears of land revenue and shall be recoverable accordingly.

Section 36 – Power to cancel or change registration and to rectify the Register:

1. On an application made in the prescribed manner to the Registrar by any person aggrieved, the Registrar may make such order as he may think fit for canceling or changing any certificate of registration issued under this Act on the ground of any contravention of the provisions of this Act or failure to observe a condition subject to which such registration certificate is issued.
2. Any person aggrieved by the absence or omission from the Register of any entry, or by any entry made in the Register without sufficient cause, or by any entry wrongly remaining on the Register, may apply in the prescribed manner to the Registrar and the Registrar may make such order for making, expunging or varying the entry as he may think fit.
3. The Registrar may in any proceeding under this section, decide any question that may be necessary or expedient to decide in connection with the rectification of the Register.
4. The Registrar on his own motion may, after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard, make any order referred to in sub-section (1) or sub-section (2).

Geographical Indications

Question 1. Who are the beneficiaries of the registration of geographical indications?
Answer:

As per Section 11 of the Geographical Indications of Goods (Registration & Protection) Act, 1999, registered proprietors of geographical indication like any association of persons, producers, organization, or authority established by or under the law are the beneficiaries of geographical indications.

The Applicant has to be a legal entity and should be representing the interest of producers of the goods applied for. Any such organization or association that is not that of the producers may have to prove that they represent the interest of producers. Any Applicant Authority also has to prove that they represent the interests of producers.

Question 2. Explain the criminal remedies in case of infringement, piracy, or falsification of Gl under the Geographical Indications of Goods (Registration and Protection) Act, 1999.
Answer:

A registered geographical indication is infringed by a person who, not being an authorized user thereof uses such geographical indication by any means in the designations or presentation of goods that indicates or suggests that such goods originate in a geographical area other than the true place of origin of such goods in a manner which misleads the persons as to the geographical origin of such goods. Hence the infringement of registered G.l. occurs if a person:

1. Uses the G.l. on the goods or suggests that such goods originate in a geographical area other than the true place of origin of such goods in a manner that misleads the public; or
2. Uses the G.L. in a manner that constitutes an act of unfair competition;
3. Uses another G.l. to the goods in a manner, which falsely represents to the public that the goods originate in the territory, region, or locality in respect of which such registered G.l. relates.

Chapter VIII of the Geographical Indication of Goods (Registration and Protection) Act, 1999 lays down provisions regarding certain offenses, Penalties and the Procedure to be followed thereof

The legislature has taken a strong view of the cases of infringement, piracy, falsification, and misrepresentation and has made them penal offenses under the Act.

The chapter apart from listing penalties for the above-mentioned offenses also details the penalty and procedure to be followed in the prosecution of such offenses.

The following are the acts deemed as offenses:

In the context of offenses, what constitutes the meaning of “applying geographical indication has been dealt with in Section 37, and the expression geographical indication has been defined in Section 2 (1) (e).

Section 38 lists two kinds of offenses namely:-

• Falsifying a Gl and
• Falsely applying a Gl.
  1. The penalty for falsification of GIs and the circumstances in which a person applies false GL are enumerated in Section 39.
  2. Selling goods to which false Gl is applied as outlined in Section 40.
  3. Enhanced Penalty for subsequent convictions for the offenses of falsifying, falsification of GIs, or selling goods with false GIs.
  4. Falsely representing a Gl as registered as listed in Section 42.

Misrepresenting the Gl as registered, which has not been actually registered is made an offence.

Question 3. Geographical indications are the new WTO-compatible measure to protect well-known traditional knowledge and established trade names. Discuss with reference to Alphonso mango case.
Answer:

Alphonso Mango from Ratnagiri, Sindhudurg, and other adjoining areas in Maharashtra, finally got the status (and thus the legal protection) of a Geographical Indication (Gl) Tag.

• A Geographical Indication or aGI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to their origin. Such a name conveys an assurance of quality and distinctiveness which is essentially attributable to its origin in that defined geographical locality.
• Darjeeling Tea, Mahabaleshwar Strawberry, Blue Pottery of Jaipur. Banarasi Sarees, and Tirupati Laddus are some of the GIs. Gl products can benefit the rural economy in remote areas, by supplementing the incomes of artisans, farmers, weavers, and craftsmen.
• Our rural artisans possess unique skills and knowledge of traditional practices and methods, passed down from generation to generation, which need to be protected and promoted.
• Recently, Union Minister of Commerce and Industry, Suresh Prabhu, launched the logo and tagline for the Geographical Indications (Gl) of India and said that the Gl will give the rightful share in the intellectual property to the artisan and the place of origin of the product.
• He emphasized that it’s an area of strength and optimism for India, whereby Gl tag has given protection to a large number of hand-made and manufactured products, especially in the informal sector.
• The Department of Industrial Policy and Promotion has also taken several initiatives in this regard and is actively involved in the promotion and marketing of GIs with a vision to enhance the horizon, both socially and economically for Gl producers.
• The king of mangoes, Alphonso, better known as ‘Hapus’ in Maharashtra, is in demand in domestic as well as the international markets not only for its taste but also for its pleasant fragrance and vibrant color.
• It has long been one of the world’s most popular fruits and is exported to various countries including Japan, Korea, and Europe. New markets, such as USA and Australia have been recently opened up for it.

The first product to get a Gl tag in India was the Darjeeling tea in 2004 and there are a total of 325 products from India that carry this indication/recognition.

Question 4. Texas-based Rice Tec Inc. claimed that their invention pertains to a novel breed of rice plants and grains therefore UPSTO granted the patent on ‘Basmati Rice Lines and Grains’ in September 1997 after years of examination and accepted all the 20 claims put forward by Rice Tec Inc. What was the consequence when India challenge the patent and why patent granted to three hybrid varieties Bas 867, RT1 1117 and RT 1121.
Answer:

In the case of a patent granted to Rice Tec Inc., an American private company based in Texas, India challenged the grant of patent in the US.

• Basmati rice, sought-after for its fragrant taste, was developed by Indian farmers over hundreds of years, but the Texan company Rice Tec obtained a patent for a cross-breed with American long-grain rice.
• Rice Tec was granted the patent on the basis of aroma, elongation of the grain on cooking, and chalkiness.
• However, the Indian government filed 50,000 pages of scientific evidence to the US Patents and Trademarks Office, insisting that most high-quality basmati varieties already possess these features. The US Patent and Trademarks office accepted the petition and will re-examine its legitimacy.
• The patent – granted only in the US – provided Rice Tec control over basmati rice production in North America. Farmers had to pay a fee to grow the rice and were not permitted to plant the seeds to grow the following year’s crops. India feared the patent may severely damage exports from its own farmers to the US.
• India has also objected to Rice Tec calling the rice ‘basmati1, insisting the name should be used only for rice grown in the Basmati region of India. The Indian government claimed status for basmati rice as that granted to Champagne, Cognac, and Scotch whisky.
• A team of agricultural scientists screened several research papers, reports, and proceedings of seminars, conferences, symposia, journals, newspapers, and archives for relevant supporting information to establish the existence of prior art in this area in India.
• The documentary evidence against claims Nos. 15, 16, and 17 of the company for novelty was so strong that Rice Tec had to withdraw these claims. The company further withdrew 11 claims.
• Hence, only five of Rice Tec’s original 20 claims survived the Indian challenges. The patent granted simply gives three hybrid varieties Bas 867, RT 1117, and RT 1121.
• The new rice has nothing to do with basmati. Importantly, none of the claims granted by the patent pertain to basmati rice as a generic category. Also, the Rice Tec. application was for a patent and not for basmati as a trademark, so there is no question of Rice Tec getting exclusive rights to use the term basmati.

The patent granted, Hence, neither prevents Indian Basmati from being exported to the US nor puts it at a disadvantage in the market.

Question 5. Geographical indications serve to recognize the essential role geographic and climatic factors and/or human know-how can play in the end quality of a product. Discuss.
Answer:

Geographical Indications (GIs) serve to recognize the essential role geographic and climatic factors and/or human know-how can play in the end quality of a product.

• Like trademarks or commercial names, GIs are also Intellectual Property Rights (IPRs), which are used to identify products and to develop their reputation and goodwill in the market.
• The Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), prescribes minimum standards of protection of GIs and additional protection for wines and spirits. Articles 22 to 24 of Part II Section III of the TRIPS prescribe minimum standards of protection to the geographical indications that WTO members must provide.
• Moreover, TRIPS leaves it up to the Member countries to determine the appropriate method of implementing the provisions of the Agreement (including the provisions on GIs) within their own legal framework.
• Notably, under the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), countries are under no obligation to extend protection to a particular geographical indication unless that geographical indication is protected in the country of its origin.
• India did not have such a specific law governing geographical indications of goods that could adequately protect the interest of producers of such goods. This resulted in controversial cases like turmeric, neem, and basmati. In the case of turmeric, in March 1995, a US Patent was granted to two NRIs at the University of Mississippi Medical Centre Jackson, for turmeric to be used as a wound healing agent.
• This patent was challenged by CSIR at the USPTO on the ground of “Prior Art” claiming that turmeric has been used for thousand years for healing wounds and rashes and hence this was not a new invention. Even CSIR presented an ancient Sanskrit text and a paper published in 1953 in the Journal of the Indian Medical Association as documentary evidence. Upholding the objections, the US patent office canceled the Patent.
• Agricultural products typically have qualities that derive from their place of production and are influenced by specific local, and geographical factors such as climate and soil. It is therefore not surprising that a majority of GIs throughout the world are applied to agricultural products, foodstuffs, wine, and spirit drinks. However, the use of GIs is not limited to agricultural products.
• A Gl may also highlight specific qualities of a product that are due to human factors found in the product’s place of origin, such as specific manufacturing skills and traditions. That is the case, for instance, for handicrafts, which are generally handmade using local natural resources and usually embedded in the traditions of local communities.
• For want of adequate legal protection, the legitimate right holders of various GIs of Indian origin, for instance, have long since been adversely affected by such unscrupulous business practices.
• Innumerable companies and traders have been found to be free-riding on the goodwill and reputation associated with various renowned geographical names of Indian origin, for years.

For instance, tea produced in countries like Kenya, and Sri Lanka, has often been passed off around the world as ‘Darjeeling tea’, which originally denotes the fine aromatic produce of the high-altitude areas of North Bengal, from where it received the name.

Question 6. In the North-East state, the tribal people have been producing a special type of beverage from time immemorial which is extracted from a special type of flower found only in that region. Now the state government is interested in getting this product in the Geographical Indication category. With your expert knowledge explain how the product will be recognized as a Geographical Indication product and how the state government can apply to bring this product under Geographical Indication.
Answer:

According to Section 2(1 )(e) of the Geographical Indication of Goods (Registration and Protection) Act, 1999, “geographical indication” in relation to goods means an indication that identifies such goods as agricultural goods, natural goods, or manufactured goods as originating or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or another characteristic of such goods is essentially attributable to its geographical origin and in the case where such goods are manufactured goods one of the activities of either the production or of processing preparation of the goods concerned takes place in such territory, region or locality, as the case may be.

• It may be noted that any name that is not the name of a country, region, or locality of that country shall also be considered as the geographical indication if it relates to a specific geographical area and is used upon or in relation to particular goods originating from that country, region or locality, as the case may be.

According to the Geographical Indication of Goods (Registration and Protection) Act, 1999, the organizations or companies who register their geographical indications enjoy various advantages from the registration, including:

1. Registered geographical indications have the exclusive right to access or use G.I.’s products during the business.
2. Authorized users enjoy the right to sue for infringement.
3. It provides legal protection to geographical signs in India.
4. Prevents unauthorized use of registered geographical indications by others.
5. It provides legal protection to Indian geographical signals which In turn promotes exports.
6. It promotes the economic prosperity of producers of goods produced In a geographical area,
7. A registered owner can also approach for legal protection In other WTO member countries.
8. It provides legal protection to the respective goods in domestic as well as in international markets.

Producer in relation to goods, means any person who,

• • If such goods are agricultural goods, produces the goods and includes the person who processes or packages such goods;
  • If such goods are natural goods, exploit the goods;
  • If such goods are handicraft or industrial goods, makes or manufactures the goods;
  • And includes any person who trades or deals in such production, exploitation, making, or manufacturing, as the case may be, of the goods.

For the registration of a geographical indication, any association of persons, producers, organizations, or authorities established by or under the law can apply.

• The applicant must represent the interest of the producers and the application should be in writing in the prescribed form. The application should be addressed to the Registrar of Geographical Indications along with the prescribed fee.
• Section 8 of the Act provides that a geographical indication may be registered in respect of any or all of the goods, comprised in such class of goods as may be classified by the Registrar and in respect of a definite territory of a country, or a region or locality in that territory, as the case may be.

The Registrar may also classify the goods in accordance with the International classification of goods for the purposes of registration of geographical indications and publish in the prescribed manner in an alphabetical index of classification of goods.

“Registering a Geographical Indication is a catalyst to getting scattered individuals together. GIs are meant to benefit a community of local producers and act as an appellation or indicator of the geographical origin of the product”. Comment.
Answer:

The Geographical Indication of Goods (Registration & Protection) Act, 1999 has been made to secure the interests of producers of unique products drawing specific quality from that particular region and to protect consumers from deception.

The term Gl refers to any indication that identifies goods as originating from a particular place, where a given quality, reputation, or particular characteristic of the goods is essentially attributable to its geographical origin.

Examples: Columbian Coffee, Darjeeling tea, Champagne wine, and Bordeaux cheese. Registered GI with distinctive signs helps artisans, weavers, and others from the onslaught of corporate competition using the name of geographical origin. Gl secures consumers from the confusion of counterfeits and artisans from undue competition.

• Unique quality arising out of that place coupled with the skill of artisans fetches the premium price. While patents and copyrights belong to individuals, the GL is a collective right of the community protected either by their group or state, helping artists and artisans to survive.
• In collective rights, the knowledge or intellect is in the public domain, and rights are held in perpetuity. In the case of GIs, the right-holders rights are circumscribed, i.e., they cannot assign these rights to others but can prevent makers from other areas from selling them projecting that those are produced in that particular geographical area.
• These rights are required to be retained in the specified territory so that the artisans in that area enjoy exclusive commercial benefits. Every region has something unique and exclusive to offer and the G.L. tag honors and recognizes these distinctive identity markers of these products and methods of production.
• There are plenty of good reasons to opt for one such as maximization of the export value and safeguarding cultural heritage, amongst others:

Branding: The regional specificity becomes a brand in itself acting as a marketing tactic. It also helps in the elimination of intermediaries leading to higher profits for the producers of the heritage art and goods.

Proof of quality: A GL tag is a guarantee of the premium quality of the product coming from its association with a certain region and the history of that product in that territory, especially as it is recognized by the national government of the country of origin (and in some cases, multiple governments all over the world).

This in turn increases the possible income in the market both from the premium quality and the heritage attached to it.

Authenticity: A similar superior quality can be imitated by the means of the power loom and other industrial methods, which acts as a threat to the uniqueness of the handcrafted material but the presence of a Gl tag preserves the essence derived from centuries of practice and honing the craft by giving the product a market edge over the imitations.

Cultural protection: The products that receive a Gl tag are rooted in the heritage of the place whether they are natural or manufactured goods, and the tag helps preserve the traditional methods of production helping protect the local culture and heritage.

• Many crafts that had been dying from the lack of patronage have been revived post being awarded the tag from the awareness and publicity created resultantly.

Economic boost: The economic value of a product with a Gl tag attached is higher than a regular product due to the promise of quality attached to it and it also helps boost the demand of the product in the market.

Registrations for GIs are not necessary, however, the organizations or companies who register their geographical indications obtain numerous benefits from the registration including:

• The authorized users are allowed to issue infringements
• It confers legal protection to Geographical Indications in India
• Prevents unauthorized use of a Registered Geographical Indication by others

Question 7. Kalyan is a non-profit statutory trust in Andhra Pradesh situated in salubrious surroundings in a rural area. Employing about 14,000 persons, Kalyan produces a special kind of puri using resources peculiar to the area and adopting cooking skills particular to the area.

The cooks preparing the puri had developed culinary skills, whose descent could be traced to their ancestors over more than 500 years. Villagers and even outsiders visiting the area savor the special taste of the puri and even get addicted to it.

• Kalyan is also under the obligation to administer and maintain the trust property and to cater to the needs of the cooks and workmen. Puri is offered at subsidized rates to the customers and has gained a great reputation and distinctiveness over a long period.
• Kalyan applied for the registration of geographical indication (Gl) for its puri under the Geographical Indications of Goods (Registration and Protection) Act, 1999 (the Act). After following the procedure laid down, the Registrar of Geographical Indications granted registration sought by Kalyan in its favor.
• In doing so, the procedural formalities contemplated under the said Act and Rules made thereunder were strictly adhered to and the genuineness of the product (puri) was verified by duly appointed experts. The product was classified as ‘foodstuff under the Act. Kalyan, thus, became the registered proprietor.
• At the time of the grant of GI to Puri, there were no objections from anyone when the matter was published in the Gl Journal.
• Thus, there was no pre¬ grant opposition to the grant of GI to puri. But yet, after the grant of Gl, one large foodstuff dealer filed a rectification application alleging that granting of Gl tag for puri contravened Section 11(1) of the Act and Rules made thereunder and that the said geographical indication was prohibited for registration under Section 9(a) of the Act.
• Further, the rectification applicant alleged that there was no industrial purpose served by the grant and that granting a monopoly to a single producer would defeat the very purpose for which the Act was brought into force.
• Section 11 of the Act refers to ‘any association of persons or producers or any organization or authority established by or under any law for the time being in force representing the interest of producers of the concerned goods’ and therefore a single producer was not entitled to the grant of GI.
• Moreover, the applicant claimed that puri was like any other similar puri made throughout the country and hence the use (consumption) of puri by customers would likely deceive or cause confusion attracting Section 9(a) of the Act.
• It was prayed by the applicant that the grant of GI to puri be removed from the Register of Geographical Indications.
• Furthermore, the rectification applicant opposed the grant of GI to Puri on the ground that it did not fall under the definition of goods in Section 2(1 )(f) of the Act.
• Kalyan (respondent) objected to the locus stand of the applicant stating that the rectification applicant was in no way offended by the registration and that he never objected when the matter was published in the GI journal before the Registrar of GI granted the registration to Puri.
• Kalyan contended that the term ‘producers’ mentioned in Section 11 of the Act represents both singular and plural. Interpretation of the term should be done in the light of Section 13(2) of the General Clauses Act, 1897.
• Producers would include a single producer. Further, the respondent argued that it had the inherent statutory and equitable rights to fence its intellectual property.
• The geographical indication registration was acquired to make the public aware of the GI tag granted to Puri produced by the trust (Kalyan) and to protect them from unauthorized sales.
• The product was rightly classified as foodstuff under section 2(1)(f) of the Act.
• Kalyan further opposed the rectification application on the ground that Section 9(a) of the Act prohibited the registration of GI which would be likely to deceive or cause confusion and that in the case of pure, there was no such confusion and misleading the public.
• On the other hand, the rectification applicant failed to explain how the registered product would cause confusion. Kalyan argued that the essence of GI was not only to protect the interest of manufacturers but also that of consumers who were willing to pay more for a genuine product.
• The legislative intent was to protect the interest of the producers and general public from imitation and consequently, with Puri having a well-known reputation, the producer (Kalyan) had every right > to fence the product by getting eligible intellectual property protection.
• The Registry of Geographical Indications sent notice to both the parties. The rectification applicant led no evidence nor did he produce any document in his favour.

Based on the above, answer the following questions:

1. Whether the rectification applicant have the locus stand to institute the rectification proceedings against the registered geographical indication puri? Whether the rectification applicant is an aggrieved person?
2. Whether there was any violation of Section 1 1 of the Act, in particular with reference to puri being produced by a single producer, Kalyan, and whether puri falls under the definition of ‘goods’ as per Section 2(1 )(f) of the Act.
3. Whether the rectification applicant had established its case for rectification, particularly in the light of Section 9(a) of the Ac.
   Answer:
   1. The respondent/registered proprietor (Kalyan) had raised its preliminary objections regarding the maintainability of the rectification application challenging the locus stand of the applicant. Under section 27(1) of the Gl Act, 1999 read with Rule 65 of the Rules made there under, an aggrieved person alone has the right to file a rectification application with the Registrar or the Appellate Board, as the case may be.

• The section in particular authorizes only ‘an aggrieved person, to apply for canceling or varying the registration of a geographical indication on the ground of any contravention or failure to observe the condition entered on the register in relation thereto by the holder of the Gl. A person cannot file a rectification application challenging the registration of Gl unless he can prove his grievances on account of the registration.
• In the present case, the rectification applicant failed to establish how he was prejudiced by the registration of the Gl. On the other hand, it is the duty of the rectification applicant to set out fully the nature of his interest in the registered product. The rectification applicant was unsuccessful in satisfying the tribunal on this issue of his interest towards the Gl.
• From the averments made in the rectification application, it is registered apparent that the rectification applicant is a third party and not involved in the same trade or manufacturing a similar product.
• Therefore, it can be safely concluded that the applicant “lacks standing” to bring an action of this nature and has also failed in proving his locus standing to seek rectification in the registered Gl.
• The issue is not in favor of the rectification applicant on the grounds that he is not an aggrieved person and also does not have any interest in the registered Gl.

1. It has been alleged in the rectification application that Sections 11(1) and 2(1)(f) of the Act and Rules made there under were violated in the grant of GI to Kalyan, raising an issue that the respondent was the sole producer of the product and therefore, it does not fall within the ambit of Section 11(1).

• Under section 11(1) of the Act, any association of persons or producers or any organization or authority established by or under any law for the time being in force representing the interest of the producers of the goods may make an application for Gl registration.
• The respondent/registered proprietor is a statutory trust in the State of Andhra Pradesh and therefore falls within the scope of Section 11(1) of the Act read with Section 2(1)(k) thereof, as a ‘person’ and ‘produced and the said entity is entitled to make an application for Gl registration for any product subject to proving that it represents the interest of producers of the particular product.
• The rectification applicant mentioned that granting of Gl tag to Puri contravened the essential condition for the grant of Gl under section 11(1) of the GI Act.
• It further alleged that there was no industrial purpose served by the grant and that such a grant shall result in a monopoly to a single producer.
• According to the rectification applicant, Kalyan, being a single producer was not entitled to the grant of Gl, and each and every person involved in the manufacturing of the product is deemed to be a producer of the product and Puri is not manufactured by the efforts of a single person.
• It is a product emerging from the effort of employees of Kalyan and Kalyan represents the producers under section 1 1 (1) of the Act.
• The term ‘producers’ mentioned in Section 11(1) of the Act includes both its singular as well as plural form. The interpretation of the term should be done in the light of Section 13(2) of the General Clauses Act, 1897, and thus read in that context Kalyan is eligible to apply for Gl registration for its Puri under section 1 1(1) of the Act.
• The rectification applicant has questioned the classification of Puri as goods under section 2(1)(f) of the Act. The said section defines ‘Goods’ as ‘any agricultural, natural or manufactured goods or any goods of handicraft or of industry and includes foodstuff. Thus in terms of the said definition, Puri falls within the definition of ‘Goods’ under section 2(1 )(f) of the Gl Act.

1. Section 9(a) of the Act prohibits the registration of a Gl which would be likely to deceive or cause confusion. In the case of Puri, there is no such confusion or deception of the public. The facts of the case also show that the rectification applicant failed to explain how the registered product would cause confusion in the minds of the public.

• The essence of the grant of right over Gl is not only to protect the interest of manufacturers but also that of the consumers who are willing to pay more for a genuine product. The legislative intent is to protect the interests of the producer as well as the general public from any imitation of the product. Puri has a well-known reputation and the producer has every right to fence the product by getting eligible Intellectual property protection.
• Regarding the applicant’s contention that production of Puri and grant of Gl for Puri shall serve no industrial purpose for which the Act was brought into force, carries no force, as it is evident from the facts of the case that Puri was being manufactured by a large workforce and was therefore serving an industrial purpose.
• As the skills involved were unique and particular to the place of origin (the area where the trust is located and the area where the culinary skills of the cooks exist having descended from their ancestors), the grant of Gl to Puri was done only after following the procedure established by law and after the genuineness of the product was verified by duly appointed experts.
• Gl is granted to an applicant only after he satisfies the requirements of Section 11(1) of the Act. The Act does not prohibit the grant of monopoly in respect of a product; rather the intent is to grant the protection to a Gl in order to protect the interest of the manufacturer as also the customers against nongenuine products. Therefore, it can be safely concluded that the rectification applicant has failed to establish his claim for rectification.

 Read and analyze the case study and answer the questions given at the end :

India is the world’s largest producer of tea, with a total production of 846 million kgs in the year 2002, supplying about 31 percent of the world’s favorite hot drink. Among the teas grown in India, Darjeeling tea offers distinctive characteristics of quality and flavor and also has had a global reputation for more than a century.

Broadly Speaking, there are two factors that have contributed to such an exceptional and distinctive taste, namely geographical origin and processing, Darjeeling tea has been cultivated, grown, and produced in tea gardens in a well-known geographical area- the Darjeeling district in the Indian State of West Bengal- for over one and a half centuries. The tea gardens are located at elevations of over 2000 meters above mean sea level.

Even though the tea industry in India lies in the private sector, it has been statutorily regulated and controlled by the Ministry of Commerce since 1933 under various enactments culminating in the Tea Act, of 1953. The Tea Board of India (Tea Board) was set up under this Act.

A major portion of the annual production of Darjeeling tea is exported, the key buyers being Japan, Russia, the United States, the United Kingdom, and other European Union (EU) Countries such as France, Germany, and the Netherlands.

Efforts made by the Tea Board to ensure the supply of genuine Darjeeling tea

In order to ensure the supply and genuine Darjeeling tea, a compulsory system of certifying the authenticity of exported Darjeeling tea was incorporated into the Tea Act, 1953 in February 2000.

