8 January, 2019
At the outset, we take this opportunity to wish you all a very happy and prosperous New Year!
This newsletter brings to you the key intellectual property (“IP”) related updates in India from the final quarter of 2018. The Ministry of Commerce and Industry recently published the Draft Patent (Amendment) Rules, 2018 (the “Draft Rules”), with the intent of promoting Patent Co-operation Treaty (“PCT”) applications originating from India and simplifying the process of patent registration in India.
The High Court of Delhi in the case of Christian Louboutin SAS vs. Nakul Bajaj, imposed an absolute obligation on online platforms to exercise due diligence so as to make use of the safe harbor provisions available under the Information Technology Act, 2000 (the “IT Act”) in cases of IP violations.
In the cases of Carlsberg Breweries vs. Som Distilleries and Greenlight Planet India Pvt Ltd vs. Gee Lighting Technology, the High Court of Delhi delved into the question as to whether a composite suit can be filed with respect to registered design infringement and passing off of different kinds, since there are two different causes of action.
The above-mentioned Draft Rules and these notable cases are discussed below.
STATUTORY DEVELOPMENT
Draft Patent (Amendment) Rules, 2018
On December 4, 2018, the draft Patent (Amendment) Rules, 2018 (the “Draft Rules”) were published by the Department of Industrial Policy and Promotion of the Ministry of Commerce and Industry for comments and feedback from the general public.
Key Features of the Draft Rules
(a) International Applications under the PCT
If the Draft Rules come into effect, all documents including scanned copies relating to PCT applications will be required to be submitted only electronically. Moreover, the original documents will have to be submitted within 15 days from the date of submission of the scanned copies.1
The requirement to pay the transmittal fee for an international application as well as the fee for preparing certified copies of priority documents and e-transmission through WIPO’s software
(which were payable to the Indian Patent Office along with the filing fees towards PCT applications) has been done away with.2
(b) Examination of Indian Applications
The existing rule3 on expedited examination, which kept the facility available for start-ups and PCT applicants who choose the Indian Patent Office as the International Search or Examining Authority, has been substituted.
Now applicants eligible to file a request for expedited examination will include a small entity; a female applicant or at least one of the applicants being a female (in case of natural persons only); a government undertaking; and applicants from countries who have entered into a Pate nt Prosecution Highway agreement with the Indian Patent Office.
The existing rule, that a request for expedited examination can be dealt with like a request for regular examination, if the request does not comply with the requirements of the rule, has been amended.
Now if the requirements of the rule on expedited examination are not complied with in a request for expedited examination initially, but such requirements are complied with prior to the issuance of the First Examination Report, then the request for expedited examination will be considered as such.4
(c) Pre-grant Oppositions
A bench comprising of 2 members will be constituted for hearing pre-grant opposition cases. If there is a deadlock, then a third member shall be nominated by the Controller, and the decision of the majority shall be final.5
NOTABLE CASE LAW
Christian Louboutin SAS vs. Nakul Bajaj and Others
A series of cases have cropped up where internet intermediaries have been held liable for the content uploaded by third parties.
These cases consider to what extent defendants can avail the safe harbor immunity available to internet intermediaries under the IT Act.
Background
Section 79 of the IT Act states that in order to construe a valid claim, the intermediary should have actual knowledge about the infringing content, and that the onus of monitoring the infringing content and notifying it to the intermediary is upon the IP right owner.
In the case of Darveys.com, using the image and the name of world-renowned fashion designer Mr. Christian Louboutin.
It was alleged on behalf of Mr. Louboutin’s company that traffic was routed to the said website through the meta-tags Christian and Louboutin and that the sale of the products on Darveys.com led consumers
to believe that such products originated from and were affiliated to the brand Christian Louboutin
This resulted in trademark infringement, passing offand an infringement ofthe personality rights of Mr. Louboutin. The owner of the website responded by saying that they were not selling the
infringing products but were merely enabling the booking of orders placed by their customers through their online
Findings
The High Court of Delhi (the “Court”) observed from the terms of use of Darveys.com that it exercised complete control over those products being sold in so far as it was identifying sellers, aiding sellers actively, promoting products and selling products, which in turn accorded Darvey.com a more significant role than that of an intermediary.
