202001.06
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Roundup of top 10 IP news and developments of 2019

There is never a dull moment in Indian IP scenario. The vibrant market is growing with courts taking up contentious issues in digital world, brand protection and Patent enforcement to provide stable IP environment. The law makers have been busy plugging gaps in IP policy and regulatory issues to encourage innovation. Our post briefly summarizes a selection of top 10 news and developments during 2019 as we welcome 2020!

  • Geo blocking or global blocking- the question is still alive?

The issue arose in a defamation suit against the author and publisher of the book ‘Godman to Tycoon – the untold story of Baba Ramdev’. An injunction order was passed against the author and publisher restraining them from publishing, distributing and selling the book containing certain offending portions. Meanwhile, certain videos were uploaded on various social media platforms; Facebook, YouTube and Twitter with objectionable portions that the court had ruled should be deleted. Swami Ramdev approached Delhi High Court to direct these platforms to takedown these videos. The Defendant platforms were willing to disable access to offending URLs limited to India only and objected to injunction being extended on a global basis on various grounds. The issue before the court was whether removal or disabling access to the defamatory content can be geographically limited or should it be global?

In a hotly contested case with extensive arguments presented by both sides, the single judge of Delhi High Court passed interim injunction order directing Facebook, Google, YouTube, Twitter and other unnamed intermediaries to take down defamatory content uploaded on their platforms against Swami Ramdev on a global basis. The court concluded that for offending content which was uploaded from India, they could direct global takedowns as it originated from India and Indian courts have the jurisdiction to pass global injunctions. For content uploaded outside India, social media platforms can stop it from being accessed in India and resort to geo-blocking.

The case has reignited the debate between the right to reputation on one hand and right of freedom of speech and expression on the other. The law on this is not harmonised globally. Taking into account the technology challenges, if geo blocking is encouraged, the remedial justice will be incomplete since content can be accessed from global websites of platforms. The last word is yet to be written in this saga, as Facebook, Twitter and Google have filed an appeal against the above order to the two judges bench (Division Bench) which was admitted by the court on 31 October 2019. The case has been put up for arguments on 13 January 2020 before the bench.

  • India rolls out PPH with Japan on a pilot basis

Indian Patent Office (IPO) on 4th December, 2019 notified the procedural guidelines for its first Patent Prosecution Highway (PPH) program with the Japanese Patent Office (JPO) on pilot basis for a period of three years and the IPO had started accepting PPH requests from December 5, 2019. The number of the requests for the PPH in each Office has been respectively limited to 100 cases per year. An applicant, who has filed a patent application, either alone or jointly with any other applicant, is not permitted to file more than 10 PPH requests to IPO per year. Under this program, JPO can receive applications in all technical fields, and IPO can receive patent applications in certain specified technical fields only and has kept “pharma” and “chemical” related patent applications away from the PPH route.  Interestingly, number of requests for PPH at IPO has already reached the allowed limit of 100 requests and no new requests can be filled until 31st March, 2020 (the end of this financial year).

  •  Civil Imprisonment to Director for Trademark Violation

Citi Group Inc. (Citi) filed a suit before Delhi High Court against Citicorp Business and Financial Services Pvt. Ltd (CBFS) alleging trademark infringement, passing off and unfair competition.  The dispute between the parties was over the CITI mark.

Aggrieved with the non-compliance of injunction order granted in favour of Citi, CBFS approached the court. The Director personally appeared and submitted that he was unaware of the injunction order which was rejected by the Court considering regular representation by his counsel. As CBFS failed to comply with the Court’s directions and injunction order even after four years, the Court concluded that the oral assurances and statements made in affidavits by the Directors before Court were not true, thus amounting to contempt of court. The Court took a stern view and sentenced one of the Directors to fifteen days civil imprisonment in Delhi’s Tihar jail. The other Director was let off with a warning considering that she was a housewife and had no role in the day to day affairs of the company. The order highlights the perils of making false statements in judicial proceedings and non-compliance of court directions with court setting the right example by taking a hard stand.