• The system makes it compulsory for all the dealers in Darjeeling tea to enter into a license agreement with the Tea Board of India on payment of an annual license fee.
• The terms and conditions of the agreement provide, inter alia, that the licensees must furnish information relating to the production and manufacture of Darjeeling tea and its sale, through auction or otherwise.
• The Tea Board is thus able to compute and compile the total volume of Darjeeling tea produced and sold in the given period.
• No blending with teas of other origins is permitted. Certificates of origin are then issued for export consignments under the Tea (Marketing and Distribution Control) Order, 2000, read with the Tea Act, 1953.
• Data are entered from the garden invoices (the first point of movement outside the factory) into a database and the issue of the Certificate of Origin authenticates the export of each consignment of Darjeeling tea by cross-checking the details.

The customs authorities in India have instructed, by circular, all customs checkpoints to check for the certificates of origin accompanying the Darjeeling tea consignments and not to allow the export of any tea as ‘Darjeeling’ without this certificate. This ensures the sale-chain integrity of Darjeeling tea until consignments leave the country.

Legal Protection at the Domestic Level

Certification Trade Marks Registration: In order to provide legal protection in India, the Tea Board registered the ‘Darjeeling logo’ and also the word ‘Darjeeling’ as Certification Trade Marks (CTMs) under the Trade and Merchandise Marks Act, 1958 (now the Trade Marks-Act, 1999).

Gl Registration: The Tea Board has also applied for the registration of the words ‘Darjeeling’ and ‘Darjeeling logo’ under the Geographical Indications of Goods (Registration and Protection) Act, 1999 (the Act) which came into force with effect from 15th September 2003, in addition to the CTMs mentioned above.

Under the Act :

• No person shall be entitled to institute any proceeding to prevent or recover damages for the infringement of unregistered geographical indications.
• Registration of geographical indications shall give the registered proprietor and all authorized users whose names have been entered in the register the right to obtain relief in respect of infringement of the geographical indications.
• However, authorized users alone shall have the exclusive right to the use of the geographical indications in relation to the goods in respect of which the geographical indications are registered.
• A registered geographical indication is infringed by a person who, not being an authorized user thereof,
  1. Uses such geographical indications by any means in the designation or presentation of goods that indicates or suggests that such goods originate in some other geographical area other than the true place of origin of the goods in a manner that misleads the public; or
  2. Uses any geographical indications in such a manner that constitutes an act of unfair competition including passing off in respect of registered geographical indications; or
  3. Uses another geographical indication to the goods which, although literally true as to the territory, region, or locality in which the goods originate, falsely represents to the public that the goods originate in the region, territory, or locality in respect of which such registered geographical indications relate.
• The purpose of the Global Indications of Goods (Registration and Protection) Act, 1999 is to create a public register, and
• The Act confers public rights.

Status of registration of Global Indications (Gl) :

The Registration of the marks applied for by the Tea Board has not yet been granted. The Registrar has, however, after examining the application for registration filed by the Tea Board advertised for any expression of opposition. It is only after considering opposition, if any, that the Registrar may decide to register the Gl of the Tea Board.

Reasons for Gl protection at the domestic level and export markets: The reasons for the need for additional protection for Gl over and above the CTM have been set out by the chair of the Tea Board as follows :

• When CTM registration is not accepted in a jurisdiction where protection is sought, for example, France for Darjeeling;
• Because Gl registration is necessary to obtain reciprocal protection of a mark mandate under EU Regulation 2081/92; and
• Registration gives clear status to a Gl, indicating a direct link with geographical origin.

Quite apart from the aforesaid reasons the Act in India has also been enacted in order to comply with its obligation under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which requires WTO members to enact appropriate implementation legislation for Gl.

Steps taken at the international level

1. Registration of Darjeeling tea and logo:

• In order to protect the ‘Darjeeling’ and ‘Darjeeling logo’ as Gl, the Tea Board registered the mars in various countries, including the United States, Canada, Japan, Egypt, United Kingdom, and some other European countries, as a trademark/CTM.
• In this context, it is relevant to note that on 3rd August 2001, the UK Trade Registry granted registration of the word ‘Darjeeling’ as of 30th March 1998 under the UK Trade Marks Act, 1994. The United States also accepted the application of the Tea Board for the registration of ‘Darjeeling’ as a CTM in October 2002.

1. The appointment of the International Watch Agency:

• In order to prevent misuse of ‘Darjeeling’ and the logo, the Tea Board has since 1998 hired the services of Compumark, a worldwide watch agency. Compumark is required to monitor and report to the Tea Board all cases of unauthorized use and attempted registration.
• Pursuant to Compumark’s appointment, several cases of attempted registrations and unauthorized use of the ‘Darjeeling’ and the Darjeeling Logo have been reported.

1. The assistance of overseas buyers:

• In order to ensure the supply of genuine Darjeeling tea, the Tea Board has sought the help of all overseas buyers, sellers, and Tea Councils and Associations insofar as they should insist on certificates of origin to accompany all export consignments of Darjeeling tea.

Local and external players and their roles: The Tea Board, the sole representative of tea producers in India, is responsible for the implementation of the government’s regulations and policies. It is vested with the authority to administer all stages of tea cultivation, processing, and sale (including the Darjeeling segment) through various orders issued by the government.

• It works in close cooperation with the Darjeeling Planters Association, which is the sole producers’ forum for Darjeeling tea. Both the Tea Board and the Darjeeling Planters Association (DPA) have been involved at various levels in protecting and defending the Darjeeling tea’ and ‘The Darjeeling logo’. The primary objects are
  1. To prevent misuse of the word ‘Darjeeling’ for tea sold worldwide;
  2. To deliver the correct product to the consumer;
  3. To enable the commercial benefit of the equity of the brand to reach the Indian tea industry and ultimately the plantation worker;
  4. To achieve an international status similar to champagne or Scotch whisky in terms of both brand and equity and governance/ administration.
• The Tea Board assumed the role of the complainant in making and filing opposition or other legal measures whenever cases of unauthorized use or attempted or actual registration of the Darjeeling and Darjeeling logo were brought to its notice.
• Such legal measures and generally taken where negotiation is filed. For instance, in February 2000 in Japan, the Tea Board filed an opposition against Yutaka Sang yo Kabushiki Kaisa of Japan for registration of the trademark ‘Darjeeling Tea’ with the map of India, the International Tea KK of Japan for registration of Darjeeling Women device in Japan under class 30/42 (tea, coffee, and cocoa) and against Mitsui Norin KK for the use in advertising of the ‘Divine Darjeeling’ logo. These opposing parties defended the invalidation action filed against them.
• Some disputes relating to Darjeeling tea have been settled through negotiations undertaken by the Tea Board of India with the foreign companies concerned with the help of their respective governments.
• Thus, the Tea Board with the help of the Indian Government continues to negotiate with France at various levels over the activities of the French trademark authorities.
• Moreover, BULGARI, Switzerland agreed to withdraw the legend ‘Darjeeling’ Tea fragrance for men’ pursuant to legal notice and negotiations. In one of the cases in France, the Tea Board put the applicant Comptoirdes Parfums (which advertised in March 1999) on notice, and drew its attention to the prior rights and goodwill in the name of Darjeeling as the Gl for tea, requiring it to withdraw its application voluntarily, Based on the correspondence, the applicant consented to the amendment of all specifications of goods by the addition of ‘all those goods being made of Darjeeling tea or recalling the scent of Darjeeling tea’.
• The amendment proposed by the applicant was found by the examiner to be descriptive of the goods in question.
• The Tea Board of India feels that a partnership with the buyers in the major consuming countries such as Germany, Japan, and the United Kingdom would be the only long-term solution to the problem of possible passing off.
• However, it strongly opposes any attempt at individual registration in the case of private labels or its misuse in specific overseas jurisdictions.

Challenges faced and the outcome: The Tea Board has faced a series of hurdles, challenges, and difficulties in the protection and enforcement of the word ‘Darjeeling’ and the Darjeeling logo. Some of the major challenges faced by the Tea Board’s effort to protect ‘Darjeeling’ and the Darjeeling logo in Japan, France, Russia, the United States, and other countries are given below :

• Unauthorized use and registration of Darjeeling Tea and logo in Japan In the first case the Tea Board filed an invalidation action against International Tea KK, a Japanese company, over the registration of the Darjeeling logo mark, namely, Darjeeling Women’s serving tea/coffee/coca/soft drinks/fruit juice’ in the Japanese Patent Office (JPO) on 29th November 1996 with the trademark registration number 3221237.
• The impugned registration was made notwithstanding the registration in Japan of the identical Darjeeling logo mark by the Tea Board, with the trademark registration number 2153113, dated 31st July 1987. The Tea Board also filed a non-use cancellation action.
• On 28th August 2002, the JPO Board of Appeal held that the pirate registration was invalid because it was contrary to public order and morality. With regard to the Tea Board’s non-use cancellation action, the JPO decided that International Tea KK had not furnished sufficient evidence to substantiate its use of registration and thereby allowed the appeal of the Tea Board.
• In the second case, the Tea Board opposed the application for ‘Divine Darjeeling1 in class 30 (Darjeeling tea, coffee, and cocoa produced in Darjeeling, India) filed by Mitsui Norin KK of Japan advertised on 29th February 2000. The opposition was mainly on three grounds, namely
  • ‘Divine’ is a laudatory term and accordingly the mark for which protection is sought is mere “Darjeeling’, which is clearly non-distinctive;
  • ‘Divine Darjeeling’ is misleading insofar as ‘coffee and cocoa produced in Darjeeling’ are concerned, all the more so because the district of Darjeeling does not produce coffee or cocoa;
  • Darjeeling tea qualifies as a geographical indication under international conventions including TRIPS and ought to be protected as such in Japan, a member of TRIPS.
• The JPO Opposition Board dismissed the invalidation action filed by the Tea Board of India primarily on the ground that the marks ‘Divine Darjeeling’ as a whole were not misleading or descriptive of the quality of goods. However, the non-use cancellation action succeeded, because the registered proprietor was not able to place on record adequate evidence to prove the use of the mark in Japan.
• In yet another case, the Tea Board brought an invalidation action against the Japanese trademark registration of ‘Darjeeling tea’ with a map of India in class 30 by Yutaka Sangyo Kabushiki Kaisa, on the ground that the registration was contrary to public order and morality.
• This action was rejected on the ground that ‘the written English characters “Darjeeling tea” and the map of India for the goods of Darjeeling tea are used as an indication of the origin and quality of Darjeeling tea and will not harm the feelings of the Indian people’. However, the non-use cancellation action filed by the Tea Board succeeded, because the registered proprietor was not able to place on record sufficient evidence to prove the use of the mark in Japan.

A perusal of these decisions reveals that the JPO did not decide the contention of the Tea Board relating to the TRIPS Agreement, which requires WTO members to provide the legal means to prevent the use of a Gl for goods originating in a geographical area other than the true on place of origin in a manner which misleads the public to constitute an act of unfair competition. Indeed, the non-disposal of the argument that the procedural guidelines of WTO be followed dilutes the effect of the TRIPS Agreement.

Other instances of defending Gl against developed countries:

1. France: While the Indian system protects French GIs, France on the other hand does not extend similar or reciprocal protection to Indian GIs. Thus French law does not permit any opposition to an application for a trademark similar or identical to a Gl if the goods covered are different from those represented by the Gl.

• The owner of the Gl can take appropriate judicial proceedings only after the impugned application has proceeded to registration. The net effect of such a provision has been that despite India’s protests, Darjeeling has been misappropriated as a trademark in respect of several goods in class 25, namely, clothing, shoes, and headgear. The French Examiner even though he found evidence in favor of the Tea Board of India
• On sufficient proof of use of ‘Darjeeling’ tea in France, and (ii) that the applicant had slavishly copied the name Darjeeling in its application – held that the respective goods ‘clothing, shoes, headgear’ and ‘tea’ are not of the same nature, function and intended use, produced in different places and sold through different networks.
• The Examiner also held that even if the applicant has slavishly copied the Tea Board’s Darjeeling logo (being the prior mark), the difference in the nature of the respective goods is sufficient to hold that the applicant’s mark may be adopted without prejudicing the Tea Board’s rights in the name ‘Darjeeling’.
• In another case, the Tea Board opposed the application against the advertised marks for Darjeeling in classes 5, 12, and 28 by Dor Francois Marie in France. The French Examiner rejected the Tea Board’s opposition and held that the respective goods did not have the same nature, function, and intended use; and
• Share the same distribution circuits. However, he held that although the applicant’s mark constituted a partial reproduction of the Tea Board’s prior figurative registration for the Darjeeling logo, the designated goods lacked similarity to that of the Tea Board’s prior marks and the logo, therefore, may be used as a trademark without prejudicing the prior rights of the Tea Board.

1. Russia: The Tea Board filed an application for unauthorized use by a company of the word ‘Darjeeling’. This application was objected to on the grounds of conflict with an earlier registration of the identical word by a company named ‘Akotus’. The Russian Patent Office overruled the objection and accepted the application of the Tea Board for the word ‘Darjeeling’.
2. United States: The Tea Board is opposing an application filed by its licensee in the United States to register ‘Darjeeling nouveau’ (‘nouveau’ is the French for ‘new’) relating to diverse goods and services such as clothing, lingerie, Internet services, coffee, cocoa and so on in respect of first flush Darjeeling tea. The registration application is under consideration even though ‘Darjeeling’ is already registered under US CTM law.
3. Other Countries: In several cases, the Tea Board opposed attempted registration and unauthorized use of the word ‘Darjeeling’ in Germany, Israel, Norway, and Sri Lanka before the Patent Office of the country concerned.

Costs of Protection And Enforcement For the Industry And The Government: Another major challenge faced by the Tea Board relates to legal and registration expenses, costs of hiring an international watch agency, and fighting infringements in overseas jurisdictions.

• Thus during the last four years, the Tea Board has spent approximately US$ 2,00,000 for these purposes. This amount does not include administrative expenses including the relevant personnel working for the Tea Board, the cost of setting up monitoring mechanisms, software development costs, and so forth. Every geographical indication right holder can’t incur such expense protection.
• Further, like overseeing, monitoring, and implementing GL protection, the high cost of taking legal action can prevent a country from engaging a lawyer to contest the case, however genuine and strong the case may be. Moreover, a lack of expertise in the proper handling of highly complex legal language is another challenge to be met.

Lessons for Others: The Tea Board appears to be not satisfied with the policy as well as the approach of the patent authority in Japan and France.

• In order to deal with the situations described above, India, along with several other member countries of the WTO, wants to extend the proposed register for Gl to include products or goods, other than wines and spirits, which may be distinguished by the quality, reputation or other characteristics essentially attributable to their geographical origin.
• The main advantage would be to develop a multilateral system of notification and registration of all geographical indications, in this connection, a joint paper has recently been submitted to the TRIPS Council.
• The Doha Ministerial Declaration under Paragraphs 12 and 18 also provides a mandate for the issue of providing a higher level of protection to GIs to products other than ‘wines and spirits’ to be addressed by the TRIPS Council. According to the Tea Board,
• Extension of protection under Article 23 for products other than wines and spirits is required where no legal platform exists to register a Gl or a CTM which is a TRIPS obligation, for example, Japan;
• Once the scope of protection is extended it would not be necessary to establish the credentials/reputation of a Gl before fighting the infringement of similar types’, ‘styles’, or ‘look-alikes’, and
• Additional protection would rectify the imbalance created by the special protection of wines and spirits. The experience in defending Gl in France, the United States, and Japan further strengthens the Tea Board’s perspective on the subject.
• Despite a registration of ‘Darjeeling’ as a GL in France, the Tea Board was unsuccessful in defending it because French law does not permit any opposition to an application for a trade mark, similar or identical to a GL Likewise, India’s efforts to protect Darjeeling’ in Japan did not succeed because the prefix ‘Divine’ has not gained currency in the Japanese language.
• From the experiences described above, it is felt that it is high time to evolve a rule that no application for registration of a Gl of the same or similar goods or products or even similar type, style, or look-alike already registered in that country be ordinarily entertained by the competent authority of the country concerned.
• Further, the Gl status and apprehended or actual violation of Gl should be published at both domestic and international levels.

Moreover, adequate steps.should be taken to evolve rules and procedures for Gl or CTM registration in all the member countries of the WTO. This would prevent conflict to a great extent. Finally, a vigilance cell should be established to check the violation and misuse of the Gl of any product.

Questions.

1. How does ‘Darjeeling Tea’ satisfy the criteria of geographical indications under the Geographical Indication of Goods (Registration and Protection) Act, 1999? Why was a compulsory system of certifying the authenticity of exported Darjeeling Tea incorporated into the TEA ACT, 1953 in 2000?
2. In case the Government of India is interested in protecting the ‘Darjeeling Tea’ under the Geographical Indications of Goods (Registration and Protection) Act, 1999, how can an application be filed and what should be the contents of the application? Explain in the context of the case study.
   Elaborate on the unauthorized use and registration of Darjeeling Tea and its logo in Japan and defend Gl against developed countries.
3. (What was the Doha Ministerial Declaration under Paragraphs 1 2 and 1 8 and what did Tea Board experience in defending Gl in France, the USA, and Japan?
4. What are the initiatives taken by the Tea Board of India to ensure geographical indications (Gl) protection for ‘Darjeeling Tea’?
5. What measures would you suggest to pave the way for enhanced protection of Intellectual Property Rights (IPRs) in the context of ‘Darjeeling Tea’?
   Answer:

• 1. The term “Geographical Indication” is defined in Section 2(1 )(e) of the Geographical Indications of Goods (Registration and Protection) Act, 1 999 as:

1. “Geographical Indication, in relation to goods, means an indication which identifies such goods as agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory of a country, or a region or locality in that territory, where a given quality, reputation or other characteristic of such goods is essentially attributable to its geographical origin and in case where such goods are manufactured goods one of the activities of either the production or of processing or preparation of the goods concerned takes place in such territory, region or locality, as the case may be.”
2. In the case of Darjeeling Tea, the key features which make it eligible to be granted registration and thus protected under the G! Act, 1999 are:

• It offers distinctive characteristics of quality and flavor.
• It has a global reputation for more than a century.
• It has been cultivated grown and produced in tea gardens in a well-known geographical area — the Darjeeling district in the Indian State of West Bengal for over one and a half centuries.
• It has tea gardens which are located in the district of Darjeeling at elevations of over 2000 meters above sea level.
• In order to ensure the supply of genuine Darjeeling tea, a compulsory system of certifying the authenticity of exported Darjeeling tea was incorporated into the Tea Act, 1 953. in the month of February 2000.
• The system made it compulsory for all the dealers of Darjeeling tea to enter into a license agreement with the Tea Board of India on payment of an annual license fee.
• The terms and conditions of the agreement provide, inter alia, that the licensees must furnish information relating to the production and manufacture of Darjeeling tea and its sale, through auction or otherwise.
• The Tea Board is thus able to compute and compile the total volume of Darjeeling tea produced and sold in the given period.
• No blending with teas of other origins is permitted. Certificates of origin are then issued for export consignments under the Tea (Marketing and Distribution Control) Order, 2000, read with the Tea Act, 1953.
• Data is entered from the garden invoices (the first point of movement outside the factory) into a database, and the issue of the certificate of origin authenticates the export of each consignment of Darjeeling tea by cross-checking the details.

Furthermore, the Customs Authorities under their circular have made it mandatory to check at each checkpoint the Certificate of Origin in respect of each Darjeeling Tea Consignment. Thus, ensuring the sale-chain integrity of Darjeeling Tea until the consignment leaves the country.

1. Filing of Application:

• An Application for the registration of a Geographical Indication by the Government of India can be made in triplicate in Form Gl – 1(A) for a single class and in Gl – 1 (C) for multiple classes.
• A Convention Application shall be made in triplicate in Form Gl – 1 (B) for a single class and in Gl – 1 (D) for multiple classes.
• Power of Attorney, if required.
• The application shall be signed by the applicant or his agent.
• The application is to be made to the Registrar of Geographical Indications.

Contents of Application: As provided in Section 11 of the GI Act, 1999, an application for registration of a Gl should include the requirements and criteria for processing a Gl application as specified below:

• A statement as to how the geographical indication serves to designate the goods as originating from the concerned territory of the country or region;
• The class of goods to which the Gl shall apply;
• The geographical map of the territory or locality in which goods are originate or manufactured;
• The particulars of appearance of the geographical indication;
• Particulars of the producers;
• An affidavit of how the applicant claims to represent its interest in the Gl;
• The standard benchmark for the use or other characteristics of the Gl;
• The particulars of special characteristics;
• Textual description of the proposed boundary;
• The growth attributes in relation to the Gl pertinent to the application;
• Three certified copies of the map of the territory, region, or locality;
• Particulars of special human skill involved, if any;
• Full name and address of the association of persons or organization seeking registration;
• Number of producers; and
• Particulars of inspection structures, if any. to regulate the use of the GI. [Rule 32].

On receipt of the application, a number is allotted. Thereafter, the examiner scrutinizes the application to check whether it meets the requirements of the Gl Act and the Rules. Deficiencies, if any, found through a preliminary examination would be communicated by the Examiner to the Applicant.

• The deficiencies need to be complied with within the time limit mentioned in the communication. [Rule 31] Upon compliance with the deficiencies, the Registrar shall ordinarily constitute a Consultative Group of experts (not more than seven representatives) to ascertain the correctness of the particulars furnished in the Statement of Case. The Consultative Group is chaired by the Registrar of Geographical Indications.
• [Rule 33] After issuance of the Examination Report, submissions of the applicant would be considered. If no further objection is raised, the application will be accepted and published (within three months of acceptance) in the Geographical Indications Journal.
• [Rule 34 & Rule 38] After the advertisement of a Geographical Indication in the Geographical Indications Journal, any person may within three months oppose the registration of an application for G I.
• This period may be extended by a period, not exceeding one month, by making an application to the Registrar along with the prescribed fee. Such an application for extension shall be filed before the expiry of the period of three months. The Notice of Opposition shall be filed only before the Registrar of Geographical Indications at Chennai. [Section 14, Form GI-2]
  3. In a case, the Tea Board had filed an invalidation action against International Tea KK, a Japanese Company, over the registration of the Darjeeling logo mark, namely, Darjeeling women ‘serving tea/coffee/coca/soft drinks/fruit juice’ in the Japanese Patent Office (JPO) on 29th November 1996 with the trademark registration number 3221237.
• The impugned registration was made notwithstanding the registration in Japan of the identical Darjeeling logo mark by the Tea Board of India, with the trademark registration number 2153713, dated 31s1 July 1987. The Tea Board had also filed a non-use cancellation action.
• On 28th August 2002, the JPO Board of Appeal held that the pirate registration was invalid because it was contrary to public order and morality.
• With regard to the Tea Board’s non-use cancellation action, the JPO decided that International Tea KK had not furnished sufficient evidence to substantiate its use of registration and thereby allowed the appeal of the Tea Board.
• In another case, the Tea Board had filed its opposition in respect of an application for registration of ‘Divine Darjeeling’ under class 30 (Darjeeling Tea, Coffee and Cocoa product in Darjeeling, India) filed by Mitsui Norin KK of Japan advertised on 29lh February 2000. The grounds of opposition were:
  1. ‘Divine’ is a laudatory term and accordingly the mark for which protection is sought is mere ‘Darjeeling’, which is clearly non-distinctive;
  2. ‘Divine Darjeeling’ is misleading insofar as ‘coffee and cocoa’ products in Darjeeling’ are concerned, all the more so because the district of Darjeeling does not produce coffee or cocoa;
  3. Darjeeling tea qualifies as a geographical indication under international conventions including TRIPS and ought to be protected as such in Japan, a member of TRIPS.

The Opposition application filed by Tea Board was however dismissed by the JPO Opposition Board stating that the mark ‘Divine Darjeeling’ as a whole was not misleading or descriptive of the quality of goods.

• In yet another case, the Tea Board brought an invalidation action against the act of trademark registration of ‘Darjeeling tea’ with the map of India in class 30 by a Japanese company, Yutaka Sangyo Kabushiki Kaisa, on the ground that the registration was contrary to the public order and morality.
• The action was however rejected on the ground that ‘the written English characters ‘Darjeeling tea’ and ‘Map of India’ for the goods of Darjeeling tea are used as an indication of the origin and quality of Darjeeling tea and will not harm the feelings of the Indian People’.
• However, the non-use cancellation action filed by the Tea Board succeeded, because the registered proprietor was not able to place on record sufficient evidence to prove the use of the mark in Japan.
• A perusal of these decisions reveals that the JPO did not decide the contention of the Tea Board of India relating to the TRIPS Agreement, which requires WTO members to provide the legal means to prevent the use of a Gl for goods originating in a geographical area other than the true place of origin in a manner which misleads the public to constitute an act of unfair competition.
• Indeed, the non-disposal of the argument that the procedural guidelines of WTO be followed dilutes the effect of the TRIPS Agreement.
• Indian Legal System protects French GIs, while France on the other hand does not extend similar or reciprocal protection to Indian GIs.
• Thus, French law does not permit any opposition to be made to an application for registration of a trademark similar or identical to a Gl if the goods covered are different from those represented by the Gl. The owner of the Gl can take appropriate judicial action only after the impugned application has proceeded for registration.
• The net effect of such a provision has been that despite India’s protests, ‘Darjeeling1 has been misappropriated as a trademark in respect of several goods in class 25, namely, clothing, shoes and headgear in France. The French Examiner — even though he found evidence supporting the case made out by the Tea Board of India.

1. On sufficient proof of use of ‘Darjeeling’ tea in France, and
2. That the applicant had slavishly copied the name ‘Darjeeling’ in its application – held that the respective goods falling in the category of ‘clothing, shoes, headgear’ and ‘tea’ respectively are not of the same nature, function and intended use, produced in different places and sold through different networks.

The Examiner also held that even if the applicant has slavishly copied the Tea Board’s Darjeeling logo (being the prior mark), the difference in the nature of the respective goods is sufficient to hold that the applicant’s mark may be adopted without prejudicing the Tea Board’s rights in the name ‘Darjeeling’.

Russia: The Tea Board had filed an application for unauthorized use by a company of the trademark ‘Darjeeling’. This application was objected to on the grounds of conflict with an earlier registration of the identical word by a company named ‘Akorus’.

The Russian Patent Office overruled the objection and accepted the application of the Tea Board of India for the use of the trademark ’ Darjeeling’.