The Court stated that:
"the obligation to observe due diligence, coupled with the intermediary guidelines which provides specifically that such due diligence also requires that the information which is hosted does not violate IP rights, shows that e-commerce platforms which actively conspire, abet or aide, or induce commission of unlawful acts on their website cannot go scot free."
The Court granted an injunction in favour of Christian Louboutin SAS. Due to loopholes in its website’s terms of use,Darveys.com was also directed to obtain certificates of genuineness of products from its sellers.
The decision is similar to an earlier observation made in Fermat Education vs. Sorting Hat Technologies Pvt. Ltd7 where the Madras High Court concluded that Sorting Hat Technologies was not
an intermediary under the provisions of the IT Act. In that case, the Madras High Court was satisfied that a prima facie case was made out and granted an interim injunction against Sorting Hat Technologies and related parties.
The High Court of Delhi (the “Court”) recently analyzed whether two matters with different causes of action under the Design Act, 2000 (the “DA”) and Trademark Act, 1999 (the “TMA”) should be adjudicated together or in two separate suits.
The Court looked at Order II Rule 2 (the “Order”)8 of the Code of Civil Procedure, 1908 (the “Code”), in light of multiple suits arising out of the overlap between the causes of action under the DA and the TMA. The overlap in the present context arose due to a suit for passing off filed under the TMA and another for design infringement under the DA. Greenlight Planet India Pvt Ltd (“GPI”) instituted a suit seeking a permanent injunction for passing off with respect to its trademark Gee-Lite by Gee Lighting Technology (“GLT”). In addition, a few years ago, GPI had also filed a suit for design infringement against GLT. In light of the above, GLT sought for the rejection of the plaint in the suit for passing off, relying upon the Order.
While the main contention of the present case was trademark passing off, (which is a common law right flowing from the savings clause of Section 27 of the TMA, per contra design infringement that is a statutory right stemming from Section 22 of the DA), the Court delved into the question of the two causes of action being tried in the same suit.
Due to the contrasting nature of the rights arising under the two laws, the Co urt resorted to the Order to answer whether remedies available to the parties arise out of the two independent suits, or should they be decided upon in one composite suit; and also, whether the plaint in the suit for passing off is liable to be rejected.
Findings
Greenlight Planet India Pvt Ltd vs. Gee Lighting Technology
Background
In its submissions, GLT relied upon the Order and stated that as per the language of the Order, the parties are precluded from filing a subsequent suit after omitting or relinquishing part of their claim.
Moreover, GPI having relinquished its claim with respect to passing off of its goods in the earlier suit, could not claim the same in the present suit.
These submissions were countered by GPI, submitting that the cause of actions of both the suits were distinct from each other and as such should be treated as independent suits.
Without going into the merits of the case and limiting its analysis to the Order, the Court decided that the intent ofthe Orderwas to avoid multiplicity of suits and to prevent parties from being sued multiple times for cases arising out of the same cause of action.
The Court summarily noted that the Order would not be applicable in the present context since the two matters were arising out of two distinct cause of actions. The Court held that that: “a cause of action for an infringement suit under the Design Act is different/separate/distinct from the cause of action for a passing off suit of a trade mark, trade name and domain name”.
Basis the abovementioned, the Court dismissed the application for the rejection of the plaint.
Carlsberg Breweries A/S vs. Som Distilleries And Breweries
In a rather interesting turn of events, a single judge of the High Court of Delhi had the opportunity to reconsider whether two matters with different causes of action under the Design Act, 2000 (the “DA”) and Trademark Act, 1999 (the “TMA”) should be adjudicated together or in two separate suits. Owing to the intricacies of the present suit, the single judge referred the matter to the special bench of the High Court of Delhi (the “Court”).
Background
Carlsberg Breweries (“Carlsberg”) is the right holder with respect to the trade dress and design registration vesting in beer bottles sold under trade name TURBO. Subsequently, Som Distilleries (“Som”) started manufacturing and selling beer bottles which were claimed to be infringing the design and trade dress of Carlsberg’s beer bottles.
Taking action against Som’s unlawful use of its IP rights, Carlsberg filed a composite suit alleging design infringement and passing off of its trade dress. Som objected to the filing of the composite suit claiming that the causes of actions were distinct from each other and could not be combined in one suit.
The question to be answered by the Court was whether there can be joinder of two causes of action: first, for infringement by Som of the registered design of Carlsberg under the DA; and second, for passing off by Som of its beer bottles as that of Carlsberg’s under the TMA.