  • Expansion of fast track examination, paperless office in new Patent Rules

On 17th September 2019, new Patent (Amendment) Rules, 2019 were notified. The major changes inter alia include waiving the transmittal fees while filing PCT application with India as receiving office and fees for preparation of certified copy of priority document and its transmission through WIPO DAS. To digitize the operations and move towards paperless office, the new Rules require only electronic filing of all the documents. Additionally, the criteria for filing request for expedited examination has been further extended to small entity applicant; female applicant and applicant eligible under an arrangement for processing a patent application pursuant to an agreement between Indian Patent Office and a foreign Patent Office. The new rules also provide benefit of the expedited examination to various government entities.

  • Dynamic injunction against rogue websites

In UTV Software and 20th Century Fox (amongst others), one of the issue which came before the court was that even after a comprehensive ban on a website in order to circumvent the court orders, the operators create ‘mirror websites’ or ‘alphanumeric variants of the same blocked websites ’ to publish the same infringing content. UTV approached the High Court against Defendants, certain identified and unknown websites impleaded as John Doe Defendants, seeking injunction from publishing, streaming and enabling download of pirated films on such websites which lead to violation of their copyright. The court while dealing with this issue borrowed the concept ‘Flagrantly Infringing Online Locations’ (FIOLs) from the High Court of Singapore and held “Rogue websites alike websites in the present case are the ones which primary purpose is to 1) predominantly share infringing content 2) masking the Registrant details 3) Inaction by such website on receipt of takedown notices 4) Volume of traffic or frequency of access to such websites. Court in order to curb this practice of creating ‘mirror websites’ ventured into new concept of “dynamic injunction” by which the right holders would not need judicial order by Judge to seek injunction against any new website which was not part of an injunction order but they can approach the Joint Registrar of the High Court to extend the injunction against a mirror or indirect replica of the blocked website publishing the same infringing content by filing an affidavit along with the sufficient supporting evidence and the Joint Registrar of the High Court upon being satisfied can grant an injunction against the aforesaid hydra headed rogue websites by virtue of inherent powers under Section 151 CPC.

  • Preserving confidentiality of documents in commercial disputes

Generally, documents which parties in legal proceedings rely upon are accessible to all the parties to the litigation and their lawyers. The right/s holders have often voiced concerns about maintaining confidentiality of documents in commercial matters pertaining to patent infringement and trade secret misappropriation cases where the adjudication of the dispute mainly depends upon the evaluation of those confidential information or documents (such as manufacturing processes, formula, agreements) and revealing the same is likely to give an unfair competitive advantage to the opposite party. In order to avoid such scenario, Delhi High Court under Rule 17 of Chapter VII of the Delhi High Court (Original Side) Rules, 2018 added a provision whereby Court by an order may constitute a ‘Confidentiality Club’ so as to allow limited access to such confidential documents/ information to the members of the club. The new Rules laid down some protocols which have to be kept in mind while forming confidentiality club though such protocols may vary from case to case. The new rules broadly provide a) Confidential Documents/ Information to be filed in a sealed cover to be kept in the safe custody of Registrar General; b) two external experts and Advocates of the parties shall constitute the Confidentiality Club c) Members alone shall be entitled to inspect the Confidential Documents/ Information but not make copies. d) During proceedings of the Court, while discussing the Confidential Documents/ Information only members of the Confidentiality Club shall be permitted to be present e) The members of the ‘confidentiality club’ will be bound by an undertaking that they shall not disclose the information which they are privy to or use it in any other legal proceedings f) the court may where possible allow copies of affidavit and documents to be taken after redacting confidential information.

  • Supreme Court sets aside order in Monsanto patent over Bt cotton

The Supreme Court hearing an Appeal against the order of a division bench of the Delhi High Court set aside the order and upheld Monsanto’s patent rights over its Bollgard-II Bt (Bacillus Thuringiensis) cotton seed technology, a GM variant that resists the bollworm pest. The Court took the view that the challenge to the patentability was by way of a counterclaim by Nuziveedu Seeds Ltd. The Apex court further held that the issue regarding the exclusion of the patent under Section 3(j) of the Patents Act was a heavily mixed question of law and facts, which required formal proof and expert evidence, evidence, to be considered at the hearing of the suit. Thus, it proceeded to set aside the Division Bench order, since the counterclaim of Nuziveedu (in which it challenged Monsanto’s patent) was not even considered (on merits) by the single Judge. The case was remanded back to the Single Judge for disposal of the patent suit.