United States: In a case, the Tea Board was opposing an application filed by its licensee in the United States to register ‘Darjeeling nouveau’ (‘nouveau’ is the French for ‘new’) relating to diverse goods and services such as clothing, lingerie, Internet services, coffee, cocoa and so on in respect of first flush Darjeeling tea. The registration application is under consideration even though ‘Darjeeling’ is already registered under US CTM law.

Other Countries: Quite apart from the above, in several cases, the Tea Board of India opposed attempted registration and unauthorized use of the word ‘Darjeeling’ in Germany, and Israel. Norway and Sri Lanka before the Patent Office of the country concerned.

1. Paragraphs 12 and 18 of the Doha ministerial declaration relate to the extension of the additional protection for geographical indications to products other than ‘wines’ and spirits.

• According to paragraphs 12 and 18 of the Doha ministerial declaration and the decision of the trade negotiation committee (tnc) of 1st February 2002, the issue of ‘extension’ of the protection of geographical indications for ‘wines’ and ‘spirits’ to geographical indications for other products shall be addressed in the regular meetings of the trips council on a priority basis. paragraphs 12 and 18 thus provide a mandate for the issue of “providing a higher level of protection to gis to products other than ‘wines and spirits’ to be addressed by the trips council”. according to the tea board,
  1.  Extension of protection under Article 23 for products other than wines and spirits is required where no legal platform exists to register a Gl or a CTM which is a TRIPS obligation, for example, Japan;
  2. Once the scope of protection is extended it would not be necessary to establish the credentials/reputation of a Gl before fighting the infringement of similar types’, ‘styles’, or look-alikes’; and
  3.  Additional protection would rectify the imbalance created by the special protection of Wines and Spirits.

Despite the registration of ‘Darjeeling’ as aGI in France, the Tea Board was unsuccessful in defending it because French law does not permit any opposition to an application for a trademark, similar or identical to a Gl. Likewise. India’s efforts to protect ‘Darjeeling’ in Japan did not succeed because the prefix ‘Divine’ has not gained currency in the Japanese language.

It is felt that it is high time to evolve a rule that no application for registration of a Gl of the same or similar goods or products or oven similar type, style, or look-alike already registered in that country be ordinarily entertained by the competent authority of the country concerned Further, the Gl status and apprehended or actual violation of Gl should be published at both domestic and international levels.

Moreover, adequate steps should be taken to evolve rules and procedures for Gl or CTM registration in all the member countries of the WTO. This would prevent conflict to a great extent. Finally, a vigilance cell should be established to check the violation and misuse of the Gl of any product.

1. The Tea Board of India took the following initiatives to ensure Geographical Indication (Gl) Protection for ‘Darjeeling Tea’:

• The Compulsory system of certifying the authenticity of exported Darjeeling tea. With this, it has made it compulsory for all the dealers in Darjeeling tea to enter into a license agreement with the Tea Board of India.
• The Tea Board registered the ‘Darjeeling logo’ and also the word ‘Darjeeling’ as Certification Trade Marks (CTMs) under the (Indian) Trade and Merchandise Marks Act, 1958 (now the ‘Trade Marks Act, 1999’).
• The Tea Board of India has also applied for the registration of the words ‘Darjeeling’ and ‘Darjeeling logo’ under the Geographical Indications of Goods (Registration and Protection) Act, 1999.
• In order to protect the ‘Darjeeling’ and ‘Darjeeling logo’ as a Gl, the Tea Board of India registered the marks in various countries.
• The Tea Board hired the services of a worldwide agency COMPUMARK, to check and prevent the misuse of the ‘Darjeeling’ and Darjeeling logo. For example, a company called Bulgari’ from Switzerland agreed to withdraw its application to use the tag ‘Darjeeling Tea fragrance for men’. Several such cases were settled through negotiations.
• The Tea Board has sought the help of all overseas buyers, sellers, and Tea Council and Associations to insist on Certificates of Origin to accompany all export consignments of Darjeeling tea.

To protect against the violations of its Intellectual Property Rights, an organization should ensure the protection of its trade secrets in a foreign country also. Every company has to take certain important and crucial measures to ensure the protection of its trade secrets.

• It may be prudent for the companies to conduct an intellectual property audit to identify the protectable business information. This will help the companies to assess the value of the information useful for their business. The intellectual property audit is the starting point for the development of a trade secrets protection program.
• Once the audit is complete, the next step is to determine appropriate level of security necessary to protect different types of trade secrets. If a trade secret is well protected, there is no term of protection. Trade secret protection can, in principle, extend indefinitely and in this respect offers an advantage over patent protection, which lasts only for a specified period.
• The Tea Board of India feels that a partnership with the buyers in the major consuming countries such as Germany, Japan, and the United Kingdom would be the only long term solution to the problem of possible passing off.
• However, it strongly opposes any attempt at individual registration in the case of private labels or its misuse in specific overseas jurisdictions.
• Governments of several countries working together have a prominent role to play in resolving disputes. Recently, India and the United States have led the way in this regard by establishing “an annual high-level Intellectual Property (IP) Working Group with appropriate decision making and technical level meetings as a part of the trade policy forum.”
• Similarly, India could look at treaties like the Hague Treaty on Industrial Designs to strengthen its IPR regime.

In the context of protection of any misuse or wrongful use of ‘Danee ng Tea’ or any deceptively similar trade name or mark which is app ec to a product not belonging to that region which holds a right ever it under the Gl Act, 1999, it is necessary that a concerted effort be made try the nations as also the concerned International Organizations, especially the TRIPS, to ensure that there is no violation committed in 1heir respective territory of the rights of others.

Descriptive Questions:

Question 1. What is a geographical indication? How is a geographical indication different from a trademark? List out the examples of possible Indian Geographical Indications.
Answer:

The Geographical indications are the indications v/hich identify a good as originating in the territory or a region a locality where a given quality is. reputation or other characteristics of the good is attributable to its geographical origin.

According to section 2 (e) “Geographical Indication” about goods. means an indication that identifies such goods as agricultural goods. natural goods or manufactured goods as originating or manufactured in the territory of a Country or a region or locality in that territory, where a given quality reputation or another characteristic of such goods is essentially attributable to its geographical origin and in the case where such goods are manufactured goods, one of the activities of either the production or of processing or preparation of the goods concerned takes place in such territory, region or locality, as the case may be.

Examples of possible Indian geographical indications are:

• “Darjeeling” for tea of Indian origin;
• “Kanjeevaram Silk” denotes that product from Kanjeevaram in Southern India;
• “Benaras Silk” indicates a product of Indian origin.

Other examples are:

• Kolhapuri Chappals,
• Agra Petha,
• Kota Masuria,
• Bikaneri Bhujia etc.

Question 2. When is a registered geographical indication said to be infringed? Can a registered geographical indication be assigned, transmitted, etc?
Answer:

According to Section 22, a registered geographical indication is said to be infringed by a person who, not being an authorized user thereof geographical indication by any means in the designations of presentation of goods that indicates or suggests that such goods originate in a geographical area other than the true place of origin of such goods in a manner good; or which misleads the persons as to the geographical origin of such goods; or uses any geographical indication in such manner which constitutes an act of unfair competition including passing off in respect of registered geographical indication.

• “Act of unfair competition” means any act of competition contrary to honest practices in industrial or commercial matters. No, a registered geographical indication cannot be assigned, transmitted, etc. A geographical indication is a public property belonging to the producers of the concerned goods.
• It shall not be the subject matter of assignment, transmission, licensing, pledge, mortgage, or such other agreement. However, when an authorized user dies, his right devolves to his successor in title.

Question 3. Who can apply for the registration of a geographical indication? What is the benefit of registration of geographical indications? Who is a registered proprietor of a geographical indication?
Answer:

As per Section 11 of the act, an application for registration of a geographical indication may be made by

• Any association of persons or producers or any organization or authority established by or under any law for the time being in force;
• Who must represent the interest of the producers of the concerned goods; and
• Desirous of registering a geographical indication in relation to such goods.

The benefits of registration of geographical indication are:

• Registration gives the registered proprietor and its authorized users, the legal right to the exclusive use of the geographical indication:
• It also gives the right to obtain relief in case of its infringement. Exclusion of unauthorized persons from misusing geographical indications would ensure that genuine products of the rightful producers are marketed.
• Any association of persons, producers, organizations, or authorities established by or under the law can be a registered proprietor of the company.

Their name should be entered in the Register of Geographical Indication as a registered proprietor for the geographical indication applied.

Question 4. What is the prohibition of registration of certain geographical indications?
Answer:

As per Section 9 of the Act prohibits the registration of certain geographical indications. They are as follows:

• The use of which would be likely to deceive or cause confusion;
• The use of which would be contrary to any law for the time being in force;
• Which comprises or contains scandalous or obscene matter;
• Which comprises or contains any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India;
• Which would otherwise be disentitled to protection in a Court;
• Which are determined to be generic names or indications of goods and are, therefore, not or ceased to be protected in their country of origin, or which have fallen into disuse in that country;
• Although literally true as to the territory, region, or locality in which the goods originate but falsely represent to the persons that the goods originate in another territory, region, or locality, as the case may be shall not be registered as a geographical indication.

It may be noted that “Generic names or indications”, about goods means the name of a good which, although relates to the place or the region where the goods were originally produced or manufactured has lost its original meaning and has become the common name of such goods and serves as a designation for or indication of the kind, nature, type or other property or characteristic of the goods.

Industrial Designs

Question 1. Industrial design plays an important role in the trading of consumer goods or products as well as helps economic development by encouraging creativity in the industrial and manufacturing sector. Discuss the salient features of the Designs Act, of 2000.
Answer :

Salient Features of Design Act, 2000

Objectives and Justification for Design Protection: The process of acquiring design rights is important from the perspective of the creator of design. Basically, the evolution of design rights was based on the keen interest to encourage and protect those who produce new and original designs, thereby facilitating competitive development and industrial progress.

Being a creation of an intellectual mind, the designs also need to be protected. Design protection through registration has been a source of tremendous progress in the field of science and technology which has revolutionized the manufacturing process.

Subject Matter of Design Law: The subject matter which is protected by the design system is the application of the design to an article. The two fundamental characteristics of the design law are – firstly, it is concerned with the visual aspects of the articles and secondly, it concerns designs applied to an article, which means concepts like garden designing, architectural drawings and designs, book jackets, labels, tokens, medals, buildings and structures have been excluded from design protection.

The term Design as per the Design Act, 2000: A design refers to the features of shape, configuration, pattern, ornamentation or composition of lines or colours applied to any article, in two or three-dimensional (or both) forms. This may be applied by any industrial process or means (manual, mechanical or chemical) separately or by a combined process, which in the finished article appeals to and is judged solely by the eye.

Who can apply for Registration: Any person the legal representative or the assignee can apply separately or jointly for the registration of a design. The term “person” includes a firm, a partnership and a body corporate. An application may also be filed through an agent in which case a power of attorney shall be filed.

What is excluded from the Design Protection: Designs that are primarily, literally or artistic in character are not protected under the Design Act. These will include:

• Book jackets, calendars, certificates, forms and other documents, dressmaking patterns, greeting cards, leaflets, maps and plan cards. postcards, stamps, transfers, medals. Labels, tokens, cards, cartoons
• Any principle or mode of construction of an article
• Mere mechanical contrivance
• Buildings and structures
• Parts of article are not manufactured and sold separately
• Variations commonly used in the trade
• Mere workshop alterations of components of an assembly
• A mere change in the size of the article
• Flags, emblems or signs of any country
• Layout designs of integrated circuits

What do you mean by new/original design: A design must have something new before the law will allow it to be registered. The design should be new or original; this is evident from Section 5(1) of the Act, which provides that the application for registration should be for “any new or original design”.

The words new or original, involve the idea of novelty, either in the pattern, shape or ornament itself or in the way an old pattern, shape or ornament is to be applied to an article. Novelty may consist not in the idea itself but the way in which the idea is to be rendered applicable to an article.

Question 2. What do you understand by ‘design’? How is it different from ‘copyright’? What is the Act covering design?
Answer:

Design as per Section 2 (d) of the Designs Act. 2000 means only the features of shape, configuration, pattern or ornament or composition of lines or colour or combination thereof applied to any article whether two-dimensional or three-dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye.

But does not include any mode or principle or construction or anything which is in substance a mere mechanical device and does not include any trade mark, as defined in clause (v) of the sub-section of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works as defined under Section 2 (c) of the Copyright Act, 1957.

• The meaning of copyright is specified under section 14 of the Copyright Act, of 1957. Design is with reference to the shape and aesthetic aspect of an article.
• It is different from copyright in the sense that a form of reference to a “hard” and “tangible” creation such as the shape of a cup. A copyright is a “soft” defined creative work on paper and other media dealing with knowledge or information.

Design does not include any artistic work, as defined in Section 2 (c) of the Copyright Act, 1957. The Design Act, of 2000 covers design.

Question 3. What is the meaning of ‘appeal to the eye’ in the definition of a design? A book designer prepares a jacket for a hard copy book. Will his work be covered under the Designs Act, of 2000 or will it be a subject matter of the Copyright Act, of 1957? Discuss.
Answer:

As per Section 2 (d) of the Designs Act, 2000 design means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two-dimensional or three-dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device and does not include any trade mark or property mark (as defined in Section 479 of the Indian Penal Code) or artistic work(as defined in clause (c) of Section 2 of the Copyright Act, 1957).

• The design will therefore be calculated to attract the attention of the beholder regardless of whether or not it makes a favorable appeal to him. The requirement of appealing to the eye is therefore really a preliminary test of novelty, as compared to the fundamental form of the article. (Amp. V. Utilux (1972) RPC 103, pp 107).

In the given case, the Jacket will be covered under the Copyright Act, of 1957 not under the Designs Act, of 2000 which is usually a three-dimensional structure or object with “appeal to the eye”.

Question 4. What are the essential requirements for the registration of a design?
Answer:

The essential requirements for the registration of a design are as under:

• The design should be new or original, not previously published or used in any country before the date of application for registration. The novelty may reside in the application of a known shape or pattern to new subject matter.
• The design should relate to features of shape, configuration, pattern or ornamentation applied or applicable to an article.
• The design should be applied or applicable to any article by any industrial process.
• The features of the design in the finished article should appeal to and be judged solely by the eye.
• Any mode or principle of construction or operation or anything which is in substance a mere mechanical device, would not be registrable design.
• The design should not include any trademark or property mark or artistic works as defined under the Copyright Act, 1957.

Question 5. What is not a design under the Designs Act, of 2000? Explain with illustrations.
Answer:

The design does not include:

• Any trademark, as defined in Section 2(zb) of the Trademarks Act, 1999 or
• Any property mark, as defined in Section 479 of the Indian Penal Code, 1860, or
• Any artistic work, as defined in Section 2(c) of the Copyright Act, 1957.

Artistic Work means:

• A painting, sculpture, drawing (including a diagram, map, chart or plan), engraving or Photograph, whether or not any such work possesses artistic quality.
• Any work of architecture i.e. any building or structure having an artistic character or design or any mode for such building or structure. Any work of artistic craftsmanship.
• Illustrative of non-registrable designs are:
  • Book jackets, calendars, certificates, forms and other documents;
  • Dress-making patterns, greeting cards, leaflets, maps and plan cards;
  • Postcards, stamps and medals;
  • labels, tokens, cards and cartoons;
  • any principle or mode of construction of an article;
  • mere workshop alterations of components of an assembly;
  • mere change in the size of the article;
  • flags, emblems or signs of any country;
  • layout designs of integrated circuits.

Question 5. Define ‘design’ and analyse non-registrable designs with examples.
Answer:

Design as per Section 2(d) of the Designs Act, 2000 means only the features of shape, configuration, pattern or ornament or composition of lines or colours or combination thereof applied to any article whether two-dimensional or three-dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye.

Exceptions: Design does not include any mode or principle or construction or anything which is in substance a mere mechanical device, and does not include any trade mark, as defined in clause (v) of sub-section of section 2 of the Trade and Merchandise Marks Act, 1 958, property mark or artistic works as defined under section 2(c) of the Copyright Act, 1957.

As per section 4 of Design Act, 2000, Design is not registrable in India, if it

• Is not new or original;
• Has been disclosed to the public anywhere in India or in any other country by publication in tangible form or by use in any other way prior to the filing date or priority date of the application;
• Is not significantly distinguishable from known designs or a combination of
  known designs;
• Comprises or contains scandalous or obscene matter.

Question 6. Sonar Industries, the proprietor of a registered design, obtained an ad interim injunction restraining TRISHA International from manufacturing portable table fans with a design that was allegedly an obvious or colourable imitation of Sonar’s registered design for such fans. Sonar Industries also alleged that TRISHA International was guilty of piracy of its registered design.TRISHA International contended striking features of the registered design could not be viewed in isolation. It added that the configuration and ornamentation of its table fan design were dissimilar. Will TRISHA International succeed in getting the ad interim injunction vacated? Give reasons in support of your answer.
Answer:

‘Design’ refers to the features of shape, configuration, pattern or ornamentation which can be judged by the eye in the finished products. Section 22 of the Design Act, 2000 provides the legal proceedings to be followed in case of Piracy of Registered Design.

One of the below remedies can be sought against the accused:

•  Paying to the registered proprietor of the design a sum not exceeding twenty-five thousand rupees recoverable as a contract debt provided that the total sum recoverable in respect of any one design shall not exceed fifty thousand rupees; and
• Recovery of damages for any such contravention, and an injunction against the repetition thereof, to pay such damages as may be awarded and to be restrained by injunction accordingly.
  • Not every resemblance is actionable and imitation does not mean duplication. An obvious limitation is one which immediately strikes one as being so like the original registered design as to be almost indistinguishable.
  • In contrast, the word ‘fraudulent’ presupposes knowledge of the registered design.
  • To ascertain infringement, the two products need not be placed side by side, but rather examined from the point of view of a customer with average knowledge and imperfect recollection. The main consideration is whether the broad features of shape, configuration and pattern are similar to one another ( Veeplast vs. Bonjour, 2011).

The Designs Act, of 2000 grants protection only for the appearance of the article which appeals to and is judged by the eye.

• In a case, the Calcutta High Court held as below:
• “Novelty resided in the design as a whole and not in its component parts.
• The striking features of the registered design could not be viewed in isolation. Components such as mounting brackets being mechanical devices could not be considered as a part of the design as registered in the Certificate of Registration.”

Thus, the question of whether TRISHA International’s portable table fan is an obvious imitation of Sonar’s registered design has to be determined solely by the test of an eye. As the shape, configuration and ornamentation of TRISHA’s portable table fan design were clearly dissimilar to those of Sonar’s registered design, no prima facie case of piracy has been made out by Sonar.

Question 7. Can stamps, Labels, tokens, and cards be considered an article for the purpose of registration of Design? If yes, why and if no, why not?
Answer:

The answer to the question is ‘No’ since, once the Design i.e., the ornamentation is removed only a piece of paper, metal or like material remains and the article referred to ceases to exist.

For Design protection, the article must have its existence independent of the Designs applied to it.[Design with respect to label was held not registrable, by an Order on civil case No. 9-D of 1963, Punjab, High Court]. So, the Design applied to an article should be integral to the article itself.

Question 8. Company A has registration for its new design of bottles for soft drinks but after substantive examination, it was found that the design is not new or original. Can the registration of a design be cancelled?

1. The registered proprietor of design is given exclusive rights to his/her registered Designs. One such right is the right of the Cancellation of Design Registration. The registered proprietor or any other person interested can file for a petition of Cancellation of Registration of Design on the grounds mentioned in the Design Act, 2000 read with the Design Rules, 2001.
   • The procedure for Cancellation is also provided in the Act and the Rules regarding the Design Law of India. The registration of a design may be cancelled at any time after the registration of the design on a petition for cancellation in Form 8, along with the prescribed fee.
2. Such petition may be filed at any of the four Patent Offices. Such petitions filed in offices other than Kolkata are transmitted to the Kolkata Patent Office. However, at present, all further proceedings of cancellation take place only at the Patent Office, Kolkata and hence all communications relating to cancellation petitions are required to be communicated to that office.
3. The petition for cancellation of registration of a design may be filed on any of the following grounds:
   1. that the design has been previously registered in India;
   2. that it has been published in India or in any other country prior to the date of registration;
   3. that the design is not a new or original;
   4. that the design is not registerable under the Designs Act;
   5. that it is not a design as defined under Section 2(d) of the Designs Act.

For a design to be called new or original, there should be some original mental application involved. The novelty or originality of even a particular part of the article may be sufficient to call the design as a whole “novel or original”, but this part must be a significant one and it must be potent enough to impart to the whole design a distinct identity.

In view of the above, registration of the design of Company A’s soft drinks bottles can be cancelled on the grounds that the design is not new or original.

Question 9. Describe the mechanism for registering an industrial design in several countries by means of a single application, filed in one language, with one set of fees.
Answer:

The Hague Agreement regarding the International Deposit of Industrial Designs, also known as the Hague system provides a mechanism for registering an industrial design in several countries by means of a single application, filed in one language, with one set of fees. The system is administered by the World Intellectual Property Organisation (WIPO).

• The Hague Agreement consists of several separate treaties, the most important of which are: the Hague Agreement of 1925, the London Act of 2 June 1934, the Hague Act of 28 November 1960 (amended by the Stockholm Act), and the Geneva Act of 2 July 1999.
• The original version of the Agreement (the 1925 Hague version) is no longer applied, since all states parties signed up to subsequent instruments. The 1934 London Act formally applied between a London Act states that did not sign up to the Hague and/or Geneva Act in relation to other London Act states until October 201 6.
• Since 1 January 2010, however, the application of this Act had already been frozen. The system allows owners of an industrial design to obtain protection in several countries by simply filing one application with the International Bureau of WIPO, in one language, with one set of fees in one currency (Swiss Francs).
• An international registration produces the same effects in each of the designated countries as if the design had been registered directly with each national office unless protection is refused by the national office of that country.
• Countries can become a party to the 1960 (Hague) Act, the 1999 (Geneva) Act, or both. If a country signs up to only one Act, then applicants from that country can only use the Hague system to obtain protection for their designs in other countries which are signed up to the same Act.

For instance, because Japan has only signed up to the 1999 (Geneva) Act, applicants who qualify to use the Hague system because their domicile is in the European Union can only get protection in countries which have also signed up to the 1999 Act or to both the 1999 and 1960 Acts.

Question 10. What is the purpose of design registration? What is not a “design” as per the provision of the Designs Act, 2000?
Answer:

‘Design’ refers to the unique aspects of shape, figure, blueprints decorations or composition of lines or hues or combination thereof given to an article, which may be 2 dimensional or 3 dimensional or in both formats, by any manufacturing procedure or mode.

• The process involved in the creation of the design may be manual, mechanical, automated or chemical, separate or all-inclusive, by which the finished article appeals and can be identified solely by the eye. However, this does not contain any mode or a standard or construction or anything which is in material a mere mechanical device.
• The Purpose of obtaining the design registration under the Designs Act is to safeguard a novel or an innovative design so created which is to be applied to a specific article under the manufacturing process through an Industrial Process or mode.
• At times, we see that the buying behaviour OT the customers towards some articles for consumption is inclined not only by their actual product quality but also by the design of their appearance, e.g., a mobile phone or goggles.
• The main objective of obtaining a design Registration is to make sure that the particular artisan, creator, craftsman, engineer or the designer of that design having a unique appearance is not deprived and deceived of his bonafide reward by some copycats, who might tend to use his design to their goods. The key reasons as to why a business entity needs a Design Registration:

To get an effectual and well-situated legal shield for safeguarding unique designs in India from being imitated or misused.

• To promote and develop creativity and originality.
• It is mandatory compliance for all the companies located in the WTO
• Member nations who have signed the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement.

The important purpose of design Registration is to see that the artisan, creator, or originator of a design having an aesthetic look is not deprived of his due reward by others applying it to their goods.

1. As stated in the definition of the design above, the design does not include:
2. Any Trademark, as defined in Section 2(zb) of the Trademarks Act, 1999, or
3. Any property mark, as defined in Section 479 of the Indian Penal Code, 1860, or
4. Any artistic work, as defined in Section 2(c) of the Copyrights Act, 1957.
5. A painting, sculpture, drawing (including a diagram, map, chart or plan), engraving or photograph, whether or not any such work possesses artistic quality.
6. Any work of architecture i.e. any building or structure having an artistic character or design or any mode for such building or structure.
7. Any work of artistic craftsmanship.

Colours, verbal elements and sounds are examples of what cannot be protected as a design since they are not part of the ornamentation of a product. On the other hand, they may seek protection under trademark law. The designs whose appearance responds exclusively to the technical function of the product.

It is possible that the technical or functional characteristics of these types of designs can be protected through other intellectual property rights (normally through patents or utility models). Designs that go against public order and certain moral standards.

As a general rule, designs that reflect or promote violence or discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation will be denied.

Question 11. XYZ company has ventured into design work. It provides logistics as well as creates architecture design for its clients. They made a three-dimensional diagram for the new corporate office for ABC Company Pvt. Ltd. in Delhi in 2006, and paid the consideration of? 10 lakh for that. However, it was planned in 201 6 to work on it and create infrastructure according to the design. To their surprise, they discovered the same architectural design as created by the other builder in making a commercial complex. What kind of rights are violated and what is the remedy?
Answer:

Design as per Section 2(d) of the Designs Act, 2000 means only the features of shape, configuration, pattern or ornament or composition of lines or colour or combination thereof applied to any article whether two-dimensional or three-dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye, but does not include any mode or principle or construction or anything which is in substance a mere mechanical device, and does not include any trade mark, as defined in clause (v) of sub-section of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works as defined under Section 2(c) of the Copyright Act, 1957.