Findings
The Court analysed the issue before it in light of the present jurisprudence and also Order II of Rule 3 (the“Order”) 9 of the Code of Civil Procedure,1908 (the“Code”).
The Court did not concur with the principles laid down in the landmark case of Mohan Lal vs. Sona Paint and Hardwares10 (the “Mohan Lal Case”) and opined that the Mohan Lal Case11 was per incuriam.
The Court also analyzed the Order and other case law and held that the intent behind the Order is to avoid the multiplicity of suits and also to save cost, time and effort and to make the conduct of several actions more convenient by treating them as one action12.
It was then laid down that the key question for deciding such suits should be the nature of the transactions that were entered into between the parties and also whether the evidence in those transactions would be common.
In addition to the above, the Court also considered the interplay between the DA and TMA and held that a remedy for passing off for a registered design can be brought:
(a) if the said design is not functioning as a trademark; and
(b) if the remedy of passing off is claimed for trade dress infringement or any other similar infringement.
Basis the abovementioned, the Court in its judgment held that two causes of actions can be combine d, provided certain conditions are met, and the aggrieved party can file a composite suit before the appropriate forum.
Prakash Jha Productions vs. 50 Ashok Kumar & Red Chillies Entertainments Pvt. Ltd. vs. Various Defendants
Prakash Jha Films13 and Red Chillies Entertainment14 (the “Producers”) moved the High Court of Madras (the “Court”) in order to try and stop 2,650 websites from distributing pirated copies of two
An Ashok Kumar order (otherwise known in the United States as a John Doe order) is similar to an injunction order passed in cases of IP infringement to protect an owner’s loss or probable loss, but only against unnamed defendants.
The Court has, while taking into account the claims made by the Producers, passed the requested order, blocking websites, including Internet Service Providers (ISPs) from distributing the films.
As a result of the order,the world-renowned Internet Archive at WaybackMachine, a non-profit library of millions of free books, movies, software, music, websites and more, was one of the ISPs that was blocked in India for a certain period.
Interestingly, the order did not delve into the nature of the defendants, their copyright claims, how copying had been allegedly perpetrated by the unnamed defendants, what loss or probable loss the Producers may have suffered and other similar questions one would normally expect to see considered.
The order did not satisfy the standards for issuing an injunction and was passed simply based on the Producers’ claims. The Court’s blocking order was overly broad and disproportionate, to the extent that it also directed ISPs to block entire websites, instead of specific, identified URLs. Such blanket blocking affected ISPs as well as innocent websites that had no intention to run any pirated version of films.
For further information, please contact:
Aditi Verma Thakur, Partner, Induslaw
bangalore@induslaw.com
1 Insertion of a‘Proviso’to Rule18(2)of the principle Patent Rules, 2003
2 Insertion of Entries 48A and 49A in the First Schedule of the principle Patent Rules, 2003 3 Rule 24C (1)(b) of the principle Patent Rules, 2003
4 Insertion of a ‘Prov iso’ to Rule 24-C (4) of the principle Patent Rules, 2003
5 Insertion of new Rule55(2A) in the principle Patent Rules, 2003
6 Civil Suit No. 344/2018; citation / link: https://indiankanoon.org/doc/99622088/
7 Civil Suit No.330/2018; relevant citation/link: https://spicyip.com/wp-ontent/uploads/2018/08/order-dated-13.08.2018.pdf
8 Order II Rule 2 of the Code of Civ il Procedure provides for Joinder of Causes of Actions and reads as follows:
Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly ; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit.
Where causes of action are united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject- matters at the date of instituting the suit.
9 Order II Rule3(1)reads as:“ Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite suchcauses of action in the same suit.”
10 AIR 2013 Del 143; citation / link: https://indiankanoon.org/doc/188045559/
11This case had held tha tdifferent causes of action couldn’t be combined in one suit at all.Also, the judgment provides that the “fundamental edifice of a suit for infringement under the Designs Act would be the claim of monopoly based on its registration,which is premised on uniqueness, newness and originality of the design. Whereas, the action for passing off is founded on the use of the mark in the trade for sale of goods and /or for offering service; the generation of reputationand goodwill as a consequence of the same”.
12 Prem Lata Nahata v . Chandi Prasad Sikaria [(2007) 2 SCC 551]; citation / link: https://indiankanoon.org/doc/1232606