  • Draft Guidelines issued for protecting consumer buying goods online

With the advent of technology and a new internet user being added every 3 seconds, the e-commerce sector in India has been witnessing an explosive growth. In order to safeguard consumer interest the government by way of these guidelines has emphasized on prevention of fraud and curb sale of counterfeit goods online. The guidelines issued by the Department of Consumer Affairs impose certain obligations on e-commerce entities. Some of the key features of the guidelines cover the following important aspects among others which must be complied with by E-commerce entities as well as the sellers: a) not to influence the price of the goods b) not adopt any unfair methods or deceptive trade practice that may influence transactional decisions of the consumers c) not misrepresent themselves as consumers to exaggerate features of the goods or services (fake reviews) d) clearly display the terms of the contract with the seller pertaining to refund, exchange, warranty, guarantee, shipment, grievance redressal mechanism enabling consumers to make informed decisions e) ensure the advertisements are not misleading and advert to actual characteristics of the goods or services f) mention safety and health care information of the goods g) include legal name, principal geographic address, website, email address, contact details and their products shall be displayed on their website h) take down a listing upon being notified as a counterfeit product by a consumer or comes to known of it by itself (after conducting due diligence).

The guidelines are open for comments and for now the government is going through consultative process with stakeholders before it becomes part of the Consumer Protection Act, 2019.

  • In chamber proceedings to prevent leak in cases pertaining to IPR

The High Court of Bombay, under the Oral directions of a sitting judge, Hon’ble Justice S.J. Kathawalla issued a notice on November 06, 2019 mentioning the Parties and Advocates seeking ex-parte ad-interim application in matters pertaining to Intellectual Property Rights (IPR) will be allowed to “mention” such cases within the confines of a closed chamber. It has been further notified that such matters will not be mentioned in open court and their list won’t be uploaded or displayed on the High Court website to maintain the secrecy. The matters approved by the Court for urgent hearing would be directly called out in the court. This move by the Bombay High Court is a a practical step to prevent any leakage of information in IPR cases in particular cases involving counterfeit goods which are likely to be removed if they go through the regular listing route with parties name being identified. In a similar situation, Justice Rajiv Sahai Endlaw of Delhi High Court in Johnson & Johnson Vs. Ashok Kumar/John Doe and Anr. (CS (COMM) 570/2019), passed an ex-parte order in chamber, as Defendant Pritamdas Arora trading as M/S Medserve was allegedly dealing in counterfeit goods under the trademark SURGICEL and house mark ETHICON of the plaintiff in USA. It was alleged that the suit has already been filed in the US court. In order to restrain the Defendant in dealing with trademark and seizing its goods in India, concealment of name of the plaintiff as well as of Defendant was sought in chamber of the Judge. Although this order was passed before the issuance of notice by the Bombay High Court, it illustrates one of the instances when in an IPR matters in chamber proceeding can be sought for preventing the leakage of information.

  •  Cinematograph (Amendment) Bill, 2019 to control film piracy

An important Bill to amend the current Cinematographic Act, 1952 was mooted to control piracy. The Bill after approval by Union cabinet is undergoing stakeholders’ consultation process before being taken up for debate by both houses of parliament. It is and is likely to come into force in 2020. The new amendment takes into account technological advancements making film piracy rampant with use of audio-video recording equipment. The Amendment makes Film Piracy offences punishable with imprisonment up to three years and fines that may extend to 10 lakh (US $ 13,875 approx) or both. The amendment makes a person liable for punishment, who without the written authorization of the copyright owner, uses any recording device to make or transmit a copy of a film, or attempts to do so, or abet the making or transmission of such a copy.

The Film Industry and the stakeholders feel strict provision are a necessary step. On the other hand a section of stakeholders feel anti-piracy measures should be aimed to prevent abuse of rights in a cinematographic film on a commercially exploitable scale, and criminalizing acts such as sending a small clip over Whatsapp should fall under exceptions. It is further being debated if fair use provisions will be curtailed by the proposed law. Overall a much needed law to control film piracy.