• Section 30 of the Design Act, 2000 read with Rules 32, 33, 34 and 35 of the Design Rules, 2001, recognizes the contracts relating to the assignment of designs and provides the procedure thereof. The Copyright in the design is only protected if the same is statutorily recognized under the provisions of the Designs Act, of 2000.
• Similarly, the rights acquired by third parties by way of assignments or licenses are only made effective if the same is duly registered in accordance with the provisions of the Act and the Rules framed there under. There is no concept of a common law license under design law.
• A registered proprietor can institute a suit for injunction as well as recovery of damages against any person engaged in piracy of the registered design.
• Such legal proceedings can be instituted from the date of registration till the expiry of the copyright. However, in the case of a reciprocity application, the registered proprietor can claim damages only from the actual date on which the design is registered in India.
• If any person commits piracy of a registered design, as defined in Section 22, he shall be liable to pay for a payment of a sum not exceeding? 25,000/- recoverable as a contract debt. However, the total sum recoverable in respect of any one design shall not exceed? 50,000/-.
• The suit for injunction/damages shall not be instituted in any Court below the Court of District Judge.
• In a case between Ampro Food Products v. Ashok Biscuit Works, AIR 1973 AP 17, the appellant manufactured biscuits with AP embossed on them. The respondent also manufactured biscuits with identical designs except that the letters AB were embossed on them, in place of AP. The suit claimed an injunction bringing a charge of piracy of design.

Issuing a temporary injunction, the Court held that in such cases the defence cannot argue that the appellant’s registered design was not new or original if no steps had been taken earlier seeking cancellation of the registration of the design.

Descriptive Questions

Question 1. What is design under the Designs Act, of 2000? What are the design not registrable under the Act?
Answer:

Designs speak of drawings. However, when a design is applied to commercial goods by the enterprise concerned, it is termed as an industrial design.

According to Section 2(d)of the Designs Act, 2000, Design means only the features of shape, configuration, pattern or ornament or composition of line or colour or combination thereof applied to any article whether two dimensional or three dimensional or in both forms, by and industrial process or means, whether manual mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye, but does not include any mode or principle or construction or anything which is in substance a mere mechanical device, and does not include any trade mark, as define in clause (v) of sub-section of section 2 of the Trade and Merchandise Marks Act,1958, property mark or artistic works as defined under section 2 (c) of the Copyright Act,1957.

• The designs which are not registrable under the Act are:
• Any trademark as defined in Section 2 (zb) of the Trademarks Act,1999;
• Any property mark, as defined in Section 479 of the Indian Penal Code,1860 or
• Any artistic work, as defined in section 2(c)of the Copyright Act, 1957.
• Examples of non-registrable designs are:
• Book jackets, calendars, forms, certificates and other documents;
• Dress-making patterns, greeting cards, leaflets, maps and plan cards;
• Postcards, stamps and medals;
• Labels, tokens, cards and cartoons;
• Any principle or mode of construction of an article;
• A mere change in size of the article;
• Flags, emblems or signs of any country;
• Layout of designs of integrated circuits.

Question 2. What is the object of registration of designs? What is the duration of design registration? Can it be extended?
Answer:

The objects of registration of design are as follows:

• It must be a design i.e. it must belong to the subject matter of a design which the Design Act, 2000, aims to protect;
• It must be new or original;
• It must not be one that is excluded from registration.
• The duration of a design registration is initially ten years from the date of registration but in cases where claim to priority has been allowed, the duration is ten years from the priority date.
• Yes, the initial period of ten years may be extended by a further period of five years, if the registered proprietor applies for extension in the prescribed manner.

Question.3 What constitutes piracy of a registered design? What penalties have been provided for piracy of a registered design under the Designs Act, of 2000?
Answer:

Piracy of a design means the application of a design or its limitation to any article belonging to the class of articles in which the design has been registered for the purpose of sale or importation of such articles without the written consent of the registered proprietor.

• Publishing such articles or exposing terms for sale with knowledge of the unauthorized application of the design to them also involves piracy of the design.
• The piracy of registered design constitutes the following:
• For the purpose of sale to apply or cause to be applied to any article in any article in any class of articles in which the design is registered, the design or any fraudulent or obvious imitation thereof, except with the licence or written consent of the registered proprietor, or to do anything with a view to enable the design to be so applied; or
• To import for the purpose of sale, without the consent of the registered proprietor, any article belonging to the class in which the design has been registered, and having applied to it the design or any fraudulent or obvious imitation thereof; or

Knowing that the design or any fraudulent imitation thereof has been applied to any articles in any class of articles in which the design is registered without the consent of the registered proprietor, to publish or expose or cause to be published or exposed for sale that article.

Penalites: As per Section 22, if any person commits piracy of a registered design, he shall be liable to pay for a payment of a sum not exceeding? 25,000/- recoverable as contract debt. However, the total sum recoverable in respect of any one design shall not exceed? 50,000/.

Question 4. Enumerate the general procedure for registering a design.
Answer.

The procedure for registration of designs is as follows:

1. Where To Apply: Any person claiming to be the proprietor of any new or original design may apply for registration. An application for registration of a design shall be addressed to the controller of design. The Patent Office at Kolkata, or at any of its branch offices in New Delhi, Mumbai and Chennai. A proprietor may be from India or from a Convention Country.

2 Type Of Application: There are two types of applications:

• Ordinary application: It does not claim priority.
• Reciprocity application: It claims the priority of an application filed previously in a convention country. Such an application shall be filed in India within six months from the date of filing in a convention country. This period of six months is not extendable.

Substitution of Application or Joint Claiming: The name of an applicant can be substituted or a joint claim can be made for an applied design, if the following requirements are met: The claim for substitution is made before the design has been registered; and

The right of the claimant shall be created only by:

1. An assignment;
2. Agreement in writing made by the applicant or one of the applicants; or
3. Operation of law; and

The design under consideration shall be identified in the assignment or agreement specifically by reference to the number of applications for registration; or The rights of the claimant in respect of the design have been finally established by a Court.

A request for substitution of applicant shall be filed in Form-2 along with the required fee as per Section 8. However, in the case of joint applicants, the controller shall not pass such direction without the consent of the other joint applicant(s).

Copyrights Objective Questions

Question 1. State, with reasons in brief, whether the following statements are true or false. Under the Copyright Act, 1957 moral rights are available to the author even after the economic rights are assigned.
Answer: True.

• Under the Copyright Act, 1957 moral rights are available to the author even after the economic rights are assigned.
• Under section 57 of the Act, an author of the copyrighted work can restrain or claim damages in respect of any distortion or mutilation of the work or any other action in relation to the said work which would be prejudicial to his honor or reputation.
• These rights can be exercised even after the assignment of the copyright.
• They can be enforced by an action for breach of contract or confidence, a suit for defamation, or passing off as the case may be.

Question 2. With reference to the relevant legal enactments, write short notes on the following: International copyright.
Answer:

1. Copyright work may not be limited to the territory of India only. Section 40 authorizes the Central Government to extend copyright protection to foreign works.
2. Section 41 provides that work made or published by certain International organizations is granted Copyright protection in India.
3. Accordingly, the Government of India enhances the scope of copyright protection by passing the copyright order under which copyright protection was granted to certain International organizations.

Question 3. With reference to the relevant legal enactments, write short notes on the following :
Term of copyright
Answer :

1. In the case of copyright, the author of a work of art or any other work in respect of which copyright exists is granted an exclusive right to make copies or reproduce the subject matter for a certain period.
2. The period or term of copyright is defined under sections 22 to 29 of the Copyright Act, of 1957
3. The term copyright can be expressed by means of the following table.

Question 4. What are the requisites for conferring copyright protection to works of international organizations?
Answer :

1. The conditions which must be satisfied are :
2. At the time of making the first publication of the work, there should not be any copyright in the work in India.
3. The work must be published under the control of an International organization.
4. If the work is published under an agreement with the author, such agreement should not reserve the author any copyright in the work or any copyright in the work should belong to the organisation.

Question 5. Attempt of the following: Mention the remedies for infringement of copyrights under the Copyright Act, 1957.
Answer :

1. The owner whose rights are infringed has the following remedies
2. The owner can claim loss of damages.
3. The owner of the copyright can initiate proceedings for the possession of infringing copies.

Question 6. Do the following amount to infringement under the Copyright Act, of 1957? Give reasons in brief:

1. Prof. Ajay recited in public an extract from a poem by Rabindranath Tagore.
2. ABC, Publishers published a compilation of speeches of Atal Bihari Vajpayee, former Prime Minister, delivered in public without permission.
3. A newspaper publishes a copy of a masterpiece painting of Ganesh Pyne while carrying a story on his death.
4. A book is not available in India. A librarian makes 10 copies of the
   book for the use of the public library.
5. A magazine reproduces an article on a political topic by Kuldip Nayar.

Answer :

1. Reciting a poem by Rabindranath Tagore by Prof. Ajay will not amount to infringement under Section 52 of the Copyright Act, 1957 if Prof. Ajay does not claim that poem as his own.
2. ABC Publishers published a compilation of speeches of Atal Bihari Vajpayee, former Prime Minister, delivered in public without permission is amounts to infringement under the Copyright Act, 1957.
3. Publishing a masterpiece painting of Ganesh Pyne by a newspaper while carrying a story on his death is not amount to infringement under the Copyright Act, as it only represents the work of the deceased.
4. A maximum of three copies of a book can be taken by a librarian to the library if a book is not available in India. In the above case, a librarian makes 1 0 copies of the book for the use of the public library which is on infringement of the Copyright Act.
5. A magazine reproduced an article on a topic by Kuldeep Nayar is amounts to infringement under the Copyright Act, 1957, if the prior permission has not been taken.

Question 7. How is computer software protected in India?
Answer:

1. Modern society relies heavily on computer technology. Without software, a computer cannot operate. Software and hardware work in tandem in today’s information society. Intellectual property protection of software is crucial not only for the software industry but for other
   businesses as well.
2. Indian Patent Act offers patent protection to products or processes (if they satisfy various requirements of patentability) as long as they do not fall under non-patentable subject matter. Sections 3 and 4 of the Indian Patent Act specify a list of subject matter that is not patentable, in particular, “a mathematical or business method or a computer program per se or algorithms” is of specific importance to software innovation.
3. The Indian Patent Law does not contain any specific provision regarding the protection of computer software. Computer software on the other hand is protected by copyright as applicable to literary and aesthetic works. A computer program is therefore dealt with as a literary work and the law and practice in relation to literary works will apply to computer programs.
4. The Indian Patent Act, as of now, excludes only ‘computer programs per se’ from patentability. The issue of whether computer programs tied to certain hardware can be patented is a controversial one. Still, an invention shall not become unpatentable in India merely because it was implemented with software.
5. The definition of “Literary work” under section 2 (o) of the Copyright Act, 1957, includes computer programs, tables, and compilations including computer databases. Like the unauthorized copying of literary works, unauthorized copying of computer programs also attracts the same legal consequences under copyright law.

Question 8. Microsoft develops software applications. Thus, it is the ‘author’ with the copyrights. When you buy Microsoft software, what is purchased, is it the software or is it a license to use the software?

1. What are the rights of the user? Can they be transferred?
2. Does the user have the right to free update versions of the software?
3. If the price of a particular application is too high for Indian consumers, what is the recourse with the Indian government to help the users in getting it at a low price?

Answer:

1. The user has a right/license to use the software and the user has rights only as a licensee of the copyright holder. These types of software are known as proprietary Software. These rights are defined in the sale agreement end-user license agreement or software license agreement. The right to use the software can be transferred from one person to another as per the sale agreement end-user license agreement or software license agreement.
2. Generally, a licensee is not allowed free updates of the software. He may be given updates at a concessional rate but it is not a matter of right.
3. The government of India can ask for a compulsory license if the price is too high for the Indian consumer. Royalty must, however, be paid to Microsoft in the case of a compulsory license.

Question 9. Copyright is a ‘bundle of rights’. Elucidate.
Answer:

Copyright is not a single right, rather it consists of a bundle of different rights in the same work.

It confers on its owners the rights to:

1. To reproduce the work
2. To issue copies of the work to the public
3. To perform the work in public
4. To communicate the work to the public
5. To make any translation of the work
6. To make any adaptation of the work
7. To make any cinematograph film or sound recording with respect to the work
8. To prepare derivative works based upon the copyrighted work.
9. In addition to the above rights which the holder of the copyright enjoys in respect of his work, he is also entitled to protect any other person from any of the above-mentioned rights without his assent. Further following moral rights are also enjoyed by the author or the copyright holder.

• The right of Publication
• The right of Paternity
• The Right of Integrity

Question 10. What is ‘Artistic Work’? Can artistic work be registered as design under the Designs Act, of 2000?
Answer:

An ‘artistic work’ is defined in Section 2(c) of the Copyright Act, 1957 as follows:

‘Artistic work means:’

1. A painting, a sculpture, a drawing (including a diagram, map chart, or plan), an engraving, or a photograph, whether or not any such work possesses artistic quality;
2. A work of architecture; and
3. Any other work of artistic craftsmanship.

It includes a graphic work, photograph, sculpture, or collage, with “graphic work” further defined to include paintings, drawings, diagrams, maps, charts, plans, engravings, etchings, lithographs, woodcuts, or similar.

The definition of a “photograph” excludes stills from a film but includes slides, negatives, and microfilm. Architectural works (including buildings of any kind), and works of artistic craftsmanship, such as jewellery or pottery, are also included.

• Copyright subsists in all of the above, regardless of artistic quality or craftsmanship. Courts in India have time and again recognized that creations of nature can be protected as copyrighted artistic works.
• For instance, the famous Panda logo of the World Wildlife Federation and the Crocodile logo of the famous French clothing brand, Lacoste, have been recognized as protected artistic works by the Delhi High Court.
• The requirement of originality, therefore, would not bar a copyright in an artistic work such as a painting or a drawing embodying a creation of nature, such as an animal or a bird, because the originality of the work would be judged on the basis of the manner in which such a creation of nature is depicted and not the idea of the creation of nature itself.
• ‘Artistic Work’ cannot be registered under the Design Act. Such work is registerable under the Copyright Act in India. The design includes features of shape, configuration, pattern, ornament, or composition of lines or colors applied to any article in two or three-dimensional form, or both, by any industrial process or means – whether manual, mechanical or chemical, separate or combined- which in the finished article appeal to and are judged solely by the eye.
• This definition excludes any mode of construction or anything which in its substance is a mere mechanical device. It also excludes any trademark or property mark as well as any artistic work as protected under the Copyright Act.
• The Delhi High Court observed in the case of Microfibres Inc. v. Girdhar and Co. that artistic work can be divided into original artistic work and commercial/industrial manifestation of such artistic work such as design derived from and founded upon the original artistic work.
• In the latter case, the work should be registered as a design under the Design Act. Whereas the original artistic work can acquire protection under the Copyright Act as an artistic work or else the protection under the Design Act qua the product created from the artistic work when industrially applied.
• ‘Artistic Work’ cannot be registered under the Designs Act, 2000. Such work is registerable under the Copyright Act only.

Question 11. A law journal copy-edited a court judgment. It sought copyright by establishing the amount of skill, labor, and capital put in the inputs of the copy-edited judgment. It was contested on the ground that judicial pronouncements are in the public domain and that their publication does not infringe the copyright. Will the law journal succeed in its copyright of a copy-edited judgment? Give reasons in support of your answer.
Answer:

A matter having similar facts was decided by the Supreme Court in the case titled Eastern Book Company and Others, vs. D.B. Modak and Another. [Appeal (civil) 6472 of 2004, D/ 12/12/2007 (A.I.R. 2008 Supreme Court 809,810)]. As per the judgment, the judicial pronouncements of the Apex Court would be in the public domain and its reproduction or publication would not infringe the copyright law.

That being the position, the copy-edited judgments would not satisfy the requirement of being a work that is to be protected by the copyright law merely by establishing some amount of skill, labor, and capital put in the inputs of the copy-edited judgments since the original or innovative thoughts contained in the judgment carrying the creativity are completely excluded from being subject to copyright.

• Accordingly, original or innovative thoughts are necessary to establish copyright in the authors’ work. The principle that where there is a common source the person relying on it must prove that he actually went to the common source from where he borrowed the material, employing his own skill, labor, and brain and he did not copy, would not apply to the judgments of the Courts because there is no copyright in the judgments of the Court, unless so made by the Court itself.
• To secure a copyright for the judgments delivered by the Courts, it is necessary that the labour, skill and capital invested should be sufficient to communicate or impart to the judgment printed in some journal some quality or character which the original judgment did not possess and which differentiates the original judgment from the printed one.
• The Copyright Act is not concerned with the original idea but with the expression of thought., Copyright has nothing to do with originality or literary merit.
• Copyrighted material is what is created by the author by his own skill, labor, and investment of capital, maybe it is a derivative work that gives a flavor of creativity. The Copyright work that comes into being should be original in the sense that by virtue of selection, coordination, or arrangement of pre-existing data contained in the work, a work somewhat different in character is produced by the author.
• To claim copyright in a compilation, the author must produce the material with the exercise of his skill and judgment which may not be creative in the sense that it is novel or non-obvious, but at the same time, it is not a product of mere labor and capital.
• The derivative work produced by the author must have some distinguishable features and flavor to the raw text of the judgments delivered by the Court. The trivial variation or inputs put in the judgment would not satisfy the test of copyright of an author.
• Adding, in the copy-edited version the cross-citations to the citation(s) already given in the original text; adding names of cases and cross-citations where only the citation of the case is given; adding citation and cross-citations where only the name of the case is given;
• inserting citation in case history where only the title and year of the impugned/ earlier order is given; presenting in their own style the cases when they are cited repeatedly in the judgment; providing precise references to the quoted matter in the judgment by giving exact page and paragraph number as in the original case source/treatise/reference material; adding margin headings to quoted extracts from statutes/rules, etc.,

when they are missing from the original text of the judgment; adding the number of the Section/ Rule/Article/Paragraph to the extract quoted in the original text; adding the names of Judges on whose behalf the opinion given; adding ellipsis” “to indicate breaks in quoted extract; supplying the matter inadvertently missed in quoted extracts in the original text of the judgment; changing the text as per corrigenda issued, etc., does not give the Law Journal Copyright in the copy-edited judgment.

Question 12. Several unpublished Ph.D. dissertations and television documentaries are lying idle in the university library. A publishing house is interested in publishing these unpublished Ph.D. dissertations in the form of a book and reproducing this television documentary but the problem is copyright. Can the publishing house apply for a compulsory license for these academic resources like compulsory licences for patented drugs?
Answer:

The law on this particular point can be ascertained from the language of section 31 and section 31 A of the Copyright Act, 1957. Section 31 of the Copyright Act, 1957 provides that: If at any time during the term of copyright in any work which has been published or performed in public, a complaint is made to the Copyright Board that the owner of copyright in the work

Has refused to re-publish or allow the re-publication of the work or has refused to allow the performance in public of the work, and by reason of such refusal the work is withheld from the public;

• Has refused to allow communication to the public by broadcast of such work or in the case of a sound recording the work recorded in such sound recording, on terms which the complainant considers reasonable, the Copyright Board, after giving to the owner of the copyright in the work a reasonable opportunity of being heard and after holding such inquiry as it may deem necessary.
• May, if it is satisfied that the grounds for such refusal are not reasonable, direct the Registrar of Copyrights to grant to the complainant a license to republish the work, perform the work in public, or communicate the work to the public by broadcast, subject to payment to the owner of the copyright of such compensation and subject to such other terms and conditions as the Copyright Board may determine.’

Compulsory License in Unpublished or Published Works

Section 31 A further provides that before making an application to the Copyright Board, the applicant is required to publish his proposal in one issue of a daily newspaper in the English language having circulation in the major part of the country and where the application is for the publication of a translation in any language, also in one issue of any daily newspaper in that language.

The section continues to lay down that the Copyright Board after holding such inquiry as may be prescribed, direct the Registrar of Copyrights to grant to the applicant a license to publish the work or a translation thereof in the language mentioned in the application subject to the payment of such royalty and subject to such other terms and conditions as the Copyright

• Board may determine, and thereupon the Registrar of Copyrights shall grant the license to the applicant in accordance with the direction of the Copyright Board. In the facts of the present case, generally, the ownership over the dissertation belongs either to the University or the Student itself (if agreed to by the University).
• The publishing house is thus not entitled to approach the Copyright Board asking for a grant of a compulsory license to publish the work, at the first instance. It has to first approach the Copyright Owner / Holder seeking its permission for such publication/republication.
• However, if later it is found that the Copyright owner/holder is unreasonable in withholding or refusing to grant its consent for such publication or re-publication of the work, then a case can be made out before the Copyright Board which shall consider and decide the matter on its own merits.

Question 13. Rajesh is a poet and maintains a blog ‘poet.blog.com’. He occasionally published his work on websites. He claims copyright infringement due to Google’s alleged copying and distribution of one of his works. Google defend and said that it is using an automated program called Googlebot. The program creates an index of the work available on the internet. The program created a cached version of the site. The cached version was then included in the search result of the Google search engine. With one click on the link to the cached version, the user can view a snapshot of the page as it appears at the time the Googlebot is found on site. Advise if is there any copyright violation of Rajesh.
Answer:

Caching involves the storage of an entire site or other complete set of materials for a source for later use. It is a process used by internet browsers to store “browsed” material in the browser computers’ RAM or cache memory. The purpose of caching is to speed up repeated access to data and to reduce network congestion resulting from repeated downloads of data.

Caching is an efficient tool. It is something that a browser programmer does independently of the user. Cached copies are incidents of using the browser program. Section 52 (1)(c) of the Copyright Act, of 1957 deals with caching and categorizes this as fair dealing.

• ‘Transient or incidental storage of a work or performance for the purpose of providing electronic links, access or integration, where such links, access or integration has not been expressly prohibited by the right holder unless the person responsible is aware or has reasonable grounds for believing that such storage is of an infringing copy:
• Provided that the person responsible for the storage of the copy has received a written complaint from the owner of the copyright in the work. complaining that such transient or incidental storage is an infringement, such person responsible for the storage shall refrain from facilitating such access for a period of twenty-one days or till he receives an order from the competent court refraining from facilitating access, and in case no such order is received before the expiry of such period of twenty-one days, he may continue to provide the facility of such access.
• There is no case of direct infringement on the part of Google since the entire process of displaying the search results and then viewing the cached page was a non-voluntary act on the part of Google. It must be mentioned that ‘safe harbor’ provisions relating to copyright infringement always mention that there can be no liability if the act is an automated process and not volitional.
• In the given case, the reproduction of copyright work is happening due to caching memory which is essentially a technical nature of the computer. Hence, it falls under the fair dealing. In the case of Field v. Google, Blake Fields, who is an attorney and a poet, published certain poems on his blog. Google, in the course of indexing this blog, created a cached copy of his poems.

In September of 2004, he filed a copyright infringement suit against Google claiming that caching of his poem “Good Tea” involved the unauthorized copying and distribution of his work. He claimed that when Google served, and users clicked on the cached copy of his poems, Google was not only ‘distributing’ unauthorized copies of his work, but ‘creating’ an unauthorized copy as well.

It is also relevant to note that Field registered his poems with the Copyright Office before publishing them on his website and he did not employ the feature that prevented Google from caching his website.

The court framed two issues to decide the matter:

1. Does the creation of a cached copy constitute unauthorized copying?
2. When Google serves the cached copy to the user as a search result, does it amount to unauthorized distribution? The court found that no copyright infringement had occurred and delivered the judgment under the following broad heads:

Direct Infringement: There was no direct infringement since the entire process starting from the display of search results and the subsequent viewing of the cached page — was a non-volitional act on the part of Google. This is consistent with the prevailing law on intermediary liability, which states that service providers cannot be held liable if the allegedly infringing act was an automated process.

Bear in mind that Field did not accuse Google of infringement for creating the cached copy in the first instance or that users who viewed the cached copy were violating his copyright, and therefore Google was thereby liable for secondary infringement. The field appears to have taken the most tenuous defense — that the ‘creation of new copies’ when a user clicked the cached link, constituted copyright infringement.

Question 14. Facts: Anand, the news reporter on behalf of the print media newspaper Worldnews approaches Alexander for his comments on the Indian foreign policy after the surgical strike of Indian force against Pak-sponsored terrorism. Alexander assured him to provide a piece of article written by him instead of the interview due to paucity of time. His Article was critical of the role of Pakistan and China on terrorism issues. Subsequently, he sends the article to Anand, which he submits to the world as an editorial article after making certain corrections. The edited version of the article is soft on China for its role in international terrorism.

Based on the above facts answer the following questions :

1. Who owns the copyright on the given piece of article?
2. Is there any violation of the rights of the author of the copyrighted work?   

Answer:                              

In copyright, the Author and owners are two separate personalities. As per Section 17 of the Copyright Act. 1957. The Author becomes the of his copyrighted work. However, this is subject to the provisions of the Act.

• If the Author creates a work during the course of employment under the contractual obligation of any creative work, then in the absence of any contrary conditions, the employer will be the owner of the work owing to the Contract of Employment.
• However, if the contract of employment is not between the creator and the owner of the publication, then the copyrighted work belongs to the author and owner of the work.

For instance Section17 (a) provides that where a work is made by the author in the course of his employment by the proprietor of a newspaper, magazine, or a periodical under a contract of service or apprenticeship for the purpose of publication in a newspaper, magazine, or periodical, the said proprietor, in the absence of any agreement to the contrary will be the first owner of the copyright in the work in so far as it relates to the publication of the work in any newspaper, magazine or similar periodical or to the publication of the work for the purpose of being so published.

Except in such cases, the author will be the first owner of the copyright in the work. In VT Thomas vs. Malayala Manorama Co Ltd, it was held that in the case of termination of the employment, the employee is entitled to the ownership of copyright in the works created subsequently and the former employer has no copyright over the subsequent work so created.

• It is based on this distinction between employees and the freelancers that the Court, in this case, recognized authorship of the content and form of the cartoon series in favor of the freelancer Thomas.
• There thus exists a disparity in the rights over the copyright of a freelancer who contributes to a periodical and an employee who creates an original work in the course of his employment under a contract of service.
• In the present case, Alexander has written an article not in the capacity of the employee but as independent of such contractual obligations. Therefore, he remains the author and owner of the copyrighted work. World News or Reporter Anand cannot be the author or owner of the creative work published.
• There exists no copyright in news or facts or information, as the same is neither created nor have they originated with the author of any work, which embodies these facts.

Facts may be discovered and discovery of facts cannot be given the protection of copyright.

• The protection of copyright is afforded only when a fact event information or material is applied to create a form of work, literary or otherwise.
• When there is no copyright in news, there can be no infringement of an original Idea’ either, copyright may exist in the manner of expressing it. That being the position, any edited piece of work that had an established amount of skill, labor, and capital put as inputs would amount to innovative thoughts and creation of the editor. Copyrighted material is what is created by the author by his own skill and labor.
• The news element in the information reporting current events contained in the literary production is not the creation of the writer, but is a report of matters that ordinarily are publici juris; let us put it in different words, it is the history of the day.

They can never be copyrighted and are part of the public domain available to every person. Accordingly, there is no violation of the rights of Alexander.

Question 15. Recently a program broadcasted by a foreign television channel in India whose content was highly critical and certain segments of society criticized this program. Can the Indian government take action against this foreign television company based in India under Chapter VIII?
Answer:

Section 40A of the Copyright Act, 1957 provides that subject to the satisfaction of the Central Government a foreign country (other than a country with which India has entered into a treaty or which is a party to a Convention relating to rights of broadcasting organizations and performers to which India is a party) has made or has undertaken to make such provisions, if any, as it appears to the Central Government expedient to require, for the protection in that foreign country, of the rights of broadcasting organizations and performers as is available under this Act, it may, by order, published in the Official Gazette, direct that the provisions of Chapter VII shall apply:

• To broadcasting organizations whose headquarters is situated in a country to which the order relates or, the broadcast was transmitted from a transmitter situated in a country to which the order relates as if the headquarters of such organization were situated in India or such broadcast was made from India;
• To performances that took place outside India to which the order relates in like manner as if they took place in India;
• To performances that are incorporated in a sound recording published in a country to which the order relates as if it were published in India;
• To performances not fixed on a sound recording broadcast by a broadcasting organization the headquarters of which is located in a country to which the order relates or where the broadcast is transmitted from a transmitter which is situated in a country to which the order relates as if the headquarters of such organization were situated in India or such broadcast was made from India.

Section 40A (2) of the Copyright Act also provides that the order so made by the Central Government may provide that:

• The provisions of Chapter VII shall apply either generally or in relation to such class or classes of broadcasts or performance or such other class or classes of cases as may be specified in the order;
  The term of the rights of broadcasting organizations and performers in India shall not exceed such tern as is conferred by the law of the country to which the order relates;
• The enjoyment of the rights conferred by Chapter VIII shall be subject to the accomplishment of such conditions and formalities, if any, as may be specified in that order;
• Chapter VIII or any part thereof shall not apply to broadcasts and performances made before the commencement of the order or that Chapter VIII or any part thereof shall not apply to broadcasts and performances broadcast or performed before the commencement of the order;
• In case of ownership of rights of broadcasting organizations and performers, the provisions of Chapter VIII shall apply with such exceptions and modifications as the Central Government, may having regard to the law of the foreign country, consider necessary.
• Similarly, Section 42A of the Copyright Act has strictly ascertained that the Central Government has the power to restrict the rights of foreign broadcasting organizations if it thinks that a foreign country hasn’t provided adequate protection of rights to a broadcasting organization or the citizens of such country are not incorporated or domiciled in India under such provision.
• In view of the above, the Indian Government shall have the right to suspend the permission of one or more permission holders in the public interest or for the sake of national security in order to prevent the misuse of their respective channels. The permission holders shall be obliged to immediately comply with the directives of the Government.

Question 16. Mr. Lall was a sculptor of international repute and fame. In 1 957, he was approached by the Government of India, to design murals to be installed on the walls of Vigyan Bhavan. Plaintiff accepted the offer and completed the production of his piece of art. The mural was a symbol of India’s cultural heritage and was themed on the ‘science of rural and modern India’.It was installed in the entrance lobby of Vigyan Bhavan in 1962 and stayed installed till 1979 when it was pulled down and kept in a Government store room. He asserted that the pulling down and improper handling of the mural caused immense damage to the mural, which resulted in the disappearance of the parts of the mural including the name of its creator. He wants to initiate legal proceedings against the Government of India.On the basis of the above facts, advise Mr. Lall as to the remedy available to him.
Answer:

Amarnath Sehgal v. Union of India [2005(30) PTC253(Del))] brought to the forefront the debate over the moral rights of authors and creators. The main issues for determination before the Court were

Whether the suit was barred by limitation.

Whether Mr. Sehgal had moral right over the mural even when the copyright vested with the UOI

Has UOI infringed on the moral rights of Mr. Sehgal?

Whether Mr. Sehgal has suffered any damage

• Relief. Section 57 of the Copyright Act, of 1957 provides for what is termed as Author’s Special Rights, better known as Moral Rights. Founded on Article 6bis of the Berne Convention, Moral Rights have two key prongs
• Right to claim authorship of the work (sometimes referred to as Rights of Attribution/Paternity Rights) and
• Right against distortion, modification, or mutilation of one’s work if such distortion or mutilation would be prejudicial to the author’s honor or reputation (or Integrity Rights). These moral rights are independent of the author’s copyright. They exist even after the assignment of the copyright, either wholly or partially.
• On the question as to whether the suit was barred by limitation, the Court ruled that the correspondence between UOI and Mr. Sehgal contained the acknowledgment by the former of the right of the latter over the mural and therefore the suit is not barred by limitation. The Court examined at length the national and the international framework for the protection of the moral rights of the Author.
• The Court was of the opinion that it is a narrow view the derogatory treatment of the creative work would mean deletion too, distortion, mutilation, or modification to, or the use of the work in a setting that is entirely inappropriate. The broad view is that mutilation is nothing but the destruction of the work to render it imperfect and is therefore prejudicial to the reputation of the author.
• Recognizing the moral rights of Mr. Sehgal over the Mural, Pradeep Nandrajog J. ruled: “Mural whatever be its form today is too precious to be reduced to scrap and languish in the warehouse of the Government of India. It is only Mr. Sehgal who has the right to recreate his work and therefore has the right to receive the broken down mural.
• He also has the right to be compensated for the loss of reputation, honor, and mental injury due to the offending acts of UOI”. The Court passed a mandatory injunction against the UOI directing it to return the mural to Mr. Sehgal within two weeks from the date of judgment. The court passed a declaration transferring all the rights over the mural from UOI to Mr. Sehgal and an absolute right to recreate the mural and sell the same. The Court also granted damages to the tune of Rs.5 lacs and the cost of the suit to Mr. Sehgal against UOI.

The case of Amar Nath Sehgal’s mural throws into relief the importance of the Section 57 provision of the Indian Copyright Act, and of the weight it has been accorded by courts in India. It also gives reason to thank the wisdom of those who resolved, all those years ago, that there should be a higher law to protect the soul and essence of artistic expression as much as – or more than- the physical or tangible form of that expression. The Court has given a wide construction to the moral rights of the author under the copyright law.

• The Statute only provides for the grant of injunction and damages in cases where any distortion, mutilation, modification, or other act in relation to the work if such distortion, etc would be prejudicial to his honor or reputation.
• Court has read into the forgoing provision the ‘right of the author to receive the copyrighted work for the purposes of restoration and sell it’. The ratio of the case establishes the proposition that ‘where the owner (not being the author) of the copyrighted work, treats the work in a manner that is prejudicial to the reputation and honor of the author, the Court may transfer all rights over the work to the author’.

Question 16. How the rights of persons with disability are protected under the Copyright Act, of 1957?
Answer:

The Amendment of the Copyright Act in 2012 largely aimed at making Copyright Act, 1957 complaint with the WIPO Copyright Treaty (WCT), the WIPO Performers and Phonograms Treaty (WPPT), and most of the international treaties and conventions in the field of copyrights. Of the numerous changes brought about in the new Indian copyright regime, exceptions and limitations for persons with disabilities were incorporated in the following provisions:

• Section 52(1 )(zb) of the Copyright Act: An author of the copyrighted work is granted exclusive rights of use, reproduction, etc. but there are a few exceptions wherein a copyrighted work can be used, copied, or reproduced without obtaining the consent from the copyright owner.
• Tin’s section basically deals with such exceptions to copyright infringement and empowers individuals, educational establishments, and non-profit organizations to reproduce all types of copyright-protected content in accessible formats for the benefit of disabled persons.
• To this extent, the Act provides that it would not be a copyright infringement if any individual or any organization working for the benefit of persons with disabilities and on a non-profit basis creates accessible format copies or distributes them to persons with disabilities.
• Section 31 B of the Copyright Act: Any person or an organization working for the benefit of disabled persons on a profit basis or for business can undertake conversion and distribution by applying for a license from the Copyright Board in accordance with the procedure laid down in this section.
• These provisions in the Indian Copyright Act are inclusive and accommodating for disabled persons. It gives greater access to creative work and the right to convert the work i.e. copyrightable work in any accessible format through any organization or themselves without the need to purchase a license.
• The Marrakesh Treaty is mainly to facilitate access to copyrighted works of authors for visually disabled, visually impaired, or print-disabled persons. A conference by the World Intellectual Property Organisation, (WIPO) along with the support of the US delegation in Morocco adopted the Marrakesh Treaty. There are eighty-eight signatories and has been ratified by thirty-three countries.
• India has made practical efforts in recent times to accommodate the print-disabled person by ratifying the Marrakesh Treaty to Facilitate Access to Published Works by Visually Impaired, 2013. Through this treaty, it has been made mandatory for member countries to enforce exceptions or limitations as need be in their Copyright laws regarding the right to reproduce copyrightable work in accessible formats and also other laws to make education, and research mom accessible.

Digital technology has the potential to transform the lives of sensory-disabled people, For example, the synthesizers that convert text-to-speech allow the words displayed/typed on the screen to be read out loud and the images so displayed to be described orally. This allows blind people to understand the text by hearing it.

• Also, software that allows a computer to respond to the commands given orally, Instead of written commands by keyboard or a mouse helps the visually impaired people to operate the computer with ease. Screen readers which decode the electronic text into Braille are also available.
• Awkwardly, DRMs restrict the above activities. For instance, e-books from Adobe have the inbuilt capacity to be read out loud by a computer, but the owners of rights use technological protection methods to turn off this application by Adobe.
• These measures block access for blind people, even when they have authentically purchased the original work. Such things override the exceptions provided by copyright law even when no legal barriers exist and create technological barriers. International IP agreements and national laws in some countries prohibit users from evading or bypassing measures for protection for legitimate access purposes.

Question 17. Do the following acts constitute an infringement of copyright under the Copyright Act, of 1957:

1. Making or publishing a painting, drawing, engraving, or photograph of a work of architecture.
2. Reproduction of a literary, dramatic, musical, or artistic work in the form of a cinematographic film.
3. Reconstruction of a building or structure in accordance with the architectural drawings or plans by reference to which the building or structure was originally constructed
4. .Making of any sound recording or visual recording for the private use of the person making such recording, or solely for the purposes of bona fide teaching or research.Making translation of a literary work.
   Answer :

• According to Section 52 of the Copyright Act, of 1957 making or publishing a painting, drawing, engraving, or photograph of a work of architecture does not constitute any sort of infringement of copyright.
  As per the provisions of Copyright Act1957 reproduction of any type of literary, dramatic, musical, or artistic work in the form of cinematographic film is considered an infringement of copyright.
• According to Section 52 of the Copyright Act,1 957 reconstruction of a building or structure in accordance with the architectural drawings or plans by reference to which the building was originally constructed does not fall within the purview of infringement.
• As per the provisions enlisted under Section 52 of the Copyright Act, 1957 there is no infringement in case sound recording or visual recording is used for private purposes or in the course of bonafide teaching or research.
  Yes, making translation of any form of literary work will fall within the ambit of infringement of copyright under the Copyright Act, of 1957.

Question 18. TV stations in Chennai and Mumbai published weekly TV guides covering their programs exclusively and claimed copyright protection. Arch TV Guide wanted to publish a comprehensive guide of TV programs of both stations but was prevented by TV stations, Chennai and Mumbai on the grounds of copyright infringement. To prevent this, the TV stations sought to ensure that third parties did not reproduce their program listing. Arch TV Guide complained to the Competition Commission of India (CCI) citing the Competition Act, 2002, and arguing that the TV stations, Chennai and Mumbai were indulging in an anti-competitive practice of refusal to deal. The TV stations drew the attention of the CGI to Section 3(5) of the Competition Act, 2002 and argued that the said section did not restrict the right of any person to restrain any infringement of or to impose reasonable conditions, as may be necessary for protecting any of the rights conferred upon them under IPR statutes.TV stations, Chennai and Mumbai contended that Section 3(5) of the Competition Act, 2002 provided protection of their IPR, namely, copyright, and prayed that the CCI should restrain Arch TV Guide from publishing the comprehensive guide. Arch TV Guide urged that the said anti-competitive practice should not be condoned while providing protection to IPRs, in this case, copyright. It prayed that it may be allowed to publish the comprehensive guide in customers’ interest and public interest, available.

In light of the facts provided, if you were the CCI, what would be your decision?
Answer:

• In terms of Section 3 (5) of the Competition Act, 2002, only those restrictions on freedom of competition inherent in the protection of IPR could be permitted. Refusal of the TV stations based on their reliance on copyright provisions prevents the creation of a new product (Arch TV Guide’s) for which there is customer demand.
• The TV stations by such refusal to deal with excluded competition in the market. Section 3 (5) of the Competition Act, allows only ‘reasonable conditions’ for protecting IP Rights. If unreasonable conditions exist in a situation, they fall under the ambit of the Competition Act and such ‘unreasonable conditions’ cannot be condoned in offering protection of IP Rights.
• Copyright of the TV stations Chennai and Mumbai cannot be protected in the light of their refusal to allow Arch TV Guide to publish the comprehensive guide, which would be in the interests of customers and the public. Consequently, Arch TV Guide should be allowed to publish the comprehensive guide.

Read the following case and answer the questions given at the end:

The plaintiff, Polymer India Ltd., is a leading manufacturer and distributor of quality products made using plastic molding technology. Its products include toys, school furniture, and playground equipment. The plaintiff is also the registered proprietor of the trademark ‘PLAY’ since 25th August 2005.

The plaintiff sued eight defendants namely Playwell Impex Pvt. Ltd., Mayank, Ms. Meenakshi, Pawan, Vishal, Darshan, R.P. Associates, and Funko India who are involved in the manufacture and distribution of similar products. The plaintiff claimed relief of permanent injunction to restrain the defendants from infringing its copyright, and common law rights in designs, and passing off deceptively similar products.

An expert ad interim injunction was granted to the plaintiff by a Court vide its order dated 7th August 2015, and the goods of the defendants were seized by the Court Commissioner appointed vide the same order.

The plaintiff’s contentions are:

• The products of the plaintiff are unique and conceptualized individually, which involves the study of the market, preparation of the drawings, drawing a feasibility report, preparation of a new color scheme, finalization of dimensions, etc.
• The defendant Playwell Impex Private Ltd. is engaged in the business of manufacture, distribution, and sale of toys in collusion with the other defendants including R.P. Associates who was earlier the distributor of plaintiff products, and Darshan, who is an ex-employee of the plaintiff.
• The defendant Playwell Impex Pvt. Ltd. has launched a range of toys that are identical and deceptively similar to the toys made by the plaintiff and is thereby passing off its goods as those of the plaintiff, infringing the bundle of intellectual property rights of the plaintiff in its products.
• That the toys manufactured and sold by the defendants under the brand FUNKO are a substantial re-production and colorable imitation of the products of the plaintiff.
• There is a clear distinction between an original artistic work and a design derived from it for industrial application on a product. The original artistic work which may be used to industrially produce the designed article would fall within the meaning of artistic work defined under section 2(c) of the Copyright Act, 1957, and would be entitled to copyright protection as defined under section 2(d) of the Designs Act, 2000.
• The defendants in their written statement have admitted the e-mail of the defendant Darshan to the defendant Playwell Impex Pvt. Ltd. forwarding the brochure of the toys of the plaintiff and therefore it is evident that the defendant Playwell Impex Pvt. Ltd. is replicating from the brochure of the plaintiff.
• The defendants’ contentions are:
  That the drawing in which the plaintiff claims a copyright does not constitute a design within the meaning of Section 2(d) of the Designs Act, 2000 and is thus, not capable of being registered under the Act.
• The plaintiff has no right to claim protection of design without any registration.
  The plaintiff’s toys which have been manufactured since the year 1992, are not novel, and similar products have been available in the market for ages.
• That the plaintiff’s products to which the design has been applied have been reproduced by it, more than 50 times by an industrial process.
• That the interim injunction granted is not justified when infringement is not proved.

Question 19.

1. Discuss the relation between the Copyright Act, of 1957, and the Designs Act, of 2000.
2. What will be your decision on the interim injunction? Will you confirm or
   vacate the same? Give reasons.
3. Is the plaintiff entitled to copyright protection? Can artistic works related
   to design be protected under the Copyright Act, 1957?
4. Explain the copyright protection to foreign works in India. What are the conditions for such copyright protection in India?     

Answer:     

1. Section 2 (d) of the Design Act, 2000 defines the term ‘Design’ and expressly excludes “and artistic work as defined in clause (c) of Section 2 of the Copyright Act, 1957″ from its scope. Section 2 (c) of the Copyright Act defines an “Artistic Work” to include any work of artistic workmanship. Hence, an artistic work does not decline within the definition of a Design under the Design Act, of 2000.

Section 15 of the Copyright Act, of 1957 declares that a copyright does not subsist under the Act in any design which is registered under the Design Act. Furthermore, the said section declares that “Copyright in any design, which is capable of being registered under the Design Act, 2000, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than 50 times by an industrial process by the owner of the copyright, or, with his license, by any other person.”

Reading together the above provisions in the Copyright Act, 1957 and the Design Act, 2000 it may be concluded that an artistic work will not decline within the definition of a Design under the Design Act, 2000, but if it is related to a Design, then they can be protected under the Design Act and not under the Copyright Act, 1957.

2. In the above case, analyzing the relationship and the interplay between the Copyright Act and the Design Act, the artistic works that are related to a Design can be protected under the Designs Act and not under the Copyright Act.

• The previous ex parte injunction granted to the plaintiff deserves to be vacated in favor of the defendants.
• The application of the Plaintiff for the interim relief is dismissed. Moreover, the applications made by the defendant for vacation of the ex parte order and return of its goods are allowed.
• The goods seized by the Court Commissioner/s shall be forthwith released to the defendants.

3. Considering the inter-relationship between the Copyright Act, of 1957 and the Design Act, of 2000, it is appropriate to state that if a design is applied to an article and re-produced more than 50 times by an industrial process after making a drawing, then the drawing cannot be treated disjunctively from the said design and the copyright cannot be vested in such a drawing. Section 15 (2) of the Copyright Act expressly provides for the end of the said protection.

• The Design and Copyright law are interrelated by Section 15(2) of the Copyright Act, of 1957, and Section 2(d) of the Design Act, of 2000. Section 15(1) of the Copyright Act categorically prohibits copyright protection if a design is registered under the Design Act.
• Moreover, sub-section 2 of Section 15 states that, if a design is capable of being registered under the Design Act but the same has not been registered, such design will cease to have copyright protection as soon as an article to which such design is applied is reproduced more than 50 times by an industrial process.
• Section 2(d) of the Design Act excludes any artistic work as defined in Section 2(c) of the Copyright Act from the definition of ‘design’ under the Design Act, 2000.

the plaintiff’s products are manufactured more than 50 times by an industrial process and their design is registrable under the Design Act, 2000. no protection on the basis of copyright can be given to the plaintiff.

4. As per Section 40 of the Copyright Act,1957, the Central Government may, by order published in the Official Gazette, direct that all or any provisions of the Act shall apply in respect of the work of any foreign country.

• Indian Copyright law is presently at parity with the international standards as contained in TRIPS.
• The Copyright Act, 1957 after the amendment made in the year 1999 fully reflects the Berne Convention on Copyrights and the Universal Copyrights Convention, to which India is a party.
• India Is also a party lo tho (Ionova Uoavoallon lot Ihn Mrofoafioa of Rights of Producers of Phonograms nr id Is a tin live member of  World IntolloctuQl Properly Orgunl/nylon (WIPO) mid-UNf fJGf ). The works of such foreign countries urn thus protected In fndln under section do of the Copyright Act, 1967, rood In conjunction with the International Copyright Order 1999.
• Under the Copyright Act, 1957 works of foreign authors/owners are accorded the same protection In India to which Indian citizens are entitled under the Act.

Conditions for the Copyright Protection of Foreign Work: The Copyright Protection to n foreign work Is subject to certain conditions which are mentioned below:

• Before making an order under this Section in respect of any foreign country (other than a country with which India has entered into a treaty or which Is a party to a convention relating to copyright to which India is also a party), the Central Government shall be satisfied that foreign country has made, or has undertaken to make, such provisions if any, as It appears to the Central Government expedient to require for the protection in that country of works entitled to copyright under the provisions of this Act.
• The order may provide that the provisions of this Act shall apply either generally or in relation to such classes of works or such classes of cases as may be specified in the order.
• The order may provide that the term of copyright in India shall not exceed that which is conferred by the law of the country to which the order relates.
• That the order may provide that the enjoyment of the rights conferred by this Act shall be subject to the accomplishment of such conditions and formalities, if any, as may be prescribed by the order.
• That in applying the provisions of this Act as to ownership of copyright, the order may make such exceptions and modifications as appear necessary, having regard to the law of the foreign country.
• That the order may provide that this Act or any part thereof shall not apply to works made before the commencement of the order or that this Act or any part thereof shall not apply to works first published before the commencement of the order.

Read the following case on Copyright Law and answer the questions that follow:

The present case is about a widely publicized Telugu film entitled ‘Sardar Rubber Singh’.This is a film that stars Mr. Savan Kaiyan, an actor of considerable renown in the Telugu film industry known as Tollywood. The movie was scheduled to release on 8th April, 201 6. From August 201 5 Sardar Rubber Singh was widely advertised. The Plaintiffs themselves admit to having seen posters in January 2016 but waited till March 2016 for the trailer. Sardar Rubber Singh is scheduled for release on 8th April, 201 6.

The Suit was filed on 24,h March 2016, at the very last minute. Defendant says that Sardar Rubber Singh has been produced with a 65 Crore budget. It is scheduled for theatrical release on 2000 screens worldwide and over 600 screens in Hindi. Back-to-back distribution and commercial agreements have been executed with several large cinema chains in India, the U.S.A., and across the world.

The case was filed on behalf of the plaintiff Aitraaz Khan. The Plaintiff alleged infringement in respect of his film ‘Jabaang’ on two footings. That is copyright infringement and passing off. Two films were produced by the Plaintiff Aitraaz Khan. The franchise features. Mr. Balwan Khan was shown as a colorful police officer known as ‘Chulbul Pandey’.

The first issue is that the Bulbul Pandey character from the Jabangg films has been infringed by the Defendants in their forthcoming film ‘Sardar Rubber Singh’. This is a sequel to the Defendants’ hugely successful ‘Rubber Singh’, a remake authorized under a written and undisputed assignment, of the first ‘Jabangg’ film.

In 2009/201 0, the Plaintiff produced and released the first Jabangg film. The film script, story, screenplay, and dialogue were written by Anubhav Singh, hired by Plaintiff Aitraaz Khan on a commission basis for that purpose. The Plaintiffs created the unique character of Bulbul Pandey, portrayed by Mr. Balwan Khan. This character is described as “a corrupt but fearless police officer”. According to the plaintiff, there are various features that make this character unique they are:

• Bulbul Pandey (portrayed by Mr. Balwan Khan) plays a corrupt but fearless police officer. He lives with his family and has a troubled relationship with his stepfather and half-brother. He calls himself “Robin Hood” Pandey.
• Bulbul Pandey has a unique, funny, and bizarre way of dealing with rogue elements. The character has developed a unique dance style. The entire character of Bulbul Pandey is that of an endearing, loving, and funny police officer, a spontaneous and peculiar laugh adds charm to his steps. Bulbul Pandey rides a bike in the movie.
• Bulbul Pandey wears aviators and has a unique style of tucking the aviators on the back of his collar in the Film. Bulbul Pandey has a well-built body type, a neat close-cut hairdo, and a handlebar pencil-thin mustache. Though a police officer, he wears a . uniform with the top buttons open.
• Bulbul Pandey is a very light-hearted police officer who dances with the
  other police officials at the police station. Even his fighting style has
  comic elements.

The Jabangg film was extremely successful. This uniquely etched character of Chulbul Pandey and it is suggested that this is no ordinary, generic, or ‘stock’ police hero.

Some two years later on 21st January 2011, the Plaintiff entered into an agreement with Rameshwara Arts, a proprietary concern of the Savan Kalyan, for the remake rights of the first Jabangg film.

As per the agreement, the Assignee obtained absolute rights to remake the film in the Telugu language only. The Assignee will have absolute rights to exploit the remade version of the film in Telugu Language only all over the world in all dimensions commercially and non-commercially. As per the agreement the term “Remake Rights” shall mean and include the rights to make a Film based on the Film and/ or Script but not limited to the following:

• The right to remake the Film in Telugu Language and for the Territory based on and using the storyline, script, scenes, screenplay, dialogues, characters, picturization, designs, dramatic work, artistic works and names of the characters, passages, title of the Film or any part thereof, etc. of the Film in any manners as Assignee may deem fit the Film or the storyline of the Film in any manner Assignee so chooses.
• The exclusive right in the intellectual Property of the New Film including but not limited to the Copyright and all other ancillary rights and exclusive rights in the New Film and its underlying works.
• Any and all other rights that are incidental to and are necessary for the appropriate utilization of the above-mentioned rights i.e. (1) and (2) of this clause.
• As per the agreement the term “Script” means and includes jointly and severally the story, each script outline treatment, draft, re-write and polish and the screenplay of the Film in Hindi with dialogues. The plaintiffs’ case is that the Rubber Singh character portrayed by Mr. Savan Kalyan is nothing but an avatar of the Bulbul Pandey character portrayed by Mr. Balwant Khan.

If Rubber Singh brought into existence a wholly different persona, then surely its creators and owners have the right to further use that character and persona, no matter what any document said. Other than the name, there is no difference, and anyone seeing Rubber Singh on-screen, played by Mr. Savan Kalyan, will believe that he is seeing Bulbul Pandey albeit with a different visage.

Defendant’s contention is that the name was different. The portrayal was different. The stylization was different. The locales were different. So too were his mannerisms, qualities, and, most of all, his core value system, his moral compass: where Bulbul Pandey is fearless but corrupt, Rubber Singh is fearless and honest.

This was an adaptation developed distinctively. The script or storyline underlying Rubber Singh, which is said to have been developed by Mr. Savan Kalyan himself, has an independent copyright. Further, they informed me that the agreement of 21 January, 201 1 relates not to a license but to an assignment, a very different thing.

The Rubber Singh character for the first Telugu film, though a derivative character, was one that was unique to that particular film. This is reflected by the fact that there is an assignment in perpetuity and with exclusivity. Copyright vested with the Defendants within the meaning of Section 14(a) and (d) respectively of a literary work and a cinematographic film.

The rights in the Rubber Singh character are wholly distinct from the rights in the Bulbul Pandey character. The rights in the Rubber Singh character vest in and only in the Defendants.

The defendant’s claim was not only that the producers had copyright in the cinematography film but that they also owned the rights in the script, and that it was the entirety of all of this material that was assigned.

There is also an argument in passing off that any person watching the Rubber Singh film is bound to recognize in the Rubber Singh’s character as portrayed by Defendant Mr. Savan Kalyan, the Bulbul Pandey character portrayed by Mr. Balwant Khan.

It is one thing to say that the character first portrayed by Mr. Balwant Khan is now being portrayed as an adaptation by Mr. Savan Kalyan. It is quite another thing to say that the two characters are exact and that anyone seeing Mr. Savan Kalyan’s performance would think and only think of Mr. Balwan Khan’s portrayal of a particular character and none other.

Again of this conflation of the two personas, and of the Rubber Singh character having no persona of his own, there is no evidence. The Court is of the opinion that both Bulbul Pandey and Rubber Singh wear their uniforms in a casual manner and are hardly unique. The Rubber Singh character features a police officer who is both fearless and honest.

The Bulbul Pandey in the Jabangg franchise is just as fearless, on the footing that we all want our heroes to be fearless, but he is at the same time corrupt, a nod to reality but hardly an aspiration. The setting of the two films is different, the Jabangg films are set in North India while the Rubber Singh films are in the Andhra / Telangana region.

There are many other points of distinction too. Based on the argument advanced and reasons explained in the present case the Bombay High Court is unable to find for the Plaintiffs on either a prima facie or balance of convenience, as a result, the court declined ad-interim reliefs.

Question 20. 

1.  Examine the concept of cinematographic film and mention the rights provided to the performer under the copyright legislation.
2. Computer programs per se not patentable.’ Discuss the patentability of computer programs in India and other jurisdictions. Specify under
3. Explain the term infringement of copyright and highlight any six statutory
4. Discuss the terms Assignments and licenses, and explain the procedure and conditions to be followed while entering into an assignment.
5. Critically analyze all the provisions and grounds established by the defendant to put his case for infringement of copyright. In whose favor the High Court awarded the judgment.             

Answer:

According to Sec. 2 (f) of Copyright Act, 1957 — ‘Cinematograph Film’ means any work of visual recording and includes a sound recording accompanying such visual recording, and ‘Cinematograph’ shall be construed as including any work produced by any process analogous to cinematography including video films. Thus, the term cinematographic film includes a video film that has been recorded in a VCR. [Entertaining Enterprises and Others v. State of Tamil Nadu and Others, AIR 1984 Mad 278]

• The Bombay High Court in Fortune Films International v. Dev AnancJ and Others AIR 1979 Born 17, held that in view of the definition of “artistic work”, “dramatic work” and “cinematograph film”, it would appear that the Copyright Act, 1957, does not recognize the performance of an actor as ‘work’ which is protected by the Copyright Act.
• To overcome the lacuna in the law as pointed out in the aforementioned judgment of the Bombay High Court in relation to the protection of actors, the Act was amended in the year 1994 and a new concept of performer’s rights was introduced into the law.

Performer’s Right: Section 38 (as substituted in the year 1994) provides that where any performer appears or engages in any performance, he shall have a special right to be known as the “performer’s right” in relation to such performance. The performer’s right shall subsist until fifty years from the beginning of the calendar year following the year in which the performance is made.

Exclusive Right of Performer: As per section 38A without prejudice to the rights conferred on authors, the performer’s right which is an exclusive right subject to the provisions of the Copyright Act to do or authorise for doing any of the following acts in respect of the performance or any substantial part thereof, namely:

• To make a sound recording or a visual recording of the performance, including
  Reproduction of it in any material form including the storing of it in any medium by electronic or any      other means;
• Issuance of copies of it to the public not being copies already in
  circulation; communication of it to the public; selling or giving it on commercial rental or offer for sale or for commercial rental any copy of the recording;
• To broadcast or communicate the performance to the public except where the performance is already broadcast.

It may also be noted that once a performer has, by a written agreement, consented to the incorporation of his performance in a cinematograph film he shall not, in the absence of any contract to the contrary, object to the enjoyment by the producer of the film of the performer’s right in the same film. However, the performer shall be entitled to royalties in case of making the performances for commercial use.

Moral Right of the Performer: Section 38B of the Act provides that the performer of a performance shall, independently of his right after assignment, either wholly or partially of his right, have the right:

• To claim to be identified as the performer of his performance except where omission is dictated by the manner of the use of the performance; and
• To restrain or claim damages in respect of any distortion, mutilation, or other modification of his performance that would be prejudicial to his reputation.

It may be noted that the mere removal of any portion of a performance for the purpose of editing, to fit the recording within a limited duration, or any other modification required for purely technical reasons shall not be deemed to be prejudicial to the performer’s reputation.

2. Modern society relies heavily on computer technology for multiple reasons. Without software technology, computer hardware cannot be operated, and therefore the software and hardware work in tandem in today’s information society.

• Therefore, considering the heavy reliance placed by different businesses on the use of software for its different business purposes the intellectual property protection granted to software becomes not just important but also very crucial to the software industry as well as other industries.
• A Software patent is generally defined as a patent that protects some programming technique. The Foundation for a Free Information Infrastructure (FFII) has defined a software patent as being a “patent on any performance of a computer realized by means of a computer program.”
• The intellectual property law protection with respect to computer software has been highly debated both at the national as well as international level.

The following are the important issues concerning software patents:

1. Whether software patents should be allowed, and if so, where the boundary between patentable and non-patentable software should lie;
2. Whether the inventive step and non-obviousness requirement is applied too loosely to software; and
3. Whether patents covering software discourage, rather than encourage, innovation.

Most countries place limitations on the grant of patents on inventions involving software as the ultimate product. Also, there is no settled definition of a software patent laid down under the law. As for instance, U.S. patent law excludes “abstract ideas”, and this has been used to refuse a grant of patents to products involving some software. In Europe, “computer programs as such” are excluded from the phenomenon of patents.

The Patent laws in several countries favor the grant of patent protection for software innovations. Such countries include the USA, Australia, and Singapore, to name a few. However, many other countries, which include India and European nations, have more stringent laws concerning grant of patent protection to software innovations.

• Most of the jurisprudence relating to software patents emanates from the United States, which is considered the cradle of software patents. In the landmark decision of the US Supreme Court in Diamond v. Thehr, (1981), the court ordered the Patent Office to grant a patent on an invention even though computer software was utilized in it.
• Indian Patent legislation offers patent protection to products and processes (if they satisfy the requirements of patentability) except the non-patentable subject matter laid down in sections 3 and 4 of the Patents Act, 1970. As per in section 3(k), it is clearly indicated that ‘a mathematical or business method or a computer program per se or algorithms are non-patentable inventions.
• One may also refer to the recently released Manual of Patent Office Practice and Procedure (2011) which clarifies ambiguities in respect of patentability. Even the manual does not provide for the patentability of computer software in combination with hardware. The text in the Manual is reproduced below.
• If the claimed subject matter in a patent application is only a computer program, it is considered a computer program per se and hence not patentable. Claims directed at computer program products are computer programs per se stored in a computer-readable medium and as such are not allowable.
• Even if the claims, inter alia, contain a subject matter that is not a computer program, it is examined whether such subject matter is sufficiently disclosed in the specification and forms an essential part of the invention.
• In India, Computer Software is protected by the Copyright Law as applicable to literary and artistic works. Computer software on the other hand is protected by copyright as applicable to literary and artistic works.
• A computer program is therefore dealt with as a literary work and the law and practice in relation to literary works will apply to computer programs. Section 2(o) of the Copyright Act, 1957 lays down that the term ‘literary work’ includes computer programs.

3. Copyright law confers upon the owner of the work a bundle of rights with respect to the reproduction of the work and the other acts which enable the owner to get financial benefits by exercising such rights. If any of these rights relating to the work is carried out by a person other than the owner without the license of the owner or a competent authority under the act, it constitutes an infringement of copyright in the work.

• Since copyright is granted for a limited period, there will be no infringement if the reproductions of the work or other acts concerned are carried out after the term of the copyright has expired. The exclusive rights conferred on the owner depend on the nature of the work in which the copyright subsists. Accordingly, the type of acts which will constitute infringement will also depend on the nature of the work.
• Any person who is without authorization or assent of the copyright owner. exercises the rights in respect of the work which is the subject matter of copyright, or does anything which is the sole right of the copyright owner. commits infringement of the copyright (Kartar Singh Gianiv.
• Ladha Singh & Others, AIR 1 934 Lah 777). Thus, if the reproduction of the work is carried out after the expiry of the copyright term the said act will not amount to infringement of copyright.

Section 51 of the Copyright Act contemplates situations where copyright in a work shall be deemed to be infringed. As per the section, copyright in a work shall be deemed to be infringed: (a) when any person, without a license granted by the owner of the copyright or the Registrar of Copyrights or in contravention of the conditions of a license so granted or of any condition imposed by a competent authority, does:

1. Anything for which the exclusive right is conferred upon the owner of the copyright, or
2. Permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright, or
3. When any person:
   • makes for sale or hire or sells or lets for hire, or by way of trade display or offers for sale or hire, or
   • distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright,
   • By way of trade
   • Exhibits in public,
   • Imports into India
   • Any infringing copies of the work.

However, the import of one copy of any work is allowed for the private and domestic use of the importer. Section 51 clarifies that the reproduction of literary, dramatic, musical, or artistic work in the form of a cinematograph film shall be deemed to be an ‘infringing copy’.

The principle of conditional grants to proprietary rights in any intellectual property is to promote public interest. This is universally recognized and incorporated in the intellectual property system. Protection and enforcement of intellectual property rights must:

• Be conducive to social and economic welfare;
• Safeguard an individual’s fundamental rights; and
• Promote commerce, competition, and innovation.

In Copyright Laws exceptions and limitations are provisions that in the public interest permit the use of copyrighted works without prior authorization or a license from its owner.

Generally, exceptions and limitations to copyright are subject to a three-step test set out in the Berne Convention for the Protection of Literary and Artistic Works. Briefly stated the Berne Convention provides that an exception or limitation to copyright is permissible only if:

• It covers special cases
• It does not conflict with the normal exploitation of the work; and
• It does not unreasonably prejudice the legitimate interests of the author.

Statutory Exception Section 52 (1) Copyright Act contains around 33 categories of exceptions wherein the act committed shall not amount to an infringement of copyright. The objective behind laying down this exception is to promote the public good and thus enable the reproduction of the work for certain public purposes and for the encouragement of private study, research, and promotion of education.

The list of acts which do not constitute an infringement of copyright are:

1. Fair dealing with any literary, dramatic, musical, or artistic work, not being a computer program, for the purposes of-
   • Private or personal use, including research;
   • Criticism or review, whether of that work or of any other work;
   • Reporting of current events and current affairs, including the reporting of a lecture delivered in public;
   • The explanation appended therewith further clarifies that storing of any work in any electronic medium including the incidental storage of any computer program, which is not itself an infringing copy for the said purposes, shall not constitute infringement of copyright.
2. The reproduction of a literary, dramatic, musical, or artistic work for the purpose of a judicial proceeding or for the purpose of a report of a judicial proceeding;
3. The reproduction or publication of a literary, dramatic, musical, or artistic work prepared by the Secretariat of a Legislature or, where the Legislature consists of two Houses, by the Secretariat of either House of the Legislature, exclusively for the use of the members of that Legislature;
4. The reproduction of any literary, dramatic musical, or artistic work in a certified copy made or supplied in accordance with any law for the time being in force;
5. The reading or recitation in public of reasonable extracts from a published literary or dramatic work;
6. The publication in a collection, mainly composed of non-copyright matter, bona fide intended for instructional use, and so described in the title and in any advertisement issued by or on behalf of the publisher, of short passages from published literary or dramatic works, not themselves published for use in which copyright subsists. Provided that not more than two such passages from works by the same author are published by the same publisher during any period of five years.
7. The reproduction of a literary, dramatic, musical, or artistic work-
8. By a teacher or a pupil in the course of instruction; or
9. As part of the questions to be answered in an examination; or
   In answer to such questions;
10. The performance, in the course of the activities of an educational institution, of a literary, dramatic or musical work by the staff and students of the institution, or of a cinematograph film or a sound parents and guardians of the students and persons connected with the activities of the institution or the communication to such an audience of a cinematograph film or sound recording.
11. The performance of a literary, dramatic, or musical work by an amateur club or society, if the performance is given to a non-paying audience, or for the benefit of a religious institution;
12. The reproduction in a newspaper, magazine, or other periodical of an article on current economic, political, social, or religious topics, unless the author of such article has expressly reserved to himself the right of such reproduction;
    The storing of a word in any medium by electronic means by a non-commercial public library, for preservation if the library already possesses a non-digital copy of the work;
13. The making of not more than three copies of a book (including a pamphlet, sheet of music, map, chart, or plan) by or under the direction of the person in charge of a non-commercial public library for the use of the library if such book is not available for sale in India;

4. The owner of the copyright can transfer his rights to any other person by way of either assignment of the copyright or by issuing licenses. The owner of the copyright in an existing work or the prospective owner of a copyright in a future work may assign to any person the copyright as per sections 18 and 19.

• Sections 17 and 18 of the Copyright Act, 1957 lay down provisions as to whom the copyright vests. Section 17 mentions that if a work is done by an author for consideration for a publisher, the copyright in it would normally vest in the publisher subject to any contract to the contrary.
• Section 18 states that the owner of the copyright in an existing work or the prospective owner of in a future work may assign the copyright to any person, either wholly or partially and either generally or subject to limitations and either for the whole of the copyright or any part thereto.

Modes of Assignment: Section 19 of the Act provides that an assignment of copyright should be in writing signed by the owner of the copyright or by his duly authorized agent. Mere acceptance of remuneration or delivery of the manuscript does not constitute an assignment of copyright. The oral assignment is invalid and it is impermissible in law (K.A. Venugopala Setty v. Dr. Suryakantha U. Kamath AIR 1992 Karl).

• This section requires that the assignment should be in writing signed by the assignor or by his duly authorized agent. The assignment of copyright should specify the assigned work, rights including the duration, territorial extent of assignment, and the amount of royalty or any other consideration payable to the author or his legal heirs.
• In case the assignee does not exercise his rights within a period of one year from the date of assignment, the assignment in respect of such rights shall be deemed to have lapsed after the expiry of said period, unless otherwise specified in the assignment. The assignment of copyright in any work contrary to the terms and conditions of the rights already assigned to a copyright society in which the author of the work is a member is void.
• The Assignment of copyright in any work to make a cinematograph film does not affect the right of the author of the work to claim an equal share of royalties and consideration payable in case of utilization of the work in any form other than for the communication to the public of the work, along with the cinematograph film in a cinema hall.

Amendment of 2012 to Section 19: Three clauses have been added with respect to the assignment to Section 19 which basically says that royalty has to be paid to the authors whose work has been exploited in a cinematographic film other than by way of exhibition of the film in a cinema hall.

• This simply means that the authors are entitled to the subsequent royalties which may arise in the course of further exploitation of the film which includes their work. For example, they will also be entitled to a royalty for satellite rights, home videos, internet rights, etc.
• This again strengthens the position that the authors of the work are the actual owners of anything apart from their work in the cinematographic film. The second clause that has been added is for sound recording and is the same as above. What the authors can do is register their work with a copyright society and thereafter license it to whoever they like

Licenses: A license is different from an assignment as the licensee gets certain rights subject to the conditions specified in the license agreement but the ownership of those rights vests solely in the owner of the copyright. On the other hand, in case of an assignment, the assignee becomes the owner of the interest assigned to him. The original owner of the copyright transfers all his/her rights to the assignee and retains none. A license can be voluntary or compulsory.

Voluntary Licensing

• Section 30 of the Indian Copyright Act defines what is meant by voluntary licensing. According to Section 30, the owner of the copyright in any existing work or the prospective owner of the copyright in any future work may grant any interest in the right by license in writing signed by him or by his duly authorized agent.
• Therefore, the copyright owner of any existing work or the prospective owner of any future work can grant any interest in the right by way of a license. However, it has to be borne in mind that in the case of future work, the license will come into force only when the work comes into existence.

Compulsory Licensing: Compulsory license is the term generally applied to a statutory license to do an act covered by an exclusive right without the prior authority of the right owner.

Compulsory licensing allows for the use of protected (in this case, copyrighted material) without the prior permission of the owner of the right.

5. In the present problem the defendant put forward the following grounds before the High Court to buttress his case that there is no infringement of copyright:

1.  The Plaintiff themselves admitted that they saw the posters of the movie in January 2016 itself but waited till March 2016 for the trailer. Sardar Rubber Singh was scheduled for release on 8th April 2016 and the suit was filed on 24th March 2016 at the very last minute. This shows that the plaintiff’s intention was to try to cause loss and damage to the defendant.
2. Plaintiff and Defendant had entered into an agreement whereby the assignee obtained an absolute right to remake the film in Telugu language only. Further, under the agreement the Assignee was conferred an absolute right to exploit the remade version of the film in Telugu language only all over the world in all dimensions commercially as well as non-commercially.
3. Defendants contended that the name of the movies was different, the Portrayal was different, the stylization was different, the locales were different and so were his mannerisms, qualities and, most of all, his core value system, his moral compass; whereas Bulbul Pandey is fearless and corrupt, Rubber Singh is though fearless but honest.
4. This was an adaptation developed distinctively. The script or the storyline underlying the character of Rubber Singh is said to have been developed by Mr. Sayan Kalyan himself, and thus he has an independent copyright over the same. Further, they informed that the agreement of 21st January 2011 relates not to a license but to an assignment which is a very different thing from a mere license. 4. Copyright vested with the Defendants within the meaning of Section 14(a) and (d) respectively of a literary work and a cinematographic film.
5. The rights in the Rubber Singh character are wholly distinct from the rights in the Bulbul Pandey character. The rights in the Rubber Singh character vest in and only in the defendants.
6. Further, the defendants claim that the producers had copyright in the cinematograph film but they also owned the rights in the script, and that it was the entirety of all of this material that was assigned.
7. The setting of the two films is different and while the Jabangg films are set in North India the Rubber Singh films are in the Andhra/Telangana region and there are many other points of distinction too.

Taking into account the provisions of the Copyright Act, especially with reference to sections 14 (a) to (d) and section 17 of the Act, in the present case, the Bombay High Court held that it is unable to find any reason in favor of the Plaintiffs on either a prima facie case or on the test of balance of convenience.

As a result, the court refused to grant any ad-interim relief to the plaintiff. Hence the suit was dismissed and the judgment was passed in favour of the defendant.

Read the following case and answer the questions given at the end:

The plaintiff, Super Cassettes Industries, contended before the High Court that the defendant, SCN Sujla Channel, a cable operator in Rajasthan was heavily using songs and film extracts to enhance its viewership. According to the plaintiff, in June 2015, when its executive captured on CD and DVD, the content being broadcast by the defendant, it realized that a major chunk of the content was copyrighted by the plaintiff and was broadcast without its consent.

Prominent examples of such content included such famous songs as Tere Mast Mast do Nain (Dabangg) Dhinkaq Chika (Ready), and Sadi Gali (Tanu Weds Manu).

The plaintiff contended that it apprised the defendant of its public performance licensing scheme under which it could legally broadcast the infringing content and also sent it a cease and desist notice in August 201 5 by which the defendant was requested to seek the requisite license and pay damages worth Rs.25 lakhs for the infringement of the plaintiff’s copyright.

Since the defendant did not respond to the notice, the plaintiff contended that the defendant’s conduct fell within the four squares of Section 51 of the Copyright Act and that the plaintiff was entitled to the grant of damages.

Since the licensing fee charged by the plaintiff was? 18 per month per household, and the defendant had thousands of connections, the plaintiff argued that it was entitled to damages worth Rs.1 crore in addition to a rendition of accounts of profit and delivery of the infringing tapes.

The Delhi High Court noted that the plaintiff had been able to successfully establish that, since it was the owner of copyright in the concerned content, its rights had been violated by the defendant within the meaning of Section 51 of the Copyright Act.

Further, since the defendant did not indicate the names of the author or owner of the copyright in the films and sound recordings broadcast by it, the Court held that it had failed to comply with the statutory command engrafted in Section 52A of the Act.

In light of the fact that the defendant had infringed the plaintiff’s rights in a deliberate and calculated fashion and did not even bother to contest the proceedings instituted by the plaintiff, the Court held that the grant of damages was warranted.

Thereafter, the Court articulated the proposition that the aim of such damages would not only be to penalize the wrongdoer but also to recompense the plaintiff for the loss suffered by it.

While the Court acknowledged the fact that the plaintiff’s prayer for the grant of damages has gone unrebutted, it noted that it had not put forth any material that could assist the Court in ascertaining what illegal revenue was earned by the defendant by virtue of the infringing content.

Holding that the plaintiff’s rate card which indicated the license fee that it charged cable operators for the broadcast of its content was an indicator of the profits that it could have earned, the Court held that the same could not take the plaintiff’s case very far in light of the fact that its estimate of 1 1 crore was founded only upon its bald assertion that the defendant had thousands of customers.

Therefore, the Court asked the plaintiff to put forth cogent and reliable evidence to indicate the amount of compensatory damages that it was entitled to owing to the defendant’s conduct and asked the defendant to share with the plaintiff its accounts of profits on the basis of which the plaintiff could compute the same. Finally, it granted punitive damages worth ? 5 lakhs in the interim.

Question 21. 

1. Does the Copyright Act envisage the grant of punitive damages? Does the High Court have a legal basis for granting punitive damages?
2. Having asked the plaintiff to put forth cogent and reliable evidence to indicate the number of compensatory damages that it was entitled to, was the Court correct in awarding interim damage of 7 5 lakhs?
3. Cite three case laws on grant of damages in IP infringement cases (no need to describe them). What provisions of the Copyright Act apply in the instant case of Super Cassettes?              

Answer:

1. The Copyright Act does not envisage the grant of punitive damages by way of remedies. There is no specific provision in the Act to award the same. But the Act provides for certain remedies like grant of injunction, damages, and accounts in case there is an infringement of a right. The Court’s award in this case lacks the legal basis and is based on the string of precedents in which the Courts have created for themselves this power.

• The Courts would do well to acknowledge the absence of the jurisprudential basis for the grant of punitive damages, but yet in the interests of the owners of copyright, the Courts may be inclined to tread the path of awarding compensatory damages. At the same time, it is desirable that the Courts should insist on the plaintiff to provide a strong evidentiary basis before granting punitive damages.
• The question of whether punitive damages should be awarded requires the consideration of whether the defendant’s misconduct ‘shocks the conscience’, and has an element of ‘wilful and wanton disregard’, as punitive damages are known to be awarded only in extremely rare cases.
• In the case of Time Incorporated vs. Lokesh Srivastava, it was stated by the Honorable Court that, “the time has come when the Courts dealing actions for infringement of trademarks, copyrights, patents, etc. should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten law breakers who indulge in violations with impunity out of lust for money so that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them”.
• Recently in the judgment of the Delhi High Court, the Court has fined one firm for software piracy. The suit was filed by Microsoft and Adobe. The firm was found guilty of using pirated software for commercial purposes without adequate licenses. The court has awarded compensatory and punitive damages of Rs.10 lakh to the firm.
• This is the first-ever judgment by any Indian Court where punitive damages are also awarded. It is desirable that the Courts should insist on the plaintiff to provide a strong evidentiary basis before granting punitive damages.

2. In the case at hand, the High Court of Delhi has noted that the plaintiff has been able to successfully establish that, since it is the owner of copyright in the concerned content, its rights have been violated by the defendant within the meaning of Section 51 of the Copyright Act. Further, since the defendant did not indicate the names of the author or owner of the copyright in the films and sound recordings broadcast by it, the court has held that it had failed to comply with the statutory command engrafted in Section 52A of the Act.

• Upon observing that the defendant had indeed infringed the plaintiff’s rights in a deliberate and calculated fashion and did not even bother to contest the proceedings instituted by the plaintiff, the court held that the grant of damages was warranted. Thereafter, the court articulated the proposition that the aim of such damages would not only be to penalize the wrongdoer but also to recompense the plaintiff for the loss suffered by it. There are many valid reasons for the same and is also supported by the case law.
• While the Court acknowledged the fact that the plaintiff’s prayer for the grant of damages has gone unrebutted, it noted that it has not put forth any material that can assist the court in ascertaining what illegal revenue was earned by the defendant by virtue of the infringing content. Holding that the plaintiff’s rate card which indicates the license fee that it charges cable operators for the broadcast of its content is an indicator of the profits that it could have earned, the court held that the same could not take the plaintiff’s case very far founded only upon its bald assertion that the defendant has thousands of customers.
• Therefore, the court asked the plaintiff to put forth cogent and reliable evidence to indicate the amount of compensatory damages that it is entitled to owing to the defendant’s conduct and asked the defendant to share with the plaintiff its accounts of profits on the basis of which the plaintiff can compute the same. Finally, it granted punitive damages worth ? 5 lakh in the interim in favor of the plaintiff.
• However, it is difficult to fathom how the Court could have awarded punitive damages while acknowledging the proposition that the plaintiff had failed to establish the amount of compensatory damages that it was entitled to. Only after the Court ascertained the actual quantum of the losses suffered by the plaintiff on account of the defendant’s conduct could it use that figure to arrive at the amount of punitive damages.

3. Case-law germane to the award of damages in IP Infringement cases are:

1. Times Inc. v. Lokesh Srivastava, 116 (2005) DLT 599: [2006] 131 CompCas 198 (Delhi). Decided by High Court of Delhi on 3rd January, 2005.
2. Microsoft v. Kiran and another, 2007 (35) PTC 748 (Delhi): ILR (2007) Supp. (5) Delhi 200. Decided by High Court of Delhi on 7th September, 2007.
3. GlaxoSmithkline Pharmaceuticals v. Sarath Kumar Reddy G., 234 (2016) DLT 459: MANU/DE/2939/2016 Decided by High Court of Delhi on 2nd November, 2016.

The Delhi High Court’s verdict in GlaxoSmithKline Pharmaceuticals v. Sarath KumarReddy G can serve as a loadstar for the courts faced with a prayer for the grant of damages in IP infringement cases. In that verdict, the Court effectively safeguarded the plaintiff’s interest by scrutinizing the prayer for the grant of damages by applying the same evidentiary standards that it applied for the grant of other reliefs. The provisions of the Copyright Act applicable in the Super Cassettes case are Sections 51 and 52A thereof.

Question 22. Mr. XYZ is a professional photographer hired by the TV channel Nature & Discovery to capture the movement of various animals in the jungle and create a documentary. Mr. XYZ fixed his camera in different parts of the jungle for 24 x 7 hours. On the fourth day when he returns back to the place of camera, he discovers that his cameras are uprooted from their places. On search, he discovers various selfies of the monkeys on his camera. He takes the credit for the monkey selfie and publishes it across the globe. He is highly appreciated for the photo. PETA, an NGO filed a case against him alleging that it is not his copyright work, but the money, as they clicked the photos by themselves. Decide the fate of copyright authorship and ownership in the given case with proper justifications. Answer:

Copyright authorship and ownership are dependent on the facts and circumstances of the situation. The major issue in the given case is whether the animal’s intellectual creativity can be a matter of copyright protection.

• The Intellectual Protection Rights jurisprudence right from the inception takes into consideration the intelligence of human beings only and therefore all Intellectual Protection Rights concepts are built and explored for the enjoyment of human beings. From the national and international perspective, the concept has been discussed from a human angle only. Therefore, animals can’t claim copyright protection over the creative work.
• Further, in the case of Naruto v. Slater, No. 1 6-1 5469 (9th Cir. 201 8), the Ninth Circuit affirmed that the monkey lacked statutory standing because the Copyright Act does not expressly authorize animals to file copyright infringement suits.

Question 21. Mr. Zubair claimed that around 2006 he wrote the script of the film “Once Upon a Time” and had it registered with the Film Writer’s Association in Mumbai. He asserted that upon registration, he was accorded a registration number: No. RNA-1 856743. He claimed that he was looking out for producers, for the conversion of the script into a film when he met Mr. Subhash Kappor. As per him the meeting took place in and around May June 2007 and agreed to convert it into a movie. The pre-production work for making the Hindi version of “Once Upon a Time”, according to him, commenced in and about July 2007. Between July-January, 2008, several other producers had expressed interest in producing a Hindi film, based on the script. However, nothing happened as all such producers/production houses demanded the transfer of the entirety of rights in the script, which included derivative works, remakes, and versions of films produced by them. Zubair was interested in granting a license to the producer to use his script for the limited purpose of making a cinematograph film in the Hindi language alone. The shooting of the film “Once Upon a Time” commenced in December 2008. The film was finally completed in August 2010. The film received excellent reviews from the critics and also won the Grand Jury Prize at the New York Film Festival, the film, did not do well commercially. As per Zubair, the commercial failure of the film was on account of the producers not being able to provide wide publicity to the film. He claimed that since he got to know in March 2013, the producers are attempting to dub the film in Telugu, Punjabi, and Bangla language and also, perhaps, were wanting to remake and/or adapt the said film, albeit, without his prior consent.

1. Zubair feels betrayed and plans to take action against the producer.
2. Advise him on the following issues:
3. Who has the rights to the dubbing of the movie?
4. What are the derivative rights?   

Answer:                                                                                                            

1. As per the Copyright Act, of 1957, the author has the right with regard to various economic rights. Since there is no assignment of his rights partial or full, the right with regards to the script sold to the producer is with regards to the production of the film. Section 14 of the Act defines the rights of the author and assign him reproduction, publication, performance of work, make cinematograph work rights.

The same section provides the rights to the producer in the case of cinematograph work the right to “communicate the film to the public” The Madras High Court in the case of Mr. Thiagarajan Kumararaja v. M/s CapitalFilm Works (India) Pvt Ltd., decided on 20.11 201 7 held that right to remake or make different version of film does not fall within the expression “communicating the film to the public” as this would entail change being made in the original script without the consent of author. The producer can’t remake the subject film or make another version of the same film.

2. Copyright also protects ‘derivative works’ that include translation, adaptation, arrangement of music and other alteration and modification of literary and artistic work all receive the same protection as original works. Adaptation is generally perceived as a modification of the original work to create another work. For example-adapting a novel to make a film or adapting a textbook that is originally written universities, to make it suitable for a lower level. Section 2(a) of the Copyright Act, of 1957 defines the word adaptation.

• An adaptation under Indian law is basically a change of format i.e. a copyrighted work is converted from one format to another. If an adaptation is created by adding a significant amount of new material, then such work would not be considered an adaptation under the Copyright Act, of 1957. The copyright in a derivative work will only extend to the material contributed by the adapter and does not affect the copyright protection given to the original material. According to copyright theory, adaptation is a work that is essentially the same as the original work although there may be a change in the format.
• If we refer to copyright theory and read it in conjunction with copyright law, it might be possible to argue that adaptations derivations, and transformations, are distinct species although they belong to the same family. Adaptation and derivation both belong to one genus and transformation belongs to another genus.

Question 22. A European company in the dental instruments sector was selling their product in China through a Chinese distributor. They discovered a competitor in China was offering a similar product, but built to lower specifications that used an identical exterior design, color scheme, and control interface. The technical manual, diagrams, and parts of their sales brochure appeared to be directly copied from the European dental instruments company. Overall, the competitor’s product gave the appearance of being similar in function to that of the European company, although its performance level and price were much lower. The European company’s representatives had previously approached the company at a trade fair to complain about the infringement of the company’s IP but had not received a positive response. The European company then proceeded to seek legal advice on what could be done. The company did not have a design patent to protect the overall appearance of its product. were there any patents covering the product’s function, so trying to claim the Chinese company committed patent infringement was legally possible but extremely difficult to do. The only legal recourse the company had was to argue copyright infringement of the technical manual. Instead of taking the legal route, the company decided to send a warning letter through their local lawyers that alleged infringement of the product’s shape though they were not on strong legal grounds for copyright. The letter implied that the company would take the matter to court. The law firm, and representatives from the European company, the letter and met with the Chinese company. The European company argued that a lawsuit would be a waste of time for both parties and that even if they were not successful in court, the Chinese competitor’s imitation of the European product would harm their corporate image in the long run. As a result, the infringing company decided to change a number of exterior features of the product and produce new manuals and brochures which greatly reduced the similarities to the European product.

1. If the company decides to send a warning letter through their local lawyers that alleged infringement of the product’s shape will they be able to prevent the Chinese company?
2. The technical manual, diagrams, and parts of their sales brochure appeared to be directly copied from the European dental instruments company. Can the European company file for copyright violation against the Chinese company?                                                                                                     Answer:

1. Registration of a Design helps protect the products which can be distinguished by their mere novel shape or pattern. However, the requirement for registration is that such design itself must be new and thus the element of novelty is of the essence for design registration. Design is registrable both nationally as well as under the EU-wide single registration. Such a right can also be protected through the copyright.

Unlike many other Intellectual Property Rights, Copyright is not necessarily registrable and it arises automatically upon the creation work itself. Further, Copyright can be enforced through the court of law.

• Today, industrial design has become an integral part of consumer culture where rival articles compete for consumer’s attention. as become important, therefore, to grant adequate protection to an origina industrial design. It is not always easy to separate the aesthetics of a finished article from its function. Law, however, requires that it is only the aesthetics or the design element that can be registered and protected.
• For example, while designing furniture whether for export or otherwise, when one copies a design from a catalog, one has to ascertain that somebody else does not have a design right in that particular design.
• In the given case, the company did not have a design patent to protect the overall appearance of their product, nor were there any patents covering the product’s function, so trying to claim the Chinese company committed patent infringement was legally possible but extremely difficult to do. The only legal recourse the company had was to argue copyright infringement of the technical manual.
• Though the company decided to send a warning letter through their local lawyers that alleged infringement of the product’s shape they were not on strong legal ground and copyright. The letter implied that the company would take the matter to court.

International instruments do not usually constitute a directly applicable source of rights to private parties. An international treaty rather imposes obligations on the states, parties to the convention domestic legislation according to its provisions. In the field of copyright and related rights, the relevant conventions establish a certain level of protection in the contracting states through the principle of national treatment and the guaranteeing of a number of minimum standards.

2. International copyright law is complex in its detail and in its aiinÿr”na,’°nal laWS’ These complexities delude national laws nations! internationally agreed on minimum standards and where aw allows for exceptions to those standards that they comply with the internationally agreed frameworks for exceptions. An important aspect of understanding and dealing with international complexity is the interpretation of international law at both international and domestic levels.

• According to the national treatment principle, works originating in a contracting state are protected in every other contracting state in the same manner as these states protect works originating in their own territory. For example, a textbook first published in contracting State A will be protected in contracting State B in the same manner as State B protects a school text originating in its own territory.
• The guaranteed minimum standards ensure that the protection provided by national laws of state parties and notably scope of rights, possible exceptions and limitations, as well as terms of protection, does not fall below the level agreed in the respective international instrument.
• Often there are several possible ways for national legislation to comply with international prescriptions. In order to find out how copyright and related rights are protected abroad, one has therefore always to consult the laws of the respective country in which protection is sought.
• The central feature of the Berne Convention is that it prohibits member countries from imposing “formalities” on copyright protection, in the sense that the enjoyment and exercise of copyright cannot be subject to any formality except in the country of origin.
• Likewise, foreign jurisdictions cannot impose similar formality requirements on U.S. copyright owners as a condition to filing suit in their national courts, even though they can impose those requirements on their own nationals.
• The other main characteristics of the Berne Convention are the concepts of “minimum standards” and “national treatment.” “Minimum standards” are the baseline that all nations must provide to non-domestic claimants. The “national treatment” principle in copyright law states that authors should enjoy the same protection for their works in other countries as those countries accord their own authors.
• Therefore, a country that is a member of the Berne Union must afford copyright protection to foreign nationals without a requirement of any formalities (like the use of a copyright notice or a registration requirement). Foreign nationals must be afforded the same rights and treatment that a domestic copyright holder would receive.

European companies can file for copyright violation against the Chinese company under the Berne Convention or the Universal Copyright Convention.

Question 23. Central Book Company is a registered partnership firm carrying on the business of publishing law books. The said company is involved in the printing and publishing of various books relating to the field of law. One of the well-known publications is the law report known as Law in India. It publishes all reportable judgments along with non-reportable judgments of the Supreme Court of India. After the initial procurement of the judgments, orders, and proceeding for publication the appellants make copyediting wherein the judgments, orders, and record of proceedings procured, which is the raw source, are copy-edited by a team of assistant staff, and various inputs are put in the judgments and orders to make them user friendly. The appellants also prepare the head notes comprising of two portions, the short note consisting of catch/lead words written in bold; and the long note, which is comprised of a brief discussion of the facts and the relevant extracts from the judgments and orders of the Court. Another company named Spectrum Business Support Ltd. came out with a software called Grand Jurix published on CD-ROMs. In CD all the modules of Central Book Company have been lifted verbatim. A suit of Copyright infringement was filed by Central Book Company against Spectrum Business Support Ltd. The defense of Spectrum Business Support Ltd. was that the Judgments published in the Law in India are nothing but merely a derivative work based upon the judgments of the court, which lacks originality and therefore no Copyright can be claimed by the Central Book Company. On the basis of the above facts discuss the concept of originality under Copyright law as laid down by various judicial pronouncements.
Answer:

Originality is the basic yardstick used by the copyright regimes in the world to evaluate the availability of copyright protection for a particular work. Section 13(1) of the Indian Copyright Act 1957 states that copyright subsists in “original literary, dramatic, musical and artistic works.” However, the Act fails to give any definition or test to determine the originality of a work.

This leaves the court with the duty to decide the amount of originality required for a work to claim copyright protection. India strongly followed the doctrine of ‘sweat of the brow’ for a considerably long time. In Eastern Book Company 1. D.B. Modak, JAIR 2008 Supreme Court 809,81 0J the Supreme Court discarded the ‘Sweat of the Brow’ doctrine and shifted to a ‘Modicum of creativity* approach as followed in the US.

• The dispute is related to the copyrightability of judgments. The notion of “flavor of the minimum requirement of creativity” was introduced in this case. The Court granted copyright protection to the additions and contributions made by the editors of SCC.
• At the same, the Court also held that the orders and judgments of the Courts are in the public domain and everybody has a right to use and publish them, and therefore no copyright can be claimed on the same. The Court further referred to the principle of a minimal degree of creativity, i.e., there should be a minimum degree of creativity in derivative work to show that the copy-edited version of the Judgement is not an original work.

It can be concluded from this case that the jurisdiction of Copyright protection under the Copyright Act, of 1957, finds itself in fair play. At the point when an individual produces something with his ability and work, it provides possession to him, for his/her production and the other individual would not be allowed to make a benefit out of the expertise and work of the primary creator, who had initially produced.

• It is for this reason that the Copyright Act of 1957, gives the authors absolute privilege of the floor in terms of exclusive rights for their originally produced work, also considered as non-tangible prerogatives in various legislation.
• This Act puts a check on the exploitation of the original owner against the use of his work without his consent. Lastly, the Court did not allow the Respondents to sell their CD ROMS with the text of judgments of the Supreme Court Cases along with their own headnotes, footnotes, and other inputs.
• The Judgement of the High Court was modified to the extent that in addition to the interim relief, the above-mentioned additional relief to the appellants was also granted by the Apex Court.
• The concept of “originality” has undergone a paradigm shift from the “sweat of the brow” doctrine to the “modicum of creativity” standard put forth in Feist Publication Inc. v. Rural Telephone Service by the United States Supreme Court. The doctrine of “sweat of the brow” provides copyright protection on the basis of the labor, skill, and investment of capital put in by the creator instead of the originality.

In Feist’s case, the US Supreme Court totally negated this doctrine and held that in order to be original a work must not only have been the product of independent creation, but it must also exhibit a “modicum of creativity”.

The Supreme Court prompted ‘creative originality’ and laid down a new test to protect the creation on basis of the minimal creativity. This doctrine stipulates that originality subsists in a work where a sufficient amount of intellectual creativity and judgment has gone into the creation of that work. The standard of creativity need not be high but a minimum level of creativity should be there for copyright protection.

Types Of Intellectual Property-Origin And Development- An Overview

Question 1. One Unniithan conceived the idea of a reality TV Show SWAYAMWAR concerning matchmaking. He shared the concept note with filmmaker Ramesh Chandra. To his surprise and shock, he came across a newspaper report about Ramesh Chandra planning to come out with a big basket match-making show using his concept. Has there been a violation of an intellectual property right? Can Unnithan institute a suit seeking an injunction? Give reasons and refer to case law, if any.
Answer: The facts given in the question are similar to the case G. Anand vs. Delux Films and Ors. AIR 1978 SC 1613 in which the Appellant R. G. Anand wrote and produced a play called ‘Hum Hindustani’ in 1953 which received huge success and was re-staged numerous times. The appellant narrated the entire play ‘Hum Hindustani’ to the Respondents.

The appellant had elaborate discussions regarding filming the play on January, 1 955. However, no further communication was made to the Appellant post the discussion. However, the respondents proceeded to make the film and the appellant filed a suit claiming copyright infringement.

The Hon’ble Supreme Court held that there exists no copyright to an idea, subject matter, themes, plots, or historical or legendary facts. Infringement is restricted only to the form, manner, arrangement, and expression of the idea by the author of the copyrighted work.

The Court should settle on whether the similarities are substantial or fundamental or not to the mode of expression adopted in the work. If a substantial or fundamental portion has been copied, then it would amount to infringement.

The other reliable test to ascertain whether there is an infringement or not is to analyze the impression created on the spectator or reader after reading or watching the works (Lay Observer Test).

Unlike the case with patents, copyright protects the expressions and not the ideas.

There is no copyright in an idea. In M/s Mishra Bandhu Karyalaya & Others v. Shivaratanlalkoshalair 1970MP261, it has been held that the laws of copyright do not protect ideas, but they deal with the particular expression of ideas.

It is always possible to arrive at the same result from independent sources. The rule appears to be settled that the compiler of a work in which absolute originality is of necessary excluded is entitled, without exposing himself to a charge of piracy, to make use of preceding works upon the subject, where he bestows such mental labor upon what he has taken and subjects it to such revision and correction as to produce an original result.

Mr. Anil Gupta and Anr. v. Mr. Kunal Dasgupta and Ors 13 [97(2002) DLT 257], the Delhi High Court was encountered with a case related to “concept note”.

The Plaintiff alleged that he had narrated a concept of “Swyaamwar” for a reality show in which a bride will traditionally choose her groom in the form of a Swyaamwar. The idea was narrated to the Defendant.

The defendant after a few months launched his TV reality show, “Shubh Vivah” based on the concept of Plaintiff, shared with him in confidence.

Justice Vijender Jain of Hon’ble Delhi High Court relied on the judgment of Terrapin v Builders Supply Co (Hayes) to evoke the doctrine of confidentiality and found force in the argument and thereby restrained the Defendants and granted an injunction in favor of the Plaintiff. Therefore, in the given case, it is simply an idea, that is not protected by the law of copyrights.

A simple idea is not an intellectual property right as stated in the above case laws. Therefore, there is no violation of intellectual property rights and Unnithan Institute cannot file a suit seeking an injunction.

Types Of Intellectual Property Short Question and Answers

Question 1. Write a brief note discussing the relativity between Intellectual Property and Business.
Answer: Intellectual Property vis-a-vis Business: A Rationale of Relativity: In today’s world, the abundant supply of goods and services on the markets has made life very challenging for any business, big or small.

In its ongoing quest to remain ahead of competitors in this environment, every business strives to create new and improved products (goods and services) that will deliver greater value to users and customers than the products offered by competitors.

To differentiate their products – a prerequisite for success in today’s markets – businesses rely on innovations that reduce production costs and/or improve product quality.

In a crowded marketplace, businesses have to make an ongoing effort to communicate the specific value offered by their product through effective marketing that relies on well-thought-out branding strategies.

In the current knowledge-driven, private sector-oriented economic development paradigm, the different types of intangible assets of a business are often more important and valuable than its tangible assets. A key subset of intangible assets is protected by what are labeled collectively as intellectual property rights (IPRs).

These include trade secrets protection, copyright, design and trademark rights, and patents, as well as other types of rights.

IPRs create tradable assets out of products of human intellect and provide a large array of IPR tools on which businesses can rely to help drive their success through innovative business models.

All businesses, especially those that are already successful, nowadays have to rely on the effective use of one or more types of intellectual property (IP) to gain and maintain a substantial competitive edge in the marketplace.

Business leaders and managers, therefore, require a much better understanding of the tools of the IP system to protect and exploit the IP assets they own, or wish to use, for their business models and competitive strategies in domestic and international markets.

Question 2. Write a brief note on the utility model.
Answer: Utility Models: A utility model is an exclusive right granted for an invention, which allows the right holder to prevent others from commercially using the protected invention, without his authorization for a limited period.

In its basic definition, which may vary from one country (where such protection is available) to another, a utility model is similar to a patent.

Utility models are sometimes referred to as “petty patents” or “innovation patents.

Only a small but significant number of countries and regions provide the option of utility model protection. At present, India does not have legislation on Utility models.

The main differences between utility models and patents are the following: The requirements for acquiring a utility model are less stringent than for patents.

While the requirement of “novelty” is always to be met, that of “inventive step” or “non-obviousness” may be much lower or absent altogether.

In practice, protection for utility models is often sought for innovations of a rather incremental character that may not meet the patentability criteria.

The term of protection for utility models is shorter than for patents and varies from country to country (usually between 7 and 10 years without the possibility of extension or renewal).

In most countries where utility model protection is available, patent offices do not examine applications as to substance before registration.

This means that the registration process is often significantly simpler and faster, taking on an average of six months.

Utility models are much cheaper to obtain and to maintain. In countries, utility model protection can only be obtained for certain fields of technology, and only for products but not for processes. Utility models are considered suitable particularly for SMEs that make “minor” improvements to, and adaptations of, existing products.

Utility models are primarily used for mechanical innovations. The “Innovation patent,” launched in Australia some time back was introduced as a result of extensive research into the needs of small and medium-sized enterprises, to provide a “low-cost entry point into the intellectual property system.”

Question 2. Write a brief note on Biodiversity and IPR.
Answer: In simple terms, the diversity among various life forms within the Biosphere refers to biodiversity. Biodiversity is the foundation of life on Earth.

It is crucial for the functioning of ecosystems which provide us with products and services without which we cannot live. By changing biodiversity, we strongly affect human well-being and the well-being of every other living creature.

Biodiversity is normally classified under 3 major categories: ecosystem diversity, representing the principal biogeographic regions and habitats; species diversity, representing variability at the level of families, genera, and species; and genetic diversity, representing the large amount of variability occurring within a species.

Diverse activities and actions have been taken by several stakeholders at local, state, national, and international levels to conserve/protect valuable resources such as biodiversity to draw the benefits accrued in them for society.

The Convention on Biological Diversity (CBD) 1992: Opened for signature at the Earth Summit in Rio de Janeiro in 1992, and entering into force in December 1993, the Convention on Biological Diversity is an international treaty for the conservation of biodiversity, the sustainable use of the components of biodiversity and the equitable sharing of the benefits derived from the use of genetic resources.

The interface between biodiversity and intellectual property is shaped at the international level by several treaties and processes, including at the WIPO, and the TRIPS Council of the WTO. With 193 Parties, the Convention has near universal participation among countries.

The Convention seeks to address all threats to biodiversity and ecosystem services, including threats from climate change, through scientific assessments, the development of tools, incentives, and processes, the transfer of technologies and good practices, and the full and active involvement of relevant stakeholders including indigenous and local communities, youth, NGOs, women, and the business community.

The Cartagena Protocol on Biosafety is a subsidiary agreement to the Convention.

It seeks to protect biological diversity from the potential risks posed by living modified organisms resulting from modern biotechnology.

The treaty defines biodiversity as “the variability among living organisms from all sources Including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part, this includes diversity within species, between species and of ecosystems.

The Convention reaffirms the principle of state sovereignty, which grants states sovereign rights to exploit their resources under their environmental policies together with the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other states.

The Biodiversity Convention also provides a general legal framework regulating access to biological resources and the sharing of benefits arising from their use. India is a party to the Convention on Biological Diversity (1992).

The Convention on Biological Diversity establishes important principles regarding the protection of biodiversity while recognizing the vast commercial value of the planet’s store of germplasm.

However, the expansion of international trade agreements establishing a global regime of intellectual property rights creates incentives that may destroy biodiversity, while undercutting social and economic development opportunities as well as cultural diversity.

The member countries were pressured to change their IPR laws to conform to the TRIPS agreement.

Types Of Intellectual Property Descriptive Questions

Question 1. What are the points, one should consider while adopting a Trademark?
Answer:

A trademark is a word, phrase, symbol, or design that distinguishes the source of products (trademarks) or services (service marks) of one business from its competitors.

To qualify for patent protection, the mark must be distinctive.

For example, the Nike “swoosh” design identifies athletic footwear made by Nike.

The Trade Marks Act 1999 (“TM Act”) provides, inter alia, for registration of marks, filing of multi-class applications, the renewable term of registration of a trademark as ten years as well as recognition of the concept of well-known marks, etc.

It is pertinent to note that the letter “R” in a circle i.e. with a trademark can only be used after the registration of the trademark under the TM Act.

Question 2. Discuss the process for the enforcement of Patent Rights.
Answer: Enforcement of Patent Rights: It is pertinent to note that the patent infringement proceedings can only be initiated after the grant of a patent in India but may include a claim retrospectively from the date of publication of the application for the grant of the patent.

Infringement of a patent consists of the unauthorized making, importing, using, offering for sale, or selling of any patented invention within India.

Under the (Indian) Patents Act, of 1970 only a civil action can be initiated in a Court of Law.

Like trademarks, the relief that a court may usually grant in a suit for infringement of a patent includes permanent and interim injunction, damages or account of profits, delivery of the infringing goods for destruction, and cost of the legal proceedings.

Question 3. Discuss the salient features of the Design Act, of 2000.
Answer:

The salient features of the Design Act, of 2000 are as under:

1. Enlarging the scope of definition of the terms “article”, “design” and introduction of definition of “original”.
2. Amplifying the scope of “prior publication”.
3. Introduction of provision for delegation of powers of the Controller to other officers and stipulating statutory duties of examiners.
4. Provision of identification of non-registrable designs.
5. Provision for substitution of applicant before registration of a design.
6. Substitution of Indian classification by internationally followed system of classification.
7. Provision for inclusion of a register to be maintained on the computer as a Register of Designs.
8. Provision for restoration of lapsed designs.
9. Provisions for appeal against orders of the Controller before the High Court instead of the Central Government.
10. Revoking of a period of secrecy of two years of a registered design.
11. Providing for compulsory registration of any document for transfer of rights in the registered design.
12. Introduction of additional grounds in cancellation proceedings and provision for initiating the cancellation proceedings before the Controller in place of the High Court.
13. Enhancement of quantum of penalty imposed for infringement of a registered design.
14. Provision for grounds of cancellation to be taken as a defense in the infringement proceedings to be in any court not below the Court of District Judge.
15. Enhancing the initial period of registration from 5 to 1 0 years, to be followed by a further extension of five years.
16. Provision for allowance of priority to other convention countries and countries belonging to the group of countries or inter-governmental organizations apart from the United Kingdom and other Commonwealth Countries.
17. Provision for the avoidance of certain restrictive conditions for the control of anti-competitive practices in contractual licenses.

Question 4. Discuss the Salient features of Geographical indications.
Answer:

Geographical Indications: Until recently, Geographical indications were not registrable in India and in the absence of statutory protection, Indian geographical indications had been misused by persons outside India to indicate goods not originating from the named locality in India.

Patenting turmeric, neem, and basmati are the instances that drew a lot of attention to this aspect of Intellectual property.

Mention should be made that under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), there is no obligation for other countries to extend reciprocal protection unless a geographical indication is protected in the country of its origin.

India did not have such a specific law governing geographical indications of goods that could adequately protect the interest of producers of such goods.

Intellectual Property Rights Distinguish Between

Question 1. Distinguish between the following:

1. ‘Intellectual property’ and ‘industrial property’.

Answer:

There are three types of property:

• Movable property
• Immovable property
• See carefully
  1. The term ‘intellectual property’ is coined to indicate the kind of property that covers in it, the creations of the human mind and human intellect.
  2. It consists of valuable information which can be converted into tangible objects
  3. The two types/branches of intellectual property are-
• Copyright
• Industrial property
  1. Owners of intellectual property enjoy certain rights like the right to use and licence and certain limitations are also placed upon them.
  2. Intellectual property includes rights relating to
• Trademarks and Service marks
• Patents
• Industrial designs etc.

While

— Industrial property

• It is a kind of intellectual property.
• It is a collective name given for rights related to industrial or commercial activities of a person and this reflects industrial or commercial rights.
• Industrial property includes
  • Patents
  • Trademark, service mark
  • Utility models
  • Industrial design
  • Geographic origin
  • Protection against unfair competition
• It covers
  • Inventions
  • Creations
  • New products
  • New Processes
  • New design/model
  • Distinct marks

Intellectual Property Rights Descriptive Questions

Question 2. Discuss how labor theory is different from functional theory in justifying intellectual property.
Answer:

Labor theory is also known as positive theory. The underlying principle of the theory is that labor of the individual is the foundation of the property. As per the theory, A product is the property of a person who produces it or brings it into existence.

Property is the result of individual labour and therefore no person has a moral right to the property which has not been acquired by his efforts.

The theory is individualistic in approach in relating to property rights. The functional theory is also known as the sociological theory of property.

According to the theory, no one can be allowed to have an unrestricted use of the property to the detriment of others, the use of the property should conform to the rules of the reason and welfare of the community.

The theory takes into concern the society as a whole and therefore maintains a welfare approach towards the creation of the property.

Question 3. Give your interpretation about the “Proviso” that a person may legitimately acquire property rights by making his labor with resources held “in common” only if, after the acquisition, “there is enough” and as good left in common for others.
Answer:

The Natural Right Theory emanates from the proposition that “a person who labors upon resources that are either un-owned or “held in common” has a natural property right to the fruits of his or her efforts and that the state must respect and enforce that natural right”.

This idea has been elaborated in the writings of John Locke and is also applicable to the subject of intellectual property, wherein the raw materials in the form of facts and concepts do seem in some sense to be “held in common” and where labor contributes substantially to the value of the finished product. Lockean property entitlements.

1. Right to use without harm
2. Right to transfer the property
3. Right of exclusive usage of the property

Personality theory finding place in the writings of Kant and Hegel is that private property rights are crucial to the satisfaction of some fundamental human needs.

The lawmakers thus must create and allocate entitlements to resources in a way that best enables people to satisfy such needs.

From this perspective, Intellectual Property Rights may be justified either on the ground that they shield from appropriation or modification artifacts through which authors and artists have expressed their “wills” (an activity thought central to “personhood”).

Justin Hughes, taking inspiration from Hegel’s Philosophy of Rights, laid down the following guidelines concerning the proper shape of an Intellectual Property regime:

1. We should be more willing to accord legal protection to the fruits of highly expressive intellectual activities, such as the writing of novels, than to the fruits of less expressive activities, such as genetic research.
2. Because a person’s “persona” his “public image, including his physical features, mannerisms, and history”  is an important “receptacle for personality.” it deserves generous legal protection, although ordinarily it does not result from labor.
3. Authors and inventors should be permitted to earn respect, honor, admiration, and money from the public by selling or giving away copies of their works, but should not be permitted to surrender their right to prevent others from mutilating or misattributing their works.

Intellectual property rights afford authors and inventors a measure of control over this risk.

To put the point a different way, it is the moral claims that attach to personality, reputation, and the physical embodiments of these individual goods that justify legal rules covering damage to reputation and certain sorts of economic losses.

Moreover, personality-based theories of intellectual property often appeal to other moral considerations. Hegel’s personality-based justification of intellectual property rights included an incentive-based component as well-he asserts that protecting the sciences promotes them, benefiting society.

Perhaps the best way to protect these intuitively attractive personality-based claims to intangible works is to adopt a more comprehensive system designed to promote progress and social utility.

Question 4. One of the prime factors contributing to the survival and growth of every business in today’s competitive world is the development of intellectual property as an instrument of economic development. Discuss.
What are the major areas in which companies in India can take the lead in the global phenomenon of intellectual property rights?
Answer:

Though the importance of the subject of Intellectual Property Rights has increased with time, it is still not a global phenomenon. The significance and importance accorded to it differs from one country to the other. The chief factors responsible for this difference are:

The amount of resources that different countries allocate and spend towards the creation of intellectual assets; and

The amount of protected knowledge and information that is used in the process of production.

A useful indicator to measure the magnitude of resources devoted towards the creation of new knowledge and information is the country’s expenditure on research and development activities.

Statistics make it clear that Developing countries tend to spend much less on R&D activities as compared to Developed countries.

In general, one of the major factors responsible for the increase in R & D funding is the growing importance and participation of the private sector which has also resulted in an increased reliance on IPR protection by the private players seeking state protection from any encroachment on their intellectual property rights.

This is not only beneficial for such private entities but also for the State since it helps in the creation and dissemination of further knowledge and information in society.

However, it has been observed that such R&D funding by private players is predominant in developed countries only.

The other way in which IPRs influence economic activity in a country is through the use of proprietary knowledge and information — owned by both domestic as well as foreign residents — in both production and consumption.

Data reveals that in countries with relatively low-income generations, the share of agricultural output is comparatively higher than the share of income earned through services.

This also suggests that the IPRs, relating to agricultural processes and products, are more important in developing countries than in developed countries.

The major area in which companies in India can take the lead in the global phenomenon of intellectual property rights is: Agriculture Traditionally, the relevance of Intellectual Property Rights in agricultural research has been very minimal.

This is because Intellectual Property Rights were mostly concentrated towards the protection of the outcome of industries as against agriculture perse.

Furthermore, most of the Research and developments & D) carried out in the agricultural sector were by the public sector institutions in both developed as well as developing countries.

For instance, the development and dissemination of the technology that led to the Green Revolution in India did not pose any substantial conflicts around the subject of IPR. Moreover, there is still reluctance in the developing nations to accept grants of Patents in the agriculture sector.

In India, since the early 1980s, there has been a significant shift in the national policy towards agricultural research.

After having tried and made continuous efforts towards public funding for R&D activities in agriculture, the budget allocation has been rationalized.

At the time, the participation of the private sector in agricultural R&D has grown by metes and bounds. In the developed nations, about one-half of the agricultural R&D is funded by the private sector.

Copyright protection concerning digital content on a worldwide basis same In the 1990s, Copyright protection had gained importance for its role in protecting digital information on the Internet.

The protection of digital content is still not a moot point or an issue in developing countries, where computer and network penetration is much lower as compared to the industrial developed countries.

In early 1998, there were, for example, only 0.2 Internet hosts per 1,000 inhabitants in developing countries compared to 31 in developed countries.

Notwithstanding all this, with a consistent trend towards liberalization of telecommunications services and the plummeting costs of computing and telecommunications technologies, there is an expectation for sustained growth of the Internet in developing countries as well and thus increased relevance of Copyright protection about digital content on a worldwide basis.

Intellectual Property Rights Important For Examinations Descriptive Questions

Question 1. Explain the concept of property. What are the different theories of property?
Answer: The term ‘Property’ has a very wide connotation, it not only includes money and other tangible objects of some value, but it also includes the intangible rights which are considered to be a source or an element of income or wealth.

It includes the rights and interests that a human possesses over land (and chattel) and which is to the exclusion of all others. It is the right to enjoy and dispose of certain things in the way that he pleases, provided that such use is not prohibited by law.

However, there are certain things over which property rights by any single individual (or an entity) cannot be exercised.

This includes the sea, the air, and the like as they cannot be appropriated. Everyone has a right to enjoy them, but no one has an exclusive right over them.

Different theories laid down on the subject of the concept of “Property” are as follows:

1. Historical Theory of Property
2. Labour Theory (Spencer)
3. Psychological Theory (Bentham)
4. Functional Theory (Jenks, Laski)
5. Philosophical Theories (Property as a Means to Ethical ends and Property as an End in itself).

According to the Historical theory of Property, the concept of Private Property grew out of joint property.

In the words of Henry Maine, “Private Property was chiefly formed by the gradual disentanglement of the separate rights of the individual from the blended rights of the community”.

In the earlier days, the ownership rights over property were vested in large societies chiefly Patriarchal societies.

However, with the disintegration of societies and families, there was a gradual evolution of the concept of individual rights.

Roscoe Pound in his theory has also pointed out the fact that the earliest form of property was like group property and it was later on when families partitioned that the existence of individual property came to be recognised.

Labour Theory (Spencer)

• This theory of property is also known as the ‘Positive Theory’. The underlying principle basis of this theory is that the labor of the individuals is the foundation of the property.
• The theory states that a thing is the property of a person who produces it or brings it into existence.
• The chief supporter of this theory is Spencer, who developed the theory on the principle of ‘equal freedom’.
• He stated that property is the result of individual labor, and therefore, no person has a moral right to property that he has not acquired by his effort.

Psychological Theory (Bentham)

• According to this theory, Property came into existence on account of the acquisitive instinct of human beings. Every individual has a desire to own and have in his possession things which is the factor responsible for bringing Property into existence.
• According to Bentham, Property is altogether a conception of mind and thus, it is nothing more than an expectation to derive certain advantages from the object according to one’s capacity.
• Roscoe Pound also supports Bentham on this school of thought and has observed that the sole basis of a conception of Property is the acquisitive instinct of the individual which motivates him to assert his claim over objects in his possession and control.
• Functional Theory (Jenks and Laski) This theory is also known as the ‘sociological theory of property’, it assumes that the concept of Property should not only be confined to private rights but should be considered as a social institution securing the maximum interests of society.
• Property is situated in society and has to be used in the society itself. According to Jenks, no one can be allowed to have unrestricted use of his property, to the detriment of others. He thus states that the use of property should conform to the rules of reason and the welfare of the community.
• According to Laski, who also supports this school of thought, Property is a social fact like any other, and it is the character of social facts to alter.
• Property has further assumed varied aspects and is capable of changing further with the changing norms of society.

Property is the creation of the State

The origin of ‘Property’ is to be traced back to the origin of ‘Law and ‘State’. Jenks observed that Property and Law were born together and would die together.

It means that Property came into existence when the State framed Laws. As per this theory, Property was non-existent before the Law.

According to Rousseau, ‘it was to convert possession into property and usurpation into a right that Law and State were founded.’

The first who enclosed a piece of land and said- this is mine- was the founder of real society. He insisted on the fact that property is nothing but a systematic expression of degrees and forms of control, use, and enjoyment of things by persons that are recognized and protected by law. Thus, the conclusion is that property was a creation of the State.

Philosophical Theories (Property as a Means to Ethical Ends) In the views of Aristotle, Hegel, and Green, Property has never been treated as an end, but always as a means to some other end.

According to Aristotle, it may be a means to the end of the Good Life of citizens. In the views of Hegal and Green, it may be a means to the fulfillment of the Will without which individuals are not fully human.

According to Rousseau, Jefferson, and Friendman, it may be a means as a pre-requisite of individual freedom seen as a human essence.

Similarly, the outstanding critics of property like Winstanley, and Marx have denounced it as something destructive of human essence, a negative means concerning the ontological end.

Question 2. Explain different connecting points of the Intellectual Property Law regime and Cyber Law regime in India as well as from the international perspective.
Answer: Intellectual Property Rights in the Cyber World: Though both Intellectual Property and the Cyber Law are independent subjects and have their area of operation, however, the influence of one on the other cannot be denied and the same is becoming all the more evident these days.

We live in a world that is dominated by computers and the internet and therefore the world today is appropriately called the Cyber World.

Intellectual Property (IP) equally is an expanding phenomenon with more and more innovations coming to the surface, which also acts as a catalyst for expanding businesses.

However, in terms of vintage and history, Intellectual Property is relatively a longstanding field of legal practice than Cyber Law.

In the Indian context particularly, Cyber Law emerged only with the passage of the Information Technology Act, of 2000, while as an IP law, the Copyright Act was passed in the year 1957.

However, the common theme that runs through both these areas of law is that both have been significantly impacted by the development taking place in the field of technology as well as the growth of the Internet medium.

For instance, a lot of issues cropped up in the area of Copyright law the internet enabled its users to readily reproduce materials available online.

To meet such challenges, the Governments have been, time and again, bringing stringent provisions in the criminal law to catch up with the criminals and thus create deterrence in the society towards such malpractices.

Copyright and Cyberspace – Copyright protection gives the author of the work a certain “bundle of rights”, including the exclusive right to reproduce the work in copies, to prepare derivative works based on the copyrighted work, and to perform or display the work publicly.

Public Performance and Display Rights – The right that does get affected is that of display. Display of the work is also done by making copies, which are then retailed or lent out. This also falls under the right to display, which the holder of the copyright has.

Distribution Rights – Copyright Law grants the holder of the copyright the exclusive right to distribute copies of the work to the public by sale or by the transfer of ownership.

Caching (Mirroring) – It is a violation of the internet. Caching may be local caching and proxy caching.

In addition, proxy caching may give rise to infringement of the right of public distribution, public policy, public performance, and digital performance.

Protection of Database in India – The Indian Copyright Act, 1957 protects “Databases” as “Literary Works” under Section 13(1) (a) of the Act which says that copyright shall subsist throughout India in original literary, dramatic, musical, and artistic works. The term computer Database has been defined in the Information Technology Act, of 2000 for the first time.

Section 43 of the IT Act, 2000 provides for compensation to the aggrieved party up to one Crore rupees from a person who violates the copyright and cyberspace norms. Also, Section 66 of the IT Act, 2000 provides for penal liabilities in such a case.

Internet Protection in India – The internet challenge for the protection of internet is the protection of intellectual property.

It is still unclear as to how copyright law governs or will govern these materials (literary works, pictures, and other creative works) as they appear on the internet. Section 79 of the IT Act 2000 provides for the liability of ISPs “Network Service Providers not to be liable in certain case.”

Section 79 of the IT Act exempts ISPs from liability for third-party information.

Indian Cyber Jurisdiction – Though it is the in nascent stage as of now, jurisprudential development will become essential soon; as the internet and e-commerce shall shrink borders and merge geographical and territorial restrictions on jurisdiction. There are two dimensions to deal with.

• How foreign courts assume jurisdiction over the internet and relative issues.
• The consequences of the decree passed by a foreign court. Thus, there is an immense need for Indian society to be made aware of the necessity of copyright protection on all fronts to prevent any unauthorized use and pilferage of the system.

The analysis of copyright in cyberspace reveals a mixed result of new opportunities and threats.

Such threats often outweigh the opportunities offered by cyberspace and the necessity arises for increasing regulations of cyberspace to protect copyrights.

Further lack of internationally agreed principles relating to copyrights in cyberspace gives ample room for divergent domestic standards. Cyberspace – Cyberspace can be described as the virtual world interconnecting human beings through computers and telecommunication without regard to the limitations of physical geography.

With the onset of modern technology, more importantly, the internet, copyright protection has taken a hit and thus the issues relating to it assumed greater significance.

Nowadays, the protections of Copyright law have been extended to protect internet items too. It protects original work or work that is fixed in a tangible medium i.e. it is written, typed, or recorded.

Although the current copyright law protects copyright owners, it has its shortcomings when it comes to its implementation and enforcement on the Cyber World.

Cyberspace is a virtual world, that technically exists only in computer memory, but it is interactive and pulsing with life. IPR and Cyber Space- While the Internet is undoubtedly acclaimed as a major achievement of humankind it cannot be denied that it has come with its own set of challenges.

One of the major challenges that it poses is that it has captured the physical marketplace and has created a new substitute which is the virtual marketplace.

It is thus the responsibility of all IPR owners to protect their IPRs from any mala fide actions of the miscreants operating on the internet medium by invalidating and reducing such mala fide acts attempts of such criminals by taking proactive measures.

It is important to know about the copyright issues associated with computer programs/software, computer databases, and various other works in cyberspace.

Under the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement, Computer Programs also now qualify for Copyright protection just as any other literary work is afforded.

Question 3. Trace the common features of Intellectual Property Rights and Human Rights.
Answer: Intellectual Property Rights as Human Rights: Human Rights and Intellectual Property, though two very different sets of laws with no apparent connection, have gradually become intimate bedfellows. Since its inception, the two subjects developed virtually in isolation from each other.

But in the last few years, international standard-setting activities have begun to map previously uncharted intersections between intellectual property law on the one hand and human rights law on the other.

Exactly how this new-found relationship will evolve is being actively studied – and sometimes even fought over – by states and non-governmental organizations (NGOs) in international venues such as the World Intellectual Property Organization (WIPO), the U.N.

Commission on Human Rights and the Sub-Commission on the Promotion and Protection of Human Rights, the World Trade Organization (WTO), the World Health Organization (WHO), and the Conference of the Parties to the Convention on Biological Diversity (CBD).

A look at the lawmaking that is underway in these for a prima facie reveals two distinct conceptual approaches to the interface between human rights and intellectual property. The first approach finds that there is a conflict between human rights and intellectual property rights.

This view believes that a regime of strong intellectual property protection undermines and therefore is incompatible with human, rights obligations, especially in the area of economic, social, and cultural rights.

To resolve this conflict it is suggested the normative privacy of human rights law over intellectual property law should be recognized in areas where specific treaty obligations conflict.

In the second approach, Human Rights and Intellectual Property Rights are seen as concerned with the same fundamental question, i.e., defining the appropriate scope of private monopoly power that gives authors and inventors a sufficient incentive to create and innovate, while ensuring that the consuming public has adequate access to the fruits of their efforts.

This school of thought sees Human Rights law and the Intellectual Property Rights law as essentially compatible, although often disagreeing over where to strike the balance between incentives on the one hand and access on the other.

But the principal reason for the execution of these agreements lies not in deontological claims about inalienable liberties, but rather in the economic and instrumental benefits that flow from protecting Intellectual Property products across national borders.

It is also true that both areas of law were preoccupied with more important issues, and neither saw the other as either aiding or threatening its sphere of influence or opportunities for expansion.

This evolutionary process resulted in a de facto separation of human rights into categories, ranging from a core set of peremptory norms for the most egregious forms of state misconduct to civil and political rights, to economic, social, and cultural rights.

Among these categories, economic, social, and cultural rights are the least well-developed and the least prescriptive, having received significant jurisprudential attention only in the last decade.

Human Rights law added little to these two enterprises. It provided neither a necessity nor sufficient justification for demanding strong, state-granted intellectual property monopolies (whether bundled with trade rules or not). Nor, conversely, did it function as a potential check on the expansion of Intellectual Property Law.

Question 4. List a few advantages of including the process of evaluation of Intellectual Property in an Organisation. What are the different methods adopted for such evaluation?
Answer: Advantages of Intellectual Property Valuation: Intellectual Property Rights, such as Patents and Trademarks, which require necessary registration with the concerned authority, provide legal evidence of one’s ownership over such intangible assets while also ensuring one’s peaceful and exclusive right to the use of such property.

It gives one the right to exclude others from the use of such rights. This means that one is armed with the legal remedy against any infringement by the competitor(s).

Moreover, it is also an asset that can be profitably licensed or sold to others to provide them with the rights they would otherwise not have, and consequent to these benefits an increase in the total value of one’s business.

At times, the process of valuation of an enterprise’s Intellectual Property itself requires registration of such property as a precondition which enables the process of monetizing one’s intangible assets.

Conducting a valuation of one’s Intellectual Property has its significance and advantages.

For instance, assessing the value of one’s Patent, Trademark, or Copyright may simplify the licensing or assignment process, and help one to determine the royalty rates that should be paid as a result of using one’s intellectual property assets.

Further, ascribing a reasonable valuation to one’s intellectual property, if not currently accounted for, increases the overall value of one’s business and provides one with collateral for loans and mortgages.

The difference between quantitative and qualitative valuations: An intellectual property can be valued on various parameters, but the overarching principle guiding the valuation process is, how much of a competitive advantage one’s intellectual property provides over others in the industry. While evaluating the worth of intellectual property, the following two methods of valuation have traditionally been used:

Quantitative valuation: As the name itself suggests, this method relies on measurable data or numerical information to produce an estimate of the value of one’s intangible assets. It attempts to answer the question by providing a monetary value or contribution that the intellectual property provides, whether directly to the business or indirectly by increasing the value of other parts of the operation or the appeal to investors.

Qualitative methods: The parameters of valuation under this method are very different from the quantitative valuation method. This method provides a non-monetary estimate of the value of an Intellectual Property by rating it based on its strategic impact, loyalty held by consumers, its impact on the company’s future growth, and other intangible metrics that do not rely solely on numbers.

These two kinds of valuation methods should however not be presumed to be contradictory or mutually exclusive; depending on the needs of one’s business, one may employ a variation of methods that fall into both categories.

It would not be wrong to suggest that the two valuation methods are perhaps the two sides of the same coin. Quantitative and qualitative attempts to tackle the question of firm value from different viewpoints, which may both come in useful depending on the audience in question and the reason for valuation.

In conclusion, it can be said that determining the value of one’s Intellectual property can be a very challenging task and an exhausting process.

But obtaining a valuation can result in significant benefits to one’s business and thus the need for valuation can neither be underestimated nor be undermined.

Following the valuation models described above to break down the process into simple steps and establish a clear purpose and audience for the valuation, can make valuation manageable.

Question 5. What are the different competing rationales put forward for the protection of Intellectual Property?
Answer: Competing Rationales for the Protection of Intellectual Property Rights:

• Intellectual property indeed is now one of the valuable assets in commercial transactions, be it intellectual property licensing, joint ventures, foreign collaborations, manufacturing, purchase or distribution agreements, or mergers and acquisitions.
• Licenses to use patents, copyrights, and trademarks, are often combined with transfers of know-how and are increasingly an important term in technology transactions.
• These licenses provide royalty revenues to the owner of the Intellectual Property and distribute products and technologies to licensees who might not otherwise have had access to them.
• In such transactions, the licensees may also gain rights to create improvements or derivative works and to develop their own Intellectual Property assets, which can then be cross-licensed or licensed to others. This creates a very productive cycle of innovation and invention and adds to the revenues of the companies.
• Intellectual property laws confer the right to own intellectual assets by its creator and also enable him to make profits from his artistic, scientific, and technological creations for a defined period.
• Such rights apply to the intellectual creations and not the physical object in which it is embodied. Countries have enacted laws to protect intellectual property for two main reasons.
• One is to give statutory expression to the moral and economic rights of creators in their creations and the rights of the public to access such creations.
• The second is to promote creativity and its dissemination which results in economic and social development.

The World Intellectual Property Report 2011: The Changing Face of Innovation new WIPO publication describes how ownership of intellectual property (IP) rights has become central to the strategies of innovating firms worldwide.

• With global demand for patents rising from 800,000 applications in the early 1980s to 1.8 million in 2009, the Report concludes that growing investments in innovation and the globalization of economic activities are key drivers of this trend.
• As a result, IP policy has moved to the forefront of innovation policy WIPO Director General, Francis Gurry, notes that “innovation growth is no longer the prerogative of high-income countries alone; the technological gap between richer and poorer countries is narrowing. Incremental and more local forms of innovation contribute to economic and social development, on a par with world-class technological innovations.”
• Intellectual property assets are used not only in business transactions but are also traded in their own right such as online exchanges for the evaluation, buying, selling, and licensing of patents and other forms of Intellectual Property.
• The buyers and sellers of intellectual property manage their intellectual property as financial assets just as investors in stocks, options, and other financial instruments.
• Strong intellectual property rights help consumers make an educated choice about the safety, reliability, and effectiveness of their purchases.
• Enforced intellectual property rights ensure products are authentic, and of the high quality that consumers recognize and expect. IP rights foster the confidence and ease of mind that consumers’ demands and markets rely on.

Question 6. What are “intellectual property rights”? List out the subject matter protected by IPR under the World Intellectual Property Organization.
Answer:

Intellect means perception. It is the barometer of one’s understanding of persons or things of events and concepts, individually or collectively.

Intellectual Property (IP) refers to the creations of the human mind like inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. Intellectual property is divided into two parts:

Industrial property and Copyright. Industrial property includes inventions (patents), trademarks, industrial designs, and geographic indications of source and Copyright includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, sculptures, and architectural designs.

Intellectual property encompasses four separate and distinct types of intangible property namely:

1. Patents,
2. Trademarks,
3. Copyrights,
4. Trade secrets.

All the above types of intangible property collectively are referred to as “intellectual property”.

Products that used to be traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value.

For example, brand-named clothing. Therefore, creators are given the right to prevent others from using their inventions, designs, or other creations. These rights are known as “intellectual property rights”.

The convention establishing the World Intellectual Property Organization (1967) listed the subject matter protected by intellectual property rights as follows:

1. literary, artistic, and scientific works;
2. Performances of performing artists, phonograms, and broadcasts
3. Inventions in all fields of human endeavor;
4. Scientific discoveries;
5. Industrial designs;
6. Trademarks, service marks, commercial names and designations;
7. “All other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields” and
8. Protection against unfair competition.